Apr 15, 2026 Audit and Finance Committee

EACH ONE OF THOSE 700 SIGNATURES REPRESENTS A CONVERSATION WITH A WORKER.

GOOD MORNING, MAYOR.

GOOD MORNING COUNCIL MEMBERS.

MY NAME IS DAVID CRUZ.

I'M A RESIDENT OF DISTRICT SEVEN AND A CITY EMPLOYEE.

I'M HERE ON MY OWN TIME AS PART OF AFSCME 1620 FOURS STOP ONE A TS CAMPAIGN IN THE NAME OF EFFICIENCY CITY MANAGER, TC BROAD SAYS HE MUST MOVE 650 IT WORKERS INTO A TS STARTING IN MAY, JUST A FEW WEEKS.

A TS DIRECTOR, IKA LAKEY, AND CFO ED VAN NU HAVE BRAGGED ABOUT INTERVIEWING 630 OF THOSE WORKERS.

I WANNA LET YOU KNOW WE'VE SPOKEN WITH THOSE WORKERS TOO.

AS OF TODAY, OVER 700 CITY OF AUSTIN WORKERS HAVE SIGNED OUR PETITION IN SUPPORT OF OUR CAMPAIGN DEMANDS TO STOP ONE A TS.

THE VAST MAJORITY OF THEM IT WORKERS, THE WORKFORCE HAS SPOKEN LOUD AND CLEAR.

THEY ARE ON OUR SIDE.

THEY ARE RAISING RED FLAGS IN OPPOSITION TO THIS DANGEROUS REORGANIZATION, AND THEY'RE JOINING OUR CALL TO MANAGER BROAD NEXT TO STOP ALL TRANSFERS THE E ATFS EFFECTIVE IMMEDIATELY.

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OUR CAMPAIGN HAS BEEN OUTSIDE OF WORK SITES ACROSS THE CITY.

WE'VE BEEN TO HEALTH FAIRS AND CONFERENCES, AND THE WORKERS WE'VE SPOKEN TO HAVE SIGNED ON IN SUPPORT OF EFFICIENCY BY ENDING A COSTLY HIGH RISK CONSOLIDATION OF IT STAFF TODAY'S TAX DAY.

SO I WANNA MAKE A SIMPLE POINT.

IF THE CITY MANAGER WANTS TO SELL ONE A TS AS A SAVINGS MEASURE, HE SHOULD BE ABLE TO SHOW US THE MONEY.

BUT WHAT DO WE SEE INSTEAD? MANAGEMENT IS DOLING OUT MILLIONS ON UNSUPERVISED NON-COMPETITIVE CONTRACTS TO CONSULTANTS WHILE ASKING THE MEMBERS OF THIS DAIS TO MAKE HARD CHOICES ABOUT PUBLIC INFRASTRUCTURE AND SOCIAL SERVICES.

THE PEOPLE GET AUSTERITY WHILE EXECUTIVES GET EXTRAVAGANCE.

AND WHETHER WE'VE ASKED IN PRIVATE OR IN PUBLIC, THEY DON'T EVEN HAVE A PLAN TO BACK IT UP.

WHAT ARE THEY EVEN GETTING FOR THIS MONEY? YOU'RE ABOUT TO SEE A PRESENTATION FROM DIRECTOR LAKEY THAT HAS NUMBERS OF APPLICATIONS SAVINGS AND A TIMELINE.

THAT IS WHAT'S SHOWING YOUR WORK LOOKS LIKE IT'S PROOF THAT THEY CAN DO THIS CRITICAL WORK, BUT AGAIN, IF THEY HAVEN'T DONE IT YET FOR CONSOLIDATING IST STAFF, WHY NOT? WHY HAVEN'T THEY DONE THIS? IN SPITE OF THE HUNDREDS OF IT WORKERS WHO SIGNED A PETITION CALLING ON THE CITY MANAGER TO STOP THIS DANGEROUS REORGANIZATION, WHY DON'T THEY HAVE A BUSINESS CASE OR A MEANINGFUL PATH TO SAVINGS WITH THIS CONSOLIDATION? THAT IS WHY AFSCME IS CALLING ON COUNCIL TO INTERVENE ON THIS ISSUE.

OUR UNION CANNOT STAND BY WHILE MANAGEMENT GAMBLES AWAY PUBLIC DOLLARS WHILE THREATENING OUR PUBLIC SERVICES.

CONSOLIDATING SOFTWARE IS SMART.

WHOEVER'S NEXT.

GOOD MORNING.

MY NAME IS FRANK HEREFORD.

I'M SPEAKING AS A CITIZEN OF AUSTIN AND A MEMBER OF AFSCME 1624.

I'VE WORKED IN IT FOR 30 YEARS, INCLUDING 15 AS THE IT DIRECTOR OF A FINANCIAL SERVICES FIRM.

I KNOW WHAT A GOOD PLAN LOOKS LIKE, AND I KNOW WHAT A FINANCIAL SINKHOLE LOOKS LIKE.

AND WE'RE LOOKING AT A SINKHOLE, THE ONE A TS CONSOLIDATION OF TECHNOLOGY WORKERS NEEDS AND IMMEDIATE HALT IT WORKERS ARE NOT WIDGETS.

THEY'RE SPECIALISTS WHOSE EXPERTISE TAKES A CAREER TO BUILD.

YOU WOULDN'T HIRE A TRIAL LAWYER TO DO YOUR ESTATE PLANNING AND YOU WOULDN'T HIRE A WEB DEVELOPER TO RUN YOUR HARDWARE INFRASTRUCTURE.

JUMBLING THESE ASSIGNMENTS WASTES YOUR MOST REFINED TALENT AND THROWS AWAY THE STAKEHOLDER RELATIONSHIPS THAT KEEP CITY PROJECTS RUNNING.

NO 30 MINUTE CONSULTANT INTERVIEW CAN PRODUCE ANYTHING BUT A FRAGMENTED PICTURE OF HOW THESE TEAMS ACTUALLY WORK.

AND IF THE ANSWER IS, DON'T WORRY.

ONE A TS WILL PUT THE TEAMS RIGHT BACK IN PLACE, THEN WHAT EXACTLY ARE WE PAYING CONSULTANTS MILLIONS OF DOLLARS TO DO? IF THE END STATE LOOKS LIKE THE BEGINNING STATE, THEN YOU'VE SPENT A FORTUNE TO STAND STILL.

HERE'S WHAT I WANT YOU TO HEAR MOST CLEARLY.

I AGREE.

THE CITY NEEDS TO CURB SPENDING.

THERE ARE PARTS OF ONE A TS, WHICH MAKES SENSE AND ACTUALLY PURSUE THAT GOAL.

PEOPLE ARE NOT THE PROBLEM.

IT'S THE SOFTWARE IN PARTICULAR.

THE CITY IS BLEEDING MONEY ON OVERLAPPING SOFTWARE SUBSCRIPTIONS AND LICENSES.

THAT IS A REAL RECOVERABLE COST AND A TS IS UNIQUELY BUILT TO FIX IT.

CENTRALIZED PURCHASING BRINGS BARGAINING POWER DIRECTOR LEAHY'S UPDATES ON THIS WORK ARE RATIONAL AND SHE AND HER TEAM ARE ON THE RIGHT PATH IN TERMS OF APPLICATION RATIONALIZATION.

MAKE A TS THE ONE STOP SHOP FOR EVERY SOFTWARE LICENSE AND SUBSCRIPTION IN THE CITY.

THAT'S THE WIN.

THAT'S WHERE THE SAVINGS ARE.

CONSOLIDATING PEOPLE IS A COSTLY MISTAKE, AND IT'S ONE VOTERS WILL REMEMBER.

EACH DEPARTMENT HAS INVESTED YEARS DEVELOPING STAFF TO MEET ITS OWN SPECIFIC NEEDS.

THOSE BUDGETS ARE ALREADY TIGHT.

THERE ARE NO IDLE HANDS TO CENTRALIZE.

I'M ASKING YOU TO PAUSE THE PERSONNEL CONSOLIDATION, DIRECT A TS TO LEAD AN IN-HOUSE AUDIT OF THE CITY'S SOFTWARE SPEND AND USE THE STRENGTHS OF THE TEAMS THAT YOU ALREADY HAVE.

AND BEFORE ANY IRREVERSIBLE DECISIONS GET MADE, COME VISIT US IN THE FIELD.

I PROMISE YOU'LL LEARN MORE ABOUT WHAT WE DO IN AN AFTERNOON THAN ANY CONSULTANT EVER WILL IN A 30 MINUTE PHONE CALL FROM DALLAS.

ELECTRIC UTILITY COMPANY, WATER UTILITY COMPANY, INTERNATIONAL AIRPORT AND TRANSPORTATION SYSTEMS. WE ALSO RUN OUR OWN WATERSHED DEPARTMENT, FLOOD OPERATIONS, PUBLIC HEALTH FUNCTIONS, AND MANY OTHER COMPLEX PUBLIC SERVICES THAT THE PIT PEOPLE OF AUSTIN RELY UPON.

GOOD MORNING, MAYOR AND COUNCIL.

MY NAME IS RAMSEY BISEX.

I'M A SENIOR SOFTWARE ENGINEER IN AUSTIN FIRE.

I'M SPEAKING TODAY IN MY PERSONAL CAPACITY AS A MEMBER OF AFSCME AND THE CHAIR OF ION TEAM.

AUSTIN IS NOT AUSTIN ANYWHERE.

USA, WE RUN OUR OWN

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OUR TECHNOLOGY HAS TO FIT OUR ACTUAL OPERATIONS.

IT WORKERS DON'T JUST MANAGE SOFTWARE.

THERE AREN'T MULTIPLE PEOPLE DOING THE SAME EXACT TASKS ACROSS THE CITY.

EACH IT WORKER SUPPORTS REAL WORLD OPERATIONS.

THE STRONGEST PATH FORWARD RIGHT NOW IS A HYBRID FEDERATED MODEL.

ONE WHERE A CENTRALIZED IT DEPARTMENT LIKE A TS, CAN SUPPORT THE WORK OF DECENTRALIZED IT STAFF ACROSS THE CITY WHO REMAIN EMBEDDED IN DEPARTMENTS AND SERVE MISSION CRITICAL FUNCTIONS THAT OUR COMMUNITIES RELY UPON.

THE PETITION TEAM HAS HAD OVER 700 SIGNATURES AND CONVERSATIONS ACROSS, UH, OUR CITY, ACROSS OUR CITY DEPARTMENTS.

FOLKS WHO RELY UPON IT HAVE EXPRESSED CONCERNS OVER AN INCREASE IN RESPONSE TIMES FOR THEIR IT NEEDS.

FOR EXAMPLE, MY ROLE SPECIFICALLY WAS CREATED BECAUSE OUR IT NEEDS WERE NOT BEING MET, UH, BY OUR CENTRALIZED MODEL.

UH, THERE ARE ALSO CONCERNS OVER IT WORKERS, UM, LOSING DOMAIN SPECIFIC MO UH, DOMAIN SPECIFIC KNOWLEDGE.

IF WE REMOVE, UH, OUR EMBEDDED TEAMS AND CENTRALIZE THEM.

THERE ARE ALSO CONCERNS OVER WEAKER PERSONAL RELATIONSHIPS WITH IT WORKERS RIGHT NOW.

UH, THERE THERE ARE CUSTOMERS ACROSS THE CITY WHO CAN WORK DIRECTLY WITH THEIR IT, UH, SUPPORT STAFF AND, AND HAVE A, A CONVERSATION WITH THEIR COWORKERS.

UH, THAT'S MUCH MORE DIFFICULT IF IT'S A IMAGE ON THE SCREEN AND A TICKET FELLOW.

IT WORKERS HAVE ALSO EXPRESSED CONCERNS OVER LAYOFFS, CONCERNS OVER LOSS OF YEARS OF EXPERIENCE IN IT JOB FUNCTIONS.

IF PEOPLE, UH, FEEL LIKE THEY'RE BEING PUSHED OUTTA THE CITY.

CENTRALIZATION IS NOT THE ONLY PATH TO EFFICIENCY, EVEN IF IT IS ONE.

IN THIS CASE, IF THE CITY WANTS EFFICIENCY, IT SHOULD RATIONALIZE APPLICATIONS AND IMPROVE UPON A FEDERATED MODEL.

THAT'S WHY ASKS ME IN THE STOP BOATS CAMPAIGN IS CALLING ON COUNCIL TO INTERVENE ON THIS ISSUE.

CITY WORKERS ARE WORRIED THAT THE CONSOLIDATION WILL HAVE MAJOR NEGATIVE IMPACTS IN THEIR JOBS AND ON THE SERVICES THAT WE PROVIDE TO THE PEOPLE OF BOSTON.

THE CONSOLIDATION IS NOT, HAS NOT BEEN SHOWN THAT IT WILL DO ANYTHING TO SAVE THE CITY MONEY OR IMPROVE ANY ASPECT OF THE CITY.

TODAY, WE ARE ASKING YOUR COUNCIL TO LISTEN TO THE WORKERS AND ESTABLISH A FEDERATED IT DEPARTMENT GUIDED BY THE PEOPLE WHO MAKE OUR CITY RUN.

COUNSEL, IT IS YOUR DUTY TO PURSUE THE BEST POSSIBLE OUTCOMES FOR CITY RESIDENTS.

GOOD MORNING EVERYONE.

MY NAME IS CHRISTINA TREMMEL, AND I'M SPEAKING AS A RESIDENT OF AUSTIN AND A MEMBER OF AFSCME 1624.

A MEMO FROM CITY MANAGER BROAD ACTS SENT ON APRIL 1ST, DRASTICALLY CHANGED TO THE ONE A TS ROLLOUT PLAN BY REMOVING OPERATIONAL TECHNOLOGY OR OT POSITIONS FROM THE CONSOLIDATION.

THE EXAMPLE THAT HAS BEEN PROVIDED IN THIS AND OTHER COMMUNICATIONS IS THAT OT STAFF ARE ONLY THOSE WORKING AT A PLANT OR OPERATING SYSTEMS AT A PLANT.

WELL, I DON'T WORK AT A PLANT, BUT MY, IN MY ROLE, WHEN THERE ARE SERVICE DISRUPTIONS DUE TO A TS SYSTEM UPGRADES A WINTER STORM OR DAILY ROADBLOCKS, I'M THE ONE THAT WORKS DIRECTLY WITH TECHNICIANS TO ENSURE THEY GET WHAT THEY NEED.

FOR THE PAST 10 YEARS, I'VE WORKED IN THE TRANSPORTATION AND PUBLIC WORKS DEPARTMENT.

MY ROLE EQUIPS OUR FIELD OPERATIONS TEAMS WITH THE NECESSARY TECHNOLOGY TO GET WORK DONE SAFELY AND EFFICIENTLY, WHILE ALSO TRACKING IT FOR ACCOUNTABILITY AND TRANSPARENCY.

MOST RECENTLY, SEVERAL COUNCIL MEMBERS HAVE HAD THE OPPORTUNITY TO MEET WITH DEPARTMENT MEMBERS AND OUR TEAM ON THE RIGHT OF WAY, ASSET MANAGEMENT PLAN, OTHERWISE KNOWN AS RAMP.

THIS GIVES OUR RESIDENTS AND COUNCIL INSIGHT INTO THE PLAN TO MAINTENANCE OF ROADS, BRIDGES, SIGNALS, SIGNS AND VEGETATION.

AND THE FEEDBACK HAS BEEN OVERWHELMINGLY POSITIVE.

IN FACT, THERE ARE SEVERAL ENHANCEMENTS ALREADY REQUESTED TO SHOW PROGRESS WITH SERVICE PLANS, WHICH IS SOMETHING THAT WE ALREADY KNOW HOW TO DO.

THIS IS DONE THROUGH DIRECT COORDINATION WITH THE OPERATIONS TEAMS DOING THE WORK AND BUILDING THE SYSTEMS AND STRUCTURES THAT COMMUNICATE THIS WORK.

AFTER SHARING THIS EXAMPLE OF HOW OUR SPECIFIC WORK, SPECIFIC TEAMS AND SPECIFIC NEEDS MEET THE DEMANDS OF THE CITY, A QUESTION COMES TO MIND FOR ME.

WHAT DOES OPERATIONAL TECHNOLOGY EVEN MEAN? IF THE DEFINITION IS TAKEN AT FACE VALUE, WHERE DO THE DRONE OPERATORS FALL? OR SOFTWARE ENGINEERS OR DATA OR BUSINESS ANALYSTS? IF OPERATIONAL TECHNOLOGY HAD A CLEAR DEFINITION, THEY WOULD BE ABLE TO PROVIDE A CLEAR NUMBER AND NOTIFY OT STAFF IMMEDIATELY.

I'M IMPORTANT TO OUR DEPARTMENT'S OPERATIONS, BUT I'M NOT OT BASED ON THE LOOSE DEFINITION OF WHAT OPERATIONAL TECHNOLOGY IS TO ONE A TS.

THIS RAISES YET ANOTHER QUESTION, AND THAT IS WHAT, WHETHER THE CITY MANAGER SHOULD BE ALLOWED TO FORCE A DANGEROUS REORGANIZATION UNDER SOFTER LANGUAGE OF OPTIMIZATION AND EFFICIENCY WITHOUT PROVING THAT IT'S SAFE, NECESSARY, OR COST EFFECTIVE.

EVEN IN THE COMMUNICATION FROM THE CITY MANAGER'S OFFICE TO AFSCME AS RECENTLY AS YESTERDAY, THEY HAVE YET TO SHOW A BUSINESS CASE FOR ANY POSSIBLE SAVINGS FROM CONSOLIDATING PEOPLE.

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THE RIGHT CHOICE HERE IS TO REJECT A DANGEROUS CONSOLIDATION THAT HAS YET TO BE JUSTIFIED ON TAX DAY.

AUSTINITES DESERVE A CITY THAT CAN SHOW ITS MATH BEFORE IT DISRUPTS CITY SERVICES.

AS I'VE INDICATED, UH, NOW WHAT WE WILL DO IS WE WILL GO INTO AN EXECUTIVE SESSION AND AS SOON AS WE COMPLETE THE EXECUTIVE SESSION, COME BACK OUT AND WE'LL JUST START WITH THE, THE ITEMS THAT ARE ON THE AGENDA AND CAN GO STRAIGHT THROUGH THOSE IN THAT WAY.

APPRECIATE Y'ALL BEING HERE.

MEMBERS,

[Executive Session]

BUT, UM, UNLESS THERE'S OBJECTION OR QUESTIONS, UH, NOW THE, UH, THE COMMITTEE, THE AUDIT AND FINANCE COMMITTEE OF THE AUSTIN CITY COUNCIL WILL GO INTO AN EXECUTIVE SESSION TO DISCUSS APPOINTMENTS OF MEMBERS TO THE MUNICIPAL CIVIL SERVICE COMMISSION.

UH, THIS IS PURSUANT TO SECTION 5 5 1 0 7 4 OF THE TEXAS GOVERNMENT CODE RELATED TO PERSONNEL MATTERS.

WITHOUT OBJECTION, WE WILL NOW GO INTO AN EXEC CLOSED EXECUTIVE SESSION AT 9:46 AM ALL RIGHT, IT'S 10 15 ON APRIL 15TH, AND I'LL CALL BACK TO ORDER THE, UH, AUDIT AND FINANCE COMMITTEE OF THE AUSTIN CITY COUNCIL.

WE, UH, WERE RECESSED, NOT RECESSED, BUT WE, UH, WENT INTO AN EXECUTIVE SESSION.

UH, WE ARE NOW OUT OF THAT EXECUTIVE SESSION, AND I WILL, UH, WE'LL START GOING THROUGH THE, THE ORDER OF THE AGENDA.

ITEM

[1. Approve the minutes for the March 4, 2026 meeting of the Audit and Finance Committee.]

NUMBER ONE IS AN APPROVAL OF THE MINUTES FOR THE MARCH 4TH, 2026 MEETING, THE AUDIT AND FINANCE COMMITTEE, UM, MEMBERS ON ITEM NUMBER, UH, ON THOSE MINUTES, UH, ON ITEM NUMBER ONE OF THOSE MINUTES, I WOULD RECOMMEND THAT WE CHANGE, UH, THAT FOR CLARITY PURPOSES SO THAT IT READS THE, THE, THE SECOND AND THIRD LINE OF ITEM NUMBER ONE, READS OF THE AUDIT AND FINANCE COMMITTEE.

AUDIT AND FINANCE COMMITTEE MEETING.

WERE APPROVED ON MOTION BY COUNCIL MEMBER UCHIN AND SECOND BY COUNCIL MEMBER FUENTES ON A FIVE TO ZERO VOTE.

UH, THAT MAKES IT CLEARER, I THINK.

UM, AND, AND WITH THAT SUGGESTED CHANGE, UNLESS SOMEONE ELSE HAS A SUGGESTED CHANGE, I'LL ENTERTAIN A MOTION TO APPROVE THE MINUTES, UH, WITH, UH, COUNCIL MEMBER UCHIN AND, UH, SECONDED BY THE MAYOR PRO TIM, UH, MOVE, UH, MOVES APPROVAL OF THE MINUTES WITH THE, UH, SUGGESTED CHANGE THAT I PROVIDED, UH, WITHOUT OBJECTION, THAT ITEM NUMBER ONE IS

[2. Discussion regarding the appointment of member(s) to the Municipal Civil Service Commission.]

APPROVED.

THAT WILL TAKE US TO ITEM NUMBER TWO MEMBERS ON ITEM NUMBER TWO.

UH, THIS IS A, A POSSIBLE ACTION FOR US TO TAKE ON APPOINTMENT OF MEMBERS TO THE MUNICIPAL SERVICE CIVIL SERVICE COMMISSION.

UH, THE CHAIR WILL ENTERTAIN A MOTION TO, FOR A REAPPOINTMENT OF KEVIN MULLEN TO THE MUNICIPAL CIVIL SERVICE COMMISSION, AND THE RECOMMENDATION THAT MR. MULLEN BE REAPPOINTED AS CHAIR, UH, WHICH IS A RECOMMENDATION THAT CAME FROM THE COMMITTEE.

COUNCIL MEMBER FUENTES MAKES THE MOTION.

IT IS SECONDED BY COUNCIL MEMBER UCHIN.

IS THEIR DISCUSSION, HEARING NONE WITHOUT OBJECTION.

UH, THE MOTION IS ADOPTED FOR THOSE THAT ARE WATCHING, UH, THE, THE MEETING AND ARE INTERESTED IN THE REAPPOINTMENT OR THE APPOINTMENTS TO THE CIVIL SERVICE COMMISSION.

UH, THE MEMBERS OF THE COMMITTEE WILL, UH, INTERVIEW, UH, OF SOME PEOPLE AT THE NEXT MEETING OF THE AUDIT AND FINANCE COMMITTEE, WHICH IS MAY 20TH.

[3. Discussion regarding the budget forecast process and inclusion of projected General Fund revenue at the no-new-revenue maintenance and operations property tax rate in the City's Five-Year Financial Forecast.]

ITEM NUMBER THREE IS A DISCUSSION REGARDING THE BUDGET FORECAST PROCESS AND INCLUSION OF PROJECTED GENERAL REV FUND REVENUE AT THE NO NEW REVENUE, MAINTENANCE AND OPERATIONS PROPERTY TAX RATE, AND THE CITY'S FIVE YEAR FINANCIAL FORECAST MEMBERS.

UH, I JUST WANTED TO PUT THIS ON THE AGENDA.

TH THIS IS JUST KIND OF A, A, A KIND OF A NOTICE ITEM.

UH, YOU, EVERYBODY HAS SEEN MY MESSAGE BOARD POST AND MY, MY THINKING, WHICH IS THAT AS WE GO INTO THIS PROCESS, ONE OF THE HELPFUL THINGS MIGHT BE FOR THERE TO BE TRANSPARENCY SO THAT THE PUBLIC WILL BE ABLE TO SEE, UH, AT THE DIFFERENT LEVELS OF THE FORECAST WHAT CAN HAPPEN AND WHAT MIGHT BE CUT, WHAT'S AT RISK.

AS I SAY IN MY, IN THE MESSAGE BOARD POST, SO THAT IF THE COUNCIL MAKES DEC ONE OF THE REASONS FOR THAT IS IF THE COUNCIL MAKES DECISIONS RELATED TO TAXES, UM, PEOPLE WILL BE ABLE TO SEE SPECIFICALLY, UH, WHAT, WHAT IS INVOLVED IN ALL OF THAT.

IN ADDITION TO THAT, IT, UH, ALLOWS BETWEEN NOW AND THE TIME THAT THERE IS A PROPOSED BUDGET FOR THERE TO BE ADDITIONAL INPUT ABOUT WHAT OUGHT TO BE PRIORITIZED.

UH, IT'S MY UNDERSTANDING AND I'M, I'M LOOKING AT SOMEBODY TO MAKE SURE MY UNDERSTANDING IS ACCURATE, THAT PROBABLY SOMETIME TODAY A, UH, A FORECAST, UH, WILL BE, UH, FORECAST REPORT OR HOW WILL BE PROVIDED TO EVERYBODY.

AND OF COURSE, ON TUESDAY, THE FULL COUNSEL AT A WORK SESSION

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WILL HAVE A PRESENTATION BY OUR, UH, DIRECTOR AND PROFESSIONAL STAFF WITH REGARD TO THAT FORECAST.

AND I JUST, ALL THE, AND THAT'S REALLY, UNLESS SOMEBODY HAS SOME QUESTIONS OR SOMETHING ELSE, THAT'S REALLY WHAT THIS WAS ABOUT WAS JUST TO KIND OF CALL THAT TO THE PUBLIC'S ATTENTION AND, AND LET EVERYBODY KNOW WHERE THINGS ARE.

COUNCIL MEMBER ALTER.

I DO HAVE ONE QUESTION, UM, FOR STAFF AS THAT IS COMING TO US.

UM, FIRST OF ALL, I DO APPRECIATE HAVING THAT INFORMATION THAT, THAT YOU'RE ASKING FOR.

I THINK BEING ABLE TO SEE KIND OF WHAT THAT LOOKS LIKE AND, AND JUST MORE INFORMATION IS ALWAYS BETTER.

SO APPRECIATE ASKING FOR THAT.

UH, WE HAD TALKED, I CAN'T REMEMBER WHAT MEETING, UH, AND WE'VE TALKED PRIVATELY ABOUT IN THE FIVE YEAR FORECAST, SHOWING US SOME KIND OF, NOT JUST ONE STRAIGHT LINE OF HERE'S WHERE WE THINK WE'RE GOING, BUT IF WE'RE OFF OF SALES TAX, LET'S SAY A PERCENT OR HALF A PERCENT, WHATEVER IT IS, SOME KIND OF CONE OF UNCERTAINTY SO THAT WE CAN HAVE A SENSE OF WHERE THINGS MIGHT SHAKE OUT IF WE'RE NOT COMPLETELY ACCURATE.

IS THAT SOMETHING THAT Y'ALL ARE PREPARED TO OFFER THIS GO AROUND? GOOD MORNING, COUNCIL MEMBER CARRIE LANG, DIRECTOR OF BUDGET AND ORGANIZATIONAL EXCELLENCE.

AND THE SHORT ANSWER IS YES, WE WILL HAVE SOME INFORMATION, PARTICULARLY IN THE PRESENTATION NEXT WEEK THAT SPEAKS TO, UH, AS YOU CALL IT, THE CONE OF UNCERTAINTY.

GREAT.

THAT'S ALL I WANNA KNOW.

VERY GOOD.

MAYOR .

AND I JUST, UH, WANTED TO MAKE A, A QUICK, UH, COMMENT ABOUT THE, THE NO NEW REVENUE, UH, YOU KNOW, PROJECTION OR THE, THE BUDGET.

YOU KNOW, EVER, EVERY YEAR THAT I'VE BEEN HERE, WE HAVE WORKED WITH A UN KIND OF SPOKEN ASSUMPTION THAT WE WERE TAKING THAT 3.5%, YOU KNOW, KIND OF CAP AMOUNT EVERY YEAR.

AND THERE HAS NOT REALLY BEEN A LOT OF, OF DISCUSSION ABOUT IT.

AND I THINK THAT'S A RIGHT POLICY.

UH, DON'T GET ME WRONG, I, I, THAT IS A RIGHT POLICY, BUT I DO THINK WE NEED TO TALK ABOUT THAT DECISION AND LOOK AT THE ALTERNATIVES, UH, AS A PART OF EDUCATING AND INFORMING THE PUBLIC, UH, YOU KNOW, AT, AT SOME POINT DOWN THE ROAD, UH, AGAIN, OBVIOUSLY THE, THE, THE TRE, UH, DID NOT PASS.

UH, AT SOME POINT DOWN THE ROAD, UH, WE WILL NEED ADDITIONAL REVENUE.

AND I, I, I FEEL LIKE IF WE DON'T HAVE THESE CONVERSATIONS, THEN, UH, IT DOESN'T REALLY PREPARE THE PUBLIC TO, UH, MAKE AN INFORMED DECISION WHEN THEY GO AND VOTE FOR A POTENTIAL TRE.

SO I DO THINK IT'S IMPORTANT THAT WE AT LEAST TALK ABOUT WHAT THOSE REVENUE CAPS MEAN, WHAT IT WOULD MEAN TO STAY AT THE NO NEW REVENUE CAP, HOW IT WOULD AFFECT CITY SERVICES.

SO AGAIN, MAYOR, I APPRECIATE THE DISCUSSION.

I THINK IT'S A GOOD DISCUSSION.

MEMBERS, THAT'LL TAKE US TO ITEM NUMBER FOUR, WHICH IS A DISCUSSION AND POSSIBLE ACTION REGARDING POTENTIAL CHANGES TO THE CITY'S FINANCIAL POLICIES.

ALRIGHT,

[4. Discussion and possible action regarding potential changes to the City’s financial policies.]

UH, MR. VAN NINO, YOU'RE RECOGNIZED.

GOOD MORNING, MAYOR.

MAYOR PROAM AND COMMITTEE MEMBERS.

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

UM, WE'RE CALLING THIS CITY FINANCIAL POLICIES PART ONE.

WE HAVE A TOTAL OF, I JUST COUNTED THEM UP WHILE YOU AND, UH, MS. LANG WERE DISCUSSING.

WE HAVE 119 FINANCIAL POLICIES THAT ARE INCLUDED, OUR ANNUAL BUDGET DOCUMENT THAT ARE APPROVED BY THE CITY COUNCIL EACH YEAR AS PART OF, UM, ADOPTING THE BUDGET.

UM, SO WE OUGHT TO BE DONE BY THE WORK SESSION.

WE OUGHT TO BE, WE OUGHT TO BE DONE BY THE WORK SESSION, YES.

UM, I'M NOT GONNA GO THROUGH EACH OF THE 119 POLICIES, BUT I WAS ASKED TO GIVE AN OVERVIEW OF THEM.

AND SO THAT WAS, PLEASE THAT WHAT I'VE ATTEMPTED TO DO IS TO PROVIDE AN OVERVIEW GENERALLY OF OUR POLICIES AND THEN HAVE A LITTLE BIT MORE DETAILED DISCUSSION ABOUT OUR GENERAL OBLIGATION DEBT POLICIES.

UM, WHICH TIES BACK TO THE CONVERSATIONS THIS BODY HAS HAD AND THE CITY COUNCIL HAS HAD AROUND A DECISION TREE FRAMEWORK FOR OUR BOND PROGRAMS. AND THAT FRAMEWORK THAT WAS ADOPTED BY THE CITY COUNCIL REFERENCES OUR FINANCIAL POLICIES.

SO AS I GO THROUGH THESE POLICIES, UM, UH, AS YOU KNOW, THERE'S NO CHANGES TO MOST OF THEM, BUT NEAR THE END, YOU'LL SEE A COUPLE AREAS WHERE STAFF IS RECOMMENDING CHANGES TO OUR POLICIES TO BE CONSISTENT WITH, UH, THE FRAMEWORK THAT COUNCIL ADOPTED AND CONVERSATIONS THAT HAVE OCCURRED AT THIS COMMITTEE.

IN PRIOR MEETINGS, UH, FOR YOUR CONVENIENCE, I DID PUT A COPY OF OUR FINANCIAL POLICIES.

THESE ARE AVAILABLE ON THE BUDGET DOCUMENT.

THAT'S WHY YOU SEE THAT PAGE NUMBERS AT THE BOTTOM ARE PAGE NUMBERS NINE 20 TO 9 35.

I JUST TOOK THESE RIGHT OUT OF THE BUDGET DOCUMENT.

THIS IS FROM THE FY 27 PROPOSED BUDGET.

THESE ARE THE POLICIES THAT COUNCIL HAS APPROVED.

UM, AND THEN I ALSO PROVIDED YOU A CONVENIENT COPY OF THE RESOLUTION THAT COUNCIL PASSED THAT ADOPTED THE, THE DECISION FRAMEWORK.

SO YOU'LL BE ABLE TO SEE WHERE WE'RE MAKING CHANGES TO THE POLICY TO SYNC UP WITH THAT FRAMEWORK.

AND MEMBERS, WHAT HE IS REFERRING TO IS, BEFORE WE STARTED MEETING, HE CAME, CAME UP ON THE DICE AND PUT THOSE TWO DOCUMENTS, UH, AT YOUR SEAT.

UH, POLICIES ARE, UM, CATEGORIZED INTO DIFFERENT GROUPINGS.

SO OUR,

[00:25:01]

THE FIRST BEING JUST GENERAL TOPICS.

AND, UM, YOU KNOW, THESE TOPICS GENERALLY SAY THAT WE'RE GONNA FOLLOW GOOD ACCOUNTING PRINCIPLES ARE GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, GAP PRINCIPLES.

UM, IT DEFINES THE ACCOUNTING BASIS THAT WE ARE GONNA USE FOR DIFFERENT TYPES OF FUNDS, WHETHER IT'S GONNA BE A MODIFIED ACCRUAL BASIS OR A FULL ACCRUAL BASIS.

UM, THIS IS WHERE YOU'LL SEE THE REQUIREMENT LATER ON THE AGENDA.

YOU'RE GOING TO SEE OUR ANNUAL FINANCIAL AUDIT AND IT'S REQUIRED PER OUR FINANCIAL POLICIES THAT WE DO THAT.

UH, THE POLICIES ALSO REQUIRE A FIVE-YEAR FINANCIAL FORECAST, WHICH YOU'LL SEE NEXT WEEK, UM, BEING PRESENTED AT THE COUNCIL WORK SESSION.

THE CAPITAL REHABILITATION FUND IS A FAIRLY NEW FUND.

IT WAS ADOPTED FIVE OR SIX YEARS AGO, UM, IN RECOGNITION THAT WE NEEDED TO TAKE MORE AGGRESSIVE STEPS TO MAINTAIN OUR CITY FACILITIES.

AND IT SAYS THAT WE WILL FUND, UM, 25% OF THE DEPRECIATED VALUE OF OUR CITYWIDE FACILITIES INTO A CAPITAL REHABILITATION FUND.

UM, I JUST NOTED HERE THAT CURRENTLY THIS IS NOT FUNDED IN OUR FISCAL YEAR 27 PLANNED BUDGET.

UM, KNOWING THAT FISCAL YEAR 27 WAS A, A TIGHT BUDGET YEAR, THIS IS RECOMMENDED TO BE PUT IN PAUSE.

CURRENTLY, UM, IT WOULD BE $12.5 MILLION TO BE IN COMPLIANCE WITH THE POLICY IN OUR FISCAL YEAR 27 BUDGET.

I WILL SAY TOO, WE HAVE OTHER WAYS TO FUND CAPITAL REPLENISHMENT THERE.

YOU KNOW, IT'S NOT EXACTLY APPLES TO APPLES, BUT WE ARE ABLE TO ISSUE, UH, BONDS TO FUND SOME CRITICAL NEEDS, BUT WE'RE NOT ABLE TO ADDRESS ALL OF OUR NEEDS THROUGH THAT MECHANISM.

SO THERE WILL BE SOME CONSEQUENCES BY NOT FUNDING THIS.

UM, THERE ARE ALSO POLICIES RELATED TO OUR LIABILITY RESERVE FUND, WORKERS' COMPENSATION FUNDS, OUR EMPLOYEE BENEFIT FUNDS, THE RESERVE BALANCES THESE FUNDS ARE REQUIRED TO, UH, MAINTAIN.

AND THEN FINALLY, THIS SECTION ROUNDS OUT WITH POLICIES GOVERNING OUR DEBT REFINANCING, UH, IT COSTS MONEY TO REFINANCED DEBT.

SO WE SAY WE, WE WILL ONLY DO IT IF WE BELIEVE WE CAN GET AT LEAST 4.5%, UH, PRESENT VALUE SAVINGS ON THE PRINCIPLE OF OUR OUTSTANDING DEBT.

SO JUST POLICIES THAT GUIDE THAT PROCESS, OUR INVESTMENT POOL, UM, AND ALSO LETTERS OF OF CREDIT.

SO THIS IS A FAIRLY TECHNICAL SECTION OF OUR, UM, FINANCIAL POLICIES.

NEXT, UH, GOING FROM JUST WHAT WE CALL GENERAL TOPICS THAT APPLY TO ALL FUNDS TO POLICIES THAT ARE SPECIFICALLY GERMANE TO THE GENERAL FUND.

AND THOSE POLICIES, THOSE POLICIES INCLUDE, UH, YOU KNOW, IMPORTANTLY ONE OF MY FAVORITE POLICIES THAT WE HAVE TO HAVE A BALANCED BUDGET IN THE GENERAL FUND IN ENTERPRISE FUNDS.

THAT'S NOT ALWAYS THE CASE, BUT THE, THE GENERAL FUND ALWAYS NEEDS TO BE PROPOSED AND ADOPTED IN A MANNER THAT'S BALANCED, UH, POLICIES THAT GOVERN THE TIMING AND APPROACH TO DOING MID-YEAR BUDGET AMENDMENTS REQUIREMENTS FOR FISCAL NOTES, UM, ON ANY KIND OF BUDGET AMENDMENTS, UH, POLICIES RELATED TO OUR PROPERTY APPRAISALS AND, UH, TAX RATE AND TAX COLLECTIONS.

UM, THIS IS WHERE YOU'LL SEE A POLICY THAT SAYS WE ARE REQUIRED TO AT LEAST REVIEW EVERY FIVE YEARS, OUR CHARGES FOR SERVICES TO MAKE SURE THAT THERE'S A COST OF SERVICE THAT SUBSTANTIATES THE FEES WE'RE CHARGING TO USERS OF THOSE SERVICES.

UM, AND THEN OUR, UH, EMERGENCY RESERVE AND OUR BUDGET STABILIZATION RESERVE POLICIES, THESE POLICIES ALWAYS COME UP.

UH, THEY'RE HIGH PROFILE POLICIES IN REGARDS TO OUR BUDGET DISCUSSIONS, EMERGENCY RESERVE OF AT LEAST 10%.

AND THE STABILIZATION RESERVE SAID THAT SAYS THAT IT SHOULD BE 7% AND BALANCES IN THE STABILIZATION RESERVE CAN ONLY BE USED FOR ONE TIME COST AND ONLY IF THE BALANCE IS ABOVE THAT 7% LEVEL.

YES, PLEASE.

ON THE REVIEW CHARGES FOR SERVICES AT LEAST EVERY FIVE YEARS, CAN YOU SHARE ONE? WAS THE LAST TIME WE REVIEWED COST OF SERVICE? YEAH, IT'S NOT A ONCE EVERY FIVE YEARS, IT'S KIND OF MORE OF LIKE A ROLLING BASIS.

AND SO THE DEVELOPMENT SERVICES DEPARTMENT, FOR EXAMPLE, UM, MIGHT DO IT MUCH MORE FREQUENTLY THAN EVERY FIVE YEARS.

BUT, UM, IN THE GENERAL FUND, YOU KNOW, THINGS LIKE OUR, OUR PARKS FEES AND OUR LIBRARY FEES, IT'S, YOU KNOW, WE, THE PARKS DEPARTMENT MIGHT DO THEIR COST OF SERVICE ONE YEAR, AND THEN THE NEXT YEAR THE LIBRARY DOES IT.

SO I'D HAVE TO GO BACK AND GET YOU WHEN EACH INDIVIDUAL DEPARTMENT LAST DID IT.

BUT THE POLICY SAYS WE'RE SUPPOSED TO BE LOOKING AT THOSE AT LEAST ONCE EVERY FIVE YEARS.

NOT NECESSARILY ALL AT ONCE THOUGH.

LESS THAN THE COST OF SERVICE.

THANK YOU, MAYOR PRO TIM, AND JUST THE CLARIFICATION, UH, WE SET THOSE AS PART OF THE BUDGET EVERY YEAR AS WELL.

WE DO SET THE FEES AS PART OF THE BUDGET.

AND ALSO FOR CLARIFICATION, IT'S NOT THAT WE NECESSARILY SET OUR FEES AT THE FULL COST RECOVERY, IT'S JUST THAT WE NEED TO HAVE A BASIS TO SAY WE'RE CHARGING A FEE OF X AND OUR COST ANALYSIS INDICATES THAT THE FEE IS AT THE COST OF PROVIDING THE SERVICES AT LEAST X OR HIGHER THAN X.

WE CAN ABSOLUTELY CHARGE

[00:30:01]

WE JUST CAN'T CHARGE MORE.

AND THAT'S WHAT WE'RE LOOKING AT WHEN WE DO THOSE STUDIES.

GOT IT.

I JUST REMEMBER AS PART OF THE BUDGET DISCUSSIONS, I KNOW WE ALWAYS LOOK AT THOSE FEES AS WELL.

SO IN, IN, IN A SENSE WE REVIEW 'EM KIND OF, SORT OF EVERY YEAR, BUT A DEEPER DIVE.

I THINK IT'S, IT'S, IT'S, UH, THANK YOU.

THE NEXT SECTION HAS, UH, THERE'S A NEW SECTION HAS TO DO WITH OUR POLICIES AROUND, UH, HOLDING A TAX RATE ELECTION.

SO THERE'S A LOT OF DISCUSSION WITH THIS BODY AND WITH THE COUNCIL LAST YEAR ABOUT ESTABLISHING THESE POLICIES.

ESSENTIALLY SAYS THAT THE CITY MANAGER NEEDS TO PRESENT TO COUNCIL EVERY YEAR A BALANCED BUDGET AT THE VOTER APPROVAL RATE.

UM, AND THEN, UH, COUNCIL CAN MAKE THE DECISION IF THERE'S A DESIRE TO GO ABOVE THE VOTER APPROVAL, LA RATE, WHICH OF COURSE WOULD REQUIRE A TAX RATE ELECTION.

THE POLICY SPEAKS TO NOT HOLDING AN ELECTION MORE THAN ONCE EVERY FOUR YEARS AND STRUCTURING A-T-R-T-R-E IN A WAY THAT'S STRUCTURALLY SOUND.

AND, AND GENERALLY WHAT THAT MEANS IS WHEN WE BRING A TRE FORWARD, THERE'S GOING TO BE A MIX OF ONE-TIME EXPENDITURES AND ONGOING EXPENDITURES SO THAT WHEN WE LOOK AT A FIVE YEAR TIMEFRAME, THE ADDITIONAL REVENUE IS FOUND TO BE STRUCTURALLY SUSTAINABLE.

TAX INCREMENT FINANCING.

THERE'S QUITE A FEW POLICIES AROUND HERE.

THE KEY ONES REALLY BEING THAT WE WON'T DO A TAX INCREMENT FINANCING ZONE UNLESS IT MEETS A, BUT FOR CRITERIA, IN OTHER WORDS, BUT FOR THE PUBLIC FINANCING FUNDED THROUGH TAX INCREMENT.

UM, BUT FOR THAT PUBLIC INVESTMENT, PRIVATE INVESTMENT WOULDN'T OCCUR WITHIN A REASONABLY FORESEEABLE FUTURE.

AND SO THAT'S A REAL IMPORTANT CRITERIA.

UM, THAT'S PART OF ANY TIFF CREATION.

UM, AND THEN ALSO ANY TIFF ZONE THAT INCLUDES HOUSING.

AT LEAST 20% OF THAT HOUSING NEEDS TO BE, UH, AFFORDABLE UNITS AT DIFFERENT LEVELS, DEPENDING UPON IF IT'S OWNERSHIP OR RENTAL.

AND THOSE DETAILS ARE IN THE POLICY.

GENERAL DEBT MANAGEMENT, UH, IS A, IS A SHORT SECTION THAT SPEAKS TO HOW WE GO ABOUT ISSUING DEBT.

THERE'S DIFFERENT MANNERS THAT WE CAN ISSUE DEBT, AND IT PROVIDES GUIDELINES FOR WHETHER OR NOT WE'RE USING A COMPETITIVE SALE, A NEGOTIATED SALE OR PRIVATE PLACEMENT.

UM, AND THEN WE HAVE REQUIREMENTS AROUND THE, UH, PROCESSES WE USE FOR THE, UH, SELECTION OF OUR FINANCIAL ADVISORS AND BOND COUNCILS AND REQUIREMENTS THAT THE FINANCIAL ADVISORS BE INDEPENDENT OF BANKING, UNDERWRITING, OR OTHER FINANCIAL INTERESTS THAT COULD CREATE A CONFLICT FOR THEM.

ARE AROUND IT BEING AN URGENT SITUATION COULD BE AN EMERGENCY, UH, PREVENTING AN ECONOMIC LOSS TO THE CITY OR RESULTING IN AN ECONOMIC GAIN TO THE CITY.

NOW MOVING ON TO THE DEBT OBLIGATION POLICIES.

THIS IS THE FINAL SECTION OF THE NON-ENTERPRISE POLICIES.

I HAVE, UH, TWO OR THREE SLIDES OF THINGS THAT AREN'T CHANGING, AND THEN I'LL GET INTO THE THINGS WE'RE RECOMMENDING CHANGES TO, AGAIN, BASED UPON THE DECISION TREE COUNCILS APPROVED AND THE CONVERSATIONS WE'VE HAD AT PREVIOUS AUDIT FINANCE MEETINGS.

BUT THE, UH, GENERAL OBLIGATION DEBT, AND AGAIN, THERE'S THE DIFFERENT TYPES OF DEBT.

THERE'S REVENUE BONDS, UH, UM, AND GENERAL OBLIGATION BONDS BROADLY, UH, GENERAL OBLIGATION BONDS AND, AND, AND ENCAPSULATE VOTER APPROVED BONDS, THE, THE BOND PROGRAMS. AND THEY ALSO ENCAPSULATE WHAT WE OFTEN REFER TO AS CERTIFICATES OF OBLIGATION AND CONTRACTUAL OBLIGATIONS, OR JUST NON VOTER APPROVED DEBT.

SO BASICALLY YOU HAVE VOTER APPROVED DEBT AND NON VOTER APPROVED DEBT.

UM, GENERAL OBLIGATION, MEANING THAT IT'S A GENERAL OBLIGATION OF THE CITY FUNDED AND PAID BACK BY THE, UH, PROPERTY TAXES.

UM, SO WE HAVE POLICIES ABOUT, UH, MAINTAINING A DEBT SERVICE RESERVE OF AT LEAST 10%.

OUR POLICIES DEFINE THE TERM HOW LONG.

SO WE, UH, SIZE OUR BONDS FOR 20 YEARS, AND WE DO IT WITH LEVEL DEBT SERVICE.

SO ALL LEVEL DEBT SERVICE MEANS IS WE'RE NOT BACK LOADING THE PAYMENTS.

YOU COULD EASILY STRUCTURE YOUR BONDS TO MAKE IT LOOK LIKE, UH, THINGS ARE MORE AFFORDABLE THAN THEY ARE BY HAVING REAL LOW PAYMENTS IN THE INITIAL YEARS, AND THEN BALLOON PAYMENTS IN THE LATER YEARS.

THAT'S NOT REAL GOOD FINANCIAL MANAGEMENT.

SO OUR POLICY SAY, DON'T DO THAT.

UH, HAVE LEVEL DEBT SERVICE PAYMENTS.

UM, THEN ALSO POLICIES RELATED TO REIMBURSEMENT RESOLUTION.

SO NEARLY ALL THE BONDS WE ISSUE, UM, FOR GENERAL OBLIGATION ARE REIMBURSEMENT BASED BONDS.

WE INCUR THE EXPENDITURES FIRST AND THEN WE REIMBURSE OURSELVES AT, AT A LATER DATE.

AND THAT HELPS US WITH OUR DEBT MANAGEMENT AND BRINGS DOWN THE COST OF ISSUANCES BY ALLOWING US TO CONSOLIDATE BOND, UH, ISSUANCES INTO ONE ISSUANCE PER YEAR.

THAT TYPICALLY OCCURS IN AUGUST OR SEPTEMBER EACH YEAR IS WHEN WE DO OUR GEO BOND SALE.

NEXT SLIDE, UH, IS ADDITIONAL GEO DEBT POLICIES.

UH, THIS ONE'S I WANTED TO HIGHLIGHT, UM, IN A LITTLE BIT MORE DETAIL THAN JUST THE GENERIC LANGUAGE I WAS USING BECAUSE THIS, THE, THE FIRST BULLET ON THIS, I USE THIS TO MIRROR SOME OF THE LANGUAGE YOU'RE GONNA SEE ON THE PROPOSED CHANGES.

SO THIS BULLET SPEAKS TO, UM, WHEN WILL WE ISSUE NON-VOTER APPROVED DEBT? AND THE LANGUAGE USED IS THAT IT'S THE CITY COUNCIL'S PRIORITY TO GO TO THE VOTERS, UH, FOR DEBT ISSUANCES, BUT WE WILL USE NON-VOTER APPROVED DEBT IN CERTAIN CIRCUMSTANCES, AND YOU CAN SEE WHAT THOSE CIRCUMSTANCES

[00:35:01]

SO, FOR EXAMPLE, ON AN ECONOMIC GAIN, WE HAD A FACILITY THAT WE BROUGHT TO THE CITY COUNCIL WITH A RECOMMENDATION TO PURCHASE IT.

THE DEBT SERVICE WAS ABOUT $8 MILLION A YEAR ON THAT PURCHASE, BUT WE WERE LEASING IT FOR 8.5 MILLION A YEAR.

SO WE IMMEDIATELY SAW AN ECONOMIC GAIN THROUGH THAT PURCHASE.

UM, SO IT JUST MADE SENSE FOR US TO DO IT.

AND, AND SO THAT FIT INTO THIS POLICY.

UM, AND THEN ALSO ANYTHING THAT'S RELATED TO A LIFE HEALTH SAFETY ISSUE.

YOU KNOW, IF, IF THERE'S A DANGEROUS SITUATION AT A CITY FACILITY, UM, WE'RE GOING TO ADDRESS IT IMMEDIATELY, NOT WAIT TO THE NEXT BOND ELECTION TO ADDRESS THAT NEED.

UH, IT ALSO SPEAKS TO THE AVERAGE MATURITY OF OUR BOND, UH, OF OUR AGGREGATE BONDS.

AND WE DON'T ISSUE BONDS FOR ITEMS THAT HAVE A VALUE OF LESS THAN $10,000.

QUESTION.

YES, MAYOR PRO TIM, UH, I SEE THAT THEY'RE REQUIRED TO ADDRESS LIVE HEALTH SAFETY ISSUES AT CITY FACILITIES TO EXTEND THE USEFUL LIFE OF CITY FACILITIES OR TO REFURBISH EXISTING FACILITIES TO MEET CHANGING CITY SPACE NEEDS.

YES.

UH, THEN THIS WOULD BE, AGAIN, I'M THINKING ABOUT, FOR EXAMPLE, OUR PUBLIC SAFETY HEADQUARTERS THAT WE USED, UH, CEOS FOR.

I'M THINKING OF A HANDFUL THAT THE OFFICE BUILDING THAT WE BOUGHT THERE IN THE, THE CONCORDIA, KIND OF THE OLD CONCORDIA CAMPUS AREA.

SO IN OTHER WORDS, MORE FOR KIND OF YOUR DAY-TO-DAY OPERATIONAL NEEDS.

WOULD THAT BE A FAIR STATEMENT? YEAH, I MEAN, I, THAT WOULD BE A FAIR STATEMENT IN REGARDS TO THOSE FACILITIES THAT WE WERE, UM, UM, PURCHASING, UM, THIS SPECIFIC BULLET THAT WE WERE TALKING ABOUT, THOUGH AGAIN, THE LIFE, LIFE HEALTH SAFETY ISSUES KIND OF MAKES SENSE, BUT THE THOUGHT PROCESS BEHIND THE EXTENDING THE USEFUL LIFE IS, YOU KNOW, WHEN WE BUILD A NEW CENTRAL LIBRARY, WE GO TO THE VOTERS AND SAY, THAT'S GONNA COST A HUNDRED MILLION DOLLARS.

WE BUILD A NEW CENTRAL LIBRARY, AND THERE'S OBVIOUSLY AN EXPECTATION THAT WE'RE GOING TO OPERATE IT, AND THERE'S AN OPERATING COST ASSOCIATED WITH IT.

WELL, PART OF THOSE OPERATING COST IS WE NEED TO BE MAINTAINING THE FACILITY SO THAT IT LASTS AS LONG AS IT POSSIBLY CAN.

UH, WE JUST THINK THAT'S GOOD FISCAL MANAGEMENT.

SO WE INCLUDE IT HERE THAT THE ROUTINE MAINTENANCE AND UPKEEP, YOU KNOW, UH, A LOT OF TIMES THAT'S DONE ON AN ANNUAL CASH BASIS, BUT SOMETIMES THERE'S MAJOR EXPENSES LIKE REPLACING AN HVAC ON A BIG FACILITY LIKE THAT IS EXPENSIVE.

AND SO WHEN IT NEEDS TO BE REPLACED, WE'LL GO AHEAD AND ISSUE NON VOTER APPROVED DEBT FOR THAT, AS OPPOSED TO, YOU KNOW, THE VOTERS HAVE ALREADY APPROVED THE FACILITY.

WE DON'T GO BACK TO THE VOTERS AND SAY, HEY, WOULD YOU LIKE US TO MAINTAIN IT NOW? SO THAT'S WHY, AND I, I, I APPRECIATE THAT ANSWER, AND I THINK THAT'S A, THAT'S A GOOD ANSWER.

I, I THINK VOTERS, THE FEEDBACK IS IMPORTANT WHEN WE WANT TO DO SOMETHING, UH, AT, SO AGAIN, WE WANNA BUILD A LARGE NEW CENTRAL LIBRARY.

WE SHOULD ABSOLUTELY GO TO THE VOTERS AND ASK THEM ABOUT THAT.

SO NUMBER FOUR HAS CHANGED A LOT, AND THERE'S BEEN A LOT OF DISCUSSION ABOUT THIS.

BUT FOR KIND OF THE ONGOING MAINTENANCE OF FACILITIES, UH, AND, AND ACTIVITIES THAT THE CITIES HAVE THAT, THAT THE VOTERS, UH, HAVE ALREADY APPROVED, UH, I, I CAN SEE WHERE THE, THE CEOS WOULD BE THE, THE MOST, OR JUST KIND OF MAKING SURE THAT, THAT THOSE FACILITIES ARE, ARE, ARE GETTING MAINTAINED, ARE, ARE, ARE GETTING DONE, THAT THE OPERATIONAL NEEDS OF THE CITY ARE, ARE, ARE BEING MET.

SO, APPRECIATE IT.

THANK YOU, MAYOR.

OKAY, SO NOW WE'LL GET INTO SOME OF THE POLICIES WE'RE PROPOSING TO CHANGE.

SO WE CURRENTLY HAVE TWO POLICIES THAT ARE RELATED TO FINANCIAL METRICS THAT GUIDE OUR GENERAL OBLIGATION DEBT.

ONE SAYS THAT THE DEBT TO AV SHOULD BE LESS, 2% OR LESS.

AND THE OTHER ONE SAYS, OUR DEBT SERVICE AS A PERCENT OF TOTAL EXPENDITURES SHOULD NOT EXCEED 20%.

THERE'S NOTHING INHERENTLY WRONG WITH THOSE POLICIES, IT'S JUST THAT THEY USED TO BE RELEVANT TO OUR RATING AGENCY'S POP PROCESS AND THEY'RE REALLY NOT RELEVANT ANY LONGER.

THE CRITERIA CHANGES OVER THE YEARS.

UH, THE CURRENT CRITERIA LOOKED AT BY THE RATING AGENCIES, UM, IS MORE RELATED TO PENSION LIABILITIES.

UH, TOTAL LIABILITIES TO, UH, INCOME RATIO AND DEBT PER CAPITA FIGURES.

WE THOUGHT ABOUT UPDATING THESE POLICIES TO REFLECT THOSE CURRENT RATING CRITERIA, BUT REALIZE FIVE YEARS, 10 YEARS FROM NOW, UM, ONE YEAR FROM NOW, THEY COULD EASILY CHANGE AGAIN.

AND THE REASON FOR HAVING THESE FINANCIAL METRICS IN OUR POLICIES IS REALLY TO MAINTAIN OUR CREDIT RATING.

WE WANNA MAINTAIN A STRONG CREDIT RATING.

STAFF HAD INITIALLY PROPOSED THIS TO BE THE CITY SHALL STRUCTURE ITS BOND ISSUANCES AND MANAGE ITS LONG-TERM BOND SALES SCHEDULE IN A MANNER, UM, NECESSARY TO MAINTAIN A TRIPLE A CREDIT RATING.

IT WAS BROUGHT TO OUR ATTENTION THAT THE FINANCIAL FRAMEWORK, THE DECISION TREE THE COUNCIL ADOPTED USES THE LANGUAGE THAT'S ON THE SCREEN FOR YOU.

SO WE WOULD, UM, OFFER THAT PROPOSAL.

THIS JUST MIRRORS THE LANGUAGE IN THE DECISION TREE THAT WE'RE GONNA MANAGE OUR BOND ISSUANCES AND LONG-TERM DEBT, UH, SCHEDULES IN A MANNER THAT'S NOT LIKELY TO RESULT IN A DOWNGRADE TO THE CITY'S CREDIT, WHICH IS CURRENTLY AAA.

AND MEMBERS, YOU'LL REMEMBER THAT THAT WAS PART OF WHAT WE DISCUSSED AT THE TIME WE WERE PASSING THE DECISION TREE.

[00:40:01]

THIS IS THE ONE THAT SAYS THE TIMING OF GEO BOND ELECTION SHALL BE DETERMINED BY THE INVENTORY OF CURRENTLY AUTHORIZED UNISSUED BONDS REMAINING TO BE SOLD.

AND THEN AN ESTIMATED TWO YEARS OF UNAUTHORIZED BONDS SHALL REMAIN BEFORE AN EXCELLENT ELECTION WILL BE HELD.

UM, THAT'S KIND OF WONKY, AND YOU KIND OF HAVE TO BE AN INSIDER TO KNOW EXACTLY WHAT THAT MEANS.

WHEN DO WE HAVE TWO YEARS OF AUTHORIZED UNISSUED BONDS LEFT? AND SO WORKING WITH OUR CAPITAL DELIVERY SERVICES DEPARTMENT, UM, AND OUR TREASURY OFFICE, WE'VE COME UP WITH WHAT WE THINK IS A SIMPLER APPROACH IS TO SAY, REALLY THE IDEA IS, IS THAT THE TIMING OF THE ELECTIONS, WE DON'T HOLD A NEW ELECTION UNTIL THE PREVIOUS ELECTION IS SUBSTANTIALLY COMPLETE.

IT'S NOT AN EXACT SCIENCE WHEN THAT'S HIT, BUT WE SAY IT'S TYPICALLY ABOUT 90%, COULD BE 85%, YOU KNOW, UH, COULD BE 88%.

WE DON'T, YOU KNOW, BUT TYPICALLY IT'S ABOUT 90% IS WHEN WE HIT SUBSTANTIAL COMPLETION.

SO IN OTHER WORDS, WE STILL HAVE SOME SPENDING TO DO, BUT WE'RE GONNA GO AHEAD AND CALL THE NEXT BOND ELECTION.

SO THERE'S SOME OVERLAP BETWEEN THE WINDING DOWN OF THE PREVIOUS ELECTION AND THE STARTUP OF THE NEW ELECTION.

SO WE HAVE CONTINUITY IN THE PROGRAM OVER TIME, JUST LIKE ON THE NON-VOTER APPROVED THAT THOUGH, REALIZING THAT, UM, IT'S NOT AN, IT'S NOT AN ABSOLUTE AND THERE COULD, YOU KNOW, THERE COULD BE CIRCUMSTANCES THAT ARE URGENT OR EMERGENCIES OR THINGS THAT WEREN'T CONSIDERED.

AND SO TRYING TO USE THAT LANGUAGE TO SAY THAT'S OUR PRIORITY.

THE, THE, AND GENERALLY THE CITY'S PRIORITY IS TO HOLD A NEW BOND ELECTION, UM, UH, NOT TO NOT HOLD A NEW BOND ELECTION UNTIL THE PRIOR BOND PROGRAMS HAVE REACHED SUBSTANTIAL COMPLETION.

HOWEVER, MORE FREQUENT ELECTIONS MAY BE HELD IN RESPONSE TO AN URGENT, UH, EMERGENCY OR, OR OTHER EXIGENT CIRCUMSTANCE, OTHER UNKNOWN CIRCUMSTANCE THAT POPPED UP.

SO WE HAD A LOT OF GOOD EXAMPLES FROM FOLKS.

I THINK COUNCIL MEMBER FUENTES BROUGHT UP THE IDEA, WELL, IF THERE'S A VERY, VERY FAVORABLE HOUSING MARKET THAT GIVES US A GREAT OPPORTUNITY TO, UM, ADVANCE, UH, YOU KNOW, TO ACCELERATE OUR AFFORDABLE HOUSING, THAT WOULD JUST BE A SMART DECISION.

SO I WOULD VIEW THAT AS, YOU KNOW, SOMETHING OUT OF THE NORM.

AND SO THAT WOULD BE AN OPPORTUNITY TO SAY THAT, YOU KNOW, IN THIS CASE IT MAKES SENSE AND WE MIGHT WANT TO DO ONE MORE THAN, EVEN THOUGH WE HAVE MONEY LEFT, WE MAY WANT TO DO ONE MID CYCLE FOR THAT PURPOSE.

UM, SYNCING UP TO THAT.

AND THESE TWO, YOU REALLY NEED TO LOOK TO GET, UH, LOOK AT THEM IN, IN, IN CONNECTION.

IT, IT HAS TO DO WITH THE, UH, TIMING OF THE ELECTIONS AND THE SIZE OF THE ELECTIONS, AND OBVIOUSLY HOW BIG THE, THE BOND PROGRAM IS AFFECTS HOW LONG IT TAKES TO DELIVER AND THE TIMING FOR THE NEXT ONE.

SO THESE REALLY ARE RELATED.

THE CURRENT POLICY SAYS THAT THE TOTAL DOLLAR AMOUNT OF BOND ELECTION PROPOSITIONS RECOMMENDED TO THE VOTERS SHALL NOT NOT EXCEED THE CITY'S ESTIMATED ABILITY TO ISSUE THE BONDS WITHIN A NORMAL SIX YEAR CYCLE.

SO THE IDEA IS WE'RE GONNA GO TO THE VOTERS ROUGHLY ONCE EVERY SIX YEARS.

WE'LL HAVE AN ELECTION, WE'LL REACH SUBSTANTIAL COMPLETION PROBABLY IN ABOUT FIVE YEARS, YOU KNOW, THAT TRIGGERS THE, THE, THE TIME FOR THE NEXT ELECTION.

AND, AND WE HAVE ANOTHER SIX YEAR CYCLE.

UM, AGAIN, TRY TO MIRROR THAT LANGUAGE THAT WE ALREADY USE IN OUR NON-VOTER APPROVED DEBT.

UH, TO GIVE A LITTLE BIT MORE FLEXIBILITY HERE IS TO SAY IT'S THE CITY'S PRIORITY TO SIZE THOSE BOND ELECTIONS FOR A SIX YEAR PROGRAM DELIVERY.

HOWEVER, SMALL OR LARGER, UH, PROPOSITION SIZES MAY BE USED IN RESPONSE TO AN EMERGENCY.

SO GOING BACK TO THAT HOUSING EXAMPLE, IF WE WERE THREE YEARS INTO A SIX YEAR CYCLE AND THE COUNCIL DETERMINED THERE WAS A GREAT OPPORTUNITY TO ACCELERATE OUR HOUSING PROGRAM BECAUSE OF CHANGES IN MARKET CONDITIONS, WE MIGHT JUST DO LIKE A OFF CYCLE HOUSING ONLY BOND SIZE IT FOR THREE YEARS TO GET THINGS BACK INTO SYNC.

AND SO THAT'S KIND OF OUR THOUGHT PROCESS AND TRYING TO, UM, PROVIDE SOME FLEXIBILITY TO THESE, TO THESE POLICIES TO ALLOW FOR CHANGING CIRCUMSTANCES.

AND THEN FINALLY, THIS WAS A, UM, A COMMENT FROM COUNCIL MEMBER LANE AROUND THE IMPORTANCE OF MAINTAINING FLEXIBILITY IN HOW WE STRUCTURE OUR BOND PROPOSITIONS.

WE'VE, IN THE PAST HAD OVERLY PRESCRIPTIVE PROPOSITION LANGUAGE AND CONTRACTS WITH THE VOTERS THAT REALLY DO LIMIT OUR ABILITY TO ADJUST THE IMPLEMENTATION OF THE BOND PROGRAM TO CHANGING CIRCUMSTANCES.

AND THIS LANGUAGE HERE IS DESIGNED TO PREVENT THAT TO SAY, NO, NO, NO, OUR POLICY IS, OUR APPROACH TO DOING BOND PROGRAMS IS TO DESIGN THEM IN A MANNER THAT ALLOWS FLEXIBILITY IN PROJECT DELIVERY SUCH THAT CIP SPENDING PLANS CAN BE ADAPTED TO MEET CHANGING MARKET CONDITIONS AND PROJECT DELIVERY PRIORITIES.

UM, YOU KNOW, YOU CAN ONLY BE SO FLEXIBLE, UH, TRANSPORTATION BOND NEEDS TO BE USED FOR TRANSPORTATION, TRANSPORTATION RELATED ITEMS. WE CAN'T JUST COMPLETELY CHANGE MINDS AND SAY THE VOTER APPROVED TRANSPORTATION FUNDING AND NOW WE WANT TO USE IT FOR PARKS FUNDING.

WE CAN'T DO THAT.

UM, BUT WE CAN DESIGN THEM IN A WAY WHERE WE MIGHT BE ABLE TO MOVE MONEY FROM A STREET REHABIL STREET REHABILITATION PROJECTS OVER TO A SIDEWALK PROGRAM IF THE SIDEWALK PROGRAM IS NEEDING AN INFLUX OF MONEY.

SO THAT'S THE KIND OF FLEXIBILITY WE'RE TRYING TO ALLOW FOR HERE.

UM, AND THEN THE FINAL TWO SLIDES IN THE DECK, GOING

[00:45:01]

BACK TO, UM, UM, THAT FOURTH FINANCIAL POLICY, UM, I'M GONNA GO BACKWARDS FIRST.

THE FOURTH FINANCIAL POLICY HERE, YOU'LL NOTE THAT IT SPEAKS TO THE PRIORITY IS TO HOLD TO, TO NOT HOLD A NEW BOND ELECTION UNTIL THE PRIOR BOND PROGRAMS HAVE REACHED SUBSTANTIAL COMPLETION.

SO THE PROGRAM MIGHT HAVE SIX OR SEVEN PROPOSITIONS IN IT, AND THAT'S, THAT'S THE DEFINITION WE'RE USING FOR PROGRAM.

THERE'S BEEN A LOT OF DISCUSSION ABOUT SHOULD THIS TIMING OF THE BOND ELECTIONS BE FOCUSED ON THE OVERALL PROGRAM REACHING SUBSTANTIAL COMPLETION OR AN INDIVIDUAL PROPOSITION WITHIN THE PROGRAM, REACHING SUBSTANTIAL COMPLETION.

SO SHOULD WE WAIT TILL WE HAVE THE PROGRAM HAS, YOU KNOW, ONLY 10% OF MONEY LEFT, OR IF WE HAVE ONE PROPOSITION THAT HAS REACHED SUBSTANTIAL COMPLETION AFTER THREE OR FOUR YEARS, IS THAT THE POINT TO HAVE ANOTHER ELECTION FOR THAT PROPOSITION? UM, AND SO THERE WAS A LOT OF DISCUSSION ABOUT THAT.

I WILL SAY THAT STAFF'S RECOMMENDATION IS, IS THIS PART FOUR SLIDE THAT'S ON THE SCREEN HERE, BUT I, UM, DID PUT TOGETHER A PART FOUR ALTERNATE, UM, WHICH FOCUSES ON THE PROPOSITIONS AS OPPOSED TO THE PROGRAMS. UM, AND THEN THERE'S A PART FIVE ALTERNATE, BUT IN RETROSPECT IT'S NOT AN ALTERNATE, IT'S EXACT SAME LANGUAGE AS AS THE ORIGINAL PART FIVE.

SO, UM, THAT'S MY PRESENTATION.

MAYOR, I'D BE HAPPY TO, UM, ANSWER ANY QUESTIONS YOU MAY HAVE.

QUESTIONS.

COUNCILMAN ? UH, THANK YOU MR. VENITO.

THIS MAY HAVE ALREADY COME UP DURING THE, UM, THE WORKFLOW PROCESS, BUT I WAS JUST CURIOUS TO THE EXTENT THAT YOU ALL HAD AN INTERNAL DISCUSSION AROUND THE NATURE OF THE RECOMMENDATIONS THAT, UM, ARE TRYING TO MAINTAIN OUR BOND RATING, UH, WHETHER YOU ALL DISCUSSED WHETHER IT MADE SENSE TO, UH, RATHER THAN SORT OF, I WOULD CHARACTERIZE IT, MAYBE PLAY DEFENSE MIGHT PREVENT US FROM, UH, SLIPPING IN THAT BOND RATING TO ACTUALLY, UH, SOMETHING A BIT MORE ASPIRATIONAL.

UH, WELL THAT WAS WHAT STAFF INITIALLY BROUGHT FORWARD WAS THAT OUR GOAL IS TO MAINTAIN AAA CREDIT RATING.

WE'RE VERY PROUD OF THAT AAA CREDIT RATING.

WE WORK REALLY HARD TO, UH, TO, TO ACHIEVE IT AND TO MAINTAIN IT.

AND THAT IS A HIGHER BAR THAN JUST NOT WANTING TO BE DOWNGRADED.

RIGHT? RIGHT NOW, NOT BEING DOWNGRADED IS THE SAME AS MAINTAINING AAA, BUT THERE'S THINGS OUTSIDE OF OUR CONTROL THAT COULD RESULT IN US BEING DOWNGRADED.

THE STATE LEGISLATURE COULD TAKE SOME ACTION THAT EXTREMELY LIMITS OUR REVENUE FLEXIBILITY, AND THE RATING AGENCIES COULD VIEW THAT AS A RISK AND, AND DOWNGRADE US.

UM, WE'VE BEEN DOWNGRADED BEFORE BECAUSE OF A PROPOSITION THAT THE VOTERS PASSED RELATED TO BINDING ARBITRATION.

UM, WE'VE SINCE BEEN RE OUR CREDIT RATING WAS RESTORED BY THAT AGENCY, BUT YOU CAN BE DOWNGRADED, GRADED FOR ANY SORT OF A REASON.

SO IF WE WERE DOWNGRADED FROM AAA TO AA PLUS THE POLICY THEN WOULD, WOULD NOW READ, WELL, WE DON'T WANT TO BE DOWNGRADED FROM AA PLUS.

THAT DOESN'T MEAN THAT STAFF WOULDN'T CONTINUE TO STRIVE AND MANAGE OUR FINANCES IN A WAY TO GET US BACK TO AAA.

THE POLICY JUST WOULDN'T NECESSARILY REQUIRE IT.

THANK YOU FOR THAT EXPLANATION.

THE OTHER QUESTION I HAD WAS MY UNDERSTANDING IS THERE IS POTENTIALLY SOME MOVEMENT AFOOT, UH, AT MAYBE THE STATE LEVEL OR OTHER PLACES TO CHANGE OR CONSTRAIN THE WAY THE MUNICIPALITIES CAN, UH, UTILIZE CERTIFICATES OF OBLIGATION.

IS THAT A CONVERSATION YOU ALL HAVE ALSO HAD ABOUT POTENTIAL CHANGES YOU MIGHT BE ENTERTAINING ABOUT, UH, TO HEAD OFF THAT DISCUSSION? UM, THAT'S A DISCUSSION THAT HAPPENS AT THE LEGISLATURE EVERY YEAR FOR AT LEAST FIVE OR SIX SESSION THAT HAS BEEN A HOT BUTTON ISSUE.

THEY HAVE TAKEN STEPS TO, UM, MODERATELY, UM, PULL BACK ON CITY'S FLEXIBILITY USE NON-VOTER APPROVED DEBT.

BUT, UM, I DON'T THINK THERE'S ANYTHING THE CITY COULD DO OR NOT DO THAT WOULD PREVENT THAT CONVERSATION FROM HAPPENING AT THE LEGISLATURE.

UM, UH, TO PUT FURTHER CONSTRAINTS ON THE FLEXIBILITY THAT A GOVERNING BO A LOCAL GOVERNING BODY WOULD HAVE TO ISSUE, UM, DEBT, BOTH, BOTH VOTER APPROVED AND NON-VOTER APPROVED DEBT ARE GOING TO ABSOLUTELY BE DISCUSSED THIS NEXT SESSION AND WHETHER OR NOT STRICTER RULES SHOULD BE PUT IN PLACE.

BUT WHAT I'M HEARING YOU SAY IS THAT THERE'S NO SPECIFIC URGENCY THAT WOULD PROMPT A DISCUSSION IN, IN THE FORESEEABLE FUTURE THAT INCLUDES SOMETHING LIKE THAT AS PART OF THE CHANGES THAT YOU'RE RECOMMENDING.

NO.

BOND PROPOSITION CATEGORY.

YOU KNOW, WE'RE VERY, WE, WE ARE VERY AWARE OF WHAT STATE LAW ALLOWS FOR AND REQUIRES, AND WE MAKE SURE THAT WE'RE WELL WITHIN THE, THE LINE OF WHAT THE, THE STATE LAW GUIDELINES ARE.

UH, DOESN'T MEAN THEY WON'T CHANGE THE GUIDELINES, BUT UM, EVERYTHING WE'RE DOING CURRENTLY IS, IS IN LINE WITH WHAT STATE LAW ALLOWS.

THANK YOU MR. FANNO FOR THE, UH, PROPOSED CHANGES TO THE GENERAL OBLIGATION BOND DEBT GUIDELINES.

I REALLY APPRECIATE THE ALTERNATIVE, UM, LANGUAGE THAT YOU PROVIDED HERE THAT GRANTS US THAT FLEXIBILITY TO CONSIDER HOLDING BOND ELECTIONS SPECIFIC TO

[00:50:01]

I THINK THAT REALLY SPEAKS TO, YOU KNOW, KIND OF THE MOMENT THAT WE'RE IN AS A CITY, ESPECIALLY KNOWING THAT THERE ARE CERTAIN CATEGORIES WHERE WE'VE EXPENDED ALL OF OUR DOLLARS AND HAVE A SIGNIFICANT NEED FOR US TO ADDRESS IN THE NEAR TERM, BUT CERTAINLY WANT TO BE MINDFUL OF STAFF CAPACITY TO BE ABLE TO DELIVER ON THE PROJECTS AND THEN ALSO JUST UNDERSTANDING, UM, THE GREATER NEEDS OF OUR CITY.

SO I, I, COLLEAGUES, I DO, UM, PREFERENCE THE ALTERNATE LANGUAGE AND JUST WANTED TO SURFACE THAT IN THIS COMMITTEE.

THANK YOU COUNCILOR WALTER, I HAVE A FEW QUESTIONS ALL THE WAY THROUGHOUT.

UM, STARTING RIGHT AT THE TOP, YOUR, WHEN WE TALKED ABOUT THE GENERAL TOPICS AND THE CAPITAL REHABILITATION FUND, YOU MENTIONED NOT BEING FUNDED IN THE PLANNED BUDGET.

UM, AND YOU TOUCHED ON LATER THAT FINANCIAL POLICY AROUND BEING ABLE TO ISSUE CERTIFICATES OBLIGATION FOR WHETHER IT'S THE HVAC OR THE NEW ROOF.

IS THAT SOMETHING THAT CAN KIND OF BE THE BANDAID FOR NOT PUTTING GENERAL FUND DOLLARS INTO THE CAPITAL REHABILITATION FUND? OR CAN YOU HELP EXPLAIN WHERE, WHAT ARE THE THINGS THAT WOULD HAVE TO BE GENERAL FUND DOLLARS NOT DEBT? UM, IT'S A BANDAID.

UM, IT'S MAYBE NOT A PERFECT BANDAID THOUGH.

IT MIGHT BE A TOO SMALL OF A, OF A BANDAID.

SO GENERALLY, YOU KNOW, IN ORDER TO BE ABLE TO ISSUE LONG, YOU KNOW, 20 YEAR BONDS FOR A A PROJECT, IT NEEDS TO BE SOMETHING THAT WOULD EXTEND THE USEFUL LIFE OF THE ASSET FOR THAT PERIOD OF TIME.

SO IF WE'RE DOING A MAJOR RENOVATION, UM, AT A CITY FACILITY, UH, THAT TOP TO DOWN RENOVATION, YOU KNOW, REDOING THE PLUMBING, ELECTRICAL, UH, CARPETING, LIGHTING FIXTURES, YOU KNOW, WE CAN ISSUE DEBT FOR THAT WHOLE THING.

IT'S, IT'S EXTENDING THE USEFUL LIFE OF THAT PROJECT.

IF WE WERE SIMPLY LOOKING AT THE FURNITURE'S OLD AND SHABBY AND WE NEED SOME NEW FURNITURE, AND THAT FURNITURE'S ONLY VIEWED AS MAYBE HAVING A 10 YEAR LIFESPAN, THEN THAT WOULDN'T BE AN APPROPRIATE THING.

IT'S NOT EXTENDING THE USEFUL LIFE OF THE FACILITY, IT'S JUST NICER FURNITURE.

AND SO IN THAT, YOU KNOW, IN THAT CASE WE WOULDN'T NECESSARILY BE ABLE TO UPGRADE THE FURNITURE OR MAYBE JUST THE CARPETING IS, IS TORN AND IN BAD SHAPE AND WE'RE NOT GONNA ISSUE BONDS TO REPLACE THE CARPETING.

IF IT WAS PART OF A BIGGER RENOVATION, WE COULD.

SO IT, THAT'S WHERE THE, IT, IT DOES PUT RESTRICTIONS ON US TO ADDRESS AGING AND TIRED LOOKING FACILITIES, UH, WHERE WE CAN'T ISSUE BONDS TO DO IT, WE JUST NEED TO CASH FUND CERTAIN THINGS IN CERTAIN CIRCUMSTANCES.

WELL, AS WE GO THROUGH THE BUDGET PROCESS, IF YOU COULD KIND OF GIVE US THAT BUCKET, YOU KNOW, HOW MUCH YOU SAID IS 12 AND A HALF MILLION FOR THE TOTAL, BUT IF JUST THE NON DEBT ELIGIBLE PIECE, WHAT WOULD THAT COST US? BE HELPFUL TO KNOW.

UM, ALSO YOU TOUCHED ON THE RESERVES AND I KNOW WE'VE HAD CONVERSATIONS AS IT RELATES TO THE FORECAST OF GETTING BACK TO THAT 17% LEVEL.

AND I'M TRYING TO KIND OF UNDERSTAND, AND FROM Y'ALL'S PERSPECTIVE, UM, KIND OF HOW YOU DECIDE AS YOU'RE BUILDING THE BUDGET AND LOOKING AT THESE POLICIES, YOU KNOW, WHERE WE'RE GONNA FUDGE A LITTLE, RIGHT? I MEAN THE, WE JUST TALKED ABOUT IT WITH THE REHABILITATION FUND AND I KNOW WE'RE NOT, I DON'T THINK THE PLAN IS TO HIT 17% IN THIS NEXT BUDGET.

SO, UM, IT KIND THAT GLOBAL QUESTION OF WHAT ARE THE ROLE OF THESE POLICIES FOR STAFF? I KNOW YOU WANT TO BE THERE, BUT KIND OF WHEN DO YOU DECIDE IT'S JUST NOT GONNA HAPPEN THIS TIME? RIGHT.

UM, SO I DO EXPECT YOU'RE GONNA SEE A FORECAST THAT, THAT THAT, UM, RECOMMENDS GETTING TO THE 17% RESERVE AND, AND PRESENTS THE FORECAST ACCORDINGLY.

UM, THIS CAPITAL REHAB PATH PLAN, LIKE I MENTIONED, IT WAS SOMETHING THAT ORDER TO GET TO THE BALANCED BUDGET FOR THE SECOND YEAR, WE HAD TO MAKE SOME CHOICES AND THAT WAS A CHOICE THAT MADE THAT WE COULD DEFER THIS.

I DON'T, I DON'T THINK THIS WOULD BE A GOOD THING TO DEFER PERMANENTLY, BUT CERTAINLY ON SOMETHING LIKE MY CARPETING EXAMPLE, WE COULD GO ONE MORE YEAR WITHOUT REPLACING THE CARPETING AND THEN LOOK TO RESTORE THE FUNDING IN A, IN A FUTURE YEAR.

BUT WE WOULD ACKNOWLEDGE THAT WE WERE BRINGING FORWARD A BUDGET.

WE DO THAT EVERY YEAR.

WE'RE BRINGING FORWARD A BUDGET THAT VIOLATES ANY OF THE 119 POLICIES.

WE WILL HIGHLIGHT THESE POLICIES ARE NOT IN COMPLIANCE WITH WHAT STAFF IS PROPOSING AND, UH, PRESENT A REASON FOR THAT AND A PLAN FOR GETTING THEM BACK INTO COMPLIANCE.

THAT'S VERY HELPFUL.

AND, UM, MOVING ALONG, SLIDE NUMBER FIVE, JUST TO FLAG FOR THE COMMITTEE THIS AROUND TIFFS AND TSS.

UM, YOU KNOW, TS CAN PROVIDE SOME BENEFIT OUTSIDE THE THREE AND A HALF PERCENT CAP THAT WE'RE UNDER.

UM, I, AS, AS WE LOOK TO ADDRESSING THESE POLICIES LONG TERM, UH, I DO WANNA LOOK AT THE CLOSURE QUESTION POLICY.

WE'VE CHANGED IT A FEW TIMES.

UM, I'M NOT A HUNDRED PERCENT CONVINCED IT'S EXACTLY WHERE IT NEEDS TO BE.

[00:55:01]

UM, I THEY CAN ALSO, YOU KNOW, WHEN CLOSED ROLL INTO THE GENERAL FUND AND, AND HAVE THAT BENEFIT AS WELL.

SO I JUST, I WANNA BALANCE THOSE TWO THINGS AGAINST EACH OTHER AND REALLY FIGURE OUT WHAT THE BEST POLICY IS AROUND THE CLOSURE.

AND OF COURSE, IN ACCORDANCE WITH STATE LAW, WE CAN'T, UM, JUST MAKE IT UP AS WELL.

SO JUST WANNA, IF, IF THAT'S SOMETHING ANYONE ELSE HAS INTEREST IN AND, AND, UM, UH, SOMETHING I'D LIKE TO WORK ON MOVING FORWARD.

UM, AND THEN MOVING DOWN HERE, I JUST WANNA ECHO, UH, WHAT COUNCIL MEMBER VELA MENTIONED, OR MAYOR TIME VELA ABOUT THE LOOKING AT NON-VOTER APPROVED DEBT CERTIFICATES OBLIGATION FOR THOSE KIND OF MAINTENANCE OF THE FACILITY THAT THE VOTERS EXPECT US TO MAINTAIN.

I THINK WE OFTEN SEE IN OUR BOND PROGRAMS, UH, AND, AND WE COULD, YOU KNOW, LOOK AT THE STAFF LIST.

THERE IS, YOU KNOW, HVAC REHAB OR FIX THE ROOF, RIGHT? THERE ARE THINGS THAT WE DO SOMETIMES ROLL INTO A, A GENERAL BOND OR GENERAL OBLIGATION BOND PROGRAM, UH, THAT ARE REALLY MAINTENANCE FOCUSED.

AND I THINK, UM, RECOGNIZING WHAT THE LIMITS ARE OF STATE LAW, BUT THEN WORKING WITHIN THOSE LIMITS AS THE, THE POLICY MENTIONS AND, AND REALLY HAVING MAINTENANCE BE SOMETHING THAT WE JUST PUT IN OUR CIP THAT WE ADOPT EVERY YEAR AND, AND GET THOSE BUILDINGS TAKEN CARE OF BECAUSE IT'S JUST GONNA COST MORE DOWN THE ROAD AND IT COSTS MORE TO OPERATE, UH, THE, YOU KNOW, USE THE GENERAL FUND DOLLARS TO OPERATE SOMETIMES IF WE'RE NOT, UM, MAKING THE NEEDED REPAIRS.

SO, UM, JUST KIND OF AS WE BUILD OUT OUR, OUR GENERAL OBLIGATION BOND, OUR, OUR, OUR PIPS REALLY, UM, I THINK HAVING THAT DISTINCTION IS A REALLY IMPORTANT ONE AND, AND ONE THAT I THINK WE HAVEN'T FULLY THOUGHT ABOUT, BUT WE'VE TALKED A LITTLE, UM, YOU KNOW, THIS QUESTION OF LIKE A MAINTENANCE FACILITY, RIGHT? THE FACILITY ITSELF, MAYBE AN EXPANSION OR SOMETHING NEW, BUT IT'S USED TO MAINTAIN SOMETHING THAT IS ALREADY A CITY ASSET, WHETHER THAT'S OUR PARKS OR OUR, YOU KNOW, WHATEVER FACILITIES THEY USE THAT MAINTENANCE FACILITY TO, TO FIX UP OUR OTHER FACILITIES.

UM, I THINK THAT'S SOMETHING THAT KIND OF THE PUBLIC EXPECTS US TO DO, RIGHT? THEY EXPECT US TO HAVE A PLACE WHERE, UH, WE CAN FIX OUR FLEET AND FIX OUR, YOU NAME IT.

UM, AND I THINK THAT IS SOMETHING THAT SHOULD KINDA BE TAKEN OUT OF THE CONVERSATION OF GOING TO THE VOTERS AND INSTEAD THEY HAVE, THEY EXPECT US TO MAINTAIN THE CITY.

UH, AND, AND WE SHOULD JUST DELIVER ON THAT AND, AND MOVE ON THAT, I BELIEVE.

UM, AND THEN THE LAST IS I WOULD JUST, UH, KIND OF ECHO WHAT COUNCILOR FUENTES MENTIONED, AS WELL AS IT RELATES TO THE, THE PROGRAM VERSUS THE PROPOSITIONS.

UM, I DON'T WANT TO LOSE SIGHT OF THE LONG TERM.

YOU KNOW, WE, WE DON'T WANNA JUST CHANGE EVERYTHING BECAUSE OF WHERE WE ARE TODAY, RIGHT? AND SO WE NEED TO HAVE A, A, A LONG LENS ON THIS.

UM, WE DO FIND OURSELVES IN A SITUATION WHERE 2018 WAS THE COMPREHENSIVE BOND, AND SO WE'RE EIGHT YEARS LATER AND THERE ARE PROGRAMS THAT ARE SUBSTANTIALLY COMPLETE OR VERY NEAR THAT AND HAVE THOSE NEEDS.

UM, AND SO, YOU KNOW, WE CAN DECIDE TO VIOLATE POLICIES BECAUSE OF, OF WHERE WE ARE OR CHANGE THE POLICIES TO MEET WHERE WE ARE.

YOU KNOW, IT'S, YOU CAN GO EITHER WAY.

UM, TOMATO, TOMATO, THAT'S RIGHT.

SO I JUST, I, I WANT TO STRIKE THE RIGHT BALANCE, BUT I, I DO THINK, UM, YOU KNOW, THAT THERE'S ARE SOME, SOME CRITICAL NEEDS AND IF WE WANT TO ADDRESS THAT THROUGH, UH, PROPOSITION SPECIFIC LANGUAGE AND, AND MOVE TO A, A SYSTEM WHERE WE CAN LOOK LONG TERM IN THAT SIX YEAR LENS, BUT NOT NECESSARILY HAVE TO DO EVERYTHING ALL AT ONCE.

RIGHT.

WE TALKED LAST MEETING ABOUT DOING A FEW IN ONE AND, BUT, BUT PLANNING TWO YEARS LATER THAT, YOU KNOW, YOU'RE GONNA MAYBE BE LOOKING AT A DIFFERENT SET OF CATEGORIES, UM, AND THAT WOULD KIND OF NECESSITATE A, A CHANGE IN THIS.

UH, I THINK IT'S A, A BROADER CONVERSATION THAT WE NEED TO HAVE THEN WE CAN, UM, AND WE CAN DO TODAY.

BUT YEAH.

RIGHT.

SO, UH, APPRECIATE ALL YOUR WORK ON THIS.

I KNOW YOU'VE BEEN DIGGING INTO THE DETAILS, AND SO JUST THANK YOU VERY MUCH.

EVERYTHING TOGETHER SO WE CAN KIND OF COMPARE THEM SIDE BY SIDE AND PRIORITIZE, UH, UH, JUST IN, YOU KNOW, WHEN I LOOK BACK AT THE LAST 20 YEARS OR SO, I MEAN, THAT'S KIND OF, I DON'T KNOW IF THAT'S QUITE WHAT WE'VE DONE, AND I DON'T, NOT SURE HOW WE'RE GOING TO GET THERE.

COUNCIL MEMBER, MAYOR TIM.

UH, THANK YOU, MAYOR.

I, I ALSO WOULD SUPPORT THE PART FOUR ALTERNATE, UH, PROPOSAL.

I UNDERSTAND.

AND I APPRECIATE THE IDEA OF PUTTING

[01:00:01]

UH, I THINK, YOU KNOW, PHILOSOPHICALLY I AGREE WITH IT AS A PRACTICAL MATTER.

UH, I, I JUST DON'T KNOW IF THAT WILL, WILL WORK.

UH, AND I, I, I WOULD SUPPORT THAT, THAT ALTERNATE LANGUAGE WHERE, YOU KNOW, WE, WE WILL NEED TO GO OUT OF CYCLE, UH, UH, TO ADDRESS, YOU KNOW, NEEDS HERE AND THERE.

UM, AND THEN I JUST WANTED TO, THINKING ABOUT THE, THE WHOLE KIND OF CO UH, DISCUSSION FOR, UM, MORE OPERATIONAL MAINTENANCE KIND OF NEEDS.

UH, SOMETHING LIKE, I KNOW ONE OF THE BIG ITEMS THAT THAT HAS, IT'S, IT'S BEEN ON EVERYBODY'S LIST AND THAT I THINK WE ALL AGREE THAT WE NEED, IS THAT NEW, UH, MAINTENANCE, UH, FACILITY FOR, UH, UH, AUSTIN, UH, PARKS AND RECREATION.

UH, MY SENSE OF THAT IS THAT IT WOULD BE MORE APPROPRIATE FOR A CERTIFICATE OF OBLIGATION TYPE, BECAUSE THAT'S NOT, YOU KNOW, I, I THINK THE VOTERS, IT'S HOW DO THE VOTERS KNOW, YOU KNOW, WHETHER WE NEED A NEW MAINTENANCE YARD OR NOT.

THEY DON'T INTERACT WITH A MAINTENANCE YARD.

YOU KNOW, THEY, THAT THAT'S, THAT'S MORE OF A KIND OF AN INTERNAL, UH, UH, DECISION.

I JUST WONDERING A, ANY, ANY, UH, AND I THINK ABOUT, AGAIN, A RR WE BROKE, UH, THAT'S A REVENUE, UH, UH, UH, THAT'S AN ENTERPRISE FUND.

AND, AND I KNOW THAT'S A LITTLE BIT DIFFERENT, BUT FOR EXAMPLE, WE HAD THAT, THAT GREAT NEW, UH, UH, FLEET, UH, MAINTENANCE, UH, FACILITY FOR A RR.

UM, HOW DO YOU KIND OF BALANCE THOSE, UH, NEEDS, LIKE GOING OUT TO THE VOTERS OR JUST KIND OF GETTING OUR DAY-TO-DAY OPERATIONAL AND MAINTENANCE, UH, UH, INFRASTRUCTURE, YOU KNOW, UP, UP TO SNUFF? THAT'S A GREAT QUESTION.

YOU KNOW, AND IT'S, IT POTENTIALLY IS OBVIOUSLY A SLIPPERY SLOPE TO SAY, WELL, THIS FACILITY WE THINK MAKES SENSE TO FIT WITHIN OUR NON-VOTER APPROVED APPROACH VERSUS TAKING IT TO THE VOTERS.

AND ONCE YOU'RE DOWN THAT SLOPE, YOU KNOW, PEOPLE COULD HAVE DIFFERING OPINIONS ABOUT WHAT FACILITIES SHOULD BE IN THAT.

WHAT, WHICH ONES MAYBE NOT.

I WILL SAY THAT, YOU KNOW, WE HAVE ACQUIRED NUMEROUS, UH, FACILITIES RECENTLY.

'CAUSE THERE WAS A, QUITE, QUITE HONESTLY, A, A VERY RARE OPPORTUNITY IN THE COMMERCIAL REAL ESTATE MARKET TO GET VERY GOOD DEALS ON PROPERTY.

SO WE WERE ABLE TO GET A NEW PUBLIC SAFETY HEADQUARTERS FOR 107 MILLION.

NOW IT'S GONNA COST MONEY TO RENOVATE THAT, BUT THE PROJECTED COST TO, UH, BUILD, AND WE HAD DONE THE CI, WE HAD STARTED DOWN THE PATH OF DOING A CIP PROJECT ON THIS.

AND HAVING A, A VOTER, YOU KNOW, INITIATIVE THAT WOULD'VE BEEN 300 TO 350 MILLION.

SO, YOU KNOW, FROM AN ECONOMIC ADVANTAGE STANDPOINT, IT WAS, YOU KNOW, KIND OF A NO BRAINER.

WE KNEW THAT WAS A CRITICAL FACILITY, AND WE CAN DO IT FOR, YOU KNOW, A HALF, ROUGHLY HALF THE COST OF BUILDING IT FRESH, AND IT MET ALL OF OUR NEEDS AND IT CAN BE DELIVERED MORE QUICKLY.

SO THOSE, THAT'S, YOU KNOW, WHAT WE'RE LOOKING AT, IS THERE AN ECONOMIC ADVANTAGE TO DOING IT THE WAY WE'RE PROPOSING TO DO IT? AND IF THERE'S NOT, THEN, YOU KNOW, GENERALLY WE'RE TRYING TO TAKE THOSE THINGS TO THE, TO THE VOTERS.

UM, I, I THINK IT'S A, A, A GOOD POLICY DISCUSSION ABOUT, YOU KNOW, THINGS LIKE MAINTENANCE FACILITIES, UM, AND WHETHER OR NOT, YOU KNOW, THE, THE NORTHEAST SERVICE CENTER IS A BIG MAINTENANCE FACILITY.

YEAH, THAT'S A COMPLICATED DEAL WITH MULTIPLE FUNDING SOURCES.

ABOUT HALF OF IT COMING FROM NON VOTER APPROVED GENERAL OBLIGATION DEBT, AND HALF OF HALF OF IT BEING, UM, PAID FOR THROUGH THE ENTERPRISE, THROUGH THROUGH RESOURCE RECOVERY.

UM, YOU KNOW, IT'S ONE OF MY THOUGHTS THAT WE'VE HAD SOME DISCUSSIONS ABOUT A MAINTENANCE COMPLEX, AND DOES IT MAKE MORE SENSE TO BUILD A MAINTENANCE COMPLEX JUST FOR PART OR TO HAVE A CITYWIDE MAINTENANCE COMPLEX THAT CAN MAYBE MEET THE NEEDS OF MULTIPLE DEPARTMENTS WHO HAVE FACILITIES TO MANAGE AND MAINTAIN? YOU KNOW, THE LIBRARY HAS A LOT OF FACILITIES.

THE HEALTH DEPARTMENT HAS FACILITIES, UM, OBVIOUSLY DARL ALEXANDER AND THE BUILDING SERVICES GROUP HAVE A LOT OF THE SAME NEEDS FOR, UH, CARPENTRY SHOPS AND PLUMBING SHOPS.

AND SO, YOU KNOW, IT MIGHT BE A LOT MORE EFFICIENT IDEA FOR US TO JUST CREATE A, A CITY FACILITIES MAINTENANCE COMPLEX, SIMILAR TO LIKE WHAT WE'RE DOING WITH THE NORTHEAST SERVICE CENTER AND BRINGING IN DIFFERENT FUNDING SOURCES FROM DIFFERENT AREAS.

UM, IN SUCH A CASE LIKE THAT, IT MAY MAKE A LOT MORE SENSE TO DO IT IN A NON-VOTER APPROVED APPROACH THAN, UM, A PARKS ONLY FACILITY.

WELL, THANK YOU VERY MUCH.

COUNCIL MEMBER WANG, I JUST WANTED TO THANK YOU FOR THE BRIEFING AND ALSO FOR, UM, ALL THE WORK THAT'S GONE ONTO THIS.

AND THIS DISCUSSION'S BEEN VERY HELPFUL.

I AGREE WITH SOME OF THE AREAS THAT COUNCIL MEMBER ALTER AND OTHERS MENTIONED.

WE MIGHT WANNA LOOK AT A LITTLE BIT MORE.

UM, BUT I DON'T HAVE ANY ADDITIONAL QUESTIONS.

I'LL JUST BE WATCHING FOR THE NEXT ITERATION OF THIS.

REGARDS TO THE NEXT ITERATION, IT SOUNDS LIKE WE WANT TO HAVE MORE DISCUSSION ABOUT, UH, PART FOUR OR PART FOUR ALTERNATE.

THANK YOU, COUNCIL MEMBER.

ALRIGHT, SO IN

[01:05:01]

WE DO.

I, I THINK THAT'S WHAT THE CONSENSUS SEEMS TO BE.

SO, AND WE CAN BRING THAT BACK AT THE, YOUR MAY MEETING AND IF THERE'S ANY CHANGES TO THE ENTERPRISE DEPARTMENT, THE FINANCE, ANY PROPOSED CHANGES TO THE ENTERPRISE DEPARTMENT FINANCIAL POLICIES, WE'LL BRING THOSE FORWARD AT THAT TIME AS WELL.

I THINK THAT'S GREAT.

AND WE'LL LOOK WITHOUT OBJECTION, THAT'S THE, BUT THANK YOU VERY MUCH, MR. VINO.

YEP.

MEMBERS

[5. Fiscal Year 2025 annual comprehensive financial report [Marija Norton, City Controller - Austin Financial Services].]

THAT'LL TAKE US TO ITEM NUMBER FIVE, WHICH IS THE FISCAL YEAR 2025 ANNUAL COMPREHENSIVE FINANCIAL REPORT.

GOOD MORNING, MAYOR, MAYOR, PRO TEM, AND COUNCIL MEMBERS.

I'M MARIA NORTON, THE CITY CONTROLLER, AND I'M HERE WITH TRACY COOLEY AND MADELINE MORRIS FROM DELOITTE AND TOUCHE, LLP, THE CITY'S EXTERNAL AUDITOR TO PRESENT THE RESULTS OF THE FISCAL YEAR TO 25 ANNUAL COMPREHENSIVE FINANCIAL REPORT.

OUR FER, UH, WAS ISSUED ON MARCH 6TH, 2026.

IT IS AVAILABLE ONLINE@AUSTINTEXAS.GOV.

AND THE WEB, UH, LINK IS POSTED ON THIS SLIDE.

THE REQUIREMENTS FOR AN ANNUAL AUDIT ARE OUTLINED ON THIS SLIDE, AND THE CITY IS IN COMPLIANCE WITH EACH OF THESE REQUIREMENTS.

DELOITTE AND TOUCH IS AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM, AND THIS WAS THE SECOND YEAR OF A FIVE YEAR CONTRACT FOR AUDIT SERVICES.

UM, THE WAS PUBLISHED ON MARCH 6TH, 2026.

THIS IS IN ADVANCE OF THE REQUIRED SIX MONTH DEADLINE OF MARCH, UH, 31ST, AND DELOITTE IS HERE TODAY, APRIL 15TH, WHICH IS 40 DAYS AFTER THE ISSUANCE OF THE, A EFFORT TO PRESENT THE RESULTS OF THE ANNUAL AUDIT.

BEFORE HANDING OFF THE PRESENTATION TO DELOITTE.

I'D LIKE TO THANK THOSE LISTED ON THIS SLIDE FOR THEIR CONTRIBUTIONS TO THE EARLY COMPLETION OF THESE KEY FINANCIAL REPORTS.

UH, MAYOR, COUNCIL MEMBERS AND THE CITY MANAGEMENT FOR THEIR SUPPORT IN EXCELLENCE OF FINANCIAL MANAGEMENT CITY STAFF, ESPECIALLY THE A FS ACCOUNTING TEAM FOR THEIR MANY HOURS OF DEDICATED SERVICE.

SERVICE TOWARDS THE COMPLETION OF THE REPORT AND DELOITTE TEAM FOR THEIR PROFESSIONALISM AND THOROUGH MANNER IN WHICH THEY HANDLED, UM, THESE AUDITS.

AND NOW TRACY AND MADELINE FROM DELOITTE WILL TAKE OVER.

GREAT.

THANK YOU, MARIA.

UH, GOOD MORNING, UH, COUNCIL MEMBERS, MAYOR PRO TEM, UM, MAYOR WATSON, WHEREVER HE IS.

UM, SO THANK YOU FOR ALLOWING US TO SPEAK WITH YOU TODAY.

UH, WE'RE GONNA GO THROUGH, AS MARIA SAID, WE'RE GONNA GO THROUGH THE RESULTS OF THE 2025 ANNUAL COMPREHENSIVE FINANCIAL REPORT.

UH, WE DID COMPLETE OUR AUDIT IN MARCH.

WE ISSUED AN UNMODIFIED OR A CLEAN OPINION ON THOSE FINANCIAL STATEMENTS.

UH, WE ALSO DO SEVERAL OTHER, UM, REPORTS AND, AND AUDITS, THE FEDERAL AND STATE SINGLE AUDITS, WHICH RELATES TO THE FEDERAL AND STATE GRANTS THAT THE CITY RECEIVES THAT IS STILL ONGOING.

UH, WE WILL BE HERE IN THE MAY ON THE MAY 20TH MEETING TO DISCUSS THE RESULTS OF THAT PARTICULAR AUDIT.

WE ALSO HAVE THE PASSENGER FACILITY CHARGE, OR THE COMPLIANCE AUDIT RELATED TO PFCS.

UM, THAT AUDIT IS COMPLETE.

IT WILL BE ISSUED THIS WEEK.

THERE ARE NO FINDINGS TO REPORT AND, AND NOTHING REALLY TO DISCUSS RELATED TO THOSE, UH, PFC AUDITS.

WE DID HAVE ONE SIGNIFICANT DEFICIENCY AS IT RELATES TO THE FINANCIAL REPORTING IN THE CITY'S ACT FOR ON PENSION ACCOUNTING FOR THE FIREFIGHTERS RETIREMENT PLAN LIABILITY.

SO WE'LL TALK ABOUT THAT IN THIS.

UM, IN THIS PRESENTATION, THERE WERE TWO ACCOUNTING CHANGES THAT THE CITY HAD TO IMPLEMENT THIS YEAR.

AND THESE ARE THE RESULT OF THE GOVERNMENTAL ACCOUNTING STANDARDS BOARD.

THERE WERE NEW STANDARDS, GS B, NEW STANDARDS ISSUED BY THE GS B.

THEY NUMBER THEIR STANDARDS, BUT FOR CONVENIENCE.

SO 1 0 1 AND 1 0 2 WERE EFFECTIVE FOR THE CITY THIS YEAR.

UH, 1 0 1 RELATES TO COMPENSATED ABSENCES, AND IT WAS REALLY A REMEASURE OF HOW THE CITY IS RECORDING, UH, COMPENSATED ABSENCES, WHICH IS VACATION AND SICK TIME.

UH, SO NOT A MATERIAL CHANGE AT ALL, BUT THERE IS A NEW WAY TO MEASURE THAT, UM, IN THE CITY'S ACT FOR GOING FORWARD.

AND THEN THERE ARE SOME UPCOMING GASB PRONOUNCEMENTS, UH, 1 0 3 AND 1 0 4, WHICH WILL BE EFFECTIVE FOR THE, UH, CITY'S FISCAL 26 AUDIT.

UH, 1 0 3, JUST MENTIONING IT, UM, IN ADVANCE, REALLY, BECAUSE THERE'S GOING TO BE QUITE A FEW CHANGES FROM A DISCLOSURE STANDPOINT WITHIN THE CITY'S ACT.

FOR THAT, YOU'LL SEE, UH, ONE OF THE MAJOR CHANGES WOULD BE RELATED TO THE, UH, INCOME STATEMENT FOR THE BUSINESS TYPE ACTIVITIES.

SO, AUSTIN ENERGY, AUSTIN WATER AIRPORT.

UM, USUALLY WE HAVE REVENUES, OPERATING EXPENSES, NON-OPERATING REVENUES, BUT THERE'S ANOTHER CATEGORY THAT THE GSB IS ADDING CALLED SUBSIDIES.

UM, AS IT STANDS NOW, THERE COULD BE TRANSFERS, PFCS MIGHT FALL INTO THOSE CATEGORIES.

SO THE FINANCIALS WILL LOOK A LITTLE DIFFERENT NEXT YEAR.

SO WE'VE BEEN LETTING A LOT OF OUR AUDIT

[01:10:01]

COMMITTEES KNOW TO EXPECT CERTAIN CHANGES WHEN YOU LOOK AT THE FINANCIALS FOR NEXT YEAR.

UM, CONTINUING ON, WE HAVE CERTAIN REQUIRED COMMUNICATIONS.

THIS IS A LONG LIST.

I REALIZE THAT, UH, WE'RE REQUIRED TO DISCUSS, UH, WITH THE AUDIT COMMITTEES.

THE BLUE DOTS WE'LL COVER IN THE MEETING.

THE GREEN DOTS ARE ITEMS THAT WE DON'T NECESSARILY HAVE TO COVER, UM, WHICH I THINK IS A GOOD THING BECAUSE IT RELATES TO DISAGREEMENTS WITH MANAGEMENT OR DIFFICULTIES IN OUR AUDIT.

UM, WE OBVIOUSLY, WE HAD NONE OF, NONE OF THOSE.

WE HAD FULL COOPERATION, NOT JUST WITH MARIA AND HER TEAM, UM, BUT ALSO THROUGHOUT THE CITY.

WE'RE IN AND OUT OF A LOT OF THE DEPARTMENTS IN THE CITY, AUSTIN ENERGY, THE AIRPORT, UH, WATER, UM, AND HOUSING.

SO WE ARE IN AND OUT, AND WE DO RECEIVE FULL COOPERATION FROM ALL MEMBERS THAT WE'VE TALKED WITH, UM, THROUGHOUT THE AUDIT PROCESS.

A LOT OF WORDS ON THIS SLIDE, BUT BASICALLY I CAN SUM IT UP THAT DELOITTE IS REQUIRED TO BE INDEPENDENT OF THE CITY, AND WE ARE INDEPENDENT OF THE CITY.

WE DO NOT PERFORM ANY OTHER SERVICES BESIDES THE AUDIT SERVICES AND, UH, CERTAIN AUDIT TEST SERVICES LIKE AGREED UPON PROCEDURES.

SO WE ARE INDEPENDENT OF THE CITY.

UM, NEXT SLIDE RELATED TO SIGNIFICANT ACCOUNTING POLICIES.

I DID MENTION THAT THE CITY DID ADOPT TWO NEW ACCOUNTING STANDARDS THIS YEAR, BUT OVERALL, WE DO EVALUATE THE SIGNIFICANT QUALITATIVE ASSETS OF THE CITY'S ACCOUNTING PRACTICES, INCLUDING ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND FINANCIAL STATEMENT DISCLOSURES.

AND WE DID FIND THAT THE POLICIES ARE APPROPRIATE, THEY'RE ADEQUATELY DISCLOSED, AND THEY'VE BEEN CONSISTENTLY APPLIED BY THE CITY.

WE DO HAVE, IN INCLUDED IN THE FINANCIAL STATEMENTS, THERE ARE CERTAIN ACCOUNTING ESTIMATES THAT WE DEEM TO BE SIGNIFICANT ACCOUNTING ESTIMATES.

UH, THEY ARE MATERIAL, THE ONES THAT ARE LISTED HERE WOULD BE OTHER POST-EMPLOYMENT BENEFITS WOULD BE RETIREE HEALTH, ALSO PENSION LIABILITIES OF THE CITY'S THREE PENSION PLANS, ASSET RETIREMENT OBLIGATIONS, WHICH ARE THE ENVIRONMENTAL LIABILITIES, AS WELL AS THE DEFERRED AMOUNTS RELATED TO REGULATED OPERATIONS AT AUSTIN ENERGY.

UM, INCLUDED IN THE PACKET THAT YOU RECEIVED.

WE DO GO INTO DETAIL ABOUT HOW THE CITY, UM, UH, THE PROCESS THAT THEY USE TO ESTIMATE, UH, SOME OF THESE AMOUNTS.

AND THEN OUR AUDIT PROCEDURES RELATED TO AUDITING THESE AMOUNTS.

UM, OVERALL, EXCEPT FOR THE, THE ONE MINOR ITEM WE'LL TALK ABOUT FOR, UM, PENSION LIABILITIES, WE DID FIND THAT THE ESTIMATES, UH, WERE SOUND THAT THE, THEY WERE REASONABLE.

AND THE CITY DOES HAVE A GOOD PROCESS IN PLACE TO MAKE SURE THAT THE ESTIMATES AND THE MEASUREMENT OF THOSE THAT END UP ON THE FINANCIAL STATEMENTS, UM, ARE ACCURATE.

UM, IDENTIFIED MISSTATEMENTS.

UH, WE REALLY DID NOT HAVE ANY UN UM, UH, UNCORRECTED MISSTATEMENTS.

I MEAN, EVERY YEAR THERE'S A FEW, THERE'S A HANDFUL THAT EITHER THE CITY FINDS OR WE FIND THROUGHOUT THE AUDIT PROCESS THAT AREN'T MATERIAL.

UM, THIS YEAR, UM, WE DID NOT NOTE ANYTHING, SO THERE'S REALLY NOTHING TO REPORT FROM FROM THAT STANDPOINT.

UM, THERE WAS, THERE WERE TWO ITEMS THAT WE NOTED IN THE CURRENT YEAR THAT RELATED TO PRIOR YEAR.

NONE OF THEM WERE MATERIAL, BUT THOSE ARE DISCLOSED IN THE MANAGEMENT REPRESENTATION LETTER THAT ARE INCLUDED IN YOUR PACKET.

UH, CONTROL RELATED MATTERS.

UH, WE JUST HAVE TWO ITEMS THAT WE NEED TO TALK ABOUT.

UM, I'LL LET MADELINE TALK ABOUT THOSE ONE RELATED TO THE CURRENT YEAR, AND ONE REALLY IS AN UPDATE TO AN ITEM THAT WE FOUND IN THE PRIOR YEAR.

THANK YOU, TRACY.

13 MILLION, $13 MILLION, SO NOTHING MATERIAL.

SO THE FIRST ITEM HERE, AS WE MENTIONED, ONE SIGNIFICANT DEFICIENCY IDENTIFIED RELATED TO THE FIREFIGHTER'S PENSION VALUATION REVIEW CONTROL, SPECIFICALLY AS IT RELATED TO THE INCORPORATION OF HOUSE BILL 28 0 2.

UM, MORE DETAILS HERE ARE ON THE SLIDE, BUT REALLY OUR RECOMMENDATION GOING FORWARD IS INCREASED MANAGEMENT REVIEW AND FOCUS WHEN THERE ARE LEGISLATIVE CHANGES OR PLAN CHANGES THAT WOULD IMPACT THOSE PENSION PLANS.

CAN YOU READ THE FIRST SENTENCE OF THAT MM-HMM .

AND TELL ME SPECIFICALLY WHAT IT IS.

'CAUSE WE JUST WENT THROUGH THIS PROCESS AND SO, I MEAN, WE JUST, THE LEGISLATION JUST PASSED MM-HMM .

SO I'M, I'M NOT SURE I UNDERSTAND SPECIFICALLY WHAT IT IS YOU'RE SAYING SHOULD HAVE HAPPENED.

RIGHT.

AND BASICALLY THE, THE FIREFIGHTERS PLAN IS AUDITED BY SEPARATE AUDITORS.

THERE'S A SEPARATE ACTUARIAL, UM, UH, VALUATION, AND THE CITY TAKES THAT VALUATION AND REFLECTS IT WITHIN THE CITY'S ACT FOR, SO FOR HOUSE BILL 28 0 2, UH, WE JUST NOTED THAT THERE WAS, IT WAS A $13 MILLION, UM, CHANGE THAT SHOULD HAVE BEEN REFLECTED IN THE, UM, IN THE CITY'S FINANCIAL STATEMENTS THAT WASN'T INCLUDED.

UM, BUT REALLY THE DEFICIENCY RELATES TO IF THERE IS A PLAN CHANGE, LEGISLATIVE OR THE PLAN JUST CHANGES BY, BY WE, AND WE VOLUNTARILY DID THAT AND WENT THROUGH THAT PROCESS.

ABSOLUTELY.

SO IT'S NOT THAT THERE WAS A CHANGE, IT WAS MAKING SURE THAT ALL OF THOSE CHANGES GET PROPERLY REFLECTED IN THE ACCOUNTING THAT IS GOING INTO THE CITY'S FINANCIAL STATEMENTS.

[01:15:03]

THIS SLIDE HERE, JUST, UM, SHOW US ABOUT THE SAME UPDATES ON THE STATUS OF THE OTHER REPORTS THAT WE TOUCHED ON IN THE BEGINNING.

SO OUR TCEQ AGREED UPON PROCEDURES WERE ISSUED MARCH 27TH.

AND THEN AS TRACY MENTIONED, BOTH OUR FEDERAL AND STATE SINGLE AUDITS ARE ONGOING AS OF TODAY WITH, UM, THE PASSENGER FACILITY CHARGES SUBSTANTIALLY COMPLETE.

AND THEN LASTLY HERE IS THE OTHER CONTROL RELATED MATTER WE MENTIONED, WHICH WAS A PRIOR YEAR FINDING.

UM, THIS SLIDE SHOWS MANAGEMENT'S UPDATE ON THEIR, UM, REMEDIATION, WHICH WE WOULD CONSIDER TO BE REMEDIATED AS WELL AS OF SEPTEMBER 30TH, 2025 PASSIVE ACT TO TRACY.

SO THAT CONCLUDES OUR REMARKS.

AS I SAID, THERE'S UM, OTHER INFORMATION INCLUDED IN YOUR PACKET.

WE'RE HAPPY TO GO THROUGH IT, UM, OR ANSWER ANY QUESTIONS.

SO IF THERE'S ANYTHING ELSE THAT WE NEED TO COVER, JUST PLEASE LET US KNOW.

THANK YOU ALL VERY MUCH.

UH, QUESTIONS OR COMMENTS? THOUGHTS? YES.

COUNCIL MEMBER ALTER AS IT RELATED TO THE PRIOR YEAR OF MEDICARE ADVANTAGE MM-HMM .

HELP ME SIFT THROUGH, DID WE, WERE WE TOO GENEROUS OR NOT GENEROUS ENOUGH IN TERMS OF WHAT WE THOUGHT WAS GONNA BE THE IMPACT? WHAT WAS, UM, ACTUALLY THE, AS THAT, THE LIABILITY ENDED UP GOING DOWN? UM, SO IT REALLY WASN'T THAT THE CITY DIDN'T IDENTIFY THAT THIS PLAN WAS A PLAN CHANGE.

IT'S REALLY, IF YOU LOOK AT THE ACCOUNTING RULES, WHAT YEAR, FISCAL YEAR IT SHOULD HAVE BEEN REFLECTED IN.

SO IT SHOULD HAVE BEEN REFLECTED IN FISCAL 24.

SO IT WAS A LAST YEAR ITEM, UM, AND WASN'T PROPERLY REFLECTED.

SO IT WAS A TIMING ISSUE MORE THAN A VALUATION ISSUE.

THANK Y'ALL VERY, VERY MUCH.

I'LL TAKE ITEM NUMBER SIX, WHICH IS A BRIEFING ON THE 26TH PRELIMINARY PROPERTY TAX ROLL THAT I PLEASE GO AHEAD.

WE APPRECIATE IT.

MEMBERS,

[6. Briefing on 2026 preliminary property tax roll data[Erik Nelson, Deputy Director - Office of Budget and Organizational Excellence].]

WELCOME BACK, ERIC, AND CONGRATULATIONS.

GOOD MORNING.

UH, ERIC NELSON, DEPUTY DIRECTOR BUDGET AND ORGANIZATIONAL EXCELLENCE.

UH, HAPPY TAX DAY, APPROPRIATE DAY TO TAKE OUR FIRST LOOK AT THE, UH, PRELIMINARY PROPERTY TAX ROLE FOR TAX YEAR 2026, WHICH ARE THE VALUES THAT WILL DRIVE THE CITY'S PROPERTY TAX REVENUE FOR FISCAL YEAR 2027.

UH, WE RECENTLY RECEIVED OUR FIRST LOOK AT THE RULE.

UM, TCAD RELEASED SOME PRELIMINARY NUMBERS, UH, AT THE END OF MARCH, AND THEY'RE PROJECTING THAT, UH, NET OF ANTICIPATED PROTESTS TAXABLE VALUES WILL DECLINE BY 3.1% IN COMPARISON WITH LAST SUMMER'S CERTIFIED TAX ROLL.

THIS WILL BE THE SECOND STRAIGHT YEAR OF DECLINING VALUES FOLLOWING LAST YEAR'S 2.7% DECLINE.

UH, I ALSO WANNA POINT OUT THAT 95, ABOUT 95% OF THE CITY'S VALUE IS IN TCAD, BUT WE DO HAVE THE REMAINING 5%, UM, IN WILLIAMSON, AND WE DO NOT HAVE THE, UH, PRELIMINARY ESTIMATES FROM WCA YET.

TCAD HAS HIGHLIGHTED SEVERAL REASONS FOR THE ANTICIPATED DECLINE.

UM, BUT THEY SHOW THAT, UH, ESSENTIALLY ALL PROPERTY SECTORS ARE AFFECTED WITH RESPECT TO RESIDENTIAL PROPERTY.

MEDIAN HOME PRICES AND SALES HAVE DECLINED AND INVENTORY IS GROWING.

UH, INDUSTRIAL DEVELOPMENT IS SLOWING, AND NEW OFFICE BUILDING DEVELOPMENT HAS NEARLY HALTED.

ONE NON-MARKET BASED FACTOR I WANT TO ADDRESS IS THE LEGISLATURE'S RECENT CHANGE TO THE BUSINESS PERSONAL PROPERTY EXEMPTION.

THEY INCREASED IT BY A FACTOR OF 50, AND TCA HAS INDICATED THAT TAXING UNITS CAN EXPECT TO SEE A DECLINE, UH, IN TAXABLE VALUE OF HALF A PERCENT TO 2% FROM THIS ONE CHANGE ALONE.

THE COMPONENT OF THE PROPERTY TAX ROLL THAT MOST STRONGLY AFFECTS PROJECTED GENERAL FUND REVENUE IS THE AMOUNT OF NEW CONSTRUCTION COMING ONTO THE RULES FOR THE FIRST TIME BECAUSE THE REVENUE FROM THIS NEW VALUE IS NOT SUBJECT TO THE 3.5% STATE REVENUE CAP.

TCA IS PROJECTING $2.8 BILLION IN NEW CONSTRUCTION THIS YEAR, WHICH IS ABOUT 500 MILLION LESS THAN LAST YEAR.

AND IT'S ABOUT 300 MILLION LESS THAN WE WERE PROJECTING AS OF LAST SUMMER.

AS WE SAW IN THE PREVIOUS SLIDE, THE MARKET IS NOT GENERATING A LOT OF COMMERCIAL OR INDUSTRIAL DEVELOPMENT,

[01:20:01]

AND THAT'S IN LARGE PART A FUNCTION OF THE CURRENT INTEREST RATE ENVIRONMENT.

UM, WHICH MEANS IN TURN WE'RE NOT GETTING A LOT OF NEW CONSTRUCTION.

UM, UNFORTUNATELY BECAUSE THERE'S A THREE OR FOUR YEAR RUNWAY BETWEEN PROJECT INITIATION AND WHEN THE NEW VALUE FROM THAT PROJECT HITS OUR ROLE, THE LACK OF NEW DEVELOPMENT STARTS, TCAT IS REPORTING TODAY MEANS THAT WE'RE LIKELY TO CONTINUE TO HAVE RELATIVELY MODEST AMOUNTS OF NEW VALUE ENTERING THE ROLE OVER THE NEXT SEVERAL YEARS.

THIS SLIDE IS JUST TRYING TO PROVIDE SOME ADDITIONAL CONTEXT FOR THE NEW CONSTRUCTION NUMBER BY LOOKING AT WHAT THE CITY HAS EXPERIENCED OVER THE LAST 35 YEARS OR SO.

IN TERMS OF ABSOLUTE DOLLARS, YOU CAN SEE THAT THE CITY WAS ALREADY ACHIEVING NEW CONSTRUCTION, APPROACHING THE $3 BILLION LEVEL IN THE EARLY 2010S, AND EVEN REACHED AS HIGH AS $2.6 BILLION, UM, AS EARLY AS FISCAL YEAR 2002.

UM, BUT SETTING ASIDE THESE SPIKES, NEW VALUES TENDED TO INCREASE OVER TIME AND PEAKED AT $5.4 BILLION IN FY 25.

IF WE LOOK AT THE SLIDE ON THE RIGHT, WE SEE THAT AS A PERCENTAGE OF THE TOTAL TAX ROLL, NEW CONSTRUCTION HAS TENDED TO DECLINE.

AND WE'VE GENERALLY BEEN SITTING IN THE ONE TO 2% RANGE, UM, IN THE LAST FEW YEARS.

LOOKING AT THAT RECORD, 5.4 BILLION IN FY 25 HERE AS A PERCENTAGE OF THE CITY'S TOTAL ROLL.

WE SEE THAT IT'S SIMPLY IN LINE WITH WHAT WE EXPERIENCED FOR MUCH OF THE 2010S AND WELL BELOW WHAT THE CITY EXPERIENCED DURING ITS INITIAL TECH BOOM IN THE LATE NINETIES AND EARLY TWO THOUSANDS.

UH, THE CITY'S OPERATING PROPERTY TAX RATE IN THOSE YEARS WAS PRETTY COMPARABLE ACTUALLY TO WHERE IT IS TODAY.

SO RELATIVE TO OUR TOTAL COLLECTIONS, WE WERE GENERATING A LOT MORE OPERATING REVENUE EACH YEAR FROM NEW CONSTRUCTION IN THOSE YEARS.

AND NEVERMIND THAT WE WERE UNDER THE 8% REVENUE CAP REGIME AS OPPOSED TO 3.5%.

SO I JUST WANTED, UH, TO ILLUSTRATE THIS DYNAMIC TO PROVIDE SOME ADDITIONAL CONTEXT, UM, FOR OUR ONGOING REVENUE CHALLENGES.

UNFORTUNATELY, I'M GONNA CONCLUDE WITH EVEN MORE BAD NEWS.

UM, IN ADDITION TO, THAT'S REALLY GOOD AVENUE HERE TODAY, , IN ADDITION TO RECEIVING A PRELIMINARY LOOK AT THE UPCOMING PROPERTY TAX ROLE, WE ALSO RECEIVED AN UPDATE REGARDING THIS YEAR'S ROLE AS A RESULT OF, UH, EXTREMELY HIGH VOLUME OF COURT APPEALS.

AND THAT'S WHEN YOU PROTEST YOUR VALUE, YOU RECEIVE A DECISION FROM THE APPRAISAL REVIEW BOARD, YOU STILL DISAGREE WITH THAT VALUE AND YOU, AND YOU TAKE THE MATTER TO COURT.

UM, 'CAUSE OF THAT, OUR ROLE FOR TAX YEAR 2025 IS NOW SITTING ABOUT $1.8 BILLION BELOW WHAT WAS REFLECTED ON THE CERTIFIED ROLE LAST JULY.

SO THIS IS GONNA ADVERSELY AFFECT OUR CURRENT YEAR PROPERTY TAX COLLECTIONS.

AND BECAUSE OF THE WAY THE STATE PROPERTY TAX CALCULATION WORKS, THERE WILL LIKELY BE ADVERSE EFFECTS AS WE PROJECT REVENUE FOR FY 27 AS WELL.

SO AGAIN, I'M SORRY TO CLOSE ON ANOTHER NEGATIVE NOTE, BUT WE WANTED TO KEEP YOU AWARE OF THIS APPEALS DYNAMIC AS IT CREATES A LOT OF CHALLENGES BOTH FOR THE APPRAISAL DISTRICTS AND ALSO FOR OUR OWN FORECASTING AND, AND REVENUE PROSPECTS.

AND AS A REMINDER FOR PEOPLE TO PAY ATTENTION TO THIS, WE WON'T KNOW AT LEAST THE LAST TWO YEARS, IT SEEMS LIKE MAYBE IT'S THE PAST THREE.

UM, WE HAVE NOT KNOWN THE FINAL NUMBERS ON ALL THAT UNTIL WE'RE SIGNIFICANTLY INTO THE BUDGET PROCESS.

IS THAT WHAT YOU ANTICIPATE HAPPENING AGAIN THIS YEAR? YEAH, THAT'S CORRECT.

UM, MY USUAL BOILER PLATE IS THAT THE THREE AND A, IT'S THREE AND A HALF PERCENT MORE REVENUE THAN LAST YEAR NET OF CERTAIN ADJUSTMENTS, BUT WE DON'T KNOW WHAT THOSE ADJUSTMENTS ARE UNTIL JULY 25TH OR WE RECEIVE THAT FINAL CERTIFICATION REPORT.

AND, AND FRANKLY, THOSE NUMBERS THERE, THERE'S TENS OF BILLIONS OF DOLLARS IN OUTSTANDING VALUE WOUND UP IN THESE APPEALS, AND IT CAN MOVE HUNDREDS OF MILLIONS OF DOLLARS EACH DAY.

AND IT JUST DEPENDS ON WHAT HAPPENED THE DAY THAT THEY ISSUED THAT REPORT.

SO IT'S FRANKLY VERY CHALLENGING FOR US TO FORECAST.

I JUST WANNA MAKE SURE EVERYBODY REMEMBERS THAT.

WE'RE NOT GONNA KNOW ALL OF THAT UNTIL WE'RE DEEP INTO THE PROCESS.

UH, COMMENTS OR QUESTIONS? UH, COUNCIL MEMBER LANG, UH, JUST RIGHT WHERE WE LEFT OFF THE IS IS IT IS THE THREE AND A HALF PERCENT CAP BASED ON COLLECTIONS.

THE, THE THREE AND A HALF PERCENT CAP IS BASED ON WHAT YOU COLLECTED LAST YEAR, BUT THE WAY YOU FIGURE OUT, OR WHAT YOU THEORETICALLY COLLECTED LAST YEAR, I SHOULD SAY.

SO YOU START WITH THE LAST YEAR'S VALUE ON THE ROLL AS OF THIS POINT IN TIME.

SO THEY FORGET ABOUT WHAT YOU THOUGHT YOU HAD LAST SUMMER AND THEY SAY, WELL, YOU'RE 1.8 BILLION LOWER, SO MULTIPLY THAT BY THIS YEAR'S TAX RATE AND THAT'S HOW MUCH YOU SHOULD HAVE COLLECTED.

AND THEN YOU'RE ADDING 3.5% TO THAT ESSENTIALLY.

GOT IT.

[01:25:01]

SO THAT WILL RIPPLE THROUGH.

YEAH, EVERYTHING.

ALRIGHT.

UM, THE OTHER QUESTION I HAD WAS ON THAT PERSONAL PROPERTY EXEMPTION THAT YOU MENTIONED FOR THE BUSINESS PERSONAL PROPERTY EXEMPTION THAT THAT ALLOWED FOR, SO WHEN A BUSINESS, WHEN, WHEN, UH, THE TCA ASSESSES OR APPRAISES A BUSINESS, THERE ARE DIFFERENT METHODOLOGIES, AND I'M STEPPING OUTSIDE MY KNOWLEDGE BASE HERE, BUT MY UNDERSTANDING IS ONE OF 'EM IS BASED ON KIND OF LIKE YOUR ASSETS, LIKE WHAT YOU HAVE IN THE BUILDING IS PART OF A WAY TO ASSESS THE VALUATION OF THAT BUILDING, THE THE BUSINESS PERSONAL PROPERTY.

AND SO ARE YOU SAYING THAT WITH THIS INCREASE IN THAT EXEMPTION, ESSENTIALLY JUST OUR BUSINESS TAX BASE HAS SHRUNK? YEAH, IT ONLY APPLIES TO COMMERCIAL ENTITIES AND IT'S, YEAH, IT'S NOT REAL PROPERTY, IT'S PERSONAL PROPERTY.

I THINK A CLASSIC EXAMPLE WOULD BE SOME OF THE INCREDIBLY EXPENSIVE, UH, SEMICONDUCTOR FABRICATION MACHINERY THAT, THAT'S A VOLATILE, UM, COMPONENT OF THE BUSINESS, PERSONAL PROPERTY.

BUT, UM, I LOOKED, AND LAST YEAR WE HAD ABOUT 28,000 SEPARATE PARCELS, IF YOU WILL, UM, FOR BUSINESS PERSONAL PROPERTY.

AND SO, UM, YEAH, THEORETICALLY ALL OF THOSE COULD EXEMPT UP TO 125,000 OF THEIR VALUE NOW.

AND THROUGH THAT EXEMPTION, ALL THAT WILL MEAN, PRACTICALLY SPEAKING, IS UNDER THE 3.5% CAP.

IT SHIFTS THE TAX BURDEN FROM THOSE BUSINESSES TO EVERYBODY ELSE.

SO TO RESIDENTS AND, AND NON-BUSINESS PERSONAL PROPERTY? THAT'S CORRECT.

THE CITY WILL BE HELD HARMLESS FROM A REVENUE PERSPECTIVE, BUT THE DIS DISTRIBUTION OF THAT SAME REVENUE NUMBER, UH, ACROSS THE TYPES OF PROPERTY WILL SHIFT.

UM, I DON'T HAVE ANY QUESTIONS.

I JUST, I HAVE A COMMENT AND IT RELATES TO KIND OF THE COMBINATION OF WHAT WE HEARD ABOUT IN MR. PINA'S PRESENTATION AND YOURS, UM, SPECIFICALLY AS IT RELATES TO WHERE WE ARE IN THE CYCLE.

AND SO THE INFORMATION YOU'VE SHARED ABOUT DECLINING PROPERTY VALUES AND ALSO CONSTRUCTION PIPELINE, AND WE AREN'T, AND AS YOU KNOW, WE AREN'T DONE WITH THAT YET.

UM, AND MR. VAN, MR. VAN, I'M SORRY, MR. VINO COMMENTED ABOUT SOME OF THESE STRATEGIC ACQUISITIONS WHEN CERTAIN TYPES OF PROPERTY WERE, UM, VERY DEPRESSED IN VALUE.

UH, I DON'T REMEMBER EXACTLY WHICH TYPE YOU MENTIONED, BUT I KNOW HOTELS WAS ONE OF THEM, AND THAT WAS GREAT.

I LOVE THE STRATEGIC WAY THAT THE CITY THINKS ABOUT BRINGING TOGETHER ALL OF THESE OPPORTUNITIES.

AND I JUST WANTED TO HIGHLIGHT THAT.

UM, ONE OF THE AREAS WHERE WE HAVE SEEN DECLINING VALUE OR THERE PER COULD PERHAPS BE OPPORTUNITY IS, UM, THAT MAY NOT HAVE BUBBLED TO THE SURFACES ALONG AT HIGHWAY INTERSECTIONS AND ALONG HIGHWAY CORRIDORS, UH, IN THE OUTLYING AREAS OF THE CITY, UM, WHERE PARTICULARLY BIG BOX RETAIL, THERE HAVE BEEN ENTIRE DEVELOPMENTS, FOR EXAMPLE, NEAR THE ARBORETUM THAT HAVE BEEN A HUNDRED PERCENT VACANT FOR YEARS.

AND SOME OF THESE ARE AT REALLY GREAT LOCATIONS FOR ANYTHING THAT WE NEED ACCESS TO CITY SERVICES.

I'VE HEARD PEOPLE SALIVATE AROUND SOME OF THOSE THINGS AS IT RELATES TO MIXED USE REDEVELOPMENT.

AND I'LL JUST ALSO MENTION, LAKELINE MALL APPEARS TO ME TO BE AT A VERY SIMILAR PLACE IN ITS CYCLE AS HIGHLAND MALL WAS AT IN THE YEARS LEADING UP TO ACCS ACQUISITION.

NOT QUITE AS DEPRESSED AS HIGHLAND MALL WAS AT THAT POINT, BUT IT COULD EASILY GET THERE IN THE NEAR TERM, UH, 'CAUSE DEPENDING ON WHAT HAPPENS WITH THESE CYCLES.

SO I, I MOSTLY JUST WANTED TO MENTION THAT STRATEGIC ASPECT OF WHAT THESE TWO PRESENTATIONS BROUGHT TOGETHER.

THANK YOU SO MUCH.

THANK YOU, MAYOR TIM.

UH, SWITCHING GEARS JUST A BIT, AND I KNOW WE'RE GONNA GET THE, THE PRESENTATION, BUT HOW ARE SALES TAX COLLECTIONS COMING ALONG? WE HAVE, UH, MANY SLIDES PREPARED ABOUT THAT FOR, FOR NEXT WEEK.

I, I, I DON'T WANNA GET TOO FAR AHEAD OF OURSELVES.

I'LL SAY THAT THEY ARE, UM, BETTER THAN WHAT WE HAD ASSUMED IN THE BUDGET, BUT WE STILL HAVE PLENTY OF, UH, UNCERTAINTY ROILING ABOUT WHAT, WHAT THE FUTURE WILL BRING.

THE COMMITTEE? UH, IT'S BEEN POSTED TO THE COMMITTEE'S WEBSITE AS PART OF THE AGENDA, BUT WE DID NOT SEND IT THROUGH OFFICIAL DISTRIBUTION.

WELL, LET'S, LET'S, LET'S STOP ON THAT GOOD NOTE THERE, UH, AND, AND THAT ANSWER, IF THAT QUALIFIES AS A GOOD , THAT TELLS YOU HOW BAD IT REALLY IS.

UM, THANK YOU ALL.

UH, THIS PRESENTATION IS A GOOD PRESENTATION AND I DON'T KNOW, HAVE YOU DISTRIBUTED TO THE ENTIRE COUNCIL WAS THE, OR JUST

[01:30:01]

YOU KNOW, I, I THINK THAT PROBABLY GOOD FOR EVERYBODY TO GET TO SEE THAT AND, AND MAYBE HAVE IT OVER THE WEEKEND AS WE GO INTO NEXT WEEK.

WE'LL DO, WE'LL DO GREAT.

THANK Y'ALL VERY MUCH.

UM,

[7. Update regarding IT application rationalization [Kerrica Laake, Chief Information Officer - Austin Technology Services].]

MEMBERS, ITEM NUMBER SEVEN IS AN UPDATE REGARDING IT APP APPLICATION RATIONALIZATION.

GOOD MORNING.

GOOD MORNING, MAYOR, MAYOR PRO TIM COUNCIL MEMBERS.

I'M KARA , CHIEF INFORMATION OFFICER AND DEPARTMENT DIRECTOR FOR AUSTIN TECHNOLOGY SERVICES.

WITH ME TODAY, I HAVE TONY ALDI FROM SALVO CONSULTING THE COMPANY, CONDUCTING THE APPLICATION RATIONALIZATION ASSESSMENT FOR THE CITY.

UH, THE CITYWIDE APPLICATION RATIONALIZATION WAS IN RESPONSE TO A COUNCIL RESOLUTION FROM LAST YEAR TO REVIEW THE CITY'S TECHNOLOGY SPEND AND IDENTIFY OPPORTUNITIES FOR EFFICIENCY THROUGH TECHNOLOGY CONSOLIDATION AND REDUCING OVERLAPPING TECHNOLOGY SOLUTIONS.

UH, LAST MONTH IN MY PRESENTATION, I COVERED THE WORK TO DATE TO INVENTORY AND IDENTIFY PROGRAMS TO REMOVE OVER 200 APPLICATIONS FROM OUR ENTERPRISE PORTFOLIO.

IN TODAY'S PRESENTATION WILL COVER THE ANALYSIS AND POTENTIAL COST SAVINGS ASSOCIATED WITH THAT WORK AHEAD OF THE REPORT THAT IS BEING RELEASED BY THE END OF THIS MONTH.

AND WITH THAT, I WILL TURN IT OVER TO TONY.

AND, UH, GOOD MORNING.

YES, GOOD MORNING, RIGHT? YES.

MORNING.

IT STILL IS.

LET'S, LET'S SEE IF WE SAY GOOD MORNING AS YOU LEAVE.

YES.

MENTIONED, THE CONTRACTS, I WON'T GO THROUGH THAT AGAIN, BUT, UH, WE WERE ABLE TO CONNECT THE CONTRACT DATA WITH THE APPLICATIONS TO BE ABLE TO REALLY UNDERSTAND, UH, THE DOLLARS THAT WERE ASSOCIATED WITH THE, THE DIFFERENT, UH, DECISIONS THAT WE'RE MAKING.

UNDERSTOOD.

UH, , UH, I WILL FLY UP THROUGH THIS THEN.

UH, SO THIS IS JUST KIND OF A RECAP OF THE, UH, EVOLUTION OF THE PROJECT.

AND IT'S, IT'S WORTH NOTING A COUPLE THINGS.

UH, AS YOU LOOK AT THESE LITTLE, UH, THE NUMBERS THAT ARE REPRESENTED HERE, IT WAS CITYWIDE.

SO WITH ALL THE DIFFERENT DEPARTMENTS, UH, WE, THEY WERE VERY INVOLVED IN TERMS OF THEIR, UH, PARTICIPATION AND CONTRIBUTIONS, UH, TO THE APPLICATIONS THAT WE WERE DISCUSSING IN THE WAY THOSE APPLICATIONS SERVED, THEIR DIFFERENT FUNCTIONS.

UH, YOU CAN SEE THE NUMBERS THERE WITH, UH, 26 WORKSHOPS.

SOME OF THOSE HAD MULTIPLE DEPARTMENTS IN THEM, UH, A NUMBER OF EMPLOYEES THAT WERE INVOLVED DIRECTLY WITH THAT.

AND THEN, UH, WE ALSO SUBMITTED SURVEYS TO COLLECT DATA FROM THEM.

SO, UH, IT WAS VERY, UH, ACROSS THE BOARD, UH, INCLUSIVE.

UH, THE, UH, THE OTHER THING I THINK THAT'S WORTH NOTING IS THAT WE DID, UH, ACHIEVE WHAT I THINK WAS A FAIRLY SIGNIFICANT, UH, UH, MILESTONE IN BEING ABLE TO CONNECT THE APPLICATION DATA WITH THE CONTRACT DATA.

AND SO, UH, THE CONTRACT DATA, UH, UH, WE WERE ABLE TO GET ACCESS TO ALL THE, ALL THE CONTRACT DATA.

YOU CAN SEE THAT THERE WAS ACTUALLY LIKE 55,000, UH, RECORDS THAT, UH, CONTRACTS THAT WE GOT OVER THE COURSE OF, I THINK SINCE 2023.

UH, WE NAILED THAT DOWN TO THE 5,653 IT SPEND ONES YOU SEE THERE.

UH, AND THEN WE REDUCED THAT DOWN TO THE ONES THAT WERE SPECIFIC TO APPLICATIONS THAT WERE JUST UNDER 3000, UH, LISTED THERE.

AND, AND THEN ASSOCIATE THOSE WITH THE APPLICATIONS SO THAT WHAT WE WERE LOOKING AT WERE REAL HONEST AND GOODNESS CONTRACTS ASSOCIATED WITH THE APPLICATIONS THAT WERE IN CONSIDERATION.

THE END RESULT OF ALL THIS, AND YOU'LL SEE SOME MORE ABOUT THIS, IS THIS, UH, 24 IDENTIFIED, UH, INITIATIVES TO HELP REDUCE THE NUMBER OF APPLICATIONS THAT THE CITY HAS, HELPS HEAD CAUSE BECOME MORE EFFICIENT WHILE STILL PROVIDING SERVICES THAT ARE NECESSARY, UM, AND REDUCE THE 200 APPLICATIONS.

ACTUALLY A LITTLE OVER THAT, THAT, UH, CARA MENTIONED.

SO, UM, WHAT DOES THAT LOOK LIKE IN TERMS OF SOME OF THE, UH, THE NUMBERS? WELL, UM, THAT, THAT THE 24 INITIATIVES, AS I MENTIONED, IS A THREE YEAR ROADMAP.

UH, AND YOU'LL SEE A PICTURE OF THAT IN THE BACK THAT YOU CAN'T READ.

BUT, UH, NONETHELESS, IT'S A, UH, 24, 3 24 INITIATIVE, THREE YEAR ROADMAP THAT HAS MULTIPLE PHASE AND, UH, 230 APPLICATION RETIREMENTS, UH, WITH THE ASSOCIATED KNOWLEDGE ASSOCIATE WITH THOSE, UH, THE, THE APPLICATIONS ARE BEING REDUCED BY A LITTLE UNDER 20%.

AND IF YOU LOOK AT THE BENCHMARKS THAT ARE OUT THERE, UH, THAT'S RIGHT IN THE, UH, KIND OF THE MEDIAN RANGE OF WHAT IS EXPECTED IN A, IN AN APPLICATION EFFORT LIKE THIS.

SO IT'S RIGHT WHERE WE EXPECTED IT TO BE.

UH, THE SAVINGS, UH, THE ANNUAL POTENTIAL SAVINGS OF THIS IS 49 MILLION TO 142 MILLION.

I KNOW THAT'S A BIG RANGE.

UM, I'LL EXPLAIN KIND OF WHY THAT IS BIG RANGE IN JUST A MINUTE.

UH, BUT THERE ARE SIGNIFICANT SAVINGS THAT ARE AVAILABLE HERE.

UM, AND THEN, UM, AS I

[01:35:01]

UM, OF NOTE, THERE'S, UH, THIS NUMBER THREE HERE WAS THE VERIFIED ANNUAL SAVINGS OF 8.1 MILLION.

AND, UM, THAT'S, UH, SAVINGS THAT WE HAD THE CONTRACT IN HAND.

WE CAN SHOW YOU THE CONTRACTS, HERE'S THE NUMBERS THAT ARE ON THERE, THE DOLLARS THAT YOU'RE SAVING.

UH, THE ACT NOW SAVINGS IN PARTICULAR WERE SAVINGS THAT IF, UH, YOU INITIATED TOMORROW, YOU WOULDN'T RECOGNIZE THOSE IMMEDIATELY.

UH, THEY WERE, UH, BASICALLY JUST SOME CLEANUP OF THINGS THAT HAD, UH, BEEN, UH, YOU KNOW, LOST IN THE SHUFFLE, SO TO SPEAK.

AND SO THAT WAS, UH, $878,000 WORTH OF THE SAVINGS, PRIMARILY AROUND THE WAY THEY MANAGE, UH, THE, THE CLOUD ENVIRONMENT THAT'S GOING ON.

UH, AND THEN ANOTHER 7.2 MILLION IN CONTRACTS THAT WERE IDENTIFIED THAT WE COULD RETIRE, UH, WITHIN THE FIRST, UH, YEAR.

SO THAT'S THE, UH, THOSE ARE THE, THE, THE BIG NUMBERS THAT REPRESENT THE OVERALL EFFORT.

UM, I'M GONNA SHOW YOU THESE, UH, I MENTIONED THE, THE, THE 49 TO $142 MILLION SAVINGS RANGE.

I'M GONNA SHOW YOU THAT FROM TWO PERSPECTIVES.

THE FIRST ONE IS, UH, KIND OF IN THE CONFIDENCE LEVEL, AND THEN, AND THEN I'LL SHOW IT TO YOU AGAIN FROM, UH, THE DIFFERENT WAYS, THE, THE CATEGORIES OF HOW WE WOULD ACHIEVE THOSE SAVINGS.

UH, SO YOU CAN APPRECIATE THAT AS WELL.

UM, I, I MENTIONED THE ACT NOW ONCE JUST PREVIOUSLY, UH, ON THE PREVIOUS SLIDE.

UH, WITH, UH, BEING ABLE TO GO IN AND, AND, AND RECOGNIZE THOSE ALMOST, UH, RIGHT AWAY, UH, THERE'S ACTUALLY SOME MORE THAT'S OUT THERE.

UH, WE ONLY HAD SO MUCH TIME AND ONLY SO MUCH ACCESS, AND SO WE WERE NOT ABLE TO GET ALL THE SAVINGS IDENTIFIED.

UH, BUT THERE ARE OTHER CLOUD SAVINGS THAT ARE AVAILABLE OUT THERE, UH, TO THE CITY.

UH, AND THEN THERE'S ALSO, UH, VERIFIABLE OVER TIME.

UH, WE CALL IT EXECUTION DEPENDENT OVER TIME.

THESE ARE WHERE WE HAVE CONTRACTS THAT WE KNOW FOR, FOR APPLICATIONS THAT ARE GONNA RETIRE.

UH, AND IT'S REALLY DEPENDENT UPON HOW WELL THE CITY CAN EXECUTE THAT.

UH, IN TERMS, IN TERMS OF THE TIMING AND PARTICIPATION WITH ALL THE, UH, DEPARTMENTS, UH, INTEGRATING ALL THE RIGHT OTHER SYSTEMS TO BE ABLE TO TURN OFF THE OTHER, UH, INFRASTRUCTURE AND SO FORTH THAT'S ASSOCIATED WITH THAT.

IF WE DO ALL THAT RIGHT, UH, THE RANGE CAN BE HIGHER ON A 65 MILLION IF IT'S, UH, IF YOU, YOU HAVE SOME AREAS WHERE THERE'S, UH, INABILITY TO GET EXECUTED ON ALL THOSE FRONTS, THEN IT'S CLOSER TO THE $22 MILLION RANGE.

UH, AND THEN THE, UH, CATEGORY B TIER WAS THE, UH, FOR CONFIDENCE WAS NEGOTIATION DEPENDENT.

THIS IS REALLY AROUND THE CONTRACTS.

UH, THERE ARE LOTS OF CONTRACTS THAT ARE ON THE TABLE, DIFFERENT, UH, SOFTWARE VENDORS AND, UH, EVERY SOFTWARE VENDOR CONVERSATION IS GOING TO BE DIFFERENT.

UH, WE'RE WE PROPOSED, UH, A, UH, I KNOW THE CITY HAS A VENDOR MANAGEMENT TEAM, AND WE PROPOSED A CONTRACT, UH, KIND OF WORKSHEET, UH, TO BE ABLE TO HAVE A STRATEGY FOR GOING FOR EVERY ONE OF THOSE CONVERSATIONS WITH THE, THE VENDORS TO BE ABLE TO NEGOTIATE WITH THEM AND, UH, REDUCE THE OVERALL LICENSING.

UH, THAT, UH, WHEN IN SOME CASES IT'S TURNING OFF LICENSING, IN OTHER CASES IT'S REDUCING LICENSING OR CONSOLIDATING LICENSING, UH, SO THAT YOU CAN RECOGNIZE SAVINGS.

UM, AND THEN, UH, THERE'S ALSO, THE LAST PART WAS JUST SOME OF THE MISCELLANEOUS THINGS THAT WE HAD NOT, UH, BEEN ABLE TO, UH, ACHIEVE YET, BUT WE WANTED TO MAKE SURE WE'RE INCLUDED.

WE LIKE THE, THERE'S A LOT AROUND THE CLOUD, UH, THAT WE DID NOT LOOK AT.

WE ONLY LOOKED AT, UH, A THIRD OF THE CLOUD ENVIRONMENT.

SO TWO THIRD OF THE CLOUD ENVIRONMENT, UH, IT WAS NOT LOOKED AT.

AND THAT ONE, ONE THIRD REPRESENTED 700,000 IN SAVINGS.

SO IF YOU DID THE LINEAR MATH, YOU KNOW, 2.1 MILLION, UH, BUT, UM, AND THEN THERE'S ALSO SOME SAVINGS IN TERMS OF HOW YOU OPERATE THE CLOUD AND SOME OF THE DATA CENTER STUFF AS WELL.

AND SO THAT'S WHAT THAT, THAT TIER C REPRESENTS FOR COMPETENCE LEVEL.

UH, THE, UM, APOLOGIZE, SAY THAT AGAIN.

START THE, THAT PART ON C AGAIN.

SURE.

UH, SO, UM, WE DID, UM, WHEN WE LOOKED AT THE CLOUD, UH, DATA, THERE'S JUST INEFFICIENCIES HAPPEN WITH, WHEN YOU MANAGE CLOUD, YOU THROW A BUNCH OF SYSTEMS IN THERE AND RESOURCES GET, YOU KNOW, THEY RACK UP COSTS, RIGHT? UH, WE KNOW WE IDENTIFIED BY LOOKING AT A THIRD OF THE, THE CLOUD ENVIRONMENT, 700, $8,000 WORTH OF SAVINGS THAT COULD BE RECOGNIZED ALMOST IMMEDIATELY BY GOING BACK AND TELLING THE CLOUD VENDORS, TURN THIS OFF, CHANGE THIS RESOURCE LEVEL, ET CETERA, TAKE THAT SAME THING AND APPLY IT TO THE OTHER TWO THAT WE WEREN'T LOOKING AT.

AND YOU CAN GET UP TO 2 MILLION.

YEAH, OKAY.

PLUS ALSO THE CITY'S RUNNING, UH, MULTIPLE TENANTS WITH THIS, WHAT THEY, THE TERM THEY USE FOR THESE CLOUD KIND OF, UM, BASE SYSTEMS, UH, FOR GOVERNMENT AND, AND FOR NON-GOVERNMENT TYPE CLOUD, UH, IF YOU WERE TO CONSOLIDATE THOSE TENANTS TO ONE, UH, NON-GOVERNMENT AND ONE GOVERNMENT TENANT, UH, THERE'S SUFFICIENCIES

[01:40:01]

THERE AS WELL.

SO THAT'S STUFF THAT'S ON THE TABLE TO BE DISCUSSED.

I JUST, I DIDN'T, I DIDN'T CLICK THE FIRST TIME YOU SAID IT.

CAN, CAN WE GO BACK TO THE PREVIOUS SLIDE, RIGHT? QUICK BET.

SURE.

UH, I'M SORRY, ONE MORE BACK.

ACTUALLY, THAT FIRST ONE.

SO IN OTHER WORDS, FOR THE VERIFIED ANNUAL SAVINGS, WE'RE TALKING ABOUT THAT 878,000 IN SAVINGS THAT ARE IMMEDIATELY AVAILABLE.

AND YOU SAID THOSE WERE THE CLOUD, A LOT OF THAT WAS THE CLOUD RELATED SAVINGS.

IS THAT YES.

NOW THAT $7.2 MILLION ANNUAL SAVINGS THROUGH THOSE CONTRACT RETIREMENTS FROM CONSOLIDATION OVER THREE YEARS, WHICH COULD, COULD YOU EXPAND ON THAT A LITTLE BIT? WHAT, WHAT ARE THOSE? OKAY, SO, UM, AS I MENTIONED, WE DO, WE ARE, WE'RE ABLE TO, UM, CONNECT CONTRACTS SPECIFICALLY TO CERTAIN APPLICATIONS.

TRUST ME, THAT WAS ANOTHER EASY TASK.

'CAUSE THE DEFINITIONS AND NAMINGS AND THINGS WERE OFTEN VERY, UH, FUZZY.

BUT, UH, $7.2 MILLION WORTH OF THE CONTRACTS ARE IDENTIFIED AS THE 24 INITIATIVES OVER THAT THREE YEARS ARE CONTRACTS THAT WE COULD GO AND SAY, IF YOU CANCELED THIS CONTRACT, WHICH IS INTENDED TO BE, IF WE'RE RECOMMENDING, UH, THEN YOU WILL RECOGNIZE THESE SAVINGS, UH, THAT ARE ON THIS CONTRACT.

SO THEY'RE VERIFIABLE IN THAT RESPECT.

GOT IT.

AND THEN THESE ARE, AGAIN, WE SOFTWARE CONTRACTS.

SOFTWARE CONTRACTS, YES.

AND, AND WE WOULD CANCEL THEM BECAUSE THERE IS AN ALTERNATIVE BECAUSE WE'RE NO LONGER USING THEM OR A MIX OF, I GUESS REASONS.

YOU'RE GETTING INTO MY NEXT SLIDE.

YES.

ALRIGHT.

UH, UH, BUT YES, THAT'S EXACTLY RIGHT.

UH, THERE, THERE, THERE ARE MULTIPLE SOFTWARE CONTRACTS THAT ARE DOING KIND OF THE SAME THING.

UH, DIFFERENT DEPARTMENTS HAVE BOUGHT ONE FROM PEN A, ANOTHER ONE FROM VENDOR B, BUT THEY DO THE SAME THING.

WITH GREAT RESPONSIBILITY COME WITH SPIDER-MAN, QUOTE, SAY, GREAT RESPONSE.

UM, SO I WENT THROUGH THE, THE SAVINGS BY CONFIDENCE LEVEL.

I WANTED TO BREAK IT DOWN A LITTLE BIT BY, UH, THE CATEGORIZATION.

THIS WILL HELP I THINK A LITTLE BIT WITH YOUR QUESTION.

UH, YOU JUST ASKED ABOUT THE, UM, THE TYPE OF, UH, SAVINGS THERE.

SO THE FIRST ONE IS WE, WE CALL THE APPLICATION RATIONALIZATION, WHICH IS A LITTLE CONFUSING 'CAUSE THE WHOLE PROGRAM IS APPLICATION RATIONALIZATION, BUT HAD EIGHT TO, UH, 3 34 POINT MILLION DOLLARS, UH, SAVINGS.

AND YOU CAN SEE SOME OF THE, IN THE RIGHT HAND SIDE THERE, UH, THE WAYS THAT WE, THOSE WERE RECOGNIZED VERIFIABLE SAVINGS, AS I MENTIONED, CONTRACTS THAT YOU CAN HOLD IN YOUR HAND AND SAY, THIS IS ACTUAL CONTRACTS THAT WE COULD CANCEL.

UH, OTHERS ARE, UH, KIND OF THE RIPPLE EFFECT OF THAT.

I CALL IT.

UH, IF YOU TURN OFF CERTAIN APPLICATIONS, YOU CAN TURN OFF THE SERVERS, UH, YOU CAN TURN OFF MAYBE THE CLOUD SERVICES THAT SUPPORT THAT.

UH, YOU CAN ALSO, UH, THERE ARE CON SUPPORT CONTRACTS ASSOCIATED WITH A LOT OF THOSE APPLICATIONS THAT GET TURNED OFF.

AND SO YOU RECOGNIZE THOSE RIPPLE EFFECT SAVINGS AS WELL.

SOFTWARE LICENSE OPTIMIZATION IS ANOTHER ONE.

UM, AND AGAIN, UH, WE DIDN'T GET A CHANCE TO LOOK AT THE DETAILS ON ALL THE SOFTWARE LICENSING, BUT THE AREAS THAT ARE TYPICALLY, UH, YOU CAN SAVE ON, AND WE DID GET SOME OF THIS TO VERIFY THAT IT'S OUT THERE, IS THAT, UH, REMOVE UNUSED SEATS.

UH, A LOT OF PEOPLE WHEN THEY NEGOTIATING A VENDOR CONTRACT, NEGOTIATE IT FOR A MATCH NUMBER.

AND THEN YOU REALIZE OVER THE YEARS THAT YOU'RE USING VERY LITTLE OF THAT, UH, REDUCE THOSE NUMBERS.

UH, THE, UH, RIGHT SIZING THE LICENSE TYPES.

SOMETIMES THE LICENSE THAT YOU'RE ASKING FOR IS, UH, THE FULL BUFFET AND YOU JUST NEED AN APPETIZER.

AND SO RIGHT SIZING THAT.

UH, AND THEN, UH, COMPLIANCE AVOIDANCE IS ANOTHER ONE.

UH, THAT'S A BIG ONE FOR CERTAIN VENDORS.

UH, AND THEN THERE'S JUST SOME IDLE LICENSES, UH, IN GENERAL THAT ARE ESTIMATED OUT THERE.

WE LOOKED AT ONE THAT WAS, UH, AN ASSET MANAGEMENT SYSTEM HAD 5,500 LICENSES, UH, THAT WERE PURCHASED.

UH, THERE WERE ROUGHLY 1,100 USERS USING THAT SYSTEM.

SO IT WAS AT 20% OR SO.

UH, AND EVEN IF THAT A HUNDRED OF THOSE, WELL, UH, YEAH, ABOUT A HUNDRED OF THOSE USERS HAD NOT LOGGED INTO THE SYSTEM FOR OVER A YEAR.

SO THERE IS SAVINGS, AND THAT WAS JUST ONE EXAMPLE, UH, WHERE WE COULD GET RIGHT SIZING WITH THOSE LICENSING.

UM, THE OTHER AREAS THAT ARE REPRESENTED HERE, VENDOR CONSOLIDATION AS YOU, UH, THIS GOES TO YOUR QUESTION, YOU WERE JUST ASKING WHERE IF WE WERE ABLE TO BRING MULTIPLE, UH, APPLICATIONS ONTO THE SAME MULTIPLE DEPARTMENTS ONTO THE SAME APPLICATION, WE CAN SAVE MONEY.

ASSET MANAGEMENT'S ONE OF 'EM, WE'RE LOOKING AT, UH, TO DO THAT, FOR EXAMPLE.

UM, AND THEN WE CAN REDUCE THE NUMBER OF VENDORS THAT YOU'RE WORKING WITH, WHICH SAVES TIME, EFFORT, AND MONEY.

UH, IT GIVES NEGOTIATION POWER TO THE CITY WITH THAT VENDOR.

AND, UH, AND BRINGS OVERALL THE ABILITY.

AND, AND THERE'S JUST A CORRELATION OF THE NUMBER OF APPLICATIONS YOU'RE MANAGING AND THE COST OF IT.

IF WE CAN GET RID OF 200 PLUS APPLICATIONS, THE COST OF IT WILL GO DOWN.

UH, CLOUD OPTIMIZATION IS ONE OF THE ONES I MENTIONED WAS THE ACT OUT STUFF.

UH, SO I WON'T PUT THAT IN IN DETAIL, BUT THERE'S LOTS OF MONEY THAT'S POTENTIALLY THERE.

UH, CLOUD HAS GREAT POTENTIAL, UH, BUT

[01:45:01]

THANKS.

I'M GLAD TO KNOW WHERE, WHERE THAT CAME FROM.

UH, YEAH, BUT IT DOES REQUIRE MANAGEMENT IS WHAT IT BOILS DOWN TO.

OTHERWISE IT JUST GETS OUTTA CONTROL.

UH, AND THEN DELIVERY TRANSFORMATION AROUND, UH, EFFICIENCY OF BEING TO PULLING PEOPLE TO AREAS WHERE THEY CAN BE MORE EFFICIENT AND, UH, AND REALLY WORK ON THINGS.

HIGHLY VALUE ADDED TO THE CITY.

UM, SO, UH, THAT'S THE SAVINGS BY CATEGORY AND IT'S REPRESENTED IN A, A BAR CHART HERE, UH, FOR THOSE WHO ARE INTERESTED.

UM, THE PROGRESSION YOU SEE IN THE DIFFERENT, UH, FROM IN THE ROW KIND OF WAYS.

UH, D SEVEN REPRESENTS OUR DELIVERABLE SEVEN, WHICH WAS EARLY ON ESTIMATES.

UH, WE HAD A WORSE CASE, MOST CONSERVATIVE CASE AND A MODERATELY CONSERVATIVE CASE.

AND YOU CAN SEE THE NUMBERS ASSOCIATED WITH THAT.

AND THEN A DELIVERABLE 12, WHICH WAS THE FINAL AFTER WE WERE ABLE TO LOOK AT ALL THE CONTRACT DATA AND A LOT OF THE VENDOR INFORMATION, THE SAVINGS THAT WERE AVAILABLE FOR WORST CASE IN CONSERVATIVE CASE, WE DID NOT PUT THE 1 49 ON THE 1 42 ON THERE.

THAT WOULD BE LIKE NIRVANA CASE.

BUT, UH, YOU CAN SEE THE, THE RELATIONSHIP BETWEEN ALL OF THE, AS AS IT PROGRESSED.

UH, AND IT MAKES SENSE.

THE, THE, THE, THE, THE DATA WHEN IT CAME IN KIND OF STARTED COALESCING MORE TOWARDS THE MIDDLE.

I, UH, AND THEN THIS IS THE SLIDE I MENTIONED.

YOU CAN'T READ, UH, BUT IT'S, UH, THIS IS AN INTERACTIVE ROADMAP, UH, OF THE THREE YEAR PROGRAM.

IT'S THREE PHASES.

PHASE ZERO IS, UH, SIX MONTHS LONG, AND THEN THERE'S ANOTHER, I THINK A 12 MONTH PHASE AFTER THAT.

AND THEN THE, THE REMAINDER IS THE THIRD PHASE.

AND PROGRESSIVELY, UM, THE EFFORT AND THE FOCUS BECOMES MORE AND MORE, UH, STRATEGIC AND AGGRESSIVE, UH, IN, IN THE LATTER PROGRAMS, WHICH YOU CAN'T READ 'CAUSE THEY'RE NOT ACTUALLY REPRESENTED ON THERE.

BUT, UH, FINANCE SYSTEMS, FOR EXAMPLE, WOULD BE A BIG STRATEGIC FINANCIAL, UH, APPLICATION EFFORT THAT'S, UH, WOULD BE A PHASE THREE EFFORT, UH, UPFRONT.

THERE'S THINGS THAT ARE VERY QUICK WINS AND, UH, VERY EASILY IDENTIFIABLE, UH, TYPE OF APPLICATIONS THAT WE CAN, UH, TARGET IMMEDIATELY.

AND THIS HAS THE ABILITY TO LOOK TRAIL ANY, AS YOU SEE ON THE RIGHT HAND SIDE, THERE'S A A, IF YOU CLICK ON ANY ONE OF THOSE LITTLE ICONS FOR THE INITIATIVES, IT SHOWS YOU, UH, THE ASSOCIATED SAVINGS, ASSOCIATED ESTIMATED COSTS, TIMELINES, UH, BASICALLY KEY METRICS WE CAN USE TO TERMS IF WE'RE ACTUALLY TRACKING TO WHAT WE HAD ESTIMATED ON.

SO THAT'S, UM, THAT'S THE LAYOUT OF HOW WE GOT TO THAT'S GOOD.

THE NUMBER WE HAVE.

IN SEPARATE CONVERSATIONS WITH TONY, HE'S REALLY STRESSED TO US THAT HE'S SEEN JURISDICTIONS WHERE THEY GO THROUGH AN APPLICATION RATIONALIZATION.

DO YOU WANNA SAY ANYTHING, UH, IN RESPONSE TO THAT? YES, THANK YOU.

SO, UH, WE'RE VERY EXCITED ABOUT THIS ASSESSMENT AND THE FINDINGS.

WE'RE MOBILIZING NOW ON SOME OF THOSE QUICK WINS.

SO WE WERE REALIZ THOSE SAVINGS EVEN WITHIN THIS FISCAL YEAR.

AND THEN WE ARE STRATEGICALLY CREATING THE TEAMS OF PROJECT MANAGERS AND IDENTIFYING STAKEHOLDERS SO THAT WE CAN AGGRESSIVELY MOVE ON ADDRESSING MANY OF THESE RECOMMENDATIONS.

SO MEMBERS, I KNOW YOU ALL KNOW THIS, BUT I'M GONNA SAY IT OUT LOUD BECAUSE I WANT THE PUBLIC TO ALSO HEAR THIS IS AN EXAMPLE OF SOME OF THE ONGOING, UH, OUTSIDE AUDITS OR PERFORMANCE EVALUATIONS THAT ARE GOING ON IN THE CITY.

SOME SUGGEST THAT NONE OF THIS HAPPENS AND, AND WE NEED TO, OF COURSE, WE'VE PASSED AN ORDINANCE TO MAKE SURE THAT WE HAVE A SYSTEMIC CITYWIDE AUDIT AS WELL.

AND I'M PROUD AND PLEASED THAT THE COUNCIL HAS DONE THAT.

BUT THERE'S AL ALWAYS, THERE'S, THERE'S STUFF GOING ON ALL THE TIME TO, TO LOOK FOR EFFICIENCIES, EFFECTIVENESS, UH, COST SAVINGS, AND THIS IS AN EXAMPLE OF THAT.

AND, UH, IF SOMEBODY FROM OUTSIDE THE CITY THAT COMES IN AND REVIEWS THE CITY, AND AS A RESULT OF THAT, THE CITY IS NOW MOVING AND GOING TO TAKE ACTION IN ORDER TO FIND THOSE EFFICIENCIES, EFFECTIVENESS AND COST SAVINGS.

MR. VINO, YOU LOOK LIKE YOU WANNA SAY SOMETHING? WELL, I WOULD JUST, UM, MENTION THAT THIS INITIATIVE ACTUALLY GOES BACK TO A DECEMBER 24 COUNCIL RESOLUTION THAT DIRECTED US TO START THIS WORK, RIGHT? AND SO, EVEN, EVEN THIS WORK, UM, CAME WITH THE GUIDANCE FROM THE CITY COUNCIL.

I DID JUST WANNA MENTION TOO, THAT WE HAVE, THAT YOU'RE ALL FAMILIAR, WE HAVE THREE INTERRELATED, UH, MAJOR, MAJOR IT INITIATIVES.

I WORRY ABOUT KARICA BECAUSE ANY ONE OF THESE WOULD BE A WHOLE JOB BY ITSELF ON THE TOP OF RUNNING A BIG COMPLEX DEPARTMENT.

BUT SHE'S RUNNING A BIG COMPLEX DEPARTMENT AND LEADING THREE HUGE INITIATIVES.

ONE IS AROUND OUR, UH, INFORMATION TECHNOLOGY STRATEGY AND GOVERNANCE.

ONE IS AROUND THE, UH, UH, ORGANIZATIONAL STRUCTURE AND CENTRALIZING POSITIONS.

AND THEN ONE IS AROUND THIS APPLICATION RATIONALIZATION.

UM, WE'RE PREPARING A MEMO TO THE FULL COUNCIL TO PROVIDE AN UPDATE ON ALL OF THOSE INITIATIVES, WHICH OF COURSE YOU JUST GOT A GREAT UPDATE ON THE APPLICATION RATIONALIZATION INITIATIVE, BUT ALSO TRYING TO STRESS HOW INTERRELATED THEY ARE.

UM,

[01:50:01]

YOU TAKE YOUR 1200 APPLICATIONS DOWN TO 900 APPLICATIONS, YOU SAVE ALL THIS MONEY, BUT YOU DON'T DO ANYTHING TO CHANGE YOUR ORG STRUCTURE OR YOUR GOVERNANCE STRUCTURE THAT LED TO THE 1200 APPLICATIONS.

AND IN JUST A FEW SHORT YEARS, YOU'RE RIGHT BACK TO 1200 APPLICATIONS.

SO THIS ALL NEEDS TO BE LOOKED AT HOLISTICALLY AND ADDRESSED HOLISTICALLY TO, UH, TO REALIZE THESE SAVINGS AND TO MAKE SURE THAT THEY'RE SUSTAINED.

THANK YOU FOR THAT.

ANYTHING ELSE, MEMBERS? YES.

COUNCIL MEMBER DUCH.

UH, FIRST THANK YOU FOR THIS.

THIS IS VERY ENCOURAGING AND I LOOK FORWARD TO THE WORK THAT IN THE THREE YEAR WORK THAT THAT WILL START.

I HAD JUST A COUPLE OF QUESTIONS.

ONE IS TO FOLLOW UP ON A COMMENT YOU JUST MADE MR. VANNEY KNEW, WHICH WAS, UM, TRYING TO UNDERSTAND HOW TO ADDRESS THIS HOLISTIC ISSUE THAT YOU MENTIONED.

'CAUSE I HAVE THE SAME QUESTION POP UP, WHICH IS, IS THIS RELATED TO THE FREQUENCY OF DOING THIS WORK? OR FOR YOUR POINT, IS THERE INSTEAD A BETTER WAY TO LOOK AT THIS TO PUT IN, I DON'T KNOW, SOME KIND OF GUARDRAIL TO ENSURE THAT WE DON'T WIND UP BACK IN THIS SPACE? WHAT DOES THAT LOOK LIKE? WELL, I THINK IT LOOKS LIKE A MORE, UM, UM, CENTRALIZED APPROACH TO MAKING OUR IT DECISIONS, HAVING A COMMON STRATEGY ACROSS THE ORGANIZATION ABOUT, UM, THE TYPE OF IT SERVICES WE'RE AIMING TO DELIVER AND HAVING A MEANINGFUL GOVERNANCE STRUCTURE AROUND IT.

I MEAN, THERE'S LOTS OF EXAMPLES THAT THE FOLKS UP HERE TALKING TO YOU COULD PRESENT, BUT JUST IN MY OWN PORTFOLIO OF DEPARTMENTS, I'M RESPONSIBLE FOR THE REAL ESTATE SERVICES DEPARTMENT WHO WENT THROUGH THEIR OWN, UM, IT PROCESS OF A FINDING OF IDENTIFYING A REAL ESTATE MANAGEMENT SYSTEM, UH, BUILDING SERVICES.

A DIFFERENT DEPARTMENT ALSO REPORTS TO ME AND THEY DIDN'T KNOW ABOUT WHAT REAL ESTATE WAS DOING.

AND SO THEY WENT THROUGH THEIR OWN PROCESS TO IDENTIFY SOFTWARE THAT, UM, FOR THEM TO MANAGE FACILITIES AND DEFERRED MAINTENANCE ON FACILITIES, BOTH SYSTEMS CAN, THEY, THEY MADE DIFFERENT DECISIONS ON WHAT DECISION WAS THE RIGHT SYSTEM FOR THEM.

BOTH SYSTEMS CAN DO WHAT THE OTHER SYSTEMS DO.

AND SO BY CONSOLIDATING THAT CLEARLY WE'RE GOING TO SAVE MONEY, NOT ONLY THAT WE'RE GONNA IMPROVE SERVICES.

'CAUSE RIGHT NOW I DON'T, THE TWO SYSTEMS DON'T SHARE DATA.

SO IF I WANT TO HAVE REPORTS THAT CONNECT LEASING INFORMATION TO, UH, OWNERSHIP INFORMATION AND DEFERRED MAINTENANCE, WE DON'T HAVE THE, THE SYSTEMS AREN'T EVEN SHARING DATA.

SO THERE'S AN ADDED COMPLEXITY AND A, AND A REDUCTION IN, IN FUNCTIONALITY.

AND THEN, YOU KNOW, IF I GO FROM HAVING TWO SYSTEMS, THE ONE SYSTEM, UH, ULTIMATELY I'LL NEED FEWER, UH, CONTRACT, UH, VENDORS TO HELP SUPPORT THOSE SYSTEMS AND, AND INTERNAL STAFF TO SUPPORT THOSE SYSTEMS. SO AGAIN, ALL OF IT, IT REALLY CONNECTS TOGETHER.

UM, AND THAT'S WHY WE'RE TRYING TO ADDRESS IT HOLISTICALLY, UM, AS OPPOSED TO JUST INDIVIDUAL INITIATIVES.

AND THAT'S WHY I'M WORRIED ABOUT CARA'S , UH, FAMILY LIFE BALANCE RIGHT NOW.

ALL RIGHT.

I APPRECIATE THAT ANSWER.

AND, AND YEAH, WOULD LOOK FORWARD TO, UM, BETTER UNDERSTANDING HOW THAT HOLISTIC APPROACH IS GONNA GET ROLLED OUT OR IF IT'S JUST PART OF THE ENTIRE, AS YOU SAY, THE, THE THREE SORT OF, UH, CENTRALIZATION UNDERTAKINGS THAT WE'RE WORKING THROUGH RIGHT NOW.

AND, AND AGAIN, WE HAVE AN UPDATE MEMO, UH, UH, COMING TO CITY COUNCIL SHORTLY.

UM, IT'S IN FINAL REVIEW THAT WILL PROVIDE AN UPDATE ON ALL THESE VARIOUS INITIATIVES AND TALK MORE ABOUT HOW THEY'RE INTERCONNECTED.

UH, I HAVE A QUESTION REGARDING, I, I NOTICED WE DIDN'T SPEND A TON OF TIME ON THE RISK AND CHALLENGES SLIDE THAT YOU ALL PREPARED, AND PERHAPS BECAUSE WE WANTED TO END ON A POSITIVE NOTE FOR THIS MEETING, UM, BUT MAYBE JUST END THE MEETING MAYBE THE WAY TO GO.

UM, BUT I THINK RATHER THAN DIVING INTO THOSE SIX ITEMS THAT ARE LISTED THERE, WHAT I'D REALLY LIKE TO ASK FOR YOUR HELP WITH IS AS WE POTENTIALLY GO OUT AND TALK ABOUT THE WORK THAT YOU'RE UNDERTAKING AS PART OF THIS EFFORT, UM, ARE THERE ANY EXAMPLES YOU CAN START TO SHARE REGARDING THE DIFFERENT CATEGORIES THAT YOU'VE OUTLINED? UM, SPECIFICALLY I THINK ON SLIDE FIVE, RIGHT? THE APP, THE APP RATIONALIZATION, THE SOFTWARE LICENSE OPTIMIZATION, CONSOLIDATION AND SO ON, I'M THINKING MIGHT BE USEFUL FOR CERTAINLY FOR ME AT LEAST TO GO TALK TO CONSTITUENTS.

A HERE ARE SOME EXAMPLES OF, UM, SPECIFIC PROJECTS OR OPPORTUNITIES THAT WE'RE TAKING ADVANTAGE OF TO GENERATE THOSE SAVINGS.

'CAUSE UNLESS YOU WORK IN THE IT SPACE, THIS DOESN'T MEAN ANYTHING TO YOU.

DOES THAT MAKE SENSE? DOES THAT REQUEST MAKE SENSE? IT DOES, AND I THINK WE CAN DEFINITELY PULL TOGETHER EXAMPLES THAT FROM A COMMUNITY PERSPECTIVE THAT WOULD RESONATE.

THERE'S A LOT OF CHANGE HAPPENING IN THE ORGANIZATION.

I THINK THAT MIGHT BE REALLY USEFUL FOR US.

AND THE LAST QUESTION I'VE GOT IS JUST, UH, AND AGAIN, GOES BACK TO YOUR RISK AND CHALLENGE SLIDE.

IS ANY, UM, ANY UNINTENDED CONSEQUENCES THAT YOU THINK AS A RESULT OF UNDERTAKING THIS EFFORT THAT WE SHOULD BE AWARE OF AS YOU PROCEED OVER THE, OVER THE THREE YEAR WINDOW? IT IS AN AGGRESSIVE ROADMAP AND A VERY AGGRESSIVE STRUCTURE.

[01:55:01]

UH, WE BELIEVE THAT THE, THE CENTRALIZATION IN THE ORGANIZATION OF STAFF TO HELP ACTUALLY MOVE THIS FORWARD AT THIS RAPID PACE, UM, IS, UH, A NEEDED COG IN, IN, IN, IN THIS OVERALL WHEEL OF MAKING SURE ALL OF THESE THINGS ARE ORCHESTRATED WELL AND HAPPEN, UM, IN THE RIGHT TIMELINE.

SO, UH, HAVING EVERYONE FOCUSED ON THE GOAL IS THE MOST IMPORTANT THING.

WE HAVE THE TECHNOLOGY TALENT TO ENABLE IT.

WE JUST HAVE TO BE MOVING IN THE SAME DIRECTION THAT MAKES SENSE.

HOW OFTEN WOULD WE EXPECT UPDATES REGARDING THE STATUS OF THIS PROJECT OVER THE NEXT THREE YEARS? I AM HAPPY TO COME BACK QUARTERLY.