>> IT IS 8:30 A.M. AUGUST 17TH 2026. I CALL TO ORDER THE BUDGET WORKSHOP NUMBER ONE MEETING TO ORDER. STARTING OFF WITH THE INVOCATION I ASK FOR DIRECTOR ADAM TO LEAD US IN PRAYER. >> ALL RIGHT I WILL LEAD US IN PRAYER TODAY HEAVENLY FATHER WE COME TO YOU IN NAME WE THANK YOU FOR THE OPPORTUNITY TO SERVE WED DISCERNMENT WE ASK YOU FOR PATIENCE. WE ASK YOU FOR PEACE WE THANK YOU FOR YOUR WORD SAYS THAT TO WHERE MUCH IS GIVEN MUCH IS REQUIRED WE TAKE THAT TO HEART. AND ASK YOU TO BE WITH US AS WE CONTINUE TO MAKE DECISIONS THROUGH THE BUDGET FOR THIS AMAZING COMMUNITY THAT WE LIVE IN AND WORK IN AND PLAY IN AND WE THANK YOU FOR EVERYBODY THAT'S HERE AND ALL THE STAFF AND EVERYONE THAT HAS DONE SO MUCH FOR THIS LONG WEEK OF CONTINUED TO KEEP THIS COMMUNITY GREAT WE THANK YOU AND WE LOVE YOU AND WE APPRECIATE YOU IN NAME AMEN. >> THE PLEDGES ALLEGIANCE PRAYER DIRECTOR FRANKS TO LEAD US. >> I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA, AND TO THE REPUBLIC FOR WHICH IT STANDS, ONE NATION UNDER GOD, INDIVISIBLE, WITH LIBERTY AND JUSTICE FOR ALL. >> THE TEXAS FLAG WE HONOR THE TEXAS FLAG I PLEDGE ALLEGIANCE TO THEE TEXAS ONE STATE UNDER GOD INDIVISIBLE. >> ALL RIGHT IT'S 8:31AMI DECLARE IN ACCORDANCE WITH STATE LAW THIS MEETING WAS POSTED 72 HOURS IN ADVANCE OF THIS MEETING. POSTING OCCURRED INSIDE THE BOUNDARIES OF THE WOODLANDS TOWNSHIP IN THIS OFFICE BUILDING. STATE LAW REQUIRES AT LEAST FOUR BOARD MEMBERS IN ATTENDANCE TO ESTABLISH A QUORUM I ASK THEM TO INDICATE YOUR PRESENCE WITH THE SOUND OF AN AUDIBLE SOUND OF ACKNOWLEDGMENT AS I CALL A ROLL FOR VICE CHAIRMAN EISLER. >> HERE. >> DIRECTOR FRANKS. DIRECTOR LAM. >> HERE. >> DIRECTOR NELSON. >> SHE IS MISSING BUT SHE IS COMING IN ROUTE SHE JUST TEXTED ME AND SHOULD BE HERE MOMENTARILY. IN 5 MINUTES. >> AN AUDIBLE SOUND RIGHT THERE. >> SECOND. >> MOVING ON RECEIVING CONSIDERATE ACT UPON ADOPTIONS MEETING AGENDA REVIEW AGENDA LOCATED ON PAGES 1-3 OF YOUR PACKET I CALL A MOTION AND A SECOND TO ADOPT THE AGENDA. >> SO MOVED. >> SECOND. >> ALL THOSE IN FAVOR RESPOND BY SAYING AYE. ALL THOSE OPPOSED MOTION CARRIES. MOVING ON TO RECOGNIZE PUBLIC OFFICIALS. WE HAVE TWO. SCOTT PRESTON STERLING RIDGE. SCOTT, WELCOME. DSC AND FIVE OTHER COMMITTEES. THANK YOU SO MUCH. FOR ALL YOU DO. WE DO HAVE ONE PUBLIC COMMENT THAT I WILL READ THE DISSERTATION HERE BEFOREHAND. PARTICIPATION IN MEMBERS OF THE PUBLIC HAS AN OPEN MEETING IN THE BOARD OF DIRECTORS IS WELCOMED AND ENCOURAGED FOR A PUBLIC COMMENT AGENDA FOR ITEMS FOR BOARD MEETING AGENDAS FOR IN ACCORDANCE WITH THE BOARD ADOPTED POLICY THE MOST EFFECTIVE AND EFFICIENT PROCESS, WE ALLOW CONSTITUENTS TO ADDRESS THE BOARD, THE WOODLANDS TOWNSHIP BOARD OF DIRECTORS EXPECTS -- AND GUIDELINES OF A PUBLIC MEETING NUMBER ONE WISHING TO ADDRESS THE BOARD FOR SIGNING THE SPEAKERS ROSTER PROVIDED BY THE BOARD SECRETARY FOR INDIVIDUALS WHO CAN MAKE A GENERAL ANNOUNCEMENTS ADDRESS TOPICS NOT INCLUDED IN THE AGENDA OR WISH TO ADDRESS SPECIFIC AGENDA ITEMS MUST DO SO IN THE PUBLIC COMMENTS AGENDA AT THE BEGINNING OF THE MEETING NUMBER THREE INDIVIDUALS LIMITED TO TOTAL 3 MINUTES REGARDLESS OF THE NUMBER OF TOPICS IF THERE ARE MORE THAN 15 SPEAKERS OF PUBLIC COMMENTS EACH SPEAKER WILL BE LIMITED TO 2 MINUTES. IN THE ORDER IN WHICH THEY SIGN UP SPEAKERS WILL NOT BE ALLOWED TO YIELD THEIR TIME TO ANOTHER SPEAKER FOR NUMBER FIVE STATE LAW PROHIBITS THAT THE BOARD FORMALLY ACTING ON SPECIFIC ITEM PUBLIC UNLESS IT APPEARS ON POSD AGENDA PACKET THEREFORE BOARD DISCUSSION ITEMS ARE NOT LIMITED TO THE POSTED AGENDA IS LIMITED QUESTIONS FOR CLARIFICATION WHETHER OR NOT THE ITEM SHOULD BE PLACED ON A BOARD AGENDA FOR MOST EXPRESS VIEWPOINTS BUT NOT PERMITTED TO PARTICIPATE IN THE DEBATE OF AN ISSUE SPEAKERS WILL NOT USE PROFANITY PER. [LAUGHTER] PTSD. COMMENT SPEAKERS MAY BE MADE TO THE BORDERS OR INDIVIDUAL DIRECTORS I WOULD LIKE YOU TO PLEASE PLACE YOUR CELL PHONES ON SILENT MODE FOR FIRST UP I CALL ON GEORGE CHRISTENSEN TO COME SPEAK. MR. CHRISTENSEN, IS THAT RIGHT? YOU CAN COME ON UP TO THE PODIUM HERE THANK YOU, SIR. AND WELCOME. SPEAKING THANK YOU MR. CHAIRMAN. IS THIS OKAY? >> YES. >> GOOD MORNING. I AM GEORGE CHRISTENSEN. I HAVE BEEN A RESIDENT OF THE AREA SINCE 1995. I THINK WE CAN ALL AGREE THAT THE PAST WAYS OF ACCESS OF THE
WOODLANDS IS ONE OF THE THINGS THAT MAKES IT A REAL PLEASURE TO LIVE HERE. AND IT IS USED BY MANY PEOPLE. TWO YEARS AGO AFTER THE HURRICANE, THE TOWNSHIP DIDN'T MAKE A CLEANUP -- WHICH WAS SORELY NEEDED AFTER THE HURRICANE. AND THE POLICE FOR THE WILD. THINGS BUILT UP. FALLEN BRANCHES AND DITCHES. AND NOW ALMOST TWO YEARS LATER, IT LOOKS HERE AND THERE. PATHWAYS AND BRANCHES, AS LONG AS THEY STAY THERE, UNFORTUNATELY, THEY ONLY NEED TO BE REMOVED ONCE. AND I WOULD LIKE TO SUGGEST THAT THE TOWNSHIP ADOPT A MAINTENANCE PROGRAM FEATURING A MONTHLY INSPECTION OF THE PATHWAYS FOR TWO PURPOSES. REMOVE DEAD BRANCHES LYING WITHIN 10 FEET OF THE PAVEMENT. NUMBER TWO, MAKE A LIST OF DEAD TREES FOR ORDERLY SCHEDULED REMOVAL. DEAD TREES, THE DEFINITION. WE HAVE DEEP FOREST AREAS BY WHICH ANYTHING CLEARLY VISIBLE FROM THE PATHWAY, CLEARLY VISIBLE. WHICH OF COURSE IS A SOFT DEFINITION. BUT THE BEST I COULD COME UP WITH. YOU WILL KNOW IT WHEN YOU SEE IT. I UNDERSTAND THAT THIS IS BEYOND THE SCOPE OF WORK THAT PARKS DEPARTMENT IS CURRENTLY BUDGETED FOR THEREFORE I WOULD APPEAL TO YOU TO APPROVE AN INCREASED BUDGET FOR THE PARKS AND RECREATION DEPARTMENT. I FIND INITIAL MAJOR CLEANUP, I THINK THE MONTHLY EXPENSE WOULD BE QUITE MODEST. ESPECIALLY WHEN CALCULATING ON A PER HOUSEHOLD BASIS. I APPEAL FOR YOUR ACTION TO PUT SOME MONEY INTO MAINTENANCE OF THE PATHWAYS. AND THANK YOU VERY MUCH FOR YOUR ATTENTION AND YOUR CONSIDERATION. >> THANK YOU MR. CHRISTENSEN. I APPRECIATE YOUR DETAILED ATTACHMENT HERE. THAT HELPS VERY, VERY WELL DONE. THANK YOU, SIR. ALL RIGHT, THAT CONCLUDES THE PUBLIC COMMENT. MOVING ON TO AGENDA ITEM 6. TAXPAYER IMPACT STATEMENT NOTICE IN COMPLIANCE WITH THE TEXAS GOVERNMENT CODE SECTION 551.043(C)(2), HB 1522. WHICH IS NEW TAXPAYER TAX STATEMENT FROM THE LAST LEGISLATIVE SESSION FOR I CALL ON SHARP TO ADDRESS THIS. WELCOME. >> GOOD MORNING. I'M GOING TO PULL UP MY POWERPOINT HERE REAL QUICK. ALREADY READY TO GO. DO I NEED TO START THE? OKAY. THANK YOU. OKAY. IN YOUR PACKAGES AND ON YOUR AGENDA, WE ARE REQUIRED NOW TO PRINT THE IMPACT STATEMENT. THAT WAS THERE. I'M GOING TO SUMMARIZE IT HERE FOR US THIS MORNING FOR THE TAX WORKSHEETS AND THE RATES ARE CALCULATED BY THE MONTGOMERY COUNTY TAX ASSESSOR'S OFFICE. WE WORK CLOSELY WITH TAMMY ON THIS. THE CURRENT TAX RATE IS 17.1 $0.04 PER $100 ASSESSED VALUE FOR THAT WAS THE RATE THAT WAS -- THAT IS THE CURRENT RATE WE ARE USING FOR THIS BUDGET CYCLE. PER THE DASH IT IS FOR THE '27 BUDGET PER BUT IT'S CALLED THE '26 TAX RATE BECAUSE IT'S BASED ON THE VALUES THAT WERE PRESENT JANUARY 1ST, 26 FOR THE NO NEW REVENUE RATE FOR THIS YEAR IS 16.54. SO 0.6 CENTS LESS THAN THE CURRENT REVENUE, THAN THE CURRENT RATE AND THE VOTER APPROVAL RATE IS HIGHER THAN OUR CURRENT RATE AT 1804. AS A REMINDER, THE NO NEW REVENUE RATE IS THAT RATE THAT GENERATES THE SAME AMOUNT OF PROPERTY TAX REVENUE WHEN CONSIDERING PROPERTIES THAT WERE ON THE TAX ROLLS WERE BOTH YEARS THE PREVIOUS YEAR AND THIS YEAR.
WHAT IT DOES NOT INCLUDE THEN ARE ANY NEW PROPERTIES ADDED TO THE ROLL. AGAIN, THE NO NEW REVENUE RATE WOULD GENERATE THE SAME AMOUNT OF PROPERTY TAX REVENUE AS THIS CURRENT YEAR BASED ON PROPERTIES ON THE ROLL FOR LAST YEAR VERSUS THIS YEAR. THE VOTER APPROVAL RATE IS THAT RATE. ANY RATE THAT THE BOARD WOULD SET ABOVE THE VOTER APPROVAL RATE WOULD REQUIRE A VOTE BY THE PUBLIC. HOWEVER, IF YOU WILL RECALL WHEN YOU SET THE BUDGET CALENDAR EARLIER THIS YEAR, YOU ALREADY TOOK THAT OFF THE TABLE BECAUSE THE DUE DATE IS TODAY TO TURN SOMETHING INTO THE SECRETARY OF STATE FOR A VOTE. THAT'S NOT SOMETHING THE BOARD EVEN WANTED TO CONSIDER. THAT'S NOT SOMETHING WE WILL TALK ABOUT MUCH OTHER THAN MY NEED TO REPORT IT TO YOU THIS MORNING PER OUR TAX RATE OR ANY TAX RATE THAT THE BOARD SETS CONSISTS OF AN M AND O RATE THAT WAS MAINTENANCE AND OPERATIONS WERE ONGOING OPERATIONS. AND A DEBT SERVICE TAX RATE WHICH PAYS THE DEBT SERVICE ON OUR GENERAL OBLIGATION BONDS/THAT IS SET AT 1 PENNY PER? TWO COMPONENTS ARE HOW WE GET TO THE TOTAL TAX RATE OF 1714 PER I WILL BE GLAD TO ANSWER ANY QUESTIONS. >> ANY QUESTIONS OR COMMENTS? I THINK THIS IS KIND OF AN ENTRY SLIDE FOR A LONG CONVERSATION HERE I FEEL LIKE WE COULD COME BACK TO THIS NUMEROUS TIMES. >> WE WILL. >> AS WE LOOK AT EVERYTHING, IT'S GOING TO COME. ANY OTHER QUESTIONS OR COMMENTS? IF NOT, WE WILL PROCEED. >> IF YOU COULD JUST ACCEPT THE REPORT, PLEASE. >> I MOVE TO ACCEPT. >> SECOND. >> LET ME GET BACK TO MY SCRIPT GUYS. ALL RIGHT. I MOVE TO ACCEPT THE TAXPAYER IMPACT STATEMENT NOTICE AND COMPLIANCE OF TEXAS GOVERNMENT CODE SECTION 551.043(C)(2), HB 1522. DO I HAVE A MOTION? >> MOVED. >> SECONDED. >> SECONDED BY VICE CHAIRMAN. ALL THOSE RESPOND BY SAYING AYE ONTO AGENDA SEVEN FOR RECEIVE AND CONSIDER THE 2026 NO NEW REVENUE TAX RATE AND VOTER APPROVAL TAX RATE. REFER TO PAGES 4-17 OF YOUR PACKET. I CALL ON MONIQUE SHARP TO PRESENT. >> WE JUST COMBINED THOSE TWO AGENDA ITEMS IF YOU COULD JUST TAKE THE SEPARATE MOTION AS RECORDED THERE. WE'VE COVERED BOTH. >> I CALL THE MOTION AND SECOND TO RECEIVE AND ACCEPT THE 2026 TAX RATE WORKSHEET PREPARED BY THE MONTGOMERY COUNTY TAX ASSESSOR'S OFFICE. MOVED BY DIRECTOR FRANKS. ALL THOSE IN FAVOR RESPOND BY SAYING AYE ACT UPON THE 2027 PRELIMINARY BUDGET FOR THE WOODLANDS TOWNSHIP LOCATED ON PAGE 18 ON YOUR PACKET. WELCOME BACK, MONIQUE. >> THANK YOU. I WANT TO START OFF THIS MORNING FIRST OF ALL WELCOMING EVERYBODY. OUR BOARD OF DIRECTORS AND EVERYONE IN OUR AUDIENCE. THIS IS THE FIRST BUDGET WORKSHOP WE HAVE FOR THIS WEEK. WE HAVE FIVE SCHEDULED TOTAL. DON'T KNOW THAT WE WILL NEED ALL FIVE. IT JUST DEPENDS HOW WE PROGRESS THROUGHOUT THE WEEK. BUT WHAT IS SCHEDULED RIGHT NOW IS 8:30 TILL NOON EVERY MORNING THIS WEEK. AND WE ARE GOING TO START TODAY WITH A PRELIMINARY BUDGET. WHICH WE CALL A BASE BUDGET AND I WILL DISCUSS WHAT THAT IS. THE THING THAT I GUESS I WANT TO HIGHLIGHT HERE IS I AM GOING TO GO THROUGH A PRESENTATION. Y'ALL GOT A BIG THICK COPY I REALLY DON'T WANT THIS TO BE A PRESENTATION I DON'T WANT TO GO THROUGH ALL 100 AND HOW MANY PAGES THERE ARE WITHOUT QUESTIONS. THIS IS REALLY JUST TO GUIDE US THROUGH THE BUDGET PROCESS. IT'S TO GUIDE US THROUGH THE BOOK. WE MAY END UP REFERRING TO THE BOOK DEPENDING ON WHAT LEVEL OF DETAIL THE QUESTIONS BECOME. SO PLEASE WHAT I'M SAYING IS TO PLEASE STOP ME AS WE GO ALONG IF YOU HAVE ANY QUESTIONS. THIS ISN'T MEANT TO BE A PRESENTATION THEN OPEN IT UP TO THE BOARD FOR QUESTIONS. THIS IS MEANT TO WALK US THROUGH THE BUDGET PROCESS. DOES THAT MAKE SENSE? OKAY. SO I'M GOING TO START OFF WITH AS CHAIRMAN BAILEY JUST SAID, WE WILL REFER BACK TO THE NO NEW REVENUE RATE AND THE CURRENT TAX RATE OFTEN THROUGHOUT THIS WEEK. BECAUSE THE GOAL AT THE END OF THE BUDGET SESSIONS IS FOR THE BOARD TO ADOPT A PROPOSED TAX RATE IT'S NOT YOUR OFFICIAL ADOPTION OF A RATE. BUT WHAT YOU'RE GOING TO DO AT THE END OF THIS WEEK IS YOU ARE GOING TO ADOPT A PROPOSED TAX RATE -- WHICH IS GOING TO CONSIST OF THE M&O RATE AND A DEBT SERVICE RATE PICK THE REASON THAT IS NECESSARY IS BECAUSE IF THAT RATE THAT YOU VE ON IS HIGHER THAN THE NO NEW REVENUE RATE, THEN IT REQUIRES A PUBLIC HEARING AND A NOTICE. SO WE NEED TO KNOW WHAT THAT IS SO THAT WE CAN GO THROUGH THE PROCESS. IT IS THE SAME PROCESS WE HAVE FOLLOWED FOR YEARS. JUST LAST YEAR FOR INSTANCE, IT
WAS NOT AT THE NO NEW REVENUE RATE. SO WE HAD THE NOTICE, AND WE HAD THE PUBLIC HEARING. BUT THAT IS THE PURPOSE. YOU CAN ALWAYS WHEN YOU GET TO YOUR FINAL VOTE, YOU CANNOT INCREASE THE RATE THAT YOU DID ON YOUR PROPOSED, BUT YOU CAN LOWER IT IF YOU WANT TO. THAT IS THE PURPOSE HERE OF THE BUDGET WORKSHOPS. AS WE CONSIDER AS WE GO THROUGH THIS WEEK, I WANTED EVERYONE TO KEEP THIS IN MIND IN TERMS OF WHAT WE ARE LOOKING AT IN TERMS OF IMPACT. IF WE GO FROM THE PRELIMINARY BUDGET RATE OF 17.14 MEANING THE MATERIALS THAT WE ARE GOING TO LOOK AT IN YOUR BUDGET BINDERS THAT WE ARE GOING TO GO THROUGH IN THIS POWERPOINT SLIDE WHERE BASED ON MAINTAINING THE CURRENT RATE AT 17.14. IF THE BOARD CHOOSES TO LOWER THE TAX RATE, HERE ARE SOME OPTIONS AND WHAT THE IMPACT WOULD BE. AGAIN, WE'VE GOT A WHOLE WEEK BEFORE WE HAVE TO DECIDE ON THIS. I WANT YOU ALL TO KEEP THIS IN MIND FOR WHAT WE DID IS WE DROPPED THIS IN 0.002 INCREMENTS PER 0.002 OF A PENNY IF WE DROPPED TO 16.94, THE IMPACT OF THE TOWNSHIP WOULD BE $625,000 PER THE IMPACT TO A PROPERTY OWNER ON A $500,000 HOME WOULD BE $10 PER YEAR OR $0.83 A MONTH. IF WE DROPPED THE RATE TO 16.74, THE IMPACT TO THE TOWNSHIP WOULD BE $1.25 MILLION PER THE IMPACT TO AN OWNER OF A $500,000 HOME WOULD BE $20 A YEAR OR $1.67 A MONTH IF WE WENT THROUGH THE NO NEW REVENUE RANGE, THE IMPACT TO THE TOWNSHIP WOULD BE 1.879. THE IMPACT TO A HOME OWNER PROPERTY OWNER FOR A $500,000 HOME WOULD BE $30 A YEAR OR $2.50 A MONTH. AGAIN, THERE CAN BE OTHER OPTIONS THAN THE ONES THAT I HAVE LISTED HERE. JUST TO GIVE YOU AN IDEA OF THE IMPACTS BOTH TO THE TOWNSHIP AND TO A PROPERTY OWNER, I WANTED TO GO AHEAD AND LIST THESE SO THAT YOU COULD THINK ABOUT THESE AS WE GO THROUGH THE BUDGET. >> AM I CORRECT IN SAYING, THE NUMBERS YOU HAVE THERE IN THE 2027 REVENUE IMPACT TO THE TOWNSHIP, IF SOMEONE IS PLANNING THE NO NEW REVENUE RATE, THEY HAVE TO LOOK FOR $1.879 MILLION TO CUT FROM THEIR PROPOSED BUDGET QUESTION MARKS B WHEN WE DO WE HAVE ABOUT $300,000 RIGHT NOW IN A FAVORABLE VARIANCE. I DON'T RECOMMEND TAKING THAT NUMBER DOWN TO ZERO. TO YOUR POINT, YES, WE WOULD BE LOOKING FOR ABOUT $1.8 MILLION. >> IMPORTANT FOR EVERYONE TO KNOW. >> OKAY, WHAT WE ARE GOING TO DO TODAY IS REVIEW AND DISCUSS THE 27 PRELIMINARY BUDGET. WE WILL HAVE AN OVERVIEW. WE ARE GOING TO TALK ABOUT RESERVES AND FUND BALANCES, OUR DEBT PROFILE WE'RE GOING TO LOOK AT REVENUE SOURCES, PERSONNEL, OPERATING EXPENDITURES PER VISIT THE WOODLANDS AND TRANSPORTATION HAVE THEIR OWN FUNDS SO WE WILL TAKE A LOOK AT THOSE, BECAUSE TE ROLL UP INTO THE CONSOLIDATED BUDGET. AND WE WILL LOOK AT CAPITAL PROJECTS. SO A LOT TO COVER TODAY. HOPEFULLY WE WILL GET THROUGH IT. IF NOT WE CAN CERTAINLY CONTINUE THE CONVERSATION TOMORROW. AS I JUST LISTED HERE. AFTER WE FINISHED THE REVIEW OF THE PRELIMINARY BUDGET, THAT WILL BE THE TIME TO REVIEW AND DISCUSS BUDGET INITIATIVES -- WHICH ARE ITEMS THAT ARE NOT CONSIDERED IN THE BASE BUDGET. THEY ARE NOT CONSIDERED A CONTINUATION OF SERVICES. THEY ARE CONSIDERED ENHANCED LEVEL OF SERVICES. THAT IS WHY WE CONSIDER THOSE DIFFERENT. THE BOARD WILL THEN VOTE ON ANY PROPOSED BUDGET ADJUSTMENTS, ADJUSTMENTS YOU WANT TO MAKE TO THE PRELIMINARY BUDGET. AS I JUST DISCUSSED, YOU WILL TAKE A RECORDED VOTE ON THE PROPOSED 2026 TAX RATE. AND IF THAT RATE IS HIGHER THAN THE NO NEW REVENUE RATE, YOU WILL TAKE A VOTE TO CONFIRM THE DATE AND TIME FOR A PUBLIC HEARING. OKAY, THE PRELIMINARY BASE BUDGET, EXISTING SERVICE LEVELS. IT MEETS ALL OF OUR CONTRACTUAL AND STATUTORY OBLIGATIONS. IT ACCOMMODATES COMMUNITY GROWTH AND ACCOUNTS FOR CHANGE IN ECONOMIC FACTORS. MEANING IF WE HAVE CONTRACTS THAT ARE TIED TO A CPI, THEN WE HAVE FACTORED THAT CPI IN THERE. IT IS BASED AS I SAID ON THE CURRENT PROPERTY TAX RATE OF 17.14 AND DOES NOT INCLUDE BUDGET INITIATIVES. THIS IS WHAT WE ARE LOOKING AT TODAY. I ALSO WANT TO START OFF WITH A GENERAL OVERVIEW OF WHAT OUR CURRENT FINANCIAL ASSESSMENT IS PURE THE WOODLANDS I BELIEVE CONTINUES TO EFFECTIVELY MANAGE ITS LONG TERM DEBT PLANS. AND I SAY THIS, BECAUSE WE ARE MAINTAINING A AA+ BOND RATING FROM STANDARD AND POOR'S. WE ARE NOT ELIGIBLE FOR A TRIPLE A RATING. THIS IS THE HIGHEST THAT WE CAN GET. THAT IS BECAUSE WE HAVE OVERLAPPING DEBT FROM THE COUNTY AND THE SCHOOL DISTRICTS PRIMARILY -- WHICH PREVENTS US FROM BEING ABLE TO GET TO A TRIPLE A. WE MAINTAIN A DOUBLE A ONE BOND RATING. ALSO WE HAVE BEEN TALKING ABOUT THIS FOR YEARS, BUT THE DETENTION CENTER BONDS ARE FINALLY FULLY PAID OFF IN 2027. WHICH IS GOING TO FREE UP ABOUT
$2.8 MILLION IN REVENUE PER. >> ON THE TRIPLE A RATING, IS THAT BECAUSE OF ENABLING LEGISLATION OR IS IT -- >> IT'S A FUNCTION OF OTHER CREDIT AGENCIES DO THEIR CALCULATE THEIR RATINGS. AND AGAIN, PART OF WHAT OUR RATING IS BASED ON IS OVERLAPPING DEBT FROM THE COUNTY AND THE SCHOOL DISTRICTS. >> THAT DOESN'T SEEM RIGHT. THAT SEEMS LIKE THOSE ARE TWO DIFFERENT GOVERNMENTAL ENTITIES THAT ARE MAKING DECISIONS. >> I UNDERSTAND. THEY LOOK BROADER THAN THE TOWNSHIP. THEY LOOK AT GEOPOLITICAL. THERE'S ALL KINDS OF THINGS THAT GO INTO THE RATINGS. >> CAN YOU MARK THAT DOWN AS SOMETHING THAT NEEDS TO BE EXPLORED? IF THAT'S THE CASE FOR EVERYBODY IN TEXAS, THAT DOESN'T SEEM RIGHT. >> OKAY. >> THANK YOU. >> ANOTHER QUESTION. WHEN ARE THE CONVENTION CENTER BONDS FULLY PAID OFF IN 2027? IS THAT DECEMBER? >> WE HAVE PAYMENTS IN MARCH AND SEPTEMBER SO SEPTEMBER. SOME OF THE RECENT CREDIT AGENCY COMMENTS REGARDING THE TOWNSHIP, THEY DO TALK ABOUT US HAVING A HISTORY, A STRONG FISCAL MANAGEMENT WITH MAINTENANCE OF HEALTHY FUND BALANCES AND LIQUIDITY FOR OUR CREDIT STRENGTHS INCLUDE A LARGE AND DIVERSE TAX BASE AND STABLE FINANCIAL OPERATIONS WITH SOUND RESERVES AND LOW DEBT RETENTION BURDENS. WE ACTUALLY DON'T HAVE A PENSION BURDEN. WE ARE UNIQUE IN THAT COMPARED TO MANY LOCAL GOVERNMENTS. BUT WE BENEFIT FROM CONSERVATIVE BUDGETING AND CAREFUL EXPENSE MANAGEMENT THAT HAS CONTRIBUTED TO STABLE FINANCIAL RESERVES. SO YOU SEE THEY KEEP TALKING ABOUT OUR FUND BALANCES AND RESERVES WHICH WE ARE GOING TO SPEND SOME TIME TALKING ABOUT. THAT IS VERY IMPORTANT TO MAINTAINING OUR CREDIT RATING. WE DO CONTINUE TO BE IN A POSITION OF FINANCIAL STRENGTH, AND WE WILL SEE THIS IN THE 2027 BUDGET WHICH PROVIDES RESOURCES TO MAINTAIN HIGH LEVELS OF SERVICES AND AMENITIES THAT ARE DESIRED BY OUR RESIDENTS. BENEFITS FROM STRONG AND DIVERSE REVENUE SOURCES, PROVIDES BUDGET FLEXIBILITY, MAINTAINS POSITIVE CASH FLOW AND RESERVE BALANCES THAT ARE EVALUATED FAVORABLY BY THE CREDIT RATING AGENCIES. WE ARE NOT BECAUSE OF THE TYPES OF BENEFIT PLANS THIS BOARD AND PREVIOUS BOARDS HAVE ADOPTED, WE ARE NOT BURDENED WITH UNFUNDED PENSION COSTS OR LARGE VACATION AND SICK LEAVE BALANCES. AND OUR BUDGET WILL REFLECT LOW AND DECREASING DEBT BALANCES. AGAIN, WE WILL COVER ALL OF THESE AS WE GO THROUGH TODAY. I DO WANT TO TALK ABOUT FIRST OF ALL AND BRAG ON OUR FINANCE STAFF. I ALSO WANT TO TALK ABOUT THE BUDGET AND HOW WE PREPARE IT. I GET COMMENTS SOMETIMES ABOUT, WHY DIDN'T YOU SHOW IT THIS WAY AS OPPOSED TO THIS WAY? THE REASON IS BECAUSE WE FOLLOW CERTAIN STANDARDS THAT ARE ESTABLISHED BY THE GOVERNMENT FINANCE OFFICERS ASSOCIATION FOR NOT ONLY TO RECEIVE THIS AWARD BUT ALSO IT'S CONSIDERED BEST PRACTICES JUST IN LOCAL GOVERNMENTS. SO YOU CAN SEE WE DID RECEIVE THE DISTINGUISHED BUDGET PRESENTATION AWARD FOR OUR LAST BUDGET I BELIEVE THIS BUDGET DOCUMENT BEFORE YOU WILL QUALIFY FOR US TO RECEIVE IT AGAIN. WE ALSO HAVE TO FOLLOW OUR GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. THIS AWARD WHICH WE ALSO RECEIVED FOR ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING RECOGNIZES GOVERNMENTS THAT GO BEYOND THE MINIMUM REQUIREMENTS OF GAAP. AND ALSO THAT SUCCEED IN PREPARING REPORTS THAT EVIDENCE THE SPIRIT OF FULL DISCLOSURE AND TRANSPARENCY. SO I WOULD ARGUE THAT OUR BUDGET PROCESS IS ONE OF THE MOST TRANSPARENT AROUND. EVERY DETAIL THAT YOU WOULD WANT TO SEE IS EITHER GOING TO BE PRESENTED IN THESE MEETINGS OR IS POSTED ONLINE IN OUR BUDGET DOCUMENT. OKAY, WITH THAT, WE WILL GET TO THE ACTUAL BUDGET NUMBERS. WHAT WE ARE GOING TO DO OVER THIS WEEK, IS WE ARE GOING TO TALK ABOUT BALANCING BUDGET PRIORITIES. AS MUCH AS WE WOULD ALL I THINK WOULD LIKE TO DO EVERYTHING, THERE IS JUST SIMPLY NOT ENOUGH RESOURCES TO GO AROUND. WE HAVE TO PRIORITIZE WHAT OUR PRIORITIES DO. I DID THAT IN THE PREPARATION OF THIS BUDGET DOCUMENT. AND THEN THE BOARD WILL DO THAT THIS WEEK BEFORE YOU SET A PROPOSED RATE AND ULTIMATELY ADOPT THAT BUDGET. WE WILL BE TALKING ABOUT REVENUE SOURCES OTHER THAN PROPERTY TAX REVENUE FOR INSTANCE SALES TAX AND HOTEL TAX, WE WILL BE TALKING ABOUT OUR SERVICES AND AMENITIES. THAT'S OUR OPERATING EXPENDITURES AND CAPITAL. WE WILL BE TALKING ABOUT OUR VARIOUS RESERVES AND FUND BALANCES. TALKING ABOUT OUR DEBT. AND WHAT CENTERS ALL OF THAT WITH ALL OF THOSE TAKEN INTO ACCOUNT, ULTIMATELY, WE END UP WITH A PROPERTY TAX RATE THAT WE NEED TO GENERATE THE REVENUE TO BALANCE THE BUDGET. SO HERE WE ARE.
REVENUES FOR 2027 TOTAL $184.6 MILLION. THAT IS A 17 MILLION OR 18.4% DECREASE FROM THE 2026 BUDGET. THE REASONS FOR THAT DECREASE ARE BECAUSE OF GRANTS. WE RECEIVED A LOT OF GRANTS IN 2026 SPECIFICALLY FOR TRANSPORTATION CAPITAL PROJECTS THOSE PROJECTS HAVE BEEN COMPLETED OR NEAR COMPLETION IN FACT THAT REVENUE IS NOT REFLECTED IN 2027. WE WILL GO IN MORE DETAIL ON THE REVENUE WITH WHAT HAS INCREASED BECAUSE THAT'S THE REASON FOR THE OVERALL DECREASE IS BECAUSE IT GRANTS SIMILARLY EXPENSES FOR A TOTAL OF $189.7 MILLION -- WHICH IS A 46.4 MILLION OR 19.6 DECREASE FROM THE '26 BUDGET BUT YOU CAN SEE THE LAST LINE ITEMS DOWN THERE FOR ITS RELATED TO TRANSPORTATION AND REGULAR CAPITAL TO THE EXTENT THOSE WERE COMPLETED IN '26, NOT REPEATED IN '27. THAT IS WHY YOU ARE SEEING THE BIG DECREASE THERE. I WILL JUST GIVE THIS AS AN OVERVIEW. WE WILL TALK ABOUT THESE INDEPENDENT COMPONENTS SEPARATELY ON SEPARATE SLIDES. OKAY, SO WE HAVE 184 -- I. WANT TO GO BACK TO THE PREVIOUS SLIDE. I GET THIS SOMETIMES. SOME PEOPLE SAY YOU BUDGETED $184 MILLION IN REVENUES BUT $189 IN EXPENSES SO YOU ARE ALREADY OUT OF BALANCE. WHAT YOU HAVE TO REMEMBER IS THIS DIFFERENCE IS FUNDED BY SOME OF OUR RESERVES. PRIMARILY OUR CAPITAL REPLACEMENT RESERVES PROGRAM CAPITAL EXPENDITURES IN HERE THAT WILL BE FUNDED BY THE RESERVES -- WHICH IS NOT CONSIDERED AN ONGOING REVENUE AND THEREFORE IS NOT LISTED IN THE REVENUE NUMBER AT THE TOP. SO IN TOTAL WE HAVE $184 MILLION IN OPERATING REVENUE. AND HOW THAT IS BEING DISTRIBUTED AND ALLOCATED AMONGST OUR VARIOUS REQUIREMENTS IS OPERATING EXPENSES PER USES $168 MILLION PER YEAR CONTRIBUTIONS TO OUR RESERVES IS $7.6 MILLION. THAT IS PRIMARILY CONTRIBUTIONS TO OUR CAPITAL REPLACEMENT RESERVES. WE HAVE ABOUT $3.5 MILLION IN HOTEL TAX THAT WE GENERATE EACH YEAR. THAT IS ALSO INCLUDED IN THAT NUMBER. THOSE ARE THE TWO PRIMARY COMPONENTS OF THAT. WE PAY DEBT SERVICE AT $5.9 MILLION. WE HAVE CAPITAL EXPENDITURES OF 1.9 THAT ARE FUNDED THROUGH GENERAL FUND TAX REVENUES. ANY QUESTIONS BEFORE I GO ON? >> UNDESIGNATED 361. WHAT WAS IT LAST YEAR? >> LAST YEAR WAS 170 WAS WHERE WE ENDED UP. >> AND THAT NUMBER, MONIQUE -- IT'S NOT AN ARBITRARY NUMBER. WE ARE MAKING UP FROM THE RESERVES. OBVIOUSLY THE CAPITAL REPLACEMENT RESERVE. WE SAW IT WAS GOING TO BE DEPLETED I'M SURE WE WILL TALK ABOUT THAT. >> WE WILL. >> THE BALANCE OF THE SOURCES OF FUNDING COMING FROM THE RESERVES TO GET TO THE UNDESIGNATED. >> IT ALL CONTRIBUTES. BUT THAT AMOUNT REPRESENTS IS THE AMOUNT THAT IS LEFT OVER AFTER WE HAVE ACCOUNTED FOR EVERYTHING ELSE. SO WE HAVE OUR OPERATING REVENUES LOADED INTO THE BUDGET. WE HAVE OUR EXPENSES, CAPITAL ALLOCATIONS TO THE RESERVES THAT YOU JUST MENTIONED. AFTER ALL OF THAT WE ENDED UP WITH AN UNDESIGNATED FUND BALANCE. AND THEN HERE AGAIN IS WHAT WE LOOK AT. IN 2026, WHAT WE HAVE ENDED UP WITH IS ABOUT $3.3 MILLION IN OUR UNDESIGNATED PURCHASES. SO THIS WAS GENERATED, BECAUSE WE HAD HIGHER REVENUES THAN WE BUDGETED. HAD LOWER EXPENSES THAN WE BUDGETED. THOSE FAVORABLE VARIANCES COMBINED TO GIVE US $3.3 MILLION IN A '26 FUND BALANCE WHICH CAN BE USED FOR ONE TIME PURCHASES BECAUSE THEY'RE LIKE SAVINGS. YOU CAN'T USE THEM TO FUND ONGOING EXPERIENCES BECAUSE WE HAVE A REQUIREMENT THAT ONLY ONGOING BALANCES CAN FUND ONGOING EXPENDITURES IN 2027 CALCULATORS THE 361 AGAIN. THAT IS WHAT IS THERE RIGHT NOW. AS WE MAKE DECISIONS, AS THE BOARD MAKES DECISIONS, THIS WEEK THAT NUMBER MAY GO UP OR IT MAY GO DOWN. THAT NUMBER NEEDS TO STAY POSITIVE IN ORDER TO HAVE A BALANCED BUDGET. >> WITHIN THE BUDGET, THE 3.3, THERE IS ABOUT 2.9 IN ONE TIME PURCHASES, RIGHT? AND CAPITAL EXPENDITURES FOR THE '27 BUDGET TO GET TO THE 3611?
>> THERE ARE. WE HAVE ABOUT 1.9 IN EXPENDITURES THAT ARE BEING FUNDED OUT OF THE GENERAL FUND. SO IF WE EITHER DID NOT INCUR THOSE CAPITAL EXPENDITURES OR FUNDED THEM THROUGH THE CAPITAL REPLACEMENT RESERVE, THAT WOULD GIVE US ADDITIONAL MONIES. >> CORRECT OKAY. >> ANY QUESTIONS ON THAT? THE 361 NUMBER IS THE NUMBER WE ARE GOING TO CONTINUE TO MONITOR THROUGHOUT THE WEEK BECAUSE THAT'S WHAT WE'VE GOT TO FIGURE OUT. >> LAST YEAR, WE HAD UNDESIGNATED FUND BALANCE OF $2.355 MILLION. IN AN UNDESIGNATED FUND BALANCE FOR ONGOING EXPENSES FOR $655,000. >> AFTER THE BUDGET INITIATIVES WERE APPROVED BY THE BOARD WE ENDED UP WITH ABOUT 177. YES, SIR. >> THOSE ADJUSTMENTS THAT YOU ARE TALKING ABOUT, THEY ARE GOING TO GO UP AND DOWN. THAT'S GOING TO BE DIFFERENT THAN AN OPERATING EXPENSES THAT IMPACT THE CURRENT RATE OF NO NEW REVENUE RATE. >> THAT WILL BE PART OF IT. IF THE BOARD CHOSE TO REDUCE OPERATING EXPENSES IN A SERVICE LINE ITEM, THEN IT WILL MAKE THAT NUMBER GO UP. >> OKAY. >> ANY OTHER QUESTIONS? OKAY. WITH THAT, I'M GOING TO MOVE ON TO THE TOWNSHIP'S CURRENT BALANCES OR PROJECTED BALANCES IN RESERVES AND FUND BALANCES. SO HERE IS A SNAPSHOT OF WHERE WE ARE CURRENTLY OUR OPERATING RESERVE IS OUR LARGEST FOR OUR L REPLACEMENT RESERVE IS NEXT AT 24.7. OUR HOTEL OCCUPANCY AT 14.8. I'M NOT GOING TO READ THROUGH THE REST OF THESE BECAUSE WE HAVE SEPARATE PAGES FOR THOSE. BUT THEN YOU CAN SEE AGAIN THOSE TWO NUMBERS THAT WE JUST TALKED ABOUT FOR '27 AND '26 UNDESIGNATED ARE LISTED AT THE BOTTOM AND TOTAL, WE HAVE TOTAL RESERVES AND FUND BALANCES OF $93 MILLION. >> WOULD YOU GO BACK TO THAT SLIDE, PLEASE? THANK YOU GOOD MORNING, MONIQUE. ON THIS CULTURAL EDUCATION RESERVE OF $1.8 MILLION, IS THAT EXCLUSIVELY THE 10% THAT THE TOWNSHIP RETAINS FROM THE EVENT OR THE TICKET TAX? AND THE OTHER 90% GOES TO THE MITCHELL PAVILION? >> THAT IS CORRECT, YES, MA'AM. >> IF THAT WERE TO BE ENDED IN THE FUTURE THAT YOU COULD EXPECT THAT FUND TO BE 90% LARGER THAN IT IS TODAY. AM I RIGHT ABOUT THAT? >> IF WE CONTINUE WITH THE TAX AND 100% IS ALLOCATED TO THE TOWNSHIP, THEN YES, MA'AM. >> ARE THERE RESTRICTIONS ON THAT RESERVE? >> THERE ARE BY STATE LAW FOR THEY ARE RESTRICTED TO BE USED FOR CULTURAL EDUCATION, AND PROGRAMS. >> WOULD THAT BE AVAILABLE TO THE CONSTRUCTION OF A NEW PERFORMING ARTS CENTER? PROBABLY. >> WE WOULD HAVE TO LOOK. WE WOULD HAVE TO. >> I BELIEVE THAT IF THERE WAS A NEW PERFORMING ARTS CENTER, THEY WOULD ALSO BE LOOKED AT BEING INCLUDED IN THE TICKET TAX. IF YOU ARE SELLING SHOWS IN THE PERFORMING ARTS CENTER YOU'RE GETTING MORE TICKET TAX. >> I'M ASKING YOU ABOUT USAGE. THE USAGE OF THE FUNDS HERE CAN YOU USE THEM FOR CAPITAL PROJECTS THAT ARE CULTURALLY RELEVANT OR CULTURALLY EDUCATIONAL? >> I WOULD HAVE TO GO BACK AND LOOK AT THE SPECIFIC LANGUAGE AND CONFIRM WITH LEGAL COUNSEL. I BELIEVE YOU PROBABLY COULD, BUT I DON'T KNOW THAT FOR SURE. I DON'T WANT TO SAY IT FOR SURE. >> I BELIEVE YOU CAN. >> THAT IS SOMETHING TO THINK ABOUT. THANK YOU. >> THESE ARE THE THREE RESERVES OUT OF THOSE OTHER LISTED THAT HAVE A SIGNIFICANT IMPACT ON OUR CREDIT AGENCY RATING. SO IF WE WERE TO CHANGE THE RESERVE BALANCES OR OUR POLICY REGARDING THESE RESERVES, IT WOULD LIKELY HAVE AN IMPACT ON OUR CREDIT RATING, A NEGATIVE IMPACT. WE MAINTAIN AN OPERATING RESERVE BALANCE THAT IS EQUAL TO 25% OF GENERAL FUND OPERATING EXPENSES. THE PURPOSE OF AN OPERATING RESERVE IS IF WE HAVE AN UNEXPECTED DECLINE IN REVENUE BECAUSE OF UNFAVORABLE ECONOMIC CONDITIONS FOR HEAVEN FORBID A TORNADO OR HURRICANE TAKE OUT TOWN CENTER ONE OF OUR MAJOR REVENUE SOURCES UNTIL THINGS COULD BE REBUILT OR UNTIL WE GOT INSURANCE PROCEEDS, THIS WOULD COVER ABOUT THREE MONTHS OF OPERATIONS. AGAIN, THIS WITH A 25% IS TIED TO. THE CAPITAL REPLACEMENT RESERVE IS A FUNDING SOURCE. WE'VE TALKED ABOUT THIS MANY TIMES FOR THE ANNUAL REPLACEMENT OF OUR MAJOR REPLACEMENT OR REPAIR OF OUR CAPITAL ASSETS. WE HAVE OVER $300 MILLION IN ASSETS IN TOTAL.
WHAT THIS HELPS US DO IS BE ABLE TO MAINTAIN THEM ON A SCHEDULED BASIS. IT ALSO LIKE MOST LOCAL GOVERNMENTS WHO WHEN THEY NEED TO REPLACE ■ROOFS ONPAVILIONS OR BUILDINGS OR HVAC UNITS OR PLAYGROUND EQUIPMENT IN FACT THEY HAVE TO GO OUT TO BOND. WE SEE THAT ALL THE TIME. WE DO NOT BECAUSE WE HAVE THIS RESERVE. IT SAVES OUR RESIDENTS MILLIONS OF DOLLARS IN INTEREST EXPENSE BY BEING ABLE. WE INVEST THIS AND WE EARN INTEREST ON IT AS OPPOSED TO ISSUING BONDS AND INCURRING INTEREST EXPENSE. FINALLY, OUR DEBT SERVICE RESERVE IS WHAT WE NEED TO PAY OUR DEBT SERVICE. THAT IS A REQUIREMENT OF OUR BOND COVENANTS. HERE IS A LOOK AT OUR OPERATING RESERVE. AGAIN AS I MENTIONED, MAINTAINED AT 25%. CURRENTLY IT IS AT $35.1 MILLION AS EXPENSES INCREASE IN THE FUTURE. THIS IS JUST BASED ON THE ASSUMPTIONS IN THE 5-YEAR PLAN. IT DOESN'T NECESSARILY MEAN THAT IS WHAT THE BUDGET WILL ACTUALLY BE. IT JUST SHOWS US THAT WE HAVE TO KEEP PEGGING OUR OPERATING RESERVE BALANCE TO OUR GENERAL FUND. HERE IS OUR CAPITAL REPLACEMENT RESERVE. WE CURRENTLY HAVE A BALANCE OF $24.7 MILLION. IN ACCORDANCE WITH THE RESERVE STUDY THAT WAS DONE BACK IN 2012, WE KNEW THIS WAS A TIME PERIOD WHERE WE WOULD BE HAVING SIGNIFICANT -- WHERE WE WOULD BE TAKING MORE OUT OF THE RESERVE THAN OUR ANNUAL CONTRIBUTION. SO WE ARE DRIVING THIS RESERVE BALANCE DOWN. YOU CAN SEE IN 2031, IT HAS A RESERVE BALANCE OF $13 MILLION BECAUSE THE RESERVE CITY RECOMMENDED BALANCE IS 14.9. WE'RE ABOUT $2 MILLION SHORT. THE REASON I'M NOT WORRIED ABOUT THIS IS BECAUSE ACCORDING TO YOUR POLICY, EVEN THOUGH THE RESERVE STUDY SAYS THAT WE ARE TO ALLOCATE IN ORDER TO MAINTAIN, TO GET TO THAT BALANCE THAT WE WOULD FUND WITH TAX DOLLARS $5,000,000.250 A YEAR PER WHAT WE WERE ACTUALLY DOING IS 4,000,250 A YEAR. THE BOARD POLICY IS THE FIRST MILLION DOLLARS OF FAVORABLE VARIANCES THAT WE HAVE EACH YEAR OF SAVINGS THAT WE HAVE EACH YEAR IS USED TO SHORE UP THE CAPITAL RESERVE. SO EACH ONE OF THESE YEARS FOR FIVE YEARS IS SHORT $1 MILLION. BUT WE KNOW WE ARE GOING TO TAKE UNLESS THE BOARD CHANGES THE POLICY, WE ARE GOING TO TAKE A MILLION DOLLARS OF SAVINGS EACH YEAR AND WE ARE GOING TO -- THE FIRST THING WE ARE GOING TO DO WITH IT IS REPLENISH THIS FUND. THEREFORE, YOU CAN ADD $5 MILLION BY THE END OF THE 13. YOU WOULD BE AT $18 MILLION AND ACTUALLY BE ABOVE YOUR RESERVE REQUIREMENT. DOES THAT MAKE SENSE? OKAY. THESE ARE OUR RESERVES THAT ARE TIED TO LEGAL OR CONTRACTUAL OBLIGATIONS. WE HAVE A TRANSPORTATION FUND BALANCE. WE ARE UNDER CONTRACT WITH HARRIS COUNTY FOR THE SPRING CREEK GREENWAY TRAIL SPRING THE BOARD ALLOCATED $5 MILLION IN TOTAL FOR THAT PROJECT. WE HAVE SPENT $1.2 MILLION AND HAVE $3.8 MILLION OF OBLIGATED IN THE RESERVE. WE JUST SPOKE ABOUT THE CULTURAL EDUCATION RESERVE. WE HAVE A BALANCE IN THERE OF $1.8 MILLION. FINALLY WE HAVE AN AGREEMENT, THE COMPREHENSIVE COMMUNITY SERVICE AGREEMENT WITH HOWARD HUGHES. AND THAT IS FUNDING THAT IS UTILIZED FOR SHARED PROJECTS WHERE WE FUND 50, AND THEY FUND 50 TYPICALLY. SO THAT HAS A BALANCE OF $3.9 MILLION IN IT RIGHT NOW. >> MONIQUE, WHAT IS AN EXAMPLE OF ONE OF THOSE TYPES OF PROJECTS THROUGH THE CCSA THAT WE HAVE DONE? AND WHAT IS ELIGIBLE? IT IS MUTUALLY AGREED UPON? >> THEY ARE. THEY GAVE US A PRELIMINARY LIST BREAK THAT LIST CHANGES. WHEN THEY WENT TO SPEND MONEY OUT OF THIS FUND CORRECT THEY COME TO US AND ASK US FOR PERMISSION FOR AN EXAMPLE WOULD BE PATHWAYS IN TOWN CENTER WHERT COMPLETE CONNECTIVITY. THEY MAY COME TO US AND SAY, NOW THAT THIS DEVELOPMENT HAS OCCURRED, WE WOULD LIKE TO CONNECT THE PATHWAY SYSTEM THROUGH THIS AREA. AND WE WOULD TYPICALLY FUND 50/50. >> IT IS TYPICALLY THEM COMING TO US AND NOT THE OTHER WAY AROUND? >> WE COULD GO TO THEM. IT HAS TYPICALLY BEEN THE OTHER WAY, BUT WE COULD CERTAINLY ASK THEM AND ACTUALLY HAVE. WE DID RECENTLY. FOR INSTANCE, YES. THE WOODLANDS RESERVED PATHWAY. THEY HAVE BEEN ASKING FOR THAT. WE DID GO TO THEM AND SAY, WE THINK THIS WOULD BE A GOOD USE OF THIS FUND RIGHT HERE. THAT IS WHAT WE PLAN TO FUND THAT WITH. >> NOT REPAIRS OR MAINTENANCE OF EXISTING FACILITIES LIKE ELEVATORS OR FOUNTAINS. >> THIS IS NEW DEVELOPMENT. >> COULD THAT HAVE BEEN NEGOTIATED AT THE TIME OF THAT CONVERSION FROM HOWARD HUGHES TO
THE TOWNSHIP? >> THE ELEVATORS? AT THE TIME THEY WERE CONVEYED, THEY WERE WORKING. THEY ARE NO LONGER WORKING. SO NO. WE ASKED. >> BUT EVERYTHING IS NEGOTIABLE. >> WE CAN CERTAINLY GO BACK IF THAT IS WHAT YOU WOULD LIKE TO DO. >> THAT IS FOR THE BOARD'S EDIFICATION, THERE IS A CURRENT PROPOSAL FOR AN AMENDMENT TO THIS AGREEMENT FROM HOWARD HUGHES CONTAINING A FEW THINGS WE ARE GOING TO BE NEGOTIATING THIS AGREEMENT IN THE NEXT YEAR VERY POSSIBLY. AS THINGS COME UP RELATED TO THE CCSA, WE CAN DISCUSS THOSE. >> THANK YOU. >> THIS IS A LOOK AT OUR CULTURAL EDUCATION RESERVE. BASED ON OUR 10% THAT WE RETAIN EACH YEAR, IT EQUATES TO ABOUT $200,000 A YEAR. SO THAT WOULD UNLESS THERE IS A USE THAT IS IDENTIFIED AND APPROVED BY THE BOARD, THAT IS HOW THAT RESERVE WOULD GROW. YEAR 2 OF OUR DESIGNATED RESERVES VISIT THE WOODLANDS HAS A BALANCE CURRENTLY OF $800,000. AND WE ALSO HAVE A SELF FUNDED HEALTH INSURANCE. OUR PLAN IS BASED ON SELF FUNDED. AND SO WE MAINTAIN A MILLION DOLLAR RESERVE IN CASE WE HAVE EXPERIENCED LEVEL THAT IS BEYOND WHAT WE BUDGET. WE CAN TAP INTO THIS RESERVE. WE'VE HAD SELF FUNDED HEALTH INSURANCE FOR AT LEAST TEN YEARS NOW AND HAVE NEVER HAD TO TAP INTO THE RESERVE. BUT IT IS THERE IN CASE WE NEED IT. >> TALK A LITTLE BIT ABOUT HOW THAT WORKS. IT IS THROUGH AN INSURANCE COMPANY, RIGHT? WE ARE ESSENTIALLY TAKING ON THE CATASTROPHIC RISK OURSELVES. >> WE HAVE STOP LOSS PLANS. WE HAVE A COMBINATION LIKE WE WERE RIGHT NOW. OUR CURRENT IS THROUGH BLUE CROSS BLUE SHIELD. WE DO HAVE A BASIC PLAN, CAN WE HAVE A STOP LOSS. THERE IS ONLY SO MUCH LOSS THAT WE WILL INCUR BEFORE THAT PLAN KICKS IN. >> HIGH DEDUCTIBLE? >> PARDON? >> HIGH DEDUCTIBLE? >> OUR CURRENT PLANS? NO, SIR. WE CAN TALK MORE ABOUT IT. WE HAVE A SET AMOUNT FOR EMPLOYEES THAT EMPLOYEES CAN USE DEPENDING ON THAT IT'S $1500 FOR AN EMPLOYEE TO START OFF WITH. IF YOU GO BEYOND THAT $1500, THERE'S A PERIOD OF TIME WHERE YOU ARE PICKING UP THE FULL EXPENSE. WE HAVE COINSURANCE AT THE END. ANGELA, IF YOU WOULD LIKE, ANGELA COULD GO THROUGH THAT AND MUCH MORE DETAILED TOMORROW. >> THANK YOU. AND THESE ARE RESERVES THAT ARE AVAILABLE TO FUND ONE-TIME EXPENSES. WE TALKED ABOUT THE $3.3 MILLION THAT IS IN OUR 2026 DESIGNATED FUND BALANCE. WE ALSO HAVE THE HOTEL OCCUPANCY TAX RESERVE RIGHT NOW THAT TOTALS ABOUT $14.8 MILLION. THE THOUGHT PROCESS FOR THE BOARD HAS BEEN TO RESERVE THAT MONEY FOR ECONOMIC DEVELOPMENT OPPORTUNITIES. SO FOR INSTANCE, IF WE HAD A PERFORMING ARTS CENTER, THAT $14.8 MILLION COULD BE USED TO IN PARTNERSHIP WITH OTHER ENTITIES TO FUND THE ARCHITECTURAL DRAWINGS OR AS A DOWN PAYMENT ON ANY CAPITAL COSTS. >> I HAD A QUESTION ABOUT THAT. I'M LOOKING BACK AT MY NOTES FROM LAST YEAR. ON THE HOTEL -- ARE WE AT THE HOTEL OCCUPANCY RESERVE? A COUPLE THE HOTEL OCCUPANCY RESERVE. SORRY. >> ARE BEGINNING BALANCE IN OUR HOTEL OCCUPANCY IS $11.8 MILLION. WE BELIEVE BASED ON HOTEL TAX PROJECTIONS THAT WE WILL BE ABLE TO ADD ABOUT $3.6 MILLION IN IT PER THE PREVIOUS BOARD DECISIONS, WE ARE USING HOTEL TAX TO PER THE PREVIOUS BOARD FUND THE ANNUAL HOLIDAY DECORATIONS. AND THE TOWN CENTER ELEVATOR MODERNIZATION WHICH LEAVES US AT 14.8 AT THE END OF THIS YEAR. AND THEN HERE IS A LOOK AT OUR HOTEL TAX RESERVE AND HOW WE EXPECT IT TO GROW. AS I JUST MENTIONED WE HAVE $14.8 MILLION PROJECTED AT THE END OF THIS YEAR. BECAUSE WE ARE PAYING OFF THE CONVENTION CENTER BONDS, WHEREAS THAT NUMBER USED TO BE -- LIKE FOR '25, $3.5 MILLION GOES INTO IT. NOW WE ARE ABOUT TO HAVE ABOUT $6.2 MILLION AND CLIMBING. IF THE BOARD DID NOTHING WITH THE HOTEL TAX RESERVE FOR THE NEXT FIVE YEARS, YOU WOULD SEE IT WOULD GROW SIGNIFICANTLY TO A BALANCE OF ABOUT $40 MILLION. >> SO I'M LOOKING BACK AT MY NOTES FROM LAST YEAR. IN 2026, WE HAD $8.8 MILLION IN HOTEL TAX RESERVE WITH A
PROJECTED TO BE $12 MILLION IN 2027. WE HAVE $14.8 MILLION IN 2027 VERSUS $2.8 MILLION SWING. HOW DID THAT HAPPEN? DO WE HAVE HIGHER THAN EXPECTED HOTEL OCCUPANCY TAXES? DID WE PUT MORE MONEY IN THERE? WHAT IS THE REASONING FOR THAT? >> I WOULD HAVE TO GO BACK AND LOOK, CHAIRMAN I DON'T KNOW OFF THE TOP OF MY HEAD. I THINK ONE OF THE FINANCE STAFF. INTEREST. >> HIGHER INTEREST RATES. >> COULD WE TAKE THAT $2.8 MILLION AND MOVE IT OVER TO THE WHERE YOU GET THE ONGOING EXPENSE? LEDGER? WHAT IS THE OPERATING GENERAL FUND? >> OKAY, THOSE BALANCES REPRESENT -- IT IS A BALANCE IN OUR RESERVE. IT'S A BALANCE IN OUR SAVINGS ACCOUNT YOU COULD USE THE $6 MILLION EACH YEAR, BECAUSE IT IS AN ONGOING REVENUE TO FUND ONGOING EXPENSES IN YOUR GENERAL FUND ACCOUNT. BUT YOU CAN'T JUST TAKE THE 2.8 SAVINGS IN INTEREST OVER THERE IT'S GOOD FOR ONE TIME BALANCES. AGAIN IT DEPENDS WHAT YOU WANT TO DO FOR YOUR HOTEL TAX RES RESERVE. >> CHAIRMAN, I GUESS TO CLARIFY, YOU ARE ASKING IF THE EXCESS ABOVE FORECAST COULD BE USED TO SHAVE DOWN THE TAX RATE? >> CORRECT. >> THE EXCESS ABOVE FORECAST GOES BACK TO THE 2026 RESERVE. WE ARE GENERATING A FAVORABLE VARIANCE, ONE-TIME FAVORABLE VARIANCE THAT WE CAN USE FOR ONE-TIME PURCHASES. IF WE WANT TO USE HOTEL TAX, IF WE WANT TO START USING HOTEL TAX IN ORDER TO LOWER THE TAX RATE, YOU ARE LOOKING AT THIS 6.166. YOU ARE LOOKING AT THE ONGOING EXCESS TAX REVENUE THAT COULD BE USED. >> I ASKED THAT, BECAUSE HERE IS WHAT I AM THINKING. I THINK WE HAVE A VERY UNIQUE MODEL UP HERE IN THE WOODLANDS THAT WE ARE ABLE TO USE OUR HOTEL TAX DIFFERENT I VISITED SHENANDOAH RECENTLY, AND THEY CAN'T IT WOULD HAVE TO ONLY BE FOR THE PROMOTION OF HOTELS. BUT COULD WE USE A PORTION OF IT, SAY 20% OF OUR HOTEL OCCUPANCY TAX FUND GENERATES FOR LAW ENFORCEMENT AND INFRASTRUCTURE PROJECTS IN AND AROUND OUR HOTEL AREAS? WE SEE UPTICK OF ROOMS ABOUT THE SAFETY IS A BIG THING FOR INFRASTRUCTURE AND THE WATERWAY IS A BIG THING. ALL OF THESE THINGS ABOUT BEING ABLE TO DEDICATE THAT WOULD BE ESPECIALLY THE SITUATION THAT WE ARE IN WOULD HELP THE BOTTOM LINE WITH US. BUT ALSO HELP VISITORS PAY FOR A LOT OF THE DIFFERENT THINGS THAT'S HAPPENING IN AND AROUND THOSE DISTRICTS. >> WE ABSOLUTELY CAN. WE HAVE UNRESTRICTED HOTEL TAX. IT CAN BE USED FOR ANY PURPOSE. THIS BOARD AND PREVIOUS BOARDS HAVE CHOSEN TO USE THIS RESERVE TO FUND ECONOMIC DEVELOPMENT OPPORTUNITIES THAT WE MAY NOT KNOW THAT EXIST YET. SO FOR INSTANCE, THE $6 MILLION THAT YOU SEE ONGOING THERE IS WHAT WOULD BE NEEDED TO FUND, TO PAY DEBT SERVICE ON A $100 MILLION BOND. FOR INSTANCE IF WE WERE GOING TO PARTNER WITH SOMEBODY ON A PERFORMING ARTS FACILITY, AND OUR SHARE WAS $100 MILLION, WE WOULD NEED EVERY BIT OF THAT $6 MILLION TO DO THAT. SO THAT'S A DECISION POINT FOR THE BOARD. YOU CAN ABSOLUTELY LEGALLY START USING THAT MONEY TO FUND OPERATIONS. BUT IT WILL LESSEN YOUR ABILITY TO PAY DEBT SERVICE ON A BOND THAT YOU MAY WANT TO DO FOR ECONOMIC DEVELOPMENT PURPOSES. IT IS THE TRADE OFF. >> I THINK THAT IS INTERESTING FOR THE BOARD TO LOOK AT. WE INCUR A LOT OF OPERATION COSTS WE INCUR A LOT WITH THE WATERWAY. IT WAS GREAT TO GET IT. ONCE YOU GET IT, YOU HAVE TO PAY FOR IT AND MAINTAIN IT. IT SEEMS TO BE A LITTLE BIT A LOT MORE WORK THAN WE THOUGHT IT WAS. MAKING SURE WE WERE ABLE TO LOOK AT THAT AND TAKE SOME PRESSURES OFF OF DIFFERENT BUDGET AREAS MIGHT BE AN OPPORTUNITY FOR US TO EXPLORE. >> TO CARRY ON WITH THAT POINT OF LOOKING FOR MONEY, BECAUSE WE ARE ALWAYS LOOKING FOR MONEY WHETHER YOU HAVE A LOT OR WHETHER YOU HAVE A LITTLE. EVERYBODY WANTS A LITTLE MORE. BUT I THINK THAT BEING INTO THE RESERVES LIKE THIS IS TOO EASY. IT IS JUST TOO EASY. WE OUGHT TO BE LOOKING AT OUR BASE BUDGET AND SAYING, IS IT REALLY ESSENTIAL? ALTHOUGH BASE BUDGET. IT KIND OF FLOATS ALONG. AND NOBODY SINCE I HAVE BEEN ON
THE BOARD HAS REALLY GONE INTO THAT BASE BUDGET AND SAID, WE COULD DO BETTER. RIGHT? WE COULD DO BETTER. I THINK WE HAVE A FEW DAYS HERE THAT WE CAN REALLY THINK ABOUT AND LOOK AT THAT BASE BUDGET. DO WE REALLY NEED EVERYTHING THAT IS IN THERE? BECAUSE IT HAS GROWN. OUR NUMBER OF EMPLOYEES HAS GROWN SIGNIFICANTLY. EXCEEDING OUR POPULATION GROWTH RATE. SO I THINK RATHER THAN LOOK AT -- I. APPRECIATE WHAT YOU ARE DOING, CHAIRMAN. BECAUSE IT IS REASONABLE THAT WHENEVER WE ARE PROVIDING MORE ENTERTAINMENT AND MORE SERVICES, AND WE HAVE MORE ASSETS, WE HAVE RECEIVED MORE ASSETS FROM HOWARD HUGHES. AND OF COURSE, THEY NEED MAINTENANCE. THAT IT IS REASONABLE TO LOOK AT WAYS FOR VISITORS TO SUPPORT THAT MAINTENANCE. I GET THAT. BUT AT THE SAME TIME, THIS HAS BEEN SOMETHING THAT HAS BEEN SACROSANCT THAT WAS FROM THE TIME I JOINED THE BOARD THAT WE DON'T TOUCH THE HOTEL RESERVE, BECAUSE IT WILL BE NEEDED FOR BIG PROJECTS. IT COULD BE A NEW CONVENTION CENTER, EXPANDING THE CONVENTION CENTER, PARKING. WE HAVEN'T EVEN TALKED ABOUT PARKING. BUT THAT IS A BIG HEADACHE AS YOU KNOW FOR THE DOWNTOWN CENTER. WHERE DO WE COME UP WITH THE MONEY FOR THAT? RIGHT HERE IN THE HOTEL RESERVES. SO LET'S NOT BE LIKE THE LITTLE 6-YEAR-OLD THAT GOES INTO THE PIGGY BANK AND SAYS, LOOKY, MOMMY, IT'S FULL. YOU KNOW. AND THEN BY THE TIME THEY REALLY NEED SOMETHING LIKE THOSE TEN ISSUES THAT COST A LOT OF MONEY, IT'S NOT THERE SO I JUST CAUTION EVERYBODY THAT IT'S TOO EASY. WHEN IT'S TOO EASY, IS PROBABLY NOT THE RIGHT CHOICE. >> I DON'T KNOW ABOUT THAT, BUT OKAY. WE ARE GOING TO TALK A LOT ABOUT THIS A LOT. WE ARE GONNA BE HERE ALL WEEK, MOST OF THE WEEK. A LOT TO TALK ABOUT. SORRY, MONIQUE, TO HIJACK IT. THANK YOU. >> AND THEN WE HAVE ALREADY TALKED ABOUT THIS. RIGHT NOW, THIS IS THE AMOUNT WE HAVE TO EITHER FUND BUDGET INITIATIVES THAT HAVE AN ONGOING OPERATING EXPENSE ATTACHED TO IT OR TO PAY DOWN THE DEBTS IN FACT THE TAX RATE. OKAY, ANY QUESTIONS ON OUR RESERVES BEFORE I MOVE FORWARD? OKAY. HERE IS A LOOK AT SOME OF OUR HIGHLIGHTS ON OUR DEBT. THE TOWNSHIP HAS PAID OFF $22.7 MILLION OF DEBT OVER THE PAST TEN YEARS -- WHICH HAS SAVED OUR TAXPAYERS $6.8 MILLION IN INTEREST EXPENSE. WE HAVE RAISED FINANCE TAX $46.5 MILLION OF DEBT OVER THE PAST EIGHT YEARS AT HISTORICALLY LOW INTEREST RATES. SAVING $5.7 MILLION OF INTEREST EXPENSE. AND WE HAVE ACHIEVED THE STANDARD AND POOR'S BOND RATING OF DOUBLE A PLUS. AS I MENTIONED EARLIER, THAT IS THE HIGHEST BOND RATING HELD BY A SPECIAL PURPOSE DISTRICT IN TEXAS. THIS COMES FROM THE TEXAS BOND REVIEW BOARD. EVERY YEAR, WE ARE REQUIRED BY LAW TO SUBMIT ALL OF OUR DEBT INFORMATION TO THE STATE OF TEXAS. AND THIS TEXAS BOND REVIEW BOARD THEN COMPARES OUR TAX, OUR DEBT TO WHAT THEY CONSIDER OUR PEERS. MAINLY IN TERMS OF POPULATION. AND SO YOU CAN SEE HERE THAT WE ARE BY FAR THE LOWEST IN TERMS OF TAX SUPPORTED DEBT PER CAPITA COMPARED TO OUR PEERS. >> I LOVE SEEING THAT NUMBER. IT IS A GREAT SLIDE. >> I WANT TO COMPLIMENT THE FINANCE DEPARTMENT FOR THIS. ALONG WITH PREVIOUS BOARDS, Y'ALL HAVE FOCUSED ON REFINANCING DEBT WHEN IT IS APPROPRIATE. AND JUST KUDOS TO YOU. THIS IS AMAZING TO HAVE SO LITTLE DEBT. I WAS JUST LOOKING AT THE U.S. DEBT PER CAPITA IN THE UNITED STATES. IT IS ALMOST $120,000 PER CAPITA RIGHT NOW, PER PERSON ONCE WE CLEAR. 120, ALL OF US PER $120,000 PER PERSON IN THE UNITED STATES DEBT AND GROWING. BECAUSE OF THE RATE ALL THE TIME. THAT IS WHAT THE MEDIUM INCOME OF $60,000 PER YEAR WE NEVER WANT TO EVEN CONSIDER GOING IN THAT DIRECTION. BUT WE DO NEED TO TAKE ON DEBT SENSIBLY WHEN IT IS APPROPRIATE WE SHOULDN'T BE AFRAID OF DEBT. BUT IT IS REALLY TO THE CREDIT OF THE FINANCE DEPARTMENT THAT WE ARE IN THIS GREAT SITUATION. SO I WANT TO THANK YOU FOR THAT. >> I THINK WE WOULD ALL SECOND THAT. >> WAS THAT A PUN INTENDED THERE?
GIVING CREDIT TO THE FINANCE DEPARTMENT? >> OF COURSE. [LAUGHTER] THANK YOU. >> I TAKE GREAT PRIDE IN THIS. I TEXTED THIS GRAPH TO A FRIEND OF MINE THAT USED TO BE ON THE CITY COUNCIL AND IS A STATE REP NOW. JUST NOT BRAGGING. >> YOU DON'T HAVE HOUSTON IN THERE. THERE IS SO MUCH THAT GOES ON THAT THEY DON'T EVEN PUT ON THEIR DEBT ROSTER. BUT YES. WE ARE IN A WONDERFUL SITUATION. AND WE NEED TO GUARD THAT AND PROTECT THAT. >> THANK YOU FOR THE COMPLIMENTS TO THE FINANCE STAFF PICK THE BOARD HAS DONE A GREAT JOB IN SETTING POLICY FOR OUR DEBT MANAGEMENT. IT IS DEFINITELY REFLECTED HERE. AND IN THESE NEXT SLIDES. THE OUTSTANDING DEBT THAT WE DO HAVE RIGHT NOW TOTALS $10.1 MILLION. AS YOU CAN SEE, THE CONVENTION CENTER DEBT AS WE TALKED ABOUT IS GOING TO BE PAID OFF IN 2027. THAT IS CURRENTLY FUNDED FROM OUR BASE HOTEL TAX. WE ALSO HAVE BONDS THAT WERE ISSUED IN 2011 AND '12. THAT WAS WITH A TRANSITION FROM THE COMMUNITY ASSOCIATIONS TO WHAT IS NOW TODAY THE WOODLANDS TOWNSHIP. THERE WERE ABOUT $10 MILLION IN THAT BALANCE. IT WAS PARKS AND REC AND FIRE DEPARTMENT CAPITAL PROJECTS. AND WE HAVE AN ANNUAL DEBT SERVICE PAYMENT ON THAT AT $3.1 MILLION. I TALKED ABOUT THE DEBT SERVICE TAX RATE AT THE BEGINNING. 1 PENNY IS WHAT IS USED TO FUND THOSE BONDS, THOSE BOND PAY PAYMENTS. HERE IS A LOOK FROM 2017. OVER THE PAST TEN YEARS OF OUR OUTSTANDING DEBT BALANCES, WE HAVE PAID OFF $62.6 MILLION OR 86% REDUCTION IN DEBT TO OUR CURRENT BALANCE OF $10.1 MILLION. AND HERE IS A LOOK AT WHAT WE HAVE PLANNED BASED ON OUR CURRENT DEBT LEVELS FOR THE NEXT FIVE YEARS. SO YOU CAN SEE THERE THAT WE ARE CONTINUING TO PAY DOWN OUR DEBT BALANCES. FIRST OF ALL IN 2027 WITH THE CONVENTION CENTER. AND I BELIEVE THE PROPERTY TAX BONDS FUNDED BY THE PROPERTY TAX ARE PAID OFF -- WE HAVE A SLIDE RIGHT HERE FOR ONE FROM 2013 UNTIL 202031. WE WILL SEE A DROP THERE. IN 2032, THAT FINAL BOND IS PAID OFF FOR ANOTHER $7 MILLION PICKED UP $2.4 MILLION DECREASE IN THE $.7 MILLION DECREASE THAT IS THE TAX RATE HERE IN 2030, WE WILL HAVE AN AUTOMATIC REDUCTION OF ABOUT 0.7 CENTS TO THE PROPERTY TAX RATE ON THE OTHER $0..3 WILL BE IN 2032. IT IS A WAYS OUT. BUT IT'S FINALLY HIT OUR 5-YEAR PLAN FOR WE TALKED ABOUT IT FOR YEARS AND WE CAN FINALLY SEE IT REFLECTED IN THE 5-YEAR PLAN. SO BEFORE I MOVE FORWARD, ANY OTHER QUESTIONS? WE ARE NOW GOING TO TALK ABOUT THE REVENUE SOURCES THAT HAVE BEEN INCLUDED IN OUR 2027 BU BUDGET. AS I MENTIONED EARLIER, OUR OPERATING REVENUES ARE $184.6 MILLION. THAT IS A $17 MILLION DECREASE FROM THE '26 BUDGET. HERE ARE THE COMPONENTS OF THE INCREASES AND DECREASES WHEN COMPARING THE TWO BUDGET YEARS. WE HAVE SALES AND USE TAX GOING UP BY $3.7 MILLION. BASED ON OUR PROPERTY TAX RATE OF 17.14, PROPERTY TAX REVENUE GROWS BY 1.9 PER OUR PROGRAM REVENUE -- WHICH IS OUR BUS FARES AND PARKS AND RECS PROGRAMS IS GROWING BY ALMOST A MILLION DOLLARS. INTEREST INCOME IS GROWING BY ABOUT $618,000. OUR OTHER INCOME IS GROWING BY ABOUT 600. AND YOU CAN SEE THE BIG DECREASE IS IN GRANTS. HERE IS A LOOK AT OUR REVENUES BY TYPE. SALES AND USE TAX IS OUR LARGEST COMPONENT OF OUR REVENUE SOURCES FOLLOWED BY PROPERTY TAX AND HOTEL TAX. AND I'M NOT GOING TO READ ALL THE CATEGORIES, BUT YOU CAN SEE THEM THERE. SO IN TERMS OF OUR SALES TAX FOR '27, IT MAKES UP 46% OF OUR TOTAL REVENUE SOURCES FOR OUR HOTEL TAX MAKES UP 6%. OUR PROPERTY TAX MAKES UP 29%. THE REASON THAT YOU ARE SEEING THE INCREASE IN PROPERTY TAX GOING FROM 26% OF REVENUE SOURCES TO 29% IS BECAUSE OF ALL THAT CAPITAL AND GRANT REVENUE THAT I WAS TALKING ABOUT IN '26. OTHER REVENUES -- WHICH IS OUR GRANT REVENUE BASICALLY WAS SO
HIGH IN '26 THAT IT SKEWED THE OTHER NUMBERS IN '27, WE ARE BACK TO OUR NORMAL COMPLEMENT. WHY THIS IS SIGNIFICANT, THERE ARE SO MANY LOCAL GOVERNMENTS THAT WOULD ABSOLUTELY LOVE TO HAVE A SLIDE THAT LOOKS LIKE THIS. AS YOU CAN SEE, THE NOTE DOWN AT THE BOTTOM, ACCORDING TO THE STATE COMPTROLLER, LOCAL GOVERNMENTS TYPICALLY IN TEXAS RAISE ABOUT $1 IN SALES TAX REVENUE FOR EVERY $7 OF PROPERTY TAX REVENUE. MEANING THEY RELY MUCH MORE HEAVILY ON THEIR PROPERTY TAX AND SALES TAX. WE ARE FORTUNATE BECAUSE OF DECISIONS MADE BY THE BOARD IN OUR ECONOMIC DEVELOPMENT INITIATIVES THAT WE HAVE SUCH A STRONG SALES TAX REVENUE SOURCE. HERE IS A LOOK AT OUR SALES AND USE TAX GROWTH OVER THE PAST FIVE YEARS. WE'VE SEEN ABOUT A 26% INCREASE FROM 22-27. WHAT WE HAVE BAKED IN FROM THE FORECAST NUMBER, OUR FORECAST TO OUR BUDGET IS ABOUT A 3.25% GROWTH FACTOR. AND I SEE MY NUMBER GOT CUT OFF OVER THERE. FROM THE '26 BUDGET, IT'S ABOUT A 4.5% INCREASE FROM BUDGET TO BUDGET BUT WE HAVE ALREADY GONE AHEAD AND REFLECTED. WE KNOW WE ARE GOING TO BE OVER. WE BUDGETED OUR SALES TAX IS EXCEEDING WHAT WE BUDGETED FOR '26 -- WHICH WE ARE GOING TO LOOK AT THAT SLIDE HERE IN JUST A SECOND SO WE WENT AHEAD AND ADJUSTED THE FORECAST. AND SO FOR THE FORECAST NUMBER, THE HIGHER FORECAST NUMBER WE BUDGETED 3.25% GROWTH. I WILL GO THROUGH THE REASONS WHY. HERE'S A LOOK AT OUR LATEST SALES TAX REPORT FOR AUGUST. AND YOU CAN SEE HERE THAT WE ARE CURRENTLY ABOUT $3.2 MILLION OR 6% OVER WHAT WE COLLECTED LAST YEAR AT THIS TIME. AND ON A BUDGET BASIS WE ARE ABOUT $1.5 MILLION OR 2.8% OVER. THE INCREASE THAT YOU SEE IN AUGUST, IF YOU LOOK AT THE AUGUST LINE ITEM. WE ARE OVER BY 477. I DO WANT TO POINT OUT THAT A LARGE PART OF THAT WAS DUE TO AUDIT ADJUSTMENTS. SO THE STATE COMPTROLLER CONSTANTLY AUDITS OUR SALES TAXPAYERS. AND WE ALSO LOOK AT IT AND GIVE THEM CLUES WHEN WE NEED TO. BUT THEY JUST CAME BACK AND HAD AUDIT ADJUSTMENTS OF ABOUT $420,000. SALES TAX THAT WE SHOULD HAVE COLLECTED IN PREVIOUS PERIODS THAT WAS NOT REPORTED BY THE TAXPAYERS AND NOW IS BEING REPORTED. >> HOW OFTEN DO THEY DO THAT? >> WHAT WOULD YOU SAY WE GET? [INDISTINCT] >> THE AUDIT. HOW OFTEN IS THE AUDIT MONTHLY? >> BY THE STATE COMPTROLLER, IT IS DONE MONTHLY. OUR AUDIT IS DONE ANNUALLY. >> AND WE ARE PROJECTED IF I AM READING IT RIGHT FROM THE PREVIOUS SLIDE, YOU HAVE $85.28 MILLION IN SALES TAXES THIS YEAR. >> CORRECT. >> THE EXCESS, THE OVERAGE FROM ACTUAL TO BUDGET, THAT GOES INTO THAT UNDESIGNATED FUND BALANCE? >> CORRECT, YES, SIR. THAT IS REFLECTED THERE. HERE IS A USE. WE HAVE MULTIPLE INDUSTRY CODES, WAYS THAT WE COLLECT SALES TAX. THIS IS DEFINED BY THE STATE. SO OUR LARGEST AMOUNT OF SALES TAX COMES FROM RETAIL TRADE. IF YOU ASK CERTAIN PEOPLE, THEY WOULD SAY THAT THEY THINK 100% COMES FROM RETAIL. THAT IS WHAT THEY ARE USED TO SEEING. WE ACTUALLY RECEIVED SALES TAX FROM A VARIETY OF SOURCES. SOME OF OUR OTHER LARGEST AREAS ARE ACCOMMODATION AND FOOD SERVICES. RESTAURANTS BASICALLY. MANUFACTURING, INFORMATION, MINING, OIL AND GAS THIS YEAR AND WHOLESALE TRADE. THOSE ARE OUR TOP CATEGORIES. THOSE MAKE UP ABOUT 85% OF OUR TOTAL SALES TAX REVENUES. SO I WANT TO TAKE A LOOK. LET'S TAKE A LOOK AT HOW EACH OF THOSE TOP CATEGORIES, THE FIRST FIVE OR SIX CATEGORIES ARE DOING THIS YEAR. IN TERMS OF RETAIL SALES TAX, WE ARE SEEING OVERALL YEAR TO DATE GROWTH OF ABOUT 5.3%. THAT IS GREAT. THAT IS OUR LARGEST CATEGORY THAT COMES FROM. THAT IS WHERE WE WOULD DEFINITELY WANT TO SEE OUR GROWTH. YOU CAN SEE WE HAD TWO BIG MONTHS IN APRIL AND MAY. >> CAN YOU BREAK THAT DOWN BY LOCATION? IS IT MARKET STREET? IS IT THE WOODLANDS MALL? IS IT HUGHES LANDING? YOU CAN GUESS WHERE THEY ARE
CORRECT BUT DO YOU KNOW QUESTION MARKS B WHEN WE DO. WE HAVE ALL THAT. I HAVE TO BE CAREFUL WHAT I CAN SAY IN PUBLIC. WE CAN TALK MORE ABOUT IT PRIVATELY PRACTICES PROTECTED LEGALLY, CONFIDENTIALITY. WHERE YOU WOULD EXPECT IS FOR RETAIL IS IN OUR TOWN CENTER AREA. MARKET STREET, MALL. >> AND LINDA'S AMAZON PURCHASES. [LAUGHTER] >> GOOD TO SEE THE PERCENTAGE THERE, TOO. >> I BET WHEN THAT LEGAL CASE HIT, THAT DRASTICALLY CHANGED OUR SALES TAXES. >> IT DID. IT WAS WONDERFUL. >> AMAZON DELIVERY DRIVERS -- ALL TIMES OF DAY AND NIGHT AND EVERYTHING. >> THAT WAS THE WAY THE SUPREME COURT AGAIN WHERE WE WERE ABLE TO GET SALES TAX FROM ONLINE PURCHASES FROM WHERE PRODUCTS ARE DELIVERED AS OPPOSED TO WHERE THEY WERE PURCHASED THAT HAS SIGNIFICANTLY GROWN OUR RETAIL SALES TAX OVER THE PAST EIGHT YEARS. >> CAN WE GO BACK A COUPLE OF SLIDES TO THE PIE? YOU MAY NOT HAVE TO SHARE SPECIFIC INFORMATION CORRECT BUT I'M CURIOUS HOW MUCH WE ARE KEEPING OUR EYE ON THE BALL WITH MAYBE ANY OF THESE LARGE COMPANIES THAT REPRESENT A SIGNIFICANT PERCENTAGE THAT IN THE EVENT THEY VACATED THE WOODLANDS CORRECT WE WOULD BE IN TROUBLE. AND HOW WE GAUGE THAT. IS THERE COMMUNITY RELATIONS? PEOPLE CHECKING IN. MAYBE THAT IS INFORMATION WE WOULDN'T KNOW. I THINK THE INFORMATION 7.7. I'M SURE IT IS AT A LOT OF COMPANIES. JUST MAKING SURE THAT WE ARE WATCHING SOME OF THESE THINGS. RETAIL AND TRADE IS SIGNIFICANT. AND IF A BIG STORE LEAVES, IT'S NOT GOING TO TURN THE SHIP. BUT IF A LARGE MANUFACTURER LEAVES OR IF A LARGE INFORMATION TECHNOLOGY COMPANY OR SOMETHING LIKE THAT MOVES, THAT COULD CHANGE THIS SIGNIFICANTLY. >> IT COULD. TYPICALLY WHAT WE HAVE FOUND IS ANY COMPANIES PLANNING ON MERGERS OR ACQUISITIONS OR MOVING AND EVERYTHING, THEY DON'T SHARE THAT INFORMATION THROUGH THAT IS HELD PRETTY TIGHT TO THE VEST UNTIL THEY ARE READY TO DO IT. WE HAVE NOT HAD MUCH LUCK IN FORECASTING. >> YOU BRING UP A VERY GOOD POINT. ECONOMIC DEVELOPMENT IS NOT JUST RECRUITING BUSINESSES. IT IS ALSO RETAINING BUSINESSES THAT YOU HAVE HERE. I BELIEVE YOUR QUESTION FALLS ON THE LAP OF THE ECONOMIC DEVELOPMENT PARTNERSHIP. SHOULD HE HAVE IN DEPTH CONVERSATIONS ABOUT WHO IS STAYING HERE AND WHAT? WE DID HAVE ONE LEAVE. AND LIKE THAT, IT CHANGED DRAMATICALLY THIS PIE CHART. RECRUITING IS ONE PART OF IT. BUT RETAINING IS A BIG PART OF IT. >> HERE IS OUR COMMENDATION ON FOOD SERVICES PER YEAR TO DATE GROWTH OF ABOUT 6.2%. AGAIN, THAT IS OUR SECOND LARGEST CATEGORY. WE ARE HAPPY TO SEE THAT. HERE IS OUR NEXT CATEGORY. WE HAVE SEEN A DROP IN MANUFACTURING OF ABOUT 26.3%. OUR INFORMATION HAS DROPPED. IT IS BASICALLY EVEN. MINING AND OIL AND GAS. BASICALLY OIL AND GAS HAS BEEN THE BIG DRIVER THIS YEAR IN OUR INCREASE IN SALES TAX. I'M GOING TO COME BACK TO THAT IN A SECOND. AND WHOLESALE TRADE IS GROWING BY 24.5. CONSTRUCTION IS DECREASING BY ABOUT 3%. I KNOW WE HAVE CONSTRUCTION GOING ON OUT THERE. WE DO RECEIVE SALES TAX FROM CONSTRUCTION. BUT IT GETS VERY COMPLICATED. IT DEPENDS IF YOU HAVE A LUMP SUM CONTRACT OR IF YOU HAVE A SEPARATED CONTRACT ON WHERE ON HOW THE CONTRACTOR WHETHER THEY HAVE TO PAY SALES TAX TO US OR THEY PAY SALES TAX TO WHERE THEY ARE PURCHASING THE SUPPLIES. THE CONSTRUCTION MATERIALS. WE HAD FROM THE RITZ CARLTON, WE DID SEE THE INCREASE THERE. OVERALL RIGHT NOW WE ARE DECREASING. >> I HAVE A QUESTION FOR IN THE EVENT THAT WE ARE DOING SOME KIND OF -- EVEN PUBLIC OR PRIVATE PARTNERSHIP HERE AND WE ARE NEGOTIATING A CONSTRUCTION CONTRACT. IS THERE A STIPULATIONS WE CAN PUT INTO THAT? PREFERENTIAL PURCHASING? SOMETHING LIKE WHEN YOU THINK ABOUT HIRING PEOPLE LOCAL OR DOING THINGS LIKE THAT? DO WE EVER DO THAT WITH CONTRACTS OR OUTSIDE PARTIES? >> NOT REALLY. WE HAVE WORKED WITH HOWARD HUGHES. HOWARD HUGHES HAS BEEN A GREAT PARTNER IN HAVING THEIR CONTRACTS WHERE THE TOWNSHIP RECEIVES THE SALES TAX. THERE IS NOT A WHOLE BUNCH OF OTHER PARTNERS OUT THERE. SOMETIMES THOUGH WE WHERE THE TOWNSHIP RECEIVES THE SALES TAX A LOT OF TIMES IS NOT NECESSARILY ALWAYS THE MOST BENEFICIAL WAY FOR THE
CONTRACTOR TO DO IT BECAUSE A WHOLE BUNCH OF REASONS WE CAN GO INTO. SO WE DON'T APPROACH OTHER LARGE CONTRACTORS. FOR THE MOST PART, HOWARD HUGHES IS THE MAJOR DEVELOPER IN THE WOODLANDS. THEY HAVE BEEN A GREAT PARTNER IN WORKING WITH US ON THAT. >> IT'S TOUGH TO THINK ABOUT IT WITH THOSE CONTRACTS. >> I AGREE. I WANT TO TALK ABOUT THE MINING AND REALLY THE OIL AND GAS. I'M GONNA GO BACK TO THIS SLIDE RIGHT HERE. WE HAVE ONE TAXPAYER THAT HAS CONTRIBUTED A VERY SIGNIFICANT PORTION. OVER HALF OF THAT INCREASE THAT YOU SEE IN THE '25 UNTIL '26 IS ATTRIBUTABLE TO ONE TAXPAYER PER THE INCREASE THAT YOU SEE THAT WE ARE OVER BUDGET IS ATTRIBUTABLE -- BESIDES THE AUDIT ADJUSTMENT. ONE TAXPAYER. SO WE HAVE TO KEEP THAT IN MIND WHEN WE ARE LOOKING FORWARD TO WHAT WE WANT TO FORECAST FOR 2027. BECAUSE FROM '25 IN '25, THEY STARTED PAYING IN DECEMBER OF 2025 IS WHEN THEY WERE FIRST ON OUR RADAR. IT IS A HEADQUARTERS THAT WE STARTED COLLECTING FROM. SO EVEN THOUGH THE COMPANY HAD BEEN HERE, THE HEADQUARTERS THAT GOT HERE -- WHICH CHANGES EVERYTHING WE WENT FROM ZERO IN '25 TO A LOT IN 2026. BUT WHEN WE LOOK FORWARD TO '27, WE ARE NOT GOING TO SEE THAT GROWTH. WE HOPE THEY CONTINUE TO PAY, BUT IT'S GOING TO BE FLAT OR JUST A SMALL INCREASE. IT IS NOT GOING TO BE THE HUGE INCREASE WE ARE SEEING HERE WHEN WE CAME UP WITH OUR 3.25% GROWTH FACTOR, EVEN THOUGH YOU ARE SEEING BIGGER NUMBERS HERE, YOU ARE SEEING A 6% JUMP FROM YEAR TO YEAR. WE DO NOT TAKE ALL THAT INTO ACCOUNT BECAUSE WE BELIEVE WE WOULD BE OVER BUDGETING. WE HAD TO TAKE INTO ACCOUNT THE SIGNIFICANT CONTRIBUTION FROM THE ONE TAXPAYER. >> IT IS SMART LONG TERM. THIS IS ONE BUDGET FOR A YEAR. HOW WE THINK ABOUT FIVE OR SIX OR TEN YEARS IS PROBABLY WAY MORE IMPORTANT. >> EXACTLY. I WANTED TO POINT THAT OUT. THIS YEAR IT IS GREAT. WE WILL TAKE ALL THAT REVENUE. WE CAN'T COUNT ON THAT LEVEL OF GROWTH GOING FORWARD. OKAY, ANYTHING ELSE ON SALES TAX? I'M GOING TO MOVE TO HOTEL TAX REVENUES. IN HOTEL TAX WE ARE PROJECTING FOR 2027, $10.7 MILLION. WE ARE FACTORING IN A 2.6% GROWTH FACTOR FROM OUR FORECAST. WE WORK WITH OUR VISIT THE WOODLANDS TEAM AND LOOK AT REVPAR DATA AND THINGS LIKE THAT IN ORDER TO DETERMINE OUR GROWTH FACTOR FOR THIS IS HOW OUR HOTEL TAX IS ALLOCATED. THAT TOTAL BUDGET OF 10.7, $4.3 MILLION OR 40% IS USED TO FUND VISIT THE WOODLANDS. THE DEBT CENTER ON THE CONVENTION BONDS AGAIN LAST YEAR, '27, $2.8 MILLION. THAT'S WHAT I AM SAYING WILL THEN BECOME AVAILABLE FOR OTHER PURPOSES IN THE FUTURE. AND THEN OUR HOTEL TAX RESERVE -- WHICH RIGHT NOW -- AND WE DON'T HAVE ANYTHING IDENTIFIED FOR IT EXCEPT FOR POTENTIAL ECONOMIC DEVELOPMENT PROJECTS. ABOUT 34% OR $3.6 MILLION IS FLOWING INTO THAT RESERVE. HERE IS OUR MIXED BEVERAGE TAX REVENUE. WE HAVE BUDGETED. WE ARE MAINTAINING THE BUDGET, THE '26 BUDGET AT '27 AT 1,000,045. I DID A SLIGHT INCREASE ON THE LAST REPORT. I COULD PROBABLY TWEAK THAT UP 5-$10,000. I'M SORRY I WILL DO THAT ON THE FINAL REPORT. >> TAXES DOWN FLAT. >> STAYED FLAT. ONLY SO MUCH DRINKING CAN HAPPEN IN A SMALLER SITUATION UNLESS WE HAVE A NEW EVENT CENTER OR HOTEL. >> A NEW RESTAURANT CHEF AUSTIN WILL SELL A LOT OF BOOZE. >> THERE'S LIMITED SPACE UNLESS YOU DEVELOP ANOTHER AREA -- WHICH COULD BE PART OF A PARCEL THAT WE HAVE CALLED THE GE BET CENTER WE MIGHT BE ABLE TO DO SOMETHING THERE TOO HOWARD HUGHES REALLY HOLDS ALL OF THAT IN THEIR HAND. THEY HAVE THE RETAIL COMMERCIAL PROPERTY. >> I THINK WE CAN PLAY A LITTLE PART IN THAT, TOO. >> WE DON'T REALLY BUILD RESTAURANTS. >> LIKE YOU SAID THE BETS PROPERTY. WE HAVE A LOT OF DIFFERENT AREAS THAT WE CAN LOOK AT. OPPORTUNITIES FOR GROWTH IN THE COMMERCIAL AREA THAT GENERATE MORE HEADS AND BEDS AND INCREASED BEVERAGE TAXES. >> ALL OF THAT IS EXACTLY WHAT WE NEED TO KNOW. IN TERMS OF WHAT WE HAVE IN TODAY'S -- IF NONE OF THAT HAPPENS, THIS IS PROBABLY THE NUMBER WE ARE LOOKING AT. >> CORRECT. >> I WILL CONTINUE TO LOOK AT THE DATA TILL THE DAY WE
PUBLISHED THE BUDGET TO SEE IF IT, INCREASE THAT PER. >> I JUST HEARD DOCTOR SHELLEY CHALLENGE THE COMMUNITY TO INCREASE THIS NUMBER. [LAUGHTER] >> WERE YOU DRINKING THIS MORNING? >> I DON'T WANT PEOPLE -- IF THIS WAS A SMOKING TAX, OBVIOUSLY WOULD SAY FORGET THAT. WE ARE NOT DOING THAT. BUT IT A DRINKING TAX. WE HAVE TO BE HONEST. THIS IS NOT THE PLACE TO HANG OUR FAMILY-FRIENDLY BEST PLACE TO RAISE A FAMILY IN THE UNITED STATES FLAG. WE DON'T NEED TO PLANT IT ON THE MIXED BEVERAGE TAX. BUT STILL -- AND I THANK YOU. I WANT TO THANK YOU, THE BOARD, ESPECIALLY MR. BAILEY, FOR BRINGING THIS TAX TO US BECAUSE THIS WAS SOMETHING WE DIDN'T HAVE FOR MANY YEARS AS A TOWNSHIP. AND YOU WORKED WITH LEGISLATORS TO GET IT. AND STEVE AND BRAD, SENATOR CRAYTON YOU DESERVE THE CREDIT. >> IT WAS A TEAM EFFORT INCLUDING FORMER CHAIRMAN SNYDER. >> ABSOLUTELY, ABSOLUTELY. >> I REPRESENT THE HALF PENNY ON THE TAX RATE THAT YOU WERE ABLE TO LOWER BECAUSE OF THIS. >> IT IS A WONDERFUL. >> IN TERMS OF INTEREST INCOME CAN YOU REMEMBER BACK IN '23-'24 COMING OUT OF THE COVID DAYS THAT INTEREST RATE WAS ASTRONOMICAL. AND BAD FOR PERSONAL, BUT GOOD FOR THE TOWNSHIP IN TERMS OF WHAT WE WERE ABLE TO DO WITH INVESTMENTS. THAT NUMBER HAS COME DOWN TO REFLECT CURRENT MARKET RATES. WE WILL BRAG AGAIN, SHE DOES A MAGNIFICENT JOB OF TAKING OUR ADDITIONAL FUNDS AND LADDERING THEM OUT AND GETTING AS MUCH INTEREST INCOME AS SHE CAN. BUT SHE IS NOT A MAGICIAN. SO WE HAVE TO FOLLOW THE MARKET. AND THAT IS WHAT WE ARE LOOKING AT RIGHT NOW. WE DO EXPECT A SLIGHT INCREASE IN 2027 TO $5 MILLION. OKAY, BEFORE WE GO INTO PROPERTY TAX REVENUE, ANY QUESTIONS ON OTHER REVENUE SOURCES? NO? OKAY. SO OUR PROPERTY TAX VALUES PER THE CERTIFIED ROLLS THAT CAME IN FOR 2027 TOTALED $31.4 BILLION. THERE WERE TWO COMPONENTS THAT INCREASED IT FROM THE 26 TOTAL TO $30.3 MILLION. FIRST OF ALL, YOU HAVE AN INCREASE IN THE REVALUATION OF EXISTING PROPERTIES. THAT WAS 3.1% THIS YEAR. SO YOU SEE THAT'S LOWER THAN IT HAS BEEN FOR THE PREVIOUS FOUR YEARS. BUT THE REVALUATION WAS 3.1%. WE ALSO HAD AN INCREASE IN NEW PROPERTY ADDED TO THE ROLLS OF ABOUT 0.5% -- WHICH IS NOT SURPRISING BECAUSE WE KNOW RESIDENTIAL IS FOR ALL PRACTICAL PURPOSES BUILT OUT. WE DO COMMERCIAL GROWTH PER COMMERCIAL REPRESENTS ABOUT 20% OF OUR TOTAL TAX ROLL COMPARED TO 80% RESIDENTIAL. EVEN THOUGH WE ARE HAVING GROWTH IN COMMERCIAL, IT DOESN'T MOVE THE NEEDLE THAT MUCH WHEN YOU LOOK AT THE OVERALL TOTAL OF $31.4 BILLION. >> WHEN DOES THE RITZ-CARLTON GO ON OUR TAX ROLLS? >> THE TAX ROLLS WERE BASED ON JANUARY 1ST OF 2026. THAT IS WHAT THE CURRENT TAX ROLLS ARE. THERE WAS SOME CONSTRUCTION STARTED AT THAT POINT. OBVIOUSLY MOST OF IT HAS HAPPENED THIS YEAR. SO FOR THE NEXT TAX YEAR -- WHICH IS GOING TO BE BASED ON JANUARY '27 TAX ROLLS, THAT IS WHERE WE WILL SEE THE BIG INCREASE. >> BECAUSE IT IS SUCH A BIG BUILDING AND SELLING FOR MILLIONS AND MILLIONS, AND MILLIONS PER UNIT, CAN WE LOOK AT THAT INFORMATION AS PART OF THE VALUE OF THE TOTAL THING? DO WE HAVE AN INDEPENDENT PERSON THAT KIND OF LOOKS AT -- BECAUSE IT IS FIRST OF ITS KIND? IS PRETTY VALUABLE ESPECIALLY IF THEY ARE SELLING UNITS FOR $3 MILLION EACH. >> DOES THE TOWN VALUE -- >> ARE WE ABLE TO LOOK AT THE TOTAL VALUE OF THAT PROPERTY AND DO A FORMULA BASED ON WHAT THEY ARE SELLING FOR? THEY ARE SELLING JUST LIKE ANY REAL ESTATE, BUT IT IS A UNIT. WE SHOULD BE ABLE TO VALUE IT AT WHAT EACH UNIT IS SELLING FOR. >> THE APPRAISAL -- WE FOLLOW WHAT THE APPRAISAL DISTRICT DOES. WE GO OFF OF THE APPRAISAL. >> ONE OF HIS 36 BOARDS HE SERVES ON, ARTHUR I NEED YOU TO GO EACH UNIT, FLOOR BY FLOOR AND GET THE EXACT SALES AMOUNT AND MAKE SURE THEY KNOW THAT. I THINK THAT'S GOING TO BE A BIG NUMBER. A REALLY BIG NUMBER. >> I THINK IT IS APRIL '27 THAT THEY WILL START MOVING IN IS THAT WHEN THE VALUATION STARTS? >> THE VALUATION IS BASED ON IMPROVEMENTS ON THE GROUND. SO TO THE EXTENT THAT THEY HAVE PUT A WHOLE BUNCH OF IMPROVEMENTS ON THE GROUND FROM JANUARY 1ST OF 2 '26 THIS YEAR, THE APPRAISAL DATE WILL BE JANUARY 1ST, '27. THERE WILL BE MORE THAT HAPPENS BETWEEN JANUARY AND APRIL NEXT
YEAR. WE WILL SEE A BIG INCREASE THIS YEAR. WE HAVE TRIED TO FACTOR THAT INTO OUR 5-YEAR PLAN BECAUSE WE DON'T KNOW THE EXACT AMOUNT. BUT WE FACTOR SOMETHING IN THERE. A LITTLE BIT. >> CAN YOU ADDRESS THE TREND THAT WE SEE IN THE APPRAISED VALUES GOING UP? THEY CONSISTENTLY INCREASE. THEY HAVE JUMPED SO MUCH FROM TIME TO TIME. CAN YOU EXPLAIN THAT TO US? >> I CANNOT, BECAUSE I'M NOT PART OF THE APPRAISAL. I AM THE CENTRAL APPRAISAL DISTRICT. WE CAN GET MORE INFORMATION FROM YOU. AND ARTHUR I'M SURE COULD GIVE US SOME INFORMATION. BUT AGAIN YOU CAN SEE THIS YEAR THAT THE GROWTH WAS STEADILY GOING UP IN THE PREVIOUS FIVE YEARS AND THEN FOUR YEARS. WE DID HAVE ALMOST HALF OF WHAT IT WAS LAST YEAR. >> I THINK IT'S IMPORTANT FOR THIS BOARD TO UNDERSTAND IF YOU LOOK AT THE GOVERNOR'S PROPERTY TAX PLAN AND THE LIEUTENANT GOVERNOR'S PROPERTY TAX PLAN, THIS CHART IS GOING TO DRASTICALLY CHANGE. AND MAKING SURE WE PREPARE FOR THAT AND UNDERSTAND WHAT'S COMING IS CRITICALLY CRITICALLY IMPORTANT. WE ARE BLESSED TO HAVE 72 WHATEVER THE PERCENTAGE IS OF USE TAXES HERE. AND 48 -- -- >> 49%. >> 49% PROPERTY TAX WE ARE VERY ANOMALOUS. THE COUNTY HAS GOT A BIG ISSUE FACING THEM THAT ALSO HAS IMPLICATIONS TO US. WE NEED TO CONSIDER THAT AS WE LOOK AT THIS BUDGET. IT IS COMING SOON. >> WE DO. EVEN THIS YEAR PART OF THE REASON WE SEE DECREASE IS COMMERCIAL INVENTORY. WAS EXEMPT FROM TAXATION. THE LEGISLATURE CONTINUES TO DO THINGS THAT LOWER THE TAXABLE AMOUNT. THIS RIGHT NOW, THE LAW IS THAT THERE COULD BE A 10% INCREASE IN YOUR HOMESTEAD THAT IS CONSIDERED. THAT IS ONE OF THE THINGS THAT THE GOVERNOR IS CONSIDERING REDUCING THAT RATE. YOU ARE RIGHT. THERE'S GOING TO BE A LOT OF CHANGES. >> THE LIEUTENANT GOVERNOR PART OF HIS PLAN IS THE DOUBLE NICKEL PLAN IF YOU ARE 55, THE LIEUTENANT GOVERNOR PATRICK, 55 YEARS OLD, YOU GET DOWN TO THE SENIOR LEVEL HOMESTEAD POSITION PORTION. I MEAN WE HAVEN'T LOOKED AT THAT. BUT THAT IS A BIG NUMBER. >> DOES THAT AFFECT ALL JURISDICTIONS? >> EVERY SINGLE HOME THAT IS 55 YEARS AND OLDER WILL THEN HAVE THE SENIOR CITIZEN DISCOUNT IN PLACE THAT WE HAVE RIGHT NOW. RAISE YOUR VALUES. THERE'S A LOT OF DIFFERENT FACTORS. THAT'S A BIG NUMBER. >> IT IS. WE HAVEN'T GOT TO THAT PART YET. IT'S ONE OF THE THINGS THE BOARD WILL HAVE TO CONSIDER IF YOU WANT TO LOWER THE TAX RATE THIS YEAR. THERE'S A WHOLE BUNCH ON THE HORIZON THAT IS PROBABLY GOING TO FORCE THE TAX RATE LOWER ANYWAY. >> HAVEN'T BEEN TO TWO MEETINGS OR TWO PRESENTATIONS OF THE GOVERNOR THERE'S NO QUESTION. THEY ARE VERY, VERY SERIOUS ABOUT THIS. THIS IS NOT JUST A CAMPAIGN. THEY ARE WORKING VERY HARD TO GET THIS DONE. YOUR POINTS ARE WELL TAKEN. >> WE DO HAVE PROPERTY TAX EXEMPTIONS THAT ARE IN PLACE FOR THE AGE 65 AND OLDER OR DISABLED THERE'S AN EXEMPTION AT $50,000. THIS BOARD INCREASED THAT LAST YEAR OR TWO YEARS AGO. IN TOTAL, THAT EXEMPTS VALUES OF ABOUT $521.1 MILLION. WHICH REDUCES THE TOWNSHIP'S TAX REVENUE BY ABOUT $893,000. THERE'S ALSO A 3% HOMESTEAD EXEMPTION -- WHICH REDUCES PROPERTY VALUES OR EXEMPTS PROPERTY VALUES OF ABOUT $591 MILLION. WHICH SAVES TAXPAYERS A TOTAL OF JUST OVER A MILLION DOLLARS. SO WHEN YOU COMBINE THESE EXEMPTIONS, THE BOARD HAS TAKEN ACTION TO LOWER TAXABLE VALUES, PROPERTY OWNERS BY $1.1 BILLION. END RESULTS IN ABOUT A $1.9 MILLION REDUCTION IN TAX REVENUE FOR THE TOWNSHIP. SO IN TERMS OF OUR TAX RATE, OUR -- YOU CAN SEE WHAT OUR RATES HAVE BEEN SINCE THE INCEPTION SINCE WE WENT FROM THE COMMUNITY ASSOCIATION DAYS WHERE THE COMPOSITE RATE WAS ABOUT $0.42. AND HOW THAT HAS STEADILY DROPPED ABOUT 59% OVER THESE YEARS. WE CAN ALSO COMPARE THAT TO WHAT WE TALKED ABOUT EARLIER, THE NO NEW REVENUE RATE. THE BLUE LINE IS THE ADOPTED TAX RATE. THE ORANGE LINE IS THE NO NEW REVENUE RATE. SO YOU CAN SEE IN SOME YEARS, WE HAVE BEEN AS BOARDS HAVE MADE THEIR DECISIONS IN SOME YEARS, WE HAVE BEEN OVER THE NO NEW REVENUE RATE. SOME YEARS, WE HAVE BEEN RIGHT EVEN WITH IT. WHEN YOU LOOK AT THE '23 TIME FRAME, WE WERE LOWER THAN THE NO NEW REVENUE RATE. FOR THE PAST SEVERAL YEARS, WE HAVE BEEN AT THE 17.14 RATE -- WHICH HAS BEEN HIGHER THAN THE NO NEW REVENUE RATE PER YOU CAN
SEE IN 2027, THAT GAP GETS CLOSED. THERE ARE REASONS WHY WE HAVE BEEN ABOVE THE NO-NEW-REVENUE RATE FOR THOSE OUR POLICY DECISIONS THE BOARD HAS MADE I PERSONALLY BELIEVE THEY HAVE BEEN GOOD ONES. YOU CAN SEE IN THAT GRAY BOX, THOSE ARE THE THINGS THAT THE BOARD HAS CONCENTRATED ON IN RESPONSE TO WHAT OUR RESIDENTS HAVE REQUESTED -- WHICH IS ENHANCED LAW ENFORCEMENT. THE PAY PARITY FOR LAW ENFORCEMENT WAS NOT A RESIDENT REQUEST, BUT THAT WAS A REALITY HAD WE HAD TO DEAL WITH STARTING LAST YEAR. WE HAVE ENHANCED THE FORESTRY MANAGEMENT. WE HAVE ENHANCED COMMUNITY MAINTENANCE. YOU SAW IN THAT INTEREST INCOME WHERE WE HAVE DROPPED DOWN IN WE COULD EARN IN INTEREST INCOME. THAT HAS HAD AN IMPACT ON US. THAT WAS REVENUE THAT WE USED TO HAVE THAT WE DIDN'T HAVE. WE HAD TO ACCOUNT FOR THAT. FINALLY, WE HAD CARES ACT AND FUNDING FOR TRANSPORTATION PROGRAMS. WE DID NOT DURING THOSE YEARS FROM ABOUT 20-24, WE DID NOT HAVE TO PAY OUR LOCAL MATCH FOR TRANSPORTATION PROGRAMS. IT WAS COVERED BY GRANTS. THAT EXPIRED IN '24. IN ORDER TO CONTINUE OUR PUBLIC TRANSPORTATION, WE HAVE HAD TO ALLOCATE TAX RESOURCES TOWARDS THAT. >> MONIQUE, IF YOU GO BACK FOUR SLIDES DUE 2023. GRAB ONE MORE RIGHT HERE. THE JUMP TO 13% STANDS OUT TO ME. IS THIS A REEVALUATION THAT HAPPENS WITH THE APPRAISAL DISTRICT THAT TAXES GO UP ACROSS THE BOARD? THE REASON I'M ASKING IS 2023 AND THE 13.80% JUMPS OUT. IF WE GO BACK TO THE SLIDE YOU WERE ON, WE ARE BELOW. DOES THAT HAVE ANYTHING TO DO? >> THERE WAS A CORRELATION BETWEEN THOSE TWO. >> COULD YOU EXPLAIN THAT? >> THE 13.9% INCREASE I'M REMEMBERING CORRECTLY, HOMESTEAD EXEMPTIONS ARE CAPPED AT 10%. BUT NOT HOMESTEAD AND COMMERCIAL DO NOT HAVE THAT CAP. I BELIEVE THIS WAS A YEAR WHERE WE SAW A LOT OF COMMERCIAL APPRECIATION COMING OUT FROM THE CERTIFIED ROLLS -- WHICH IS WHY IT IS HIGHER THAN THE 10%. BECAUSE WE HAD THAT ADDITIONAL TAX REVENUE, THE BOARD AT THAT TIME DID CONSIDER -- THEY DID LOOK AT THE RATE AND WERE ABLE TO LOWER THE RATE LOWER THAN THE NO-NEW-REVENUE RATE THAT WAS ALSO AROUND THE TIME WHERE THE INCORPORATION DISCUSSION WAS GOING ON. AND SO THERE WERE SOME RESERVES AVAILABLE THAT WE WERE ABLE TO CONVERT AND USE FOR DIFFERENT THINGS. THAT ALSO CONTRIBUTED TO THE DECLINE. >> MOVING FORWARD AS WE TALKED ABOUT THE GOVERNOR CHANGING THE TAX RATE AND SOME OF THOSE THINGS, IF WE DON'T ANTICIPATE THAT IN THE OTHER DIRECTION, IT COULD PUT US IN A PINCH? >> I AGREE WITH YOU, YES. SO THIS IS A LOOK AT OUR PROPERTY TAX REVENUE FROM 2027. AGAIN YOU CAN SEE THERE THE DROP IN '23 AND '24 AS WE WERE JUST DISCUSSING. AND THEN YOU CAN SEE IT INCREASING FROM THERE THROUGH THE '25, '26, AND '27 BUDGET. AND IT IS FOR THE REASONS LISTED IN THE GRAY BOX BECAUSE WE DID USE PROPERTY REVENUE IN ORDER TO MAKE ENHANCEMENTS TO OUR SERVICES. AND TO ACCOUNT FOR LOWER INTEREST INCOME AND FUNDING FOR TRANSPORTATION PROGRAMS. SO LET'S LOOK AT WHAT THAT MEANS FOR THE ANNUAL TAXPAYER. SO THE MEDIAN VALUE HOME IN 2027 IS 509,335. A TAXPAYER, A HOME OWNER BACK IN 2012 OF THIS HOME, THEY HAD A HOME VALUED AT $312,000. BECAUSE OF THOSE RATE INCREASES THAT WE SAW OVER THE YEARS, THAT HOME IS NOW THE MEDIAN HOME VALUE IS NOW $509,000. IN 2012, THEY WERE PAYING A TAX RATE OF 32.5 CENTS WHILE THE VALUE OF THEIR HOME. AND THE TAX TO THE TOWNSHIP WAS $1014. HERE WE ARE 15 YEARS LATER. THAT HOME IS NOW VALUED AT $509,000. THE TAX RATE IS AT $0.17. AND THAT SAME HOME OWNER IS NOW PAID $873. WHAT THIS SHOWS US IS THE TAX RATE HAS BEEN VERY TO ACHIEVE THAT BALANCE BETWEEND THE PROVISION OF SERVICES THAT ARE DESIRED BY THE RESIDENTS. >> I THINK IT ALSO SHOWS TOO THAT THIS IS SUCH A GREAT COMMUNITY THAT-- IT SHOWS ALL OF THE SERVICES, ALL OF THE PUBLIC SAFETY HELP ALL OF OUR HOLTZ GOO UP. >> VERY GOOD WAY OF PUTTING IT. I DO WANT TO JUST REMIND THE BOARDS.
OUR MOST RECENT DATA POINT THAT WAS CONDUCTED FROM THE SURVEY. THIS IS THE QUOTE FROM THE PEOPLE THAT DID THE RESEARCH, RESIDENTS EXPRESSIONED OVERWHELMLY POSITIVE REVIEWS. 95% RATED VERY GOOD OR GOOD VALUE FOR THE MONEY. THE RATING IS HIGHER THAN THE NATIONAL AVERAGE IN TEXAS. 95% HAS HELD STEADY OVER THE PAST SIX YEARS. SO WHEN WE SURVEY OUR RESIDENTS THEY DO BELIEVE OVERWHELMINGLY THAT WE RECEIVE-- THEY RECEIVE GOOD VALUE FOR THE TAX RATE THAT THEY PAY. >> THE SAME PROPERTY THAT I WAS TALKING ABOUT ON THE PREVIOUS SLIDE THAT HOMEOWNER'S VALUE HAS GONE UP 63.3% IN THOSE 15 YEARS. THE TOWNSHIP HAS DECREASED THEIR PROPERTY TAX AMOUNT BY 13.9%. SO-- >> THAT DOESN'T EXIST ANYWHERE. >> NO. IT DOESN'T. >> THAT IS AMAZING. >> I AGREE WITH YOU. >> OKAY. VERY GOOD POINT. >> THEN IF YOU ALSO-- IF YOU THINK OF ALL THE SERVICES AND AMENITIES THAT HAVE BEEN ADDED OVER THE LAST 15 YEARS IN THIS COMMUNITY THAT RESIDENTS GET TO ENJOY, AND YET THEY ARE PAYING SIGNIFICANTLY LESS THAN WHAT THEY DID THAT 15 YEARS, IT IS AMAZING. HERE IS A LOOK AT OUR TAX RATE FOR THE TOWNSHIP COMPARED TO OUR OTHER TAXING ENTITIES AT LEAST IN MONTGOMERY COUNTY. HOUSTON IS ALSO LISTED THAT THEY ALSO SEE ON THEIR TAX STATEMENT WHEN THEY GET. SO AGAIN WE ARE THE LOWEST RATE AT 17-- 14-CENTS. THE ONE I'VE LISTED UP ABOVE ARE THE PROPOSED RATES. SHANIAN DOA. IS DEGREE TO INCREASE UP TO 1911. THAT IS THEIR PROPOSED RATED COMPARED TO CURRENT. HOUSTON ARE-- THESE ARE NOT FINAL. FINALLY. MONTGOMERY, IF YOU LIVE IN MONTGOMERY COUNTY AN THE OWNER OF A 500,000 HOME, YOUR TAX BILL THAT YOU ARE GOING TO GET IN OCTOBER IS GOING TO BE APPROXIMATELY-- THIS IS BASED ON A CURRENT YEAR. TAX BILL OF 7,035. ONLY 831 WAS PAYABLE TO THE TOWNSHIP. SO 12% OF YOUR TOTAL TAX BILL. WE FIND A LOT OF RESIDENTS-- I TAKE A LOT OF CALLS. PEOPLE GET THEIR TAX STATEMENT. THEY SEE IT. WE'RE TYPICALLY ONE OF THE MOST ACCESSIBLE PLACES TO CALL AND GET A HOLD OF. THEY CALL, BUT THEY THINK THIS IS THEIR TOWNSHIP TAX. THEY THINK IT'S ALL CONSOLIDATED. WE SHOW THEM THE SLIDE AND ONE BY ONE WE HELP EDUCATE PEOPLE AS TO WHAT IS REALLY GOING ON. >> I THINK IT'S EVEN WORSE THAN THAT MONIQUE. 80% OF MORTGAGEHOLDER HAVE ESCROW MORTGAGE. THEIR TAXES AND INSURANCE IS INCLUDED IN THERE AND THEY'RE SEEING IT GROW AT A RAPID RATE. NO CLAIMS UNTIL JANUARY 10TH. I THINK PEOPLE ARE GETTING PINCHED AND THEY'RE GETTING THE TOTAL BILL. THEY AREN'T LOOKING AT LINE ITEM BY LINE ITEM. >> NO QUESTION ABOUT THAT. >> THEY'RE FEELING THAT ACROSS-- EVERYONE FEELS THAT. IT'S IMPORTANT TO POINT OUT. >> THIS IS A HOME IN HARRIS COUNTY. 9,832. AGAIN, 831 OR 8% WAS PAYABLE TO THE TOWNSHIP. >> IS THAT CHART SHARED WITH HOMEOWNERS OR TAXPAYERS. DO WE SHARE THIS CHART? >> WE PUT IT ON-LINE, AND ONE OF THE THINGS THAT THE COMMUNICATION COMMITTEE HAS US WORKING ON IS A VIDEO AND MORE COMMUNICATIONS TO REALLY GET THIS STORY OUT. THAT IS GREAT.
I THINK IT'S IMPORTANT TO SHARE. >> ANY OTHER QUESTIONS BEFORE I MOVE ON. I'M GOING TO GET INTO EXPENSES NEXT OR DO WE WANT TO TAKE A BREAK? HOW ARE YOU ALL DOING. >> DO YOU WANT TO TAKE A BREAK. >> WE WILL BE GOING INTO JUST F.Y.I. LIKELY CONSECUTIVE SESSION AT 10:30 SO WE CAN KEEP GOING UNTIL 1030 AND TABLING A BREAK THEN OR YOUR CALL. >> LET'S KEEP GOING. >> CARRY ON. OKAY. >> WE'RE GOING TO MOVE INTO PERSONNEL. TOTAL LOOK-- FIRST OF ALL, WHEN WE LOOK AT EXPENSES BY TYPE, SALARIES AND BENEFITS IS THE LARGEST COMPONENT OF OUR EXPENSES. THAT HAS BEEN TRUE FOR A LONG TIME. CONTRACTED SERVICES IS THE NEXT. 69 MILLION IS THE TOTAL. SAILRY AND BENEFITS. 64 MILLION IN CONTRACTED SERVICES. THIS IS NOT SURPRISING BECAUSE OF THE NATURE OF OUR BUSINESS. WE ARE HERE TO PROVIDE SERVICES. WE ARE A SERVICE VERY HIGH LEVEL SERVICE ORIENTED ORGANIZATION. THIS ALSO SHOWS THAT WE TRY VERY HARD TO LOOK AT SALARIES AND BENEFITS VERSUS CONTRACTED SERVICES, AND SPLIT THE SERVICES OUT FAIRLY EVENLY BETWEEN WHETHER IT'S PERFORMED BY STAFF OR PERFORMED THROUGH CONTRACTS DEFENDING ON WHAT OUR ANALYSIS TELLS US IS THE MOST EFFICIENT WAY TO DO IT. YOU CAN SEE AGAIN THE BREAKOUT BETWEEN FIRE DEPARTMENT EMPLOYEES ON SALARIES AND BENEFITS AND ALSO OUR TOTAL STAFF POSITIONS. WE HAVE TOTAL FULLTIME EQUIVALENCE OF 631 EMPLOYEES. >> CAN YOU GO BACK TO THAT A MINUTE. IF YOU LOOK AT THE PRIVATE SECTOR, THERE HAVE BEEN A LOT OF CHANGES AND CONTINUE TO BE MORE CHANGES BASED ON ARTIFICIAL INTELLIGENCE ON EMPLOYEE NUM NUMBERS. YOU SAID YOU ANALYZED THE CONTRACT SERVICES VERSUS IN-HOUSE SERVICES, BUT YOU DIDN'T SAY HOW. HOW MUCH A.I. ARE YOU USING AS THE PRESIDENT TO SEE HOW YOU CAN CUT THE BASE BUDGET HERE ON THE NUMBER OF EMPLOYEES? DO WE REALLY NEED THIS MANY EMPLOYEES? I KNOW YOU PROTECT YOUR EMPLOYEES, AND I WOULD TOO. BUT AT THE SAME TIME THIS IS WHERE THE FUNDS GO PREDOMINANTLY. SO I WOULD LIKE TO ASK YOU GOING FORWARD, SURE, TO LOOK AT THIS FROM AN A.I.-DRIVEN BASIS. HOW CAN YOU TRIM-- I DON'T KNOW IF YOU DO THAT IN THE HOSPITAL-- LOOKING DEMOCRATTOR NELSON. DO YOU HAVE A COMMENT ON THAT? >> NO. I THINK ALL COMPANIES RIGHT NOW ARE DEFINITELY LOOKING AT A.I. AND WHAT POSITIONS CAN BE CHANGED OR EVALUATED FOR SURE. >> THERE IS ALSO AN OPPORTUNITY OF MOVING FORWARD HOW WE THINK OF HOW MANY A.I. CAN HELP INSTEAD OF ADDING NEW POSITIONS AS WELL. THAT IS ANOTHER WAY TO LOOK AT IT. >> REDISTRIBUTED. >> CAPABILITIES. >> WE CAN-- I CAN ASK WILLIAM TO MAKE A PRESENTATION TOMORROW. WE ABSOLUTELY ARE USING A.I. WHERE WE CAN. WE MAY COME WITH A BUDGET INITIATIVE FOR ADDITIONAL TRAINING. IT'S NOT IN HERE, BUT WE ARE USING IT TO A PRETTY LARGE DEGREE I'M NOT-- I DO BELIEVE ALL THE POSITIONS WE HAVE WE NEED. I AM NOT LOOKING AT A.I. AS A WAY TO ELIMINATE STAFF POSITIONS OTHER THAN THROUGH ATTRITION. WHEN WE HAVE POSITIONS COME OPEN, THAT IS PART OF OUR ANALYSIS. ARE THERE WAYS THROUGH TECHNOLOGY OR MERGING TECHNOLOGY THAT WE COULD USE TO NOT HIRE-- TO NOT RETIRE THE POSITION, AND USE TECHNOLOGY INSTEAD. I DO THINK THAT A.I. AND OTHER TECHNOLOGY CAN PLAY A HUGE ROLE GOING FORWARD TO EXACTLY WHAT DIRECTOR LAMB JUST SAID WHICH IS INSTEAD OF ADDING STAFF, THAT WE ARE MORE EFFICIENT AND PRODUCTIVE WITH WHAT WE HAVE BY UTILIZING TECHNOLOGY. IT WILL REQUIRE, IF WE MOVE IN THAT DIRECTION, IT WILL REQUIRE AN INVESTMENT IN AN A.I. BEYOND WHAT WE HAVE RIGHT NOW. WE WILL NEED TO GET OUR STAFF MORE-- THEY ARE TRAINED MOST OF THEM ARE TRAINED IN THE HIGH LEVEL, THE BASIC FUNCTIONS, BUT NOT DEEPER, AND THEN IT WILL REQUIRE SOME INFRASTRUCTURE CHANGES. BUT THE REASON-- THIS IS MY DECISION, THE BOARD CAN MAKE A DIFFERENT DECISION. I THINK ELIMINATING CURRENT STAFF WOULD SIGNIFICANTLY CHANGE THE SERVICE DELIVERY MODEL THAT
WE HAVE ESTABLISHED AT THE TOWNSHIP AT THIS POINT. >> CAN YOU BRING TO US A SLIDE THAT SHOWS THE PERCENT GROWTH IN OUR STAFF, OUR EMPLOYEES OVER THE LAST FIVE YEARS, AND I'VE SEEN THAT GRAPH. >> WE HAD AN EXTENSIVE PRESENTATION LAST YEAR, AND I APPRECIATED THAT. I WOULD LIKE AN UPDATE MAYBE TOMORROW AND SHOW US THE INCREASE IN STAFF THAT WE HAVE ADDED, AND SHOW US PER CAPITA. >> I WILL BE GLAD IF YOU WANT TO READDRESS THAT-- THIS YEAR WE'RE PRESENTING ACTUALLY A .5 DI CREASE IN STAFF THERE. IS NO NEW STAFF ADDED IN '27. >> I SAW THAT. THANK YOU FOR THAT. BUT THAT DOESN'T REFLECT THE LAST FIVE YEARS. I'M GOING TO SAY-- I DON'T KNOW THE NUMBER. IT'S GROWN A LOT. >> IF THE BOARD WOULD LIKE TO REVISIT THE SAME PRESENTATION FROM LAST YEAR. I WOULD GLAD TO DO THAT TOMORROW. >> NOT THE WHOLE PRESENTATION. JUST A COUPLE OF SLIDES WOULD BE HELPFUL. >> BUT THERE IS A STORY BEHIND THE SLIDES. I'M NOT GOING TO PRESENT SLIDES WITHOUT PRESENTING THE REASONS WHY THE STAFF INCREASED. I WOULD BE GLAD TO DO THAT. >> I THINK YOU HAVE ONE COMING UP. >> YES. >> THAT IS NOT THE SLIDE I'M LOOKING FOR. THANK YOU. >> YOU ARE WELCOME. >> SO WHAT WE HAVE BUILT INTO '27 BUDGET FOR PERSONNEL COST FOR GENERAL EMPLOYEES IS WAGES AND FICA ARE GROWING BY 2.9%. THAT INCLUDES A 3% GENERAL WAGE INCREASE, A 20,600 INCREASE IN OVERTIME IN IMPACTS TO FICA. IN THE FIRE DEPARTMENT, WAGES IN FICA ARE GOING 913,000. THAT ALSO INCLUDES 3% GENERAL WAGE INCREASE. AND 125,000 INCREASE IN OVERTIME. YOU HAVE TO REMEMBER FIRE DEPARTMENT OVERTIME. THEY HAVE OVERTIME BUILT INTO THEIR SCHEDULE BECAUSE OF THE SHIFTS THAT THEY WORK, SOME OF IT IS STRAIGHT TIME AND SOME OF IT IS AUTOMATICALLY OVERTIME AND THEN THERE IS UNSCHEDULED OVERTIME. THE UNEMPLOYMENT TAX IS 18.4% INCREASE. IT'S A BIG INCREASE AMOUNT, BUT A SMALL DOLLAR AMOUNT, 17,500. THAT IS BASED ON OUR EXPERIENCE RATING IN THE REPLENISHMENT TAX RATE. IT'S SET BY THE STATE TO KEEP THE UNEMPLOYMENT COMPENSATION TRUST FUND INTACT, AND BOTH THE EXPERIENCE AND THE REPLENISHMENT TAX RATE INCREASE THIS YEAR. WE HAVE NOT YET DETERMINED OUR HEALTH INSURANCE RATE INCREASE. YOU HAVE AN AGENDA ITEM ON THIS THURSDAY BOARD MEETING, ANGELA HAS TRACKS-- NOTICED THE YEAR-OVER-YEAR INCREASE WHILE IT WAS BELOW THE NATIONAL AVERAGE, IT WAS NOT ACCEPTABLE TO US. SHE HAS DONE A FANTASTIC JOB OF GOING OUT TO BID ON GETTING A NEW BROKER. THAT IS GOING TO BE BEFORE YOU ON THURSDAY, AND WE HOPE YOU WILL APPROVE IT. WE THINK THAT THEN WE WILL USE OUR NEW BROKER TO GO OUT TO MARKET AND HOPEFULLY BE ABLE TO LOWER OUR RATES. SO RIGHT NOW WE HAVE ABOUT A 7% BUILT INTO THE BUDGET. AGAIN. WE HOPE THAT CAN BE LOWER DEPENDING ON WHAT WE FIND OUT. >> GO AHEAD. >> I WAS GOING TO SAY. WITH THAT TOO, WITH INSURANCE COMPANIES THERE ARE SOME INTERESTING WAYS TO CREATE PREVENTATIVE HEALTH STUFF WITHIN THE INSTITUTION THAT CAN HELP SUBSTANTIALLY LOWER THE RATE FOR INSURANCE COMPANIES BUT YOU HAVE TO ASK. WE HAVE TO DIG INTO THAT WITH WHAT MIGHT BE AVAILABLE BROW THAT BROKER IF WE TELL THEM HEY, WE WANT TO FIND SOME THINGS LIKE THAT. RATE FOR THE COMPANY. >> YES. THANK YOU. >> THAT 7%, THAT IS WHAT REFLECTED HERE, WHAT WAS CAME BACK FOR THE ORIGINAL QUOTE. >> THE ORIGINAL, THAT'S RIGHT. SO WE'RE HOPING TO BE ABLE TO LOWER THAT. I WILL SAY AGAIN EVEN WITH THE INCREASES WE'VE SEEN OVER THE YEARS, AGAIN GOING TO COMPLIMENT ANGELA AND THE H.R. STAFF. THEY'VE DONE A FANTASTIC JOB. IN EACH OF THE LAST THREE OR FOUR YEARS WE'VE BEEN BELOW THE NATIONAL TRENDS. SO THE SELF-FUNDED HEALTH INSURANCE WE'VE SAVED ABOUT $4.2 MILLIONS IN INSURANCE PREMIUMS SINCE GOING TO. THAT WE ARE CAREFULLY MANAGING IT, BUT IT WAS GETTING TO A POINTED WHERE WE DIDN'T LIKE WHAT WE WERE SEEING ON THE HORIZON. THAT IS THE ACTION TAKEN BY ANGELA. >> THAT IS ALSO DRIVEN, I WOULD IMAGINE, BUT GENERALLY HEALTHY EMPLOYEE POPULATION. >> WE DO. A LOT OF ACTUALLY WHAT DRIVES OUR INCREASE OVERALL. WE'RE HEALTHY. BUT IT ONLY TAKES THREE OR FOUR SIGNIFICANT CLAIMS TO MOVE THE
NEEDLE. THAT IS TYPICALLY WHAT HAS HAPPENED WITH US. SO WE FOCUS A LOT ON PREVENTATIVE HEALTH MEASURES TRYING TO KEEP EVERYONE HEALTHY SO YOU DON'T HAVE THE CHRONIC SEVERE HEALTH ISSUE. >> RETIREMENT WE SEE OVERALL INCREASING BY 176%. THIS IS JUST DUE TO INCREASES BASICALLY TIED TO INCREASES IN WAGES, BUT EMPLOYEES, SOME EMPLOYEES INCREASE THEIR CONTRIBUTIONS TO RETIREMENT AND SOME DECREASE EVERY YEAR. SO WE TRACK THOSE THE BEST WE CAN, AND THEN WORKERS COMP INCREASE OF 3.7% OR 18,000. >> THE WAY THAT WE CAME UP WITH THE 3% GENERAL WAGE INCREASE IS ACCORDING TO THE COMPENSATION PLAN THAT WAS ADOPTED BY THE BOARD IN 2023, WE HAVE A GROUP OF PEER CITIES THAT WE LOOK AT FOR THE ONES THAT HAVE REPORTED, AND NOT ALL HAVE REPORTED BUT THE ONES THAT HAVE, THEY ARE REFLECTING IN THEIR BUDGET A 3.47% INCREASE. WE ALSO LOOK AT THE AVERAGE OF WHAT WE ALL THE ADDITIONAL REGION 14 CITIES WHICH WERE BASICALLY HOUSTON METRO CITIES THAT MIGHT NOT NECESSARILY BE OUR PEERS BUT WE WANT TO BE TRACK WHAT IS BEING DONE LOCALLY. 317.25%. WHEN YOU TAKE ALL OF OUR PEER CITIES AND THE REGION 14 CITIES TOGETHER, THE AVERAGE OF THOSE IS 3.322%, AND OUR PROPOSED GENERAL WAGE INCREASE FOR '27 IS 3%. ANY QUESTIONS THERE? THE REPORT FROM C.P.I. FROM THE BURE LABOUR STATISTICS THAT CAME OUT LAST THURSDAY HAS C.P.I. AT 3.4%. SO WE ALSO LOOK AT C.P.I. HERE IS THE STAFFING LEVEL FOR OUR GENERAL EMPLOYEES AT 438.2 PROPOSED FOR 2027. WE ARE REQUESTING A .5 COVENANT ADMINPOSITION WHICH I THINK HAVE LISTED HERE. ONE FOR STREET SCAPE OPERATIONS, AND WE ARE DECREASING RECREATION BY TWO POSITIONS. SO IN NET-- NET TOTALLY WE ARE DECREASING BY A-- HERE ARE THE NEW EMPLOYEES WE ARE PROPOSING. ONE IS A COMPLIANCE FILLED REP. THIS IS FOR OUR COMMERCIAL AREAS. IT HAS BEEN A FOCUS OF THE BOARD TO MAKE SURE OUR COMMERCIAL BUSINESSES, TOWN CENTER AREAS, ARE ADHERING TO THE STANDARDS. WE DO HAVE NOT ENOUGH RESOURCES TO GET TO ALL THE COMMERCIAL BUSINESSES ON A TIMELY BASIS. AND SO WE ARE REQUESTING A. 5 FIELD REP TO FOCUS ON COMMERCIAL, AND THEN WE ARE ASKING A STREET SCAPE SPECIALIST FOR THE PATHWAYS IN OUR STREET SCAPE DIVISION OF ONE F.T.E. THIS IS-- WE ARE HOPING THAT THIS COMBINED WITH A CHANGE IN THE CONTRACT THAT Y'ALL ARE GOING TO BE CONSIDERING ON THURSDAY WITH OUR STREET SCAPE PROVIDER CONTRACT, THAT THAT WILL HELP US PROVIDE ADDITIONAL RESOURCES IN ORDER TO IM IMPROV- >> I'M SORRY. I WAS GOING TO ASK ABOUT THE RECREATION EMPLOYEES, THE TWO. ARE THOSE LOST TO ATTRITION? ARE THOSE TWO -- >> THESE ARE ADVENTURE FOR TREE ADVENTURE. THEY'RE ADVENTURE COURSE OPERATORS, AND BY LOOKING AT THE USAGE OF THE AMENITY, AND HOW WE HAVE BEEN ABLE OVERTIME TO DO THINGS DIFFERENTLY, WE DO BELIEVE WE CAN-- THEY'RE CURRENTLY UNFILLED, AND WE DO NOT HAVE A NEED TO FILL THEM. SO WE WOULD LIKE TO RELEASE THEM FROM THE BUDGET. >> WOULD YOU -- >> STREET SCAPE POSITION, WOULD THAT ADDRESS MR. CHRISTIANSON CONCERN THAT HE BROUGHT UP THIS MORNING? >> IT WILL HELP. SO WHAT HE ASKED FOR THIS MORNING, WOULD PROBABLY REQUIRE ADDITIONAL RESOURCES THAN WHAT WE HAVE HERE. BUT WE ARE MAKING A CHANGE-- WE ARE RECOMMENDING A FAIRLY SIGNIFICANT CHANGE IN CONTRACTED SERVICES WITH A FAIRLY SIGNIFICANT COST, AND WE WOULD LIKE TO SEE HOW THAT PLAYS OUT ALONG WITH ADDING THIS EXTRA TEAM MEMBER BEFORE WE WOULD REQUEST ADDITIONAL STAFF. BUT THAT IS A STAFF-INTENSIVE PROGRAM THAT IS NOT SOMETHING THAT A.I. SOLVES. YOU GOT TO BE OUT THERE DOING THAT. BUT WE'RE HOPING BETWEEN-- I DON'T KNOW IF YOU WANT TO ADD ANYTHING.
BETWEEN THE CONTRACT AND NEW POSITION THAT WE CAN MAKE PROGRESS. WE BELIEVE WE WILL. >> QUESTION. I HAVE-- WOULD YOU GO BACK ONE SLIDE PLEASE, THANK YOU. GOING DOWN THE LIST HERE, I AM-- I WOULD LIKE MORE DETAIL ON CUSTOMER ENGAGEMENT WHY WE HAVE 10 PEOPLE IN CUSTOMER ENGAGEMENT? WE DON'T SELL ANYTHING THROUGH CUSTOMER ENGAGEMENT, DO WE? I WOULD LIKE MORE DETAIL? >> IT'S THE FRONT DESK. IT'S OUR CUSTOMER SERVICE REP. IT'S WAYNE BACK HERE THE BACK DECK. ANGELS WHO DOES THE SOLID WASTE CONTRACTS. CUSTOMER ENGAGEMENT. IS A WEIRD NAME. BUT THAT IS WHAT IT IS. BUT I CAN GIVE YOU EXACTLY WHO MAKES THAT UP. >> AND HOW MUCH TIME IS USED, IF ANY, IN CUSTOMER ENGAGEMENT FOR MANAGING THE ALPHA AND OMEGA MOUNTED PATROL CONTRACT. BECAUSE I KNOW THAT COMES UP. THAT SEEMS TO BE A CONSTANT DRUM BEAT THAT THERE IS ALWAYS SOME ISSUES TO BE DEALT WITH THEM. DOES THAT GO THROUGH. >> ANGEL NICKS IS THE DIRECT OBJECT OF THIS DEPARTMENT. >> IF WE DIDN'T HAVE THAT CONTRACT, COULD WE REDUCE THE NUMBER THERE. >> NO, MA'AM, I DON'T BELIEVE SO. >> WHY NO. >> ANGEL DOES MORE THING. >> I DIDN'T SAY ANGELS PER SE. >> THERE IS MUCH MORE THAN A.-AND-O. THAT IS A VERY SMALL PART OF WHAT THIS DEPARTMENT DOES. >> IT'S 50% OF THE BUDGET. >> I THINK WE'RE GOING INTO DETAIL LATER. >> I'M ASKING FOR DETAIL LATER. >> IN CHARGE OF THE SOLID WASTE CONTRACT. THE LAW ENFORCEMENT CONTRACTS AND ALL OF CUSTOMER SERVICE. THAT IS WHY I'M SAYING CONTRE DEUCE. >> I KNEW YOU WOULD NOT LIKE THAT IDEA, BUT I HAD TO JUST FLOAT IT. >> I UNDERSTAND. >> LET'S GO TO NEIGHBOURHOOD SFERSZ. I WOULD LIKE MORE DETAIL ON WHAT THAT DEPARTMENT DOES, AND THEN THE ENVIRONMENTAL SERVICES, WHAT THEY ALL DO IN THEIR REGARD? THANK YOU. >> WE'RE GOING TO HAVE SOME SLIEDZ COMING UP ON THAT. >> WE ARE GOING TO GOING DEPARTMENT BY DEPARTMENT, CORRECT, MONIQUE. >> THAT IS CORRECT. >> OKAY. GOOD. >> OKAY. SO AGAIN, WE'RE REQUESTING 1.5 NEW POSITIONS AT A COST OF 89,000. WE ARE ALSO REQUESTING TO RELEASE TWO FULL-TIME EQUIVALENT POSITIONS IN RECREATION ALT A COST OF 78,000. SO THE NET OF THOSE WOULD BE AN INCREASE IN SALARY AND BENEFITS FOR NEW POSITIONS OF ABOUT 10,500. LOOKING AT OUR GENERAL EMPLOYEES HERE ACROSS-THE-BOARD, AGAIN THIS IS NOT NONFIRE DEPARTMENT. CURRENT EMPLOYEES HAVE A BUDGET OF ABOUT $36 MILLION. THAT IS ABOUT 2.7% INCREASE. WE ARE REMOVING TWO POSITIONS. WE'RE REQUESTING ONE-AND-A-HALF. YOU CAN SEE THE COST THERE. SO IN TOTAL FOR 2027, THAT WOULD BE A 36 MILLION-DOLLAR BUDGET FOR OUR EMPLOYEES OR ABOUT 945,000 INCREASE, AND BENEFITS AS A PERCENTAGE OF SALARIES WEVMENT TRACK THIS TOO IS AT 34% FOR GOVERNMENTAL EMPLOYEES BENEFITS AS A PERCENTAGE OF SALARIES IS 38.5. WE ARE BELOW THE B.L.S. BENCHMARK. >> ANNUAL INCREASE OF 3%, BUT IT'S REALLY LIKE 2.7. >> THAT'S RIGHT. THE REASON FOR THAT IS BECAUSE YOU-- WE HAVE TURNOVER, AND SO TYPICALLY NEW EMPLOYEES COME IN LESS THAN THE EMPLOYEES THAT ARE LEAVING. WE BUDGET. WE HAVE A HUGE SPREADSHEET. WHAT THEIR STATUS IS AND WHY THEY'RE ABLE TO TRACK IT. -- IF THERE IS AN OPPORTUNITY TO REPLACE THAT WITH MORE EFFICIENT TECHNOLOGY AND ALMOST LIKE A TARGET OF HEY EVERYBODY GETS 3% UP, BUT WE WERE ABLE TO MAKE THAT UP BECAUSE WE ARE MORE EFFICIENT. INTEREST IN THAT. IT COULD BE AN INTERESTING WAY TO LOOK AT IT. >> OVERTIME WITH ATTRITION WE WILL BE LOOKING AT THAT. >> THIS IS FOR GOVERNMENT NALL EMPLOYEES, MOST HAVE PENSIONS.
HAVE DEFINED BENEFIT PLANS WHEREAS WE'RE DEFINED CONTRIBUTION PLANS. THAT IS DEFINITELY ONE REASON WHY WE'RE LOWER. OUR HEALTH INSURANCE IS LESS THAN NATIONAL TRENDS IS ANOTHER REASON. HERE IS A LOOK FOR THE FIRE DEPARTMENT. 1993 FULL-TIME EQUIVALENT POSITIONS. I SHOULD HAVE DATED THIS-- 26 AND 27 COLUMNS, NOT 25 AND 26. SO WE ARE-- THERE IS NO INCREASE IN POSITIONS BEING REQUESTED FOR THE FIRE DEPARTMENT THAT ARE INCLUDED IN THIS BUDGET. 3.3%. THE REASON THEIRS IS HIGHER THAN THE 3.3% IS PER THE COMPENSATION PLAN, THEY ALSO HAVE STEP INCREASES THAT THEY GO THROUGH AND IN ADDITION TO THE GENERAL WAGE INCREASE. >> TO REPLACES THOSE GUYS. >> NO, SIR. OKAY. ANYTHING ELSE ON PERSONNEL BEFORE I MOVE FORWARD? >> ALL RIGHT. IT'S 10:26, BUT I DON'T SEE DANIEL HERE YET. OKAY. DO YOU WANT TO TAKE A BRIEF BREAK. IT IS >> COUNTY JUDGE: WE ARE BACK IN SESSION. TURN IT BACK OVER TO MONIQUE. >> THANK YOU. BEFORE WE GET STARTED AGAIN, JUST AGAIN BASED ON-- THIS IS JUST TO BE PRESENTATION. I WANT TO GIVE YOU PLENTY OF OPPORTUNITIES FOR QUESTIONS. ARE YOU ALL READY FOR TO MOVE ON. OKAY. OKAY. THANK YOU. SO WE ARE GOING TO TAKE A LOOK AT CONSOLIDATED EXPENDITURES. WE TOUCHED ON THIS BRIEFLY. WE HAVE A $46.4 MILLION DECREASE IN CONSOLIDATED EXPENDITURES OR 19.6%. BUT THAT IS BECAUSE WE HAVE A DECREASE IN CAPITAL EXPENDITURES FROM 26 TO 27 AND A DECREASE IN TRANSPORTATION EXPENDITURES. IF YOU WILL RECALL THE REPLACEMENT OF THE BUSES AND THE TROLLEYS WERE TWO OF THE LARGE PURCHASES IN '26 THAT WE WILL NOT REPEAT IN '27. OVERALL, E.D.Z. ECONOMIC DEVELOPMENT ZONE EXPENDITURES WILL INCREASE BY 400,000 TIED TO INCREASES IN SALES TAX REVENUE. WE HAVE A $2.3 MILLION INCREASE IN LAW ENFORCEMENT ABOUT 10.8%. 3.8 MILLION REPRESENTING ABOUT 2.9% INCREASE. AND WE ARE GOING TO GO THROUGH IN DETAIL WHAT ALL OF THOSE ARE. SO HERE IS A LOOK AT OUR CONSOLIDATED EXPENDITURES BY DEPARTMENT. AGAIN 2027 WE'RE LOOK LOOKING AT 189 MILLION. YOU CAN SEE IT GOES IN DECLINING ORDER WHAT-- HOW OUR BUDGET IS ALLOCATED. WE SAW THIS ON A PREVIOUS SLIDE. EXPENDITURED BY SALARY AND IN CONTRACTED SERVICES ARE OUR TWO LARGEST COMPONENTS OF OUR BUDGET FOLLOWED BY CAPITAL. HERE IS A LOOK AT THE HIGH OVERVIEW LOOK OF WHERE OUR EXPENDITURES ARE INCREASING AND DECREASING WHEN WE COMPARE TO THE 26 BUDGET. SO LAW ENFORCEMENT IS OUR HIGHEST INCREASE AT $2.3 MILLION. FIRE DEPARTMENT AT $1.3 MILLION IN PARKS AND RECREATION AT 1 MILLION. YOU CAN SEE THE OTHER EXPENDITURES DOWN THE WAY. DOWN AT THE BOTTOM AGAIN, THE TRANSPORTATION CAPITAL PROJECTS AND THEN THE REGULAR CAPITAL PROJECTS WERE OUR BIG DECREASES. SO I'M GOING TO START OFF WITH OUR LARGEST EXPENSE INCREASE WHICH WAS CONTRACTED LAW ENFORCEMENT. HERE IS A LOOK AT THE BUDGET FROM '23 TO '27 OVER THE FIVE YEARS, THIS BUDGET HAS BEEN INCREASED BY $9.7 MILLION OR ALMOST 70%, AND YOU CAN SEE THE COMPONENTS THERE. IN 2024, THERE WERE A LOT OF NEW POSITIONS ADDED, AND THAT WAS THE BIG INCREASE YOU SEE THERE. 2025, WE HELD PRETTY FLAT AFTER THE BIG INCREASE IN '24.
LAST YEAR WAS PAY PARITY, THE FIRST OF FOUR YEARS OF PAY PARITY. THAT IS WHY YOU SEE THE BIG INCREASE THERE. 2027 WE'RE HAVING ABOUT 10.8% INCREASE IN A LOT OF THAT AGAIN IS THE IMPLEMENTATION OF THE SECOND YEAR OF PAY PARITY. >> HOW MANY YEARS ARE WE EXPECTING THAT? >> FOUR YEARS. UNLESS THE COUNTY CHOOSES TO EXTEND THAT TO SPREAD IT OUT OVER MORE YEARS WHICH I KNOW IS A TOPIC OF DISCUSSION, BUT AS OF RIGHT NOW THAT NOTHING OFFICIAL. >> WE'RE ON YEAR 2. >> WE'RE ON YEAR 2. THAT IS CORRECT. >> LAST FIVE YEARS WE'VE INCREASED POLICE BY-- >> THAT IS CORRECT. >> HOW MANY NEW COPS DID WE ADD. >> I'M TRYING TO THINK WHAT WE DID IN '24. ANGEL, YOU CAN LOOK THAT UP FOR ME? I WILL GET ANGEL TO GIVE US THE OFFICIAL NUMBER. >> THANK YOU. >> SEVERAL. >> OUR CONTRACT HAS THE LARGEST NUMBERS OF OFFICERS ANY ANYBODY IN THE COUNTY. >> BY FAR. >> BY FAR. >> IN TERMS OF NUMBER OF PERSONNEL THAT WE CONTRACT FOR, IT'S 134 WITH MONTGOMERY SHERIFFS DEPARTMENT 101. THE CONSTABLE'S OFFICE SIX. THAT IS OUR INTERNET CRIMES AGAINST CHILDREN AND SAFE HARBOUR, THE CHILDREN'S PROGRAMS. HARRIS COUNTY CONSTABLES, WE HAVE 17 AND THEN WE DO FUND A JUST OF THE PEACE PRECINCT 3 CLERK, ONE THERE. IN 134. CONTRACTED WAGE AMOUNT OF $18.4 MILLION. >> SO IF WE WERE GOING TO LOOK AT A SPOT THAT WOULD NOT BE NECESSARY, WE MIGHT LOOK AT THE CLERK WHO OPERATES IN THE JUSTICE OF THE PEACE OFFICE 75,000 A YEAR. IS THAT SOMETHING THAT MAGNOLIA OR ANY OF THE OTHER END TIGHTS. SHENS. >> THAT IS WHEN THEY FIRST STARTING ENHANCING LAW ENFORCEMENT TO SUPPLEMENT WHAT COUNTY PROVIDED. BECAUSE OF THAT THERE WAS A LOT OF MORE ACTIVITY IN THE COURT. THOSE TYPES OF THINGS. SO THE IDEA WAS THAT WE WOULD HELP FUND THAT NEW POSITION THAT WAS NECESSARY THINKING AT THE TIME THAT WE ALSO MAY HAVE REVENUE SHARE IN THE FEES THAT WERE COLLECTED THAT HAS NOT HAPPENED. WE DO NOT OR NOT ELIGIBLE FOR ANY TYPE OF PORTION OF THOSE FEES. >> THAT IS MY THINKING. WE JUST CAN'T. >> WE STAFF THE POSITION TO HELP PROCESS TICKETS FOR REVENUE THAT WE DON'T GET. >> RIGHT. >> THE CLERK ACTUALLY SERVICES PEOPLE WHO ARE NOT IN THE WOODLANDS TOO. >> JUST OF THE PEACE-- PRECINCT-- I DON'T KNOW HOW THAT WORKS. I DON'T KNOW IF BRETT OR-- I DON'T KNOW THE ANSWER TO THAT QUESTION. >> WE GET NO ANY KIND OF A REBATE ON THE TICKETS. >> NO. >> IT'S A COURTESY. >> IT IS. IT'S A COURTESY. >> EXPENSIVE COURTESY. >> YES, MA'AM. >> SOMETHING WE SHOULD THINK ABOUT BECAUSE IF WE'RE LOOKING AT EMPLOYEES THAT REALLY SHOULDN'T BE HERE, THIS ONE SHINES. >> WELL AS YOU KNOW WE'VE BROUGHT THIS UP BEFORE, SO, YEAH, IT'S WHATEVER DIRECTION Y'ALL WOULD LIKE TO MOVE. IN I WILL SAY THEY'VE ALREADY SET THEIR BUDGET AND DONE A PROPOSED RATE SO IF WE'RE GOING TO DO ANYTHING WITH THIS, I PROPOSE THAT WE GAVE GIVE THEM A YEAR'S NOTICE SO THEY CAN REFLECT IT IN THEIR NEXT YEAR'S BUDGET. >> THAT MAKES SENSE. >> THANK YOU. >> THIS WAS THEIR SLIDE FROM LAST YEAR. I CONVERTED IT INTO SLIDES SO WE COULD SEE THE ACTUAL INCREASES. SO YOU SEE IN 2026 WHAT THE PAY PARITY INCREASES WERE DEFENDING ON NUMBER OF YEARS OF SERVICE THAT THE DEPUTIES AT THAT SERVICE IN THEIR POSITION AND NOW IN YEAR 2. THIS IS WHAT WE WOULD BE LOOKING
AT. YOU WILL SEE IN OUR BUDGET IN A MINUTE. IT AVERAGES OUT TO-- THAT IS NOT AN EXACT AMOUNT BECAUSE THEY DO IT BY PERSON THAT IS ON OUR CONTRACT. >> IN ADDITION TO THEIR PARITY. THEY ALSO IMPLEMENTED ADDITIONAL PAY INCENTIVES FOR LAW ENFORCEMENT AND FOR THE GENERAL EMPLOYEES BUT FOR US IT MATTERS TO LAW ENFORCEMENT. THINGS LIKE EDUCATION PAY AND DIFFERENT STIPENDS DEPENDING ON WHAT TYPE OF WORK THAT THEY DO. YOU CAN SEE THAT LISTED HERE. THAT HAS ALSO IMPACTED OUR BUDGET. >> SO IN TERMS OF CONTRACTED LAW ENFORCEMENT FROM '26 TO '27, WE ARE SEEING A 273 MILLION 2.3 MIN INCREASE. COUNTY SHERIFF'S OFFICE. WE HAVE BUILT IN A 12.5% PAY PARITY. THEY HAVE DEFERRED IMPLEMENTING-- PAY PARITY UNTIL JUNE 1ST OF '27 SO THAT IS GOING TO LOWER OUR AMOUNT BY ABOUT 690,000 IF I RECALL. BUT AGAIN THAT IS JUST A ONE-TIME THING. WE ARE GOING TO HAVE TO PICK IT UP THE FOLLOWING YEAR. IT IS A DEFERRAL THAT GENERATORS A ONE-TIME SAVINGS OF 690 FOR THUS YEAR, AND I HAVE A SUGGESTION ON HOW WE COULD MAYBE REUTILIZE THAT. >> PICK IT UP NEXT YEAR BUT THE PARITY FOR THAT YEAR. >> THEY HAVEN'T DECIDED THAT YET. IN TOTAL THEY PLAN TO KEEP ON GOING. I DON'T KNOW IF THERE IS GOING TO BE A CONSTANT DEFERRAL OF SIX MONTHS. THAT WAS NOT DISCUSSED. >> VEHICLES ARE INCREASING IN ENVIRONMENT BY 400,000. HARRIS COUNTY HAS FACTORED IN 8.8%. THAT COVER 2 CAN 208,000 AND JUT A NOMINAL AMOUNT INCREASE FOR FUEL THAT WE PAY FOR OUR CONTRACT DEPUTIES. >> SO THIS IS A LOOK AT DETAILED CONTRACTED LAW ENFORCEMENT BUDGET. SO IN IT HAS ALL THE DIFFERENT LINE ITEMS THERE. THE ONE THAT I HAVE IN RED THERE AS I MENTIONED THE 12.5% FOR MONTGOMERY COUNTY SHERRIFFS PERSONNEL OF 1.7% INCREASE BASED ON A 12.5% PAY PARITY. BY DEFERRING THAT TO JUNE 1ST, I BELIEVE WE'LL SAVE SOMEWHERE AROUND $690,000. OUR BODY VEHICLE CAMERAS, DECREASE OF 300,000. WE HAD TO PAY FOR THEIR NEW CAMERA SYSTEM. THE EXXON SYSTEM. NOW WE'RE ONLY RESPONSIBLE FOR THE ONGOING MAINTENANCE. THAT IS WHAT THE DECREASE IS THERE, AND EQUIPMENT REPAIRS AND MAINTENANCE IS ALSO MISLAINOUS EQUIPMENT. WE'RE SEE BEING 114,000 SAVINGS THERE. COULD YOU GO BACK TO THAT EQUIPMENT EXPENSE. WOULD YOU BE ABLE TO LINE ITEM FLOCK CAMERAS IN THERE SO WE CAN SEE WHAT WE'RE SPENDING ON FLOCK CAMERAS. >> YES. FLOCK CAMERAS ARE 90,000 A YEAR ONGOING MAINTENANCE, BUT YES, I CAN SHOW A LINE ITEM. >> SO IN TERMS OF OUR VEHICLES AND EQUIPMENT, THAT TOTAL BUDGET LINE ITEM WAS $2.7 MILLION. WE SAW AN 813,000 INCREASE. THE REASON FOR THAT INCREASE IS THE LINE ITEM THAT IS LISTED HERE IN BLUE. IN TOTAL THAT EQUIPMENT LINE ITEM, FIRST OF ALL REPLACE VEHICLES AT ABOUT 18 PER YEAR FROM MONTGOMERY COUNTY AT A COST. I HAVE ADDED TO THE BUDGET THIS YEAR AS A CONSIDERATION. IF WE WERE TO INSTEAD OF CONTRACT WITH ALPHA AND OMEGA AND WANTED TO MOVE TO THE SHERIFF'S OFFICE AND WE'LL EXPLAIN THE REASONS WHY IN THEIR PROPOSAL, WE WOULD NEED TO FUND
ONE-TIME CAPITAL COST OF ABOUT $700,000. THE BOARD DOES NOT HAVE TO MOVE FORWARD WITH THIS, BUT I WANTED TO PUT IT IN THE BUDGET TO SEE HOW WE WOULD HELP FUND IT MY IDEA ACTUALLY NOW IS THE 690,000-DOLLARS THAT WE KNOW WE'RE GOING TO SAVE BECAUSE OF THE DEFERRAL OF PAY PARITY THAT WE WOULD USE THAT MONEY TO HELP FUND CAPITAL. AS OPPOSED TO FUNDING IT SEPARATELY. THEN IF YOU GO TO THE CUSTOMER ENGAGEMENT BUDGET WHICH IS LISTED HERE, YOU CAN SEE IN MOUNTED PATROL. I HAVE THAT LEFT THAT CONTRACT JUST AS IT IS. SO WE HAVE BUDGETED IN FORECASTING C.P.I. OF ABOUT 3 HEARSE INCREASE SO IT WOULD TAKE THEIR BUDGET BY 45,000 FOR A TOTAL OF 1,576. THEY DID REQUEST BUDGET INITIATIVES WHICH WILL PRESENT TOMORROW. THEY ARE ASKING FOR AN INCREASE IN RATE AND HOURS. THAT IS NOT REFLECTED HERE. SO WHAT I'M SAYING IS WE TOOK THE MONEY THAT IS HERE FOR MOUNTED PAROLE AND WE DID-- WE FUNDED A ONE-TIME CAPITAL PURCHASE USING THE SAVINGS FROM PAY PARITY. THE BOARD COULD CHOOSE TO MOVE TO STILL HAVING A MOUNTED PATROL BUT HAVING IT PERFORMED IN A DIFFERENT WAY. SO LET'S TALK ABOUT THAT. THE MONEY IS IN BUDGET TO DO THE WAY WE'RE TALKING ABOUT WITH ONE-TIME CAPITAL COST. SO MONTGOMERY SHERIFFS OFFICE HAS SUBMITTED A PROPOSAL FOR A MOUNTED PATROL. I'M NOT GOING TO READ THROUGH ALL OF THIS, BUT THIS IS WHAT THEY'RE SUGGESTING, AND THEIR PATROL WOULD BE BASED ON PROVIDING 400 HOURS PER WEEK OF SERVICES. THIS WOULD BE THE PROGRAM HIGHLIGHTS. SUPPLEMENTAL OVERTIME BUDGET WOULD BE SIX MOUNT PAD TROLL DEPUTIES AND ONE MOUNTED PATROL SERGEANT FOR A STAFF SEVEN. THE CAPITAL WOULD INCLUDE TWO ONE-TON PICKUP TRUCKS AND TWO FOUR-HORSE TRAILERS. PART OF THE CAPITAL REQUIREMENTS WOULD INCLUDE IN PARTNERSHIP WITH MONTGOMERY COUNTY BUILDING A FACILITY TO HOUSE THE HORSES. SO THE STALLS FOR THE HORSES AND THIS PROGRAM WOULD HAVE SPECIAL MOUNTED UNIFORMS AND SUPPLIES. THIS IS A COMPARISON OF THE MAJOR DIFFERENCES BETWEEN HAVING MOUNTED PATROL FOUNDED BY ALPHA AND O'MAKE GAH, AND I GUESS I SHOULD HAVE STARTED OFF BY SAYING THIS. WE DON'T-- MOUNTED PATROL PERFORMED BY ALPHA AND OMEGA. THEY HAVE BEEN A GREAT COMMUNITY PARTNER WITH US FOR YEARS AND YEARS AND YEARS. WHAT WE ARE TRYING TO ADDRESS HERE-- WHAT I'M TRYING TO ADDRESS HERE IS PRIMARILY THE LAST ITEM ON HERE. PROVIDES A PRIVATE COURTESY PATROL ABOUT AS MONTH GULF OF MEXICO I DIDN'T COUNTY SHERIFFS WOULD BE COMMISSIONED OFFICERS. RIGHT NOW ALPHA AND OMEGA, SUSPICIOUS ACTIVITY. THEY CALL PROPERTY SECURITY OR THEY USE THEIR CELLPHONE TO CALL 911. UNDER A PROGRAM SUPPORTED BY M.C.S.O. IF THERE IS SUSPICIOUS ACTIVITY THEY WOULD HAVE THE AUTHORITY TO ACT IMMEDIATELY AND THEY'RE INTEGRATED INTO ALL SHERIFF OFFICES COMMUNICATION METHODS MEAN NOTHING DELAY IN CONTACTING BACKUP LAW ENF ENFORCFORCEMENT RIGHT NOW WE FUA PATROL OF HOURS OR-- HOURS VARIED PER WEEK BASED ON 387 HOURS PERIQUE. THE MOUNTED PATROL WOULD BE BASED ON 400 HOURS PER WEEK. WE ALSO PAY IN ADDITION TO PATROL. WE PAY FOR SUPPORT HOURS UP TO 120 HOURS A WEEK. A CLERK AND A MANAGER FOR A.N.O. UNDER M.C.S.O. WE WOULD FUND ONLY THE SEVEN POSITIONS. THE SIX DEPUTIES AND THE ONE FULL-TIME SERGEANT. ALPHA AND OMEGA. NO CAPITAL COSTS BECAUSE THOSE ARE FULLY FUNDED THROUGH THEIR CONTRACT RATES. WE WOULD HAVE ONE-TIME CAMENTD COST FOR THE INITIAL SETUP IN PARTNERSHIP. PRIVATELY OWNED BY THE RIDERS. THE HORSE WOULD SAY BE OWN AND TRAINED BY M.C.S.O. ONE OF THE PRIMARY THINGS THAT I FOCUSED ON WITH THIS IS UNDER ALPHA AND OMEGA THE TOWNSHIP DOES HAVE-- DUE TO A PRIVATE VENDOR PATROLLING ON NONTOWNSHIP OR PRIVATE PROPERTY.
THAT EXPOSURE AND LIABILITY GETS ELIMINATED IF THEY WERE TO MOVE TO M.C.S.O. BECAUSE THEY CAN'T PATROL TOWNSHIP WITHOUT US HAVING THE EXPOSURE. >> THIS WAS THE ONLY BUDGET INITIAL TITCH THAT I OFFERED FOR FOR THE YEAR 2027. ALTHOUGH WE'VE DISCUSSED IT MANY, MANY TIMES. THE BOARD HAS DISCUSSED IT. IT'S BEEN-- CAN KICKED DOWN THE ROAD FOR YEARS. I THINK THAT IN MY OPINION THAT ALPHA AND OMEGA HAS-- MAYBE IT WAS ONCE DIFFERENT BUT NOT MUCH MORE THAN A CELLPHONE ON A PONY, AND AT THIS POINT WE HAVE THE OPPORTUNITY FOR THE FIRST TIME TO HAVE THE SHIR I SHERRIFFS' OG WILLING AND ABLE TO TO PROVIDE A SINCERE UPGRADE. THIS IS NOT ELIMINATING THE MOUNTED PATROL. IT'S ENHANCING IT. AND MOST IMPORTANT IT'S TAKING THE LIABILITY OFF THE TOWNSHIPS TAXPAYERS SHOULD ANYTHING UNTOWARD HAPPEN WITH ONE OF THEIR RIDERS OR ONE OF THEIR PONIES. SO I THINK THAT IT IS SUCH A WIN-WIN OPPORTUNITY, I DON'T KNOW HOW THE REST OF THE BOARD WILL FEEL ABOUT THIS, BUT FOR ME AS A REPRESENTATIVE OF THE TAXPAYERS, I THINK THIS IS ON BALANCE THE BEST WAY TO GO FORWARD AND PROVIDE THE SECURITY ENHANCED SECURITY FOR OUR RETAIL CENTERS AND OUR EVENT CENTERS LIKE THE PARKS TOWN GREEN PARK PARTICULARLY. I THINK IT'S A GREAT OPPORTUNITY AND I HOPE THE BOARD WILL MOVE UNANIMOUSLY TO GO IN THIS COST-EFFECTIVE DIRECTION. >> I 100% AGREE. THESE ARE EIGHT, SEVEN OFFICERS, FULL-- FULL LAW ENFORCEMENT OFFICERS WITH A GUN. WITH ARRESTING CAPABILITIES. THIS IS ONE OF THE THINGS I WOULD LIKE TO LOOK OTD-- I POINTED OUT EARLIER-- THEY'RE PATROLLING EVERYWHERE IN OUR COMMERCIAL DISTRICTS. THIS IS 700 ONE-TIME PAYMENT. I THINK COULD EASILY BE ENCOMPASSED BY THAT IF THE BOARD SO CHOOSES. IT GIVES US THE ABILITY TO DIVERSIFY A LITTLE BIT AND NOT HAVE SO MUCH HIT ON OUR OPERATIONS. BUT I DO SUPPORT THIS. >> TELL ME MORE ABOUT THE LIABILITY AND THE EXPOSURE THE TOWNSHIP HAS. >> THERE IS A LITTLE HISTORY THERE. WE AMENDED THE AGREEMENT, WHEN WAS, THAT MONIQUE, FIVE YEARS AGO, BECAUSE OF THE CONCERN THAT WE HAD THAT THERE HAS NEVER BEEN AN AGREEMENT WITH THE PRIVATE PROPERTY OWNERS THAT ALPHA AND OMEGA COULD BE ON THEIR PROPERTY. WE AMENDED THE AGREEMENT AT THAT POINT TO PROVIDE THAT THEY NEEDED TO GO OUT AND GET PERMISSION AND AN ENDIMMITY FROM EACH OF THE LAND OWNERS. THE MALL, MARKET STREET, UNANIMOUSLY THEY WOULD NOT GIVE THEM-- THEY JUST BASICALLY SAID WE AREN'T GOING TO SIGN THAT AGREEMENT. BECAUSE WE DON'T WANT TO INDEMNIFY ANYBODY. THE ISSUE WE HAVE IS THE TOWNSHIP WAS PAYING FOR THOSE SERVICES. OBVIOUSLY A TARGET FOR ANY LAWSUIT IF SOMETHING WERE TO HAPPEN. EITHER A HORSE KICKED SOMEBODY OR THERE WAS AN INCIDENT WHERE THEY DON'T THINK IT'S PROPERLY HANDLED. THERE ARE LAWSUITS ALL THE TIME. THEY'LL SUE THE LAND OWNERS AND ANYONE ELSE INVOLVED. WE HAD REAL CONCERNS. THIS DOES SOLVE THAT PROBLEM. IF THESE ARE LAW ENFORCEMENT HAS A RIGHT TONE FORCE THE LAW ON ANY PROPERTY THEY WANT. BUT PATROL WHEREVER THEY NEED TO PATROL. THIS DOES REMEDY THAT SITUATION. OBVIOUSLY THE COUNTY WOULD THEN BE RESPONSIBLE IF THERE WAS A MISHAP. GOVERNMENTS HAVE GOVERNMENTAL IMMUNITY TO A CERTAIN EXTENT. ADDED PROTECTION FROM THE TOWNSHIP THAT WE'RE PAYING FOR LAW ENFORCEMENT. THEY'RE THE EXPERTS. WE AREN'T. >> THAT IS A GOOD QUESTION. >> HAVE WE BEEN CARRYING EXTRA INSURANCE ON OUR BOOKS FOR THAT. JUST OVERALL CONCERN. >> WE HAVE PROPERTY AND LIABILITY INSURANCE ON ALL OF OUR TOWNSHIP OWN THE PROPERTY. WE DON'T KNOW HOW THAT WOULD PLAY OUT. THERE ARE TONS OF OTHER CASES WHERE THEY WOULD LIKELY SUE THE TOWNSHIP. >> I WANTED TO ASK THE QUESTION. PRIOR TO MY COMING ONTO THE
BOARD, I WAS TOLD THAT THIS SERVICE. ALPHA AND OMEGA WAS PART OF OUR LAW ENFORCEMENT BUDGET. IS THAT CORRECT? >> IT USED TO BE, AND THEN WE MOVED IT TO THIS CUSTOMER ENGAGEMENT BECAUSE THEY AREN'T COMMISSIONED LAW ENFORCEMENT OFFICERS. THEY ARE A LAYER OUT THERE TO ASSIST LAW ENFORCEMENT. BUT THEY AREN'T LAW ENFORCEMENT. IN THIS CASE THIS, WOULD ALLOW US TO PUT THEM BACK UNDER THE LAW ENFORCEMENT. >> THEN IT WOULD BE UNDER LAW ENFORCEMENT. PROVIDED THROUGH MOUNTED PAD TROLL. >> HAVE WE SPOKE TO THE PROPERTY OWNERS OR COMMERCIAL DISTRICT TOWN CENTER, THE MALL, MARKET STREET PAVILION. HOTELLIERS. I THINK IT WOULD BE GOOD FOR TO US MAKE SURE WE BRIEF THEM ON IT. THEY PLAY A KEY PART ON THEIR FACILITIES. >> WE HAVE NOT, BUT THAT WOULD CERTAINLY BE PART OF THE PLAN IF THE BOARD IS INTERESTED IN MOVING FORWARD WITH THIS. NOTIFYING THEM. >> HOW THEY WOULD FEEL ABOUT IT. >> YEAH. IT PLAYS AN IMPORTANT PART. >> THE OVERALL COST FOR THE SHERIFF'S OFFICE MOUNT PAD TROLL IS OPERATIONALLY ONGOING IS EQUIVALENT. IS THAT -- >> IT'S ACTUALLY BASED ON THE PROPOSAL THAT WE ARE PRELIMINARILY LOOKING AT WOULD BE ABOUT 200,000 LESS IN ANNUAL OPERATING COST. >> CHEAPER. >> YES, SIR. >> TELL US ABOUT THE HOURS THAT THEY ARE PLANNING TO COVER THE EVENTS? HOW THAT WOULD BE AN IMPROVEMENT AS WELL. >> WELL AGAIN THERE ARE SERVICES BASED ON 400,000-- 400 HOURS PER WEEK. IN OUR TALKS WITH THE SHERIFF'S DEPARTMENT IS WHAT THEY HAVE SAID IS THEY WILL CONCENTRATE HEAVILY ON WHEN THERE ARE EVENTS, HOLIDAYS, SPECIAL OCCASIONS-- PATROLS EVERY DAY. THERE MAY BE PATROL ON TUESDAY EVENINGS, AT 7:00-- IF THERE IS NOTHING GOING ON. THEY'RE ALWAYS GOING TO HAVE IS A PRESENCE. BUT THEY MAY NOT PUTS MUCH A RESOURCES ON A TUESDAY NIGHT WHEN THERE IS NOTHING GOING ON AND BE ABLE TO DEPLOY RESOURCES WHEN THERE IS A MAJOR EVENT OR CHRISTMAS. >> FREQUENTLY ON THE WEEKENDS AND WE'VE HAD SOME DIFFICULTIES GETTING COVERAGE FROM A.N.O. ON WEEKENDS. >> YES, MA'AM. >> THANK YOU. >> IS THERE A HORSE TO HORSE COMPARISON AS FAR AS ON THE PAVEMENT AT A TIME-- IS IT THE SAME. IS IT DIFFERENT. >> RIGHT NOW. ALPHA AND OMEGA. WE HAVE A SCHEDULE. WITHIN THE 387 HOURS A WEEK. THEY DETERMINE WHEN THEY WILL PATROL. SO WILL THE SHERIFF'S DEPARTMENT. WE DON'T REALLY CONTROL -- >> EXACTLY. >> THEY'LL CERTAINLY LISTEN TO OUR INPUT. RIGHT. YES, SIR. >> TYPICAL CAR GUY ASKING ABOUT HORSEPOWER. [LAUGHTER] >> SO THIS SHERIFF OFFICE MOUNT PAD TROLL-- >> THAT IS CORRECT. ALTHOUGH THEY HAVE MENTIONED EVEN BEING ABLE TO GO THROUGH OUR PATHWAY SYSTEM. SO IF WE'RE HAVING A SPECIFIC AREA ALONG THE PATHWAY WHERE IS WE'RE HAVING ISSUES THEY HAVE SAID THEY WOULD PATROL THOSE AREAS AS WELL. BUT IT'S PRIMARILY AROUND THE TOWN CENTER AREA. THEY HAVE TALKED ABOUT GOING ON TO THE PATHWAYS WHERE NEEDED. >> OKAY. HORSES HAVE ALWAYS BEEN A IMAGE AROUND PART OF THE REPUTATION OF THE WOODLANDS TOWNSHIP. NO MATTER WHAT, WE NEED TO MAINTAIN THAT. BUT THIS IS COMPELLING. >> YEAH. IT'S A GOOD POINT YOU ARE BRINGING UP. THEY ARE HERE ALSO AS PART OF WHAT THE WOODLANDS IS. SO I WOULD ASSUME IF WE DID GO WITH THIS GROUP PART OF PROVIDING FOR THE. >> I REDID IT AND DROOPED IT. I APOLOGIZE. BUT, YES, VERY GOOD POINT. THEY HAVE MADE IT VERY CLEAR TO THEM THAT WE STILL WANT THIS TO
BE A CUSTOMER ENGAGEMENT TYPE OF THING. RESIDENT ENGAGEMENT, AND THEY ABSOLUTELY BELIEVE THAT IS NECESSARY PART OF THIS PROGRAM. IT'S NOT JUST LAW ENFORCEMENT. IT IS ENGAGING WITH THE COMMUNITY AND PROVIDING THAT. >> PERFECT. JYE THINK IT COULD BE A TREMENDOUS GOODWILL OUTREACH ON THE PART OF THE SHERIFF'S DEPARTMENT. WE HAVE THIS COFFEE WITH A COP, BUT THIS IS A WAY TO BRING CHILDREN INTO THE IDEA THAT THESE ARE YOUR FRIENDS, THAT LAW ENFORCEMENT IS HERE FOR YOU. >> A PHOTO WITH THE PONY. >> PHOTO WITH THE POLICEMAN, RIGHT. AND OF COURSE THE PONY HELPS. >> ANY OTHER QUESTIONS ON THIS. >> THANK YOU SO MUCH. >> WHEN DO WE HAVE TO DECIDE ONE WAY OR ANOTHER. >> WITH THE ADOPTION OF THE BUDGET WHICH IS THE FIRST WEEK IN SEPTEMBER. SO AGAIN I JUST WANTED TO POINT OUT THAT I HAD THE PLACEHOLDNER HERE FOR THE ONE-TIME CAMENTD. THE OPERATING COSTS ARE ALREADY COVERED. >> GREAT. >> OKAY. >> OKAY. ANY OTHER QUESTIONS ON LAW ENFORCEMENT. NOT JUST MOUNTED PATROL. I'M GOING TO MOVE ON TO FIRE. OKAY. ANOTHER VERY IMPORTANT PART OF OUR COMMUNITY'S PUBLIC SAFETY IS PROVIDED BY OUR OWN WOODLANDS FIRE DEPARTMENT. THEY WHO I'M GOING TO POINT OUT JUST GOT FOR THE THIRD TIME 100% RATING IN THE COMMUNITY SURVEY. THEY MOST DEFINITELY PROVIDE EXCELLENT SERVICE AS WE ALREADY KNOW. THE FIRE DEPARTMENT BUDGET 37.5 MILLION. INCREASE OF 1.279 OR 3.5% INCREASE. THE PRIMARY REASONS FOR THAT INCREASE YOU CAN SEE IN THE CHART BELOW, WE HAVE STAFFING. WE'VE ALREADY TALKED ABOUT THE SALARY ADJUSTMENTS THERE AT A MILLION DOLLARS. SO THAT IS OBVIOUSLY THE MAJORITY OF THE INCREASE. THERE ARE SOME EQUIPMENT EXPENSES PRIMARILY STAR LINK DATA SERVICES. RIGHT NOW IN PERIODS OF SELF-COVERAGE OUTAGE OR CERTAIN EMERGENCY EVENTS THEY DON'T ALWAYS HAVE RELIABLE SERVICE ON EACH OF OUR APPARATUS WHICH WE BELIEVE WE CAN SOLVE THROUGH PROVIDING THE STAR LINK DATA SERVICES. THAT WOULD BE A COST OF ABOUT 109,000. THERE ARE A VARIETY OF CONTRACT SERVICE INCREASES RELATED TO COMPUTE SUPPORT. MEDICAL SUPPORT AND CONSULTING. THAT IS ABOUT 86,000. FACILITY EXPENSES, 19,000 AND THEN OTHER MISHEINOUS COSTS OF 10.5. >> MONIQUE, IN THE LAW ENFORCEMENT SECTION YOU TALKED ABOUT VEHICLES AND EQUIPMENT INCREASING COSTS. I KNOW THOSE FIRE TRUCKS AREN'T CHEAP. WHAT ARE WE SEEING AS FAR AS PERCENTAGE OF COST INCREASE OF VEHICLES? >> SO I'M GOING TO GET CHIEF TO COME UP AND TALK ABOUT THIS ONE. ONE OF THE THINGS THAT THE BOARD DID IN THE FIRE DEPARTMENT WAS VERY PROACTIVE ON IS BACK IN 2024. YOU FUNDED-- YOU PREFUNDED PURCHASES THAT LADDERED OUT OVER THE NEXT FOUR OR FIVE YEARS. PARTLY BECAUSE THERE IS A LONG WAIT TIME IN DOING THAT AND PARTLY TO TAKE ADVANTAGE OF THE LOWER COST. SO THAT WAS GOOD FOR THE UPCOMING ENGINES, BUT I WILL LET DOUG AND CHIEF TALK ABOUT THIS. >> DELIVER TO OUR TRUCK WHISPERER DOUG ADAMS. [LAUGHTER] >> WELL THE COSTS CONTINUE TO GO UP. WE DO GET THOSE COMPETITIVELY BID. RIGHT NOW, POWER PLAY LOOKING AT PROBABLY ABOUT 400,000 MORE FOR A TRUCK THAN WHAT WE PAID FOR FIVE YEARS AGO. >> WHICH IS PERCENTAGEWISE? >> ABOUT 40%. >> JESUS CHRIST. >> IS THAT BECAUSE DEMAND HAS INCREASED OR THE CONSTRUCTION MATERIAL HAS INCREASED? >> I DIDN'T AND YES. >> YES AND YES. >> THE DEMAND. >> AND COMING OUT OF COVID, WHEN ALL THE INVENTORY PROBLEMS STARTED. THEY HAVE LABOUR ISSUES. BUT IT'S A PROBLEM. >> HOW MANY VENDORS BUILD FIRE TRUCKS. I ALMOST THINK IT'S LIKE-- IF I'M READING THIS CORRECTLY, THERE IS A HANDFUL THAT ARE VASTLY ESCALATING THE PRICES OF THIS ON THE BACKS OF GOVERNMENTS ALL ACROSS THE UNITED STATES. IT'S 40% IS UNHEARD OF.
>> THAT IS CRAZY. >> THERE IS PROBABLY SEVEN MAJOR SUPPLIERS TO THE MUNICIPAL CITIES ACROSS THE COUNTRY. >> COUPLE HAVE FALLEN OUT OVER THE PAST FEW YEARS. >> YES. >> I DON'T REMEMBER-- THERE ARE A COUPLE-- >> YES. >> LAST YEAR DID WE FUND MAINTENANCE-- DID WE FUND A POSITION FOR MAINTENANCE. >> YES. WE DID. >> DOES THAT HELP EXTEND THE LIFE. >> YES. WE ARE REALLY HAVING TO DO THAT. BECAUSE IT'S TAKEN US ALMOST FIVE YEARS TO GET A FIRE TRUCK. WHICH IS A CHALLENGE. FORTUNATELY THANKS TO THE BOARD IN '24 MAKING THAT PURCHASE. SO WE DID LOCK IT IN, PRICES, IN '24. EVEN THOUGH THERE IS SOME THE EMISSIONS STANDARDS HAVE AN ISSUE ALSO, SO DEPENDING ON WHERE THAT FALLS MAYBE WE'LL SEE A LITTLE REFUND, BUT I DON'T KNOW. >> AS WE LOOK FORWARD-- I'M ROLLING OFF. I'M NOT DONE. I THINK THIS IS IMPORTANT BECAUSE I THINK THIS IS-- THESE ARE VENDORS THAT-- I UNDERSTAND ESCALATE-- THINGS COST MORE, BUT 40% SEEMS A LITTLE OBSCENE. BUT AS WE MOVE FORWARD I THINK FIRE DEPARTMENTS-- WE GOT TO START LOOKING AT HOW WE DO A SHENANDOAH. WE PROVIDE MUTUAL SERVICE TO THEM, BUT IF SHENANDOAH DECIDED TO STAND UP FIRE DEPARTMENT ALL OF A SUDDEN, THEY WOULD HAVE TO BUY A LADDER TRUCK. GO BUY ALL THE DIFFERENT TYPES OF TRUCKS AND THINGS LIKE THAT. BUT THEY DON'T NEED TO HAVE A LADDER TRUCK RIGHT NEXT TO A COMMUNITY THAT HAS MANY LADDER TRUCKS AS WE DO. HOW DO WE LOOK TERRITORIAL ON THE NEEDS OF APPARATUS AND VEHICLES AND STUFF MAKING SURE WE ARE PROVIDING GREAT SERVICE BUT NOT GETTING GOUGED 40% BY THESE VENDORS. I THINK THAT IS OBSCENE. >> WHAT DOES A TRUCK COST? >> CURRENT FIRE ENGINES ON ORDER, THE PUMPERS THAT YOU SEE THROUGH THE WOODLANDS. 1.3 MILLION WITH EQUIPMENT. >> AND YOU ARE SAYING HOW LONG AGO WAS IT? >> WE ORDERED THOSE AT 2024. >> TODAY IT WOULD BE 40% MORE? >> WELL, NO. THAT KIND OF TAKES IN FROM WHEN ALL THIS STARTED. OVER-- IT'S HARD TO-- THERE ARE FIRE TRUCKS DIFFER IN COSTS DEPENDING ON WHAT TYPE OF TRUCK YOU BUY. >> HOW MUCH IS A LADDER TRUCK? >> WE'RE PROBABLY LOOKING AT 1.29 MILLION. THE ONE THAT WE JUST RECEIVED WAS 1.7 MILLION. >> WHAT IS THE LIFETIME OF THOSE? >> OUR REPLACEMENT PLAN FOR LADDER TRUCKS FOR DEDICATED LADDER TRUCKS ARE 12 TO 15 YEARS. FOR OUR-- WHICH RUN LIKE ENGINES, THAT IS 0 YEARS, AND OUR ENGINES ARE ALSO 10 YEARS. THEY MOVE INTO RESERVE STATUS, AND THEN MOVE TO TRAINING AND THEN WE GET RID OF THEM. >> OKAY. >> OKAY. YOU WOULD THINK THINGS WOULD HAVE SETTLED OUT BY NOW AS FAR AS COST OF SUPPLIES AFTER COVID. >> THINGS ARE-- THIS ISSUE HAS GOTTEN A LOT OF ATTENTION OF SOME LAWMAKERS. >> GRABBED MY ATTENTION. >> THEY ARE WORKING THROUGH A LOT OF THINGS, BUT YOU HAVE SEEN SOME STABLIZATION. YOU HAVE SEEN SOME IMPROVEMENT IN LEAD TIMES. BUT I CAN'T TELL YOU-- IT'S NOT HELPING FOR PUMPERS. >> WHERE ARE THEY MADE MOSTLY. >> WHERE WE PURCHASE OUR TRUCKS ARE IN APPLETON, WISCONSIN. >> NOTHING MADE IN TEXAS? WE DON'T BUILD LADDER TRUCKS. >> WE JUST BOUGHT A TRUCK MADE IN HILLSBOROUGH. SO, YEAH. >> GOOD. >> BUT MAJOR MANUFACTURERS ACTUALLY THERE ARE A LOT IN WISCONSIN. BUT THEY ARE ALL OVER THE COUNTRY. >> TEXAS ATTORNEY GENERAL LAUNCHED AN INVESTIGATION INTO THREE MANUFACTURERS FOR ANTICOMPETITIVE PRACTICES-MULTIPLE MUNICIPALITIES RAISED CONCERNS ABOUT DELAYS IN DELIVERY. OUR STATE'S FIREFIGHTERS PUT THEIR LIVES ON THE LINE TO KEEP THEIR COMMUNITIES SAFE. I WILL NOT ALLOW PUBLIC SAFETY AND THE WELL BEING OF OUR FIREFIGHTERS COULD BE COME PROMICED BY UNEIGHTHICAL ILLEGAL ACTIVITY.
I WOULD LIKE OUR BOARD FURTHER ENDAITEM NOT TONIGHT. TO PUT A LETTER TOGETHER TO SUPPORT THIS BECAUSE I THINK IT'S-- WE'RE SPENDING SO MUCH MONEY ON APPARATUSES AND STUFF, IT'S HARD TO GIVE THE MEN AND WOMEN OF THE FIRE DEPARTMENT RAISES BECAUSE OF IT. 40% IN A FIVE-YEAR WAITED. GEEZ. THAT IS CRAZY. >> CAN'T FIX A PROBLEM UNTIL YOU IDENTIFY IT RIGHT. THANK YOU. >> THAT WILL HELP US GOING FORWARD. FOR THIS PARTICULAR ITEM WE'RE COMMITTED, RIGHT. >> YES, THEY'VE BEEN ORDERED. >> HOW MANY DID WE FUNDS IN 2024. >> A TOTAL OF FIVE TRUCKS. FIVE APPARATUS. TWO LADDER TRUCKS, AND THREE ENGINES. >> AND IT'S ALL PART OF OUR CAPITAL RESERVE AND CAPITAL. >> WELL DONE TO THE 2024 BOARD. >> ALL RIGHT. THANK YOU. >> THANK YOU. >> OKAY. WE ARE GOING TO LOOK ON A DEPARTMENT BY DEPARTMENT BASIS AT LINE ITEM BUDGET FOR YOUR DIRECTION AT BUDGET STRATEGIC PLANNING SESSION IN MAY. FIRST ONE UP IS HIRE E.M.S. MANAGEMENT AND OBVIOUSLY THE CHIEF BUCK AND CHIEF ADAMS WERE HERE. SO I WOULD SUGGEST YOU HAVE THIS IN FRONT OF YOU. YOU LOOK THROUGH HERE. WE'VE ALREADY TALKED ABOUT SALARIES AND BENEFITS. IF YOU SEE ANYTHING SPECIFIC YOU CAN ASK US, BUT OTHER THAN THAT, IF THERE IS ANYTHING ON THIS SLIDE THAT YOU HAVE QUESTIONS ABOUT, WE WILL BE BLOOD TO ANSWER. >> THAT DATA SERVICES THAT YOU SEE THERE. THAT IS RELATED TO THAT STAR LINK THAT WE TALKED ABOUT. >> HERE IS THE SECOND PAGE. >> THERE WE GO. GOOD. >> ANY QUESTIONS? >> MONIQUE, I HAD ASKED YOU ABOUT THE T.E.C. INCREASES. WOULD YOU WANT TO SHARE WHAT YOU SHARED WITH ME ABOUT THAT. >> SURE. WE TALKED ABOUT THAT BACK IN PERSONNEL. BUT I WOULD BE GLAD TO DO IT. THE T.E.C. INCREASES. TWO FACTORS THAT RELATE TO THAT. ONE OF THEM IS OUR EXPERIENCE RATING, AND THE OTHER ONE IS BUILDING UP THEIR TRUST FUND TO MAKE SURE THAT THEY HAVE ENOUGH SO THAT RATING ALSO INCREASED. SO BETWEEN THOSE TWO RATINGS. WE ARE LOOKING AT 18% INCREASE. 57,000 OVERALL SO IN 186 MILLION-DOLLAR BUDGET. ISNOT THAT SIGNATURE BUT THE PERCENTAGE INCREASE IS LARGE. THAT IS WHY. >> ANY QUESTIONS ON THIS? IF NOT WE'LL MOVE TO FIRE PROTECTION. YOU CAN SEE THESE WERE ALL SUMMARIZED ON THE FIRST PAGE. HERE IS THE LINE ITEM DETAIL. HERE IS DISPATCH. >> I WOULD LIKE TO NOT A BUDGET REALLY INITIATIVE, BUT MAYBE INITIATIVE TO LOOK AT-- NOT GOING TO COST US ANY MONEY. BUT I LEARNED THAT EVERYONE SEES OUR FIREMEN, WOMEN PICKING UP FOOD, DOING THINGS LIKE THAT. I LEARNED THEY ALL PATE OUT OF THEIR OWN POCKET FOR THAT. IS THAT CORRECT. >> YES. >> THEY PAY OUT OF THEIR OWN POCKET. IT WOULD GREAT ON THIS BOARD TO WORK OUR BUSINESSES AND COMMUNITY, TO START GETTING GIFT CARDS FOR THOSE TYPES OF SCENARIOS. SO MANY PEOPLE GIVE TO THIS. IT WOULD BE A GREAT OPPORTUNITY TO TAKE A LITTLE BIT OF THAT OFF OF THEM AND BE ABLE TO PUT A GIFT CARD SYSTEM THAT GOES THROUGH TO DONATIONS TO THE FIRE DEPARTMENT. A LOT OF DETAILS. BUT I THINK THAT WOULD BE SOMETHING THAT I THINK WOULD BE A LITTLE THANK YOU TO WHAT OUR FIRE DEPARTMENT DOES. FUTURE AGENDA ITEM. >> THAT DOESN'T GET REIMBURSED. >> NO. THEY PAY FOR THEIR OWN. >> THAT IS A GREAT IDEA, CHAIRMAN. >> I THINK PUTTING IT OUT THERE. THERE ARE A LOT OF CHARITIES THAT WOULD PICK THAT UP TOO KNOWING THAT THIS WAS AN ISSUE. >> ABSOLUTELY. I HAD NO IDEA UNTIL A COUPLE OF WEEKS AGO. WOW.
>> THE SALARIES AND BENEFITS I THINK LAST TIME WE TALKED ABOUT ADDING BILINGUAL PAY. THAT IS NOT INCLUDED IN HERE. >> NO, SIR. >> THAT WAS NOT APPROVED BY THE BOARD GOING FORWARD. WHAT THE BOARD DECIDED IN TERMS OF BILINGUAL PAY. EDUCATION PAY AND WHAT YOU WILL SEE IN THE HUMAN RESOURCES BUDGET IS MANY FOR A COMPENSATION STUDY THAT WOULD BE DONE IN 2027 IN ORDER TO-- AND THAT WOULD BE CERTAINLY PART OF THAT COMPENSATION PLAN IS TO LOOK AT WHAT OUR PEERS ARE DOING. SO THAT IS SOMETHING THAT WOULD BE BROUGHT BACK TO YOU NEXT YEAR. THAT IS HOW WE HAVE SET IT FOR RIGHT NOW. >> THAT IS SET TO HAPPEN NEXT YEAR. IN '27. >> OKAY. >> OKAY. >> OKAY. THANK YOU Y'ALL VERY MUCH. >> THANK YOU. CHIEFS. >> I SEE DANIEL COMING. OH, SORRY. MR. RINGOLD IS HERE. >> IS 11:2. GOING INTO EXECUTIVE SESSION. WHERE MY BOOK. I HAVE TO DO A BIG READING. HANG ON. WE'RE GOING TO MOVE AGENDA ITEM 10 AND RECESS TO EXECUTIVE SESSION TO DISCUSS MATTERS RELATED TO REAL PURE UNIT IS TO SECTION TEXAS GOVERNMENT CODE. DELIBERATION OF ECONOMIC DEVELOPMENT NEGOTIATION PURSUANT TO SECTION-- DISCUSS PERSONNEL 55-- AND TO CONSULT WITH-- IT IS-- WHAT TIME IS IT HERE? 12:21 P.M. WE ARE BACK IN SESSION. IT WILL NOT BE NECESSARY TO TAKE ANY ACTION AT THIS TIME. WE ARE GOING TO CALL IT A DAY. COMING UP ON 12:30. SO DOES ANYBODY HAVE ANY CONVERSATIONS FOR AGENDA ANNOUNCEMENTS FOR TOMORROW MORNING? PROBABLY NOT. ANY BOARD ANNOUNCEMENTS? PROBABLY NOT. I CALL THE MOTION TO SECOND TO ADJOURN. >> SO MOVED. >> SECOND. >> MOVED BY DIRECTOR FRANK SECONDED BY