Feb 27, 2024 City Council Work Session

MAY NOT BE TO OUR STANDARDS AND THEY WON'T BE CITY MONITORED.

CERTAINLY WE'VE LOST ONE OF THE BIGGEST INCENTIVES TO THIS PROGRAM, WHICH WAS THE EASE OF PROCESS, WHICH, UM, ADDS UP TO SAVINGS ON TIME AND COST OF A ZONING APPLICATION.

IF WE ADD A LOT OF OTHER REQUIREMENTS, NOW, WE RUN THE RISK OF THIS PROGRAM NOT BEING USED AT ALL.

AND OBVIOUSLY IF WE ARE TAKING THE TIME AND STAFF INPUT AND EXPERTISE TO CRAFT IT, WE WANT IT TO BE A USEFUL TOOL FOR, UH, MEMBERS OF OUR COMMUNITY.

SO IN THIS CASE, APPLICANTS CAN SIMPLY CHOOSE A ZONING CATEGORY WITH THE SAME ENTITLEMENTS THAT HAS NO AFFORDABILITY REQUIREMENT.

AND EVEN IF AFFORDABILITY IS PRIVATELY NEGOTIATED, IT

[00:10:01]

I'D LIKE TO NOTE THAT THE LANGUAGE IN PART THREE H IN DB 90 THAT REFERS TO FOUR 18 IS A BIT CONFUSING.

UH, THIS MIGHT BE BECAUSE THE WORDING PUTS THE REFERENCE TO DIVISION BEFORE A REFERENCE TO THE OVERARCHING ARTICLE.

IN FUTURE, IT MIGHT NOT BE AS CLEAR AS IT COULD BE TO DISCERN BETWEEN DIVISIONS IF MORE ARTICLES AND DIVISIONS ARE ADDED TO THIS ORDINANCE.

AND I THINK STAFF IS, HAS, UH, TAKEN THAT IN AND IS WORKING ON THAT.

IS THAT CORRECT? YES.

COUNCIL MEMBER HARPER MADISON.

UM, THANK YOU.

I WILL ENTERTAIN SOME QUESTIONS.

UM, I HAD A QUICK QUESTION, BUT IT LOOKED LIKE THE MAYOR, OR I'M SORRY, THE MANAGER RAISED HIS HAND BEFORE.

I DIDN'T WANNA GO OUTTA TURN.

IT LOOKED LIKE YOU HAD RAISED YOUR HAND LIKE YOU NO.

SMALL NUMBER OF PROPERTIES.

SO I, MY CONCERNS, AND I THINK YOU MIGHT HAVE ADDRESSED THEM ALREADY.

UM, SO WHAT I WOULD LIKE TO KNOW IS, UM, IN RESPONSE TO THE CONSIDERATIONS ABOUT HOW BEST TO MEET OUR DISPLACEMENT GOALS, GIVEN THAT THERE'S A BIT OF LIKE, UH, WONKINESS SOME EXCEPTIONS THAT WE NEED TO MAKE, I'M CURIOUS WHAT WE CAN DO BOTH BY WAY OF THE HOUSING AND PLANNING COMMITTEE AND JUST, UH, COUNCIL AS A BODY TO ASSIST STAFF WITH MEETING THOSE GOALS AND SORT OF ASSESSING WHAT THE EXCEPTIONS DO TO A THING THAT'S, UM, FLEXIBLE.

CURRENTLY IT'S IN PLAY.

SO JUST CURIOUS WHAT WE CAN DO TO HELP YOU GUYS OUT.

WELL, IF THE DB 90 PROGRAM IS ADOPTED, AS WE CURRENTLY RECOMMEND, WITHOUT THE REQUIREMENTS, COUNSEL CAN ALWAYS CONSIDER THE FACTS OF THE PARTICULAR PROPERTY WHEN A REZONING CASE COMES BEFORE YOU.

AND SO THAT WOULD BE AN OPPORTUNITY IN THE INTERIM TO THINK ABOUT, YOU KNOW, AS YOU'LL HAVE THE INFORMATION IN THE STAFF REPORT ABOUT WHETHER THERE IS EXISTING AFFORDABLE MULTIFAMILY DEVELOPMENT ON A PROPERTY AND IF IT MEETS THE PLANNING PRINCIPLES TO APPLY THE DENSITY BONUS ZONE.

SO THERE WILL BE AN OPPORTUNITY TO DO A PROPERTY BY PROPERTY ANALYSIS OF THE APPROPRIATENESS OF THE DB 90 PROGRAM.

WHILE WE ARE DOING A MORE, UH, COMPREHENSIVE REVIEW OF DISPLACEMENT PREVENTION, UH, METHODOLOGIES AND OPTIONS, THE PLANNING DEPARTMENT IS ALSO CURRENTLY WORKING ON A REVIEW OF DENSITY BONUS PROGRAMS GENERALLY, AND ALTHOUGH WE DON'T HAVE THE, YOU KNOW, CONSULTANTS IS NOT SPECIFICALLY TASKED TO EVALUATE DISPLACEMENT PREVENTION MEASURES, IT IS CERTAINLY SOMETHING THAT STAFF CAN BE THINKING ABOUT HOLISTICALLY FOR ALL OF OUR DENSITY BONUS PROGRAMS. AND THEN ANY FINDINGS OR RECOMMENDATIONS THAT ARE COMING OUT OF THAT WILL RETURN TO COUNCIL, UH, OR PROTECT PERHAPS TO THE HOUSING AND PLANNING COMMITTEE FIRST, UH, FOR, YOU KNOW, VETTING AND DISCUSSION.

I LIKE THAT VERY MUCH.

AND, AND FOR WHAT IT'S WORTH, I THINK OUR, I'M REALIZING MORE AND MORE JUST HOW USEFUL OUR COMMITTEES ARE FOR VETTING THESE IDEAS AND SORT OF RUNNING THROUGH THINGS THAT ARE IN FLUX.

UM, I HAD THE OPPORTUNITY OUT IN WHISPER VALLEY LAST WEEK TO ATTEND, UH, AN UNVEILING FOR A MULTIFAMILY, AND THIS IS LIKE COMPLETELY, IT LOOKED LIKE I HAD LEFT TOWN.

UM, THERE'S JUST NOTHING OUT THERE.

BUT RECOGNIZING THAT THIS COMMUNITY IS EMBRACING MULTIFAMILY AND, YOU KNOW, RECOGNIZING WHAT SOME OF THE CONSIDERATIONS ARE, I THINK YOU ADDRESSED MY POINT.

UM, WHEN YOU SAID, UH, THE THING EARLIER ABOUT WHEN YOU SAID, WHEN STAFF IS ADDRESSED AS STAFF IS ADDRESSING THIS, ONE OF THE THINGS THAT WE NEED TO CONSIDER IS WHETHER OR NOT WE'RE GONNA BE ABLE TO MEET OUR GOALS.

AND THAT JUST GOT ME THINKING IF WE PREEMPT THE ABILITY TO MEET OUR GOALS BY BUILDING IN PROTECTIONS AND, YOU KNOW, RECOGNIZING WE COULD USE THE HOUSING AND PLANNING COMMITTEE TO SAY, OKAY, THIS IS AN OPPORTUNITY FOR US TO, BUT YOU SCARE ME A LITTLE.

'CAUSE I, I, I DIDN'T KNOW HOW TO ARTICULATE IT.

YOU DID IT REALLY WELL.

YOU SAID CASE BY CASE, UM, CONSIDERATIONS, AND THAT SOUNDS LIKE A LOT OF WORK TO ME.

UM, AND SO THAT CONCERNS ME.

AND SO WHEN I'M ASKING, I THINK THAT'S WHAT I WAS TRYING TO ARTICULATE.

HOW CAN WE HELP RELIEVE SOME OF THAT WORKLOAD? BECAUSE WHEN YOU START SAYING CASE BY CASE, IT SOUNDS LIKE AN EXTENDED WORKLOAD, WHICH SOUNDS LIKE MORE TIME.

YEAH, WE COMPLETELY AGREE.

AND THAT WAS ONE OF THE POTENTIAL BENEFITS OF INCLUDING STANDARDIZED, UH, PROVISIONS FOR ALL BONUS PROGRAMS SO THAT, UH, COMMUNITY DEVELOPMENT COMMUNITY KNOW WHAT TO EXPECT WHEN THEY'RE ENVISIONING DEVELOPMENT OF UNDER A BONUS PROGRAM.

AND SO THAT'S SIMPLY AN OPTION FOR COUNCIL CONSIDERATION.

IN THE INTERIM, WHILE A POTENTIAL ALTERNATIVE TO THIS APPROACH IS BEING CONSIDERED, YOU KNOW, IT MAY BE A REEVALUATION OF THE REDEVELOPMENT REQUIREMENT PROVISIONS TO ENSURE THAT THEY ARE FEASIBLE FOR MOST MARKET RATE DEVELOPMENTS TO MEET.

AND SO WE'VE HAD A SHORT TEST TIME WHILE THESE PROVISIONS HAVE BEEN IN THE RESIDENTIAL AND COMMERCIAL PROGRAM, BUT HONESTLY, THEY ONLY APPLY TO A RELATIVELY

[00:15:01]

THESE PROGRAMS ARE DESIGNED, BOTH DB 90 AND RESIDENTIAL AND COMMERCIAL ARE DESIGNED FOR, UH, PROPERTIES WITH COMMERCIAL BASE ZONES.

AND ONLY ABOUT 7% OF THE PROPERTIES THAT WOULD BE ELIGIBLE FOR DB 90 HAVE MULTIFAMILY HOUSING IDENTIFIED AS THEIR LAND USE IN OUR LAND USE DATABASE.

AND IT'S AN EVEN SMALLER PERCENTAGE FROM THERE, UH, THAT WOULD MEET THESE AFFORDABILITY REQUIREMENTS.

SO IT'S SMALL NUMBER OF PROPERTIES, BUT THE FATE OF THOSE PROPERTIES IS IMPORTANT.

AND SO IT'S WORTH ADDITIONAL STUDY TO ENSURE THAT WE CAN PROVIDE PROTECTIONS THAT ARE WELL DESIGNED TO ACCOMMODATE DEVELOPMENT THAT INCLUDES INCOME RESTRICTED HOUSING THROUGH A BONUS PROGRAM, INSTEAD OF, UH, SENDING THOSE PARTICULAR PROPERTIES TO A PATH THAT MAY INVOLVE DEVELOPMENT UNDER A BASE ZONE WITH THE NO INCOME RESTRICTED AFFORDABLE HOUSING AS A RESULT.

THAT IS VERY, VERY HELPFUL AND IT REALLY ANSWERED ALL MY QUESTIONS.

I, I WON'T BE ASKING ANYMORE.

I'LL JUST BE WAITING TO GET, UM, MORE INFORMATION AS YOU GUYS PRESENT MORE BRIEFINGS.

COUNCIL MEMBER.

UM, ANY MORE QUESTIONS? YES, COUNCIL MEMBER ALLISON ALTER.

GOOD MORNING.

CAN YOU JUST GIVE US A SENSE OF THE TIMING FOR THESE DISCUSSIONS? WELL, WE NOT HAVE SCOPED OUT A PROCESS FOR CONSIDERATION SINCE WE WERE INITIALLY ENVISIONING STARTING FROM THIS POINT.

WE DON'T HAVE A SPECIFIC TIMELINE, UH, FOR THE THOROUGH EVALUATION OTHER THAN THE TIMELINE THAT WE'RE ON FOR THE COMPREHENSIVE REVIEW OF THE BONUS PROGRAMS. AND I BELIEVE THAT THAT IS SCOPED, UH, FOR MOST OF THE REMAINDER OF THIS CALENDAR YEAR WITH THE POTENTIAL TO COME BACK TO COUNCIL WITH RECOMMENDATIONS AND POTENTIAL INITIATION FROM THOSE, FROM THAT STUDY, UH, IN THE LATE FALL OR EARLY WINTER.

AND SO OF COURSE, IF THEY'RE A LOW HANGING FRUIT AND WE REALIZE A GREAT APPROACH THAT COULD BE, YOU KNOW, READY FOR STAKEHOLDER DISCUSSION AND POTENTIAL COUNCIL REVIEW EARLIER THAN THAT, YOU KNOW, BEFORE THE THOROUGH COMPREHENSIVE ANALYSIS IS COMPLETE, WE COULD PROPOSE THAT FOR INITIATION BECAUSE WE WERE ALSO THE SPRING, UH, DEVELOPING THE ETOD OVERLAY, WHICH HAS, UH, SO WE'LL BE THINKING ABOUT SIMILAR TYPES OF THINGS.

UH, AND WE'LL ALSO, YOU KNOW, IN ADDITION TO THE WORK ON THE COMPREHENSIVE DENSITY BONUS PROGRAMS, UM, YOU KNOW, THREAT FOR THE REMAINDER OF THE YEAR.

AND SO I GUESS THAT WOULD BE KIND OF THE LONGEST ENVISION TIMELINE NOW IS, YOU KNOW, THAT COMPREHENSIVE REVIEW THAT GOES THROUGH THE END OF THE YEAR.

BUT IF THERE'S A CLEAR PATH BEFORE THAT, UH, WE WOULD BE HAPPY TO BRING IT FORWARD FOR COMMITTEE YEAR, FOR COUNCIL CONSIDERATION.

BUT UNDER THIS CURRENT PLAN, IF, IF WE ADOPT THESE ITEMS ON THURSDAY, A PROPERTY THAT FALLS IN THOSE CATEGORIES WOULD BE ABLE TO DEVELOP UNDER THESE RULES WITH NO EXTRA ATTENTION TO THE PROPERTIES IF, UH, INCOME RESTRICTED, CURRENT INCOME RESTRICTED OR CURRENT, UM, MARKET RATE, LOW INCOME HOUSING.

UH, IF IT, UH, IF COUNCIL APPLIES THE DB 90 DISTRICT TO THE PROPERTY, YES.

THE AFFORDABILITY PROGRAMS TOO DIFFICULT IS THAT THEY COULD JUST ASK FOR MS ZONING THAT HAS NO AFFORDABILITY AND NO REQUIREMENT, YOU KNOW, SO I, I JUST WANNA BE CAREFUL ABOUT, YOU KNOW, TRYING TO KIND OF GET TOO MUCH, AND THEN THE DEVELOPERS WOULD BE THAT, YOU KNOW WHAT, WE'RE JUST GONNA GO WITH THE BASE ZONING AND WE'RE GONNA CHANGE OUR PROJECT, AND THEN WE LOSE THE, YOU KNOW, 10, 20, HOWEVER MANY AFFORDABLE UNITS THAT WE WOULD GET, UH, OTHERWISE.

IT WOULD BE ABLE TO DEVELOP WITHOUT MEETING THE REQUIREMENTS.

AND I, AND I JUST REMIND US ALL THAT THE POINT OF THIS EXERCISE WAS TO, UM, REESTABLISH THE MU TWO, WHICH WE HAD PASSED WITH GOOD SUPPORT PREVIOUSLY, AND THE DIRECTION TO STAFF WAS TO BRING THAT BACK SO THAT WE COULD APPROVE IT A SECOND TIME UNDER THE CIRCUMSTANCES, UH, GIVEN THE CIRCUMSTANCES OF THE LAWSUIT.

COUNCIL MEMBER VALLA, I JUST WANTED TO MENTION, WE'RE WORKING ON, ON, UH, SOME AMENDMENTS, UH, ON THE DB 90.

AND, UH, ONE OF THEM IS, IS ACTUALLY A PROVISION THAT'S CURRENTLY IN THE, UH, UH, UH, THE CRESTVIEW STATION, UH, UH, MASTER PLAN, THE, THE REGULATING PLAN, WHEREBY THERE'S A PROVISION IN THERE SAYING THAT YOU HAVE TO PROVIDE 10%, UH, AFFORDABLE UNITS, BUT THE CITY CAN BASICALLY BUY DOWN ADDITIONAL AFFORDABILITY WITHIN THE, UH, CRESTVIEW, UH, AREA.

AND WE, THAT'S A, IT'S A REALLY INTERESTING PROVISION.

I DON'T THINK IT'S ONE THAT WE'VE ACTUALLY USED.

IT'S IN THERE, BUT IT, IT HASN'T BEEN ACTUALLY USED BY THE CITY, BUT I WANT TO TRY AND INCORPORATE SOMETHING LIKE THAT INTO THESE OTHER PROGRAMS THAT ARE COMING DOWN THE ROAD SO THAT, UH, WE CAN POTENTIALLY THROUGH, UH, A TIFF OR A TURS OR SOMETHING LIKE THAT, UH, POTENTIALLY REINVEST SOME MONEY INTO AFFORDABILITY, YOU KNOW, ALONG, UH, THESE AREAS OR IN, IN SPECIFIC PROJECTS.

SO WE'RE NOT QUITE A, A, A VARIANT, WE'RE, WE'RE STILL KIND OF DRAFTING AND, AND, AND WORKING ON IT.

UH, BUT I JUST WANTED TO, TO MENTION THAT AGAIN, THE GOAL BEING AFFORDABILITY.

I, I, I, YOU KNOW, AND I JUST WANNA MENTION THAT ALSO WHAT MY CONCERN WOULD BE IN MAKING

[00:20:01]

SO I DO THINK WE HAVE TO BE VERY CAREFUL ABOUT THE CALIBRATIONS ON THOSE, UH, AFFORDABILITY PROGRAMS. THANK YOU.

UH, COUNCIL MEMBER RYAN ALTER, JUST A QUICK FOLLOW UP QUESTION ON WHAT COUNCILMAN ALLISON ALTER IS ASKING IF, IF THIS PASSES AND SOMEONE CURRENTLY HAS THE, THEY'RE PLANNING ON USING VMU TWO, THEY CAN'T JUST CONTINUE ON THEIR PATH, RIGHT? THEY NEED TO GO GET A REZONED, HOPEFULLY THROUGH A, UH, SPEEDIER PROCESS THAT MS. HARDIN TALKED ABOUT AT OUR PREVIOUS MEETING.

BUT, BUT THERE WILL STILL BE AN APPLICATION POTENTIAL FOR, UH, THE NEIGHBORS TO PROTEST ALL, ALL THOSE, SO THAT IT'S NOT JUST LIKE A OVERNIGHT DEAL THERE, THERE'LL STILL BE A PROCESS INVOLVED.

THAT IS CORRECT.

UH, THE ORDINANCE WOULD HAVE CITY INITIATION OF THE REZONING, WHICH IN THIS CASE MEANS A WAIVING OF FEES FOR PROJECTS THAT MEET CERTAIN PARAMETERS, BASICALLY, THAT WERE IN THE PIPELINE OF ATTEMPTING TO USE VM U2 OR ONE OF THE OTHER INVALIDATED PROGRAMS. BUT IT WOULD REQUIRE AN APPLICANT APPLICATION, UH, THE STAFF REVIEW AND THE TRADITIONAL NOTIFICATION PROCESS PLANNING, COMMISSION HEARING AT COUNCIL HEARING.

THANK YOU VERY MUCH.

COUNCIL MEMBER, UH, KARE, UH, THANK YOU.

UH, JUST A QUICK QUESTION FOR CLARIFICATION'S SAKE, UH, RELATED TO THE RIGHT OF RETURN POLICY.

IT'S A, IT'S A GREAT POLICY, BUT, UH, I UNDERSTAND IT'S D DB 90 WOULD NOT APPLY TO THAT, IS THAT CORRECT? UH, THE CURRENT STAFF RECOMMENDATION, YEAH, THE UPDATED STAFF ORDINANCE WOULD NOT, UH, WITHOUT THE REDEVELOPMENT REQUIREMENTS, WOULD NOT HAVE A RIGHT TO RETURN PROVISION.

COUNCIL MEMBER ALLISON ALTER.

CAN YOU CLARIFY, UM, WHETHER THE PROPERTIES THAT WOULD BE ELIGIBLE TO COME IN AND APPLY FOR DB 90 ARE THE SAME PROPERTIES THAT WERE ELIGIBLE FOR VM U2 OR, OR IS IT A WIDER UNIVERSE? THERE IS A LITTLE BIT OF NUANCE TO THAT, AND I WILL LEAN ON JOY HARDEN TO DESCRIBE THE DIFFERENCE IN HOW VM U2 WAS APPLIED JUST PREVIOUSLY TO ITS INVALIDATION.

AND JUST TO CLARIFY, I'M REALLY INTERESTED TO UNDERSTAND WHETHER THE UNIVERSE OF PROPERTIES IS DIFFERENT THAT CAN APPLY FOR, FOR DB 90 THAN VERSUS VM U2.

UH, JOY HARDIN ZONING OFFICE IN THE PLANNING DEPARTMENT, EXCUSE ME, COUNCIL MEMBER AL ALTER.

UM, SO THE CODE ALLOWS PROPERTIES TO APPLY WHAT THE CODE HAD WAS CORE TRANSIT QUARTERS AND FUTURE CORE TRANSIT QUARTERS IN THE CODE WHERE YOU COULD APPLY.

NOW, IF YOU HAVE CERTAIN COMMERCIAL OFFICE ZONING DISTRICTS, NO MATTER WHAT STREET TYPE YOU'RE ON, YOU CAN APPLY FOR, UH, DP 90.

SO THAT'S THE MAIN DIFFERENCE.

IF YOU HAVE OFFICE LO, UM, GEO AND THEN COMMERCIAL DISTRICT ZONINGS, THEN YOU COULD APPLY WHAT, NO MATTER WHAT STREET, OF COURSE, IT GOES THROUGH THE STANDARD ZONING PROCESS AND IT GOES TO THE POLITICAL COMMISSION AND THEN COUNCIL.

BUT, UM, THE MAIN DIFFERENCE IS REGARDLESS OF STREET, UM, OF COURSE TYPICALLY NOT A LOCAL STREET OR RESIDENTIAL STREET, BUT REGARDLESS OF STREET, IF YOU HAVE CERTAIN OFFICE OR COMMERCIAL ZONINGS, YOU CAN APPLY FOR DB 90, AND THAT'S THE MAIN DIFFERENCE.

UM, DOESN'T MEAN YOU GET 90 FEET IF YOU'RE NOT.

SO IT'S AN ADDITIONAL 30 FEET, UM, TO THE BASE ZONING DISTRICT.

YOU MAY NOT BE ABLE TO ACHIEVE THAT 30 FEET FOR OTHER REASONS.

UM, AND IF YOUR BASE ZONING DISTRICT DOESN'T ALLOW, LET'S SAY LR IS 40 FEET, SO IF YOU GOT THE ADDITIONAL 30 FEET, YOU'D HAVE A 70 FOOT MAXIMUM HEIGHT, 70 FEET OF MAXIMUM HEIGHT INSTEAD OF 90.

SO IT'S A 30 FOOT BONUS TO YOUR BASE ZONING DISTRICT.

DO WE HAVE ANY KIND OF MAP OF THE ELIGIBLE PROPERTIES THAT CAN APPLY? I'M NOT SURE.

MAYBE WE COULD MAKE ONE.

UM, THAT WOULD BE HELPFUL IF IT'S POSSIBLE TO SEE THE AREAS WHERE THERE ARE OFFICE.

AND I JUST WANNA REMIND PEOPLE, UM, IF SOMEONE HAD, I THINK THIS CAME UP, IF SOMEONE, UM, MAYBE COUNCIL MEMBER VELA, SOMEONE COULD HAVE A MULTIFAMILY, A LOWER LEVEL MULTIFAMILY AND DECIDE TO REZONE TO LO TO DO DB 90 OR AN OFFICE.

SO I JUST WANNA REMIND, AND WE SEE THAT EVEN NOW, THAT JUST BECAUSE YOU DON'T HAVE AN OFFICE OR COMMERCIAL ZONING DOESN'T MEAN YOU CAN'T REZONE TO THAT

[00:25:01]

TO ALLOW THE DB 90.

DOES THAT MAKE SENSE? YOU COULD HAVE A MULTIFAMILY OR, UM, UH, SF SIX CLASSIFICATION ORDER.

SO MAYBE THE ELIGIBILITY CRITERIA THAT I'M, THAT MAPPED DOESN'T MAKE SENSE.

I JUST WANNA EXPAND THE UNIVERSE.

YEAH, NO, THAT'S, THAT'S, IT WOULD SHOW YOU WHAT WE HAVE NOW, BUT I MEAN, THIS HAPPENS NOW, EVEN UNDER THE VM U2 AND THE V YOU SEE RESIDENTIAL PROPERTIES WANT THE ADDITIONAL HEIGHT, AND, AND IT DOES REQUIRE THE AFFORDABILITY AS COUNCIL MEMBER VELA SAID, AND THE COUNCIL HAS APPROVED MOST OF THESE BECAUSE NOW IF THEY BILL TO THE EXTRA HEIGHT, THEY WOULD HAVE TO DO THE AFFORDABLE UNITS.

SO IF YOU HAD AN MF THREE PROPERTY AND YOU REZONED, SO THAT WOULDN'T JUST GIVE YOU THE FULL UNIVERSE OF, OF PROPERTIES.

LOOKS LIKE WE HAVE ADDRESSED THE QUESTIONS.

UM, THANK YOU STAFF FOR BRINGING ALL OF THIS GOOD INFORMATION, THE NEW VERSION AND THE CONTEXT.

SO ONTO THE

[B1. Austin Water forward update: Reuse Plan]

BRIEFINGS, CITY MANAGER.

AS A WAY TO OFFSET POTABLE WATER USE.

THE FIRST ITEM IS THE, UH, WATER FORWARD UPDATE, UH, REUSE PLAN.

AND SHAY ROLLS IS HERE TO MAKE THAT PRESENTATION AND ANSWER YOUR QUESTIONS.

GOOD MORNING, MAYOR PORTER, COUNCIL MEMBERS, I'M SHAY RAWLS ROLSON, THE DIRECTOR OF AUSTIN WATER, AND WE'RE HERE TODAY TO TALK ABOUT A NUMBER OF, UM, ITEMS COMING BEFORE YOU ON MARCH 7TH RELATED TO MOVING, UH, OUR WATER FORWARD PLAN FORWARD, UH, PARTICULARLY RELATED TO OUR STRATEGIES FOR REUSE AND RECLAIMED WATER.

SO TODAY, UM, I'LL START WITH A BRIEF OVERVIEW OF WHAT WATER FORWARD IS, JUST TO MAKE SURE WE'RE ALL JUMPING OFF FROM THE SAME POINT.

UM, TALK ABOUT OUR, OUR SHORT AND LONG-TERM REUSE STRATEGIES.

UM, WE'VE DONE QUITE A BIT OF WORK, UH, ON THESE STRATEGIES TO ADDRESS AFFORDABILITY.

SO WE'LL REVIEW THAT, AND THEN WE'LL TALK ABOUT OUR KEY, UH, 2024 ACTIVITIES.

UM, AND THAT'S MOSTLY AROUND, UH, MARCH 7TH NEXT WEEK.

UM, SO WATER FORWARD IS OUR 100 YEAR INTEGRATED WATER RESOURCE PLAN.

IT WAS UNANIMOUSLY ADOPTED BY COUNCIL IN NOVEMBER OF 2018.

IT HAS A NUMBER OF DIVERSE AND ENVIRONMENTALLY CONSCIOUS WATER MANAGEMENT STRATEGIES, PARTICULARLY FOCUSED AROUND ADAPTING TO GROWTH, DROUGHT, AND CLIMATE CHANGE.

UM, AND WE DEVELOPED THIS PLAN IN CONJUNCTION WITH OUR WATER FORWARD TASK FORCE, WHICH IS, UM, UH, COUNCIL APPOINTED TASK FORCE THAT WE HAVE BEEN WORKING WITH, UM, FOR, UH, CLOSE TO 10 YEARS.

AND I WANNA THANK OUR, UH, THE CHAIR OF THE WATER FORWARD TASK FORCE, JENNIFER WALKER, WHO'S HERE WITH US TODAY.

UH, WE APPRECIATE THEIR GUIDANCE AND SUPPORT.

SO, UH, A LITTLE BIT ABOUT WHERE AUSTIN'S WATER COMES FROM.

WE GET ALL OF OUR DRINKING WATER FROM THE COLORADO RIVER.

UM, WE HAVE THREE WATER TREATMENT PLANTS THAT TAKE WATER FROM, UH, LAKES, AUSTIN AND TRAVIS.

UH, WE HAVE VERY OLD, UH, SENIOR WATER RIGHTS TO THE RUN OF RIVER RIGHTS, IS WHAT THAT'S CALLED.

UM, PLUS CONTRACTS WITH THE LOWER COLORADO RIVER AUTHORITY FOR STORED WATER IN THE LAKES THAT GIVES US RIGHTS TO UP TO 325,000 ACRE FEET PER YEAR, UH, BACK IN 1999.

SO RIGHT AT 25 YEARS AGO, WE RECOGNIZED A NEED TO SHORE UP THOSE RIGHTS, AND WE ENTERED INTO A CONTRACT WITH LCRA, UH, FOR ADDITIONAL, UM, WATER.

AND WE PAID A HUNDRED MILLION DOLLARS UPFRONT AT THAT TIME.

UM, NOW USE FEES WILL GO INTO EFFECT ONCE OUR AVERAGE USE, UM, FOR TWO CONSECUTIVE YEARS EXCEEDS 201,000 ACRE FEET.

SO, UH, BACK IN 1999, WE THOUGHT WE WOULD REACH THAT TRIGGER BETWEEN, UM, YOU KNOW, AROUND 2015 TO 2020.

BUT THANKS TO OUR COMMUNITIES, UH, REAL EFFORTS ON CONSERVATIONS THE THINGS THAT WE ARE ALL DOING IN OUR HOMES EVERY DAY, UH, OUR WATER USE LAST YEAR WAS 175,000 ACRE FEET.

UM, AND SO THE NEXT, UH, YOU KNOW, WE'VE REDUCED OUR DEMAND QUITE A BIT.

UM, OUR NEXT OPPORTUNITY FOR REALLY KEEPING THAT TRIGGER, UH, PUSHING THAT TRIGGER OFF IN TIME IS OUR RECLAIMED AND REUSE WATER STRATEGIES.

SO WHEN WE TALK ABOUT OUR CENTRALIZED RECLAIMED SYSTEM, WE'RE TALKING ABOUT HIGHLY TREATED EFFLUENT FROM OUR WASTEWATER TREATMENT PLANTS, UM, THAT IS PUMPED BACK UP INTO THE CORE OF OUR SERVICE AREA FOR USE FOR NON-POTABLE WATER USES.

UM, THE REMAINDER OF THAT WATER THAT WE COLLECT FROM OUR CUSTOMERS, UM, THAT GETS TREATED AT OUR WASTEWATER PLANTS IS DISCHARGED TO THE COLORADO RIVER.

SO WE'RE REALLY TALKING ABOUT THE WATER THAT GETS BY US, UH, CATCHING THAT AND REUSING THAT, UH,

[00:30:01]

SO OUR WATER FORWARD GUIDING PRINCIPLES, UM, IT'S AN ADAPTIVE MANAGEMENT PLAN, AS I MENTIONED, IT'S UPDATED ON A FIVE YEAR CYCLE.

UH, WE ARE WORKING ON THE NEXT UPDATE NOW, WHICH WILL COME FORWARD FOR COUNCIL APPROVAL, UH, AT THE END OF THIS YEAR.

AND WE'RE REALLY FOCUSED ON, UM, RESILIENCY, UH, INCLUSIVITY, OUR COMMUNITY VALUES, HAVING A DIVERSE SET OF TOOLS IN OUR TOOLBOX, EQUITY AND AFFORDABILITY, WHICH WE'LL TALK MORE ABOUT TODAY.

UM, CLEARLY WE NEED TO PROTECT THE COLORADO RIVER.

WE NEED TO REDUCE OUR OPERATIONAL RISKS, AND WE FOCUS ON OUR LOCAL SUPPLIES.

AND IF, IF THOSE, UH, TOP LINE, UM, UH, GUIDING PRINCIPLES LOOK FAMILIAR, WE'RE VERY WELL INTEGRATED WITH THE OTHER STRATEGIC PLANS, UM, WITHIN THE CITY.

SO, UH, THE CLIMATE EQUITY PLAN, THE STRATEGIC MOBILITY PLAN, UH, WATERSHED PROTECTION DEPARTMENT'S, RAIN TO RIVER STRATEGIC PLAN, AUSTIN ENERGIES, AUSTIN RESOURCE RECOVERY, UH, ALL OF THESE PLANS ARE VERY WELL INTEGRATED, AND THEY'RE BALANCED ON THE THREE LEGGED STOOL OF ENVIRONMENTAL SUSTAINABILITY AND CLIMATE EQUITY, AFFORDABILITY, AND RELIABILITY AND RESILIENCY.

SO WHAT WE ARE REALLY TALKING ABOUT WHEN WE TALK ABOUT AN ADAPTIVE PLAN IS PLANNING FOR UNCERTAINTY.

WE KNOW THAT AUSTIN IS GROWING.

WE DON'T KNOW EXACTLY WHERE AND WHEN THAT GROWTH WILL HAPPEN.

WE KNOW OUR CLIMATE IS CHANGING.

WE DON'T KNOW EXACTLY WHAT THAT'S GONNA LOOK LIKE IN A HUNDRED YEARS.

AND SO WHAT WE DO IS WE DEVELOP A RANGE OF STRATEGIES THAT WORK FOR AS MANY POSSIBLE OUTCOMES AS POSSIBLE, AND THEN WE REVISIT THAT ON A, ON A REGULAR RECURRING BASIS.

UM, SO THAT OUR PLAN IS, IS ADAPTIVE TO CHANGING CONDITIONS.

UM, AND THAT THOSE CHANGING CONDITIONS ARE HERE NOW, UH, WE CAN LOOK AT, UM, THE COMBINED STORAGE OF OUR WATER SUPPLY LAKES, WHICH ARE LAKES, BUCHANAN, AND TRAVIS.

UM, AND THE, UH, THIS IS THE FULL TIME PERIOD SINCE THE DAMS WERE BUILT.

UM, YOU CAN SEE BACK IN THE FIFTIES, A SIGNIFICANT DROUGHT, UM, FOR A LONG, LONG TIME, MOST OF MY CAREER, UH, THAT WAS OUR DROUGHT OF RECORD.

IT WAS THE, IT WAS A PART OF THE LORE OF THE, OF CENTRAL TEXAS AND IN THE WATER SUPPLY PLANNING BUSINESS, UM, THAT WE PLANNED FOR A REPEAT OF, OF THE DROUGHT OF RECORD, WHICH WAS THE DROUGHT OF THE FIFTIES.

UH, AND THEN WE HAD A LONG PERIOD OF, OF, OF RELATIVELY STABLE HYDROLOGIC CONDITIONS WHERE THE LAKES WOULD FALL, BUT THEN THEY WOULD RISE AGAIN UNTIL WE GOT INTO 2008 TO 2016.

UH, AND YOU CAN SEE THAT THAT'S, IT'S DEEPER, IT'S LONGER.

UM, AND, AND SO WE ARE, WE ARE COMING INTO A PERIOD OF HIGH VARIABILITY, AND WE NEED TO HAVE PLANS THAT NOT ONLY PROVIDE FOR OUR NEEDS AS A GROWING COMMUNITY, BUT HELP US BRIDGE THESE TIMES OF DEEP DROUGHT AND DEEP UNCERTAINTY.

SO WHEN WE THINK ABOUT OUR COLLECTION OF WATER FORWARD STRATEGIES, THERE'S ABOUT 18 TO 20 OF 'EM.

I'M GONNA WORK FROM THE RIGHT TO THE LEFT.

PARTNERSHIPS.

WE'RE TALKING ABOUT OUR PARTNERSHIPS WITH LOWER COLORADO RIVER AUTHORITY.

WE'RE TALKING ABOUT OUR PARTICIPATION IN THE REGION.

K UM, UH, REGION OF THE STATE WATER PLANNING PROCESS.

WHEN WE TALK ABOUT SUPPLY, I MENTIONED THAT WE GET ALL OF OUR WATER FROM THE COLORADO RIVER.

SO WE'RE LOOKING AT WHAT ARE OUR ALTERNATIVES TO SUPPLY FOR THE FUTURE CONSERVATION.

I MENTIONED HOW MUCH VALUE WE HAVE GOTTEN OUT OF THE DEMAND SIDE OF THIS EQUATION, REDUCING OUR DEMAND THAT HELPS EXTEND OUR SUPPLY, EXISTING SUPPLIES.

AND THEN REUSE IS REALLY A SWITCH HITTER FOR US.

SO IT'S A NEW SUPPLY BECAUSE IT'S ADDITIONAL MOLECULES OF WATER THAT WOULD OTHERWISE FLOW DOWN THE COLORADO RIVER, AND WE CAPTURE THAT AND REUSE IT.

UM, BUT IT'S ALSO A SUPPLY STRIDE STRATEGY, BECAUSE EVERY DROP OF RECLAIMED OR REUSE WATER THAT WE USE IS A DROP OF POTABLE WATER WE DON'T NEED.

SO THAT REALLY UNDERSCORES THE VALUE TO US OF REUSE.

AND WHEN WE THINK ABOUT WHY WE'RE SO FOCUSED ON THIS, RIGHT, RIGHT NOW, YOU KNOW, WHEN WE SIGNED THAT DEAL WITH LCRA IN 19 99, 25 YEARS AGO, UM, THIS IS WHAT YOU, ON THE LEFT IS WHAT YOU SAW IF YOU WERE OUT PADDLING ON TOWN LAKE.

UM, AND OF COURSE, ON THE RIGHT IS WHAT YOU SEE TODAY FROM, FROM LADY BIRD LAKE.

UH, AND SO WHO KNOWS WHAT OUR COMMUNITY WILL LOOK LIKE 25 YEARS FROM NOW.

UH, AND SO WE NEED ALL THE STRATEGIES WE HAVE TO GET READY FOR THAT.

UM, AND SO WHEN WE TALK ABOUT, UH, FINANCIAL VALUE OF REUSE, UM, OUR ESTIMATE IS THAT EVERY YEAR WE PUSH OFF THAT TRIGGER, UM, FOR THE USE PAYMENTS TO LCA IS WORTH ABOUT $10 MILLION A YEAR TO US.

SO, UM, THAT'S REAL MONEY.

SO THIS IS NOT NEW WORK.

WE'VE BEEN WORKING ON THE, THE RECLAIM SYSTEM SINCE THE MID NINETIES.

UM, WE HAVE, UH, BEEN WORKING ON ONSITE WATER REUSE SYSTEMS. WE, AUSTIN WATER AND THE CITY OF AUSTIN, UH, OTHER DEPARTMENTS HAVE BEEN LEADING THE WAY IN THIS.

WE HAVE ONSITE WATER REUSE SYSTEMS IN USE AT THE CENTRAL LIBRARY.

WE HAVE BOTH, UM, ONSITE, UH, STORMWATER, RAINWATER,

[00:35:01]

CONDENSATE, AS WELL AS BLACKWATER TREATMENT AND REUSE AT THE PERMITTING AND DEVELOPMENT CENTER.

UH, AE HEADQUARTERS FLUSHES THEIR TOILETS WITH RECLAIMED WATER, UM, AS WELL AS A NUMBER OF OTHER DEVELOPMENTS.

SO I WANNA EXPRESS MY GRATITUDE TO THE OTHER, UH, DEPARTMENTS IN THE CITY THAT HAVE BEEN REAL PARTNERS WITH US IN DEMONSTRATING THAT THESE SYSTEMS WORK.

UH, YOU MAY BE WONDERING, UM, WHY PURPLE? UM, WE'RE, WE, WE TALK, WE'RE TALKING ABOUT PURPLE PIPE DAY, AND EVERY, EVERY ICON YOU SEE THAT HAS RECLAIMED WATER IS PURPLE.

AND THAT IS BECAUSE, UH, A VERY MUNDANE REASON.

WE HAVE A COLOR CODE IN THE WATER INDUSTRY AND RECLAIMED WATER AS PURPLE.

AND SO ANYTIME YOU SEE A PURPLE PIPE OUT IN THE WILD, THAT IS RECLAIMED WATER.

SO, UM, IN TERMS OF, UH, COUNCIL ACTIONS, UH, PRIOR, BACK IN 2021, UM, WE, UH, IMP YOU ALL IMPLEMENTED, UM, A NUMBER OF ORDINANCES THAT SET THE FRAMEWORK FOR ONSITE WATER REUSE SYSTEMS, UH, AS WELL AS A NEW, UM, A VOLUNTARY CONNECTION INCENTIVE THAT, UH, HAS BEEN IN PLACE SINCE THEN.

AND THEN SET A TIMELINE THAT WE WOULD BEGIN TO, UH, MAKE THESE REQUIREMENTS, UM, MANDATORY BEGINNING IN THIS, IN THIS TIMEFRAME NOW.

UM, AND THEN, UH, ON THE CONSERVATION SIDE, WE'VE BEEN DOING WATER BENCHMARKING.

SO THIS IS WHERE NEW DEVELOPMENTS COME IN AND THEY PREPARE A SPREADSHEET OF WHAT ARE THEIR WATER NEEDS AND HOW CAN THEY OFFSET THOSE NEEDS WITH REUSE AND RECLAIMED WATER.

AND THAT IS GIVING US A LOT OF REALLY GOOD DATA ABOUT HOW WE CAN PUSH WATER REUSE FORWARD.

UM, A LITTLE BIT ABOUT THE CENTRALIZED RECLAIMED SYSTEM, BECAUSE AUSTIN WATER AND THE CITY OF AUSTIN HAVE MADE SIGNIFICANT INVESTMENTS IN THE CENTRALIZED SYSTEM, UM, BEGINNING WITH THE, UH, WATER, UH, RECLAIMED WATER INITIATIVE, UH, AT THE WALNUT CREEK WASTEWATER PLANT BACK IN THE MID NINETIES.

UM, THE, THE MONEY DOESN'T QUITE LINE UP WITH THE YEARS.

THAT'S JUST TO GIVE YOU AN IDEA ON THE LEFT, A HUNDRED MILLION DOLLARS, THAT'S HOW MUCH THAT'S COMPLETED.

PROJECTS A PIPE IN THE GROUND, $94 MILLION IS THE VALUE OF WORK THAT IS ONGOING RIGHT NOW.

AND THEN IN OUR PLAN, AN ADDITIONAL $203 MILLION.

SO THIS IS A TREATMENT AT OUR PLANTS.

IT'S PIPELINES, PUMP STATIONS, STORAGE TANKS, UM, AND THIS IS WHAT THE SYSTEM LOOKS LIKE TODAY.

SO THOSE PURPLE BOXES ARE, UM, THE WALNUT CREEK WASTEWATER PLANT IN THE NORTH, UM, AND THE, UH, SOUTH AUSTIN REGIONAL PLANT, UM, TO THE EAST.

AND, UH, THERE ARE, YOU CAN SEE THAT THEY, THE PIPES ARE MAKING THEIR WAY TOWARD DOWNTOWN.

UM, AND PROJECTS ARE CURRENTLY IN DESIGN AND CONSTRUCTION THAT WILL CONNECT THAT TO MAKE THAT A LOOPED SYSTEM, WHICH WILL MAKE IT A LOT MORE, UH, ROBUST IN TERMS OF CUSTOMER SERVICE.

UM, BUT YOU CAN TELL BY LOOKING AT THIS MAP, IT'LL BE A LONG TIME BEFORE WE HAVE PURPLE PIPE DOWN EVERY STREET, THE WAY WE HAVE WATER AND WASTEWATER DOWN EVERY STREET.

UH, AND SO THESE, UH, TOOLS THAT WE'RE WORKING ON NOW THAT WE'RE MOVING FORWARD WITH ASKING FOR YOUR SUPPORT, UM, ARE, ARE ABOUT, UH, INCREMENTALLY MOVING WATER REUSE FORWARD.

SO WHEN WE, UH, TALK ABOUT THE CURRENT STRATEGIES THAT ARE, UM, THAT ARE UP FOR YOUR CONSIDERATION, I WANNA START RIGHT AT THE TOP WITH AFFORDABILITY.

UM, OUR COMMUNITY IS HAVING A LOT OF CONVERSATIONS ABOUT HOUSING AFFORDABILITY, AND THAT IS TOP OF MIND FOR US AS WELL.

UM, AND SO WE HAVE, UH, REALLY PUT A LOT OF EFFORT INTO, UM, INTO INCENTIVES.

UM, BECAUSE WE RECOGNIZE THAT, THAT WE ALL, UH, THE COSTS, WE ALL, THAT THERE ARE COSTS ASSOCIATED WITH EXPANDING THE SYSTEM.

AND THERE IS A LOT OF VALUE TO AUSTIN WATER AND TO ALL OF OUR CUSTOMERS, REGARDLESS OF WHETHER YOU'RE THE ONE CONNECTING TO THE SYSTEM OR NOT, IN EXPANDING THIS RECLAIMED WATER, BECAUSE IT, BECAUSE OF ALL THE REASONS I TALKED ABOUT, HOW IT SUPPORTS OUR OVERALL WATER SUPPLY.

UM, SO WE WILL CONTINUE TO INVEST IN EXPANDING OUR CENTRALIZED RECLAIM SYSTEM.

UM, WE ARE LOOKING AT OPPORTUNITIES FOR COMMUNITY SCALE RECLAIMED, WHICH IS WHERE, UH, YOU COULD, UM, TREAT AND REUSE WATER, RIGHT? UH, RIGHT WHERE IT'S, UM, WHERE IT'S GENERATED IN A LOCAL COMMUNITY.

UM, AND THEN WE HAVE THE ONSITE, UH, WATER REUSE SYSTEMS, WHICH IS DEVELOPMENT SCALE, COLLECTION OF AIR CONDITIONING, CONDENSATE, RAINWATER, STORM WATER, UM, THAT'S THEN, UH, RECYCLED AND REUSED FOR NON-POTABLE USES LIKE IRRIGATION, COOLING TOWERS, AND TOILET FLUSHING.

SO, SO IN OUR, UH, PROPOSED TOOLBOX FOR ADDRESSING AFFORDABILITY, WE HAVE INCENTIVES AND GRANTS FOR REUSE AND CONSERVATION.

THIS IS, UH, WHERE WE WOULD FUND A PORTION OF THE, UM, OF THE PROJECT COSTS FOR IMPLEMENTING THESE SYSTEMS. UM, THERE'S SOME BUILT IN, UH, BENEFITS TO CONNECTING THE RECLAIMED.

IF YOU, UM, DON'T USE AS MUCH POTABLE WATER, YOU DON'T NEED AS BIG A WATER METER.

AND SO YOU GET A BREAK ON THE COST OF YOUR WATER METER, YOU GET A, UM, YOU PAY

[00:40:01]

LESS PER GALLON FOR RECLAIMED WATER THAN, UH, THAN YOU DO FOR POTABLE WATER.

SO THERE'S SOME BUILT IN COST SAVINGS.

THEY DON'T MAKE A, UH, THESE PROJECT COSTS A PENCIL OUT.

AND SO, UM, WE HAVE SOME ADDITIONAL PROPOSED, UH, REDUCTION IN MONTHLY FIXED CHARGES, UH, HELPING THESE DEVELOPMENTS TO GET INTO THE EXPEDITED BUILDING PERMIT REVIEW PROCESS.

UM, A LOW INTEREST LOAN PROGRAM IS ON THE DRAWING BOARD, WHICH WOULD BE, UM, FUNDED, UH, WITH SEED MONEY FROM AUSTIN WATER, BUT MANAGED THROUGH THE FINANCIAL SERVICES DEPARTMENT.

UM, AND THEN COST SHARING, UM, YOU KNOW, THAT WOULD BE WHERE WE WOULD DIRECTLY PARTICIPATE IN THESE, IN THESE PROJECTS.

UH, AND THEN THERE ARE, UH, THERE'S A STATE MANAGED PROGRAM CALLED PACE, UM, WHICH STANDS FOR PROPERTY ASSESSED CLEAN ENERGY.

AND TRAVIS COUNTY IS ONE OF THE ADMINISTRATORS OF THAT PROGRAM.

WE'VE DONE A WHITE PAPER ON HOW THAT COULD BE USED TO SUPPORT RECLAIMED AND REUSE WATER SYSTEMS, UH, IN AUSTIN.

AND SO WE'RE PREPARED TO HELP DEVELOPMENTS GO THROUGH THAT PROGRAM AS WELL.

SO ALL OF THESE AFFORDABILITY STRATEGIES, UM, REQUIRE FUNDING.

AND SO WE HAVE A NUMBER OF, UH, FUNDING STRATEGIES.

ONE IS WE CURRENTLY HAVE A COMMUNITY BENEFIT CHARGE OF 15 CENTS PER THOUSAND GALLONS THAT FUNDS OUR CUSTOMER ASSISTANCE PROGRAM FOR OUR MOST VULNERABLE CUSTOMERS.

UH, WE ARE PROPOSING TO ADD AN AN, AN ADDITIONAL 15 CENTS PER THOUSAND GALLONS THAT WOULD BE DEDICATED TO OUR RECLAIMED WATER SYSTEM EXPANSION.

UH, OUR CAP, UH, CUSTOMERS DO NOT PAY THE CBC, AND SO THIS WOULD NOT AFFECT OUR, UM, OUR MOST VULNERABLE CUSTOMERS.

UM, BUT EVERYONE ELSE WOULD PAY, UH, 15 CENTS PER THOUSAND GALLONS.

WE ESTIMATE FOR THE AVERAGE RESIDENTIAL CUSTOMER, THAT'S ABOUT A DOLLAR 47 PER MONTH.

UM, THE ANOTHER, UM, FUNDING STRATEGY IS WHAT WE'RE CALLING THE ONSITE WATER REUSE ALTERNATIVE FEE.

SO IF THERE ARE DEVELOPMENTS THAT ARE MORE THAN 500 FEET FROM THE RECLAIMED WATER SYSTEM, UH, THE CENTRALIZED SYSTEM, UM, THEN WE, THEY WOULD HAVE THE OPTION TO DUAL PLUMB THEIR BUILDING, UH, MAY, UH, IF THEY HAVE MULTIFAMILY, UH, MAKE READY FOR CENTRALIZED RECLAIMED WATER.

UM, BUT RATHER THAN BUILDING THE ONSITE WATER REUSE SYSTEM, PAY A FEE IN LIEU OF THAT.

AND SO WE'RE WORKING THROUGH THE DETAILS ON THAT.

AGAIN, THAT'S, UM, PROPOSED TO APPLY TO MULTI-FAMILY DEVELOPMENTS.

UM, AND ON THE OTHER HAND, WE ARE ALSO PROVIDING INCENTIVES TO HELP THEM PAY FOR THOSE SYSTEMS. SO WE, WE HOPE THEY WILL CHOOSE THAT OPTION INSTEAD, BUT WE WANT TO HAVE ALL THE TOOLS IN OUR, IN OUR TOOLBOX.

UM, WE'RE ALSO LOOKING AT PURPLE CHOICE AND PURPLE CHOICE PLUS, WHICH IS A VOLUNTARY RATE PROGRAM DESIGNED AFTER AUSTIN ENERGY'S GREEN CHOICE.

UM, FOR THOSE OF YOU WHO ARE FAMILIAR WITH THAT ONE, UH, AND AGAIN, THAT WOULD BE JUST A WAY FOR THOSE IN OUR COMMUNITY WHO REALLY WANNA SUPPORT THIS WORK, COULD SIGN UP TO PAY THIS VOLUNTARY, UH, RATE, AND THAT MONEY WOULD BE DEDICATED TO EXPANDING THE RECLAIM SYSTEM.

AND THEN AT SOME POINT IN THE FUTURE, UH, WE'RE LOOKING AT EXCESS USAGE FEES.

I TALKED ABOUT THE WATER BENCHMARKING, UH, WHERE DEVELOPMENTS LOOK AT HOW MUCH WATER THEY NEED.

UM, IN THE FUTURE, THAT COULD BECOME A BUDGET, UH, WHERE WE WOULD THEN, UM, APPLY EXCESS USAGE FEES IF THEY EXCEED THAT BUDGET.

UH, THE MORE YOU USE THE HIGHER TIER RATE YOU GET INTO, WE DON'T REALLY HAVE A COROLLARY TO THAT ON THE COMMERCIAL SIDE.

SO THIS WOULD MOVE US CLOSER TO SOMETHING SIMILAR TO WHAT WE DO ON THE RESIDENTIAL SIDE.

SO, UM, A SUMMARY OF WHAT THESE REQUIREMENTS LOOK LIKE BY DEVELOPMENT SIZE.

UH, FOR SMALL DEVELOPMENTS UNDER 250,000 SQUARE FEET, UM, THEY ARE CURRENTLY REQUIRED TO CONNECT TO THE RECLAIMED SYSTEM.

IF THEY'RE WITHIN 250 FEET.

THERE'S NO CHANGE PROPOSED FOR SMALL DEVELOPMENTS, FOR LARGE DEVELOPMENTS THAT DO NOT HAVE MULTIFAMILY, UM, THEY'RE CURRENTLY REQUIRED TO CONNECT WITHIN 500 FEET TO THE CENTRALIZED SYSTEM.

UM, GOING FORWARD, THEY'LL BE REQUIRED, UM, UH, TO CONNECT WITH HIM 500 FEET OR INSTALL AN ONSITE WATER REUSE SYSTEM AND USE IT FOR, UH, USES LIKE TOILET FLUSHING, WHICH REQUIRES DUAL PLUMBING.

AND THEN FOR LARGE DEVELOPMENTS THAT DO HAVE A MULTI-FAMILY, UM, IT WOULD BE THE SAME REQUIREMENTS AS WITHOUT MULTIFAMILY, UM, EXCEPT THAT THEY WOULD HAVE THE OPTION TO PAY A FEE, AN ALTERNATIVE FEE, INSTEAD OF BUILDING THE ONSITE WATER REUSE SYSTEM.

AND I'LL NOTE THAT, UH, WE ARE RECOMMENDING THAT, UH, PROJECTS THAT ARE, UH, THAT QUALIFY FOR THE CITY'S AFFORDABILITY UNLOCKED OR STATE LOW INCOME HOUSING TAX CREDIT WOULD BE EXEMPTED FROM THESE REQUIREMENTS.

BUT AGAIN, THEY WOULD BE ELIGIBLE FOR OUR INCENTIVE PROGRAM.

SO WE HOPE TO HELP MAKE IT FEASIBLE FOR ALL OF THESE DEVELOPMENTS TO IMPLEMENT THESE WATER SAVING, UM, STRATEGIES.

SO THAT BRINGS ME TO,

[00:45:01]

UM, UH, MARCH 7TH.

SO THAT'S NEXT THURSDAY.

WE WILL HAVE, UH, FOUR ITEMS ON THE AGENDA FOR YOU THAT SUPPORT THESE INITIATIVES.

UM, AND, AND THEN, UH, UH, AS WELL AS, UH, AN INTERLOCAL AGREEMENT WITH TRAVIS COUNTY, WHICH IS A GREAT EXAMPLE OF HOW WE'RE PARTNERING, UM, TO BRING RECLAIMED WATER TO NEW DEVELOPMENTS.

THE TRAVIS COUNTY COURTHOUSE, UH, DOWNTOWN IS ALREADY DUAL PLUMBED.

THEY'RE JUST WAITING FOR US TO GET THERE.

AND SO WE'VE WORKED OUT A COST SHARING AGREEMENT TO GET CENTRALIZED RECLAIMED WATER TO THEM FASTER.

UM, AND THEN IN AUGUST, UH, WE WILL HAVE ADDITIONAL RATES AND INCENTIVES THAT WILL BE A PART OF OUR BUDGET ADOPTION.

BUT EVERYTHING THAT I'VE TALKED ABOUT TODAY IS WRAPPED INTO THOSE, UM, COUNCIL ITEMS THAT ARE ON YOUR AGENDA FOR NEXT WEEK.

AND WITH THAT, I'M HAPPY TO TAKE ANY QUESTIONS.

THANK YOU SO MUCH.

UH, DIRECTOR, COUPLE OF QUESTIONS AND THEN I'LL SEE, UM, WHO ELSE ON THE DA HAS SOME QUESTIONS? CAN YOU TELL US HOW MANY GALLONS OF POTABLE WATER, UM, WILL BE SAVED BY THIS PROJECT? UH, ON A DAILY BASIS, UM, WE ESTIMATE THAT WE'LL SAVE MORE THAN 10 MILLION GALLONS OF POT WATER, UM, BY 2040, UM, AS WELL AS, AS I MENTIONED, PUTTING OFF THE $10 MILLION A YEAR THAT WE WOULD PAY TO LCRA, UM, UH, ONCE WE HIT THE TRIGGER OF WATER USE.

SO, AND HOW DOES DELAYING THE PAYMENT TRIGGER TO LCRA BENEFIT OUR CUSTOMERS? YES, .

UM, UH, IT'S PRIMARILY A FINANCIAL BENEFIT.

UM, UH, AS WELL AS, AS WE LOOKED AT WITH THE, UM, THE UNCERTAINTY IN, IN THE LAKE LEVELS.

UM, IT GIVES US MORE PEACE OF MIND, UH, THAT WE CAN BRIDGE THOSE DEEP DROUGHTS.

YOU MENTIONED GO PURPLES, TIE TO, UH, WATER FORWARD.

CAN YOU DESCRIBE THE OVERALL WATER FORWARD PROCESS ITS DEVELOPMENT, AND HOW AUSTIN WATER HAS RECEIVED STAKEHOLDER FEEDBACK? SURE.

UM, SO, UH, WATER FORWARD IS, AS I MENTIONED, AS OUR A HUNDRED YEAR WATER RESOURCES PLAN.

AND WE BEGAN IT, UM, MANY YEARS AGO, AND OF COURSE, IT WAS ADOPTED BY CITY COUNCIL IN 2018.

UM, WE'VE HAD A LOT OF VETTING AND DIALOGUE.

WE HAVE OUR WATER FORWARD TASK FORCE, UM, THAT INITIALLY WE, UH, UH, COUNCIL STOOD UP THAT TASK FORCE TO HELP US GET WATER FORWARD, DONE AND, YOU KNOW, DEVELOP WHAT THAT PORTFOLIO OF STRATEGIES WAS GONNA BE FOR THE 2018 PLAN.

UH, BUT ONCE WE GOT GOING, WE REALLY REALIZED THE VALUE IN HAVING THOSE PERSPECTIVES, UM, AT THE TABLE WITH US.

AND SO WE CONTINUE TO MEET WITH OUR WATER FORWARD TASK FORCE, AND THEY'RE ACTIVELY ENGAGED IN THE UPDATE, UM, TO THE PLAN.

AND WE DO A NUMBER OF OUTREACH ON OUR SPEAK UP BOSTON PAGE.

WE DO SURVEYS, UM, WE HOST COMMUNITY EVENTS.

UM, WE'VE DONE A LOT OF WORK AROUND ENGAGING OUR COMMUNITY AND WHAT THESE STRATEGIES SHOULD, SHOULD BE.

UM, AND WE ARE REALLY LOOKING TO HAVE, UH, YOU KNOW, A WIDE VARIETY OF STRATEGIES.

WE DON'T WANNA HAVE ALL OUR EGGS IN ONE BASKET, IF YOU WILL.

WE WANT TO, SO THERE ARE SOME THAT HAVE MORE OR LESS YIELD, IF YOU WILL, LIKE MOLECULES OF WATER THAT THEY PRODUCE.

UM, BUT THEY BRING US VALUE IN OTHER WAYS, INCLUDING IN HOW WE ENGAGE WITH OUR COMMUNITY.

I REALLY APPRECIATE THE PUBLIC ENGAGEMENT AND THE EDUCATION.

WHAT ABOUT EDUCATING THE PUBLIC ABOUT OTHER CITY WATER CONSERVATION PROGRAMS THAT WOULD ALSO BOOST, UH, THIS BOOSTS THEM AND THEY BOOST THEM LIKE WATERWISE AND THE GREEN GROW PROGRAMS? WE ARE CONTINUING TO WORK WITH OUR, OUR PARTNERS, UM, IN WATERSHED AND, UH, AND OTHER DEPARTMENTS TO, UM, TO GET THE WORD OUT ABOUT THE THINGS PEOPLE CAN BE DOING IN THEIR OWN HOMES.

YOU ARE ALSO GOING TO BE SEEING OUR, UH, UPDATED DROUGHT CONTINGENCY PLAN AND WATER CONSERVATION PLAN, WHICH ARE ALSO ON A FIVE YEAR SCHEDULE AND ARE DUE TO TCEQ THIS SPRING.

UM, LCRA IS UPDATING THEIR DROUGHT CONTINGENCY PLAN, AND SO OURS WILL BE, UH, IN LOCKSTEP WITH THEIRS AS OUR, UM, AS OUR, UH, WATER SUPPLIER.

AND, UM, AND WE CAN, WE ARE, WE'VE BEEN DOING A, A NUMBER OF OUTREACH ACTIVITIES TO OUR COMMUNITY AROUND WHAT OUR WATER CONSERVATION, UH, REQUIREMENTS SHOULD BE.

UM, YOU KNOW, ON A BASE LEVEL, WE ONLY DO ONE DAY OF WATERING A WEEK IN AUSTIN.

THAT'S BEEN OUR CONSERVATION STAGE FOR MANY YEARS.

UM, AND SO WE'RE BEGINNING TO LOOK AT, YOU KNOW, HOW DO WE RATCHET DOWN WATER USE WHEN WE GET INTO THESE DEEP DROUGHT SITUATIONS, AND WE WANNA HEAR FROM OUR COMMUNITY WHAT THEY THINK IS FEASIBLE AND PRODUCTIVE ON THAT PERSPECTIVE.

AND, AND I THINK, UH, JUST AS A NOTE AT OUR NEXT, UH, WATER OVERSIGHT COMMITTEE MEETING, I'D LIKE TO GET A, A FULL PRESENTATION OF ALL THE VARIOUS CONSERVATION EDUCATION PROGRAMS THAT WE HAVE, UM, FOR THE COMMUNITY, JUST TO REMIND EVERYBODY ABOUT THEM AND, UM, THE MANY YEARS THAT THEY HAVE BEEN ONGOING AND THE IMPACTS, UM, ON OUR COMMUNITY.

[00:50:01]

UH, OTHER QUESTIONS? YES.

COUNCIL MEMBER FUENTES.

I'M EXCITED FOR PURPLE PIPE DAY NEXT WEEK WITH THE FOUR COUNCIL ITEMS THAT WE WILL BE VOTING ON.

IT'S GONNA BE A FUN DAY, AND I THANK YOU FOR SHARING ABOUT HOW THESE STRATEGIES CAME ABOUT.

AND WE APPRECIATE THE WORK OF THE WATER FOR TASK FORCE AND ALL THE COMMUNITY MEMBERS WHO WEIGHED IN TO HELP SHAPE WATER FORWARD.

AND IT'S EXCITING TO SEE THE STRATEGIES IN MOTION AND KNOW THAT THERE'S STILL SO MUCH MORE THAT THAT NEEDS TO BE DONE TO ENSURE THAT EVERYONE HAS ACCESS TO CLEAN, SAFE, AND AFFORDABLE WATER.

UH, SOME OF THE QUESTIONS THAT I HAVE ARE CENTERED AROUND, YOU KNOW, WHAT WE, WHAT YOU LAID OUT AND WHAT WE KNOW IS THAT THE CITY OF AUSTIN HAS BEEN LEADING THE WAY WITH RECLAIMED WATER AND WITH OUR REUSE STRATEGIES.

UM, YOU'VE LISTED A COUPLE OF DEVELOPMENTS THAT, UH, THAT HAS A SYSTEM ONSITE.

HAVE WE, OR TO WHAT EXTENT HAS THE CONVENTION CENTER, THE AIRPORT EXPANSION, THOSE REALLY BIG PROJECTS THAT WE HAVE IN THE PIPELINE OVER THE NEXT DECADE, HOW, HOW HAVE THEY BEEN INVOLVED IN THESE CONVERSATIONS? SO, UM, YOU CAN SEE ON THE MAP THAT I PUT UP EARLIER THAT WE HAVE A LOT OF PURPLE PIPE ON THE AIRPORT PROPERTY.

SO THE AIRPORT USES, UM, RECLAIMED WATER, UM, FOR, UH, A NUMBER OF USES ON THAT FACILITY.

AND THEN THE CONVENTION CENTER WILL BE, UM, YOU KNOW, THEY'RE, THEY'RE IN THE HEART OF OUR, OF OUR DISTRIBUTION SYSTEM FOR, FOR RECLAIMED WATER.

SO THEY'LL, THEY WILL COMPLY WITH ALL OF THE, ALL OF THE NEW REQUIREMENTS AS WELL.

AND IS THERE A PROCESS IN PLACE THAT THE CITY HAS, UH, THAT TAKES A LOOK AT UPCOMING DEVELOPMENTS, WHETHER IT BE WITH AFFORDABLE HOUSING, UM, MULTI-FAMILY UNITS, UNITS PERFORM, UH, PERMANENT SUPPORTIVE HOUSING, OR OTHER BIG SCALE INFRASTRUCTURE PROJECTS? Y'ALL ARE INVOLVED IN THOSE CONVERSATIONS AS WELL? WE ARE.

SO AS, AS DEVELOPMENTS ARE BEGINNING TO GO THROUGH THE CITY'S PROCESS, THEN WE GET ENGAGED TO HELP THEM UNDERSTAND WHAT THE REQUIREMENTS ARE AND HELP THEM PREPARE THAT WATER BENCHMARKING, UM, DOCUMENT AND UNDERSTAND WHAT THEIR WATER NEEDS ARE AND WHAT THEIR OPTIONS ARE FOR, FOR MEETING THOSE, UH, DEMANDS.

LOOKING FORWARD WITH THE, WITH FEDERAL FUNDING OPPORTUNITIES, CAN YOU SPEAK TO HOW WE'RE ENGAGED WITH THE, UM, BIPARTISAN INFRASTRUCTURE LAW, ANY OTHER TYPES OF FEDERAL FUNDING OPPORTUNITIES THAT MIGHT COME DOWN OUR WAY? SO THE, UM, THE FEDERAL FUNDING PRIMARILY COMES THROUGH THE TEXAS WATER DEVELOPMENT BOARD AS THE STATE'S, UM, UH, AGENCY THAT DISTRIBUTES THOSE FUNDS.

AND SO THEY, UH, CALL FOR PROJECTS EVERY YEAR.

UH, WE VET OUR PROJECTS EVERY YEAR AND SUBMIT PROJECT INFORMATION FORMS. UM, AND SO WE HAVE HAD, UH, STATE REVOLVING FUND, UM, UH, SUPPORT, WHICH CAN INCLUDE OFTEN DOES INCLUDE FEDERAL MONEY, UM, FOR A NUMBER OF THESE RECLAIMED PROJECTS, AS WELL AS OTHER WATER AND WASTEWATER PROJECTS.

AND SO WE'LL CONTINUE TO WORK WITH WATER DEVELOPMENT BOARD.

UM, WE'RE ALSO TALKING TO THE BUREAU OF RECLAMATION, WHICH HAS REUSE SPECIFIC FUNDING OPPORTUNITIES TO SEE HOW, UM, THEIR OPTIONS MIGHT FIT IN WITH OUR PROJECTS.

UH, AND SO THAT'S A, THAT'S, WE HAVE A TEAM ON OUR, IN OUR FINANCES TEAM THAT THAT'S PART OF THEIR RESPONSIBILITIES.

AND SO WE, WE LOOK FOR THOSE FUNDING OPPORTUNITIES AND WE HAVE SAVED, UH, A LOT.

IT'S, THAT'S REAL MONEY FOR US.

WE'VE SAVED A LOT OF MONEY USING THOSE, UH, TEXAS WATER DEVELOPMENT BOARD, LOW INTEREST LOANS.

THANK YOU, ALISON ALTER.

MAIN GOAL IS FOR AS MANY BUILDINGS TO BE READY FOR RECLAIMED WATER AS POSSIBLE.

UM, AND I THINK THERE'S ALSO SOME FOLKS TO THE LEFT OF YOU.

UM, GOOD MORNING.

GOOD MORNING.

UM, I TOO AM VERY EXCITED TO SEE US MOVE FORWARD AND, AND, UM, I HOPE, YOU KNOW, THE DELAY THAT WE HAD FROM THE FALL WILL NOT NOT BE REPEATED, UM, NEXT WEEK, AND THAT WE CAN ACTUALLY MOVE FORWARD, I THINK AS WE'RE LOOKING AT 88 DEGREE DAYS IN FEBRUARY, THE REALITY OF POTENTIALLY HAVING A LONGER DROUGHT, UM, THIS YEAR AND, AND FOR THE FORESEEABLE FUTURE IS VERY REAL.

UM, AND WE NEED TO BE TAKING EVERY STEP THAT WE CAN.

SO I APPRECIATE THAT YOU ALL ARE BRINGING THIS FORWARD.

I WANTED TO, UM, JUST CHECK IN ON, UM, YOU KNOW, SO THIS ADDITIONAL OPTION THAT WAS ADDED TO THE PROPOSALS THAT WE SAW BEFORE, WHERE THEY CAN, IF THEY'RE MULTIFAMILY THAT IS LARGER THAN 250,000 SQUARE FEET, THAT AS AN OPTION THEY CAN INSTALL DUE PLUMBING, UM, MAKING IT READY TO CONNECT TO THE RECLAIMED WATER, UM, AND THEN PAY A FEE TO SUPPORT THE RECLAIMED SYSTEM EXPANSION.

UM, HOW IS THAT GOING TO INTERPLAY WITH THE INCENTIVES THAT YOU'RE OFFERING? BECAUSE I WOULDN'T WANT TO GIVE THEM, LIKE, THEY'RE SUPPOSED TO BE PAYING US TO BE IN THE RECLAIMED WATER.

I DON'T WANNA THEN BE TURNING AROUND AND SUBSIDIZING THEIR DE PLUMBING WHEN THEY'RE OPTING OUT OF THE THING THAT WE THINK WOULD BE MORE USEFUL AT THIS STAGE.

WELL, AT THIS.

SO HOW DOES THAT WORK AT THE, I WILL SAY THAT WE ARE CONTINUING TO WORK THROUGH THE DETAILS ON WHAT THIS PROGRAM IS GONNA LOOK LIKE.

UM, AT THIS TIME, OUR

[00:55:01]

AND SO OUR FINANCIAL INCENTIVES, UM, SUPPORT, UH, SUPPORT THAT, UM, AND, AND ARE AVAILABLE TO, TO BUILDINGS.

UM, AND THEN, UH, I'M THINKING, GIVE ME A MOMENT TO THINK THROUGH YOUR QUESTION.

SO WE WOULD, OUR FINANCIAL INCENTIVES RIGHT NOW ARE PRIMARILY AROUND ASSISTING DEVELOPMENTS IN CONNECTING TO THE CENTRALIZED RECLAIMED WATER SYSTEM.

UM, IF THEY ARE FARTHER THAN 500 FEET FROM THAT SYSTEM, THEN THEY WILL BE REQUIRED TO DUAL PLUM, AND THEN IF THEY HAVE MULTIFAMILY, THEY CAN OPT OUT OF THE ONSITE WATER REUSE SYSTEM AND PAY A FEE, UM, INSTEAD.

AND IF THEY DON'T HAVE MULTIFAMILY, THEN THEY HAVE TO BUILD THE ONSITE WATER REUSE SYSTEM.

SO I DON'T THINK THERE'S AN OVERLAP IN PAYING AN INCENTIVE VERSUS, UM, THEM PAYING US A FEE.

UH, BUT WE'LL LOOK INTO THAT.

UH, I, AND YOU KNOW, JUST FRANKLY, OUR GOAL IS MORE DUAL PLUMBING AND MORE PURPLE PIPE IN THE GROUND AND MORE ONSITE WATER REUSE SYSTEMS. SO, UM, WE ARE TRYING TO DO EVERYTHING WE CAN IN FURTHERANCE OF THAT GOAL.

UM, AND WE DO HAVE, WE CAN'T, UM, WE CAN'T MAKE IT A NET PROFIT FOR DEVELOPMENTS.

THERE'S RULES AGAINST THAT.

SO, YOU KNOW, WE'LL, WE WILL BE LOOKING AT EACH DEVELOPMENT SPECIFICALLY.

AND WHEN WILL WE BE SEEING THIS PROGRAM? WILL WE HAVE THIS DRAFT NEXT WEEK? ARE WE ADOPTING THAT NEXT WEEK? OR, OR YES, IT'S IN THE, IT'S DEFINED IN THE DOCUMENTS THAT YOU HAVE.

BUT WHICH PART THEN IS STILL EVOLVING? GOOD QUESTION.

I'M GONNA, I'M GONNA GET SOME HELP WITH THIS ONE.

GOOD MORNING COUNCIL MEMBERS.

I AM ANNA BRIAN AUSTIN WATERS, ASSISTANT DIRECTOR OF BUSINESS SERVICES.

UH, THE, UH, CODE AMENDMENTS THAT YOU WILL SEE NEXT WEEK WILL ESTABLISH THE FEE IN LIEU PROCESS FOR MULTIFAMILY PROPERTIES.

AND WE'LL ALSO ESTABLISH THE, UM, UM, OR RE AUTHORIZE OUR PILOT INCENTIVE PROGRAMS. WE CURRENTLY HAVE A PUBLISHED DOCUMENT FOR THE PILOT INCENTIVE PROGRAMS, UH, THAT IS PUBLISHED ON OUR WEBSITE.

AND SO WITH COUNCIL'S ADOPTION, WE WILL UPDATE THAT, UH, PILOT INCENTIVE PROGRAM TO INCORPORATE ALL THE VARIOUS INCENTIVES THAT, UH, COUNSEL HAS AUTHORIZED US TO UNDERTAKE.

SO WHILE THE, UH, DETAILS OF ADMINISTRATION AND EXECUTION ARE DEVELOPED IN AN ADMINISTRATIVE DOCUMENT THAT'S PROGRAMMATIC, WE WILL RE WE WILL DOCUMENT THAT TO REFLECT COUNCIL'S INTENT AND DIRECTION TO US.

UM, AND, UM, WE WILL ALSO, WITH OUR PILOT INCENTIVE PROGRAM, WE'LL BE BRINGING THAT BACK ON AN ANNUAL BASIS FOR REAUTHORIZATION.

SO WHEN WE VOTE NEXT WEEK, WILL WE HAVE CLARITY ON HOW THE INCENTIVES WOULD INTERACT WITH THIS THIRD OPTION OR FOURTH OPTION? I GUESS FOR THE LARGE MULTIFAMILY PROPERTIES THAT ARE NOT WITHIN THE 250, I THINK IT WILL BE IMPORTANT FOR US TO DEVELOP THOSE ANSWERS, UH, TO THE EXTENT THAT WE ARE ABLE WITHIN THE TIMEFRAME.

SO I THINK THAT, THAT, THAT IS A TASK THAT WE NEED TO MAKE SURE TO PREPARE LEADING INTO MARCH 7TH.

UNDER THE WATER FORWARD UMBRELLA, OR IS THAT SOMETHING THAT'S RESERVED FOR A DISCUSSION OF A RATE CASE? WE ALSO HAVE, I, I MEAN ABOVE AND BEYOND THE BENCHMARKING ISSUE, RIGHT? SO THE, HOW THAT EXCESS USAGE FEE WOULD WORK.

AND, AND I'M NOT SURE WHAT THE, THE BALANCE IS, BUT I DO WANNA UNDERSTAND THE INTERPLAY AND HOW, HOW YOU'RE PROPOSING THAT TO WORK.

I UNDERSTAND THAT WE ULTIMATELY DO WANT THESE PROPERTIES TO HAVE THE DUAL PLUMBING, AND IN SOME SENSE, THE ONSITE IS A INTERIM STEP TOO, SO, SO, BUT I DO WANNA HAVE SOME CLARITY THERE OF, OF HOW THOSE ARE, HOW THOSE ARE CONNECTING.

UM, THANK YOU.

UM, AND THEN DIRECTOR OLSON, YOU MENTIONED THAT THE, UM, WE DON'T CURRENTLY HAVE A WAY TO STEP UP THE COSTS FOR COMMERCIAL USAGE OF WATER.

CAN YOU ELABORATE A LITTLE BIT MORE ON THAT? SURE.

WE HAVE A, WE HAVE A TWO RATES FOR COMMERCIAL.

IT'S SLIGHTLY HIGHER IN THE SUMMER AND SLIGHTLY LOWER, UM, THE REST OF THE YEAR.

AND, AND SO THE, UM, THERE'S NOT AN INCLINED RATE FOR COMMERCIAL WHERE THE MORE THEY USE, THE MORE THEY PAY.

UM, AND SO THAT'S SOMETHING THAT WE ARE WORKING TOWARDS WITH THIS IDEA OF THE EXCESS USAGE FEES.

BUT THAT'S NOT A PART OF WHAT'S IN, UM, YOUR, WHAT YOU'LL BE APPROVING NEXT WEEK, UM, OR VOTING ON NEXT WEEK.

AND WOULD THAT BE SOMETHING THAT WE'D BE CONSIDERING

[01:00:01]

UM, I THINK WE WOULD BE TALKING ABOUT THAT PRIMARILY IN THE COST OF SERVICE AND RATE, UM, DISCUSSION.

UH, AND SO THAT'S, BUT THAT'S NOT, THAT'S A FUTURE TOPIC.

THAT'S NOT SOMETHING THAT WE'RE ACTIVELY, UM, WORKING ON RIGHT NOW.

UM, IN PART BECAUSE WE NEED TO GIVE THIS WATER BENCHMARKING TIME TO BECOME MORE ACCURATE, UM, AND TO GET BETTER DATA OUT OF IT SO THAT WE UNDERSTAND, UM, WHAT'S REASONABLE TO, TO LOOK OUT FOR THAT.

UM, BECAUSE EVERY RESIDENTIAL USE HAS A LOT OF SIMILARITIES.

UM, COMMERCIAL USE CAN VARY QUITE A BIT DEPENDING ON THE, THE BUILDING.

I THINK THERE'S STILL A QUESTION OF LIKE HOW MUCH YOU USE GENERALLY BEYOND WHAT YOUR BUILDING WAS DESIGNED FOR AND, AND, AND WHETHER IF YOU'RE, IF YOU'RE DEPLOYING A LOT OF WATER, UM, FOR YOUR PROCESSES AND YOU KNOW THAT, THAT AS YOU ADD MORE WATER TO YOUR USAGE, UM, THAT, THAT WE SHOULD BE CONSIDERING THAT.

UM, BUT IT DOESN'T SOUND LIKE WE CURRENTLY HAVE A PROCESS FOR THAT.

SO THAT'S SOMETHING THAT I WILL, UM, THINK ABOUT AS WE'RE GOING THROUGH THE RATE PROCESS, ET CETERA.

UM, AND WHEN IT'S APPROPRIATE AND WE'LL NOT HAVE MORE CONVERSATIONS, I'M JUST LEARNING ABOUT IT.

SO I, I DON'T, I DON'T KNOW WHICH WAY IS THE RIGHT WAY TO MOVE FORWARD, BUT, UM, FROM A CONSERVATION STANDPOINT, IT, IT DOES SEEM LIKE THE PRICE SIGNALS WOULD BE USEFUL.

SO I, I THINK SO TOO.

I MEAN, OUR, OUR COMMERCIAL AND INDUSTRIAL CUSTOMERS HAVE A LOT OF PRICE SIGNALS ALREADY BECAUSE THEY USE A LOT OF WATER, AND SO THEY HAVE THAT INCENTIVE, UM, TO REDUCE THEIR WATER USE.

BUT I THINK SOME ADDITIONAL WORKING TOGETHER ON, UM, HOW WE CAN, UH, HELP THEM BE INCENTIVIZED TO FIX LEAKS FASTER, YOU KNOW, DO ALL THE THINGS THAT WE'RE TRYING TO DO ON THE PUBLIC SIDE AS WELL.

COUNCIL MEMBER, UH, COUNCIL MEMBER, UH, HARBOR MADISON, AND THEN COUNCIL MEMBER RYAN ALTER.

THANK YOU, MAYOR PRO TIM.

AND, UH, COUNCIL MEMBER ALTER YOU.

ACTUALLY, UH, THAT WAS A GREAT LEAD IN, 'CAUSE I WAS THINKING ALONG THE LINES OF, ESPECIALLY WITH LARGER CONSTRUCTION PROJECTS, I THINK ABOUT LIKE OUR NORTHEAST PLANNING DISTRICT.

AND, UH, I REALLY APPRECIATE THAT YOUR PRESENTATION ADDRESSED GREEN SPACES OR GREENFIELD, UM, 'CAUSE THAT'S A, A D ONE ISSUE.

AND SO, UH, IN RECOGNIZING THAT, UM, I DO HAVE SOME QUESTIONS AROUND WITH ITS SIZE AND DIVERSITY AND THE VARIOUS PLANNED COMMUNITIES, UM, I, I ANTICIPATE THAT THERE WILL BE A CHALLENGE ON PRIORITIZATION, UM, FOR AN AREA LIKE A DISTRICT ONE THAT'S RELATIVELY COMPLEX.

UM, I, I'M CURIOUS, HOW DO WE PRIORITIZE, UM, REDEVELOPING EXISTING INFRASTRUCTURE AND LAYING DOWN NEW PIPES IN NOT JUST NEW DEVELOPING, BUT RAPIDLY NEW DEVELOPING AREAS.

UM, THAT'S ONE QUESTION.

AND IF I COULD STICK IN THERE, UH, ONE WORD, REGIONAL, UH, NEW DEVELOPING AREAS AND THEN REGIONAL.

YOU KNOW, I, I SAW AN ARTICLE THE OTHER DAY ABOUT AN EXTENSION OF A TRAIL THAT GOES FROM AUSTIN TO MAYNARD.

AND THEN I WAS TALKING TO SOME FOLKS IN MAYNARD WHO ARE TALKING FROM MAYNARD TO ELGIN, AND THEN FOLKS WHO ARE TALKING FROM MAYNARD EAST TO HARKER HEIGHTS.

AND SO IT'S LIKE THE REGIONAL CONVERSATION REALLY KEEPS COMING UP.

AND SO I FIND MYSELF, UM, WONDERING WHAT THAT IMPACT LOOKS LIKE FOR THE RAPID NEW DEVELOPMENT.

BETWEEN DEVELOPERS ABOUT HOW THEY CAN, UH, COLLABORATE ON GETTING THAT INFRASTRUCTURE BUILT TO COLLECTIVELY SERVE THEM.

SO TO START WITH HOW WE MAKE OUR CHOICES ABOUT WHAT WE REHABILITATE, UM, WE HAVE, WE HAVE A REALLY ROBUST CONDITION AND CRITICALITY ASSESSMENT, UM, ASSET MANAGEMENT PROGRAM.

AND SO WE USE THAT EVERY YEAR IN OUR CIP BUDGETING PROCESS TO ALLOCATE WHAT WE CALL RENEWAL FUNDING.

AND SO THAT IS MONEY THAT IS JUST FOR, UH, REPLACING POOR PERFORMING PIPE.

UM, AND, AND SO THAT'S HOW WE PRIORITIZE WHERE WE REPLACE THAT OLD, OR IT, IT ISN'T NECESSARILY CORRELATED WITH AGE, BUT PIPE THAT IS, UH, IT IS NOT PERFORMING WELL.

IT HAS A LOT OF BREAKS.

SO THEN THINKING ABOUT HOW WE, UH, PLAN FOR THE FUTURE AND WHERE DEVELOPMENT IS COMING, PARTICULARLY IN RAPIDLY DEVELOPING AREAS, WE HAVE A SERVICE EXTENSION REQUEST PROCESS.

UH, AND SO WHEN A NEW DEVELOPMENT IS CONTEMPLATING, UH, YOU KNOW, BEGINNING TO GO THROUGH THE PROCESS OF DEVELOPING, THEN THEY SUBMIT TO US THEIR, WHERE THEY ARE, UH, WHAT THEIR, WHAT KIND OF, UM, USES THEY'LL HAVE, UH, HOW MUCH WATER AND WASTEWATER THEY'LL NEED.

AND WE LOOK AT HOW NEAR OR FAR THEY ARE FROM OUR EXISTING SYSTEM AND HELP THEM IDENTIFY, UH, WHERE THEY NEED TO BUILD THE INFRASTRUCTURE TO SERVE THAT NEW DEVELOPMENT.

AND IN THESE REALLY RAPIDLY DEVELOPING AREAS, WE'LL HAVE, UM, A NUMBER OF THESE SCRS HAPPENING ALL ADJACENT TO EACH OTHER.

UM, AND SO WE SEE A LOT OF CONVERSATIONS HAPPENING

[01:05:01]

AND SO SOMETIMES WE FACILITATE THOSE CONVERSATIONS.

UM, AND THEN THAT IS A PIECE OF OUR LARGER OVERALL LONG RANGE PLANNING PROCESS, UM, WHICH IS, UH, FOR WATER WASTEWATER AND RECLAIMED WATER.

WE HAVE EXTENSIVE, UM, HYDRAULIC MODELS.

UH, WE ESTIMATE WHERE THE DEMANDS ARE GOING TO BE.

WE RUN THAT SIMULATION OVER MULTIPLE YEARS AND DETERMINE WHERE WE NEED TO BUILD NEW PIPE TO SERVE THAT GROWTH, UM, OR UPSIZE PIPE TO SERVE INFO GROWTH.

UH, AND SO ALL OF THOSE PLANNING EXERCISES ARE HAPPENING ON TOP OF EACH OTHER AND INFORM ONE ANOTHER.

THAT'S PERFECT.

AND REALLY DOES HELP TO ANSWER MY QUESTION 'CAUSE I'M THINKING ALONG THE LINES OF IF WE CAN FIND CREATIVE SOLUTIONS LIKE OUR PARTNERSHIP WITH THE COUNTY AROUND THE NORTHEAST PLANNING DISTRICT, I WONDER, DOES THAT FREE UP, UM, SOME RESOURCES? DOES THAT FREE UP SOME DOLLARS FOR US TO DIG A LITTLE BIT DEEPER IN OTHER NEIGHBORHOODS THAT OTHERWISE MIGHT HAVE BEEN MISSED? AND SO, BUT I THINK YOU'RE ANSWERING THOSE QUESTIONS AND IT SOUNDS LIKE ALL THE CONSIDERATIONS ARE BEING MADE.

WE, WE DEFINITELY DON'T WANT DEVELOPMENTS NEXT DOOR TO EACH OTHER, EACH BUILDING A 16 INCH WATER LINE.

YEAH, AND I APPRECIATE THAT BECAUSE THAT'S ONE OF THE, THE POINTS OF CONSIDERATION FOR ME IN ADDRESSING THINGS THAT ARE EXISTING AND THEN INCOMING.

SO FOR EXAMPLE, WE HAVE SOME REALLY COOL INCOMING DEVELOPMENT THAT'S DIRECTLY ADJACENT TO FAILING INFRASTRUCTURE AND, AND POWER LINES THAT NEED TO BE BURIED, BUT THEY'RE STILL NOT A COMPREHENSIVE SYSTEM FOR ALL OF THESE PROJECTS TO TALK DIRECTLY TO ONE ANOTHER.

SO THAT DUPLICATIVE EFFORT, IT REALLY DID WASTE RESOURCES AND TIME.

IT'S, IT'S THE TIME THAT YOU REALLY CAN'T GET BACK.

SO THAT'S RIGHT.

BUT I, IT SOUNDS LIKE YOU GUYS ARE ALREADY CONSIDERING THOSE THINGS.

I HAVE ONE MORE QUESTION, AND IT MIGHT BE A LITTLE OFF THE WALL, SO BEAR WITH ME.

UM, SO AS I'M LOOKING AT SOME THINGS AROUND, I'M ENTIRELY OBSESSED WITH AGRICULTURE FOCUSED HOUSING RIGHT NOW, AND AS I'M LOOKING AT THAT, A LOT OF THAT IS CONSIDERATIONS AROUND WATER USAGE, UM, AND REALLY SMART, UM, SUSTAINABLE APPLICATION OF THE USE OF WATER.

AND I, WE'VE BEEN LOOKING AT, UM, SOME, UM, ENERGY GENERATION STUFF AND SURE ENOUGH, SERENDIPITOUSLY OVER THE WEEKEND I HEARD ON KUT, UH, REPORT ABOUT GEOTHERMAL.

UM, AND SO I JUST FOUND MYSELF WONDERING, AND IT'S ACTUALLY SOMETHING I WANTED TO BRING TO WATER OVERSIGHT, UM, JUST SOME CURIOSITIES AROUND WHAT ARE THE POTENTIAL IMPACTS FOR LIKE, UM, YOU KNOW, AS THEY'RE HAVING THIS CONVERSATION SPECIFICALLY, THEY SAID SOMETHING ALONG THE LINES OF, UM, GEO FLUID EXTRACTION CONSIDERATIONS.

AND I JUST FIND MYSELF WONDERING, DOES THAT HAVE ANY IMPACT, GOOD OR BAD ON US, UM, FOR OUR WATER CONSIDERATIONS? SO I'M CERTAINLY NOT ASKING YOU TO ANSWER THE QUESTION NOW.

I JUST DIDN'T WANT IT TO BE TOO WEIRD WHEN I ASKED, START ASKING THESE OFF THE WALL QUESTIONS AROUND GEOTHERMAL CONSIDERATIONS.

I WILL GO LOOK INTO GEOTHERMAL AND HOW IT'S USED IN CENTRAL TEXAS.

AWESOME, THANK YOU.

WELL, IT TURNS OUT, APPARENTLY TEXAS IS ONE OF THE, UM, PREMIER USERS OF GEOTHERMAL ENERGY.

UM, AND WE'RE MAKING SOME REAL INNOVATIVE, UM, SORT OF STANDARDIZING, UH, THE PRACTICE.

AND SO I THINK THAT'S REALLY COOL.

AND, AND I APPRECIATE THAT YOU WORE A PURPLE SHIRT.

UH, I THANK YOU.

I LIKE TO COORDINATE WITH MY POLICY AS WELL, .

SO THANK YOU.

AND, AND JUST SO EVERYBODY KNOWS, THE GEOTHERMAL CONVERSATION WILL BE SOMETHING THAT WE ARE TALKING WITH AUSTIN ENERGY ABOUT AS WELL, SO IT'S DEFINITELY, UH, IN THE QUEUE.

WHERE SOMEONE COULD OPT IN TO A HIGHER FEE NOW, BUT THEN THAT BE LOCKED IN AND OVER TIME THAT BE LOWER, WHETHER THAT'S YOUR CUSTOMER CHARGE OR SOME OTHER, YOU KNOW, WE HAVE THE POWER SUPPLY ADJUSTMENT FOR AUSTIN ENERGY.

UH, COUNCIL MEMBER RYAN ALTER, THANK YOU VERY MUCH.

UM, I WANTED TO START WITH YOUR DISCUSSION OR YOUR KIND OF NOTING ABOUT AFFORDABLE HOUSING AND PERMANENT SUPPORTIVE HOUSING NOT HAVING THIS REQUIREMENT.

AND I THINK THAT'S SOMETHING I UNDERSTAND, UH, THE CONSIDERATION THAT AS, AS WE GO FORWARD THINKING ABOUT, UH, OF COURSE IT REQUIRES ADDITIONAL RESOURCES, BUT US BRINGING TO THE TABLE THAT, THAT FULL BRIDGE SO THAT THESE DEVELOPMENTS, UH, CAN TAKE ADVANTAGE OF REUSE AND, AND HOPEFULLY LOWER WATER BILLS.

UM, BUT WE COULD REALLY USE THESE DEVELOPMENTS AS MODELS TO THE COMMUNITY OF HOW, I'LL SAY EASY IT IS, BUT HOW YOU CAN REALLY INTEGRATE THIS INTO A MULTIFAMILY DEVELOPMENT AND, AND SHOW ALL THE BENEFITS.

BUT WE HAVE TO, AS A CITY, UH, CERTAINLY RECOGNIZE THE ADDITIONAL COST AND I THINK, UH, GO BEYOND WHAT WE WOULD TYPICALLY DO FOR A STANDARD PROJECT.

BUT I THINK THAT'S SOMETHING THAT WE SHOULD CONSIDER, UH, LOOKING FORWARD, JUST BECAUSE I DON'T THINK BECAUSE YOU'RE IN AFFORDABLE HOUSING DEVELOPMENT, YOU SHOULDN'T HAVE THE BENEFITS OF, UH, MORE EFFICIENCIES AND, AND LOWER WATER USAGE.

SO I JUST KINDA WANNA TO FLAG THAT I, WE TALKED A WHILE BACK, UH, WHEN YOU WERE FIRST GOING OVER THESE, THE, THE PURPLE CHOICE PROGRAM AND, UM, ANY KIND OF COROLLARY AS IT RELATES TO AUSTIN ENERGY'S COMMUNITY SOLAR PROGRAM.

YOU MENTIONED THE, UM, GREEN CHOICE PROGRAM, BUT IF THERE IS ANYWHERE WITHIN OUR RATE STRUCTURE

[01:10:01]

Y'ALL DON'T HAVE THAT EXACT, UH, COROLLARY, BUT I COULD IMAGINE A BUSINESS SAYING, I MIGHT BE WILLING TO PAY A LITTLE MORE NOW, BUT HAVE THAT ABILITY TO KNOW WHAT MY FUTURE LOOKS LIKE BY LOCKING IN THE RATE.

UM, I JUST, I, I THINK IT'D BE INTERESTING FOOD FOR THOUGHT, AND I KNOW Y'ALL ARE LOOKING AT ALL THESE FINANCING MECHANISMS, BUT, UM, A WAY TO KIND OF INCENTIVIZE PEOPLE NOW TO, TO REALLY REDUCE ANY KIND OF UPSIDE RISK LATER ON.

UM, YOU MENTIONED OPPORTUNITIES FOR COMMUNITY SCALE RECLAIMED WATER.

WHAT, WHAT DID YOU MEAN BY YOU'RE LOOKING FOR OPPORTUNITIES THERE? WELL, THERE, THERE, FOR EXAMPLE, UM, LET'S SAY THERE'S AN AREA ON THE NORTHEAST SIDE OF AUSTIN THAT IS DEVELOPING, AND THAT IS A LONG WAY TO GO WITH CENTRALIZED WASTEWATER TO GET ALL THE WAY DOWN TO OUR REGIONAL PLANTS.

SO THAT COULD BE AN AREA WHERE WE WOULD BUILD A SMALL WASTEWATER TREATMENT PLANT AND THEN REUSE THAT, UH, THAT RECLAIMED WATER RIGHT THERE IN THAT COMMUNITY.

AND WHEN WE THINK OF COMMUNITY REUSE, ARE YOU TYPICALLY JUST THINKING FOR IRRIGATION OR ACTUALLY IN RESIDENTIAL, WE ARE BEGINNING TO LOOK AT DEVELOPING THE STANDARDS FOR, UH, FOR RECLAIMED USE FOR RESIDENTIAL SINGLE FAMILY HOME RESIDENTIAL RECLAIMED USE.

WOW, THAT'D BE INTERESTING.

UH, AND YOU MENTIONED A SEED FUND FOR THE LOW INTEREST LOANS.

COULD YOU TALK ABOUT THAT A LITTLE BIT? UH, MY, I WHAT I, WHAT I REALLY MEANT BY THAT, AND I I I'M NOT SURE SEED IS THE RIGHT WORD TO USE THERE, BUT ESSENTIALLY THAT, UM, THE LOW INTEREST LOAN PROGRAM WOULD BE A PROGRAM ADMINISTERED BY THE FINANCIAL SERVICES DEPARTMENT OF THE CITY OF AUSTIN, UM, TO PROVIDE BELOW MARKET LOANS TO DEVELOPMENTS, UH, TO MAKE THEIR FINANCING MORE AFFORDABLE.

AND THAT, THAT INITIAL MONEY, THAT MONEY WILL BE PAID BACK OVER TIME.

SO IT SHOULD BE SELF-SUSTAINING, BUT UM, THAT INITIAL MONEY TO FUND THAT PROGRAM WOULD, WE WOULD FRONT THAT.

I GOTCHA.

AND, UM, AS IT RELATES TO THE PURPLE CHOICE PROGRAM, OR POTENTIALLY THE FEE IN LIEU, IF WE ARE ABLE TO, YOU KNOW, COLLECT WHETHER IT'S $1 MILLION, $3 MILLION, $5 MILLION, THE IDEA IS TO TURN THAT AROUND AND JUST BUILD OUT THE PURPLE PIPE SYSTEM FASTER.

IS THAT RIGHT? THAT'S RIGHT, YES.

YEP.

SO I, I THINK, YOU KNOW, I HIGHLIGHT SOME OF THESE BECAUSE OF COURSE ALL THESE REQUIRE INVESTMENTS REQUIRE ADDITIONAL DOLLARS, AND Y'ALL HAVE CERTAINLY, UH, BROUGHT FORTH SOME VERY USEFUL TOOLS.

BUT, YOU KNOW, IN, IN LIGHT OF THE CONVERSATIONS WE'D BE HAVING AND, AND THE CONVERSATIONS I THINK WE'RE GOING TO HAVE AROUND, UH, THE ENVIRONMENTAL INVESTMENT PLAN, WE HAVE OPPORTUNITIES TO BRING ADDITIONAL RESOURCES TO KIND OF SUPERCHARGE SOME OF THESE EFFORTS, WHETHER IT IS GETTING OUR AFFORDABLE HOUSING DEVELOPMENTS, UH, ABLE TO REUSE WATER OR HAVING THAT COMMUNITY SCALE, UH, PROJECTS OR EVEN JUST, YOU KNOW, HAVING A MORE PURPLE PIPE FASTER, UH, IF WE BRING THOSE INVESTMENTS, AS YOU MENTIONED, WE'RE GONNA SAVE MONEY IN THE LONG TERM.

YOU MENTIONED THAT WE HAD, UH, 175,000 GALLONS OR NOT, UH, ACRE FEET USED LAST YEAR.

OUR CLIMATE EQUITY PLAN GOAL IS FOR 152,000 BY 2030.

SO WHAT, YOU KNOW, ARE WE GONNA HIT THAT? NOT ON OUR CURRENT TRAJECTORY, BUT, YOU KNOW, THIS IS PART OF THE QUESTION THAT I THINK WE SHOULD BE ASKING OF HOW DO WE, UH, INVEST TO ACHIEVE OUR GOALS.

AND SO I REALLY APPRECIATE, UH, THIS WORK.

THANK YOU AND LOOK FORWARD TO WEARING PURPLE ON THE SEVENTH.

EXCELLENT.

THANK YOU, DIRECTOR ROLSON.

AND, AND, UM, JUST KEEP IN MIND, IT SOUNDS LIKE WE'RE GONNA HAVE TO STAFF UP IN ORDER TO MEET THE AMBITIOUS PLANS THAT COUNCIL MEMBER RYAN ALTER HAS FOR US .

UM, ANY OTHER QUESTIONS? YES, COUNCIL MEMBER ELLIS? I DID.

THANK YOU MAYOR PRO TEM, COULD YOU COVER THE DATES AGAIN? WHEN IS THIS GOING TO LAUNCH OR ARE THERE ANY OTHER DATE METRICS PEOPLE SHOULD BE CONSIDERING AS THEY PROCESS THIS INFORMATION? SO THESE, UH, THE REQUIREMENTS THAT YOU WILL CONSIDER NEXT WEEK ON MARCH 7TH WILL, WOULD GO INTO EFFECT APRIL 1ST.

UM, AND SO THAT IS THE SAME, YOU KNOW, THESE INCENTIVES, UM, PART OF, UH, THE ITEMS THAT YOU WILL CONSIDER NEXT WEEK WILL IMPLEMENT THE COMMUNITY BENEFIT CHARGE IMMEDIATELY.

UH, AND SO THAT MONEY WILL START COMING IN AND WILL BE ALLOCATED TO OUR BUDGET.

AND SO THERE'S A BUDGET AMENDMENT IN YOUR PACKAGE AS WELL, WHICH WILL AUTHORIZE OUR, UM, PILOT INCENTIVE PROGRAM UP TO $5.6 MILLION FOR THIS FISCAL YEAR.

SO DEVELOPMENTS THAT COME IN AFTER APRIL 1ST WILL BE SUBJECT TO THE REQUIREMENTS AND ELIGIBLE FOR THE INCENTIVES AND THIS FISCAL YEAR, MEANING THROUGH SEPTEMBER 30TH, 2024?

[01:15:02]

THAT'S CORRECT.

AND THEN WE WILL CONTINUE TO, UM, EVALUATE THAT ON AN ANNUAL BASIS, WHICH OF COURSE FOR FISCAL YEAR 25 MEANS WE'RE LOOKING AT IT FOR OUR BUDGET RIGHT NOW, UM, AS WE GO THROUGH OUR COST TO SERVICE STUDY AND LOOK AT OUR, UM, AT, AT OUR RATE NEEDS AS WELL.

THANK YOU EVERYBODY.

UH, LAST QUESTION, COUNCIL MEMBER VELA, JUST YOU ON THE EXISTING PROPERTIES THAT ARE USING A PURPLE PIPE, THE LIBRARY, THE AUSTIN ENERGY BUILDING, WHAT PERCENTAGE OF THEIR WATER USE IS THE PURPLE PIPE? IS, UH, THE, THE REUSE OR RECLAIMED WATER? DO WE KNOW THE ANSWER TO THAT? YES.

COME ON UP, KATHRYN.

I INVITE SUPERVISING ENGINEER KATHERINE DKI TO THE PODIUM.

GOOD MORNING COUNCIL MEMBERS, WE JUST LOOKED AT THIS DATA RECENTLY AND I BELIEVE THE AUSTIN ENERGY BUILDING IS, UM, REDUCED THEIR POTABLE DEMAND BY 80% AND THE CENTRAL LIBRARY IS 85% REDUCTION.

AND IT'S, UH, UH, THAT'S REALLY GOOD NEWS AND GLAD TO HEAR THAT IT IS THAT EFFECTIVE.

I MEAN THAT HIGH OF A PERCENTAGE OF THE, THE WATER USE, THIS IS A A BROADER QUESTION, BUT IN THINKING ABOUT WATER GENERALLY, HOW MUCH OF OUR USE IS LAWN USE STILL? 'CAUSE WHEN I THINK ABOUT, YOU KNOW, WATER SAVINGS, YOU KNOW, LAWN AND PEOPLE WATERING THE GRASS JUMPS OUT TO ME AS KIND OF THE, DO WE KNOW WHAT THE, THE, THE KIND OF THE ESTIMATES ARE FOR THE AMOUNT OF, OF, UH, OUR WATER THAT GOES TOWARDS LAWNS VERSUS FOR OTHER HUMAN USES? WE DO KNOW THAT WE HAVE A MODEL THAT HAS SORT OF FIGURED OUT THAT DEMAND BY SINGLE FAMILY SECTOR, MULTIFAMILY SECTOR, COMMERCIAL SECTOR.

OFF THE TOP OF MY HEAD, I DO NOT HAVE THAT IN THOSE NUMBERS FOR YOU, BUT WE CAN PROVIDE THEM AND, AND NO PROBLEM.

AND, AND JUST A COUPLE MORE QUESTIONS.

AND AGAIN, THESE ARE KIND OF MORE BIGGER PICTURE QUESTIONS.

I'M JUST TRYING TO UNDERSTAND BETTER THE, THE, THE WATER SITUATION, THE 10 MILLION GALLONS SAVED, I GUESS, IS THAT 10 MILLION A YEAR SAVED? UH, 10 MILLION A DAY? OH, CORRECT.

10 MILLION GALLONS PER DAY.

AND I THINK THAT'S FOR CENTRALIZED RECLAIMED.

AND THEN THE ONSITE WOULD BE AN ADDITIONAL 6 MILLION GALLONS PER DAY.

SO, UH, AND WHAT WOULD BE OUR WATER USAGE PER DAY? LIKE 10 MILLION GALLONS? WHAT'S THE, THE, THE TOP LINE NUMBER? LIKE HOW MUCH WATER ARE WE USING PER DAY ON A, ON A WINTER DAY, WE TYPICALLY USE AROUND 120 MILLION GALLONS A DAY.

UH, AND ON THE SUMMER, AND IN THE SUMMER WE'RE UP AROUND 180.

SO, UH, IT, IT, OVERALL WE'RE TALKING ABOUT, YOU KNOW, UH, 10% ISH OF OUR, OUR, OUR WATER USE WOULD BE THE THROUGH THE, THE RECLAIMED AND, AND REUSED WATER.

HUH? THAT'S RIGHT.

AND I WOULD CALL THAT, YOU KNOW, THAT'S IN THE NEXT 10 TO 15 YEARS.

UM, AND THEN OF COURSE AS WE CONTINUE TO BUILD OUT THE SYSTEM AND INVEST IN THESE SYSTEMS THAT WILL ONLY GROW, UM, YOU KNOW, THE, THE GOAL IS TO, UM, IS TO GET AS MUCH OF THESE SYSTEMS GOING NOW, UM, FOR THE, FOR THE FUTURE.

'CAUSE IT'LL JUST CONTINUE TO PAY DIVIDENDS.

AND, AND LANDSCAPE IRRIGATION.

AND JUST A FOLLOW UP QUESTION ON THE PERCENTAGE OF THE DEVELOPMENTS USE, OF THE 80% OR 85%, ALMOST ALL OF THAT IS TOILET FLUSHING? THAT'S RIGHT.

WOW.

AND LANDSCAPE IRRIGATION AS WELL.

AND THEN FINALLY ON, ON THE CHART FOR THE, THE DEVELOPMENTS UNDER 250 K, UM, THAT ANY DEVELOPMENT UNDER 250 K WOULD, UH, THAT INCLUDES MULTIFAMILY DEVELOPMENTS UNDER 250 K? THAT'S CORRECT.

AND ANY SENSE OF THE COST OF, UH, THE PURPLE PIPE, YOU KNOW, PER UNIT OR, YOU KNOW WHAT I MEAN, FOR A 200 UNIT MULTI-FAMILY OR SOMETHING LIKE THAT? UH, WE DID LOOK AT, SO IT, IT VARIES A LOT BY BUILDING TYPOLOGY.

AND SO, UM, IN OUR REPORT THAT WE, UM, PROVIDED TO YOU ALL BACK IN OCTOBER, UM, IT HAD SOME NUMBERS IN THERE FOR, UM, FOR THE DIFFERENT BUILDING TYPES AND WHAT THE COST PER UNIT WAS.

SO FOR THE HIGH-RISE BUILDINGS WHERE THE PLUMBING IS KIND OF STACKED ON TOP OF EACH OTHER, IT'S, IT'S BASICALLY A WASH IN COST.

UM, BUT FOR THE, UM, I THINK, SO IT WAS BASICALLY FROM A COST BENEFIT ALL THE WAY UP TO I THINK ABOUT $7,000 PER UNIT.

UM, AND SO THAT'S REALLY WHAT THESE AFFORDABILITY INCENTIVES ARE BASED AROUND.

UM, WE REALLY DON'T WANT DEVELOPMENTS TO, I MEAN, WE WANT THEM ALL TO TAKE ADVANTAGE OF THESE, UM, MEASURES SO THAT THEY CAN IMPLEMENT THESE OPTIONS.

AND AND JUST TO, TO BE CLEAR THOUGH, IF YOU'RE A MULTI-FAMILY DEVELOPMENT WITHIN 250 FEET OF A PURPLE PIPE, UH, YOU HAVE TO CONNECT INTO THE PURPLE PIPE AND PLUM YOUR BUILDING WITH, UH, AND THAT'S A CURRENT RULES.

THAT'S CURRENT.

OF THE USES INCLUDING DUAL PLUMBING.

UH, CURRENTLY, UH, YES.

IF YOU ARE WITHIN 250 FEET MM-HMM, , AND YOU'RE, UH, LESS THAN 250,000 SQUARE FEET, UM, REGARDLESS OF YOUR BUILDING USE, YOU'RE REQUIRED TO CONNECT AND USE IT FOR ALL

[01:20:01]

AND, AND THIS WOULD EVEN BE, LET'S SAY A VERY, A VERY SMALL DEVELOPMENT, YOU KNOW, LIKE, LIKE LET'S SAY, UH, IS THAT, DO YOU WANNA SPEAK TO THAT? I THINK CATHERINE CAN ANSWER THESE QUESTIONS A LITTLE BIT BETTER ABOUT THE DIFFERENCES BETWEEN WHAT'S REQUIRED FOR THE DIFFERENT BUILDING TYPES.

SO, UM, THEY CAN BE SMALL DEVELOPMENTS.

UM, THEY WOULD HAVE TO BE A MULTIFAMILY WITH FIVE OR MORE UNITS.

SO THAT'S KIND OF THE THRESHOLD.

UM, THERE IS AN ALLOWANCE FOR A DIRECTOR'S VARIANCE FOR A FINANCIAL HARDSHIP IF THERE'S REALLY, YOU JUST CAN'T MAKE IT PENCIL OUT FOR THOSE SMALLER DEVELOPMENTS THAT EXIST AND WILL PERSIST.

GOOD INFORMATION, GOOD QUESTION.

AND IS THERE ANY CAP IN TERMS OF THE VARIANCE, LIKE, YOU KNOW, UNDER, YOU KNOW, I DON'T KNOW, 20 OR, YOU KNOW, SOMETHING LIKE THAT? IT'S NOT DEFINED LIKE THAT.

IT'S MOSTLY, IT'S, YOU KNOW, FOR THE PUBLIC SUPPORTIVE HOUSING PROJECTS AND THINGS LIKE THAT THAT HAVE JUST, YOU KNOW, A DISCRETIONARY VARIANCE, I GUESS, AS NEEDED ON A CASE BY CASE BASIS, HUH? CORRECT.

ALRIGHT, WELL THAT'S ALL MY QUESTIONS.

THANK YOU VERY MUCH.

DIDN'T WE HAVE A CASE RECENTLY THAT WAS DISCRETIONARY AND A ZONING CASE THAT THE DIOCESE VOTED NOT TO REQUIRE THE CONNECTING TO THE PURPLE PIPE? UM, YES, THAT WAS AN EXISTING, UM, UH, DEVELOPMENT THAT WAS COMING BACK FOR A VARIANCE, UM, FROM CITY COUNCIL AND, UH, DID NOT MOVE FORWARD WITH CONNECTING TO THE RECLINED WATER SYSTEM.

AND DO THESE RULES MAKE THAT, UM, APPEAL TO THE COUNCIL? NOT, DOES IT REMOVE THAT OR WOULD THAT, UM, OPEN DOOR STILL BE AVAILABLE? UH, I THINK I'D HAVE TO ASK THE PLANNING DEPARTMENT ABOUT THAT.

I THINK THAT WAS PART OF WHAT WE GRAPPLED WITH, WITH THAT PARTICULAR, UH, REQUEST OF THE DAIS.

UM, BECAUSE IF WE HAVE BREAKS IN THE CON CONNECTIVITY WITHOUT THAT PIECE, THEN IT'S HARDER FOR ANYBODY FURTHER DOWN THE LINE TO CONNECT BECAUSE NOW THAT PIPE DOESN'T EXIST.

SO I THINK WE ON A POLICY BASIS WILL NEED TO TAKE ON THAT CONSIDERATION SO THAT WE CAN TRULY HAVE A DECISION ON WHETHER THIS WILL BE A COMPREHENSIVE CITYWIDE PLUMBING WITH THE PURPLE PIPE.

THAT'S A DECISION THAT RESTS WITH THIS DAIS.

THANK YOU, DIRECTOR ROLSON.

I THINK THAT'S IT FOR THIS, UM, BRIEFING.

REALLY APPRECIATED.

CITY MANAGER.

UM, WOULD YOU LIKE TO CALL UP THE NEXT BRIEFING? INDEED.

THANK YOU ALL INDEED.

UH, WE HAVE A ROUTINE ITEM

[B2. Fiscal Year 2023 closeout and sales tax revenue update.]

THAT, UH, IS GONNA TALK ABOUT CITY FINANCES .

UH, GOOD MORNING MAYOR PRO TEM COUNCIL MEMBERS.

MY NAME IS ED VAN NINO, CHIEF FINANCIAL OFFICER FOR THE CITY.

ITEM NUMBER TWO, BRIEFING NUMBER TWO ON YOUR AGENDA AS AN FY 24 BUDGET UPDATE.

NOW WE JUST HEARD THAT COUNCIL MEMBER HARPER MADISON LIKES TO COORDINATE HER DRESS WITH HER POLICY.

IN ABOUT 10 MINUTES, Y'ALL ARE GONNA KNOW WHETHER THE RED WAS FOR THIS ITEM OR FOR SOMETHING ELSE.

UM, CARRIE'S WEARING GREEN.

WEARING GREEN.

ALL RIGHT, CARRIE'S WEARING GREEN .

WE ARE GONNA FIND OUT WHICH ONE OF THEM WAS RIGHT IN ABOUT 10 MINUTES.

UM, SO CARRIE'S GONNA DO THE BULK OF THE PRESENTATION, BUT, UH, BEFORE SHE COMES UP HERE, I WANTED TO LAY A LITTLE BIT OF, UH, UH, A FOUNDATION FOR THIS ITEM BY PROVIDING YOU WHAT I THOUGHT WAS SOME IMPORTANT CONTEXT AND BACKGROUND INFORMATION BEFORE CARRIE GETS INTO THE DETAILS, BEGINNING WITH WHY ARE WE HERE? AND THE ANSWER TO THAT GOES BACK TO AUGUST OF 2023 WHEN Y'ALL WERE ADOPTING THE FISCAL YEAR 24 BUDGET.

AS HAPPENS WITH EVERY BUDGET THAT I'VE EVER BEEN ENGAGED IN, THERE SIMPLY IS NOT ENOUGH, NEVER ENOUGH FUNDING TO ADDRESS ALL OF THE PRIORITIES THAT AN ELECTED BODY OR THE COMMUNITY MAY HAVE.

AND IN PARTICULAR, THERE WERE FOUR PROGRAMS WHERE WE DIDN'T HAVE PERFECT INFORMATION.

ANOTHER COMMON THEME WITH, WITH BUDGETS.

UM, BUT WE DIDN'T KNOW FOR THOSE PROGRAMS, UM, WHAT THEIR SPENDING REQUIREMENTS WERE GOING TO BE FOR THE FISCAL YEAR.

WE ALSO HAD A LOT OF UNCERTAINTY ABOUT OUR SALES TAXES.

WE DIDN'T KNOW WHAT OUR REVENUES WERE GONNA LOOK LIKE, UM, UM, FOR THE NEXT FISCAL YEAR.

AS YOU MAY RECALL, THAT FOR A LONG PERIOD OF TIME, WE HAD BEEN SEEING DOUBLE DIGIT GROWTH IN OUR SALES TAX REVENUES.

AND THEN IN THE MONTHS LEADING UP TO THE BUDGET ADOPTION, THEY HAD REALLY SEEMED LIKE THEY HAD PLATEAUED AND HAD FLATTENED, UM, OUT.

SO THERE WAS ALL THAT UNCERTAINTY.

UM, AND SO COUNCIL ASKED STAFF TO COME BACK MIDYEAR 24.

AND THAT'S WHAT WE'RE DOING HERE TODAY TO PROVIDE AN UPDATE ON THOSE PROGRAMS TO LET YOU KNOW, UM, WHAT WE'VE LEARNED ABOUT THE, THE SPENDING TRAJECTORY OF THOSE PROGRAMS. AND ALSO TO GIVE YOU AN UPDATE, UM, ON OUR SALES TAX REVENUE PROJECTIONS.

THE SECOND ITEM IS JUST, THIS IS GOING TO BE A MUCH BRIEFER PRESENTATION, BUT IN APRIL, LIKE WE ALWAYS DO, WE WILL BE COMING TO COUNCIL WITH A VERY DETAILED FIVE YEAR FINANCIAL FORECAST THAT'LL GIVE YOU A MUCH BIGGER, BROADER PICTURE ABOUT WHAT THE CITY'S, UH, CURRENT FINANCES LOOK LIKE AND WHAT THE FINANCIAL PROJECTIONS ARE IN THE FUTURE.

WE'RE ALSO, RIGHT NOW WE'RE WORKING WITH ALL OF OUR DEPARTMENTS ON THEIR EXPENDITURE PROJECTIONS AND THEIR RATE PROJECTIONS, UM, FOR THE NEXT FIVE YEARS.

AND SO YOU'LL GET THE BENEFIT OF THAT BROADER PICTURE, BUT YOU'RE GONNA HAVE TO WAIT ABOUT SIX WEEKS TILL WE COME BACK AND DO A LENGTHIER, UH, PRESENTATION

[01:25:01]

WITH OUR FIVE YEAR FINANCIAL FORECAST.

UH, I MENTIONED EARLIER THAT THAT TREND, THAT LONGSTANDING TREND WE HAD HAD, I MEAN, 10, 20 SOME MONTHS, EVEN 30% YEAR OVER YEAR GROWTH IN OUR SALES TAX REVENUE AND THEN A PLATEAUED AND FLATTENED OUT IN THE TWO OR THREE MONTHS LEADING UP TO BUDGET ADOPTION, IT HAD DROPPED DOWN TO LOW SINGLE DIGITS.

UM, WE HAVE CONTINUED TO SEE THAT TREND OVER THE LAST, UH, THREE OR FOUR MONTHS.

WE HAVE CONTINUED TO SEE REALLY, UH, FLAT SALES TAX REVENUES.

NOW THE GOOD NEWS OF THAT IS FLAT IS BETTER THAN DOWN, RIGHT? UM, AND SO FLAT IS BETTER THAN DOWN.

BUT THE BAD NEWS IS, IS WE BUILT OUR FY 24 BUDGET, ASSUMING 4% SALES TAX GROWTH.

AND SO FLAT'S NOT GOOD ENOUGH.

IF OUR SALES TAX REMAIN FLAT AGAINST THAT 4% ASSUMPTION THAT WE MADE IN THE BUDGET, UM, WE ARE GONNA HAVE A BUDGET DEFICIT, UH, THAT WE'LL NEED TO DEAL WITH BEFORE THE END OF THE FISCAL YEAR.

UM, AND THEN THE FINAL POINT IS, AND YOU'RE GONNA HEAR A LOT MORE ABOUT THIS DURING THAT FINANCIAL FORECAST PRESENTATION, BUT, UM, WE ARE, UM, UM, HEADING TOWARDS A A, A FISCAL CLIFF WITH OUR ARPA SPENDING.

AND I DON'T SAY A CLIFF TO BE OVERLY DRAMATIC, BUT IT IT DOES KIND OF, THAT'S JUST THE IMAGE I GET IN MY HEAD BECAUSE IN ARPA WE RECEIVED $188 MILLION OF FEDERAL STIMULUS DOLLARS.

UH, COUNCIL APPROVED A SPENDING FRAMEWORK OF $263 MILLION.

THAT INCLUDED THE ARPA FUNDING.

IT INCLUDED SOME GRANT FUNDING AND IT INCLUDED SOME GENERAL FUND RESERVES.

SO $266 MILLION INFLUX OF FUNDING INTO OUR BUDGET THAT ALLOWED US, ALLOWED US TO ELEVATE, UM, SERVICES IN A NUMBER OF AREAS.

AND OVER THE NEXT THREE YEARS THAT FUNDING'S GONNA START DROPPING OFF.

THE ARPA FUNDS HAVE TO BE FULLY COMMITTED BY THE END OF THIS FISCAL YEAR, AND WE'RE CONFIDENT WE'RE GONNA BE ABLE TO DO THAT.

AND THEY HAVE TO BE FULLY EXPENDED BY THE END OF, UH, 2026, DECEMBER OF 2026.

AND WE'RE CONFIDENT WE'LL BE ABLE TO FULLY EXPEND ALL OF THOSE FEDERAL DOLLARS.

WE'RE NOT GONNA LEAVE ANYTHING ON THE TABLE, BUT THERE ARE GONNA BE SOME CRITICAL POLICY DECISIONS COMING UP DURING THAT PERIOD OF TIME ABOUT THIS ELEVATED LEVEL OF SPENDING AND, AND WHETHER OR NOT WHEN THAT MONEY STARTS TO DRY UP, IF WE'RE GONNA GO BACK TO PRE COVID LEVELS OF FUNDING OR IF WE'RE GONNA TRY TO MAINTAIN THOSE ELEVATED LEVELS OF SPENDING.

AND IF SO, HOW DOES THAT LOOK RELATIVE TO OUR ABILITY TO DO SO RELATIVE TO OUR REVENUE? SO I JUST WANNA HIGHLIGHT THAT WE WILL HAVE MORE ON THAT IN THE FINANCIAL FORECAST, BUT IT'S ANOTHER IMPORTANT BACKDROP FOR THIS WHOLE CONVERSATION.

I FELT THAT WE, WE KIND OF NEEDED TO SET THE TABLE WITH THAT, THAT THAT IS COMING AND MAKE SURE YOU'RE, YOU'RE AWARE OF THAT.

UM, I DUNNO IF WE WANNA PAUSE REAL QUICK FOR QUESTIONS ON JUST MY SETTING THE TABLE, OR IF YOU WANT TO GO STRAIGHT TO CARRIE, DOES ANYBODY HAVE ANYTHING SPECIFIC TO WHAT ED WAS JUST TALKING ABOUT CITY MANAGER, DID YOU? WELL, I MEAN THE, THE ONLY THING I'D SAY IS TO, TO JUST BUILD ON WHAT ED JUST TALKED ABOUT IS THAT, UH, ONE IS THIS, THIS A LITTLE UNUSUAL IN THE SENSE THAT WE'VE NOT DONE, UH, MID-YEAR, KIND OF A MID-YEAR REVIEW.

SO THIS IS A FIRST IN A LONG TIME.

SO, UH, SO BE GENTLE WITH YOUR QUESTIONS AS, UH, AS CARRIE GETS THROUGH HER PRESENTATION.

THE SECOND THING IS, IS THAT WE, UH, HAVE FOR A LONG TIME NOT HAD ECONOMIC HEADWINDS, UH, IN OUR BUDGETING PROCESS.

AND IT AT LEAST ONE QUARTER DOESN'T MAKE A TREND NECESSARILY, BUT, BUT THOSE ARE BEGINNING TO MANIFEST THEMSELVES.

THE HIGHER INTEREST RATES HAVE BEGUN TO HAVE THE DESIRED EFFECTIVE SLOWING THE ECONOMY DOWN.

AND EVEN THOUGH AUSTIN IS STILL THE ENVY OF THE STATE OF TEXAS IN TERMS OF ECONOMIC ACTIVITY, WE HAVE SLOWED DOWN AND IT, AND I THINK IT'S BEGINNING TO IMPACT, UH, OUR, OUR REVENUES.

AND, UH, CARRIE WE'LL GET INTO THAT IN A COUPLE OF MINUTES.

THE FINALLY THING I'LL SAY IS, IS THAT AS YOU PREPARE, AS YOU BEGIN TO UNDERSTAND ALL OF THAT, BUT WE WOULD SIMPLY ASK THAT YOU AVAIL YOURSELF TO MORE INFORMATION RATHER THAN LESS INFORMATION BEFORE MAKING COMMITMENTS UNTIL WE KNOW KIND OF WHAT THE TRENDS ARE GONNA BE.

AND WE'LL HAVE A LITTLE BIT MORE OF THAT DISCUSSION TOWARD THE END OF, UH, CARRIE'S PRESENTATION SO THAT, UH, WHEN WE DO MAKE A COMMITMENT, UH, THAT WE CAN ACTUALLY FULFILL THAT COMMITMENT.

THE SECOND THING IS THAT, AND I'VE TOLD THE STAFF THIS OVER AND OVER AGAIN, THE LAST THING WE WANNA DO IS BEGIN TO HIRE INDIVIDUALS WHO THEN BEGIN TO MAKE COMMITMENTS, WHETHER IT'S HOUSING OR WHETHER IT'S, UH, REFRIGERATORS, WHETHER IT'S UH, HA, WHETHER IT'S, UH, AUTOMOBILES OR CHILDREN'S TUITION.

AND THEN THREE MONTHS LATER FIND OUT THAT WE CAN'T, WE CAN NO LONGER AFFORD THAT INDIVIDUAL BECAUSE WE DON'T HAVE THE INCOME TO PAY FOR IT.

AND THEN YOU HAVE TO, YOU HAVE THE UNPLEASANT DISCUSSION WITH THAT PERSON THAT THAT JOB IS BEING ELIMINATED.

SO WE'RE NOT QUITE THERE YET, BUT I THINK IT'S, THOSE ARE THE THINGS THAT WE TEMP, WE TEMPER OURSELVES IN TERMS OF NOT GETTING OVER OUR SKIS WITH RESPECT TO FINANCES.

THANK YOU, CITY MANAGER, MS. LANG, IT IS GREAT TO SEE YOU.

WELL, GOOD MORNING.

IT'S GREAT TO BE HERE.

UM, CARRIE LANG, BUDGET OFFICER WITH THE FINANCIAL SERVICES DEPARTMENT.

I'M GLAD TO BE HERE TO TALK A LITTLE BIT MORE ABOUT A FISCAL YEAR 24 UPDATE.

UM, I HAVE, UM, ERIC NELSON WITH ME, WHO IS THE DEPUTY, UH, BUDGET OFFICER.

AND, UM, WE ARE GOING TO WALK THROUGH TODAY, TALK ABOUT THE FISCAL YEAR 23, UM, YEAR END REVIEW.

THIS IS A PRELIMINARY REVIEW OF

[01:30:01]

FISCAL YEAR 23 AS WE ARE STILL WAITING ON THE FINAL AUDITED NUMBERS FROM, UM, FOR, FOR FOR THE FISCAL YEAR.

AND THEN WE'LL MOVE FORWARD OUR DISCUSSION TODAY TO TALK ABOUT SOME OF THAT SALES TAX COLLECTION TRENDS THAT, UM, THE CITY MANAGER AND ED DISCUSSED, AS WELL AS PROVIDING YOU ALL AN UPDATE OF THE SPECIFIC AREAS THAT WERE FLAGGED DURING BUDGET ADOPTION.

UM, NAMELY WE'LL TALK ABOUT TENANT STABILIZATION FUNDS, UM, OUR PERMANENT SUPPORTIVE HOUSING FUNDS IN REGARDS TO LOCAL VOUCHERS AND WRAPAROUND SERVICES.

AND THEN THE CITY OF AUSTIN'S CHILDCARE ASSISTANCE PROGRAM.

SO WHEN WE LOOK AT FISCAL YEAR 23 AND HOW WE ENDED THE YEAR, UM, THE GENERAL FUND REVENUE ESSENTIALLY MET ITS REVENUE TARGET FOR FISCAL YEAR 23.

UM, WE HAD $1.304 BILLION, UM, IN REVENUE, 3.5 MILLION ABOVE THAT.

SO WE PRETTY MUCH MET OUR REVENUE TARGET, BUT IT'S REALLY IMPORTANT TO KNOW HOW WE MET THAT TARGET FOR, FOR FISCAL YEAR 23 WHEN WE ENDED THE YEAR.

WHEN WE LOOK AT OUR PROPERTY TAXES THERE, THERE WAS A SHORTFALL THAT WAS PRIMARILY DUE TO, UM, UM, PROTESTS AND REFUNDS THAT WERE GIVEN AFTER BUDGET ADOPTION, SO THAT, THAT IMPACTED THE PROPERTY TAX REVENUE.

AS WE TALKED ABOUT, SALES TAX COLLECT COLLECTIONS CONTINUED THE DOWNWARD TREND THAT WE STARTED DISCUSSING LAST FISCAL YEAR, ALTHOUGH WHEN WE WERE AT THE BUDGET STATE, UH, BUDGET ADOPTION PROCESS, WE WERE STILL OVER A A THREE AND A HALF PERCENT GROWTH.

AND SO THAT'S WHY YOU SEE THE TREND WHEN YOU SEE THE TREND GOING DOWN COMPARED TO WHAT WE BUDGETED, WE STILL HAD RELATIVELY STRONG, EVEN THOUGH IT WAS TRENDING DOWN.

UM, BUT PR SALES TAX CONTINUED TO TREND DOWN AND IT WAS A $4.3 MILLION SHORTFALL FROM WHAT WAS ESTIMATED FOR THE END OF THE FISCAL YEAR.

THOSE SHORTFALLS WERE OFFSET WITH THIS ONE TIME $5.9 MILLION EMS, UH, REVENUE.

THAT REVENUE IS ATTRIBUTED TO THEM CLEANING UP THEIR BACKLOG, THEIR BILLING BACKLOG, AND THEY WERE ABLE TO, UM, CLEAN IT UP MUCH FASTER THAN THEY ANTICIPATED, AND THAT SHOWED THAT $5.9 MILLION INCREASE IN THEIR REVENUE.

AGAIN, THAT IS THE ONE TIME REVENUE THAT WE'LL SEE NOW THAT THEY ARE LEVELED.

WE'LL JUST SEE THE NORMAL INCREASES AND, AND EBBS AND FLOWS FOR EMS REVENUE.

AND THEN WE DID SEE AN INCREASE IN INTEREST EARNINGS BASED ON THOSE HIGHER INTEREST RATES THAT WE ARE, THAT WE ARE DEALING WITH RIGHT NOW.

WHEN WE LOOK AT THE EXPENDITURES FOR FISCAL YEAR 23, THE GENERAL FUND DEPARTMENTS DID, UM, COME WITHIN 99.9% OF THEIR BUDGET FOR THE FISCAL YEAR.

AND ALL OF THIS IS TELLING THE, THE STORY AND SETTING THE STAGE OF WHAT WE'RE LOOKING AT FOR FISCAL YEAR 24.

SO WHEN YOU THINK ABOUT THE YEAR END FOR FISCAL YEAR 23 AND ITS IMPACT ON RESERVES, WE ARE, UM, CURRENTLY WITH THE RESERVE BALANCE OF 4.7 MILLION ABOVE OUR FINANCIAL POLICY REQUIREMENTS.

BUT THERE ARE SOME MAJOR, UM, ASSUMPTIONS THAT WERE MADE IN THE CREATION OF THE, OF THE BUDGET AND THE RESERVES BUDGET FOR FISCAL YEAR 24 THAT ARE REALLY IMPORTANT TO DISCUSS.

AND NOW I'LL TALK ABOUT A LITTLE BIT MORE DETAIL IN THE NEXT COUPLE OF SLIDES, BUT WE'LL TALK ABOUT THE SIGNIFICANT FEMA REIMBURSEMENT EXPECTATIONS THAT WE PUT INTO OUR RESERVE BUDGET, UM, FOR THIS YEAR, AS WELL AS OUR TRAVIS COUNTY REIMBURSEMENT FOR COVID EXPENSES, AND THEN CONTINUE THE CONVERSATION ABOUT WHAT WE'RE SEEING WITH OUR SALES TAX AND THE EXPECTATION FOR A THREE AND A HALF PERCENT RETURN.

SO DIGGING A LITTLE BIT MORE INTO OUR REIMBURSEMENT ASSUMPTIONS, UM, WE HAVE BUDGETED 19.2 MILLION FOR COVID RELATED FEMA REIMBURSEMENTS FOR THIS FISCAL YEAR TO DATE.

WE HAVE RECEIVED, UH, 16.4, BUT I THINK IT'S REALLY IMPORTANT TO NOTE THAT WE DON'T HAVE A TIMELINE OR A A, A ACTUAL REAL IDEA OF WHEN THOSE ADDITIONAL DOLLARS WILL COME IN.

SOMETIMES WE SEE A COUPLE OF NEW OBLIGATIONS FROM FEMA IN THE FIRST COUPLE OF MONTHS, AND THEN THEY MAY GO QUIET FOR SEVERAL MONTHS.

SO IF WE REMAIN FLAT FOR THE REST OF THIS FISCAL YEAR WITH FEMA REIMBURSEMENTS IN PARTICULAR, THEN THAT WOULD BE AN ADDITIONAL $2.8 MILLION POTENTIAL GAP IN OUR ASSUMPTIONS FOR FISCAL YEAR 24.

ALONG THE LINES OF THE TRAVIS COUNTY REIMBURSEMENT STAFF HAS BEEN WORKING REALLY CLOSELY WITH THE TRAVIS COUNTY TEAM ON THAT $15 MILLION BUDGET.

THAT IS JUST $15 MILLION OF THE TOTAL AGREEMENT THAT WE BUDGETED FOR THIS FISCAL YEAR BECAUSE WE KNOW THAT THE, UH, REIMBURSEMENT COULD TAKE A LITTLE BIT LONGER.

SO WE WANT TO BE CONSERVATIVE IN OUR EXPECTATION OF RECEIVING THE FULL, UH, CONTRACT AMOUNT IN THIS FISCAL YEAR.

AND SO WE HAVE RECEIVED $10.6 MILLION TO DATE.

WE ARE CONTINUING TO WORK WITH TRAVIS COUNTY AND GETTING THEM THE INFORMATION THEY'VE REQUESTED TO TRY TO MAKE SURE THAT WE GET THE FULL REIMBURSEMENT FOR THIS FISCAL YEAR.

GOING BACK TO SALES TAX, UM, AS WE LOOK AT OUR SALES TAX RETURNS SO FAR, THE, THE CHART THAT YOU SEE THERE SHOWS THE DOWNWARD TREND THAT BEGAN IN FISCAL YEAR

[01:35:01]

23.

UM, WE TALKED ABOUT HOW WE SAW THE TREND MOVING DOWN, UM, DURING THE BUDGET PROCESS, UM, BUT WE DIDN'T REALIZE OUR FIRST NEGATIVE GROWTH UNTIL AUGUST.

UM, AND SO THAT, THAT WAS HOW, THAT WAS THE INFORMATION WE HAD TO IMPACT HOW WE BUDGETED FISCAL YEAR 24, UM, IN THE FIRST QUARTER.

IF YOU LOOK AT THE FIRST QUARTER OF THE FISCAL YEAR, THEN YOU RECOGNIZE THAT WE'LL SEE A 0.5% GROWTH FOR THIS FISCAL YEAR.

I WANT TO JUST RE UH, REMIND YOU ALL THAT SALES TAXES ON A TWO MONTH LAG.

AND SO WHAT YOU'RE SEEING FOR DECEMBER, JANUARY AND FEBRUARY REPRESENTS THE FIRST QUARTER OF THE FISCAL YEAR, UM, FOR, FOR THE CITY'S REVENUE.

AND SO WHEN WE LOOK AT THAT, WHEN WE LOOK AT THAT, THAT, UH, THE ACTUAL 0.5% GROWTH COMPARED TO THE 3.5%, WE, WE START THE YEAR AND WE, WE CURRENTLY HAVE A $8.5 MILLION, UH, BUDGET DEFICIT WHEN WE'RE LOOKING AT SALES TAX REVENUE.

IF WE CONTINUE ON THIS, THIS FLAT, UH, GROWTH FOR THE FISCAL YEAR, THAT COULD GET UP TO $15.4 MILLION OF A GAP BY THE END OF THIS FISCAL YEAR.

NOW WE'LL COME BACK TO YOU AS, AS, UM, THE CITY MANAGER AND ED MENTIONED IN THE FINANCIAL FORECAST TIMEFRAME AND GIVE YOU ALL AN UPDATE IN ABOUT SIX WEEKS TO SHOW YOU WHAT WE ARE SEEING WITH SALES TAX.

WE'LL HAVE ABOUT FIVE MONTHS OF INFORMATION AT THAT TIME, AND WE'LL GIVE YOU THE PROJECTIONS FOR THE FISCAL YEAR BASED ON THAT UPDATED INFORMATION THAT WE'LL RECEIVE, UM, IN THE FINANCIAL FORECAST.

MOVING FORWARD TO THE ITEMS THAT WERE, UM, DISCUSSED DURING BUDGET, THERE WERE, THERE WERE, UM, FOUR OR FIVE ITEMS THAT WERE SPECIFICALLY DISCUSSED, UM, DURING BUDGET ABOUT COMING BACK AND HAVING A CONVERSATION ABOUT THESE ITEMS DURING, UM, A POTENTIAL MIDYEAR CONVERSATION.

TENANT STABILIZATION IS ONE, UM, THE, THE PUBLIC, EXCUSE ME, PERMANENT SUPPORTIVE HOUSING, LOCAL VOUCHER AND WRAPAROUND SERVICES PROGRAMS WHERE THE OTHERS AS WELL AS THE CITY OF AUSTIN CHILDCARE ASSISTANCE PROGRAM.

SO WHEN WE START THE CONVERSATION ABOUT, UM, TENANT STABILIZATION, WE WANT TO START OFF BY LOOKING AT OUR FULL HOUSING STABILIZATION EFFORTS AND KIND OF TOUCH BASE ON THE ALL THE AREAS THAT WE, UM, HAVE LOOKED AT OR HAVE, WE'VE INVESTED IN ON, UM, HOUSING STABILIZATION AND, UM, AND, AND TENANT STABILIZATION PROGRAMS. THE ONES THAT WE TALKED ABOUT IN BUDGET IN PARTICULAR WERE THE EMERGENCY RENTAL ASSISTANCE AND TENANT RELOCATION.

IT ALSO INCLUDES TENANT REPRESENTATION AND RENTAL'S RIGHTS.

THE CITY'S ALSO INVESTING IN ANTI DISPLACEMENT THROUGH THE PROJECT CONNECT FUNDS, AS WELL AS DISPLACEMENT PREVENTION NAVIGATOR PROGRAM.

AND THEN FINALLY, IN OUR HOMELESSNESS RESPONSE EFFORTS, OUR PERMANENT SUPPORTIVE HOUSING PROGRAMS AND OUR RAPID REHOUSING WITH TENANT STABILIZATION.

IN PARTICULAR, THE CITY BEGAN FUNDING RENTAL ASSISTANCE AS PART OF OUR RESPONSE TO THE IM TO THE IMPACT THAT COVID WAS HAVING ON THE COMMUNITY.

WE CURRENTLY HAVE $9.6 MILLION OF ONE-TIME FUNDS FOR TENANT STABILIZATION RELATED TO RENTAL ASSISTANCE AND RELOCATION.

THIS INCLUDES $7.8 MILLION FROM FISCAL YEAR 23 AND $1.8 MILLION THIS FISCAL YEAR.

THE CONTRACT WITH THE VENDORS.

AND WHEN YOU LOOK AT THIS SLIDE, YOU'LL SEE THAT WE'VE HAD $2.2 MILLION OF EXPENDITURES.

UM, AND THAT SPEAKS TO THE CONTRACT WITH THE VENDOR WAS SIGNED THIS, THIS SUMMER, BUT THERE WAS A RAMP UP PERIOD WITH THE VENDOR.

UM, AND SO WE'RE STARTING TO SEE MORE OF THAT, THOSE EXPENDITURES, UM, THAN WHAT IS WHAT THE NUMBERS SHOW OR WHAT THE NUMBERS INDICATE.

UM, AND SPEAKING WITH THE DEPARTMENT, WE'VE HELPED 345 HOUSEHOLDS TO DATE.

WE ANTICIPATE FULLY EXPENDING THOSE DOLLARS AND SERVING 1500 HOUSEHOLDS BY THE END OF MAY.

AND THE ONE OF THE REASONS THAT WE THINK THAT IT'S GONNA WRAP UP WITH THAT RAMP UP PERIOD NOW IN PLACE, THE, THE VENDOR HAS INDICATED THAT THEY'LL BE ABLE TO PROCESS SOME OF THESE REQUESTS A LITTLE BIT FASTER MOVING FORWARD TO THE PERMANENT SUPPORTIVE HOUSING LOCAL VOUCHER PROGRAM.

THIS PROGRAM, UM, WAS, UH, IS FOR THE VOUCHER PROGRAM THAT PROVIDES THE SUBSIDY FOR THESE UNITS THAT ARE COMING ONLINE OR HAVE RECENTLY COME ONLINE.

UM, THERE IS THE 12.4 MILLION IN THE AUSTIN HIGH AUSTIN HIGH HOUSING FINANCE CORPORATION.

AND THE ONE TIME, UH, DOLLARS OF 1 MILLION THAT IS IN THE GENERAL FUND BUDGET STABILIZATION RESERVE.

THESE DOLLARS HAVE BEEN CONTRACTED OUT.

THEY WERE CONTRACTED OUT IN NOVEMBER OF 2023.

UM, AS YOU ALL KNOW, SPARROW OPENED IN JANUARY AND SO THEY ARE STILL IN THE LEASING PROCESS.

AND SO AS THOSE LEASES START AND WHEN PECAN GARDENS COMES ONLINE IN SPRING OF 24, THEN WE'LL START SEEING THESE FUNDS BE EXPENDED IN THIS FISCAL YEAR.

UM, THE

[01:40:01]

ANTICIPATION IS THAT $1.5 MILLION WILL BE EXPENDED THIS YEAR.

AND THEN AS MORE, UM, UNITS COME ONLINE, THE EVENTUAL ANNUAL EXPENDITURE IS ESTIMATED TO BE $4.5 MILLION ANNUALLY.

BUT FOR THIS FISCAL YEAR, WE ONLY ANTICIPATE THE USE OF $1.5 MILLION.

NEXT WE'LL TALK ABOUT THE WRAPAROUND SERVICES.

UM, THERE WAS $1 MILLION PROVIDED IN THE, UH, ONE-TIME FUNDS FOR WRAPAROUND SERVICES FOR THIS FISCAL YEAR.

THE DEPARTMENT HAS BEEN WORKING TO, UH, CREATE A SOLICITATION FOR THAT $1 MILLION THAT IS EXPECTED TO GO OUT AT THE END, OR EXCUSE ME, LATER THIS SPRING AND SPRING OF 2024.

HOWEVER, THE DEPARTMENT ALSO HAS $8.7 MILLION OF FUNDING THAT IS IN THEIR ONGOING FUNDING FOR WRAPAROUND SERVICES.

AND AS YOU CAN SEE TO DATE, THOSE FUNDINGS THAT HAVE BEEN SPENT ARE ABOUT $1.6 MILLION.

AND THEN FINALLY, THE CHILDCARE ASSISTANCE PROGRAM.

UM, THAT PROGRAM IS CURRENT UNDER, CURRENTLY UNDER EVALUATION AND, UM, RECEIVING AND EVALUATING THE SURVEYS THAT WENT OUT TO EMPLOYEES IN JANUARY.

AND, UM, WE HAVE 70 EMPLOYEES CURRENTLY ENROLLED.

THAT'S WHY THE EXPENDITURE TO DATE IS ONLY SHOWING $73,000.

WE ANTICIPATE, UM, SPENDING APPROXIMATELY $400,000 THIS FISCAL YEAR.

AND THE HUMAN RESOURCES DEPARTMENT IS WORKING ON GETTING THE INFORMATION OUT TO EMPLOYEES SO THAT THEY ARE AWARE OF THE PROGRAM AND THAT THEY CAN, UM, EVALUATE THE SURVEY TO SEE HOW TO BETTER IMPLEMENT THE PROGRAM FOR THIS FISCAL YEAR AND GOING FORWARD.

SO AS WE START TO WRAP UP THE DISCUSSION, UM, OR THE PRESENTATION, WE WANT TO JUST KIND OF DO A RECAP AND, AND FOCUS ON THE THINGS THAT WE ARE SEEING FROM A FINANCIAL PERSPECTIVE.

UM, WE THINK THAT BOTH THE LOCAL VOUCHER AND THE WRAPAROUND SERVICES FOR PERMANENT SUPPORTIVE HOUSING HAS SUFFICIENT FUNDS FOR THIS FISCAL YEAR.

WE, UM, WE BELIEVE THAT CONTINUED DISCUSSION AND EVALUATION IS NEEDED ON ATTENDANCE STABILIZATION PROGRAM TO SEE HOW WE CAN BETTER FIT THE PROGRAM OR RIGHT SIZE THE PROGRAM BASED ON FUNDING THAT IS AVAILABLE.

AND THEN IN LIGHT OF THE CURRENT TRENDS THAT WE ARE ANTICIPATING FOR SALES TAX, WE WANNA MAKE SURE THAT WE ARE CAUTIOUS ABOUT THE FINANCIAL OUTLOOK OF WHAT THE CITY IS GOING TO SEE BY THE END OF THIS FISCAL YEAR AND THE IMPACT OF THOSE SALES TAX RETURNS ON FISCAL YEAR 25 AND OUR FINANCIAL FORECAST PERIOD.

WE'LL BE BACK WITH YOU IN SIX SHORT WEEKS.

IT'S GONNA BLINK OF AN EYE.

Y'ALL WILL SEE US AGAIN AND WE'LL HAVE A MORE COMPREHENSIVE, UM, UPDATE ON WHAT WE'RE SEEING WITH OUR REVENUE, WHAT WE'RE SEEING WITH EXPENDITURES, AND WHAT ANTICIPATED GROWTH WE'RE SEEING WITH EXPENDITURES OVER NOT JUST THE SHORT TERM FOR FISCAL YEAR 25, BUT ALSO OVER THE MIDTERM, OVER THE FIVE YEAR FORECAST.

AND SO WITH THAT, WE, AND ALL THESE VARIABLES THAT WE'RE STILL WORKING WITH, WE'RE ASKING THAT, UM, THAT YOU AS COUNCIL, WE ALLOW US TO COME BACK WITH THAT FINANCIAL FORECAST UPDATE BEFORE WE START MAKING ANY ONE TIME OR, OR, UH, CHANGES FOR THIS FISCAL YEAR BECAUSE WE WANNA HAVE A COMPLETE, UM, AND COMPREHENSIVE UNDERSTANDING OF WHAT THESE IMPACTS WILL HAVE FOR US, NOT JUST FOR THIS YEAR, BUT IN THE FUTURE.

AND COUNCIL MEMBERS.

ONE OF THE THINGS I'D LIKE TO DO, JUST TO WRAP UP IS JUST AS AN EXAMPLE, I, I THINK, UH, ARPA HAS, UH, PROVIDED A DISTORTION OF WHAT WE CAN AFFORD IN TERMS OF A RUN RATE.

AND SO FOR EXAMPLE, AS A, AS A, THIS IS A MADE UP EXAMPLE, BUT IT'S A, IT'S A, I THINK IT'S A REAL EXAMPLE.

IF WE HAVE A A, AN ABILITY TO SPEND $20 MILLION ON A PROGRAM, 'CAUSE THAT'S IN OUR RUN RATE, IT'S IN OUR BASE BUDGET, BUT ARPA CAME IN AND WE ADDED 40 MILLION TO THAT.

WHEN THAT 40 MILLION GOES AWAY, ALL YOU CAN AFFORD IS 20 MILLION.

AND SO THAT IS 40 MILLION OF BENEFIT THAT YOU GAVE TO THE COMMUNITY FOR WHATEVER PROGRAM THAT WAS.

AND THAT MONEY HAS NOW LAPSED AND YOU DON'T HAVE THE ABILITY TO SPEND $60 MILLION.

YOU CAN ONLY, YOU CAN ONLY SPEND 20 MILLION.

AND I THINK THOSE ARE REAL THINGS THAT CARRIE AND ERIC AND ED ARE TRYING TO SORT THROUGH.

UH, AGAIN, WE'RE NOT, I THINK WHAT WE, WE WOULD REALLY, THE TAKEAWAY FOR US AS WE WENT THROUGH THIS VERY VALUABLE EXERCISE IS THAT WE WOULD LIKE TO HAVE MORE INFORMATION SO THAT WE COULD GIVE YOU THAT INFORMATION SO YOU WOULD HAVE MORE INFORMED, BE BE BETTER INFORMED IN TERMS OF WHATEVER DECISIONS YOU MAKE GOING FORWARD WITH RESPECT TO NOT JUST THE, THE, THE BUDGET FOR THIS YEAR, BUT AS YOU PUT THE BUDGET TOGETHER FOR YEAR 25.

AND WITH THAT, I THINK CARRIE AND ERIC AND ED ARE HAPPY TO ANSWER ANY OF YOUR QUESTIONS AND I'LL

[01:45:01]

BE A SUPPORTING CAST MEMBER.

CITY MANAGER, UH, COUNCIL MEMBER VELA, WE'LL START WITH YOU.

AND THEN COUNCIL MEMBER RYAN ALTER, STEPPING BACK JUST A LITTLE BIT ON ON ON KIND OF A MORE OF A BIG PICTURE, HOW IS, UH, THE THREE AND 5%, UH, PROPERTY CAP, UH, AFFECTING US? A AND I GUESS MY QUESTION WOULD BE MORE WITHOUT THE THREE AND A HALF PERCENT PROPERTY CAP.

UM, SINCE I'VE BEEN ON THE DA I'VE ONLY BEEN IN THE THREE AND A HALF PERCENT, UH, PROPERTY CAP ENVIRONMENT.

WHAT WOULD WE HAVE TAKEN OF THE INCREASE IN PROPERTY TAXES IN THE PAST? I BELIEVE THE CAP USED TO BE 7%, EIGHT AND A HALF PERCENT.

IT USED TO BE 8%.

AND WHAT WOULD BE A NORMAL, AND AGAIN, I KNOW IT VARIES PER YEAR, BUT YOU KNOW, WHAT WOULD WE NORMALLY HAVE CAPTURED OF THAT? EIGHT AND A HALF PERCENT.

SO IT WOULD, IT WOULD VARY YEAR OVER YEAR, BUT WE WOULD CONSIDER GOING, I MEAN, WE WOULD GO RIGHT BELOW EIGHT OR A COUPLE OF, YOU KNOW, PERCENTAGES BELOW, BELOW EIGHT.

SO IT WOULD, IT WOULD DEPEND ON WHAT THE NEEDS WERE FOR THAT FISCAL YEAR, BUT WE HAD THE FLEXIBILITY MM-HMM.

TO UH, ADDRESS ANY GAPS, ADDRESS ANY ENHANCEMENTS UP TO THAT 8% WITH THAT CAP.

WHAT IT MEANS IS THAT WE RELY MORE HEAVILY ON WHATEVER SALES TAX IS DOING TO BALANCE MOSTLY OUR BASELINE EXPENDITURE GROWTH.

AND SO, I MEAN, AND WHEN DID THE THREE AND A HALF PERCENT PROPERTY TAX CAP KICK IN 2019 WAS WHEN IT PASSED? 2021 WAS WHEN IT WAS PUT INTO PLACE.

AND SO SINCE 2021, I MEAN, WE'RE TALKING ABOUT, YOU KNOW, TENS OF MILLIONS OF DOLLARS IN PER YEAR THAT WE'RE ESSENTIALLY KIND OF LEAVING ON THE TABLE.

UH, AND, AND AGAIN, THAT'S, THAT'S PILING UP, YOU KNOW, YEAR AFTER YEAR, HUH? CORRECT.

UM, THE QUICK QUESTION ON THE EMS BILLING BACKLOG, ARE THEY DONE WITH THAT BACKLOG? ARE THEY, OR ARE, ARE THERE GONNA BE SOME ADDITIONAL REVENUES THAT COULD POTENTIALLY COME IN? MY UNDERSTANDING IS THEY'VE CLEARED THEIR BACKLOG AND THEY'RE ONLY USE THEIR, THEIR REVENUE AT THIS POINT IS THEIR REGULAR TRANSPORT REVENUE.

SO THERE'S NO ANTICIPATED, UH, ADDITIONAL EMS BACKLOG BILLING COLLECTIONS? NO.

UM, AND THEN THE 9.6 MILLION FOR THE TENANT STABILIZATION, THOSE ARE ALL LOCAL FUNDS THAT WE HAVE BUDGETED OVER THE LAST COUPLE OF YEARS, IS THAT CORRECT? CORRECT.

UM, AND THE 9.6 MILLION WAS BUDGETED OVER A TWO YEAR PERIOD? YES, WE, WE BUDGET THE ORIGINAL 7.8 MILLION IN FISCAL YEAR 23.

AND THEN IN THIS LAST BUDGET CYCLE FOR FISCAL YEAR 24, WE BUDGETED 1.6 BOTH ONE TIME.

IT'S IN SEVERAL DIFFERENT, UM, PHASES.

UM, THING IS THAT, THAT'S REALLY ALL MY QUESTIONS.

I KNOW WE DISCUSSED THIS IN THE HOUSING COMMITTEE THE OTHER DAY, YOU KNOW, ABOUT THE, THE NEED, AND I APPRECIATE Y'ALL IDENTIFYING THAT, YOU KNOW, THE PSH PROGRAMS AND THE CHILDCARE ARE, ARE, ARE IN A, A DECENT PLACE, BUT THE TENANT STABILIZATION IS LIKELY TO, TO RUN OUT.

UH, AND THAT'S A CONCERN ESPECIALLY, AND I THINK THE CITY MANAGER SPOKE TO IT TOO, WHERE, YOU KNOW, WE DON'T WANNA, WE, WE'VE GOTTA KEEP CONTINUITY IN THESE PROGRAMS. YOU KNOW, THE STOP AND START NATURE IS, IS NOT GOOD FOR, UH, THE PEOPLE RECEIVING AND ASKING FOR THE FUNDS.

IT'S NOT GOOD FOR THE, THE, THE CONTRACTORS FOR THE, YOU KNOW, THAT ARE ADMINISTERING THE FUNDS.

YOU KNOW, WE WANT, UH, SOMETHING, UH, A LITTLE MORE, UH, MORE STEADY, UH, AND STABLE AND, AND THE FACT THAT THE, THE PROGRAM HAS ALREADY CLOSED IN NEW APPLICATIONS AND IS LIKELY TO RUN OUT OF FUNDING, UH, BEFORE THE END OF THE FISCAL YEAR IS A, A REAL CONCERN.

UM, YOU KNOW, I I, I LOOK FORWARD TO, AS Y'ALL, YOU KNOW, WE CAN GET THE FEBRUARY SALES TAX NUMBERS, UH, I GUESS AT, AT AT SOME POINT, UH, UH, PRETTY SOON AND, YOU KNOW, WE'LL, WE WILL GET A LITTLE BIT MORE INSIGHT INTO, YOU KNOW, WHERE WE ARE.

UM, YOU KNOW, BUT I, I LOOK FORWARD TO, TO KIND OF LOOKING AT THAT AND, AND TRYING TO FIGURE OUT WHAT WE CAN DO.

AND, AND NOT ONLY THAT, BUT I MEAN, THINKING ABOUT THE PROGRAM MOVING FORWARD, WHAT'S THE LEVEL OF FUNDING THAT IS GONNA BE MANAGEABLE MOVING FORWARD? I, I MEAN, I KNOW WHEN WE BUDGETED THAT $8 MILLION THAT FIRST, UH, 20 IN 2022, YOU KNOW, WE HAD ABOUT A $25 MILLION BUDGET SURPLUS, UH, IF I REMEMBER CORRECTLY, THAT, THAT WE WERE, WE WERE WORKING WITH.

OBVIOUSLY THE SITUATION HAS CHANGED, UH, SUBSTANTIALLY.

AND, AND I'M JUST, YOU KNOW, WE, WE'VE GOT TO GET TO A NUMBER THAT, THAT IS SUSTAINABLE OVER THE, THE LONG TERM.

THANK YOU CHAIR.

THANK YOU MAYOR PORTAN.

COUNCIL MEMBER RYAN ALTER.

THANK YOU, UH, ON YOUR FEMALE REIMBURSEMENT DISCUSSION, HOW MUCH DO WE HAVE? OUTSTANDING.

I KNEW SOMEONE WOULD ASK THAT QUESTION.

UM, SO

[01:50:01]

AND SO WHAT I UNDERSTAND IS 43 MILLION HAS BEEN SUBMITTED AND IT'S BEING REVIEWED.

UM, BUT THE TOTAL, THE TOTAL, UH, SUBMISSION OR ANTICIPATED SUBMISSION IS 168 MILLION.

AND I CAUTION THAT BECAUSE WE HAVE SEEN SOME REVENUE REIMBURSEMENT OR SOME REIMBURSEMENT FROM COVID, FROM FEMA.

HOWEVER, THE TIMELINE IS WHAT IS, HOW IS WHY WE CAUTION, BECAUSE WE HAVE SOME PROJECTS FROM FEMA 2013 HALLOWEEN FLOODS, THINGS LIKE THAT, THAT WE STILL HAVE NOT RECEIVED REIMBURSEMENT FOR.

THEY'VE BEEN, UM, FEMA HAS BEEN REALLY RESPONSIVE ON SOME OF THE COVID PROJECTS.

HOWEVER, WE HAVE NO INDICATION FROM THEM ON HOW FAST THEY WILL MOVE FORWARD.

AND SO, UM, WHEN WE, WHEN WE ANTICIPATED THE 19.2 MILLION FOR THIS YEAR, IT WAS BASED ON THE DOLLARS THAT WE ALREADY SAW, WERE EITHER OBLIGATED OR GOING TO POTENTIALLY BE OBLIGATED IN THIS FISCAL YEAR.

WE DON'T KNOW WHERE FEMA'S GOING TO OBLIGATE THE REMAINING DOLLARS.

YEAH, NO, I, I KNOW THIS IS A HUGE GUESSING GAME.

I WAS JUST CURIOUS WHAT KIND OF MAGNITUDE STILL IS OUTSTANDING.

UM, WHEN YOU TALK, AND I DON'T KNOW IF THIS IS A QUESTION FOR YOU OR MAYBE A QUESTION FOR MANDY ABOUT THE HOUSING VOUCHERS, THE LOCAL HOUSING VOUCHERS.

UH, I, I SEE MANDY COMING ON DOWN.

I KNOW FOR THOSE THAT HAKA, THEY'RE TYPICALLY FUNDED AT ABOUT $15,000 A TENANT PER YEAR.

IS THAT KIND OF WHAT WE'RE DOING? ARE WE MATCHING HAKA OR SAME KIND OF DEAL? MANDY DE MAYO INTERIM, UH, DIRECTOR OF HOUSING DEPARTMENT? YES.

OUR PROGRAM, THE LOCAL HOUSING VOUCHER PROGRAM IS BASED ON THE FEDERAL PROGRAM, WHICH IS WHAT HAKA ADMINISTERS.

SO THE PROJECT BASED VOUCHERS PAYS THE DIFFERENCE BETWEEN WHAT A TENANT CAN AFFORD 30% OF THEIR ADJUSTED GROSS INCOME AND THE FAIR MARKET RENT THAT'S ESTABLISHED BY HUD.

AND THAT DOES AVERAGE OUT TO ABOUT $15,000 PER UNIT PER YEAR.

AND SO WHEN, UM, MS. LANG WAS TALKING ABOUT $4.5 MILLION IS KIND OF WHAT WE ANTICIPATE THIS PROGRAM STABLE STABILIZING AT, WE'RE ANTICIPATING ABOUT 300 VOUCHERS A YEAR.

THAT IS CORRECT.

WE HAVE ALREADY COMMITTED TO, UM, UH, A VARIETY OF DIFFERENT, UM, PERMANENT SUPPORTIVE HOW, UH, PROJECTS, UM, AND YOU ALL SAW A PRESENTATION FROM DAVID GRAY AND JAMIE MAY A FEW WEEKS AGO WHERE WE TALKED ABOUT ALL OF THE PSH PROJECTS THAT WE HAVE IN THE PIPELINE.

MANY OF THOSE PROJECTS WE HAVE COMMITTED VOUCHERS TO, UM, AND, UH, HAKA IN ADDITION HAS TYPICALLY MATCHED OUR VOUCHERS.

SO A SPARROW AT RUTLAND DOES AN EXAMPLE.

IT'S 171 UNITS, 101 OF THOSE UNITS HAVE PROJECT BASED VOUCHERS.

51 OF THOSE UNITS ARE OURS.

LOCAL HOUSING VOUCHER AND 50 ARE FROM HAKA, SO FROM THE FEDERAL GOVERNMENT.

AND ARE THOSE OVERSUBSCRIBED KIND OF LIKE RHODA OR IS IT PRETTY, ARE WE IN FAIR BALANCE OF THE NEED IN THE, SO, UM, WE ARE CURRENTLY, UM, WE HAVE COMMITTED TO ALL OF THE PROJECTS THAT ARE IN THE PIPELINE THAT WE CAN FUND REASONABLY WITH THAT ESTIMATED FOUR TO FOUR AND A HALF MILLION DOLLARS PER YEAR.

WE ALSO ACKNOWLEDGE THIS IS A TOUGH PROGRAM BECAUSE UNLIKE THE FEDERAL GOVERNMENT COMMITS TO THE PROJECT BASED VOUCHERS OVER A 15 PLUS YEAR TIME PERIOD, WE DO NOT, WE COMMIT FOR A YEAR AND THEN IT'S DEPENDENT BECAUSE THE FUNDING TYPICALLY COMES THROUGH THE HOUSING TRUST FUND.

SO IT'S DEPENDENT ON ANNUAL CONTRIBUTIONS TO THE HOUSING TRUST FUND.

WE TRY TO MAKE IT AS LONG OF A COMMITMENT AS POSSIBLE, UM, SO THAT ON THE FRONT END, THE AFFORDABLE HOUSING PROJECTS CAN GO THROUGH UNDERWRITING TYPICALLY WITH THE STATE, WITH THE TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS AND CAN BE UNDERWRITTEN FOR THOSE, UM, OPERATING EXPENSES.

KNOW, WE, WE PUT FORWARD OUR PROPOSED, UH, AMENDMENTS AND THEN KIND OF HAD YOU AND THE DEPARTMENTS WORK THROUGH IT AND, AND UM, YOU KNOW, I THINK IT WAS VERY VALUABLE AND HELPFUL, BUT I'M WONDERING FROM YOUR PERSPECTIVE, IS THERE VALUE IN US IN THIS POLICY INPUT TIME, BRINGING FORWARD SOME OF THOSE IDEAS SO THAT YOU CAN FLESH THEM OUT NOW RATHER THAN RIGHT WHEN WE'RE, YOU KNOW, THE BUDGET IS ON US.

THAT MAKES, UH, A LOT OF SENSE.

UM, MY NEXT QUESTION IS NOT FOR YOU, MANDY.

YOU ANSWER MY QUESTION.

THANK YOU, .

YOU KNOW, YOU MENTIONED BOARDS AND COMMISSIONS, JUST THINKING, TAKING THIS OPPORTUNITY TO THINK ABOUT THE PROCESS THAT WE UTILIZED BACK IN JULY AND AUGUST OF, YOU

[01:55:01]

UH, AND YOU KNOW, IN SOME INSTANCES WE HAD CONVERSATIONS WHERE WE FOUND OUT THAT THINGS, UH, WERE ALREADY HAPPENING WITHIN A DEPARTMENT OR, OR COULD BE, UH, FIT INTO AN EXISTING PROGRAM.

AND SO I'M JUST WONDERING, UH, IS, IS MORE INFORMATION NOW FROM US HELPFUL OR ARE YOU KIND OF STILL DOING FORMULATION AND, AND WOULD IT BE BETTER TO WAIT UNTIL THAT JULY AUGUST TIMELINE? SO I WOULD SAY I, I THINK IF YOU WANNA PROVIDE US SOME MORE DIRECTION OR IF YOU HAVE AREAS THAT YOU WANT US TO LOOK AT, NOW IS A A FINE TIME FOR US TO LOOK AT.

WE WOULDN'T BE ABLE TO, UM, GIVE SPECIFIC FUNDING AVAILABILITY UNTIL WE KINDA WORK THROUGH IT MORE.

BUT IF YOU WANT TO GIVE US SOME AREAS TO WORK WITH THE DEPARTMENTS MAYBE TO HELP YOU UNDERSTAND WHAT'S ALREADY FUNDED AND IF THERE NEEDS TO BE ADDITIONAL FUNDING, THAT'S WHAT WE'RE HERE FOR.

WE'RE HERE TO HELP YOU WALK, WALK THROUGH THOSE THINGS.

UM, IT IS A TOUGH CRUNCH WHEN WE GET INTO THE LAST FEW WEEKS TO GET AMENDMENTS AND, AND WORK THROUGH THEM AND, BUT I THINK THE DEPARTMENTS AND THE TEAM IS READY TO DO BOTH.

SO GIVE US INFORMATION NOW.

WE'LL START WORKING THROUGH WORKING WITH DEPARTMENTS TO GET IT, KNOWING THAT WE'LL BE ABLE TO REFINE THAT DATA AS WE GET MORE DATA RELATED TO WHAT WE ANTICIPATE FOR NEXT FISCAL YEAR.

WELL, I, YOU KNOW, ONE THING BEEN THINKING ABOUT IS IT WOULD BE VALUABLE KIND OF FOR US TO, TO BUILD A VERY PRELIMINARY, UH, LIST AND JUST SO THAT WE CAN ALL KIND OF KNOW WHAT EACH OTHER ARE THINKING ABOUT.

'CAUSE WE CAN'T HAVE THOSE CONVERSATIONS, UNFORTUNATELY SEP A SETTING, UH, SUCH AS THIS.

BUT THAT, YOU KNOW, NOT SAYING THAT THIS MUST BE IN THE BUDGET, BUT KIND OF HELP US THINK WHAT THAT COST WOULD BE OR HOW THAT WOULD WORK OUT.

OR MAYBE IT, IT, YOU ALREADY, UM, PLANNING ON IT.

I JUST, I I'M WONDERING IF THAT, TRYING TO THINK THROUGH THAT BENEFICIARY OR I THINK THE CITY MANAGER WANTED TO RESPOND.

I, I WILL SAY THAT ALLOWING US TO GIVE YOU SOME MORE COMPREHENSIVE INFORMATION AND FINANCIAL FORECAST COULD PROBABLY SET THAT STAGE A LITTLE BETTER.

AND SO IF YOU WOULD ALLOW US TO GIVE THAT INFORMATION IN APRIL, AND THEN START GIVING US SOME INFORMATION TO KIND OF MAKE SURE WE CAN WORK THROUGH THOSE AND, AND ANALYZE THEM.

THAT WOULD PROBABLY GIVE US A GOOD LEEWAY INTO WHAT NEXT FISCAL YEAR IS GOING TO LOOK LIKE.

AND I UNDERSTAND, I WANNA MAKE IT EASIEST FOR YOU.

SO I'M, I'M TRYING TO NOT HAVE YOU, UH, US, YOU KNOW, LOAD YOU DOWN AT THE LAST MINUTE.

RIGHT.

UH, ALLOW FOR, FOR YOUR OFFICE TO, TO WORK THROUGH THAT.

MY LAST QUESTION, CITY MANAGER, I JUST WANTED, I MEAN, I THINK YOU'RE, UH, AT THE TIME WE, UH, DELIVER THE FINANCIAL FORECAST, WHICH WILL BE IN SIX WEEKS, THAT'LL BE THE TIME FOR THE COUNCIL.

YOU'RE, YOU'RE GONNA GET THE, THE, THE, THE DATA, THE DATA DUMP AS IT WERE, OF THIS IS WHERE WE STAND, AND THAT'D BE A GOOD TIME TO SAY, WELL, HERE'S THE KINDS OF THINGS WE, THAT WE WOULD LIKE THERE TO BE SOME FOCUS ON.

ONCE UPON A TIME, THERE USED TO BE A POLICY BUDGET THAT WAS DONE IN EARLY PART OF THE BUDGET PROCESS IN JUNE.

SOMETIME WE DON'T DO THAT ANYMORE.

AND THAT WAS TO ALLOW COUNSEL TO BASICALLY SAY, HERE'S THE, HERE'S THE, THE, THE STRUCTURE OF WHAT THE BUDGET'S GONNA LOOK LIKE BASED ON WHAT YOUR PRIORITIES ARE.

AND ALL I WANT TO JUST SAY IS THAT WHEN THE BUDGET GETS PUT TOGETHER, A LOT OF THAT ALREADY REFLECTS WHAT THE COUNCIL'S PRIORITIES ARE.

RIGHT? THERE ARE THINGS THAT YOU'VE EITHER APPROVED, YOU'VE ASKED US TO GO, UH, LOOK AT.

WE'RE NOT PERFECT.

WELL, SOMETIMES WE, UH, WE HAVE LAPSES IN JUDGMENT.

UH, ED GETS AWFULLY, UH, FRUGAL AND DECIDES NOT TO, YOU KNOW, THAT KIND OF STUFF.

BUT, BUT ARE THOSE ARE, I MEAN, THOSE ARE THE THINGS THAT WE WOULD WANT TO HAVE A DISCUSSION IN IN APRIL.

AND THEN, BUT, BUT IT CERTAINLY THINGS THAT YOU CAN PUT ON THE TABLE, SAY, HERE'S THE KINDS OF THINGS WE'RE THINKING ABOUT.

AND WHAT HAPPENS IS THE BUDGET, THE BUDGET IS INCREMENTAL IN THE SENSE YOU HAVE SO MUCH PERSONNEL COSTS AS A PERCENTAGE OF OUR BUDGET THAT, THAT THERE'S REALLY, I MEAN, THE DISCRETIONARY EXPENSES THAT YOU'RE GONNA HAVE RELATIVE TO THE TOTALS IS NOT THAT MUCH MONEY.

AND SO JUST TO BE MINDFUL OF THAT AS YOU GO, AS YOU THINK THROUGH YOUR, UH, UH, YOUR PRIORITIES AS YOU WANNA THINK ABOUT.

ABSOLUTELY.

I THINK, UH, COUNCIL MEMBER FUENTES, OH, I HAVE ONE MORE QUESTION ABOUT ONE MORE QUESTION.

AND SO I'M WONDERING, UH, IS THAT SOMETHING WE EXPECT TO CONTINUE? IS, IS THE DEPARTMENT DOING ANYTHING TO ADDRESS THAT? UH, OVER TIME? I, I SAY CHIEF HENDERSON MAKING HER WAY DOWN.

LET ME CHIEF AS YOU COME UP, UH, TO ANSWER THIS

[02:00:01]

QUESTION.

LET ME TRY TO ADDRESS THIS A LITTLE BIT.

UH, YES.

I THINK THERE'S BEEN A, A BOLUS OF OVERTIME THAT HAPPENED IN THE FIRST COURT.

UH, PART OF THE, WHAT'S DRIVING THAT IS THE SHORT, THE, THE, THE NUMBER OF OFFICERS THAT ARE STILL MISSING FROM THE ROSTER.

AND SO YOU CAN IMAGINE WHAT THE CHIEF IS HAVING TO DEAL WITH WHEN WE NEED TO COVER AN EVENING SHIFT, AND THERE ARE NO TAKERS OR THERE'S VERY FEW TAKERS, AND SO YOU USE INCENTIVES TO TRY TO BRING, TO BE ABLE TO COVER THAT THAT EVENING.

UH, NOW OUR ACADEMY CLASSES HAVE GOTTEN A LITTLE BETTER.

SO I THINK THAT THAT, THAT IN THE ING AND THEN, UH, IN ADDITION, UH, UNDER THE DIRECTION OF, UH, ASSISTANT MANAGER BRUCE MILLS, THERE'S AN ORGANIZATION THAT WE ARE, UH, WORKING WITH THAT WILL COME IN AND HELP, UH, CHIEF HENDERSON SORT THROUGH THE SCHEDULING PROGRAM THAT WE DO.

HOW, HOW DO THE, HOW CAN WE SCHEDULE THE EXISTING RESOURCES IN A MORE EFFICIENT AND EFFECTIVE WAY? AND SO I THINK THOSE ARE ALL THINGS THAT ARE WORKING.

AND THEN ED'S GOT SOME QUESTIONS, I MEAN, SOME ANSWERS IN TERMS OF THE DOLLARS THEMSELVES, AND THEN THE CHIEF IS HERE TO ELABORATE ON WHAT IT I JUST TALKED ABOUT.

AND I'LL QUICKLY TURN IT OVER TO THE CHIEF TO TALK ABOUT WHAT'S DRIVING THE OVERTIME, BUT I JUST WANTED TO COMMENT IN REGARDS TO THE OVER BUDGET CONSIDERATION.

SO CERTAINLY IF YOU LOOK AT THAT LINE ITEM, POLICE IS OVER BUDGET, BUT EVERYBODY NEEDS TO REMEMBER THE BUDGET IS A PLAN.

AND SO WHEN WE PUT TOGETHER THE LINE ITEM BUDGET, THIS IS KIND OF OUR PLAN FOR SPENDING.

TYPICALLY ABOUT DAY TWO OF THE BUDGET, SOMETHING HAPPENS IN THE PLAN NEEDS TO BE ADJUSTED, BUT BY CHARTER, THE, THE SPENDING AUTHORITY THE COUNCIL APPROVES IS AT THE DEPARTMENT LEVEL.

SO THE DEPARTMENT'S NOT OVER BUDGET UNTIL THEIR BOTTOM LINE.

IF THEIR BUDGET'S A HUNDRED MILLION DOLLARS UNTIL THEY GO OVER A HUNDRED MILLION DOLLARS, THEY'RE NOT OVER BUDGET.

BUT I'M TELLING YOU, EVERY DEPARTMENT DIRECTOR, IF THEY'RE DOING THEIR JOB WELL, THEY'RE ADJUSTING THEIR BUDGET SPENDING PLAN AS THE YEAR GOES ON.

AND AS CIRCUMSTANCES CHANGE.

SO IN THE CASE OF THE POLICE DEPARTMENT WHERE YOU LOOK AT COUNCIL AUTHORIZED SOMEWHERE AROUND 1800 SWORN PERSONNEL, AND WE CURRENTLY HAVE ABOUT 1,450 SWORN PERSONNEL BOOTS ON THE STREET, THAT CREATES A LOT OF SAVINGS THAT WE HAD BUDGETED FOR SALARIES THAT THE CHIEF IS NOW NEEDING TO USE IN OVERTIME TO, TO MEET THE, TO MEET THE MISSION.

, THANK YOU.

COUNCIL MEMBER ARTLAND, APPRECIATE THE QUESTION.

UM, PLEASE NOTE THAT IN FY 23 2 OF THE PRIMARY COST DRIVERS FOR OUR BUDGET WAS NOT JUST OVERTIME, BUT ALSO OUR TERMINAL LEAVE PAYOUT.

AND ESSENTIALLY THAT'S WHEN A RETIREMENT OCCURS.

THERE'S SOME COST ASSOCIATED WITH THAT.

SO WHILE OVER TIME WAS ONE OF THE, OR THE SECOND HIGHEST, PLEASE NOTE THE HIGHEST ONE WAS OUR TERMINAL LEAVE PAYOUT.

PLEASE NOTE, WE UNDERSTAND THE EXPECTATIONS IS THAT WE ARE GONNA STAY ON BUDGET AND, AND WE WILL STAY ON ON BUDGET FOR 20 FY 2024.

ONE THING THAT WE'RE INSTITUTING AND HAVE INSTITUTED SINCE THE INCEPTION OF THE FY 24 BUDGET IS A DAILY EVALUATION OF OUR BUDGET.

IN ADDITION, AFTER TWO WEEKS AFTER THE TWO WEEK PAY PERIOD, A MORE IN DEPTH EVALUATION IS, IS DONE TO IDENTIFY ANY POTENTIAL TRENDS.

UM, ANYTHING THAT WE NEED TO POTENTIALLY FORECAST, BUT UNDERSTAND, LIKE I SAID, THOSE, THE PRIMARY DRIVER WAS OUR TERM RELIEF PAYOUT.

AND OUR SEPARATIONS FOR THIS YEAR ARE, AS OF RIGHT NOW, ARE NOT TRENDING AS HIGH AS THEY DID LAST YEAR POINT, POINT IN TIME.

AND SO WE DON'T ANTICIPATE, UM, THAT WE'LL HAVE THE SAME NUMBER OF SEP SEPARATIONS.

UM, AND THEN IF WE STAY ON PAR WITH WHERE WE'RE AT, WE THAT THERE SHOULD NOT BE ANY ISSUES AS FAR AS THAT TERMINAL LEAVE PAYOUT AND BEING ABLE TO ADJUST OUR BUDGET TO, TO COMPENSATE FOR THAT.

AND DO, IS SOME OF THAT OVER TIME, DOES THAT FACTOR, DO SPECIAL EVENTS FACTOR INTO THAT? IT, IT DEPENDS.

UM, SOME, SOME SPECIAL EVENT OVER TIME IS REIMBURSED AND SOME, SOME SOME'S NOT.

SO IT ALL DEPENDS ON THE EVENT IN AND OF ITSELF.

AND, AND THE, THE PROGRAM THAT, THAT THE MANAGERS MENTIONED, CAN YOU JUST TALK ABOUT THAT REAL QUICKLY? WHAT, WHO, WHO IS HELPING US? WHAT MM-HMM.

, THAT'S BARRY, BARRY DUNN, UM, IS A, UH, COMPANY THAT'S BEEN HIRED TO NOT JUST DO AN EVALUATION OF OUR, OUR SHIFTS AND HOW WE ALLOCATE OUR PERSONNEL, BUT ALSO GONNA BE LOOKING AT OUR RECRUITING PROCESSES.

ALSO, LOOKING AT OUR PI PIS AND HOW THEY'RE PROCESSED.

IS THERE A MORE EFFICIENT WAY THAT WE CAN, WE CAN DO IT.

WE'RE, WE'RE, IT'S ANOTHER METHOD FOR US TO BE MORE INNOVATIVE AND STRATEGIC IN HOW WE'RE GOING TO STILL DELIVER QUALITY POLICING SERVICES WITH THE, WITH THE STAFFING SHORTAGES THAT WE DO HAVE.

WELL, AND I DON'T KNOW IF THAT THIS IN INDIVIDUAL OR FIRM IS, IS THE APPROPRIATE MECHANISM OR NOT NOT, BUT AS YOU'RE REVIEWING THAT, I THINK IT'S HELPFUL FOR US TO THINK ABOUT, UH, IF THERE ARE OPPORTUNITIES TO, UH, DO AUGMENTATION FOR THINGS THAT, THAT MAYBE AN A D OFFICER DOESN'T NEED TO BE DOING.

AND, AND WE'D RATHER HAVE THEM, YOU KNOW, DOING SOMETHING ELSE LIKE A, A CRASH REPORT OR, OR SOMETHING OF THE NATURE.

SO, UH, DON'T KNOW IF THAT'S AN OPPORTUNITY TO HELP US THINK ABOUT THAT, BUT WOULD LOVE ABSOLUTELY.

[02:05:01]

UH, MY QUESTION IS AROUND, THIS IS FOR CARRIE LANG.

CAN YOU SHARE WITH US ANY NEW REVENUE SOURCES THAT WE ANTICIPATE FOR THIS YEAR? I KNOW THAT, UM, WE'VE INITIATED THE TOURISM PUBLIC IMPROVEMENT DISTRICT, AND THAT'LL COME BACK TO US TO APPROVE BY ORDINANCE, BUT NOT SURE WHEN THAT'LL ACTUALLY TAKE EFFECT IF APPROVED BY COUNCIL.

UM, BUT ANY NEW REVENUE SOURCES THAT YOU CAN TOUCH ON THAT WE ANTICIPATE? MY, MY FACE PROBABLY SAYS IT ALL.

THERE AREN'T ANY ADDITION, ESPECIALLY IN REGARDS TO THE GENERAL FUND REVENUE.

WE HAVE NOT IDENTIFIED ANY NEW REVENUE SOURCES FOR GENERAL FUND.

UNTIL A COUPLE OF WEEKS AGO WHEN WE SHUT DOWN THE PORTAL, WE HAD ABOUT 7,000 FOLKS, UM, APPLY, UM, THAT ON AVERAGE, UH, THE REQUEST IS THE MAXIMUM, UM, RENTAL ASSISTANCE AVAILABLE PER THE PROGRAM GUIDELINES IS $6,000.

AND WELL, I GUESS FOR THE APRIL MEETING, CAN WE HAVE A, A LIST OF WHAT THAT MIGHT BE? I KNOW WE ALSO CLOSED THE C HOME TOURS.

UM, ANY OTHER REVENUE SOURCES THAT WE'VE PUT INTO MOTION THAT WE SHOULD BE CONSIDERING WHEN WE TAKE A LOOK AT OUR FINANCIAL FORECAST? THAT WOULD BE HELPFUL.

UH, THE OTHER QUESTION I HAVE IS, CAN YOU REMIND US THE, UH, RESERVE POLICY THAT WE PUT INTO MOTION THIS FISCAL YEAR? THE AMOUNT THAT WE INCREASED IT, THE RESERVE POLICY WAS SET AT 17%, HOWEVER, THE COUNCIL DECIDED TO FUND AT 16.7% FOR THIS FISCAL YEAR.

SO I THINK WE WENT FROM 14% TO 16.6%, WHICH IS ABOUT $35 MILLION INCREASE.

JUST WANNA REMIND OUR COLLEAGUES THAT WE PUT AN ADDITIONAL 35 MILLION INTO OUR RESERVE FUND, UM, WHICH WAS THAT PERCENTAGE INCREASE THAT WE JUST OUTLINED ON SLIDE SIX, YOU MENTIONED THAT CURRENTLY OUR RESERVE BALANCE IS 4.7 MILLION ABOVE OUR FINANCIAL POLICY REQUIREMENT.

CAN YOU ELABORATE A LITTLE BIT MORE ON THAT? YEAH, SO THE, UH, FINANCIAL POLICY FOR RESERVES HAS TWO COMPONENTS.

THERE'S THE, UH, 17% TOTAL BALANCE COMPONENT, AND THEN THERE'S ALSO A REQUIREMENT THAT WE NOT SPEND MORE THAN ONE THIRD OF THE BSRF.

AND SO, UM, THE 4.7 MILLION IS WHAT'S LEFT AT THAT CAPACITY, BASED ON THAT ONE THIRD PROVISION, ALTHOUGH IT'S PRETTY CLOSE TO WHERE YOU'D BE, UM, BEING ABOVE THE 17%.

SO IT'S WHAT'S LEFT AT THAT CAPACITY, ASSUMING A 17% FINANCIAL RESERVE POLICY, ASSUMING A 17%, AND ASSUMING THE LONGSTANDING POLICY OF NOT EXPENDING MORE THAN ONE THIRD OF THE BALANCE OF THE STABILIZATION RESERVE IN ANY YEAR.

VERY GOOD.

ONE, UM, ITEM COLLEAGUES THAT I WANNA HIGHLIGHT THAT IS OF PARTICULAR INTEREST IS OUR RENTAL ASSISTANCE FUND.

UH, WHAT WE KNOW IS THAT THE DEMAND IN OUR COMMUNITY HAS BEEN QUITE HIGH.

UM, WE'VE HAD THOUSANDS OF AUSTINITES APPLY FOR EMERGENCY RENTAL ASSISTANCE, AND THEY'VE ALREADY SHUT DOWN THE REGISTRATION LIST BECAUSE WE'RE AT CAPACITY.

WE'VE OVEREXTENDED, UM, THE AMOUNT OF FUNDS THAT WE HAVE AVAILABLE.

COUNCIL MEMBER VELA, YOU ALLUDED TO THIS IN, IN YOUR REMARKS EARLIER ABOUT, UM, THE, THE NEED FOR US TO ESTABLISH A MORE PERMANENT FUND AND TO RIGHTSIZE WHAT THAT FUND SHOULD LOOK LIKE.

AND I JUST WANTED TO PUBLICLY SHARE MY SUPPORT FOR US TO HAVE A PERMANENT RENTER ASSISTANCE FUND, UH, FOR EMERGENCIES, UM, MOVING FORWARD.

YOU KNOW, COUNCIL HAS TAKEN ACTION THESE LAST TWO FISCAL YEARS WHERE WE'VE HAD THESE ONE-TIME ALLOCATIONS AS PART OF THE BUDGET DELIBERATIONS.

BUT CLEARLY GIVEN THE DEMAND THAT WE HAVE IN OUR COMMUNITY, GIVEN THE HOUSING CRISIS THAT WE'RE IN, AND GIVEN OUR COMMITMENT TO PREVENT HOMELESSNESS IS INCUMBENT ON US TO HAVE A PERMANENT FUND DEDICATED FOR EMERGENCY RENTAL ASSISTANCE.

UM, KNOWING THAT WE HAVE, YOU KNOW, AN INCREASE HERE IN OUR RESERVE FUND, UM, KNOWING THAT, UH, WE HAVE THE OP WE WERE, YOU KNOW, TOLD WE WERE GONNA HAVE A MID-YEAR BUDGET REVIEW PROCESS.

AND, UM, IT SEEMS LIKE APRIL MIGHT BE THAT TIMEFRAME FOR US TO CONSIDER MID-YEAR BUDGET AMENDMENTS.

I WOULD BE SUPPORTIVE OF US INCREASING THE AMOUNT THAT WE HAVE AVAILABLE INTO THE FUND.

AGAIN, GIVEN THAT WE'VE ALREADY EXCEEDED OUR CAPACITY, THE FUNDS HAVE BEEN, HAVE BEEN SPENT, BUT THERE'S STILL QUITE A GAP.

AND I, AND I WONDER IF DIRECTOR DE MAYO HAS ANY, UM, INDICATION OF WHAT THAT GAP IS, GIVEN THE AMOUNT OF APPLICATIONS THAT HAVE COME IN FOR THE RENTAL ASSISTANCE AND THE AMOUNT THAT WE'VE HAVE CURRENTLY ALLOCATED FOR FUNDING.

SO WE HAD A PRESENTATION AT THE HOUSING AND PLANNING COMMITTEE, UH, LED BY NEFERTITI JACKMAN, OUR DISPLACEMENT PREVENTION OFFICER.

UM, AND SHE WAS JOINED BRIEFLY BY DR.

MORILLO, WHO RUNS EL ANO, UM, WHICH IS THE VENDOR FOR OUR, I BELONG IN AUSTIN PROGRAM, OR OUR EMERGENCY, UH, OUR TENANT STABILIZATION AND EMERGENCY RENTAL ASSISTANCE PROGRAM.

RIGHT NOW.

WE HAVE, UM, IN THE FIRST, WE OPENED THE PORTAL, I THINK IN SEPTEMBER, UM, AND THROUGH, UH,

[02:10:01]

WE'RE SEEING AN AVERAGE ABOUT $4,700, UM, PER APPLICANT.

UM, AND SO WITH THE CURRENT POOL OF APPLICANTS, WE ESTIMATE THAT ABOUT 80% OF THEM WILL BE ELIGIBLE PER THE PROGRAM GUIDELINES, MEANING THAT THEY MEET THE INCOME QUALIFICATIONS AND THAT THEY LIVE IN THE FULL PURPOSE JURISDICTION OF THE CITY OF AUSTIN.

UM, THE, THE NEED FAR OUT PACES, UM, THE RESOURCES AND THAT WE'RE NOT UNIQUE IN THE CITY OF AUSTIN, UM, ACROSS THE COUNTRY, WE ARE SEEING THIS, THIS IS A, A, A TREND ACROSS THE COUNTRY, AND I DON'T KNOW OF ANOTHER JURISDICTION, UM, THAT CAN PROVIDE THE RESOURCES TO MEET THE NEED OUT THERE.

UM, OUR CURRENT PROGRAM, UM, AS CARRIE MENTIONED, IS ON PACE, UM, TO EXPEND ALL THE FUNDS, UM, THE END OF MAY.

UM, WE ARE LOOKING AT, BASED ON A CONVERSATION WE HAD AT, UH, WITH COUNCIL MEMBER VELA AT THE HOUSING AND PLANNING COMMITTEE, UM, WE ARE LOOKING AT WAYS TO PERHAPS REPRIORITIZE, UM, APPLICANTS SO WE CAN, UH, NARROW THE POOL OF APPLICANTS TO BETTER HAVE THE, UM, RESOURCES MEET THE DEMAND, MAYBE LOOKING AT LOWER INCOME LEVELS.

CURRENTLY, THE MFI LIMIT FOR OUR EMERGENCY RENTAL ASSISTANCE PROGRAM IS 80% MEDIAN FAMILY INCOME.

WE, OF COURSE, COULD LOWER THAT TO 30% MEDIAN FAMILY INCOME, 50% MEDIAN FAMILY INCOME, AND SERVE FEWER FOLKS, FEWER HOUSEHOLDS, BUT SERVE PEOPLE WITH HIGHER NEEDS.

SO THERE ARE DIFFERENT WAYS TO TARGET THE PROGRAM, AND WE'RE LOOKING AT THAT, UM, FOR FUTURE ITERATIONS OF THE PROGRAM.

DIRECTOR DE MAYO AND COLLEAGUES AGAIN.

I MEAN, I THINK THERE, THERE'S CONSIDERABLE INTEREST AND I JUST WANNA REEMPHASIZE MY SUPPORT FOR ESTABLISHING A PERMANENT RENTAL ASSISTANCE FUND FOR EMERGENCIES, UH, FOR ENSURING THAT WE HAVE, UH, PARAMETERS IN PLACE, UH, SO THAT WE ARE ABLE TO EFFECTIVELY GET THESE DOLLARS OUT, UM, IN EMERGENCY SITUATIONS, KNOWING THE NEED THAT WE HAVE IN OUR COMMUNITY, KNOWING THAT WE'VE ALREADY EXTENDED THE RESOURCES WE HAVE AVAILABLE FOR IT, UM, AND AM AM COMMITTED TO THAT WORK.

AND, UH, COUNCIL VELA, IF YOU, IF YOU'RE INTERESTED IN BRINGING FORWARD AN AMENDMENT IN APRIL AS PART OF THIS CONVERSATION, FOR US TO INCREASE THE AMOUNT THAT WE HAVE AVAILABLE FOR THE RENTAL ASSISTANCE FUND, PLEASE KNOW THAT I STAND IN SUPPORT.

THANK YOU, COUNCIL MEMBER.

AND, AND TO THAT EXTENT, MAYBE CITY MANAGER, IF IT LOOKS LIKE THERE IS SOME INELASTICITY IN THE FUNDING, CAN YOU HELP US KNOW CERTAINLY WHERE WE WOULD NEED TO SHIFT REVENUES IN ORDER TO FUND THAT? WELL, IT'S CERTAINLY VALUE.

I THINK ONE OF THE THINGS THAT I JUST WOULD ASK YOU GUYS, UH, THE COUNCIL MEMBER TO THINK ABOUT IS WE HAVE A LOT OF HOUSING PROGRAMS. STABILIZATION IS ONE OF THEM, BUT THERE'S SEVERAL OTHERS.

AND I WOULD ASK YOU JUST SIMPLY TO LOOK AT THE WHOLE, AND, AND TO MAKE SURE THAT WE UNDERSTAND ALL THAT'S BEING INVESTED ALREADY IN KEEPING PEOPLE IN THEIR HOMES OR IN THEIR APARTMENTS AS THE CASE MIGHT BE.

UH, THE SECOND THING IS, IS THAT, AND I ASKED, UH, CARRIE TO, TO DO THIS JUST TO BEGIN TO ILLUSTRATE WHAT WAS THE STATE THAT EXISTED PRIOR TO COVID, PRIOR TO ARPA, WHAT WAS IN THE BASE THEN, AND WHAT'S, AND WHAT HAVE WE SPENT SINCE THEN THAT'S IN, IN, UH, EXCESS OF THAT BASE? AND, UH, SO THAT YOU CAN BEGIN TO SEE JUST AS AN ILLUSTRATION OF HOW MUCH WE ADDED INTO THOSE PROGRAMS OVER THE, THE, WITH THE ARPA MONEY AND OTHER FUNDING SOURCES THAT WE MAY HAVE HAD.

BUT I THINK WE WELCOME THE DISCUSSION IN APRIL.

I MEAN, I THINK, UH, THAT'S THE TIME TO HAVE THAT DISCUSSION IN A ROBUST DEBATE ABOUT THIS PRIORITY, ALONG WITH ALL THE HOST OF OTHER PRIORITIES THAT THE COUNCIL'S GONNA HAVE TO GRAPPLE WITH AS IT TRIES TO WRESTLE THE 25 BUDGET, UH, TO SOME CONCLUSION.

THANK YOU, CITY MANAGER AND COUNCIL MEMBER ALLISON ALTER IS NEXT.

THAT WAS, UM, ADDITIONAL.

UM, I WANNA START BY ACKNOWLEDGING THE REALLY HARD WORK, UM, THAT OUR EMS DEPARTMENT AND OUR BUDGET OFFICE IN WORKING WITH FINANCE HAS DONE TO ADJUST THE EMS BACKLOG.

UM, THIS IS SOMETHING THAT MY OFFICE HAS BEEN WORKING ON THROUGH OUR ROLE IN AUDIT AND FINANCE AND THROUGH VARIOUS, UM, BUDGET RIDERS, ET CETERA.

AND WE MADE AN INVESTMENT IN ADDITIONAL STAFFING FOR THE REVENUE MANAGEMENT BILLING OFFICE.

UM, YOU HOWEVER, ARE ONLY SEEING PART OF THAT BENEFIT IN THIS, UM, DOCUMENT.

UM, WE HAD A $5.9 MILLION ABOVE THE ESTIMATE IN TERMS OF GETTING RID OF THE BACKLOG FOR ONE-TIME FUNDS.

THERE WAS ALSO, UM, BY MY CALCULATIONS, UH, 3.9 MILLION IN ONGOING FUNDING THAT IS COMING.

THAT WAS ABOVE WHAT WE ANTICIPATED.

UM, AND THERE WAS ALREADY IN THE BASE FOR FISCAL YEAR 23 MONEY FROM THE ONGOING

[02:15:01]

UM, SO THIS IS A SIGNIFICANT AMOUNT OF REVENUE AND I WANT TO, UM, APPLAUD CHIEF LUCK, UM, AND HIS STAFF AS WELL AS DR.

ESCOT, WHO LED THE PROCESS FOR THE DISPATCH EQUITY STUDY THAT HELPED US SEE THAT THESE OPPORTUNITIES WERE THERE FOR THIS ADDITIONAL REVENUE MANAGEMENT.

UM, THAT BEING SAID, I DO WANNA POINT OUT THAT WE HAVE BUDGET DIRECTION FROM FISCAL YEAR 23, WHERE THIS REVENUE IS SUPPOSED TO BE REINVESTED IN THE EMS DEPARTMENT.

AND WHILE WE DID SECURE, UM, A CONTRACT THAT I THINK IS A VERY GOOD CONTRACT FOR OUR EMS EMPLOYEES, THERE ARE SOME ISSUES THAT WE DO NEED TO STILL TAKE CARE OF.

UM, AND I WANTED TO JUST FLAG A COUPLE OF THOSE, UM, FOR COLLEAGUES.

AND I'VE BEEN TALKING WITH THE CITY MANAGER'S OFFICE AND CHIEF QUIST AND BRUCE MILLS ABOUT THIS.

UM, BUT THE ONE THAT I WANNA FLAG FOR TODAY IS THAT WE STILL HAVEN'T FILLED ALL THE POSITIONS THAT WE HAVE ALLOCATED FOR EMS TO MEET THE DEMANDS IN OUR COMMUNITY.

UM, WE HAVE CLASSES FOR EMS ON A REGULAR BASIS.

WHAT WE ARE SEEING IS THAT IN ORDER FOR PEOPLE TO FILL THOSE CLASSES, THEY NEED RELOCATION ASSISTANCE.

UM, THEY NEED TO BE ABLE TO GET TO AUSTIN, WE'RE ABLE TO ATTRACT PEOPLE.

UM, BUT THERE'S AN OBSTACLE THERE BECAUSE THEY NEED THAT EXTRA $2,500, UM, TO BE ABLE TO MAKE THE MOVE TO BE ABLE TO SURVIVE THROUGH THE PERIOD OF THE TRAINING.

UM, AND SO I, I WANNA FLAG THAT AND I WANNA, YOU KNOW, UM, JUST ENCOURAGE MY COLLEAGUES TO ALSO BE ASKING ABOUT THAT.

THERE ARE OTHER THINGS, UM, OTHER PLACES WHERE WE ALSO COULD REINVEST, BUT THIS ONE IN MY VIEW, IS EXTREMELY, UM, IMPORTANT BECAUSE IT DOESN'T DO US ANY GOOD TO HAVE AUTHORIZED POSITIONS TO FUNDED POSITIONS AND NOT BE ABLE TO FILL THEM.

AND IN THE CASE OF EMS, WE CAN BRING THOSE FOLKS, UM, INTO IT.

UM, AND I DON'T KNOW IF CHIEF WANTS TO SPEAK TO THAT IT CAME DOWN OR, OR NOT, UM, OF WHERE WE'RE AT IN THAT PROCESS OR ANYTHING ELSE YOU WANNA ADD ABOUT THE REVENUE PROCESS? EXCUSE ME.

UH, THANK YOU VERY MUCH FOR, UH, INVITING ME TO COME DOWN.

UM, IN TERMS OF OUR RECRUITING, WE ARE, UM, IN, IN A VERY GOOD PLACE.

WE'VE MADE SOME SIGNIFICANT IMPROVEMENTS FROM A RECRUITING PERSPECTIVE.

UM, IF WE LOOK AT, UH, LAST YEAR, FISCAL YEAR 2023, UH, WE SAW TWICE AS MANY PEOPLE JOIN THE DEPARTMENT AS DEPARTED THE DEPARTMENT.

UM, WHICH IS A SIGNIFICANT CHANGE FROM WHAT WE'VE SEEN IN THE PAST.

AND, AND WE LOOK FORWARD TO CONTINUING THAT.

UM, WE DO ACKNOWLEDGE THAT WE DO HAVE SOME CHALLENGES.

PROBABLY THE, ONE OF THE, THE LARGER CHALLENGES IS THE ABILITY FOR FOLKS TO RELOCATE FROM OUT OF STATE TO THE CITY OF AUSTIN.

UM, WE HAVE BEEN WORKING WITH THE BUDGET OFFICE AND THE FINANCE DEPARTMENT, UM, TO, AND OUR EXISTING BUDGET TO LOOK AT OPPORTUNITIES FOR US TO INCENTIVIZE INDIVIDUALS, UH, TO RELOCATE TO AUSTIN.

UM, AND WE'LL CONTINUE TO EXPLORE AND SEE WHAT THE IMPACT ON OUR STAFFING PATTERNS ARE GONNA BE, UM, AS WE ENTER INTO THE BUDGET PROCESS FOR 2025, UM, AND CONTINUE THOSE CONVERSATIONS WITH THE CITY MANAGER'S OFFICE AND FINANCE TO SEE WHAT OPPORTUNITIES WE MIGHT HAVE, UM, IN THE SHORT TERM.

AND, AND WE'RE OPTIMISTIC THAT ANY, UH, THAT AS WE CONTINUE TO FILL THOSE VACANCIES, THAT, UH, SUCH INCENTIVES MAY, MAY BE LESS REQUIRED.

UM, WE THANK YOU FOR YOUR, FOR YOUR ADVOCACY.

NOT HAVE TO, UM, USE AN AMBULANCE AS WELL AS OUR PARAMEDIC PRACTITIONER PROGRAM, WHICH IS OUR PROGRAM THAT IS SENDING OUT, UM, UH, PHYSICIAN ASSISTANTS WHO ALSO HELP US TO ADDRESS LOW ACUITY CALLS AND NOT HAVE TO SEND AN AMBULANCE.

AND DON'T GO TOO FAR, 'CAUSE I MAY HAVE SOME MORE QUESTIONS.

UM, SO I WANTED TO RESPOND TO COUNCIL MEMBER VELAS COMMENT ABOUT LIKE, WE'RE NOT EXPECTING MORE MONEY.

UM, WE ACTUALLY DID A COST OF SERVICE STUDY FEE FOR OUR TRANSPORT FEES, AND WE ARE CHARGING LESS THAN WE COULD CHARGE WHETHER WE CHARGED MORE.

WHETHER THAT WOULD MEAN ADDITIONAL REVENUE IS ANOTHER QUESTION.

UM, THERE IS A LEGISLATIVE STRATEGY THAT I THINK THAT WE SHOULD BE PURSUING AT THE FEDERAL LEVEL THAT WOULD, UM, POTENTIALLY OPEN UP A LOT OF REVENUE FROM INSURANCE COMPANIES WHO ARE CURRENTLY NOT PAYING THEIR FAIR SHARE OF OUR EMS SYSTEM, GIVEN THE RULES THAT GOVERN FROM THE FEDERAL LEVEL.

THAT CHANGE WAS MADE AT THE STATE LEVEL, UM, DURING THE LEGISLATIVE SESSION, BUT IT HAS NOT BEEN MADE AT THE FEDERAL LEVEL.

AND I THINK THAT, UM, IT'S NOT GONNA RESOLVE ISSUES FOR THIS BUDGET IN ALL LIKELIHOOD.

UM, BUT I DO THINK IT'S SOMETHING THAT WE NEED TO BE ADVOCATING FOR AS PART OF OUR FEDERAL LEGISLATION BECAUSE THE INSURANCE COMPANIES BASICALLY ARE KIND OF GAMING THE SYSTEM AND NOT PAYING US, UM, WHAT THEY COULD GIVEN THE WAY IT CHARGES.

AND I'M NOT GONNA TRY AND EXPLAIN MORE OF THAT, UM, HERE ON THE SPOT, BUT THERE IS A WAY FORWARD, UM, WITH THE HELP OF OUR LEGISLATIVE DELEGATION WHERE A SIGNIFICANT AMOUNT OF ADDITIONAL REVENUE CAN COME, BUT THAT'S NOT FROM THE BILLING BACKLOG, BUT IT IS FROM TAKING A GOOD LOOK AT WHAT WE CAN CHARGE FOR OUR TRANSPORT FEES.

AND I THINK WE DEFINITELY, UM, SHOULD BE DOING THAT.

UM, THE OTHER THING THAT I WANTED TO RAISE IS THAT DURING THE BUDGET, WE AUTHORIZED THE PERSONNEL TO MOVE TO 24 7 SERVICE FOR OUR COMMUNITY CARE COLLABORATIVE PROGRAM, WHICH IS OUR, OUR, OUR HOTLINE.

UM, THAT HELPS PEOPLE

[02:20:01]

THAT FREES UP OUR AMBULANCES FOR WHEN YOU HAVE YOUR HEART ATTACK.

THAT, UM, MEANS THAT WE NEED LESS AMBULANCES AS WE GROW, UM, ALL OF WHICH SAVES US MONEY.

WE HAD SET A TARGET OF MAKING THAT 24 7, AND WE HAD, UM, AGREED THAT WE WERE GONNA GO SPEAK WITH SOME OF OUR PARTNERS WHO WERE REAPING SOME OF THE BENEFITS OF THE REDUCED EMERGENCY ROOM COSTS AND ET CETERA.

UM, SO CHIEF LUCK, IF YOU COULD SPEAK TO WHERE WE ARE, UM, IN THAT PROCESS AND WHEN YOU EXPECT TO BE ABLE TO COME BACK AND TELL US WE CAN DO THE 24 7.

YOU KNOW, SO TO BEGIN WITH, UM, YOU KNOW, AS WE LOOK AT, UH, THE WAY THAT WE STAFF EMS, YOU KNOW, WE ARE LOOKING AT CREATIVE WAYS.

WE HAVE NOT REACHED FULL 24 7 STAFFING FOR THAT, UH, FOR THAT DEPARTMENT.

UM, BUT, YOU KNOW, ON CERTAIN DAYS AND TIMES WHEN WE DO FEEL THAT IT IS NECESSARY, UH, WE WILL SHIFT OTHER RESOURCES IN OUR BUDGET TO BE ABLE TO ENSURE THAT WE'RE ADEQUATELY SERVING THE COMMUNITY.

FOR EXAMPLE, ICE STORMS OR OTHER TYPES OF EVENTS WHERE THAT MIGHT OCCUR.

UM, THERE HAS, YOU KNOW, WE DO RECEIVE DIRECTION TO HAVE CONTINUED CONVERSATIONS ABOUT ALTERNATIVE FUNDING SOURCES.

UM, WE ARE IN VERY ACTIVE NEGOTIATIONS, UM, AND DISCUSSIONS WITH CENTRAL HEALTH, UH, TO EVALUATE THE OVERALL PORTFOLIO OF EVERYTHING THAT WE DO FROM, FROM EMS BEYOND JUST, UH, AMBULANCE TRANSPORT TO SEE, UH, WHAT TYPES OF SYNERGIES THERE ARE WITH, UH, CENTRAL HEALTH AND OTHER RESOURCES, UM, AND HOW WE COULD, WE COULD BETTER FUND THOSE.

UM, HISTORICALLY, YOU KNOW, THERE HAS BEEN SOME FUNDING TO EMS FROM CENTRAL HEALTH, UM, FOR VARIOUS THINGS THAT WE DO.

UM, AND WE'RE KIND OF LOOKING TO SEE HOW WE CAN ADDRESS THE FUNDING THAT WE'VE HAD IN THE PAST.

WE'RE BEST TO APPLY THAT.

BUT IN TERMS OF THE ACTUAL DOLLAR AMOUNTS, I'M NOT REALLY COMFORTABLE, YOU KNOW, SHARING THAT RIGHT NOW AS WE'RE KIND OF IN ACTIVE NEGOTIATIONS.

BUT I'M HAPPY TO HAVE, UM, SOME, SOME OFFLINE CONVERSATIONS ABOUT, UH, ABOUT WHERE WE'RE AT.

BUT, UH, I'M VERY OPTIMISTIC ABOUT THE, THE CONVERSATIONS THAT WE'RE HAVING.

I APPRECIATE IT.

UM, I KNOW AGAIN, CITY MANAGER MADE A PROMISE THAT WE WOULD GET THIS DONE, AND I UNDERSTAND WE'RE IN THE NEGOTIATIONS AND WE WANNA, WE WANNA BE MOVING THAT FORWARD.

AND I JUST WANNA REITERATE, UM, MY DESIRE AND MY COMMITMENT TO MAKING SURE THAT WE CAN, UM, MOVE FORWARD WITH THESE PROGRAMS AT THE 24 7 LEVEL.

THEY'VE BEEN PROVEN TO SAVE, UM, AMBULANCE TIME AND EMERGENCY DEPARTMENT CARE, ET CETERA.

UM, AND I APPRECIATE THE DESIRE TO, TO SEEK FUNDING ELSEWHERE.

UM, BUT JUST WANNA UNDERSCORE THE IMPORTANCE OF THAT.

UM, AND THEN THE OTHER THING THAT I WANTED TO ASK IS FOR THE FEMA, UM, I THINK WE'RE GONNA BE SUBMITTING, WE HAVE SOME REIMBURSEMENTS THAT ARE COMING IN THIS AGENDA.

WE ARE GONNA BE SUBMITTING A QUESTION TO TRY AND GET SOME GREATER, GREATER CLARITY ON WHAT'S OUTSTANDING IN TERMS OF FEMA REIMBURSEMENTS ACROSS MULTIPLE INCIDENCES, NOT JUST COVID.

UM, I HAD THE OPPORTUNITY, UM, WITH A FEW OF YOU TO BE AT A EMERGENCY MANAGEMENT TRAINING AND GOT TO SIMULATE BEING IN THE FINANCE ADMINISTRATION SECTION, UH, DURING AN INCIDENT COMMAND AND LEARNED A LITTLE BIT, UH, MORE ABOUT THE DELAYS IN THE PROCESS, UM, WITH FEMA.

BUT I, BUT I THINK IT IS IMPORTANT THAT WE HAVE A SENSE OF THE MAGNITUDE OF THE AMOUNT OF MONEY THAT WE HAVE, UM, PAID OUT FOR THESE DISASTERS AND WHERE WE ANTICIPATE FUNDING BACK KNOWING OF COURSE, THAT NOTHING'S GUARANTEED AND THAT PROCESS IS SLOW.

I THINK IT IS STILL IMPORTANT AND HELPFUL, UM, AS WE THINK ABOUT OUR BUDGET MOVING FORWARD FOR US TO HAVE THAT, UM, GREATER CLARITY.

AND IF FOR SOME REASON THAT CAN'T BE DONE AT THE RIGHT QUALITY LEVEL FOR THURSDAY, THEN IF YOU CAN SEND IT IN A MEMO THAT WILL, THAT WILL WORK AS WELL.

I'M MORE INTERESTED IN GETTING THE NUMBERS RIGHT THAN HAVING IT FOR THURSDAY, IF THAT.

I KNOW IT'S COMPLICATED.

UM, A COMPLICATED, UH, PROCESS.

UM, THANK YOU.

AND I'VE GOT ONE QUESTION FOR YOU.

I THINK I'LL, I'LL CLOSE US DOWN ON THIS CONVERSATION.

CITY MANAGER AND, UM, MS. LANG, YOU HAD MENTIONED, I THINK IT WAS YOU THAT WAS TALKING ABOUT THE SALES TAX SHORTAGE, OR MAYBE IT WAS MR. VAN NOW IT WAS EIGHT AND A HALF MILLION AND YOU SHOW A GAP WIDENING TO 15.4 MILLION.

IS THIS IN A, IN ADDITION TO THE EIGHT AND A HALF MILLION OR IS THE EIGHT AND A HALF MILLION INCLUDED IN THAT 15 MILLION? THAT WOULD BE INCLUDED.

AND THAT'S, THAT'S NOT OUR CURRENT PROJECTION.

WE'RE JUST SAYING IF WE STAY AT A 0.5% GROWTH FOR THE REST OF THIS FISCAL YEAR, THAT'S WHAT IT COULD WIDEN TO.

WE, YOU KNOW, SO THAT'S GOTCHA.

I JUST WANTED TO CLARIFY THAT.

THANK YOU SO MUCH FOR THE GOOD PRESENTATION, CITY MANAGER.

IS EVEN MORE ROUTINE THAN THIS ONE AND THAT'S, UH, HEALTH SOUTH.

THE, THE LAST ITEM

[B3. Briefing on redevelopment of 1215 Red River Street and 606 East 12th Street, the former Health South tract.]

AND SO, UH, WE'LL ASK THEM TO COME UP AND MAKE

[02:25:01]

A BRIEF PRESENTATION ON THAT.

HEY, MANDY, YOU'RE IT ? MM-HMM.

OH, YOU TOO.

GOOD MORNING, MAYOR PRO TEM AND, UH, COUNCIL MANDY DE MAYO, INTERIM DIRECTOR OF THE HOUSING DEPARTMENT, AND WE ARE HERE THIS MORNING TO TALK ABOUT HEALTH SOUTH.

HERE WE GO.

UH, BRIEFLY GOING OVER THE AGENDA.

I WANNA GIVE A STATUS UPDATE ON THE PROJECT.

I AM THEN GONNA TURN IT OVER TO DARREN SMITH WITH, UM, EPS ECONOMIC PLANNING SYSTEMS. UH, DARREN IS OUR CONSULTANT FOR THE HEALTH SOUTH, UH, PROJECT, AND HE'S GONNA WALK THROUGH THE DIFFERENT SCENARIOS THAT WERE PRESENTED IN THE JANUARY 31ST MEMO.

MS. MAYOR, THANK YOU SO MUCH, BUT WE CAN BARELY HEAR YOU.

OH MY GOSH, NORMALLY I'M ACCUSED OF BEING LOUD THERE.

OKAY, THERE WE GO.

IS THAT BETTER? THANK YOU.

OKAY, I'M GONNA LEAN INTO THE MICROPHONE.

UM, THE AGENDA FOR TODAY, UH, WE ARE GOING TO GO OVER A STATUS UPDATE ON THE HEALTH SOUTH PROJECT.

I AM THEN GONNA TURN IT OVER TO DARREN SMITH WITH EPS ECONOMIC PLANNING SYSTEMS AND EPS IS THE CITY'S CONSULTANT ON, UM, THE HEALTH SOUTH REDEVELOPMENT PROJECT.

AND DARREN IS GONNA WALK THROUGH THE VARIOUS, UH, SCENARIOS THAT WERE DEVELOPED AND PRESENTED AS PART OF THE JANUARY 31ST MEMO THAT WAS SENT TO MARIN COUNCIL.

THEN WE ARE GOING TO GO THROUGH SOME ADDITIONAL CONSIDERATIONS, UM, BASED ON THOSE SCENARIOS AND HAVE HOPEFULLY A GOOD DISCUSSION, UM, REGARDING, I WANNA JUST DO BRIEF HISTORY OF THE HEALTH SOUTH PROJECT.

AND BY BRIEF HISTORY, I MEAN, WE'RE ONLY GOING BACK TO JULY OF LAST YEAR.

IN JULY OF 2023, CITY COUNCIL PASSED A RESOLUTION THAT DIRECTED STAFF, UH, TO LOOK AT A MIXED USE MIXED INCOME PROJECT, UM, FOR THE HEALTH SOUTH REDEVELOPMENT FOCUSING ON RESIDENTS AT OR BELOW 60% MEDIAN FAMILY INCOME.

THEY PRIORITIZED CITY COUNCIL PRIORITIZED LEASING RATHER THAN SELLING THE SITE DIRECTED STAFF TO CONDUCT STAKEHOLDER, UM, ENGAGEMENT AND TO DO A DEEP DIVE INTO THE MARKET FEASIBILITY OF THE REDEVELOPMENT OF THE SITE.

OF COURSE, LAST SEPTEMBER, SEPTEMBER 6TH, 2023, WE CAME, UM, TO THE CITY COUNCIL HOUSING AND PLANNING COMMITTEE AND DID A PRESENTATION ON SUMMARY OF OUR STAKEHOLDER ENGAGEMENT AS WELL AS A DEEP DIVE INTO THE MARKET FEASIBILITY OF THE PROJECT BASED ON THE PARAMETERS THAT WERE DIRECTED BY CITY COUNCIL.

ON SEPTEMBER 21ST, 2023, UH, CITY COUNCIL PASSED A RESOLUTION DIRECTING STAFF TO FOCUS ON MIXED USE DEVELOPMENT, UM, WITH A FOCUS ON AFFORDABLE HOUSING AT OR, UH, BETWEEN 50% AND 80% MEDIA AND FAMILY INCOME.

SO TO A CERTAIN EXTENT, WORKFORCE HOUSING, UM, AND TO ESTIMATE THE POTENTIAL, UH, RESIDENTIAL YIELD, BOTH AFFORDABLE AND, UM, MARKET UNDER MULTIPLE DEVELOPMENT SCENARIOS.

THAT RESULTED IN THE JANUARY 31ST MEMO THAT WENT TO MAYOR AND COUNCIL, UM, WHICH WAS DIRECTLY RESPONSIVE TO THOSE, UM, THAT RESOLUTION.

UM, I DO ALSO WANT TO REMIND FOLKS THAT THE SITE DEMOLITION, SITE DEMOLITION, WHICH WAS AUTHORIZED BY CITY COUNCIL BACK IN SEPTEMBER, IS CURRENTLY UNDERWAY.

PHASE ONE OF THAT DEMOLITION, WHICH IS THE PARKING GARAGE WAS RECENTLY COMPLETED.

AND WE ARE LOOKING FORWARD TO PHASE TWO OF THE PROJECT, WHICH IS THE ACTUAL HOSPITAL STRUCTURE.

I AM GOING TO TURN IT OVER TO DARREN AND ASK HIM TO LEAN INTO THE MICROPHONE.

THANK YOU AGAIN.

I'M DARREN SMITH WITH ECONOMIC AND PLANNING SYSTEMS. UH, NICE TO BE WITH YOU THIS MORNING.

UM, WHAT WE HAVE ON THE SCREEN IS A LITTLE BIT OF ORIENTATION FOR, UH, FOLKS WHO MAY NEED IT.

ON THE LEFT IS A, UH, GOOGLE MAPS IMAGE OF THE HEALTH SOUTH BUILDING, AND IN FRONT OF IT THE PARKING GARAGE.

THOSE ARE THE TWO CITY OWNED SITES IN QUESTION.

ON THE RIGHT YOU SEE THE SAME PARCELS FROM, UH, MAP VIEW AND YOU SEE IN YELLOW THE CAPITAL VIEW CORRIDOR THAT GOES THROUGH THE SITE AND AFFECTS THE HEIGHT AT WHICH, UH, DEVELOPMENT CAN HAPPEN ON THE PORTION OF THE SITE THAT HAS THAT YELLOW BAR THROUGH IT.

UH, SO OF COURSE THE SITE IS, UH, RIGHT AT 12TH AND RED RIVER.

UM, THE 6 0 6 EAST 12TH STREET SITE IS, UH, THE GARAGE AND 1215 RED RIVER IS THE HEALTH SOUTH PROPERTY.

UM, COUNCIL'S DIRECTION IN NO, UH, SEPTEMBER OF LAST YEAR WAS TO, UH, THEY WERE LOOKING TO SUPPORT

[02:30:02]

THE REDEVELOPMENT OF THE SITE FOR AFFORDABLE HOUSING, UH, MAXIMIZING AFFORDABLE HOUSING, BUT ALSO LOOKING AT A VARIETY OF OTHER USES.

AND, UH, AT THAT TIME, THE CITY MANAGER HAD MADE, UH, CITY MANAGER'S, UH, STAFF HAD MADE A RECOMMENDATION OF LOOKING AT THE SITE AS POTENTIALLY TWO SEPARATE DEVELOPMENTS, ONE OF WHICH WOULD BE A HUNDRED PERCENT AFFORDABLE HOUSING, AND THE OTHER WOULD BE MORE OF A MARKET RATE, UH, HOUSING PROJECT.

UM, AT, UH, COUNCIL'S DIRECTION, WE HAVE LOOKED AT THREE OTHER ALTERNATIVES, ONE OF WHICH, UH, EMPLOYS THE DOWNTOWN DENSITY BONUS PROGRAM THROUGH WHICH DEVELOPERS WOULD BE ALLOWED TO ACHIEVE CERTAIN HEIGHTS, UH, IF THEY PAY AN IN LIEU FEE FOR DEVELOPMENT, OR ALTERNATIVELY PROVIDE UNITS ON SITE.

UM, IN ADDITION, WE'VE LOOKED AT A PROGRAM SIMILAR TO THE RAINY STREET DISTRICT DENSITY BONUS PROGRAM, WHICH REQUIRES UNITS ON SITE.

THERE IS NO IN LIEU FEE OPTION FOR THAT ONE.

AND FINALLY, WHAT WAS CALLED A PAYMENT IN LIEU OF TAXES PROGRAM, THAT REALLY MEANS TO MAXIMIZE THE VALUE OF THE SITE AND THE REVENUE GENERATION FROM THE SITE AS OPPOSED TO PROVIDING AFFORDABLE UNITS ON SITE WITH THE IDEA THAT THE REVENUES FROM THAT DEVELOPMENT, UM, COULD BE USED TO, TO PRODUCE AFFORDABLE HOUSING ELSEWHERE IN THE CITY.

SO FOR EACH OF THESE SCENARIOS, WE HAVE LOOKED AT THE NUMBER OF UNITS THAT COULD BE DEVELOPED, UH, THE UNIT MIXED BY BEDROOM COUNT, UH, THE LAND VALUE AND THE PROJECTED PROPERTY TAX REVENUE.

I'VE ALREADY SORT OF DESCRIBED THE FOUR SCENARIOS.

AGAIN, THE HYBRID, WELL, LET ME JUST SKIP TO THIS ONE.

THIS IS, UH, A GRAPHIC DONE BY AN ECONOMIST.

UH, SO TAKE THAT FOR WHAT IT'S WORTH.

UM, ON THE LEFT YOU HAVE OUR ESTIMATION OF WHAT THE HYBRID SCENARIO COULD MORE OR LESS LOOK LIKE.

THERE WOULD BE A LOW RISE DEVELOPMENT ON THE HEALTH SOUTH SITE.

THAT'S THE 1215 RED RIVER SITE.

UM, THE LOW RISE DEVELOPMENT IS IMPORTANT THERE, BOTH BECAUSE THERE'S THE CAPITAL VIEW CORRIDOR, BUT ALSO BECAUSE THE FEASIBILITY OF CONSTRUCTION FOR AFFORDABLE HOUSING IN PARTICULAR IS VERY MUCH AFFECTED BY THE COST OF CONSTRUCTION.

AND, UH, AT STAFF'S DIRECTION, WE HAVE LOOKED AT A WOOD FRAME CONSTRUCTION THERE THAT CAN ONLY GET UP TO ABOUT FIVE STORIES OF WOOD FRAME CONSTRUCTION OVER A PODIUM, UH, PARKING AND, AND GROUND FLOOR RETAIL SECTION.

SO THAT ONE WOULD STAY LOW.

UM, ON THE GARAGE SITE, UH, THE PROPERTY COULD BE DEVELOPED FOR A HIGH RISE USE ON THAT SITE.

FOR SCENARIOS TWO AND FOUR, THE PRODUCT WOULD LOOK SIMILAR.

THERE WOULD BE A HIGH RISE ON BOTH SITES, BUT THE ONE ON RED RIVER, UM, THE HEALTH SOUTH SITE WOULD BE SUBJECT TO THE CAPITAL VIEW CORRIDOR, WHICH GOES UP TO THE SKY.

SO IT WOULD BE A SKINNY, UH, TALL BUILDING ON THAT SITE.

AND ON THE GARAGE SITE YOU WOULD HAVE A WIDER BUILDING, UM, IN THE RAINY STREET DISTRICT.

SCENARIO THREE, THAT ONE SHOWS A MIX OF MARKET RATE AND AFFORDABLE HOUSING ON BOTH SITES.

WE START WITH AN APPRAISAL, UM, FROM HORNSBY AND COMPANY THAT WAS COMPLETED, UH, IN JANUARY OF THIS YEAR.

WE START WITH THE APPRAISAL BECAUSE THAT TELLS US WHAT THE MARKET RATE LAND VALUE WOULD BE SUBJECT TO CERTAIN DEVELOPMENT REGULATIONS.

UH, WE ARE LOOKING AT A VARIETY OF DEVELOPMENT REGULATIONS.

SO IT IT'S IMPORTANT TO UNDERSTAND WHAT IS ASSUMED IN THE APPRAISAL.

THE APPRAISAL ASSUMED THAT THIS SITE WOULD BE REZONED FOR CBD AND WOULD BE ALLOWED A BASE ZONING OF EIGHT TO ONE FAR FLOOR AREA RATIO, UM, BUT ALSO ALLOWED TO GO UP TO 25 TO ONE FLOOR AREA RATIO THROUGH THE PAYMENT OF AN IN LIEU FEE.

UM, THAT APPRAISAL SUGGESTED THAT THESE TWO SITES COMBINED WHEN SUBJECT TO THOSE REQUIREMENTS COULD BE WORTH ABOUT $61 MILLION.

UH, IF THEY WERE, IF IT WERE DEVELOPED AT A 15 TO ONE FAR, UM, ALMOST AS MUCH INTERESTINGLY, IF ALLOWED AT A 15 TO, I'M SORRY, $61 MILLION IF DEVELOPED AT A 25 TO ONE FAR AND ALMOST AS MUCH, UH, IF DEVELOPED AT A 15 TO ONE FAR.

THEIR CONCLUSION WAS THAT THERE'S NOT A LINEAR RELATIONSHIP, UM, STRICTLY SPEAKING BETWEEN THE ALLOWABLE DENSITY AND THE VALUE OF THE SITE BECAUSE MANY SITES ARE NOT IN FACT DEVELOPING ALL THE WAY UP TO THE ALLOWABLE 25 TO ONE FAR.

SO THOSE FIGURES ARE REFLECTIVE OF THOSE DENSITIES, BUT ALSO THE EXPECTATION THAT THOSE, UH, PROJECTS WOULD BE SUBJECT TO THE IN LIEU FEE AT $12 PER BONUS SQUARE FOOT.

SO WE'VE ALSO ADJUSTED THAT, UM, TO SAY, WELL, IN OUR FOURTH SCENARIO, THE PILOT SCENARIO, UM, THE ASSUMPTION THERE IS THAT IT WOULD NOT BE SUBJECT TO THE IN LIEU FEE.

SO WHAT IS THAT IN LIEU FEE COST? AND TO THE EXTENT

[02:35:01]

THAT THEY'RE AVOIDING IT, THAT WOULD ADD, UH, VALUE TO THE PROJECT THAT ADD VALUE TO THE LAND BECAUSE THEY'RE AVOIDING A COST.

SO WE'VE ESTIMATED THE IN LIE FEE TO BE ROUGHLY $13 MILLION AT THE 25 TO ONE FAR.

SO IN THAT SCENARIO, THE LAND WOULD BE WORTH, UH, CLOSER TO $75 MILLION.

SO WE START WITH THOSE.

AND THEN AGAIN, UH, THE EXERCISE IS TO LOOK AT WHAT ALTERNATIVE DEVELOPMENT, UH, USES AND PROGRAMS COULD YIELD.

THE FIRST SCENARIO AGAIN, IS THE HYBRID.

WE ARE LOOKING IN THIS, UH, SLIDE AT THE AFFORDABLE SITE THAT IS THE RED RIVER SITE THAT THE HEALTH SOUTH BUILDING SITS ON.

UM, IN THIS CASE IT WOULD BE, AGAIN, ONLY A FIVE STORY BUILDING.

UM, AND THE SITE COULD ACCOMMODATE 176 AFFORDABLE HOUSING UNITS.

NOW WITH THE, UM, TEXAS, UH, FUNDING PROGRAM, 70% OF THOSE UNITS WOULD NEED TO BE TWO BEDROOMS OR GREATER.

SO THE ASSUMPTION THERE IS THAT 176 UNITS COULD BE BUILT, OF WHICH 124 WOULD BE TWO BEDROOM UNITS IN THIS CASE.

UH, THOSE UNITS WOULD BE PRICED AT 50 TO 80% OF MEDIAN FAMILY INCOME FOR A PERIOD OF NOT LESS THAN 40 YEARS.

IT IS POSSIBLE AND LIKELY THAT THE EXTENT THE AFFORDABILITY WOULD BE EXTENDED BEYOND THAT, BUT THAT WOULD BE THE INITIAL TERM OF AFFORDABILITY.

UM, THE LAND VALUE IN THIS SCENARIO WOULD BE ZERO.

THE LAND WOULD ESSENTIALLY NEED TO BE DEDICATED TO THAT PROJECT AND ANOTHER $17 MILLION OF PUBLIC SUBSIDY WOULD BE REQUIRED TO MAKE THAT PROJECT, UH, FINANCABLE.

AND THAT $17 MILLION IS BASED ON THE CITY'S RECENT HISTORY OF OTHER PROJECTS OF SIMILAR SCALE.

UM, THE VALUE PER UNIT, THE REVENUES PER UNIT THAT THE CITY HAS CONTRIBUTED, CONTRIBUTED TO MAKE THOSE UNITS AFFORDABLE.

UM, SO ALL TOLD IN THIS CASE, THE CITY WOULD NEED TO CONTRIBUTE $17 MILLION, WOULD NOT GET ANY REVENUE FOR THAT SITE, UM, EITHER AS A LAND VALUE OR AS ONGOING PROPERTY TAXES, BUT YOU WOULD GET 176 ONSITE AFFORDABLE UNITS.

THE OTHER SITE, UH, THE 6 0 6 EAST 12TH STREET SITE WOULD BE DEVELOPED AS A MARKET RATE HIGH RISE DEVELOPMENT.

IT WOULD ACCOMMODATE ANOTHER 328 UNITS AND, UM, IT WOULD PAY AN IN LIE FEE OF ABOUT $3 MILLION.

I'M SORRY.

YEAH, THERE YOU GO.

FAILED TO ADVANCE THE SLIDE.

UM, SO 328 ADDITIONAL UNITS, MARKET RATE UNITS, IT WOULD PAY $3 MILLION OR SO OF IN LIEU FEE, AND THE LAND WOULD BE WORTH ABOUT $15 MILLION.

UM, WHICH YOU COULD RECEIVE AS AN UPFRONT CAPITALIZED GROUND LEASE PAYMENT OR YOU COULD RECEIVE, UH, AN ANNUAL PAYMENT OVER TIME.

WE ESTIMATE THE PROPERTY TAXES FROM THAT, UH, PROJECT WOULD BE ROUGHLY $700,000 PER YEAR TO START, AND THERE WOULD BE NO PUBLIC SUBSIDY REQUIRED FOR THAT SITE.

AND ALL TOLD, UM, IT WOULD GENERATE BETWEEN THE GROUND LEASE REVENUE AND THE PROPERTY TAXES FROM THAT SITE.

ABOUT $68 MILLION OF MONEY OVER TIME, OVER ABOUT 99 YEARS IS WHAT WE'RE TALKING ABOUT THERE.

THAT MONEY, THE $68 MILLION COULD BE USED LEVERAGED TO SUPPORT THE ADDITIONAL CONSTRUCTION OF 267 UNITS OFFSITE.

UM, SO THERE WOULD NOT BE ANY AFFORDABLE UNITS IN THAT BUILDING, BUT THE MONEY FROM THAT BUILDING IS ENOUGH TO, UH, SUPPORT ABOUT 267 UNITS OFFSITE.

SO ALL TOLD BETWEEN THE TWO OF THEM COMBINED, THERE WOULD BE 178 ON-SITE UNITS AND 267 SUPPORTABLE OFFSITE UNITS FOR A TOTAL OF 445.

AND THE CITY WOULD GENERATE, UM, ROUGHLY $51 MILLION OF NET PUBLIC REVENUE, UH, WHEN ACCOUNTING FOR BOTH THE REVENUES FROM THE MARKET RATE BUILDING, PLUS THE SUBSIDY REQUIRED FOR THE AFFORDABLE BUILDING.

SO THAT'S OUR FIRST SCENARIO.

SCENARIO TWO IS THE ONE THAT WOULD BE SUBJECT TO THE DOWNTOWN DENSITY BONUS.

AND THE ASSUMPTION HERE IS THAT THE DEVELOPERS WOULD CHOOSE TO PAY THE IN LIEU FEE OF $12 PER BONUS SQUARE FOOT RATHER THAN PROVIDING THE UNITS ON SITE.

WE HAVE A SEPARATE ANALYSIS THAT LOOKS AT THAT, UH, PROVISION OF UNITS ON SITE, BUT IT IS LESS FAVORABLE, UH, TO THE DEVELOPERS, WHICH IS WHY THE DEVELOPERS, UH, PRETTY CONSISTENTLY PAY THE IN LIE FEE RATHER THAN PRODUCING THE ONSITE UNITS.

UNDER THE DENSE DOWNTOWN DENSITY BONUS PROGRAM IN THIS CASE, THERE WOULD BE A TOTAL OF ABOUT 1400

[02:40:01]

HOUSING UNITS ON THE TWO SITES COMBINED.

UM, NONE OF WHICH WOULD BE AFFORDABLE ON SITE, BUT THE, UH, PROJECT WOULD PAY ABOUT $13 MILLION OF IN LIEU FEES THAT COULD BE DEDICATED TO OFFSITE AFFORDABLE UNITS.

IN ADDITION, THE LAND VALUE IS ESTIMATED AROUND $61 MILLION AND THE PROPERTY TAXES, UH, ALMOST THREE, $3 MILLION A YEAR TO START BETWEEN THESE TWO, TWO BUILDINGS.

UM, GENERATING A NET PRESENT VALUE OVER AGAIN ABOUT A CENTURY OF $300 MILLION OF, UH, POSITIVE REVENUE TO THE CITY, WHICH COULD BE LEVERAGED TO SUPPORT, UH, ALMOST 1600 UNITS OFFSITE SOMEWHERE ELSE.

AGAIN, THE TRADE OFF THERE IS YOU GET MUCH MORE MONEY, BUT NO AFFORDABLE UNITS ON THE SITE.

THE THIRD SCENARIO, UM, REPLICATES SOMETHING LIKE THE RAINY STREET BONUS PROGRAM, WHICH REQUIRES THAT 5% OF THE UNITS ON SITE BE PROVIDED AS AFFORDABLE HOUSING.

UM, NOW THE MARKET RATE VALUES OF THESE UNITS ARE AT LEAST TWICE AS HIGH AS THE AFFORDABLE PRICES.

AND WHAT THAT MEANS IS THAT FOR THE SAME CONSTRUCTION COST, THE THE PROJECT WOULD PHYSICALLY BE THE SAME, BUT SOME OF THE UNITS WOULD BE WORTH A LOT LESS.

SO THE CONSTRUCTION COSTS STAY THE SAME, THE VALUE OF THE PROJECT GOES DOWN, AND BECAUSE OF THAT, THE LAND VALUE COMES DOWN AS WELL.

IN THIS CASE, AGAIN, YOU'D HAVE 1400 TOTAL UNITS, YOU'D HAVE 93 OF THOSE UNITS BEING PROVIDED AS AFFORDABLE AT 80% OF MEDIAN INCOME FOR A PERIOD OF 40 YEARS.

UM, BUT THE LAND VALUE WOULD GO DOWN SIGNIFICANTLY FROM $61 MILLION IN SCENARIO TWO TO ONLY $44 MILLION.

IN THIS CASE, YOU WOULD STILL HAVE SIGNIFICANT PROPERTY VAL, UH, PROPERTY VALUE AND AS, UH, TAX ASSESSMENTS.

UM, BUT THE TOTAL NET PRESENT VALUE OF THE REVENUES WOULD COME DOWN FROM ABOUT 300 MILLION TO CLOSER TO 240 MILLION THAT COULD STILL SUPPORT OVER 1200 UNITS OF AFFORDABLE HOUSING OFFSITE.

IN ADDITION TO THE 93 UNITS ONSITE FOR A TOTAL OF 1,331, UH, AFFORDABLE UNITS IS OUR CURRENT ESTIMATE.

THE LAST SCENARIO, THE PILOT, UH, PAYMENT IN LIEU OF TAXES IS WHAT IT WAS REFERRED TO AS IN THE COUNCIL RESOLUTION.

REALLY WHAT THIS IS, IS A SCENARIO IN WHICH THERE IS NO AFFORDABILITY REQUIREMENT ON SITE, BUT RATHER YOU'RE TRYING TO MAXIMIZE THE VALUE OF THE DEVELOPMENT, UM, TO GET THE MOST REVENUE AND SEE WHAT YOU CAN DO WITH THAT REVENUE.

SO IN THIS CASE, AGAIN, THE PHYSICAL PROGRAM STAYS THE SAME 1400 HOUSING UNITS, NONE OF THEM WOULD BE AFFORDABLE.

THERE WOULD BE NO IN LIE FEE PAYMENT FROM THAT ONE.

UM, BUT THE LAND VALUE WOULD BE MAXIMIZED AT CLOSE TO $75 MILLION.

THE, UH, ASSESSED VALUE WOULD BE MAXIMIZED AS WELL, AND YOU WOULD END UP WITH SOMETHING LIKE $330 MILLION OF NET PRESENT VALUE, PUBLIC REVENUE THAT COULD SUPPORT, UH, OVER 1700 AFFORDABLE UNITS OFFSITE.

SO ONCE AGAIN, YOU HAVE THE TRADEOFF OF GETTING MORE VALUE AND REVENUE, UM, BUT NO ONSITE AFFORDABLE UNITS.

AND THIS SLIDE IS PROBABLY VERY HARD FOR MOST EVERYONE TO READ , BUT WE'RE TRYING TO, UM, PUT THEM SIDE BY SIDE AND SHOW YOU THE, THE FOUR SCENARIOS IN THE FIRST ONE.

AGAIN, UM, YOU GET 445 TOTAL SUPPORTABLE AFFORDABLE UNITS, OF WHICH 170 WHITE WOULD BE PHY, UH, SORRY, 178 WOULD BE PHYSICALLY ON SITE.

UM, BUT THE CITY WOULD BE GIVING UP THE LAND VALUE FROM THE HEALTH SOUTH PROPERTY AND ALSO NEEDING TO PUT IN $17 MILLION OF NEAR TERM SUBSIDY TO MAKE THAT PROJECT HAPPEN.

BY COMPARISON, THE THREE OTHER ALTERNATIVES PRODUCE LESS OR EVEN ZERO AFFORDABLE UNITS ON SITE, UM, BUT DO PRODUCE MUCH MORE REVENUE FOR THE CITY THAT COULD BE USED TO LEVERAGE, UH, MANY MORE AFFORDABLE UNITS ELSEWHERE IN THE CITY AT THE CURRENT GOING RATE OF CITY SUBSIDY FOR AFFORDABLE HOUSING.

I KNOW THAT WAS A LOT OF INFORMATION, UM, AND I WANNA GO AHEAD AND, UM, BRING UP SOME ADDITIONAL CONSIDERATIONS FOR YOU ALL AS YOU CONTEMPLATE THOSE FOUR DIFFERENT SCENARIOS.

AS WE TALKED ABOUT AT THE SEPTEMBER, 2023 HOUSING AND PLANNING COMMITTEE, UM, WE ARE FACING ENORMOUS ECONOMIC HEADWINDS RIGHT NOW.

WE HAVE, OF COURSE, VERY HIGH INTEREST RATES, HIGH CONSTRUCTION COSTS, UM, AND LOTS OF COMPETITION FROM NEW, UH, AND UNDER CONSTRUCTION PROJECTS.

IN FACT, WE HAVE ABOUT 3000 MULTIFAMILY UNITS COMING ONLINE.

THEY'RE UNDER CONSTRUCTION RIGHT NOW.

UH, DOWNTOWN.

UH, WE ALSO HAVE ABOUT 3 MILLION SQUARE FEET OF COMMERCIAL PROPERTY THAT IS UNDER CONSTRUCTION RIGHT NOW.

SO THERE'S A BIT OF UNCERTAINTY IN TERMS OF THE

[02:45:01]

DOWNTOWN MARKET.

UM, WE ALSO KNOW FROM THE APPRAISAL, UM, AS WELL AS CORROBORATED FROM MULTIPLE OTHER, UM, UH, UH, CONTACTS THAT SEVERAL RECENT PROJECTS HAVE ACTUALLY SCALED BACK, UM, OR DELAYED DEVELOPMENT.

AND WE ALSO KNOW THAT RIGHT NOW IN THIS MOMENT, OUR LAND VALUES ARE MOST LIKELY A BIT DEPRESSED, UM, VERSUS WHAT WE WOULD CONSIDER STABLE MARKET CONDITIONS.

ANOTHER THING I WANNA DRAW EVERYBODY'S ATTENTION TO AND UNDERSCORE FROM THE EARLIER CONVERSATION, AND IN SOME WAYS I'M GLAD THAT WE WENT AFTER CARRIE, UH, ED AND ERIC, UM, THAT THE HYBRID SCENARIO, THAT FIRST SCENARIO THAT WE CONTEMPLATED, WHICH INCLUDED THE ONSITE AFFORDABLE UNITS, WOULD REQUIRE AT A MINIMUM $17 MILLION, UM, OF NEAR TERM CITY SUBSIDY.

UM, IT'S A PRETTY SIGNIFICANT AMOUNT OF FUNDS.

UM, AND WE HAVE SEEN, AND YOU ALL WILL SEE AT THE UPCOMING THURSDAY, AUSTIN HOUSING FINANCE CORPORATION, UM, MEETING WHERE YOU ALL WILL BE ASKED TO CONSIDER, UH, NINE PROJECTS IN OUR RENTAL HOUSING DEVELOPMENT OR OWNERSHIP HOUSING DEVELOPMENT, UH, SECOND QUARTER APPLICATIONS.

WE ARE SIGNIFICANTLY OVER OVERSUBSCRIBED IN OUR SUBSIDY.

IN FACT, IN THE SECOND QUARTER OF OUR ROTA AND ODA PROGRAMS, UM, WE HAD ASKS OF ABOUT $120 MILLION WE ARE BRINGING FORWARD FOR YOUR CONSIDERATION ON THURSDAY, $50 MILLION, UM, WORTH OF, UH, PROJECTS THAT WE ARE RECOMMENDING, UM, APPROVAL OF CITY SUBSIDY.

BUT THE $17 MILLION THAT WOULD BE REQUIRED IN ORDER TO MOVE FORWARD WITH THE HYBRID SCENARIO MEANS THAT OUR VERY LIMITED RESOURCES WOULD NEED TO BE REDIRECTED TO THIS PROJECT AND WOULD POTENTIALLY PAUSE OTHER, UM, HIGH PRIORITY, AFFORDABLE, UH, PROJECTS.

THE OTHER THING I REALLY WANT TO UNDERSCORE IS THAT THE BEST CASE TIMING FOR THE AFFORDABLE HOUSING PROJECT, UM, THE HYBRID SCENARIO THAT'S CONTEMPLATED TO TO COME ONLINE WOULD BE, UH, SOMETIME IN 2028 JUST BASED ON SOLICITATION REQUIREMENTS.

UM, AS WELL AS PULLING TOGETHER THE FINANCING FOR THE PROJECT BETWEEN THE PRIVATE ACTIVITY BOND, UM, LOTTERY, AS WELL AS THE LOW-INCOME HOUSING TAX CREDIT PROGRAM.

ANOTHER IMPORTANT ASPECT TO UNDERSCORE IS THAT, UH, THE GROUND LEASE REVENUES MAY BE LESS.

WE'RE TALKING ABOUT A LEASE SCENARIO BECAUSE THAT IS WHAT CITY COUNCIL ASKED US TO CONTEMPLATED, BUT THEY WILL MOST LIKELY BE LESS THAN WHAT WOULD BE ACHIEVABLE THROUGH A FEE SIMPLE SALE.

UM, GROUND LEASE PROJECTS CAN FACE GREATER FINANCING CHALLENGES.

UM, AND SO WE JUST WANNA MAKE SURE THAT EVERYBODY IS, UH, FULLY AWARE OF THAT, UM, AND THAT THE GROUND LEASE OPTION, UH, WOULD NOT NECESSARILY OPTIMIZE REVENUES, BUT WOULD CERTAINLY, UM, MAINTAIN CITY OWNERSHIP OVER THE LONG TERM.

UH, THE OTHER THING, WHEN WE TALK ABOUT THE OFFSITE SUPPORTABLE AFFORDABLE UNITS, WHICH IS ON THE PREVIOUS SLIDE, THE THE LAST NUMBER OF COURSE, UM, WITH OUR SCENARIOS TWO, THREE, AND FOUR, THE PILOT, THERE'S A PRETTY SIGNIFICANT NUMBER OF SUPPORTABLE OFFSITE UNITS, UM, THOSE WOULD BE ACHIEVED OVER TIME.

BEST CASE SCENARIO, WE WOULD SEE THOSE UNITS OVER A DECADE OR TWO, UM, THAT ASSUMES NEW PROPERTY TAX REVENUE FROM THE SITE DEVELOPMENT GO INTO THE HOUSING TRUST FUND AND THEN WOULD BE, UM, REDIRECTED TO AFFORDABLE HOUSING DEVELOPMENT.

SO IT WOULDN'T BE IMMEDIATE.

UM, AND I JUST WANT TO MAKE SURE THAT FOLKS KNOW THAT THAT IS OVER TIME ANTICIPATION.

WE ARE, UM, HAPPY TO OPEN IT UP FOR DISCUSSION.

I DO WANNA LET FOLKS KNOW THAT WE HAVE, UM, MOST OF OUR PROJECT TEAM HERE, WHICH INCLUDES, UM, THE AUSTIN ECONOMIC DEVELOPMENT CORPORATION, SSA ALVAREZ IS HERE.

UH, WE WORKED WITH SSA AND ANNE GALING HAYNES, UH, MARGARET SHAW WITH ECONOMIC DEVELOPMENT.

WE ALSO HAVE, SO NOIA HOLT RA, WE HAVE THE LAW DEPARTMENT.

UM, MERRICK IS A DOCHE WITH FINANCIAL SERVICES AND REAL ESTATE.

AND MYSELF, NICOLE, JOCELYN, UM, HAVE BEEN WORKING ON THIS PROJECT FROM THE HOUSING DEPARTMENT AND OF COURSE DARREN SMITH AND EPS.

WE ARE HAPPY TO TAKE ANY QUESTIONS.

THANK YOU MR. MAY FOR THE GREAT PRESENTATION.

UH, COUNCIL MEMBER CADRE I THINK IS GONNA START US OFF.

HEALTH SOUTH IS SUCH A FUN THING.

UM, YEAH, I, UH, I HAVE, I HAVE TWO QUESTIONS, UH, BUT YOU KNOW, I JUST KIND OF WANNA LAY I GUESS THE GROUNDWORK FOR ALL THIS.

UH, AS AN OFFICE, AS AS A DISTRICT NINE OFFICE, OUR VISION FOR THE PROPERTY, UH, HAS BEEN ALIGNED WITH A LOT OF THIS AREA STAKEHOLDERS, AND THAT'S AFFORDABILITY, THAT'S GROUND FLOOR RETAIL, UH, AND THAT'S A MIXED USE SITE.

AND I KNOW STAFF RECOMMENDED TO WAIT UNTIL LATER IN THE YEAR AFTER THE BUDGET, UH, TO KIND OF REVISIT HEALTHSOUTH.

AND THAT'S SOMETHING THAT I'M COMFORTABLE WITH.

UH, AND I KNOW OTHER COUNCIL OFFICES THAT AT LEAST I'VE, I'VE SPOKEN TO ARE, ARE KIND OF ON THE

[02:50:01]

SAME PAGE.

SO, YOU KNOW, AS Y'ALL ARE LOOKING AT FINANCIAL MARKETS, UH, YOU KNOW, MY MAIN ASK OF Y'ALL IS JUST TO CONTINUE TO, UH, KEEP IN MIND I GUESS OUR VISION, WHICH IS THAT OF AFFORDABILITY, UH, GROUND FLOOR RETAIL AND, AND, AND A MIXED USE SITE.

BUT I I HAVE TWO QUESTIONS, UH, FOR Y'ALL.

UH, THE FIRST QUESTION IS, WHAT WOULD IT LOOK LIKE TO REINVEST THE REVENUE OF THIS PROPERTY INTO COMMUNITY BENEFITS ON SITE? YEAH, I MEAN, THAT'S BASICALLY SCENARIO FIVE, RIGHT? RIGHT.

UM, THANK YOU FOR THE QUESTION.

UM, IF I UNDERSTAND IT CORRECTLY, YOU'RE ASKING ABOUT THE, THE REVENUES, WHAT WE HAVE MODELED MM-HMM.

IS THAT ALL OF THOSE REVENUES, WE, WE'VE ESTIMATED HOW MANY AFFORDABLE UNITS COULD BE PRODUCED WITH THOSE REVENUES.

OF COURSE, IF YOU ARE ASKING FOR OTHER DIFFERENT COMMUNITY BENEFITS, UM, WHATEVER THOSE MAY BE, AND THERE'S BEEN TALK OF A NUMBER OF THINGS OVER TIME, CULTURAL FACILITIES, UM, ACTIVE, UH, LIVE MUSIC VENUES, CHILDCARE, A LOT OF THINGS HAVE BEEN DISCUSSED FOR THAT SITE AND, AND OTHER CITY OWNED SITES.

UM, TO THE EXTENT THAT YOU'RE ASKING FOR THOSE THINGS, THEY WOULD NECESSARILY COST THE PROJECT SOMETHING, AND SO FEWER OF THOSE DOLLARS WOULD BE AVAILABLE FOR AFFORDABLE HOUSING.

UM, SO THAT'S, THAT'S WHERE THE TRADE OFF IS REALLY, UH, IN THEORY YOU COULD DRIVE THE LAND VALUE ALL THE WAY DOWN TO ZERO, UM, WITH A COMBINATION OF AFFORDABILITY AND COMMUNITY BENEFITS AND SO FORTH.

UM, BUT YOU KNOW, WE, WE, THE, THE DOLLARS THAT I HAVE PRESENTED, UM, ARE SIGNIFICANT, RIGHT? IN, IN SOME CASES THERE ARE HUNDREDS OF MILLIONS OF DOLLARS OF, UH, MONEY FROM LANDS, UH, GROUND LEASE PAYMENTS AND PROPERTY TAXES FROM THE PROJECT.

UM, THOSE COULD BE SORTED OUT AND YOU COULD DECIDE HOW MUCH OF THAT YOU WANT TO GO TO AFFORDABLE HOUSING VERSUS SOME OF THESE OTHER COMMUNITY BENEFITS THAT YOU'RE TALKING ABOUT.

AND IT WOULD BE REALLY A, A, A SORT OF SHOPPING LIST, IF YOU WILL, TO THE EXTENT THAT YOU HAD SET A BAR FOR HOW LOW YOU'RE WILLING TO GO ON THE LAND VALUE.

AND, AND I THINK MY SECOND QUESTION MIGHT KIND OF HIT ON MY, MY FIRST QUESTION A BIT.

UH, I WAS JUST GONNA ASK IF THERE ARE ANY OTHER WAYS TO MAKE AN INCLUSIVE DEVELOPMENT ATTAINABLE AND, YOU KNOW, SOME OF THOSE OPTIONS, UH, ARE THINGS THAT YOU LISTED, CREATIVE SPACES, CHILDCARE FACILITIES, ARE, ARE, ARE THERE ANY OTHER THINGS THAT Y'ALL HAVE IN, HAVE IN MIND THAT WE HAVE IN? SO WHEN WE LOOKED AT ALL OF THE DIFFERENT SCENARIOS ACROSS THE BOARD, WE ASSUMED, UM, A CERTAIN AMOUNT OF GROUND FLOOR RETAIL LOOSELY DEFINED.

UM, AND I KNOW IN THE PREVIOUS SOLICITATION THERE WAS A GOAL FOR THINGS LIKE, UM, CHILDCARE AND CREATIVE SPACES AND, UM, WE WANTED TO SOLVE FOR THE RESIDENTIAL COMPONENT FIRST BECAUSE THAT IS THE PRIMARY GOAL, UM, AS WE UNDERSTOOD IT, OF THE HEALTH SOUTH REDEVELOPMENT.

AND SO WE WANT TO SOLVE FOR THAT AND UNDERSTAND BETTER THE AFFORDABILITY MIX AND WHAT WE COULD ACHIEVE WITH THE AFFORDABILITY MIX BEFORE DELVING INTO THE COMMERCIAL COMPONENT, WHICH WOULD BE A SECONDARY COMPONENT OF THE REDEVELOPMENT.

UH, THANK YOU.

THOSE ARE ALL MY QUESTIONS.

MAYOR PROTO, COUNCIL MEMBER RYAN ALTER, WHEN WE TALK ABOUT THE CAPITAL, CAPITAL VIEW CORRIDOR, I WAS LOOKING AT THE MAP AND IT LISTED AS A CITY CAPITAL VIEW CORRIDOR.

IS THAT CORRECT OR IS THAT A STATE CREATED CAPITAL VIEW CORRIDOR? OUR ASSUMPTION IS IT'S PART OF THE STATE CAPITAL VIEW CORRIDOR.

LOOK, WE WANT 50% OF WHAT YOU WOULD NORMALLY PAY, AND THAT WOULD BE, YOU KNOW, UPWARDS OF ALMOST $6 MILLION INSTEAD OF THE JUST ABOUT $3 MILLION YOU'RE PROJECTING HERE, IS THAT, I KNOW THERE ARE OTHER FINANCIAL CONSIDERATIONS, BUT IN, IN THEORY, IS THERE, IS THERE ANYTHING WRONG WITH THAT ASSUMPTION? I THINK THERE IS.

IF WE COULD GET CLARIFICATION ON THAT.

I, WE, WE WILL, I WOULD LOVE TO.

UM, THAT'S MORE OF AN ASIDE.

I, WHEN WE TALK ABOUT THE PROPERTY TAX ELEMENT, UH, ESPECIALLY IN THE PAYMENT OF LOAD OF TAXES MODEL, IF AN INDIVIDUAL, AND I'M NOT ADVOCATING THAT WE SHOULD DO THIS, BUT IF WE WERE TO SELL IT, SOMEONE FULLY DEVELOP IT, THEY WOULD THEN PAY, YOU KNOW, ALL THE PROPERTY TAXES THAT WE ALL HAVE THE PLEASURE OF PAYING, UM, THAT IS GREATER THAN THIS AMOUNT.

CORRECT.

WE ARE ONLY CALCULATING THE CITY PORTION OF THE PROPERTY TAXES, NOT THE SCHOOL DISTRICT AND HEALTH, YOU KNOW, ALL THE OTHERS.

CORRECT.

SO THERE IS, THE REASON I ASK IS I, I, IN MY MIND, IT SEEMS LIKE THERE IS POTENTIAL THERE.

THE CITY IS ABOUT A QUARTER OF THE TOTAL TAX RATE, RIGHT? SO IF, IF SOMEONE IS PLANNING A DEVELOPMENT AND INCLUDING THE PROPERTY TAX ELEMENT IN THEIR, UH, OPERATING COST, THEY WOULD PLAN FOR A NUMBER THAT'S ALMOST FOUR TIMES GREATER THAN LET'S SAY THE 2.8 MILLION.

AND SO WE HAVE THE, THE POTENTIAL TO CAPTURE EVEN GREATER PAYMENT IN LIEU OF TAXES.

IF WE WERE TO SAY TO THE DEVELOPER,

[02:55:01]

UM, THE PAYMENT, THE PAYMENT IN LIEU OF TAXES, UH, SCENARIO THAT WE'VE RUN, UH, REALLY IS JUST MATHEMATICALLY MEANT TO MAXIMIZE THE VALUE OF THE SITE.

IT HAS NO AFFORDABLE HOUSING.

UM, FRANKLY, UH, WE HAD A HARD TIME UNDERSTANDING EXACTLY WHAT PAYMENT IN LIEU OF TAXES MEANT IN THIS SCENARIO.

WHETHER THE, THE PROPERTY IS SOLD OR ON A GROUND LEASE BASIS, THERE WOULD BE A POSSESSORY INTEREST TAX.

UM, THAT IS EFFECTIVELY JUST THE SAME TAX RATE THAT, UM, THEY WOULD HAVE IF THEY OWNED IT OUTRIGHT.

AND THE REVENUES FROM THAT WOULD GO, AS YOU SAY, TO THE CITY, THE COUNTY, THE, THE VARIOUS, THE SCHOOL DISTRICT AND OTHERS.

UM, AND SO WHEN WE'VE DONE THE MATH, IT IS ASSUMING THAT YES, THE, THE DOLLARS THAT WE'RE TALKING ABOUT ARE JUST THE CITY'S PORTION OF THOSE, UH, PROPERTY TAXES.

IF YOU WERE ABLE TO MAKE A DEAL WITH SOME OF THE OTHER TAXING ENTITIES THAT THEY TOO WOULD PARTICIPATE IN SOME WAY, UH, TOWARD AFFORDABLE HOUSING, FOR EXAMPLE.

UM, THERE MAY BE OPPORTUNITIES TO INCREASE THE NUMBERS THAT WE'VE TALKED ABOUT, BUT IF THE DEVELOPER WERE REQUIRED TO PAY MORE THAN THE STANDARD RATE OF TAXES, THEN THEIR OPERATING COSTS WOULD GO UP.

AND THE AMOUNT THAT THEY COULD PAY FOR THE LAND IN THE FIRST PLACE THEN GOES DOWN BECAUSE THE CONSTRUCTION COST STAYS THE SAME, THE OPERATING REVENUES GO DOWN.

UM, SO WE'VE TRIED TO JUST ASSUME THAT THEY'RE PAYING A TYPICAL TAX RATE.

SO I THINK MAYBE I DIDN'T ASK IT IN THE RIGHT WAY, BECAUSE IF, IF WE OWN THE LAND MM-HMM.

AND WE ARE PROVIDING A GROUND LEASE, THERE ARE ZERO TAXES BEING PAID.

IS THAT CORRECT? THAT IS NOT CORRECT.

UM, THEY, THEY WOULD BE SUBJECT TO A POSSESSORY INTEREST TAX, UH, ESPECIALLY IF IT'S A LONG-TERM GROUND LEASE, WHICH IT WOULD NEED TO BE FOR A, A DEVELOPMENT OF THIS SCALE.

AND THAT'S, AND THAT'S ESSENTIALLY JUST THE EXACT SAME TAX RATE THEY WOULD OTHERWISE BE PAYING.

I'M WITH YOU.

IS THERE ANY MECHANISM, I KNOW THERE ARE VERY DIFFERENT AFFORDABILITY REQUIREMENTS IF WE START TALKING ABOUT SOMETHING LIKE A PFC, BUT IS THERE ANOTHER MECHANISM WHERE WE DO CAPTURE OR, OR MAKE THE ENTIRE PROJECT TAX FREE OR TAX EXEMPT THAT WE ARE ABLE TO CAPTURE THOSE REVENUES? NOT THAT I'M AWARE OF, BUT WE WOULD, WE CAN CERTAINLY LOOK INTO IT FURTHER.

YOU MENTIONED PFC, SO THE PUBLIC FACILITY CORPORATION, WHICH OF COURSE WOULD REQUIRE 50% OF THE UNITS BE AFFORDABLE AT 80%, 40% AT 80%, 10% AT 60%, UM, OR A HOUSING FINANCE CORPORATION STRUCTURE, WHICH WOULD REQUIRE SIGNIFICANTLY MORE AFFORDABILITY THAT WOULD NOT BE ACHIEVABLE, UM, AT A SCALE LIKE THIS.

TO BE IN, UH, YOU KNOW, TO GET OFF THE STREET AND, AND INTO PERMANENT SUPPORT OF HOUSING.

SO I AM NOT AWARE OF A SCENARIO, BUT WE COULD CERTAINLY CONTEMPLATE THAT.

THAT'S VERY HELPFUL.

AND I THINK JUST THE LAST, UH, PIECE OF NOTE, AND YOU TOUCHED ON IT, BUT I THINK IT'S REALLY IMPORTANT TO HIGHLIGHT IF WE ARE LOOKING AT SCENARIO ONE, NOT ONLY THE $17 MILLION THAT SOMEONE WOULD HAVE TO COME TO THE CITY, WHICH WOULD TAKE, UH, PROJECTS THAT WE WOULD HAVE OTHERWISE FUNDED OFF THE TABLE.

BUT YOU MENTIONED IN YOUR MEMO THAT THIS, IN THIS PROJECT WOULD ALSO REQUIRE TAX CREDITS, WHICH MEANS A PROJECT THAT WOULD HAVE OTHERWISE RECEIVED TAX CREDITS.

TAX CREDITS ARE A FINITE POOL, SO SOMEONE ELSE IS NOT GETTING THOSE TAX CREDITS.

AND SO WHILE WE MIGHT BE BRINGING THAT 445 UNITS TO MARKET HERE, WE ARE TAKING HUNDREDS OF UNITS AWAY SOMEWHERE ELSE.

AND SO THE NET BENEFIT TO THE PUBLIC COULD ALMOST BE AWASH.

AND I THINK THAT'S, THAT'S JUST SOMETHING ON A SITE LIKE THIS WE HAVE TO BE VERY CAUTIOUS OF, OF WHAT IS OUR, OUR NET BENEFIT.

AND, AND, AND THE LAST POINT I'LL MAKE IS I THINK IT PIGGYBACKS VERY WELL ON THE DISCUSSION WE HAD WITH THE, WITH CARRIE AND THE BUDGET AND, AND OUR DISCUSSION, YOU KNOW, WE THINK ABOUT DOLLARS INTO AFFORDABLE HOUSING AS BUILDING A NEW PROJECT, RIGHT? BUT THE GOAL IS TO HAVE PEOPLE, ESPECIALLY AT A LOWER INCOME, BE ABLE TO AFFORD A PLACE TO LIVE.

AND SO HERE IS A POTENTIAL ONGOING REVENUE STREAM THAT STARTS AROUND $3 MILLION AND WILL GROW THAT COULD BE USED TO HELP PEOPLE STAY IN THEIR APARTMENT THAT IS AFFORDABLE HOUSING OR COULD BE USED, UH, IN THE HOPE FUND THAT WE CREATED TO HELP PROVIDE PSH VOUCHERS FOR INDIVIDUALS

[03:00:01]

THESE ARE THINGS THAT ARE ACHIEVING THE GOALS OF BUILDING A AFFORDABLE HOUSING COMPLEX SOMEWHERE ELSE, BUT THAT ARE NOT IN THE WAY WE TYPICALLY THINK ABOUT DOLLARS BEING DEPLOYED.

AND SO I THINK AS WE ENTER INTO A TIME OF, OF MORE AUSTERITY, LOOKING AT REVENUE SOURCES LIKE THIS TO BOLSTER PEOPLE BEING ABLE TO STAY IN THEIR HOMES AFFORDABLY, UH, ACCOMPLISHES A LOT OF THOSE SAME GOALS.

SO, UH, I WILL, I WRAP IT UP WITH THAT AND I APPRECIATE YOUR WORK.

THANKS VERY MUCH.

ARE THERE ANY OTHER QUESTIONS? COUNCIL MEMBER ALLISON ALTER.

UM, I APPRECIATE YOUR LINE OF QUESTIONING, COUNCIL MEMBER RYAN ALTER.

UM, JUST TO PIGGYBACK ON THE TAX PIECE, HAVE WE CONSIDERED A SCENARIO WHERE WE ASK SOME OF OUR OTHER, UM, ENTITIES TO COMMIT TO DEVOTE THAT TAX REVENUE TO AFFORDABLE HOUSING OR SOMETHING DOWN THE LINE? IS THAT SOMETHING THAT WE'VE LOOKED AT? IT'S CERTAINLY SOMETHING THAT WE COULD CONTEMPLATE SOME SORT OF COOPERATIVE AGREEMENT WITH THE OTHER TAXING ENTITIES, BUT WE HAVE NOT, WE'RE NOT AT THAT STAGE YET.

UM, BUT IT CERTAINLY, AND EVEN IF IT WAS FOR THEIR PROJECTS FOR AFFORDABLE HOUSING, I THINK THAT WOULD BENEFIT.

IT DOESN'T HAVE TO BE MONEY THAT THEN LIKE THE CITY CONTROLS, BUT IT COULD BE THAT IT WOULD CREATE A FUND FOR THEM TO DO SIMILAR KINDS OF THINGS.

UM, IN THAT.

AND THAT'S A GREAT IDEA.

WE CERTAINLY HAVE TWO OTHER JURISDICTIONS THAT ARE ACTIVE IN AFFORDABLE HOUSING.

THAT WOULD BE A ISD, THE SCHOOL DISTRICT IS UNDERTAKING SOME AFFORDABLE HOUSING DEVELOPMENT, UM, AND OF COURSE TRAVIS COUNTY.

AND SO WHAT IS, SO I APPRECIATE THESE SCENARIOS AND I KNOW YOU WERE GIVEN DIRECTION TO PROVIDE THESE.

UM, WHAT IS IT THAT STAFF IS RECOMMENDING AS THE NEXT STEPS OR OF THESE SCENARIOS? WHICH ONE, UM, DO YOU FAVOR? SO AT THIS POINT, CONSIDERING, UM, THE PREVIOUS SLIDE WITH ALL OF THE VARIOUS CONSIDERATIONS, UM, THE MARKET REALITIES, THE REQUIRED SUBSIDY AS WELL AS A VARIETY OF, UM, HYPERLOCAL CONSIDERATIONS, THAT AREA, UM, THE NORTHEAST AREA OF DOWNTOWN, UM, IS UNDERGOING A LOT OF, UH, CHANGE AND POTENTIALLY UNCERTAINTY.

UM, WE HAVE A VACANT, IT'S ABOUT 14 ACRES, UH, VACANT TO THE NORTH OF US OWNED BY CENTRAL HEALTH.

WE ARE AWAITING, UM, SOME REDEVELOPMENT, UM, DECISIONS BY THE CENTRAL HEALTH BOARD.

UM, WE ALSO HAVE SOME PROPERTY THAT IS DEVELOPING ADJACENT, UM, TO THIS PROPERTY.

WE HAVE A HOTEL AT THE SOUTHWEST CORNER, THE SOUTH SOUTHWEST OF OUR PROPERTY AT THE NORTHEAST CORNER OF 12TH AND RED RIVER.

UM, AND THEN WE HAVE MARKET CONSIDERATIONS AND MARKET REALITIES THAT WE WANT TO, UM, TAKE A DEEPER DIVE INTO.

UM, OUR RECOMMENDATION AT THIS POINT REALLY IS TO PAUSE, UM, AND TAKE THIS UP AGAIN SUMMER, FALL, UH, WHEN WE HAVE A BETTER IDEA OF BOTH THE BUDGET FOR FY 25, UM, AS WELL AS SOME OF THE ONGOING, UM, MARKET CONDITIONS THAT WE ARE CONTEMPLATING.