Good morning, everyone.

That's my HGAC gavel I got, so I'm all excited to use it.

Welcome to the October Budget and Fiscal Affairs Committee.

We are going to get started right away because as you can see, we have a very lengthy agenda and a really impactful agenda today with a lot of uh interesting topics important to our city.

So I want to start by welcoming my council members in in attendance.

We have Mayor Pro Tem Martha Castax Tatum, Vice Mayor Pro Tem Amy Peck, Councilmember Abby Kamen is online, um Vice Chair Mario Castillo, Councilmember Joaquin Martinez is here, uh Councilmember Julian Ramirez, and Councilmember Twila Carter.

So welcome all.

We are going to get right into it with our first presentation, which is the monthly financial report with Will Jones representing the controller's office and Melissa DeBaske.

Floor is yours.

Good morning, uh Madam Chair, Councilmembers and staff.

I'm here today to present the monthly financial report for the period ending August 31st, 2025.

In the general fund, the controller's office is projecting an ending fund balance of 356.7 million or 14 percent of expenditures less debt service and pay as you go for FY 2026.

This is 17.5 million lower than the projection of the Finance Department.

The difference is due to a lower revenue projection than the Finance Department.

Based on our current projections, the fund balance will be approximately 166.2 million above the city's target of holding 7.5% of total expenditures, excluding debt service and pay as you go.

Also, uh, we are projecting no changes in the enterprise funds.

Uh so for the commercial paper and bonds, the city's practice has been to maintain no more than 20 percent of the total outstanding debt for each type of debt and a variable rate structure, which is in line with rating agency's guidance of 25 percent.

From time to time, the city's enterprise credits have exceeded this threshold on an interim basis as they have undertaken large capital improvement projects or major expansions.

Thank you very much, and that concludes my report.

This is the two plus ten financial report for the period ending August 31st, 2025.

Fiscal year 26 projections are based on two months of actual results and ten months of projections.

For the general fund, both of our revenue and expenditure uh projections remain unchanged from the adopted budget and from the prior month.

Therefore, we're currently projecting the ending fund balance to be $374 million, which is about $29 million higher than the adopted budget and represents 14.7 percent of estimated expenditures, not including debt service and pay as you go.

Um that fund balance is $183.7 million above the target of holding 7.5% of expenditures, not including debt service and pay as you go.

Not in my next presentation, but one of the other presentations in the on the agenda today.

I'll talk a little bit more about future projections for the fund balance due to the property tax rate that we're proposing.

Um but these are the figures as of this monthly financial report.

Um for the enterprise special revenue and other funds.

We're not projecting any forecasted changes uh to those funds.

And that concludes my report.

Thank you very much.

Any questions on the monthly financial report?

I would like to welcome Councilmember Caroline Evan Shbaz, Councilmember Fred Flickinger, Councilmember Mary Nana Huffman, Councilmember Willie Davis, and staff from Councilmember Cayman's Office is in chambers, and we have staff from Councilmember Ed Pollard's office and Councilmember Letitia Plummer's office.

All right.

I don't see any questions, so we can go on to your next presentation on upcoming financial transactions.

Yes, good morning.

I'm presenting this presentation today on behalf of the finance working group.

On the next slide, I'll go over our agenda for the day.

The first item is the public improvement bond series 2025 sale summary that we conducted last month.

I'll just give you an update about what happened with the bond sale.

And then we're going to talk about an upcoming commercial paper program series G2 item.

So on the next slide, just to update this body about the pension uh the public improvement bonds, sorry, nothing to do with pensions, public improvement bonds.

Um we had the sale for the bonds back last month on September 15th.

Um that week uh was a good week for issuers in the municipal market.

Um we happened to price the day before the uh Fed cut the interest rate.

Um, but I think as we've talked about in the past, the uh market largely uh anticipates those interest rate cuts and had that already priced into the rates in the market.

Um that week our transaction was the largest Texas deal in the municipal market for the week, and so we were able to attract a lot of investors for the transaction.

Because of that uh large interest uh that we had in the transaction, uh, we were able to uh reduce the interest rate that we have to pay to investors by up to 10 basis points um during the order period because of the number of orders that we brought in.

Um we additionally um negotiated with the underwriting team to um ask for additional adjustments in the interest rate because of that demand that we saw for the uh orders that uh were put in for our for our bonds.

And that uh additional negotiation saved an additional $55,000, um, which I know doesn't seem like a lot, but every bit counts as these bonds are going to be payable with um general fund resources.

Um all in the true interest cost of the bond transaction was 3.47% and uh represented a savings of debt service of approximately three million dollars over the life of the bonds compared to what we were looking at before the day of pricing based on the market and the what we were able to negotiate.

So on slide four um that gives you an overview of uh the transaction and the format that you are used to seeing.

Um it's our going to be our goal to, of course, we present to this body before the bond transaction and before the item comes to council for approval by ordinance, um and it's our goal to come after the bond transaction to update um this body on the results of those sales going forward.

So on slide five, you see an overall view of what the general obligation debt service looks like in total.

The blue bar represents our existing debt service with the additional bonds that we issued.

Um, we layered on the green bar and the small gray bar that you see there.

Um and we do um you know anticipate debt service declining over time as you see us paying off those streets and drainage bonds.

Um of course, as we continue on with our capital projects, we will begin to still layer additional um debt service on for funding those uh other types of improvements um like fire stations, police stations, parks, and whatnot.

So moving on to the next item, slide six.

Uh this is the commercial paper summary for the general obligation credit.