FY 2027 Budget Work Session | May 5, 2026

追加: 2026-05-13

[00:00:01]Good morning and I will call us to order is just after 11. Welcome to our city council work session specific to the budget and I will immediately turn it over to Jay Choa. But before I do that, I want to sincerely thank all city staff um those that are in the room and those that are working across the city for your help in passing successfully all of our bond propositions. I think that deserves a round of applause.

[00:00:31]But those of us around this table know that our city staff worked tirelessly um to transparently explain that bond election, justify it, and we're just really appreciative of all your hard work. So, thank you, Jay. Over to you.

[00:00:43]>> Thank you, mayor. Thanks for that recognition of staff. They are hardworking group. I especially want to thank uh the Fororth Lab, Christian, and April Rose specifically. Uh they did a lot of the heavy pulling there at the end. So, thank you all. Um, as far as the the the workshop today, um, this is the start basically of the of the overall process for the city council.

[00:01:06]Staff started a couple three months ago pulling things together. Um, as you already know, it is going to be a tough budget year just based on current projections as we're looking at the whole thing. What I would ask is for you to have patience to work through the process. Um, we uh will begin to pull things together from the individual departments. They're all doing a lot of work to see where uh how they can um make the biggest impact to try to get everything in alignment. And as we go through this, a lot of this is information for you to hopefully provide you a depth of understanding in the different areas of the of the budget so that when we actually put together the recommendation and present it in August that you'll have enough knowledge to be able to to make decisions and give us feedback uh as we move forward. So with that, I believe Christian's gonna kick off the show.

[00:01:59]>> Thank you. Good morning, everyone. I like today. I like budget work sessions.

[00:02:04]So, some of you might remember a couple of years ago, we made this shift um in the way that we deliver budget information earlier in the year. So, prior to a couple of years ago, we'd present the recommended budget in August and then we'd respond to your inquiries and sort of schedule some work sess sessions from there over the next four to six weeks. Um, a couple of years ago, we started doing them in April and May, just realizing that the budget's big and even the revenue picture was getting a little more complicated a couple of years ago with some of the appraisal district activities and other other drivers. And so, we decided, you know, we'll start communicating a little earlier and bring you along the way, hopefully give you, like Jay said, a depth of understanding that's helpful um to you and to staff and as you communicate in your districts or your constituents sort of what what makes up the budget. So, this year continues that tradition. It is frankly a little more work for staff and I always like to give the caveat at the first session. Um you know this is a work in progress so we're bringing you really along in real time.

[00:02:58]So numbers are shifting and assumptions shift as we get more information. So um thank you for your patience. We do think the juice is worth the squeeze with the extra early work sessions. I hope it is for you too. Um so I'm going to you're going to hear from both of the Fort Worth Lab assistant um budget directors today. Christy Lemon um oversees the operating and capital budgets and those associated analyst teams um and then Brady Kirk, you'll hear from him on revenue. So, I'm going to let us get to work and turn it over first to Christy Lemon and then I'll come back sort of at the end of her presentation to um introduce Brady's topic, but we're excited that you're here. Thank you for being here. And I'll turn it over to Christie.

[00:03:38]Good morning.

[00:03:40]Pleased to be here. Christy Lemon. the assistant director um as Christian mentioned in the Fort Worth lab going to just the conversation today is really about context as we go forward in the budget process. So where we're starting um kind of challenges we're seeing right away. Um so this is our kind of overall timeline that gets us to adoption in September. So a little more than a month ago we had a kickoff um meeting with all city staff who were involved in the budget process. We opened our budget software and then departments submitted their budgets last Friday. So, we're busy looking at those already. We have about a month in the Fort Worth lab to analyze those budgets, ask tons of questions, make sure everything is tying out properly.

[00:04:22]Then, uh the very beginning of June, we'll have our budget blitz uh with the city manager's office. So, those are really just budget presentations that all the departments make for CMO. Um and then the city manager's office will be considering all of the decision packages, both reductions and additions.

[00:04:37]And then we get certified um tax roles at the end of July. And then we'll do final balancing leading up to a recommended budget presentation in mid August. I think it's August 11th this year. Um and then we'll do community engagement throughout the summer and then be ready for budget adoption with a balanced budget midepptember. So that's kind of the timeline that we're working with.

[00:05:03]Um just picking up where we left off with our last conversation. So, last time we were together, Brady presented the long-term forecast and kind of highlighted our budget gap. So, you may remember that we're almost $50 million in terms of a gap. Um, and really the most simple way to explain this is that revenues are growing much slower than expenses. That's kind of like the the bottom line there.

[00:05:28]Um, this gap includes a number of things that we've done in past years and kind of carried forward in terms of planning.

[00:05:36]So, the past couple of years, we've been increasing the vehicle and equipment uh maintenance fund by about a million dollars to try to catch up on equipment replacement. So, that's factored into the gap. Um, we also have operating costs for all of the uh capital projects and facilities that will open in the upcoming year. So, we always budget those items first to make sure we have staff to run those facilities when we open them.

[00:05:59]We have um about $7 million plugged in as a placeholder for implementation of the the pay study that's been going on.

[00:06:08]Um and then we increased the EMS subsidy about $6 million. So last year we budgeted $20 million in subsidy. This year we have a placeholder for about 26 million. That's based on some early budget work on the EMS fund. Um and then for the health fund, as some of you have been in audit and finance committee meetings, we've been talking about condition of the health fund. We are seeing increased claims costs. Um and so for early budget development, we plugged in a 40% increase as a placeholder for the employer contribution um for the health fund. So that's a big driver as well. And of course, everything we're talking about is in the general fund. So really the presentation going forward for the rest of today is focused on the general fund making some of these same adjustments though in the other funds.

[00:06:55]So like the health um healthcare cost adjustment has has been factored into all budgets in all funds. Um so that amount is 17.5 million that we have plugged into that gap for the health fund.

[00:07:11]So we're going to talk about target budgets. We kind of visit this in our first uh work session together each year as we start budget development. So we use target budgets to constrain spending at each in each department in the general fund. Um so departments are given a target by for lab and then they build their budgets to that target and last year we reduced the target 1% from the previous year. Um and then departments built to that target that was that was 1% less than the previous year. We did the same uh used the same strategy for this year as well to try to cut some things that are discretionary and could be reduced and also constrained spending a little bit.

[00:07:52]Just to recap on what we were able to do last year. So when we um held budget kickoff, we had a gap of about 11 million. So a little bit different than what we're seeing this year, but we generally always start with a gap and then work to balance the budget over the summer. So, lots of different levers we can pull and lots of different decisions to be made um to get to that balanced budget by the time it's presented to you in August. Just a recap of last year.

[00:08:16]So, we did reduce property tax a quarter cent. Um we incorporated full funding for emergency medical services. That was our first full year of operation in that fund. Um we sustained payo and then we also did a few things in the general fund um for code enforcement. we um expand in the mobile tool shed program.

[00:08:37]So, some small things that do have big impacts on neighborhoods. So, that's that's kind of where we landed last year and then we'll talk about how the targets are built. So, um as we're building the target, there are several layers of predetermined costs that go into building the target. So, one year we showed you a layer cake and we went through a layer cake uh example. This is kind of using our beautiful city hall um and kind of walking up the building with different uh factors that go into the target.

[00:09:09]So we start with a prior year's adopted budget. So that's a starting place for each general fund department.

[00:09:16]And then um we always have some one-time costs that we're able to reduce out. So for example, we had a one-time cost for um the comprehensive plan study. So, we don't do that continuously all the time.

[00:09:30]So, that's a good example of a onetime cost that we'll budget and then once the study's complete, we'll pull that money out of the budget for a future year. So, we do reduce out those onetime costs. We also had a small reduction this year for some IT projects that were completed um and we don't need the funding for those to continue.

[00:09:49]And then we look at our prior year commitments. So, uh, probably the easiest example of that are the capital projects that we're building and we know we need staff to run them or we have maintenance for parks that we're building and so we factor those costs in as prior year commitments. We fund those things first to make sure all of those new facilities are are operating well when they're opened and then um we look at the cost allocations. So some of our other funds do have um costs that they allocate out to general fund departments. So examples are IT fleet risk management and we do hold departments harmless for those costs. So if their IT costs rise, we'll hold them harmless for the IT costs. If fleet costs are increasing, we'll hold them harmless for those. Those are um sometimes pretty big numbers for some of the small departments and pretty hard for them to work around. Those those are a little bit more like fixed costs for them. So, we reduce that out from their 1% um reduction.

[00:10:50]And then we layer in the salary and benefit costs. So, that includes retirement, health fund, so that 40% increase that we talked about. Um and then, uh pay for performance, any other related salary and benefit items, we'll add those to the target.

[00:11:07]So, this is what our target summary looks like. So the growth this year is 52 million. So it's almost 5% in growth.

[00:11:16]Um just in those the the basic target.

[00:11:22]Um this covers some of the additional items. I talked about some of them along the way, but we do have um those committed costs for meet and confer. So we added that in at 15 million. Um, as I said, we added in health insurance. Uh, some additional dollars there for health insurance allocations went up some. Um, the pay for performance is in there. We are seeing lower vacancy rates across the organization and so we're restoring some dollars back to departments. Um, we typically will budget for them to have some savings in personnel costs because we know their positions all positions won't be filled all throughout the year.

[00:12:00]So, we know they'll have some savings, but as we see um turnover slowing, we'll push dollars back to the departments to make sure that they can afford personnel.

[00:12:10]Um for payo growth, we budgeted 2% and that's that's equivalent to the growth that we are budgeting in terms of our revenue. So, it's matching our property tax revenue at 2%. Um those other prior year commitments are all the things I talked about related to capital projects. And then um we did reduce uh we do have in here a 1% target reduction that's equivalent to about 7.8 million.

[00:12:36]And I'll show you what each department's uh impact is there. And then the onetime cost that I talked about and then IT capital that I talked about. So these are kind of all the little things that go into building that target. Um that's increasing 52 million.

[00:12:53]What we don't have in here yet is collective bargaining. So negotiations are underway and so we don't have a number plugged in here um for the collective bargaining contracts.

[00:13:06]So strategies for closing the gap um we started with budget kickoff um doing a couple of different things. So one is to ask departments to reduce their we reduce their targets 1% and then we also asked them to submit reduction packages in the amount of 3%. for public safety departments um where we have contractual obligations, the civil service salaries are not included in that 3%. So those are excluded. And then we are working on tons of different projects to identify opportunities to cut costs in order to close the gap.

[00:13:43]My mouse isn't working. Okay. Um so this is the 1% target reduction. If you add uh every department's 1% savings, it's about 7.8 million. This shows what each department has been asked to trim as they build their budgets to their targets.

[00:14:00]And then the 3% reduction packages is about 14 million. So the big difference there is in the 1% uh from 1% to 3% is that exclusion for civil service pay in the 3% scenario. So departments um as of Friday submitted all of their reduction packages and then city manager's office will be evaluating those. Last year of course we took all the 1% cuts from departments and then the 3% we took some but not all of those reduction packages until we were able to balance the budget. So oh yes please.

[00:14:33]>> And I know this is an overview but I want to put on the record. Uh I think we talked about this the last time. We're asking uh city departments to do the 1% cut and they're presenting well you guys are presenting us the overview of what the cuts are.

[00:14:47]>> Yes.

[00:14:48]>> I'm interested in looking at uh what each department is cutting in their uh department if it can be through a spreadsheet uh because some of those things that may be cut it may be vital to the city of Fort Worth that we may have a discussion about. So >> I see what you pres pro provided here, but I would actually like to see line item by line item for each department.

[00:15:11]>> Okay.

[00:15:11]>> We did present a summary of that last year and so we can put together a summary again. Jay, I'm sorry. Didn't >> Yeah. So we will pre present that when we when we do the recommended budget just because it's going to change so much right now as we go through the process. But yeah, I think last year we did it we did an overall summary in a spreadsheet and we'll do the same thing this year. ultimately what was part of those cuts.

[00:15:38]>> All right. So again, 1% seven and a half. Um and then last year we took about almost $5 million in reduction packages. So I think we generated 13 million or something like that in potential and we only needed to to cut five million to balance the budget. So when Jay was saying things will change a lot throughout the year, that's an example. So, we had a a group of of reduction packages we were considering and then we got the final property tax values and then reconsidered after we were working with really solid numbers on the property tax. So, that's going to flip, you know, a few times throughout the summer.

[00:16:17]Um, so the budget gap um that we're starting with uh 49 million, the 1% reduction is 7.8, 8 the 3%'s 14 and so that leaves us um with about 27 million that we're still solving for. So the punchline here is the gap is still pretty big after asking departments to make all of those adjustments and if we took everything that they submit we still have a $27 million gap. So that's just kind of a magnitude conversation.

[00:16:50]>> Um I I'm sorry. Can we and you don't have to go back to the slide, but just in the 3% reduction packages um first I appreciate all of the um effort that's been done to see where we can reasonably um trim some fat and it gets us kind of where we need to go, but it certainly doesn't get us where we need to go. What I'm concerned about is um that we're doing this necessarily across the board for all departments instead of looking at really um maybe one department can shed 5% and another need not shed. And I bring that up specifically because I see that um that we're asking the fire department to do that. and all the discussion we've had about EMS and new vehicles and new um you know equipment bedding and things like that reasonably can we make that cut and then provide what we need to provide that for EMS >> well again part of this process is to allow the departments themselves to identify what they believe they can cut this is what the 3% gets you a third of the budget is not touched because it's civil service salaries that's why 3% only gives you it's more like 2%. Right?

[00:18:05]So it it it's less. So part of it is to allow the department heads who are closest to what's going on in on the ground what they would think would be the things in their department to that that could be reduced. At the end of the day I I can tell you not every package in that 3% would be would be part of the cut. This is just an order of magnitude for you all to see in the process that we're going through. If if numbers stay where they are, we still have to find another 27 million, right? And you'll see in Brady's pres presentation coming up where the dollars the big dollars are. And it and I mean we can say we don't want to touch certain departments and their sacred cows, but then that means, you know, 3% in one department is is maybe a whole department somewhere else. And so if we want to eliminate that service, that's something we can look at. All I'm saying is that we're too early in the in the to make for me to provide a recommendation one way or the other. I say that we we can't touch the the EMS piece.

[00:19:09]>> Yeah. I'm just I'm not first of all I think we're going to have to look at some sacred cows. Honestly, if we're in the budget, we're going to have to make >> someone's going up on the altar. Maybe it's you. I don't know. But we're going to have to make some tough decisions.

[00:19:22]And so, you know, um I get that. But that was just my one concern is because we've had those conversations about how EMS really we don't have a handle on it yet. And so I just wanted to make sure >> when EMS is in a separate is in a separate fund.

[00:19:35]>> Okay.

[00:19:36]>> And that and what we're showing is fully funding the subsidy. Okay.

[00:19:39]>> Or EMS. So EMS is not even part of the equation.

[00:19:42]>> Okay. Okay.

[00:19:43]>> Because that subsidy is not out of the fire department. It's out of non-EP departmental. Okay.

[00:19:47]>> I appreciate that. Thanks. I if I may interject right now, I hear what you're saying, Jay, and we'll hear more later to this work session, but uh we can't presume too far ahead since, you know, we have more to consider, more to listen, uh as far as any revenue generating, you know, uh matters that we can, you know, take advantage of. Again, >> that's part of what Brady will be talking about as he comes forward and a breakdown of where our revenues come from. I think the reason it's it's hard to get ahead is because Uh, you know, we just received the first round of TAD numbers last week. They'll get better at the end of this month. They'll get even better at the end of June and then the final ones are in July. And last year, what we saw those numbers changed and and basically they come in the highest they are now, and then they they work their way down because of protests and all those kind of things. But um last year what we were projecting the amount that was coming down didn't come down as far and that's why we were able to put that $5 million back into the into the budget. So as we go along we part of it that's why I said earlier about having being patient through the process because it's hard not to get ahead because you want to solve the issues but then the numbers swing so wildly that you said well we went we did a whole lot of work here and and put people's expectations at a certain place and part of us is I I don't want to get I don't want to get to the point where employees especially are overly nervous and they decide oh I I've got to go find a different job and we lose a lot of good employees through this process. So, I want to make sure that we're being transparent and communicative, but also not over uh oversell the the plight we're in as well.

[00:21:34]>> All right, with that, I'll turn it back over to Christian.

[00:21:44]All right. So, uh, as part of just the earlier engagement and the lab and the city's commitment to transparency, um, something that we're considering that we just wanted to run by you and see what you think, uh, is doing an earlier than usual round of engagement on the budget.

[00:22:00]Um, so a lot of pure cities do this.

[00:22:01]Austin, San Antonio are two that we looked at, for instance. I know Denver does, Charlotte anyway, some others. Um, but some of the feedback we get, and I'm sure you get it too, is um, when we do public engagement in August and September, people are like, "Well, you already baked the whole budget, so we're just kind of responding to, you know, a static document and or you're just kind of doing engagement as window dressing."

[00:22:20]And so we thought, well, why don't we launch, you know, just a a pretty quick survey through Connect for Worth and CPE can help us get it out there um knowing that we have a tough budget year coming just to get some general sentiment about what people's priorities are, what what services they might be willing to um you know, sacrifice or or reduce uh in order to keep those priorities high. And so we thought um just based on some benchmarking that we did of what other cities do, we could ask questions such as, you know, what city services or programs are most important? and what are less important for you to be able to keep those things and we could provide the right kinds of lists. Um, and then we also considered doing a a question on property taxes. You know, we hear a ton of different sentiments around the property tax rate and what it should be depending on the service levels. And so we thought we could ask a property tax related question. You know, would you like to keep it the same and keep services the same, that kind of thing.

[00:23:11]Um, so open to any feedback about the idea of doing the earlier survey. We would plan to keep it open maybe through the summer but perhaps present to you some of what we're getting through the data maybe mid June before the break and then that way we could you know give you some um some actual data to look back to with the recommendations. Yep. Go ahead.

[00:23:28]>> No, I think that is perfect. The sooner we get to our citizens about what they'd like to see the better. And so I agree when when we do it in August, people say it's we've already made decisions and so I am in favor of doing it now.

[00:23:45]>> Thank you.

[00:23:46]>> Shan, I'm curious. What does success look like in terms of um constituent engagement on the survey >> and this is not meant to be a slight. We struggle >> Yes, we do.

[00:23:57]>> with actually real engagement and who are reading and the number of people that are actually responding.

[00:24:02]>> I know. Yeah. I mean, I think like the best practice is like 1% engagement, which obviously is an underwhelming statistic. Um, but that's, you know, I think municipal engagement is just a challenge and Sana and her team have great ideas for how to get the word out.

[00:24:16]Um, but we certainly would like everyone to engage. We've been trying to meet people where they are through pop-ups and digital engagement and that kind of thing and we'll certainly continue those strategies. Um, but I don't know that we'd get, you know, half a million people to respond or anything, >> right? Okay.

[00:24:32]Yeah.

[00:24:33]>> Any other questions around this?

[00:24:35]>> Questions, thoughts on questions?

[00:24:39]>> I think we have to try though and so the more we get it out and we've got Sununa now to help us with communications, but I think the the early outreach is much better. And I know that participation is low. Look at what just happened in the last election. But we need to try to do a better job of getting out and then all of us have a responsibility to talk to our constituents when we're out in the community and urge them to participate.

[00:25:08]>> Thank you, mayor.

[00:25:09]>> I think maybe Jan, I'll come back to you. I I think we can maybe come get some input on what survey questions could look like and giving people real open. I know these are just examples, but open-ended like which services do you like the most or that's not really helpful. It's more like these are the these are the current budget decisions we're making. This is what a 3% cut, 1% cut, and then letting the reaction to be to that because I would suspect that most of the reductions currently proposed and we still have a $27 million gap aren't likely things that are front-facing with constituents as much other than maybe personnel they don't really see. Um, and then you might get a few answers that would surprise me, but if you're asking people, do you want to raise your taxes? I can guarantee you their answer is going to be absolutely no. So, let's just think through how we're asking those questions.

[00:25:57]>> Sure.

[00:25:57]>> We can pull together some some additional options.

[00:26:00]>> Janette.

[00:26:01]>> Oh, no. Just I was going to concur with Councilwoman Peoples that yes, the sooner the better, but um you know, just an idea of maybe including because we're going to have a lot of kiddos registering for the summer program, maybe a part of that application process.

[00:26:15]>> Oh, yeah. Thanks. Good idea. Like the creativity. Okay.

[00:26:21]Um, all right. And then this is just an early kind of skeleton draft of what we're planning to bring forth. So, we're doing your kickoff today. Um, next week we meet kind of late in the day and so we just have one topic which is the health fund. So, um, audit and finance committee members have heard a couple of presentations on the health fund. Um, Kristen Smith with HR will give some more detail on how that's permeating through the budget for fiscal year 27.

[00:26:45]May 19th will be a big one. We're going to do preliminary values then as well as more sales tax data and then talk about street maintenance which I know you're familiar with. Um we'd originally talked about doing class and comp or some related topic on June 2nd. So that will probably be an HR centric um meeting depending on what kind of data we can share at that time. And then June 16th we'll do rates and fees. So you might remember around that time last year we did water, storm water, environmental and solid waste. So some of the the resident facing fees. uh and then looking forward after the July break to Jay's recommended presentation at the beginning of August. And then of course we can do council specific or council driven work sessions from there. Um so let me know if you think anything's missing from this list, but this is certainly just kind of like a preview of where we think we're going.

[00:27:33]And is that all for me? I think so. So we'll switch topics a little bit. Um still in the budget vein, of course, but I'll ask Brady to come talk to you. He's going to talk about general fund revenues in a way that I think is a new kind of slice and dice. It's interesting. It we try to be intentional about maybe showing you the same information but from a different view knowing that it might land from different perspectives. So interested in your feedback on Brady's presentation as he talks about general fund revenue sources and sort of how how those fund our different services.

[00:28:14]All right. Well, good morning. I'm Brady Kirk and as Christian said, we what we want to give you an idea of with this presentation is when you look at our biggest priorities in the general fund and you consider that within the scope of our revenues, just how much of that funding do our largest priorities take up? So given that this is a little bit more cerebral and today's holiday, I'm going to start out with an analogy about this. Okay. So imagine that I'm making a batch of margaritas. And the way that I'm serving this is that let's say Jay and Mayor Parker just drink all the tequila. And then our first few council members just get to sip on the tequila mix. A couple people just have to eat ice. Someone gets a spoonful of salt. Maybe at the end there's a lime for somebody to bite into. That's not really how you make margaritas. And really in the same way, what you're seeing here is not literally the way that we fund our general fund departments. But hopefully, nonetheless, this will show you the magnitude of what it takes to fund some of them and and how that goes when you allocate the money.

[00:29:34]So in the general fund, we've got a few different revenue sources and it's a balanced fund when we adopt it every year. So the expenses are always going to equal the revenues. So in there we've got some revenue that the departments actually generate in the course of business. And this is mostly what you see when we bring you the fee ordinance and we change fees each new year when we adopt the budget.

[00:30:00]Then for some of our departments that provide services citywide, like the Fort Worth lab, the city secretary, the legal department, we allocate some of that cost to some of our other city funds because they're getting the benefit of those services, but those employees are not in those funds. So that's a little bit of revenue as well, but the vast majority of how the general fund is funded is just by general, usually tax related sources of revenue. And that's why it's the general fund. you have a lot of services that everybody gets to enjoy and they don't have to pay for as they use them. And that's that's really why we have property taxes and sales tax. And beyond that, there's also some other taxes, most of which are franchise fees >> appropriate for budget. Geronimo, >> right?

[00:30:58]So in this exercise, what we're basically doing is we're going to theoretically fund every single of our general fund departments with the revenues that are available. Um, and so how do we go about doing that and and seeing how much it needs? Well, most departments, like I mentioned, generate at least a little bit of their own revenue, uh, but not enough to cover the full cost of their operations. So that would be really the first source for funding that department's expenses.

[00:31:30]Then after that is applied and then there's some allocations and payo. I'll get to that. The funding is going to have to come from those general sources.

[00:31:41]Now, the public safety you're going to you're going to see and and you know very well already is the largest cost category and that that really places the priority claim on that money just because that along with roads is pretty much the top priority to our citizens. And as we look at surveys year-over-year, we usually see that play out. And it really makes sense to merge these two because if that's the largest priority, the property tax on the other hand, and that's what I mean by these two, the public safety and the property taxes, that's really the one major funding source that we have any kind of direct control over in the general fund that we set the fees, but um of those large general sources, that's the main one.

[00:32:30]And like I said at the beginning, this is really only an illustration. We don't actually give our departments property tax revenue and and sales tax revenue in their budgets to do as they see fit with.

[00:32:44]So, we're going to fund every department um along with the department revenue and payo, which is also more targeted to their specific needs. We're just going to go down the list. So, we're going to apply the general operating property tax revenue until that runs out and uh some of those departments are funded. Then we'll move over to sales tax which is the next biggest and then finally use up the other tax revenue.

[00:33:12]Starting out with only the police department which is our largest uh expense budget within the general fund.

[00:33:20]At the top of this page you can see the whole funding mix. So that big blue bar is the operating revenue. Then the next bit is the payo revenue which is still property tax revenue but smaller portion then sales tax and on down the line. So if we see how the police budget stacks up to that there is a little bit of department generated revenue within police but almost everything that we spend on general fund policing is going to have to come from that operating property taxes.

[00:33:53]Then when we go in, we add every department into this model or this table, it looks like this. And it's it's taking up a smaller amount as we go down the line because we're starting with the biggest departments first. And except for public safety, we're we're putting first. So the operating property tax revenue gets you through the police and fire department. And then there's if you show the the subsidy for the EMS system in there, there's a little bit of it that goes towards that, but then you're mostly on to sales tax, which is going to take you about twothirds of the way through. And then the rest of the departments are funded by the other tax category.

[00:34:39]So, I'm going to show you more numerically what this looks like for each of our departments. And a reminder about the portions of our property tax rate of 67 cents total only 52 and a4 cents is in the general fund. So that's the only amount we're actually allocating. The 14 and 3/4 cents for the general debt service fund is outside of the scope of this. So you're not going to see this on the next table.

[00:35:08]But of that 52 and a quarter cents, the lion share is the 45 cents for general operations.

[00:35:16]And over half of that is going to police. And really, police and fire are eating up all but about a fifth of a penny of that. So before we've actually funded all of our public safety, which includes the EMS subsidy and the general fund and also the um office of emergency management, we've used up the operating property tax revenue.

[00:35:40]Uh and property tax and public safety is still not fully covered at that point.

[00:35:44]>> Freddy, I want you to repeat that. Maybe not for us, but for others.

[00:35:49]to repeat that before we've even fully funded our public safety needs, we've already used up all of the operating property tax revenue in the general fund.

[00:36:01]>> Thank you.

[00:36:03]>> The payo on the right side, that's more targeted, more specific about certain things we're paying for. So that's not as much general revenue. So we're showing the departments that that's going towards funding.

[00:36:18]Like I said, to finish funding the public safety, then we start dipping into the sales tax.

[00:36:24]So, as a reminder, we have two cents overall of city sales tax. One full cent goes into the general fund. One half of a cent goes into our crime crime control and prevention district fund for mostly for police. And then the other half cent is really kind of external to the city because that funds Trinity Metro which is a public entity but that's an external organization.

[00:36:54]But continuing on with that about 15% of our sales tax goes towards funding the rest of that EMS subsidy and then the emergency management department within the general fund. And then you can see the departments that are funded with what is the other 85% of our general fund sales tax penny. The department that gets the most is parks. And that's not because it's larger than TPW, but TPW also has a the by far the largest amount of the PGO property tax revenue.

[00:37:29]And then there's just a little little fraction of library under this method that's not covered. So we start moving into the other tax funding that really if you talk about just the number of departments is covering the majority. So this is all the other departments we have that need some sort of general funding. So a lot of those are also allocated out to city funds but uh you have 14 total that are getting some of that other tax funding.

[00:38:00]Uh, property management is going to look a little bit funny on here because it looks like it's 100% allocated, but that also has a good degree of PEGO and sales tax funding and department generated revenue.

[00:38:17]And that pretty much brings me to the end, but these are the points I'd say to wrap this all up and leave you with. So, of all of our general fund revenue, which is over 1.1 billion now in the FY26 adopted budget, 92% of that pretty much comes from general sources and things that we don't have too much control over aside from how we set the tax rate each year.

[00:38:45]And then the public safety commitments to reiterate that again because I know it's one of the main messages and one one of the main takeaways those take up more than 100% that operations property tax revenue which is 45 cents. Um and they have the potential to exceed the general fund revenue growth rates. One of the main things that Christy mentioned as well that we're in this position that we have a gap because there's a difference between how revenue is growing and how expenses are growing.

[00:39:16]And if you look at our departments, the number of departments in the general fund, about twothirds of those are to some degree reliant on that other tax funding which has been growing at less than 1% per year.

[00:39:32]Thank you. Any questions or comments from council?

[00:39:38]Anyone?

[00:39:40]Um maybe with one comment is we continue to work through budget into the summer. The way we articulate um the restraint we have both with a property tax revenue that's coming in and then you mentioned a growth of expenses.

[00:40:00]Those growth of expenses are basic city services.

[00:40:03]And we need to make sure we're clear on that, right? If we're we are in need of revenue, it's because we need to make sure we provide police officers, firefighters, parks, litter abatement, homelessness services, all those things.

[00:40:16]Um I just don't want us to get lost in the language there that that makes the assumption that we're just spending money. Um that's that's actually not the case at all. These are basic city services for the highest quality of life. And that's why putting pen to paper for department heads is quite difficult. Um, you can always find, you know, 1% 3% here, but we still have a long way to go. So, that's just those are hard decisions we're gonna have to make as a council in in the next budget cycle.

[00:40:41]>> Something Chris? Yeah, I I was thinking about that and I think I mentioned this the last time when we talk about the tax rate or anything going up or down. I think it might be very important that we outline if we're going upwards, we're able to do X, Y, and Z, which is going to bring infrastructure to your streets or provide police officers. If we're going down, then this is what that decrease is going to look like. It may save you $100 off your tax a month, but what would it do if we did this? I think it's going to be very clear that we explain articulate uh the direction that we're trying to make a decision around this table.

[00:41:22]>> Anybody else?

[00:41:25]>> Brady, how do you think you'll communicate or Jay when you get final tax rules in July?

[00:41:31]How will council members be notified and opportunity to kind of digest that information prior to August budget sessions?

[00:41:39]>> I mean, I think we'll we'll you'll be at the point probably by the time we end in June of what we're we're projecting and then we can provide the city council final numbers and let you know that what you saw last time we either have x millions above or x millions below what we're estimating so it gives you a better idea. One of the key things and I think Councilman Nettles touched on it is at the end of the day that at this point in the process really the only lever we have as a as a city to pull that impacts revenues is the property tax either down or up. And so that's that's a key decision. It's a key decision for the recommendation from from me and my office and then also through the city council as we go forward. Um, beyond that, they're kind of set things. And as as Brady pointed out, all of those 14 departments that are funded with other tax revenues that over time we've lost when I say we, local government has lost control of those of how you set those because the state basically has changed how the rules work in the state and a lot of those. So that less than 1% growth those 14 departments if you think about it to keep up with market on traditionally we try to keep as around 4% pay increases to try to keep up with market and those kind of things but at some point those don't if you looked at it just strictly by these sources that's not going to level out right and what's helped us in the past is that our growth on the sales tax side has really come through higher than than 4% and then property tax values have also done that higher than 4%. % and so that's allowed us to to be able to be on the trajectory. I think we we've run out of that rope right now with the current economy and some of the changes with the appraisal system. So all that to say that's big picture that's kind of where we're where we're at and as we go through the process we'll we'll be whittling down um on the cost side because really other than that tax rate piece it's just the cost side is the only other thing that we have control.

[00:43:45]Any other questions or comments for Brady? Yeah, Charlie.

[00:43:49]>> So, Jay, I'm glad you brought up um you know that 4% growth that we typically see. And there's going to be really difficult conversations as we go forward too, especially as we talk about public safety. Um and how we fund things. And I know one we talked about before it's going to be incredibly important is how we're looking at our um fire department for our recruits who understand they're not part of the um negotiations but their pay still being at $39,000 and that they haven't had a raise in over 20 25 26 years and we talked about before and that's going to be a really difficult one too is how we make make that right u because I think it's really going to hurt with recruiting at some point for So, I don't I don't know if we're going to end up I'm sure we're going to have a lot of one-on- ones in the different offices and we talk and then you all take all that. I also think as far as neighborhood outreach, one of the things I would like to do, kind of shifting gears a little bit to outreach is uh bringing in some of the um very active HOAs and some of their leadership that can really help us get that word out because unfortunately sometimes they get bad information and we saw a lot of that with that this recent uh bond issues, just a lot of bad information. And when you have people in positions of leadership in their own community who are getting information, interpreting it their own way, and then passing that to people, you know, they trust those individuals more than they trust us in government. Um, and so one thing I'd like to do with us uh in District 4 is actually bring a lot of those key leaders, you know, down here sitting in the conference room and having some of the uh the big brains uh like yourself helping explain a lot of this. And really, if you break it down to where if I can understand it, then everyone can understand it. Um, and same to the mayor's point about the questions and looking at some of those, you know, certainly bounce them off me because I'm going to be the dumbest guy in the room 99% of the time. And if I can understand it, then then certainly our residents are going to understand it, too. So, >> see if I can give you a run for your money title.

[00:45:44]>> Oh, perfect. Let's go. Let's compete.

[00:45:48]>> Yeah. Anybody else? Charles, >> um maybe this is best articulated in the form of an IR. I'm wondering since um and there are a lot of moving parts to this. I mean, there's more than one thing that needs funding that has a funding gap. I understand that. Uh but taking certain items, uh could we have staff take a look at what kind of uh response volumes we have for assisted senior living centers?

[00:46:17]uh because I think maybe there might be some correlation with how they're staffed when it comes to uh taking care of the needs of our seniors, which is very important. But uh I'm curious to see that particular industry, right? What it's doing. I mean, do do they have sufficient staff there at the facilities to take care of the needs of the seniors or is that over time being gradually, you know, offloaded to, you know, our fire and EMS?

[00:46:49]>> Are you talking about like a a ratio of staff to folks?

[00:46:54]>> Yeah, exactly.

[00:46:56]>> We'd have to check with law to see if we have that authority in the state, but we can look at it.

[00:47:03]>> Thank you, Brady. Appreciate. Thank you, >> Jay. That's the last of our presentations, correct? On budget today.

[00:47:11]>> So, at this time, we can take requests for future agenda items pertaining to the budget. Anybody in particular?

[00:47:17]Talked about a few today?

[00:47:18]>> No.

[00:47:20]Okay. We're going to adjourn here and then head into executive session. Yep.

[00:47:24]I've got a piece of paper to read.

[00:47:26]just any requests or any follow-ups.

[00:47:28]We'll bring them back to the bond to the actual budget uh workshops instead of into the council so we don't mix them up with IRS.

[00:47:36]>> Okay. The city council will now convene an executive session on the following matters. The city council will conduct a closed meeting in order to seek the advice of its attorneys as authorized by section 551.071 of the Texas government code. Deliberate concerning real property matters is authorized by section 551.072 of the Texas government code. Deliberate concerning economic development negotiations as authorized by section 551.087 of the Texas Government Code and deliberate concerning security as authorized by section 551.076 and section 551.089 to the Texas government code.