Secretary for wall called certification report.

Mayor Scott Bradley.

Mayor President Elizabeth Abraham?

Here.

Deputy Mayor Janae Butler here.

Councilmember place to Scott Smith.

Here.

Councilmember place three, Debbie Ison here.

Councilmember place for Ken Altman.

Here.

Councilmember place five, Kevin Kelly.

Here.

Mayor certified the presence of a form.

Thank you.

All right.

We'll go right into presentations.

Item 3A discussed regarding the debt grants, unless you wanted to do a quick anything.

Yeah, well, I mean, I'll just open it up, but we can roll right into it.

So, you know, good evening.

Um, for all of you community council and our new uh council members.

This is your first budget work session.

Um, so congratulations for making it to this point.

Tonight is intended to be a high-level conversation where we will discuss several components that go into the creation of the FY27 budget.

Tonight is not intended for you to make your final budget decisions, but we do act or direction at every step of the process when we're talking about the budget, so that we know for sure that staff is on the right track.

So by the time we get to August and September, the budget that is before you to vote on, is a budget that you are in agreement, and we are aligned on.

So let's go ahead and jump in.

So this is just an overview of our budget timeline.

As most of you know, our budget year goes from October 1st to September 30th.

But the budget process is a 12-month ever-rolling process.

There is not a month that we are not focused on budget.

It is a living breathing document, as I like to say, so we are always having to make sure we are monitoring our spending, our projections, and making sure that we are where we expect to be at that point in the year.

So, as a reminder though, we are still very much early in the budget process in our development cycle.

This is the point of the process where staff evaluates our long-range operational and infrastructure needs.

So we'll be talking a lot about that tonight.

We'll be discussing our funding capacity and the impacts those decisions, excuse me, those decisions may have on both our maintenance and operations tax rate.

That's our MO, we call it for short.

So if I inadvertently say that M and O stands for maintenance and operations, or our interest in sinking tax rate, that's essentially our debt fund, right?

Our debt tax rate.

So tonight, to be specific, we're going to be talking about debt and grants.

We'll do a brief general fund overview.

We'll talk about a capital maintenance fund, something that we uh are aspiring to in the future.

We'll go over technology, both our current technology needs and then our life, our kind of life cycle and planning for future technology needs, and then we have an update on some staffing.

As you as uh previous council knows, we have talked about staffing already during the budget process once this year.

Uh, but we do have some recommended changes coming to you, so we will touch on that as we wrap up tonight.

So I will begin with debt issuance uh planning.

So our debt issuance planning, it's the long-range financial plans for the community infrastructure needs are evaluated at the start of the budget process.

What this is intended to do, it reflects the adjustments in the project timelines and funding availability.

It allows the council the opportunity to approve our capital needs funding within the upcoming year's INS rate.

We have had a policy here over the last few budget cycles not to increase our INS rate.

We can continue to take debt, and we'll talk to you about how that happens, how you can continue to take on new debt while maintaining that debt tax rate.

We'll talk about that as we go into the presentation.

But that's been kind of the direction from council is you can continue to meet the needs that you have through taking debt if you need to.

However, we want to hold steady where we are on our INS rate.

So this portion of the tax rate, it's it's really determined by the total tax-supported debt service payments.

This excludes utility.

The utility fund has its own debt tax, right?

It its own portion that we pay from the utility fund to cover the debt that we take to do utility projects.

It's also determined by taxable assessed value.

Those are our homes.

We'll get into what our assessed value, our preliminary numbers are later in the presentation.

And then our city's fund balance policy also plays a role as well.

We adopted uh council adopted two years ago, maybe last year or two years ago, we officially are to maintain at least a 20% fund balance in our general fund and in our utility fund.

And it's kind of an unofficial rule internally, my management direction is that we try to maintain 20% across all of our funds.

But council did adopt in a new financial policy last year that we would maintain at least a 20% fund balance in general fund.

We far exceed that.

So we are in good shape right now.

All right.

So currently the city has approximately 49.9 million in outstanding debt across both our general fund and our utility fund.

So I just want to point out it's important that our debt portfolio remains manageable as I've mentioned before, and it's structured around our major public investments, including our streets, public safety facilities, parks, water infrastructure, and things of those nature.

So you'll see here in your packet, you have all the detail on what makes up that 49.9 across both funds in our debt and our total debt right now.

You'll also see on that far right column where debt will start to roll off.

And this is where this is our ability to take on new debt while maintaining our current INS rate.

So you'll see in 2027 we have debt rolling off in 2029 and 2031.

So as that debt rolls off, we don't ever really recommend that you lower that INS rate because we know we continue to have long-term infrastructure needs that have to be met.

So in order to meet those, we say, hey, some debt rolled off.

Here is an opportunity to roll new debt on to get new service levels for our community without increasing that debt tax rate.

All right.

Some low rates that we have.

Yeah.

Are they fixed?

Are they fixed rates?

Are they oh our um you're talking about our the rates?

Our interest rates.

Uh yes.

Or capped.

And we will we will refund some debts, right?

Consolidated refund in order to get better rates.

But we've got fantastic rates.

Really just looking at it.

Our bond rating is amazing.

And it was just reconfirmed this last year, some of really just the five percent, even you know, when we took that in 2025, that five percent was a fantastic rate, but it's it's a new new world.

All right, so again, the recommendation before council uh tonight is not to issue debt immediately, but you know, rather we want to begin positioning the city for a potential GO bond election.

Um, and we are hoping that we can do that in May of 2027.

So this kind of shows you what we're looking for.

If we do a May 2027 uh GO bond election, that's general obligation bond.

We do different types of form of bringing in debt.

One is a general obligation bond, you'll hear me say geo bond.

Another, you'll hear me say CO bond, that's certificates of obligation, and then we have something called tax notes.

The difference between a geo bond and a CO bond is one has to go to the voters.

The GO bond goes to the voters, it is backed by our tax rate and our property taxes, our property appraisals, excuse me, and the CO gives you more flexibility.

Council makes the complete approval on whether or not we're going to issue debt through a CO.

We did one of those last year.

It allows you to take out debt in a faster way, so when needs come up that maybe weren't anticipated five, ten years ago when we were planning out our debt schedule, we can issue a CO through council approval to get those things done.

The state legislature constantly looms over us with threat that they might change some of the requirements around how we issue debt, namely trying to restrict how we issue CO.

I think the state uh has a thought that they want every debt decision to go to the voter.

Um, it is my belief that some of that autonomy belongs to the council who the citizens elected to make those types of decisions.

So hopefully we can keep that flexibility as long as possible.

But every legislative session, there's some kind of bill out there uh threatening us otherwise.

So looking out the next three years before you, well, a little longer than that, but we've got um we've got three here.

Yeah, three GOs that are um getting close to payoff, the 2027, which was 1.6 million originally, uh, the 2029, which was three million originally, and the 2031, which was eight million.

So avoiding the troughs.

Yes, and you are thinking about a GL bond in um in 2027.

In May 2027, would be the election.

We would not draw down that debt until 2028, and then another portion of that in 2030 and 2030.

And that and I think that's important.

We don't take all the money uh initially, we take them in conscious as we need as we have a spend.

Right.

So and that is to make sure that again we are managing that rate, we're not taking on more debt than we are ready to spend it.

Uh, and so that's how we plan it out.

Staff has identified through a series of meetings and looking at future needs.

We have identified about 27 million dollars in GO needs and 12 million in future CO needs.

So our total needs you'll see up there, excuse me.

I can't I can't see.

Hold on.

Eight million.

Eight million.

Eight million.

Later than eight million.

Sorry, yes.

Yes.

That could be anything.

We're around we're around 12.

We're around 12.

All right, and then on the GO side, there are somewhere around, we're between 27 and 32.

So we'll as we continue to go through this and we bring the projects back to you to really scrub through, we'll get a firmer number.

All right.

So here is some preliminary information for how the timeline that we would want to deploy.

Decisions would need to be made early next year.

My recommendation is that we do put a bond committee together, some comprised of council and then some council appointees.

This uh people from the community, this is an opportunity to make sure that what we're going to go and ask the voters is actually what they want to see, right?

It's our job to educate them on why we believe they are needs, why we believe they should be approved, but we really need their on the ground perspective as to whether or not we are truly on the mark with these asks.

So a bond committee is something that we will be requesting that you deploy if you agree to move in this direction for a GO bond in 27.

Thank you for answering that because I was getting ready to ask that, you know, the public's engagement with this and educating them because sometimes when we have it on the ballot, it's confusing to a lot of them when they're reading it.

The questions they do that, you know, so that they know when they go in, like this is what it means.

So other times there are other people putting their own narratives of why they should not, but just so that they have a great idea about what it is if they're going in to vote yes or no to.

Yeah, and I think that's another that's just another endorsement for having a bond committee, right?

Because they sit in that room, they really make sure it's yes, staff is gonna bring them recommendations, but they're really going to be the driving advice to you all on what actually makes it onto that ballot.

And because they're a part of the process and they believe in it from the beginning, they typically become community ambassadors, right?

They are the ones who are really out there on the ground educating their neighbors.

We'll do our part too as the city, but we we need to rely heavily on them to get the message across.

Oh, I'm part of this.

I'm sorry.

Go ahead.

No, here we are, like dancing now.

But can we have a forum, you know, for the community to come in and ask, you know, because sometimes it may be people you know in your particular community or neighborhood, but it doesn't really get out to the masses.

So something to publicize to say, hey, if you have questions, you can come this day this time, ask more and learn more about what we're gonna what we're thinking about as far as the GOs go.

That's definitely something that we can we can explore to see if that can happen.

Um I think that would be great if we can get people to come here and actually engage with us.

I would love that.

Yeah, I want to make sure, and and I'm positive it was on your list, but I want to make sure that in a retreat, council is an opportunity to outline the major categories that are going to be presented to uh the bond committee.

Um, you know, the last bond was a little disappointing because it was you know carpet and paint uh in the bond and the kind of things that we were kind of excited about, never made it into the bond, right?

Um, and that's fine.

Uh but but but sitting down, making sure that we have an opportunity to look at the big blocks, identify the major categories that uh that we we see consume what staff is thinking because there's always a maintenance side to these bonds.

Uh, and then use that as an opportunity to present it to um to the uh the the bond commission uh to create weightings on these to define value uh value versus cost uh and then provide recommendations.

Yeah, I we're we're aligned in that.

Council should absolutely be a part of this process every step of the way, especially in the beginning part, right?

And your your concern about putting in things like carpet and some of the kind of unsexy needs um that are that are always looming over a city, that's where the GO versus the CO comes in.

If it's something that we know that, you know, the community we we know we have to get it done.

So getting getting that no is really gonna set us back, but it it's not flashy and it's not fun.

Those are the types of things that we really should be putting in COs that give us the flexibility to make sure we can get those things done.

So we will absolutely use strategy when we're talking about um going into this election, and having you guys a part of the process will make sure we're doing that too.

For new for the new council members, if a geo, an item on a geo election fails, um, there are limitations for our ability to turn around and then do those things in a CO.

Uh and those limitations are gonna get they're getting stricter, very strict.

We're trying to make them stricter.

So if we decide, oh, we need to do we need to do a road, we're gonna do it in the GO, and it turns around and the community denies it, we can't fund it another way for a period of time.

I think right now is it three three years?

Yeah, right now it's three years, so it would set us back.

So that's why being strategic about what you put on a geo is extremely important.

Um, so making sure that we have the room to get a no and still be okay with our service delivery to the community, that's going to really tell us what should go in a geo and what should not go in a geo.

All right.

Okay, so again, the city must call the bond election for May 27 between January 31st and February 12th.

So tonight we'll kind of as we go through, we will circle back on some direction on some of the different areas that we're talking about.

Um, and if the direction is that you all are in agreement that we move down this road, then we will start having the conversations like the mayor talked about what major category areas are we going to explore.

What are the specific projects that staff has already identified that are needs uh for the future?

So the only thing with that is um Aretha, we don't have like any other council seats open next year, right?

Right.

So it would be the only thing on the ballot.

Yeah, it would be a special election.

Okay, yes.

Is there any other option besides that?

November.

We have talked, we have talked.

Well, if you want voter voter returned.

Yeah, so so to be candid, we have talked to our bond council, and the originally we wanted to go with November, but and I think for good reason the recommendation is that we go with May, because next year is a legislative session, and every year I'm in here crying to y'all at the end of budget about I don't know what's gonna happen, you know, all of these restrictions might come down, and truly they they prep and prime these restrictions for a any legislative session at this point where they do put tighter restrictions on how we do these bonds, what we what we can put on them, how much we can put on them, and so it it would be my recommendation that we try to get in front of any of those changes.

Yeah, the only reason why I say that is because I think it was the last bond, wasn't it?

And three of them passed, one of them failed, right?

So just I'd hate for it to fail.

I understand I would too usually strategically and I and I have thoughts on this on both sides of the conversation.

Strategically the reason why municipalities like their May election is because they know who's voting in the May election right when you stay away from November elections because everybody votes and you have less control over uh kind of the results so you know on one side it's you know the more more of a voice of the community you know the better on the other side I know how the election's going to turn out so um all the mad people show up yep and this this may be the next May stuff not fail it yeah this this may be the last May session that's even allowed to do that with the legislature because some of them are some of the things they're talking about is making sure that all bond elections they're trying to they're trying to prevent this as well right so yeah so we're we're just we're trying to get in front of some of the anticipated changes that's why we got to go into the people and try to engage them and educate them.

We can't promote we can we can educate we can educate we can give facts but we can't we cannot uh campaign for them they can come in and learn more okay all right so you'll see here um that our debt capacity based off what we know right now and the amount of debt that we have and what's anticipated to roll off is just over 27 million dollars so that is the amount that would be split over that 28 and uh 30 between both GO and CO.

So that's about our capacity that's where we are right now without increasing the INS rate and as a reminder our INS rate is point zero nine one three per 100 of valuation yeah and I want to be I want to be clear about that right the the value of the city changes every year.

Yes and as the value of and the INS rate is simply a percentage of the percentage of debt versus or debt payment versus the value of the city how much money do we need to pay our debts so the value of the city can go up your debt service can go up and the rate stays the same.

If the value of the city starts to go down your and your debt stays the same your debt goes up then your rate goes up so your rate is really just a definite just a percentage how much money you need divided by the value of the city right and so we've been able to keep our debt service rate very stable because the city value grows and that's a very common strategy absolutely and and I under you know understand you don't want to be a city that is being devalued every year.

You want to see that value go up right and and maintaining the tax rate we've talked about this a lot in the past doesn't necessarily mean that's maintaining your tax bill because as the value goes up you know the cost of your bill goes up as well but it continues to allow us to provide the service level that our citizens have become accustomed to without making them take these dramatic swings and hits by making drastic changes over time.

Okay.

So here are some of the projects and I don't want to deep dive into these projects tonight.

I want us to talk more about these if we truly want to move in this direction at a later date but here are the types of projects that we have identified as staff you guys can look at those and if you have questions please feel free to ask.

But if not, I'm gonna I don't want to deep dive into these, I'm gonna move forward.

My assumption is we'll go over these during the retreat, right?

We will go over these, yes.

Okay, all right.

Okay, all right.

So again, our INS rate is 0.913, and we're gonna move uh shift gears a little bit and start talking about grants.

So we've also um I have some changes.

I came to you all in that first budget work session, and we talked about a grant that COVID was offering for some EV chargers.

Um we were very excited about it at the time, but since that time, after learning more information, getting final contracts, we have determined that it is not in our best interest right now.

Um it would require a heavy burden on staff to the point where um I am being told that it will probably uh require an additional staff person to manage that grant.

I am not on board with adding staff to manage that grant.

Um and so we are going to ask to abandon that idea that we brought forth to you.

If you recall, that was a 100% reimbursable grant that we were going to get, but we were going to have to provide the upfront cost.

That upfront cost was coming from remaining ARPA funding that we had left over, so now we are going to recommend that we redirect those funds to some technology needs that we are anticipating that you'll hear about later tonight as well.

So we are moving away from that grant.

Does anybody have questions?

Approximately how much of the ARPA funds are we talking about?

What's the dollar amount?

I think it's about four.

Let me let me get here.

I think it's about 400, and it was about 468.

How much was it?

We have this much left.

This one, so we actually have 1893 left.

But we were gonna upfront a total of like 430 something for that.

So it's just 139.

Yes.

I was just wondering if we could use that for land acquisition or anything of that nature.

No, all right, okay.

So there it is for you to see that 1893 is we're hoping we'll offset some of our software needs as our software costs are dramatically rising.

Google Docs is free.

What's free?

Google Docs is free.

Oh my gosh, you're trying to set us back.

Okay, all right.

Now we're gonna move on uh to appraisal and valuation and do a little bit of a general time overview.

That should come.

So we have received our preliminary numbers.

We receive preliminary numbers from the appraisal district every April.

We don't get our final numbers until the end of July every year.

Um, our valuation is actually up a little over 2% from last year.

We're over uh just over $4 billion in valuation across the city.

Um these, I will tell you, looking at the other cities, um, because they release all of the county, and you can see the school districts, you can see the cities.

We are actually in a in a much better position than a lot of uh cities in Collin County right now.

Being up over two percent was a pleasant surprise to us, and historically, what's happened um when we get those final numbers, there's even more of a little bump above what the preliminary said.

We never bank on that, but historically, that is what's happened.

Um, so the hope is that we can come in at least around two and a half percent increase.

Um, but we are prepared if we don't.

I'm surprised at that, but the value of my house actually went down slightly.

And that's what you're hearing a lot across Collin County, and it's reflected in some of those valuation numbers that came out.

We black them all out on here, but um a lot of cities you're seeing a downward valuation.

There, they were not in the positive the way that we are, they were in the negative.

So it is surprising.

Um but somebody in this city is going up here with me, all right.

Well, good.

Good.

I'm happy to offset two of you.

Um, and uh something else for the the new guys, um, valuation is kind of broken into two pieces.

Valuation of existing property of everything that was on the tax rules last year, and um, and that that is the basis of how we set our tax rate, and then you've got valuation of new property.

That's gravy.

We don't have any.

Right, and we'll talk.

We're gonna get into a little bit of that so you guys can understand how the calculation works and when you talk about the state restriction, what valuation that's on versus what valuation that's not on, but yeah, the mayor is spot on with that.

Alright, so our property tax uh comparison you can see here from FY26, which is the current fiscal year that we're in, compared to where we will be next fiscal year.

Based off of the information that we've gotten, the current projector voter approval tax rate is approximately 0.363917 per 100 evaluation.

And I'll talk to you a little bit about that.

We have a few different tax rate options in Texas.

We have what's called the voter approval tax rate.

Uh we have the no new revenue tax rate, and then we have kind of a voter election triggered tax rate.

So I'll talk to you about the no new revenue rate first, and that's not the rate that I'm ever going to recommend to you unless something dramatic happens.

Um the no new revenue rate is essentially saying you're maintaining, you're maintaining, you're bringing in the same amount of money that you brought in last year from existing properties, not new properties from existing properties.

It doesn't give you any room for growth, it doesn't give you any room for inflation.

You're essentially keeping your you're lowering or you're you're leveling the tax rate so you bring in the same amount of revenue as you did before.

The voter approval tax rate takes you right up to the line before you have to go to the voters for approval, and that tax rate allows you to go up a maximum of three and a half percent over existing properties, right?

The valuation for existing properties.

Again, as the mayor said, it does not include new properties, and this is the dilemma.

We are a city that is near build-out, right?

A lot of Collin County is still growing rapidly, so this doesn't affect them the same way it affects us because they have new growth that offsets the restriction of that three and a half percent.

We don't have that luxury at this point, and if we're gonna continue to build out, maintain the type of workforce we've all said we're committed to having, then we're going to have to do something to try to bring in additional revenue, right?

And one way of doing that is by having you all adopt the voter approval tax rate.

So this year that would that does go up just a bit.

You'll see um going from 0.357514, which we're currently at, to that point 363917.

All right, so I want to kind of talk to you a little bit about what that actually looks like to our residents.

So, based off our median um homestead taxable value, right now, that is $553,000.

Um, we expect that to be somewhere around 576.

Again, please keep in mind these numbers are not final.

We don't get our final numbers until the end of July, but we're anticipating somewhere around a 122 dollar tax increase to the median homeowner or roughly $10 a month.

All right, so now you can see here where our budget is.

We're um, and we gave you a little bit of history, not not a whole bunch, but going from um fiscal year 25 to anticipated fiscal year 27, you'll see uh where we are over last year.

We're anticipating about a six percent increase in our budget going to 22.4 million for the general fund side.

We'll get into what makes that up.

Can you go back beside?

Sure.

So go back one more.

Okay.

No, I want to go back to the property tax, the rate, okay.

So this again, this is the total tax rate.

So this is both M and O and uh I uh INS, and I see MO revenue.

Are you making the assumption that that the RNS rate is staying the same?

Um, it the reason I ask is I don't I'm not seeing from here, you know, if INS drops in relation to the valuation of the community, then M and O itself is not going up a penny.

Um, no, we yes, we we are anticipating that INS is staying the same.

So it'll be the rate will be substantially the same.

Yes.

Okay.

Yes.

That is that is the direction that we've been working under.

It is.

So yeah.

So I just don't know if you've got uh is if we're looking at it staying the same, then that you know, is that uh product of debt that we've already taken, or is that a product of debt that we plan on taking?

The value of the city goes up two percent.

That means you know, the the your INS rate should go down two percent if you're not taking any more debt.

I'll let Vernon jump in for you.

So, in essence, what we're doing with the numbers that we have now.

Um, in order to get it where we want it to be, we prop it up in 27 and 28, and we um pay it down in 29.

That's how we're gonna be able to make those adjustments.

So, literally, when I go through and do the calculation, um, we would be paying more on the utility side, and that's where one of their initial slides came from.

You'd pay about 72K above what is required to make sure that we've been able to stabilize that rating.

Okay.

So that would also be adjusted whenever we get those final numbers.

Thanks, Bert.

You're welcome.

Any other questions on this slide before we move forward?

All right, and then you can see here that our expenses do um slightly exceed our revenues.

So revenues are coming in uh we anticipate at 21.2 million, and our expenses are coming in at 22.4.

Um again, we do have a healthy fund balance, and there are one-time fund balance requests that we make every year to meet some of the needs, and you'll hear about those coming up and why we are dipping into some of that or asking to dip into some of that fund balance.

I would really love to see this graph, the expense side broken out between uh recurring expenses, versus one-time expenses, right?

So personnel is that's recurrent, right?

Things that is an expense that we've committed to every year.

Right.

Um, and uh but you know, upgrading the servers, you know, with a one-year expense.

And being able to see uh on this, okay, where are we because we we have very little uh uh very little um ability to flex on non-discretionary spending, which is the personnel and other things, uh and then we have discretionary spending.

Well, maybe we won't buy new police cars this year or or something of that nature.

And we we will show you that as we do every year.

We'll show you that list of one-time funding for for the upcoming fiscal year, and we'll do that here in a minute.

All right, okay.

All right.

So you can also see broken out here.

Um, the mayor was just talking about personnel.

Personnel is the majority um of our general fund cost.

I mean, they it people are our greatest asset, and they are our most expensive one, um, and that is an expense that increases every year.

It's it's what I call the cost of doing business.

We have to give people cost of living adjustments.

Um you look at market rate adjustments some years, and so it it just comes in very high every year.

Uh materials and supplies, you'll see that broken out, our contractual, our capital outlay, and then solid waste as well.

All right, so let's get into some of those one-time expenses that we are asking for that the mayor touched on a minute ago.

Uh it's about 245,000 that I'm recommending to you in one-time spending for next year.

Now, that doesn't mean that that's the total amount of needs that we had or the total amount of requests that I received, but I meet with the departments, I'm uh with all of the staff, and I go over what they're asking for, and what they have to do ever since uh last February when we adopted the strategic plan, my direction to staff is every need or want that you have that comes forth needs to be directly linked to the strategic plan.

I need to know what part of the strategic plan we are accomplishing by doing that.

Um, and so staff did a great job of that this year.

You'll in fact you'll see that these one-time requests are really split across two areas of our city, and that's fire and IT.

That doesn't mean that IT is getting all of this, it just means that it's some type of technology component, either for the entire organization or specific departments across the organization.

So in fire, we'll go over those first.

They need four vehicle stabilization struts, and that's just because those have reached their end of life.

That goes to our strategic uh focused area of safety.

Uh, also under the safety component is the forcible entry prop.

And this is just to make sure that our firefighters are able to train appropriately and don't always have to go off and train somewhere else.

They do that too, but we want them to have the type of training equipment where they can do some of those things right here as well.

Uh, and so you'll see that up there.

Um, also sticking with safety, um, the parks game room security.

If you guys have been over to the community center lately, they have been doing like kind of a slow refresh, it looks really awesome.

They've redone the game room, redone a fitness area, and so we just need some security.

We have security in our fitness area, but we're starting to get more activity over there and more people are hanging out, which is a great thing, but we don't have any kind of security to watch in case something happens to go back and see, you know, see what in fact happened and make sure that everything is okay.

So that's what we're talking about cameras or what?

Cameras.

Yeah.

Uh-huh.

All right, and then um parks iPads.

So we're also asking for those, and that's just for those guys to use out in the field and have the equipment that they need that also goes to safety.

And then moving on to sustainable operations and safety, hitting this key focus area.

Um, is some hand heavy medical software, and y'all are gonna have to chime in and remind me whose department is that benefiting fire.

That's us.

Thank you.

Why don't you explain that for me real quick?

What that is is um it is a it's a it's a program that's gone nationwide, and it's our medical director has requested that we take this on all the other departments of the year doing it, which he covers a lot of it.

But basically, to keep it for the time's sake is it helps us do medical um calculations in the field where we're trying to give dosages to individuals and stuff.

Uh, due to the severity and the actions and so much stuff going on.

We don't have the quietness of an ER room that you can kind of operate.

We're unusually loud, rugged things going on, and once we were down the road, um, but we actually have to do math on a lot of those sorts of stuff, especially pediatric, which we don't get a lot of uh this will originally started as a pediatric region for there, but it's collected into their finding uh that the company or departments are using this or finding this very adequate for doing CPRs because everything is old-time frame that you have to give medication so you do it once five minutes later you do it, but you're doing so many other things in the meantime.

Sometimes you forget to look at your one.

So the outcomes on the patients on using this program have been uh very good.

I don't have those numbers right in front of me.

I'm more than happy to get some of that for you on a later date if you need to.

Alright, so moving on, uh WorkShield risk management software.

Um, this is a software that HR will be doing.

Risk management is one of the items under their purview.

I'm sorry, administrative services, keep calling it HR, administrative services.

This also, we anticipate that this will help us uh with our legal bill a little bit as well.

Currently, we have to reach out to our attorneys for a lot of kind of routine questions when it comes to stuff like this, but there's some kind of um legal legal guidance component involved with this that will help us hopefully not have to reach out to the expense of lawyers as much as we currently do.

All right, and then some CIP tracking software.

Um we currently use ClearGov as our budgeting module, and we're looking to expand our CIP tracking over the one of the um proud accomplishments that I have for my team and myself is that since being here, we have really made the CIP process sophisticated.

Um, we have taken it and we are actually planning out 10, 15 years in advance instead of kind of piecemealing this three to five years at a time.

Um and this software will just help us really modernize what we do and how we do it.

Just FOIA is a new open records uh software that we are proposing.

We currently use a system called GovQA, which is a bit clunky and difficult to use, not just on our side but also on the citizen side, and so this will help people request information more easily.

Cohesity, you'll hear more about that when Carter comes up to talk to you about technology, but that is a service expansion and it's for data backup, and then uh first do fire RMS system.

Um I was gonna make a joke about fire being jealous that uh that uh police got RMS last year, now they're asking for one, but I'm not gonna make that joke.

They need this.

This is very important.

Perry's rolling his ass at me.

Um, this is very important.

So this is gonna um help them also modernize their processes.

Right now, they use a pretty clunky system too.

Do you want to talk about it, Perry?

Yeah, for the most part, this went back to our strategic plan and we were reviewed a lot of different parts that we're trying to meet each year.

And in doing that, when we were looking at this, uh needing a new record management system.

Right now, we use three or four different ones, and they don't talk together.

So this puts everything under one umbrella and it all talks together, it's easier to maneuver, pull reports, pull all kinds of things on it, but it allows us to do that, and in doing this, uh, it actually meets about five of our strategic plans.

And one of them is the um what's right, the collaboration with our citizens and and citizens' engagement stuff, and there's a really large module in this that we didn't even know was there when we sent the two-hour review on it.

Um I perked up because it's all it's really awesome.

It lets our citizens interact directly with us or many number of things, but primarily medical stuff.

Like they can give us all the information about their family they want to.

So if there's an incident we roll up and no one's able to speak with us, we can fully have it.

We already have a little bit of that now through our fan system, but this offers a whole lot more.

I think put pictures names or nothing at all, put the very next one.

But it's a very, very, very big interactive tool that we're gonna be able to do with our community.

So, but primarily puts it all under one umbrella, makes it a lot easier for us.

Uh, we don't have to have four or five uh service maintenance agreements for each one for each one of them each year, puts it all under one.

So uh we think it's gonna be beneficial and cost savings long term.

And this one is a lot cheaper than the 950,000 one we we purchased last year for police.

Good heavens.

What is it 1.1?

It's fire or two.

And it's kind of all right, all right, all right.

Okay, and then um also we are requesting a cloud phone system.

We need to move our system currently, it's on um landline to just a more sustainable operation, which is the cloud phone system.

Uh so that's a request that's coming forward as well.

And then uh building permit software, as uh some of you know what I talked about in the first budget work session where we covered personnel.

We are going through some restructure in our development services division, and we are um standing up permitting outside of utility building.

Currently, our utility building department um also runs our permitting.

It's not typical, cities don't typically do that.

I do have some heartburn about it, and finally got to a financial position where we could afford to pull them out of utility building and bring them over to the general fund side as we captured some savings from some people leaving and restructuring.

Um, and so having the appropriate software for them to be able to use.

They currently use a very old system called ENCO.

That's just municipal speak for some ERP system that we have that you might not be familiar with, but this building permit software will make sure that they can be efficient and hopefully this new division can be successful out of the gate.

So with building permits seems to be a decline, you know, that we're built out.

I mean that seems like a lot of money for software for the number of permits.

I I don't know what the exact number of permits that are.

We actually issued a year, but it seems that you know being built out that for new construction, that number's got to be declining some.

Right.

So to be clear, permitting isn't just about new construction, right?

So when last year, when we had uh the big storms, a lot of our permits went through the roof because of roofing.

Um, people have to pull permits when they're doing renovations, swimming pools.

I b if we're reviewing a swimming pool, there are permits for a number of things that don't just relate to new construction.

Um so that area of the utility building division does stay pretty busy on the permit side, and we've had some issues as of the past few months, um, of being delayed beyond what we like to be delayed.

Um, and a lot of that has to do with our software and the way that they are able to manage the intake and the processing of permits, and it is my goal that we get our customer service level back to where it's supposed to be and we're processing those permits in a timely manner.

This will help with that.

I agree with you.

It is extremely expensive.

This is the first year upfront cost, so it will not be eighty thousand dollars uh moving forward.

This is just this is one of those one time payment type things, and then we'll have an ongoing maintenance software cost as well, but it's nowhere near the 80,000.

So Aretha, with that, you know, as we were talking about because I'm like, so once they have the maintenance cost, then it goes into what department is that now going.

It's gonna come out of the development services department or IT.

I I'm not sure how we'll how we'll do that budgeting.

Um Berna, is it gonna come out of IT or it'll come out of IT?

So we put a lot of sometimes when departments have software because IT, if they are charged with managing any software that is used in the city, so sometimes we'll make them pay for it.

Okay, so same with like the iPads that would go to parks if you know they need to.

That would be paid out of IT.

That would be because they deploy any of our hardware, any of our software.

So I'm I have a question.

Yeah, I just want to know what the maintenance cost of the new software is versus ENCODE.

So we do not know yet.

That 80,000 is kind of a place marker.

I'm hoping when we come back for our final meeting in July that we will have a lower number.

Um eighty thousand is the high end of what we think this will end up costing, but we do not have all the quotes that we need right now.

Yeah, and and I'm I'm assuming 80 grand is hardware, software, technical, uh training, all kinds of stuff, and that becomes a one-year fee, but right now we're paying we're paying a maintenance fee for using ENCODE, we use ENCODE throughout the organization.

We do, it's our ERP system.

So now that we're gonna move off of ENCODE for permit software, is what's the delta?

Is there a savings uh on the ENCOSI for moving off?

And then what's the ongoing cost?

Is it just additive because we're not replacing ENCODE across the board?

Is the plan to replace ENCODE across the board eventually?

The plan is to replace the NCOD across the board eventually, but I cannot afford that in the foreseeable future, right?

So it's on the CIP.

I think every year I keep pushing it out another two fiscal years.

Um that's a 1.5 to 2 million dollar project, right?

That's that's an extremely expensive project to stand up.

Um I don't have the firm numbers on the delta for you, but I'll make sure that we have that next time.

Yeah, you know, I make it and I I hate to be that guy, but you know, for that's a fair question.

I I don't I can argue, yeah.

I don't I that that's for the trucks, those are needed, right?

Building so permit software, I'm gonna ask.

Well, what's what's the value that is that gonna bring?

Are we going to respond to requests?

Are we gonna have a better uh a better ability to track those response?

So I what I can answer is it's yes, it will be more efficient, not just for us, but for the the customer on the other side.

So that's whether that's for the developer, the resident, whoever is going into that system.

Right now, things are being done piecemeal, manual versus electronic.

ENCODE is an old system, and we are not even on the latest version of ENCODE.

We're on ENCODE nine, they have an ENCODE 10, they have for years.

Um, so we are limping along because we have to, because of affordability.

And so I don't like piecemealing together an ERP system, but that's just the financial position we're in right now, which is the only reason I would request something like this, all right.

All right, well, on the table.

So I have a question.

Yes, sir.

Are there any is there any way to go in with other cities on some of these?

Like are these site licenses or, you know, or seat licenses for some of these?

Like if Wiley had the software, like could we have some sort of joint agreement with them to be on together?

Yeah, I mean, most of this is licensing.

Carter, do you want to speak to that a little bit more?

I don't want to say the wrong thing.

So the pricing on most of these is based off of cooperative agreements.

Um, there's some separate.

So you're not turning around.

Uh the pricing on most of these are already based off of usually statewide cooperative agreements or national uh cooperative agreements.

Uh so we're already leaning on other cities and their purchasing agreements and the uh kind of the larger, the larger amount of licenses that they order, we get a benefit from those discounts.

Um the cloud the cloud phone system, for example, is a per user basis.

Uh so it's based on how many users we have within our environment.

Uh, permitting software, um, I believe is usually based off of the size of our city as well as users.

Um, so um uh as far as I'm aware that uh Wiley and some other uh local areas are uh don't have the quality agreements, so we haven't really addressed that, but we usually base it off of statewide cooperative agreements.

And and I I don't know for certain, but I when you talk about sharing software, I would have some security concerns, right?

So there would be some due diligence we would need to explore before determining whether or not we can actually partner in the way you're talking about with a neighboring community on software and technology.

Okay, all right.

Any other questions on this one?

So that that is the extent of what uh what I'm recommending in one-time funding this year.

Again, it totals about 245,000.

We will have a firmer number on the bird building permit software by the time we get to our final budget uh work session when we have our final numbers um with all of the quotes in, but this is what is before you.

You do not need to make a decision today unless you want to tell me that something on here is an absolute non-starter for you so that I don't have to bring it back again.

Outside of that, you will have an additional opportunity to talk through this.

All right, we will move ahead.

So I want to go a little bit over our general fund summary, our five-year outlook.

Uh, we are in a great position.

You can see down at the end there where we have called out that 20% fund balance, making sure that we maintain that every year, and we are in a good position.

We are actually for the two new council members, there's something that we call a cliff here in Murphy, and that is where we uh know we will get to a point where our fund balance dips below that 20%, where um we have to make a decision on what we're going to do.

Are we going to go to the voters and ask them to increase beyond that 3.5% that the state has capped us at, or if there's something else we're gonna do?

Um that cliff for us is somewhere around FY23.

It's fluctuated between FY21 and FY and FY33, um, but our numbers today are showing somewhere around 32.

We are doing some things currently to stay in front of that.

So the goal is never to get to the cliff year and then make dramatic decisions.

The goal is to manage strategically and deliberately as we get up to it, so that every year we're pushing that cliff out another year, and that's kind of historically what we've been able to do is push that cliff out another year every year.

And so some of the things that you know we're looking, I'm looking at personnel and how we're hiring, making sure that as people fall out of the organization, whether that's by choice or by force, that we're being very deliberate about how we're rehiring those positions, uh, making sure that they're necessary, making sure that their duties and their job description is in line with what we really need as an organization.

We're also um looking this year.

I will not be recommending market adjustments to salaries this year.

Uh instead, um we are going to continue and request the merit increases, uh, and that's based off performance, but that's also kind of set by COLA, right?

We try to do a cost of living adjustment, but we tie it to performance to make sure that we have that accountability measure in there.

So we I will still be recommending that, and that averages the organization about 3% to salaries every year.

I am going to request in years past.

We have talked about the step plan.

When I first got here, our step plan for police and fire was 12 steps.

It took them a very long time to top out, which is some of you may know a recruitment tool that we use to get officers and firefighters into our organization.

We have since reduced that two years ago, I think, to eight steps, and it has been my goal to get somewhere around six or seven steps.

So because I'm not recommending a market adjustment, what I will be doing is recommending to you all that we reduce the step from eight to seven this year, and that's just going to be for our line staff public safety personnel.

So that will just be for our officers on the street, not command staff, just for our firefighters, not command staff.

And we can do that for around 70,000.

So it's a nominal cost that still I think will help stabilize our morale with those officers and continue to put us in a position where we can continue to recruit effective folks into the organization and keep the ones that we have.

Arita, with that step adjustment that we made last year, did we see that it helped or did it help with retention?

We did not make the step adjustment last year, so a couple of a few a few years ago.

And it has helped with retention.

I talked to you guys about those retention numbers for a while.

When I got here, we were averaging somewhere between 20 and 25% turnover annually, and we have gotten that down dramatically.

I can't.

What was our number last year, Chelsea?

Oh, was it 12%?

12%.

So we've we've more than cut that in half.

And I am convinced that has to do with culture, that has to do with the attention that we've given to our personnel, whether that was our pay structure and that compensation philosophy that you all adopted, doing things like lowering the step plan, but really making sure that we're taking care of the people who are taking care of the community.

I think has had a dramatic effect on our on our turnover rate.

I'll say that 12% the step plan is a big deal because I've got what Dallas was a 12-step plan, it's gonna take me 12 years to max out.

That's very depressing.

So when Dallas went down, it it boosted morale.

I will say that 100%.

What's Dallas said now?

They're down to they can of course they reduce it after I left full time.

Um I think they're now down to six.

So is troopers start doing that too, I believe that they started reducing the plan.

That's pretty that's a sweet spot.

Six to seven, unless you're like a plano and you have a two-step plan, but we're never gonna do that.

All right, all right, so we're gonna talk a little bit about an aspirational idea that we have, which is the capital maintenance fund.

Uh, we can't so the idea was that we would propose creating this this year, but we cannot for financial reasons because I am trying to get that cliff to move out even further than where it is.

We don't have the funding to stand this up, but I still wanted to talk to you all about it because it is something that I'm hoping we can bring back in the near future to discuss.

So the purpose is to create um and build a reserve to be used for the maintenance and preservation of the city's existing infrastructure and our assets in order to extend the life and defend against exponential uh replacement costs.

So this kind of just helps us, and some of those things that we know are coming down the pipeline, this helps us anticipate.

So it's kind of like a mini verf for some of the things that wouldn't typically fall within a VERF structure.

And I'm sorry, for our new council members, the VERF is the vehicle and equipment replacement fund that we stood up a couple of years ago because we know we constantly have to turn over those vehicles, and it was costing us large chunks of money every year, and so we found a more sustainable way to do that.

And that's what we're kind of trying to look to do with some of the capital maintenance needs that we have going as well.

Um, and the way I'm sorry, the way we were going to do that was recommending um transferring in the following budget year from the prior year audited.

So typically when we get audited, what we find is that we have more fund balance than we had projected the year before, and so our anticipation was to use that leftover fund balance and put it in this asset fund, uh, this maintenance fund, so that we could cover some of those costs without taking money away from the BERF or without taking money from the general fund unanticipated.

All right, so this is a bit more about that.

Well, again, I it'll probably be two years before I can bring this conversation up again with you.

But I wanted to be on your mind so that when it comes back, it's not foreign.

Um I think this is good management, it's it's good, it's financially responsible.

We just can't get there financially this year.

What is that amount of money typically that would be in a year that you would that would be between three and five hundred thousand?

All right, we are going to move on to IT.

Um, so before Carter comes up, I just want to make a couple mention of some things.

So a major um focus this year in technology has been life cycle planning.

That's something that you guys have requested in the past.

Um Carter came into a situation where there was not um some life cycle plan sitting on a shelf waiting for us to deploy somewhere.

Things were kind of just sporadically um swapped out as as things died.

And so we want to get in a position where we can anticipate end of life, where we can know what's coming up so that we can be prepared financially to take care of those things.

Um, but some of the systems that Carl will go over today um are going to include financial systems, um, things that are taking care of our email, backing up our information, public safety applications, and the like.

So I'll turn it over to you.

You want me to drive for you or want to do it?

Okay.

Thank you, you're welcome.

Can we introduce yourself?

Good evening, Mayor Council.

Uh, so we're gonna be in uh for Kevin Carter Smith, Director of IT.

Um, and I see you guys again, and I see everybody.

So, along with the whole uh financial conversation, we wanted to bring forward starting uh with some items that are coming up on the June 2nd meeting, uh some items that were scheduled to uh be brought up in FY27, but we're bringing them forward uh now in as part of the budget amendment uh in order to get ahead of some cost increases, some delivery increases and get ahead of the life cycle end of life on some of this equipment.

Um, and then we'll follow that up with a review of uh how we're at on inventory our IT assets identifying those life cycles and when we need to replace some of our equipment so we can get it onto our schedule.

Uh the first uh major purchase that's coming up uh in on June 2nd that's gonna be presented on June 2nd is uh to replace our Nutanix server hardware.

Uh just a little bit of background.

Currently, we have uh five server arrays, which are the physical boxes that hold all the hardware for um all our servers with six nodes, which are the the hosts that kind of manage the virtual environment.

Um so on that virtual environment, we have 75 virtual servers that includes Athena, which is our computer aided dispatch system for 911, our police record management system.

Um we have the ENCODE, which is our ERP that was mentioned earlier.

That does our utility billing, uh time entry, HR, uh payroll and such.

Uh we have our email server, all of our all of our user mailboxes, such as your emails are in the cloud with Microsoft 365.

But the email server links our local servers to that cloud service so that um like ENCODE can send out our bills and our payroll emails.

Um, I'm sure.

It will love if those if that went down, so the bills didn't go out, but um we like to keep that up and running.

Um, we have our department file shares for the working files, uh, our phone system, our current on-site phone system is hosted on a couple of servers within this environment, and a lot of our other critical uh infrastructure is hosted within um within uh the uh the these server arrays.

The current life cycle that we've set uh um scheduled uh as presented last year during um uh last year's asset review uh is five years um we have four g7 models that were purchased back in 2020 each of them single node and then back in 2022 we purchased a G8 model that's dual node to add some redundancy due to some hardware failures that um were experienced in 2022 um that affected our police dispatch system given how sensitive that system is we added the additional redundancy um so that we make sure that that system never goes down um this is a I'm sorry to me to interrupt you on the on the second line the you said Athena that's the that is the software currently being replaced correct and I'm gonna address the how that will affect our system um uh and the decision the what we're proposing for um the replacement yes thank thank you um so our G7 models are um end of March 2027 so they should have been replaced in 2025 uh but due to um some staff changeover and everything it wasn't included in the 2025 budget and we did include it uh propose it for the FY26 budget but as as uh Scott Smith mentioned we uh council approved the new uh Motorola Flex system that would replace those uh seven well eight uh seven servers offboarding one at the moment um uh uh for the Athena system that that removing that system and uh having Motorola manage that system in their own cluster allows us to downsize our system down to three server arrays um this is originally proposed an FY2 uh six pushed it into FY27 to allow that MotorolaFlex project to complete so that we can downsize that does uh with the remaining servers that does keep us at what's called an N plus one redundancy.

We still have one entire server array drop um uh whether that's due to hardware failure software failure or anything like that and our services will remain up which is important to make sure that we continue having all these critical servers or services we got a couple quotes one from Dell one from uh supermicro which is our current hardware provider we got the Dell is we're expecting it to be about 20-30% more because it's kind of the premiere option and they actually came in at the same level as the Supermicro which we're pretty excited about.

Both vendors recommended a seven year life cycle for this equipment it has better components newer components that uh can last a little bit longer to be able to move from that five year life cycle to a seven year life cycle this would this reduction removing those Athena servers would allow us to reduce uh processor cores that do kind of the main brain power behind everything from 192 to 96 with and with the Athena servers removed that would leave us at a 42% capacity so plenty of room to grow um uh our memory would have due to configuration how it has to be configured for these servers and the sizes that the that the modules come in uh the memory would have to remain the same at three terabytes if we try to downsize that we would end up at 74 70 percent capacity so we want to be able to have that redundancy so that leaves us at 35 uh percent capacity with uh the proposed uh configuration and then storage we'll be able to reduce down from 232 terabytes to 184 terabytes for our environment leaving us at 44% capacity with the replication of the uh redundancy so that gives us plenty uh the 44% is uh still gives us plenty of headroom as we're working on uh trying to digitize more of our processes trying to but we're working on building out more automation workflows on our local uh some of our local systems to be able to that will uh provide more documents that have to be stored more metadata as we stored this provides plenty of headroom for that while still downsizing our environmental.

The quotes came back at $500 thousand dollars um which um was higher than what was proposed last year um this was largely the largely due to server hardware prices dramatically going up.

Largely due to our data centers being built um I think there's been some down in uh like Red Oak, Granbury, there's a few proposed here in Plano.

Um, and those have been soaking up all the server hardware, so the prices have been going up since uh the end of last year.

Um we've been finding that quotes typically have only been good for one to two weeks.

We've been able to convince um uh our quote uh our vendors to build provider quotes uh through June 10th, and that's why we've we have it on the June 2nd meeting.

Um and uh from some uh uh cities that I've talked to uh at some conferences that I've gone to this year, the equipment that is ordered in January for the uh their nutanix equipment models were uh coming end of life in October, they weren't going to be able to receive it until August.

So we're talking it potentially eight month um uh delivery.

So we're trying to get ahead of the longer delivery dates.

Uh we're trying to get ahead of potential price increases and propose uh um try to purchase these now rather than in FB27.

Um just kind of look at the progression of how the quotes have gone.

Uh last year when we were looking at this, we're at 305,000.

Uh talking to manufacturer, we're expecting maybe if we waited maybe 330, um, somewhere in that range, and that would still get us cost savings downsizing.

When we're refreshed in preparation for the budget, we went up to 450,000.

Um, and then when in preparation for this meeting and for uh the June 2nd meeting, uh it uh bumped up to 510,000.

And we did a little bit of restructuring of some of our services to reduce that back down to 500.

Um, and important to what we've been hearing from other cities, we've heard from the manufacturer.

Um, there's some major June increases that were expected mid-June that could potentially raise that an additional 60 percent um up to 816,000.

I don't think it would actually get up to quite that level, but even a 40% increase would be um we want to be able to sustain that.

So trying to aim for that June 2nd date to try to get this in before we have these major server um price increases.

Talking to both Dell and Supermicro and some other cities, we're not expecting these prices to go down for the next at least three years probably.

Um, so this locking this in now will allow us to avoid those price increases as this hardware should last us for at least seven years.

Um, second, any questions with Nutanix before I move on to uh the other um so to be clear, Nutanix is coming to you for as a budget amendment um on June 2nd because we if we try to wait and do this as a supplemental one of those one-time funding requests for 27 as Carter said, the supply pipeline pushes us out even further, and we will have already exceeded our end of life by the time we would get the product and be able to deploy it.

Yeah, I've been you know, I've been seeing this a lot.

Okay, a lot of my last year estimates have are blown because of the hardware, especially memory that's just exploding and costs.

So, it's been uh providing a lot of challenges with uh with this.

So, and I do want to say thank you to finance for helping us jump on this uh very quickly with an accelerated timeline.

All right, um, we're also working on replacing our uh OKC uh hardware, our local hardware, uh, the warm backups.

I just in case you guys aren't familiar with uh kind of backup setups.

Warm backups are designed to kind of provide a kind of um medium length uh backups that they're kept for maybe three months or so.

Uh they're taken maybe on a day-to-day or um twice a day timeline, and they're designed to be able to allow you to quickly pull data out, like we've lost some files uh from um files getting cut up in the reserves and deletes file.

We're able to quickly hop into the warm backups and pull a pull the backups from of those files.

Uh in 2024, during the big crowd strike incident where that took down a lot of um industries, uh, we were able to recover a lot of our servers from our warm backups extremely quickly before official fixes were due to us having these warm backups.

Uh we do uh we do also have cloud coal backups and uh the Fort Knox uh project that's been proposed uh adds on uh air gapping and other features to our cloud backups, and those are intended to be more long-term archival, um the cheaper storage, but is uh takes a lot longer to pull out of and recover from.

Uh it's more as a break glass type uh setup.

Uh so it's important to maintain both types of backups so that we can keep our live servers up and running.

So this hardware uh uh with the budget amendment is proposed for 55,000, and um uh the current equipment was purchased in 2021, and as part of our initiative, as part of the strategic plan uh to kind of build out a centralized inventory of all of our assets.

We found uh during that process, we found that it has an end of life in February 2027.

So we need to try to get that replaced before that end of life.

So uh, for the same reason as the Nutanix to avoid those price increases, avoid the long shipping times.

We want to try to get those purchased now.

Let me ask you this planning in October.

Backups and everything.

Um, about a year ago, Abilene was hit by a um virus by one of those lockout uh crypto viruses, and they ended up having to replace all their hardware.

I mean, from desktops, they were just pulling them out.

The libraries were not were out without computers at all for six months because they were replacing all of them.

What do we have in place?

See your backups, see your warm and cloud, so that that keeps that that does keep an air gap for our systems.

But what are we doing uh to position ourselves not to be in that situation?

So we are working on a plan because we do have our the local equipment, and if that gets hit like that, or say a tornado blows through and takes out our physical hardware, then we're gonna have to go out and procure new hardware, like you're saying.

And uh, so we're working on a plan to be able to bring uh servers up in the cloud potentially, recover to the cloud, and link that into local networks so that uh staff, if they have again if we have computers available that they're able to connect to the systems.

Yeah, but about two years ago we went from cloud servers to back to physical servers.

The intent here is that that would be again as a break glass uh uh scenario where if the physical servers aren't available, then we would uh recover the backups to a cloud environment.

Um we haven't fully flushed out that plan yet, but it's more as in that kind of scenario where we lose our local servers for whatever reason that we're able to bring that back up.

Yeah, Abilene hadn't figured it out either, and it was brutal.

It's uh something I I've spent quite a bit of time thinking about because uh that's not a situation I want to be in.

Sure.

But we are uh trying to strategize how to avoid that kind of smart.

Um uh that will be uh part of our conversation with the COVID purchase with uh some refreshers who are doing the co-east with the Fort Knox project.

That's gonna be part of the conversation as well.

What does that look like if we need to recover from that?

So we'll be uh getting some evaluation from some experts on that as well.

Uh so those are the two major equipment purchases coming up on June 2nd.

Um, the Nutanix is uh we're uh using the VERF to purchase the new uh as that's a major equipment purchase in the in the past, uh the costs were quite a bit lower, and so we purchased through leases.

Uh, but this year we're planning on purchasing through the VERF to avoid uh having to incur that additional debt.

Um the cohesity, given that it's a lower amount, it it's more on the storage side than on the memory processing side, so it's a little bit cheaper.

Um, we're purchasing as a direct purchase.

Uh we wanted to review uh real quick, uh, kind of give you a status update on how we're doing with the initiative to inventory a lot of our assets, um the product uh for our strategic plan.

The goal is to kind of centralize our inventory, build out um all of our assets so that we're able to track uh how much they're purchased for, how they're purchased, link them to their uh the contracts that they're purchased through, but then also uh establish as they're purchased, establish uh when they're supposed to be replaced and what their end of life is as that's announced.

And then additionally, we're trying to build this out in our ticketing solution so that we can start attaching this to tickets and start identifying any assets that have a lot of it, a lot of tickets associated with them.

Um from that, we've uh uh we've uh come up with kind of a general idea to add to uh our replacement plan with uh the rest of the city.

Uh a general idea of some of our larger um uh purchases that will be need to be made over the next uh uh five to six years.

Uh this year we're working just to highlight a few of these.

Uh, this year we're working uh with FIRE to uh look at replacing their laptops and their vehicles.

We're evaluating working with um uh Joe Flowers to evaluate uh an iPad solution for some of their um for some of their services, as with this mode world flex.

Uh their fire, their software that's specific to fire is compatible with iPads and might provide a more cost-effective solution that's also a little bit um easier for staff to use.

We'll see how um how that goes.

Um but that's scheduled for this year per from the increase.

We're looking at security cameras and access control when that was presented to council and purchased back in 2020.

It was presented that that would be replaced in 2027.

Um during inventory, we um found that the cameras are end of life in 2027 as well, but those go through a local, uh we have a locally hosted uh uh camera server for those at the moment.

Um the solutions we're looking at are uh cloud camera solutions, uh cloud access control solutions such as VRCata, which is in the government space, as well as a few others that might be a bit more cost effective.

But all of them, one of our requirements for all of them, vircata follows this, the other companies I've talked to follow this.

Uh their minimum new life cycle for the cameras is 10 years instead of seven years, and um uh they uh at least for Cata has said that they will continue providing security updates past 10 years.

Um so that should extend the life cycle of that hardware.

We've discussed the Nutanix Cohesti hardware uh that will extend out to seven years for the replacement.

Um we're working with uh PD to plan out the replacement of the organized laptops in FY26 under a lease to allow for their vehicles.

Um moving on down to our network hardware is another major purchase that's coming up that is planned for being financed through the VERF.

This is our server, all of our network equipment that connects everyone to the internet and um and to all of our servers uh throughout our and we're looking at FY29 to replace that equipment.

Our firewall hardware uh we're currently planning to do direct uh purchase for that as it can't the quotes came in quite a bit lower than we're expecting.

Um but those are we have we have a couple of firewalls that uh provide security between our internal network and the internet.

Um we're looking at FY29 for those.

Um some other major purchases include uh the live streaming hardware, which we just did so that we can live stream these meetings.

Uh those were replaced last year through peg funds, and we're working with finance to kind of track and plan out how those peg funds will work.

Those peg funds come from uh they come from uh uh the cable fees, and as people are using cable less, we're getting less of those fees.

Uh so we're gonna have to try to plan out how that looks like in FY31.

Umfortunate that people aren't using cable as much, but I like my booth.

Um we have a question.

Yes, sir.

I don't know if I was not paying attention for a minute.

What's the difference between enterprise copier and office?

Oh, never mind.

I thought that was all this copier.

Never mind.

Sure.

Never mind.

I thought it was two different copier lines, but it's a oh no, no, and Exxon costs these are some large line items as well.

Both of those we're planning on purchasing to lease the office computers.

Uh uh we started the bulk of the replacement um after having some issues with shipments and wrong things being shipped um at the beginning of this fiscal year.

So we're looking at FY30 for both of those.

Um both of those we uh typically purchased through a lease.

Yeah, yeah.

Um we had our plotters, we have confirmed.

I've confirmed with our uh vendor uh for a plotters that we're not in engineering environments, so we're not printing as much on the plotters.

Usually it's marketing materials for events and such, and then we have one for the EOC in case there's a major incident that we can bring that up as quick as possible.

And IT goes out there and maintains that uh once a month to make sure it's ready for them.

Um but given our low usage, that's one of our assets that can be replaced on as needed basis.

Um, I'll come back to the AV equipment, but we have some remote site radios that I've had some information today, some discussion today with our um radio vendor.

Um that some of uh right now we were projecting potentially 25,000.

Potentially that will probably look more like 15,000 whenever we need to replace those in FY29, and uh that's for five radios that connect our um our water towers and our pump station to our network.

If we move forward with that cloud camera system, cloud access control system, those are the parts of the water towers that require the network connection.

We wouldn't have to do the radius for those sites, and so we'd be able to reduce that down potentially to five or six thousand dollars.

Um and then the conference rooms collaboration hardware, that's the uh devices like you see in executive council chambers, the big TV with the camera built in, the computer built in.

Um we're working on gradually replacing those who we've replaced two so far in this room and up in the fish.

Well, um those are more on an annual basis.

Um uh replacing them as we have funds.

The A V equipment is one of the parts that we've been actively working on to be able to fill that out.

We've received some initial quotes for the council chambers A V, but that was to replace everything across the room.

So $200,000 was to replace all the wiring, all the encoders, all the switches, the screens at your dias.

And a lot of that problem, like the wires and the uh the drop-down screen and such, probably doesn't need to be on a proper life cycle.

So for this AV equipment, we're working on establishing individually what the lifecycle actually needs to look like for the for the individual components, so that we're not unnecessarily replacing the entire system.

So for the that's everything that we've inventoried across uh all the IT assets across the city, all the major IT assets across the city.

Obviously, there's some consumables like monitors, keyboards, and such that we just keep the stock of these all the major assets.

I know I skipped over a couple of those smaller ones.

Any questions?

Any that you guys want to go back to or anything about IT is expensive, very tells me that all the time.

Yes.

Thank you.

Okay, thanks, Corey.

Should we turn the cabinets and uh adding machines?

Yeah, what do you think, Berna?

I don't want to know.

Staff would have plenty of work to do.

AI would take your job.

We don't have India's job.

We're gonna move into the berth and Bern's gonna present this section for you.

So good evening, Mary Council for uh part of this Patrick Walker on the finance director.

So um just wanted to give you the heads up.

We like to have things that are gonna be on consent.

We like to have already given you that information, and this is truly just giving you um that you will see this in the budget amendment on June six on June 2nd, and so that you're just aware of what it's asking for, and um why it's gonna be there.

Whoops, I'm sorry.

We were able to identify in the verb when we created it.

It was it started with um, lease max, it started with a a start from general fund, and then it has to be contributions that come directly from the department.

So because we had a a little bit of a higher balance in there when it came forward that there was a need that we had to go ahead and make these purchases with technology, was an opportunity to say I believe we could go ahead and fit them in the BERV.

That means that IT will then have to start contributing for its portion of what it needs to be able to pay out in the future.

But that's what the capital outlay is with the three things dropped in with IT now being a contributor, and then the other departments that are just showing you the capital outlay of where we believe their purchases would land and what they're needing.

So when it comes to paying for it, it's an internal service fund.

And what that means is it's meant to pay what the departments have contributed.

It's not meant to grow a balance, it's not meant to have a large balance, it's meant to pay in a way from one fund what is needed from those different departments.

And so this is just giving you what those contributions are.

It's a little bit underfunded right now based on what we were looking at for those projections and what is needed in the future.

So it's it's meant to just cover the basic needs, which means we won't be putting any new equipment into the BERF, but everything that's already there is um gonna start in 27.

We'll start contributing so that it'll be there for a future purchase.

I tried to show you where an ambulance is finally gonna be received.

Um, this is the reason why we order some things early.

So we're gonna be asking for you to fund an ambulance this year that's actually meant to be received by the year 30.

So this ambulance was um ordered about three years ago, was it four?

Was it just three?

A little over three.

Yeah, and so it it keeps being pushed out, but now we're being told that we should be getting it by the very end of September or the early um October.

So we went ahead and dropped it into the October numbers, and there's also going to be one growth vehicle that's added in 27, and then you'll see the the IT vehicle.

I mean, the IT equipment that's purchased there.

Everything else is just the basic items for the needs and the equipment, but those are the large dollars that shows you that even if we started at 1.2 and being strategic about rolling off the leases and and bringing in the new vehicles and how we want to handle that lease program.

The balance isn't large, but we can end up in 31 with around 350k.

This keeps us from being able, this is how we're gonna leverage that financing so that if we can do it in the the VERF, then we don't need that tax at the point where if we do go out and I have geo bond and we can get um 14 million, but the voters only want 10.

That opens up an opportunity for us to then go back and look at the debt.

Is it's a constant cycle of where would the funds be, how can we best um meet the needs of the citizens as well as the city, and this just ended up to be a vehicle that really worked.

How is the uh speaking of vehicle?

How is the enterprise overall deliverability uh just everything to do with enterprise?

How is that working out?

I don't know who about what person asked the question too, but so it's it's been um it's rolling out now, it's it's coming in in a way that we know how it's expected and how to get them auctioned off and how to bring them on.

The delivery is not immediate, depends on the type of vehicle, and Mr.

Tim gets to handle a lot of the the ebb and flow of how the fleet vehicles are handled.

Um we haven't replaced everything that we started off with.

We still have a couple years before we will have replaced all vehicles that we currently own, but overall, it's been a successful um way of being able to to get new vehicles on site.

Delivery-wise, they've tightened, and so we we have it down to kind of a fine art where he can when we got the order, is like it'll be six months before we get this one, it could be eight months before we get that one.

I will say that they changed on us.

Originally, it was we don't pay anything until we have the vehicle on site, ready to use.

That means it's completely got the logos, got the light bars, it has everything on it.

So they changed it effective October 1st of this year, where now we will begin paying for it as soon as it's delivered to the outfitter.

So the lease will kick in before we've actually touched the vehicle, and it could be being leased as much as six to eight months before we ever get to actually use it.

That was not something that was contractually part of our original contract.

That is not part of our original contract that is outside of what we originally agreed to.

We did push back and we did try to come up with a way of them honoring what we had originally agreed to, but so far we have not been successful because they're out the money also.

I mean, it's one of those where we're having to pay it while it's sitting at the outfitter.

What's the difference in you going ahead and taking it when it's sitting at the outfitter because of the what's at the outfitter is without our control, is outside of their control as well.

So is it primarily?

I mean, I mean the cars are code enforcement, they're just decals.

I'm sure that's a pretty quick turnaround.

Yeah, that would be one of your factors.

Well, I would think it's gonna be your police safety.

Yeah, your public safety.

All right, we're gonna go to staffing.

So we talked about staffing a few months ago in our first budget work session of the season.

And at that time, I made a request for four additional positions, two in the general fund, which were two new police officers, and two in our utility fund, two new crew leaders.

I also requested uh three reclassifications, one on our utility side, taking our public works superintendent to the assistant public works director, and then uh two reclasses on the general fund side for police taking our two lieutenants and making them captains, and that that request was to kind of try to manage their job duties, align their job duties with their titles, manage some overtime as well, um, but just really right size the department.

So those two new officers, it seemed like we kind of had a head nod.

Yes, we're headed in the right direction with asking for those two new officers.

And what I'm here today to ask is if we can advance hire one of those officers before the fiscal year starts, and I'll explain to you why.

So uh we have a couple of officers right now who are out on active duty military uh leave.

We've had one who's been out for quite a bit of time and another who is expected to be out for at least 12 months.

Um, one that has been out for a while, we are not paying, um, they are unpaid military leave, they have expend expended all of their accrued leave, and so we do not have to pay them, we don't pay them.

So we do have some savings there to get this done.

What I'm asking is because the department is having to make up for those two gaps, right?

We cannot release those positions, we cannot backfill those positions, so we are asking to advance one of the two FTEs that we anticipate you would have approved when we get to the end of this budget cycle.

Um, we're asking to go ahead and bring one of those in as soon as possible.

Uh, the police department has identified um uh a candidate that they want to extend an offer to who actually is graduating from the academy next Tuesday, um, and we are looking to make an offer, hopefully, next uh Wednesday morning after you hopefully approve this at the council meeting on June 2nd.

So that is what we're here to request.

You can see what the cost would end up being.

It's about four months of advanced staffing.

So to be clear, when October 1st hit, we will not be recruiting two new officers.

We will only be recruiting that net one officer.

So still asking for two new officers for FY27, but requesting that we advance one of those for uh the final four months of the fiscal year.

The net cost we're expecting is about $65,000.

The cost is about $65,000.

But again, this can be absorbed in the cost savings that we already have by having those two vacancies and not paying those positions.

And this is advancing in rank and existing officer.

Is that what I'm hearing?

So this is an officer that we would have tried to hire.

This is an entry-level position.

This is an entry-level officer.

So no, they wouldn't be, I mean, they'd be the same position.

It's the same rank as the two that are out on leave.

So we're not overfilling it in any kind of way.

This is just advancing one of the this is a patrol man.

Yes.

That you want to hire early.

Early.

Just advancing, yeah.

So that yeah, but we are anticipate both officers out of route on leave to be back, and that could be up to a year.

That could be up to a year, yes.

And one of those are legally, we have to maintain their positions whether until they tell us well.

We've already approved the increase in FTEs anyway.

You're just trying to move it forward.

Yes.

Yes.

So you haven't, you haven't officially you gave me the head knock.

Yes, this is the right track.

So but you won't officially approve these until September.

Um but I anticipate you're gonna say yes to it.

Uh and so we're just talking about it.

No, please.

So I'm just asking, give me one sooner than October 1st.

Because you're accruing a lot of overtime.

They are, they're having to backfill a lot.

Of course, you can imagine the strain that it causes on everyone.

So this is this is a creative solution that our police chief and our administrative director came up with.

Are both officers our military leave assigned to the patrol division?

Yes, one kind of is a rotating position because our social media and our social media funny guy is one of the ones who's out.

Oh somebody's replicating him.

You can't tell the difference.

Yeah, but he but he he rotates, so they're kind of on a rotating type schedule.

You look so disappointing.

We have any idea what kind of overtime this is creating.

I'm sorry, sorry for the police department.

What is this lack of personnel be in there?

What is it creating in overtime in round dollars?

Do you have that?

Yeah, Jeff, do you want to?

I don't have an exact number, but I will tell you it's significant.

So one of the charges that I've given um police specifically, but public safety as a whole, is our overtime had dramatically increased.

We talked about this at the last meeting where we had to change some um what's considered hours worked.

We had to change how we were calculating that because our overtime was going up.

So I have kind of been applying the pressure to those departments to actively manage their overtime, and they're doing a great job of doing that, but this is one of those areas that's kind of outside of his control.

He's being held accountable to this overtime, but you got these two vacancies and legally you can't do anything about it.

We can get you the round dollars for the um, we'll have them for you by Tuesday night.

And then this is on your agenda.

Okay, it's about money, but safety as well, you know, so yeah.

So this will be on our agents for for Tuesday.

Yeah, we will be requesting this, and so the reason you you know, for for those who aren't um aware, new council and previous council, uh, the city of Murphy put a policy in place.

All cities don't do this, where you if you expand an FTE, you have to come back to council to get approval for that.

Um, and that was done for various reasons.

I'm sure the mayor can uh speak to that if he wants to.

Um, you know, in some cities, if you need to do something like this, you have the wiggle room.

If it's not going to have a net uh uh cost impact, which this will not, but for good reason, we bring back if we're going to expand beyond the FTE count that you approved in the previous year's budget.

We come back to council and we justify and tell you why and make sure we get that firm.

I don't have an issue with the answer to this position.

I can tell.

Uh on your overtime.

In April, it was uh around $12,000 dollars, it doubled, it went to $22,000 in May.

And that's just one month, so so if you, you know, you draw that out.

Yeah, it's like yeah, I mean, I think that to me is a no-brainer to for my for me to.

And then we've already talked about the reduction in step plans.

I have a quick question on that one, though.

Yes, sir.

On the step plan, is it going to be built into where if you have someone with years of service with another department that they'll be able to jump to a higher step to come with recruiting?

Chelsea, do you want to speak to that?

We do, Chief Man wants to speak to that as well.

So we do have an entry-level lateral program that can extend class five because of the way the FTOs rank, and our FTOs are all portals.

So we had parity to ensure that we didn't have any cross-continuation, if you will, in terms of a uh individual training being compensated at a higher rate than their fuel training officer.

But out of eight steps, a certified officer can be higher up to step five.

Is that what you just want to say?

That's good for recruiting, so I just want to make sure that's absolutely for being competitive for years of service.

I max out at step five when we've been clear.

And I apologize.

That's perfect.

Good enough.

Thank you.

Okay.

So this is just kind of adding some more justification on the value add of advancing this officer and then the reclasses that we've already gone over.

Jen, there's the cost impact.

Um do not forget that adding those two new officers does trigger one additional vehicle.

Uh Berna went over that when she talked about the BERV.

Two officers, one vehicle, it's the formula.

They got to drive something when they're on shift.

You got bicycles.

You know, so that's something I'm gonna have to bring up with the chief because he just in my office dropped a bomb on me with the state uh with this new law, and I think is it SP 33?

HB33.

HB, thank you.

HB 33 about um the state really calling out what we have to supply to each officer in a working vehicle is one of those, so just to be clear.

Um, so so back to that.

If we're replacing two officers that are not here, why would we need to add an additional vehicle?

Well, we're not replacing two officers.

I don't mean replacing, but they're not currently here on duty, and we're adding one in.

Yes, so that's so the reason why we need to go ahead and order that is we've talked a lot about supply chain and the lead time on ordering a vehicle, right?

So these vehicles don't get here immediately.

So even though the plan was get these officers in here in October, those cars are not going to be ready for them in October.

So we need to go ahead and get those cars booked and paid for so that they can get in the order the the processing um timeline, and then by then I, you know, we don't know when we're gonna get those vehicles, but those other two employees are coming back, it's just gonna be an extended amount of time.

Right, and I guess what I meant by that is so if we had both officers here now, then we would be short vehicles.

Yes, we figure out a way.

I mean, we we'd figure out a way, but yeah, there wouldn't be a dedicated vehicle.

You can average about 12 months before you see that asset in four hits a grail.

When especially when you add in the outfitting uh that Vernon was talking about, it it the time becomes astronomical.

What are we buying in new vehicles?

Are we buying the Tahoes or are we buying the Teslas?

We're gonna replace, we're gonna do a Tesla on this one.

Um we're seeing if we'll give us a totals of three Teslas.

That would give us a total of three, and we're probably gonna replace a couple of uh Tahoes this next cycle as well.

We're seeing that in our calculation uh that we shared with you guys previously.

If we hang on to those for minimum of eight years, it's a dramatic cost savings from the maintenance, of course, the fuel and all of those things.

So and it it seems to, despite some of the comments on Facebook, it seems to be having a great um public acceptance.

So and the officers love them.

We have a waiting list now for them to use them.

The officers love them.

Yeah, they didn't.

At first they didn't want to use them, yeah.

But when they came, now all of a sudden they have a waiting list of officers wanting to be drivers of the tests.

We're gonna get a cyber truck, you think?

No, don't you look at see?

Don't even don't even tease him with a good time.

I've already told them don't ever even come and ask me.

Yeah, that would go to the fire department.

Yeah, yeah, yeah.

Oh, he'd be so upset.

We'll do it.

All right.

And this is just the personnel overview showing you uh where we are from an organizational standpoint.

We will have 154 total FTEs in FY27.

And then just a recap to make sure that we're getting firm direction from you guys before we close tonight.

We went over uh debt and grants, so I would like some conversation or some head nodding or something in the direction of are we okay to move forward anticipating a uh geo bond for a May 2027 election so that we can kind of get the wheels turning, get our bond council in here, start talking about bond committees and all of the logistics that's required.

And I will say yes, but I want um when do we have our retreat scheduled?

Uh Candy, do you have the date?

It's sometime I don't have the exact date, but February.

Yeah, early February.

Oh, February.

So we're gonna have to we can we can send out some new dates to get that pushed up.

Well, if we can't do it or in our retreat, then we're gonna want a work session.

Um, because I want I want staff's kind of wish list.

I want to be able to sit down as an organization, talk through it.

So I would love that to be in a retreat setting.

Yeah, that's what I was thinking, but February is awful far off.

Yeah, I thought it was January.

So we'll have to see if we can push up.

I think we've already booked your facilitator.

I'll have to go back to that.

Like I said, we can figure it out.

We could we could also do it, you know.

We could do a mini retreat, you know, in the fall, before the holidays, uh, just to talk about it.

I think that might make sense.

So, can we poll and get some dates?

All right.

Now I heard from the mayor.

Everybody else okay with us going in the direction of anticipating a May 27 bond election.

Yes, I'm good.

Still want to hear more about it.

But yeah.

Say it again for now, yes.

Okay, all right.

Um, and then is everyone okay with directing the ARPA funding that we were gonna use for the EV grants back to the general fund so that we can cover some of those unanticipated IT needs?

Yeah, yeah.

Well, all right, we don't need to talk about the capital maintenance fund uh technology on the June 2nd meeting as a reminder.

There will be two budget amendments coming forward to you for some technology purposes that Carter went over.

You don't, I mean you'll vote on those on Tuesday, but they're already on your agenda.

You'll have more information in your packet if you want to review it again, and then staffing is also on your agenda for June 2nd to get that advanced officer.

Very good.

Alright, any other questions as we wrap up, concerns, feedback, direction you want to provide for staff.

Alright, well, thank you for your attention, your engagement.

Thank you to Verna, Paulette, and Tim.

Uh, this is the finance team that works on all things budget, capital planning, BERFs.

Um, and so they make we look smart by putting together amazing presentations.

Um, so thank you to you guys, and thank you to all the staff back there for here tonight.

Yeah, here we have a good time.

Okay, adjourned.

Uh, time is 7 48, we're jersey.