Welcome you to the Mervyn City Council budget work session.

It's June 30th, time to 6 p.m.

From time over to City Secretary.

We'll call the screen.

Mayor Scott Bradley?

Mayor Protein Scott Smith.

Here.

Deputy Mayor Ken Oldman.

Council Member Place 1 Elizabeth Everham?

Here.

Councilmember Place 3.

Debbie Ison?

Here.

Council Member Place 5, Kevin Kelly.

Here.

Council Member Place 6, Janae Butler.

Mayor Certify the President.

With that, I will call item 3A fiscal year 2027 budget work session.

All right, Mayor and Council, thank you for being here this evening.

Uh we are here to go over our, I think this is maybe our third budget work session of the budget season.

So we'll be going over a few different things for you tonight.

The 2027 fee schedule will do a budget overview of all budget.

We'll talk about component units, the general fund overview, and we will end with the review of our utility fund.

Before we dive in, I do want to kind of frame the night and some of the things that I really want you to walk away with tonight.

After you go through this presentation, there are some things that I want you to kind of realize.

One, the city has an exceptionally strong financial position.

We are doing well where we are.

We're continuing to prioritize council's uh wants and desires and what you all have asked us to do through the strategic plan.

And we're doing all of that while still following the policies that we have in place.

We're abiding by our financial policies, and we'll show you how that looks when it comes to our fund balance when it comes to the composition of our budgets as well.

So I want you to make sure that you walk away with that tonight.

So with that, I'm gonna turn it over to our finance director, Berna Fitzpatrick Walker, and she's gonna go through our fee schedule.

Now, if you can jump in and ask questions anytime, but we will leave questions at the end of each different section as well if you want to wait, but it's totally up to you.

Thank you, Mayor and Council.

So the the fee schedule this year is just gonna be um the solid waste.

There's gonna be some water volumetric rates and the wastewater volumetric rates, and there's gonna be some changes in the billing related to the sewer averaging methodology, and then there's gonna be some new meter and meter related fees.

Um so just bring your attention to the fact that the solid waste are only changing because it's the republic CPI adjustment capability that they have and um the utility rate volume or the scenario three that was passed um in prior um fiscal year, and so it's just moving forward with that um that utility rate analysis that's going to be presented um for 27, 28, 29, 30.

They gave us five years of that rate study.

So um just wanted you to know that it's gonna be a 4.7 CPI increase, and so there's gonna be lots of um individual line items that are changed.

Um I'm not gonna walk you through each one of them, but you'll see that we have the current, you'll see the proposed, and you'll see the impact, and this is the calculation that's between these two, and then walks you forward with the administration fee and the franchise fee, as well as the total, so that you can see the impact overall.

So the solid waste once per week service is going from 1420 to 1487, and that's 66 uh cents increase.

And then the same thing walk the recycling once per week is gonna impact uh increase of 31 cents, and the um twice a year drop at city hall is gonna be four cents, and then the solid waste is an increase of 1.02.

So we just keep walking forward, it's gonna be the same thing.

We'll see some of them aren't gonna be a change, and then the impact if there's an additional solid waste fee, and then the impact for the recycling cards.

Now, just to explain this one to you a little bit, because there's so many different columns.

This is gonna be the the new proposed section, and then it's telling you if you look at CY1, it's an increase of 106, and so it's it's based by column, so then you can see the CY1 here is gonna be this, and it was an increase of 364.

And so then it just kind of walks you through those, so you don't have to do the math.

Um, I'm not going to read each one of them to you.

Just know that each one of them is because there's a 4.7% increase in the CPI.

So it's going to be on the residential side, as well as the goes into the dumpsters for the four cubic yards, the six cubic yards, eight cubic yards, and then takes us into the collection itself.

I'm still going.

And then we go into the water and sewer usage.

Is there any questions on the CPI?

Bruno, is there a uh standard percentage across the board these increases, or is it per specific?

No, it's 4.7%.

On the individual line, sorry.

Yeah, it's 4.7%.

So the the CPI increase has gone up.

I think the standard right now is 4.72.

And so some of them will calculate at 4.71, some will calculate 4.75, but generally everything is at the 4.7, which is what we had approved that they have an eligibility for do that CPI increase, and it is based on the standard of what the CPI increase is at the time.

So with water and sewer, when we made the decision to use scenario three last year, it accepted that rate study.

Overall for the total, I think it was like 7.3% for water and 7.61 for sewer.

And so then we break it out by tiers so that you can see that the tier rate is a little bit different because it's based on usage, and when they did that analysis, they're making sure that the lowest level that that steady income individual that uses the least amount of water has the least amount of impact.

And then the point was as it increased up, is because it's based on their use, so that the increase is planned so that the more water you use, then the more cost.

It's a conservation approach, too.

So here it's important to us in in North Texas that we try to encourage our residents to conserve more water.

And so by having the rate structure set this way, where the more water you use, the higher the impact to you is.

Hopefully, we hope that translates to okay, I'm going to purposely try to use less water.

So that's why you see that lower tier where kind of you know the folks who probably earn less are on more of a fixed income and use less water, they're not being impacted as much year over year.

And it is truly is their water use only.

That's where we held that base rate for the meter base steady so that there is an increase on the meter base.

It's literally just the water usage.

So then it goes into the commercial side, so you'll also see that lowest level at a 7.3% increase, and then here's your irrigation rates, and then our wastewater service volumetric rate is where it's at the 7.7% across the board for everyone.

And then this moves us into the um the winter averaging change.

Um I do have utility billing here if you need any more details on it, but basically we're we're changing the philosophy.

Before we were based on it's still three months, and it will remain three months, but December was excluded, and the the premise was then because that might be the time where you're gonna have more people over.

Um it but also might be the time that you're not there either.

So previously, December was just left out of the the calculation altogether.

But our software has the capability of just picking the lowest.

So if December is your lowest, it uses it.

If November was your lowest, it uses it.

So that you're still gonna be looking at November, December, January, and February as your winter months to to review, but it's only gonna select the three lowest, and so the same thing with this language down here.

It's just going into an explanation of how it's going to land on your your bill on April 1st, and it's going to be the 12 months and then the three month change.

Now this is when we go into some of the additional fees, and this is going to be driven by our public works request.

So they also be able to answer any questions if you need additional detail.

But in essence, what we're doing is we're making sure that we're capturing those uh meter fees that as we're going through and there's something broken and we're having to replace and there's things that need to be handled.

Um we want to be sure that we've captured the cost of what the meter actually costs right now.

And so it's got the cost of the meter of what we pay, specifically now with a little bit of a uh an upfit or an upcharge uh related to delivery and so that we're not out the cost of doing something for a repair for someone that damaged.

So the one inch has gone to a sorry, the the residential standard is a three-quarter inch, and so it's moving to from 330 to 430, and then the one inch is going to move up a little bit.

It's same thing as the the turbine is is increasing as well.

And so this is just the other sizes that are going to increase again, matching to um what it's gonna cost now if we had to make the purchase.

So previously on the one that's a new item that um this was actually a slow associated one you're gonna see next.

It's just really hard to lay it out when you add different things.

So in essence, we just added the one inch to the two-inch turbine uh twelve hundred dollars, then you'll see that the six the price quote compares to it's now just number seven.

So it's just a sequel change, it didn't go away, it's just dropping down one.

And so these are new items that were added in to be sure that we can capture those costs of loss of the things that we're having to constantly go back out and repair for a resident.

Um, and that's the the meter box and the lids, that's the antenna replacement.

And remember, we read by antenna, so if it doesn't have the antenna and the antennas broken, then our um users have um I'm sorry, our public works has to go out and has to read it manually.

So we want those antennas, but there's some tampering that can occur that will break them, it's not just the natural use of the meter, and so that's why that capture that cost is coming into play.

And the same thing with meter locks.

If we have some that we know that aren't paid and we need to lock them out of the meter, sometimes they go ahead and get themselves back into the meter, and so we just wanted to cover the cost of the damage and the replacement that happens.

So this is gonna be your meter relocation.

Um so we in I'm going out on a limb here, but tell me if I'm wrong.

So normally it's we're gonna install the meter the first time for you, but sometimes they change and want their sprinkler in a different location, or now they want to put something, they want to build something, and they will just call and request for us to relocate that meter, and so that's just gonna come with a price quote so they'll know how much that relocation is gonna be.

A lot of times that'll be because we put the meter in the ground and then now they want the driveway there, they change their mind with it where they want their driveway, so we have to we have to move it.

So it's usually it's usually the that that's usually something that the uh the builder will have you move, yeah.

Right, the homeowner doesn't usually care whether that's right, unless the homeowners move it or on gonna do something.

Yeah, homeowner may be putting in a circle drive or something.

This doesn't matter, it does happen.

So here this is just a standard language.

So if they call in a request and they say, I don't believe my meter's working correctly, and we test it and we send it off.

It's a third party that will take care of that.

And um, when it comes back, if it meets that um AWD AW standard, then it is common for them to actually have to pay for the cost of that meter test.

Now it it usually isn't sent off immediately, so normally you do something that's called a 10 gallon test.

There's other tests that can happen, but if the owner still just insists on that being pulled out of the ground and sent off, then this they would be communicated with that it would be a fee if it if it meets that standard.

They're also usually given the report to prove that that standard is in place.

So we also have meter tampering.

It happens with the antenna, it happens with different things.

Sometimes it's just inadvertent, but if the meter is tampered with, um, there is going to be a fee that can be established now for at least 250 dollars and any other damage that could have occurred because they were locked out of the meter or because they couldn't wait for someone to turn it on and then something happened.

That's what that's just recouping those cost.

And sometimes the the meter is going to be obstructed.

So it's in part of our ordinance that they are expected to have the meter available to use at public works 24 hours a day.

We own the meter, they don't own the meter, and so if they have anything on top of it or uh in front of it.

Previously, we're not able to capture that fee.

We were just asking them to unobstruct it, and then sometimes it required an estimation of pricing on because we couldn't get there to read that meter manually because when it's obstructed, it also will um block that antenna and that that wavelength.

So that's all that is there.

So number 13 there, Verna.

I'm sorry, number 13 there, um, do you also have the reconnection fee in addition to the 250?

There is a reconnection fee.

Now, whether it comes into play when there's I was just asking out of curiosity, like besides the 250, is that the standard practice of like charging a reconnection fee?

I can't answer that.

We actually have a disconnect fee.

We don't have a reconnection fee unless it's an after hours reconnection fee, and that's a $50 charge because it's an after hours.

We're bringing somebody in to take care of those situations.

But you're charging for uh the cost of tampering, right?

And then you're gonna have to reconnect it.

I really feel like we need to have a reconnection fee.

I really do.

Okay, it's something to think about.

Isn't usually tampering just we've put a lock on it and they've cut the lock?

That's what the yeah, that's I mean, Theresa probably answered this better than I can, but you know, for what Murphy does.

But typically when you're talking about a meter tampering fee, you can be range anything from, you know, they came in and they turned their meter around so they could get a little bit of reverse on the water, or they've just, you know, we pull their meter and they went and stole somebody else's meter and put it in, and that's what the 250 covers.

When you're talking about a reconnection fee, it's basically they've called and said, Hey, I'm gonna be gone for, you know, a couple of months.

I want to disconnect my service and we go reconnect it.

That's kind of what that is.

Well, that's without a fee.

Well, that would be a $50, that'll be the $50 charge.

And we disconnect it.

So we charge it on the front end, right?

Typically, if the water's gonna be disconnected, it uh almost always is gonna have to be reconnected.

So we just capture on the front end.

Is that makes it so they're we're calling it disconnection as opposed to doing it on the back end when they need to need it turned back on?

It's are you saying that you want a disconnection fee, and you want us to consider a reconnection fee as well?

Well, some places have an uh an initial fee, right?

That they charge when you are you referring to like failure to pay type of thing, like they haven't paid, so we've disconnected them because they haven't paid.

It could be that, it could be initially when you start service, all those kind of things.

I mean, I'm also looking at other utility companies, right?

Like gas, electric, what they charge to as utilities.

Teresa, we charge a deposit for new.

We charge a deposit, we do not charge an initial connect for new customers.

This is gonna be a new item as well.

It's just gonna be and be sure, and then we can then add um the labor charge associated with um any work that needs to be done on their property.

We're also wanting to make sure that we've captured any parts or equipment that is needed at um cost at the property.

This is gonna be the two-inch um meter volumetric um increase, and then we're gonna do a new fee for hydrant meter relocation for $25.

Now normally that means they've already got a hydrant meter there in construction, they've finished one location and they want to move it to another location.

Previously they were allowed to keep that without a fee involved, as long as they coordinated with the department and it could be built out correctly.

So now we're just adding the the $25 to be able to capture that relocation fee.

Yeah, and again, this is a this would be a construction, yeah.

Homeowner is gonna have a hydro fee, right?

Okay, now the hydro meter fee.

Um the volumetric rates can change, and some cities will actually do the discount related to um uh being lower because they know for that you're gonna use so much water, but we've also had another level where it actually matched the um the irrigation rate fee.

And so now I just we want to bring it forward and go ahead and match the tier levels so that it is going to four tiers instead of five, and that it does go ahead and capture at the irrigation rate instead of a separate um fire hydrant meter rate, because we're mostly built out.

Is this a thing now anymore?

I wonder I think we have last time Daniel told me, I think we had 14 construction meters out, and so yeah, so they're well, one of those is probably included the one that we use, sure.

You know, but uh and I can't tell you where they are, but any any little construction sites gonna have gonna need water, and that's how they're gonna get it.

All right, so I will say we will use these on our own projects as well so that we can capture the amount of water that we used, and we don't charge ourselves, but it will go into that building so that we use it that way too.

So, any other questions related to the fee schedule?

But I do have a quick question.

Uh let's go back to the water meter and meter related fees, it's a few spots back.

Uh one more.

Yeah, those are pretty substantial increases.

And I'm just curious if when we last had what were this 330, 420, and 950 when they were last increased, and these proposed new increases, is that is that in line with other cities around us?

And I don't know if you know that answer or is it it seemed like pretty substantial increases?

It wasn't updated last year.

It was um, and before they were doing meters every other year, right?

So we were we were alternating, um, if you weren't utility related, and then the off year would be all the other fees.

So when this was looked at last year, it actually was not brought up to speed.

It's based on what the actual cost of that meter is.

So when we order the meter or one inch meter in order to replace that meter, it's it's right at the 530 dollars now.

And that's the reason why it's not looking at other cities is not looking at anything other than how much do we physically have to pay for us to get that meter on site for us to use.

When would a resident be asked to pay this fee?

If they had an irrigation, no.

I if they needed a resident would have to request a new meter, right?

It wouldn't be a middle new charges fee.

We we replace them every 10 years, there's no charge for that.

There's there's this isn't a regular charge, so this would be uh a resident calling us saying, I need a bigger meter, right?

Or I need a meter moved, and then they get this charge.

Yes, but we we also will provide the meter to developers.

Yeah, that's the developer fee.

Yeah, so they the developer will pay us this fee.

Yeah, residential rarely will they pay this unless, for example, they're maybe installing an irrigation system and they need us, they want a separate meter for it.

Yeah, and then we'll charge them that.

Yeah, I want to be yeah, any time you've got a developer building a house and it's all those fees.

I want to make sure that we're recouping 100% of that.

But anytime I look at these, it's like, okay, when would a resident when would this get a resident?

Pretty rare.

Pretty rare.

Yeah, yeah.

It wouldn't be a lot, right?

So can we go back to the first pages, Berna?

Right after the water meter tab.

Yeah, the residential.

Yeah.

So remind me if we discussed this already on the 30,000 one plus gallons.

Um the change is less.

And the why would it be less there?

Versus like if you're at 15 to 30,000.

So we we are relying on the rate study.

We provided them the information that we gave up last year, and what they did is they went in and analyzed who actually uses that much.

When they look at the residents, they want to see and capture the level that you are and make sure that anything that's above that is so you can see the 15th of the 30 is going to be the place where most of them will land.

There's not going to be as many in the 30, 31, so that when they set that pricing, it's just based on the usage and the the billing review that they did with that analysis.

Yeah, but that group is gonna get the most percentage increase, right?

Be 15 to 30, yes, 12.12, 12.2% increase, right?

Percentage wise, yes.

Percentage-wise, yes, but they're still their rate is still lower than it would if you they used more water.

So it's still back to that conservation philosophy where if you use more, you're gonna pay more.

It's it's just that based on the other, the prior year.

Right, and you and you only and you only pay that higher fee based on what trips into that section, right?

So I never exceed 15,000 just because we're empty nesters and we don't have a pool, somebody who is three kids in a pool, they may be at 17 to 20, but they um so they would be paying that far that that higher rate from the 2,000 gallons.

So you're concerned that it's it's a bigger percentage?

Yes, so one of the things we're doing this year, and we'll talk more about it when um we close with the utility fund overview, but if you'll notice this year, new gen is not here talking to you.

So we've had new gen, who is our rate consultant, come in every year for the last several years and kind of reanalyze, come out with new recommendations, and then we have them come and do it again the next time.

So this year, what we've decided is we're gonna take a pause on that.

We've been doing it every year, they do this rate study out for three to five years, and we're gonna take the recommendations that they gave us.

So this is what we're doing in doing this.

So we're accepting the recommendations that were approved last year, and we're gonna continue to use those.

Hopefully, we can use them next year as well, unless we see something dramatically changes, where a new project or new personnel end up going into the utility fund, and we we determine that we need a new analysis to occur.

Um, and then maybe in that third year, we will we will go out, we will see do we continue to use new gen, do we use a new rate consultant to make sure that our rate structure is still in line?

But I think it's important that because we've been doing this every year that we find a way to get to a place of some true stability and some consistency with the information that we've been providing.

So that's why we're we're bringing forth the same recommendations that were passed through last year.

These are the triggers that we had talked about would increase already.

So it's nothing out of line with what you all have already said that you agree with that we need to pass on to the to the ratepayer, but would um would developers that happen like an H E B have an impact on this if we don't include that, where Jen might not have included that in the studies, like any data that they got that was actual data.

Sure.

So, so right, a lot of times we have to give them information that they have to project right what the outcomes will be.

So, yeah, and it'll take a while for the actual data to come in from HEV, right?

We need about a a year to get that actual data.

So by the time it's time for us to do a new analysis, we'll have that, but right now they worked off projections.

They know the developments that are in the pipeline.

We give them that information before they go through the analysis process.

Um, so if we had whether that's a neighborhood or a big commercial development, so all of that was considered.

But again, you're right, they're not dealing with actual numbers because they weren't on the ground.

Um, but I think that you know, based off the information around the Metroplex, because they draw on that, they came up with their best estimate.

And it's always, it's always a best estimate.

And then the commercial page, Berna, remind me why their rates are that only going up that much.

Is it because they just use a lot more water?

Yes.

Yeah, it's part of that analysis that we did before.

Now, it was different when we had scenario one.

So, scenario one said let's bump up the base rate and let's bump up the volume rate, and and then it was a completely different number.

But when we went to say, let's try to hold that bottom tier as steady as possible, and let's not impact that meter cost when this is the analysis that came back on commercial when we then had to to keep that meter cost steady.

So it went um, it changed the way the structure looked on the residential side, and because they already use so much water, and because their rate was already higher than they were able to project out using the the four point four at the second tier, because again, we're gonna keep that lowest tier at that that same 7.3 percent.

So, this is the only time you're seeing the fee schedule.

The next time it's gonna be um on consent was the idea, and then it would be um voted on in August.

So if you do have some true concerns, now is the time.

So, what we would end up doing, if you say I don't like this number, we would have to do a different number.

It's literally going to be going away from the the rate study analysis, and it would be us just plugging in a number, which I don't I don't necessarily recommend going that route when you start to do that, you you you walk away from your rationale, really, right?

And so it becomes harder to justify because there is never going to be a perfect rate that people like, um, but if you can always tie it to a rationale and some actual data, then you put yourself in a much better position.

Now we're also are still doing the same thing that the philosophy had said before is we're using fund balance.

You're gonna see that our revenue is not greater than our expenses, and the the reason why is we capture those rates and we watch the the the fund balance is going to go down because we're not in the business of just capturing utility rate money, right?

So we want to actually use it for infrastructure and use it for water and use it for projects, and we can show that as we use that fund balance down, right about the point that we're gonna want to do that fee schedule again and do that analysis again.

That's when the rates are gonna be of that rate analysis we needed, but we're gonna be good until 31 as we use down that fund balance.

Which was what their five-year plan was meant to be.

Any other questions, concerns, feedback?

Let's move forward.

All right, so let's jump into the budget overview.

Before we get into the numbers, I do want to talk to you about how we uh developed this recommended budget for you all.

So this year, I think we talked about this maybe a little bit last time, but this year I wanted to take a collaborative budget development approach.

So typically in years past, what I've done is departments will come in individually, one-on-one, they'll sit with me and the finance director.

We go through their budget, we go through their priorities, any supplemental needs that they may have.

This year, wanted to take a different approach where everyone was in the room together.

It makes it truly collaborative, and you make sure that you have different perspectives in the room, right?

Just because you're in administration doesn't mean you might not have a thought about something that parks is doing and be able to weigh in on that.

So it worked out to be a really great process.

I think everyone saw the value in it.

Um it was very engaging, and lots of different things came up that maybe wouldn't have if we had continued to do it the same way.

So I think it's something that we'll we'll continue to do as time goes forward since it was so successful.

We also increased our public engagement this year on the development of this budget.

As you all know, back in April, um we sent out a survey to the public asking them to rank some of the uh things that departments were asking for this year, and we'll get into a slide in a minute to show you how that worked out, and then uh this month, back a couple of weeks ago, June 15th, I believe it was, we also put out a to a new tool, and it's a tax receipt tool.

You can plug in your home value, you can plug in your salary, you can plug in how much you shop in Murphy, and it will tell you how much you're paying to the city every year, whether that's through property tax through sales tax, and then it breaks down how much of that is going to different areas of the city.

So it's really cool.

We'll show you here in a minute.

Oh, also I don't want to skimp on finance, did a great job in giving out awards this year.

It encouraged departments to really submit their things earlier and be very thorough and try to find savings because we were using a carrot approach, all right.

So back to the first public engagement effort we made was with the prioritization uh to the public.

We had 133 people vote, all 133 of them ranked uh street maintenance as a priority for them.

Uh we had a hundred and eight with park improvements, you'll see personnel growth, software technology improvements, new equipment, recreation program enhancements, and then MCC modernization.

So this was helpful for us in going through.

Luckily, we had enough funding to approve just about most of the supplemental requests that came in, but it's great to know what the public sees as a priority if we were in a budget crunch and we had to make some of those tough decisions on what should be funded versus what what's not.

So this is a tool we'll continue to use every budget season to hear directly from the citizens.

All right, that second tool, and I don't know.

Carter, where are you?

Can you can you pull that up so we can um I want to kind of plug in some information for so who's gonna who wants to give their data?

We can we can play.

We can play around.

All right, fine.

We'll make up John Q public's data.

All right, go ahead and put in an annual income of a hundred and fifty thousand dollars.

All right, let's say they shop in Murphy 50% of the time for their for their goods and products.

Yes, they own a home.

Let's say their assessed value is $576, that's our average.

Five seven five hundred and seventy-six thousand dollar home.

All right, now let's see what their unofficial tax receipt is.

Go down to the bottom for me, where it totals it up, and then we'll go back to the top.

So they pay the city about one thousand seven hundred sixty dollars and twenty-five cents a year.

That's across property tax and sales tax.

Less than my cell phone.

Say that again.

Less than my cell phone.

There you go.

Go back up for me, and we can go that's for the year, right?

And so they can see here how it breaks down, right?

So, how much of that is going to administration, how much is going to administrative services, and you see what's involved in administrative services, how much is paying for IT for city council, for city secretary, finance, so it really shows them.

Yes, I didn't want to increase the raise.

She wants to increase the result.

Yours is the lowest.

Well, no, city secretary, actually, Candy, you deserve the rank.

Use that at your next conversation.

No, I'm just so um, so it I it's a really cool tool because it brings it to reality for them, right?

I love this tool.

Because the reason I love this tool is people look at their property taxes holistically.

I pay $10,000 a year in property taxes.

What the hell is the city doing?

The $10,000.

City can get $10,000, right?

And so, you know, when you start to look at it, and when you really look at what you're paying, $1,700.

And I like to say, you know, yeah, my cell phone bill, because my kids won't get off my damn cell phone project, is more than that.

But uh what do I get?

I get fire, I get police, I get park, uh I get to pay for that fantastic city council, all out of that money.

And if you were to, if you were just to say, you know, I'm gonna I'm gonna do a subscription for fire service, right?

Well I want to do private subscription for fire service, just go out on the you think I could do that for where's fire?

384.

Three eighty three eighty-four a year, three eighty-four a month, right?

Or more?

I would never pay for police, but um, um, and when you really look at that and say, well, you know, you can what this is this is the advantage of paying the this collectively, yeah.

And what the what what you're getting the value of out of your out of your your taxes, spot on.

Couldn't have said it better.

So I do want to say the reason why we are showing this tool tonight as part of the budgeting is so that y'all have this tool to tell those people that are complaining, and it's on the website, and you can point them to the same thing.

I'll share this public uh quite nicely, all right.

So that tool's been out there since June 15th.

People have been playing around with that, and we hope it's providing a different different level of education than we can just kind of explain verbally.

So one thing I would ask, you know, you if I pop in here, and why did you ask for my income?

Because I want your sales tax right.

If you tell me you're 50 50 percent in, I need to know how much is 50% of your money.

I get you.

Yeah, I do.

Uh I I'm gonna be interested to see what kind of feedback I get, because I I know people are gonna be like they have asked that on social media, we have answered that for them on social media.

Well, we have we already have demographics.

Just because you say we don't, we have demographic data on what our media household income is.

I know.

Yeah, I mean it's interesting when doing so if you say what's your social security number in there for us.

Oh yeah.

If you say no, I don't own my home, then it's only calculating your sales tax contributors.

Right.

Now will it do that?

Could you leave?

Could you none of that?

You can say no, and then it will just be captured to your sales tax.

Yeah, it really is to show them the total bill because we focus so much on the property tax, but there's more involved being a resident of a city.

You hopefully you shop where you live too, right?

So, all right, so the marketing campaign for that was it just we just we put it out on social media.

Um, hold on.

Um, it's calculating those dollars.

Is it a so if I um are those dollars uh that we were looking at adjusted based on sales tax dollars as well?

Yes, that's your say that's that's both that 384 is my property tax and my sales tax?

Yes, sir, yes.

That that total bill, that seventeen hundred dollar bill, was both things.

Yes.

Okay, all right.

I I'll play around with it just to make sure that it makes sense.

So now the reason I understand it.

I also will clarify in the fact that the calculation for the sales tax is just the one percent, it's just what's going to general fund, and the calculation for the um tax rate is literally just the M and O side because you're not getting to pick where that INS rate's going.

So it's literally just the general fund.

Yeah, I understand, but if I say my if I say my income, I don't need to berate this too much.

I just think the dollars are a little skewed.

Because if I say, well, my income is a hundred thousand dollars, and I do 50% of my shopping.

Well, now wait a minute, right?

After you know, my income's only a hundred thousand dollars, but after I pay all my rather taxes and everything my disposable money is really you know it is real you know the money I'm spent consumption dollars I'm only spending you know forty thousand dollars right and although consumption dollars what percent income it said 50% of your shopping so um I played around with it as well because I was anticipating your lovely feedback and um I couldn't I I couldn't um I couldn't argue with it I found it to be correct and accurate when I went with the 30% at well the amount of amount of shopping that you do in the city though is a is probably the biggest factor that's going to result in I just want to make sure that you know and that that's a when you say 50% of your shopping I mean that's that to me is hard to think I mean you buy gas you buy I mean everything that you do.

Yeah I just want to but we're a commuting town and so everybody that lives here might not work here.

So that's the reason why it gives you the opportunity to say I'm not a hundred percent Murphy I'm 50% Murphy and where do we find this is this under finance?

Murphy TX.org backslash 150 backslash city dash budget so it's under it's under uh it's under finance yes right it's under finance budget so could you do one that's separate that doesn't include the sales tax if you say zero percent if you say you buy zero percent of stuff here yeah well I'm looking at like if I was a homeowner and I'm looking at my tax bill my property tax bill I want to know what it is that that amount that the city's collecting is covering yeah that's what I would want to see put in zero then but yes but I didn't want to say I think the sales tax like kind of skews that here yeah but that that that's that's my concern yeah the zero like you're saying put the zero but I'm saying hey why not have a tool that does doesn't have so you don't have to put it in there it you you can leave it out but if I leave it out I've captured I've lost some of the revenue so if you if I want to truly know how much you're paying for fire I have to I want to include the fact that some of your um sales taxes I hear I hear what you're talking I hear what you're saying I 100% but the question we get is not that yeah no I'm saying we can change it it can we can rework it so that it takes out sales tax and sales taxes not go into it so the question is what's your annual income right and so let's assume your annual income is 400 thousand dollars right too many zeros I think and what's your age 50 and what percentage of goods do you do you buy here 50% right but I don't I don't spend 200,000 dollars on goods right it's not gonna do one percent or two hundred thousand times fifty percent so yes in my house what's the title does it's just tax receipt right so that's a hundred and then if I come back and I don't put in income at all I just say 60 60 and yes so the what percent do you spend in here is included I could put zero I suppose number doesn't change okay I don't know why the the income's there because the number doesn't change so it's 2181.

I put zero uh zero income.

Zero percent.

It's twenty-one eighty one.

And then when you put in income, it was the same.

Okay.

Well, we will take your feedback and figure something out.

Any more questions on the tax receipt?

All right.

Okay.

There's a minor difference.

2181 versus 2372.

It said it doesn't use your exact track.

Let's take your whole thousand dollars and say you spend it all products.

That's accurate.

Yeah, then that's accurate.

What did you put in for your um?

What did you put in for your percentage?

50%.

Yeah, that tracks.

Because it's not, it's only one percent sales tax.

Right.

But it's not off the toll.

Do you want to change it?

So it's just property tax.

Well, I yeah, but I like to know the math.

So I don't know.

I don't know.

We're not giving you any tools.

I'm not asking to change anything on it right now at all.

I love the tool.

I love the tool.

I just want to make sure anytime there's tool come questions.

Yeah, I get that.

I get that.

I might be on it.

I want the math.

Let's see what's going on.

You know, the whole the whole goal, the whole goal is to remind people and to remind ourselves what these tax dollars are being spent on, right?

Each better.

And our mayor.

Remind our mayor.

So, looking at this slide, this kind of tells you what those dollars are being spent on.

So still the majority of our budget goes to public safety, fire and police, right?

Um, and you'll see here how we've kind of broken that down.

We have 26 firefighters, 25 police officers.

Um, it goes to streets and roadways.

We have 94 miles of that that we maintain, 10 parks and over 300 acres of parkland, 15 community events a year, the money goes there, 12 recreation programs and summer programs, and then we have different spaces that can be utilized.

So if you'll see a median homeowner will pay a little under 2100 with the majority of that going to the general fund to cover all of the things that we have listed here outside of the community events.

This kind of further talks to you about the cost of service for things.

So we're showing here annually, and again, these are median numbers, right?

These are all these are not fixed, and this is all based off of current property tax rates, and you'll see how that breaks down there as well.

All right, we're just recapping for you.

You've seen some of this stuff before, but we wanted to recap for you as we introduce new things through the budget process like we do every year.

Um, our community benefits and services in FY27 will continue to mirror what they've been in FY26 and years before, and that's a focus truly on the strategic plan and focusing on safety, sustainable operations, community engagement, and connectivity.

That's fine.

All right, um, city how city personnel serves, you'll see all of that here for our recreation programs, our summer programs, fire parks, all of that detail is in your packet.

I won't walk you through every single one, but this is really just to show you what we are doing year over year with the resources that we get from the taxpayers, all right.

Moving into our fund balance, um, one of the strongest indicators, as you guys know, of a city is how well we follow our financial policies, like that's gonna indicate how strong we remain financially and how sustainable our fan finances remain, and we've been doing a fantastic job of doing that.

Um, you'll see over the next five years, which is our projection period.

Um, on the financial side, we will be maintaining every fund's general fund fund balance policy, and that ranges between 20 and 25 percent.

The 20% reserve requirement um established by the financial policy that you guys approved a couple of years ago for debt service, utility fund, general fund, stormwater, all of those are there, and we are maintaining all of those through the next five-year projection horizon.

Our revenue is greater than expenses in four of our funds, uh, debt service, the MC DC, the impact fees and our court restricted funds as well.

Our restricted spending, you'll see here what some of those are.

We have 14 restricted funds.

That just means for our new members that those funds can only be used for specific things, right?

We cannot take money from impact fees and use it for something that we need to pay for for courts.

And then here's our fund breakdown.

We've gone over this several times before, but just as a refresher, our governmental form, governmental funds, include the general fund, debt service, our capital project funds.

You'll go down into our proprietary funds, our component units, which we'll get into here in a minute, which are our two M boards, our 4A and 4B corporations, and then our internal service funds.

That's with our BERF really that we established over the last two fiscal years.

Alright, so on the operating fund side, you'll see we have a total of 44.1 million dollars in expenses, 50% of that total fund balance of 23.5 million.

So again, a very healthy fund balance that we strategically utilize because, as Berna said, just like for the utility fund, we don't just kind of hoard money, we don't do that on the general fund side either.

We meet the needs that are before us, and we use it in a strategic way to keep costs down to lower how much debt we have to take in future years, and so again, looking out in that five-year horizon, we have a healthy fund balance uh projected for each year going forward.

Our capital project funds, you'll see a total of 16.6 million.

Um, now just do be aware, like we do just about every year.

We will be bringing a budget amendment to you all shortly after this budget is passed because when we have open purchase orders for big projects, we don't want to include that while we're doing the budget because we don't want to underfund it or overstate what the true cost will be.

So we wait until after the budget is done.

We see how what those actual costs are gonna be, and then we bring that back to you in the form of a budget amendment.

So we'll be bringing one back to you around the December time frame in the amount of 7.9 million dollars for some projects that are already underway that have open POs already.

But we we need to make sure that we know what that those final costs will be before we bring the final number to you.

All right, our public works projects.

You'll see here we have a total of 2.8 million budgeted, and a part of that budget amendment package that's coming back will include 496 for some of those projects.

And as a reminder, we've talked about all of these projects in the past, but if you guys have any questions about what we talked about at the last meeting on capital projects, we can do that.

All right, one-time funding summary.

You'll see here the general fund.

So those one-time purchases, that's the money that we use.

We use fund balance to cover those one-time purchases, right?

So we don't use fund balance ever to cover recurring costs.

So we never use fund balance for personnel or any programming that we have to do year over year.

We only use it for things that we we can.

If we don't, if we can't do it the next year, we won't do it one year at a time.

Um, so on the general fund side this year, I've recommended to you what you saw at the last meeting, is about 253,000 worth of one-time expenses.

We went through all of those, but we can talk about them again if you're interested.

On the MCDC side, which we will get into, we have about a hundred and eighty thousand dollars of one-time expense recommendations for you to consider on the community events side, it's about five thousand in one-time that we're recommending this year.

Street maintenance is 74,000, and then you'll see on the BERF side what we have here, and that's 1.7 because we have an ambulance that we are going to have to order coming up pretty soon to receive an FY30.

When do we have to pay the full amount?

When we receive it, but we have to.

I mean, you understand you remember how the accounting works.

We have to have that money encumbered when we order, right?

For auditing purposes and all of that, but we do not expend it until we receive the item.

Okay.

That is a total of what out of uh the fund balance.

Well, it's out of those individual fund balances.

They're all different fund balances.

So from the general fund side, another one that's 300.

Okay, great.

And here's our total preliminary budget summary.

We've gone over this one as well.

The numbers have not shifted.

So let's see.

Um 24 to 25 budget was 57.5 million.

25 to 26, 63.1.

26 to 27, 68.9.

All right.

Yep.

With yeah, the budget amendments it'll be 77.

Estimated, yeah.

But that's because this is all funds, and so it includes your projects.

So then the percent change is the 26.

Right.

Yeah, but at the end of the 26, 27 through to 20 to 27, right.

Does everyone understand this, or do you need us to slow it down and explain this?

So this is all funds, and your capital projects are extremely expensive, right?

Those are the expensive projects, those are the million-dollar projects.

They want the roads on there, right?

McMillan Road, yeah.

McMillan, you have your service line replacements, you have all of those major capital projects that we talked about.

So when you see an increase like this, it's easy to say 23% what's happening, why is the the governmental budget inflating?

This is not this is not capturing what is happening in the general fund where you have your personnel and all of those day-to-day operations.

This is really capturing everything, and in the the bulk of that 23% comes from your major projects.

Okay, all right.

Our total preliminary budgeted expenditure comparison is here as well.

We've gone over um this one as well, but we can slow it down if we need to.

Um, the BERF contributions are gonna be about a million dollars, and we've walked through with you all what the how we come to the BERV calculations and how each department we transfer funding from each department into the BERF so that they are responsible for covering the vehicles that are on the replacement schedule for their departments.

Um, it's a great way to make sure that we're being deliberate about when we replace and how we replace to tie the responsibility to each department, all right.

And here's our all fund summary.

It's pretty straightforward.

All right, so any questions before we dive into MCDC and MDD.

Think of them if you have some at the end, we'll circle back.

All right, again, we're in a really healthy financial position with these funds as well.

The FY 27 assumed 250k increase in sales tax, is what we've used as our projection numbers given some of the things that are coming online, um especially the HEB that is coming online.

We're being very conservative in our projections, hoping that they're blown out of the water, but we don't want to overassume how much we'll be receiving.

So Berna and her team does a great job of keeping those projections very conservative.

We have one-time purchases in MCDC of about 175,000 recommended on the MD MDD side.

We are assuming a bump in about $125,000 in sales tax revenue over this year's revenue.

On the community event side, the event revenue that we take in, that's the money that we take in from events, like really it's from May's days, is about $57,000 annually.

Uh, that offsets the cost of that just a little bit.

Not a lot.

Um, but revenue, some revenue for events is better than no revenue for events.

Uh MCDC transfer uh ranges from $650 to $800, and that covers personnel costs in events costs.

All of our community events are covered out of the community events budget in our M funds.

It does not come out of the general fund.

And the employees that we employ through the general fund that work specifically for events, they are paid for out of this same fund.

So money is transferred to the general fund to cover their personnel costs.

So that's that's not coming directly from general fund, and that comes in the shape of two and a half full-time equivalents.

Alright, and again, we're meeting our reserve policy for uh both of the M boards and our reserve policy for those boards is 25%, which is a little higher than it is for our general fund, which sits at 20%.

Any questions on that?

Ask about the community events.

Yes, the so we're paying.

So let's say that we have staff and they work May's days and they hit overtime.

So overtime comes out of that.

Yes.

And that really inflates our events budget as well.

So, you know, the I I can't remember what the numbers off the top of my head.

Matt, do you remember what our overtime was in events last year?

It's pretty significant because you you just you think about parks, you think about event staff, you think about PD, it starts to add up pretty quickly.

And that's not, I mean, that's just for an event like May's Days, but it's for every event because we have to have folks out there.

So when we talk about the full number of community events, it includes people as well.

Because it's not just it's not just the event, it's everything that goes into it.

We want to be able to give you all a true number of how much does it cost to bring these 15 amazing events to the city every year.

And is that a cost that you all continue to agree with, right?

Do you have it?

250.

Yeah, that's around 250.

250.

So from about a 700,000 little more than that budget, 250 of that is personnel from overtime.

Yep.

Questions.

All right.

Okay, and this is our all component unit fund summary, similar to what you saw for our other funds.

All right, diving a little bit into MCDC, you'll see some uh the changes here that we showed you from the other funds as well.

This is about a 1% change, so just a little bit.

Um, here are some of the things that we're recommending this year with that one-time money that we've talked about, and that's um replacing some tables, doing just some little things like painting to modernize the community center a little bit, make the most of the space that we have, sod, um, north hill aviary volleyball sand replacement.

We have a couple of equipment needs that are one-time needs that don't necessarily fit neatly into the VERF because they're smaller, that we're asking to pay for here as well.

Water bottle bottle refilling stations in some of our parks, and then some archery equipment for a new program that the recreation department is bringing forward for the community.

So we've gone through all of these when we talked about one-time requests last time, but we wanted to show you those one more time.

Can I ask about the big decrease from 24 to 25?

We were at 3.3.

The fiscal year 25 included the FM 544 median project, and it was around a project of 1.4 million dollars.

So anytime we get like a an influx of money, it looks like our budget went up, and then when we finally spend it two fiscal years later, it looks like we've we've dipped down, but it's plan projects all the time.

All right, and then just here's an overview for you on that same fund.

On the community events side, you'll see that the things that really come out of here.

You'll see total materials and supplies at um 484,000 dollars, which is 61% of the expenses that comes out of here, and it's really for those big engagements that we do that are listed there.

Are we able to uh a lot of sponsorship for those?

Well, Ashley does a really great job of reaching out and getting sponsorship.

So we do have quite a few um sponsorships.

We we partner with Primrose, we used to have do something with Sprouts.

The who's the medical center, Kayla.

Um we do Baylor Scott and White, um Methodist hospital is our sponsor for May's Days.

Um, we actually did go and redo the fee schedule.

I think it was like last year or the year before, um, to include fees for the food vendors because that was actually a significant amount of money that we were missing out on.

So now they pay us 10% of their uh revenues from that event.

So it's not, I mean, it is sponsorship, but it's also like the money from the vendors that are coming in, the artisan vendors, the food vendors.

So she, I mean, she works hard every year to try to expand the sponsorship, and I know.

Um, in talking to Matt, they're working through some creative solutions to kind of make our sponsorship packages more attractive and more valuable for the sponsors as well.

But yeah, and sometimes it's dollars, so and as we bring more folks online, we're hoping those sponsorships will get even better.

That's a shout out to HEB if they're listening.

We'll see.

We got 17,000 predicted for next days alone.

Okay.

Sponsorship.

So 17,000 in sponsorship is projected for May's Days alone.

Okay.

Alright, so here is our community events fund.

You'll see there.

We do uh project to carry over about a hundred and thirty-five thousand dollars into next year from this fund this year.

Um, and then our projected total revenue will be 707,000 with total expenditures being 795,000 on our community events budget next year.

All right, on the MDD side, uh, this is where we get to do all of those fun infrastructure projects that help the city uh through this fund and not have to do it through debt all the time.

So the pedestrian bridge 1.2 million is coming from this fund to help cover a portion of that project, not the whole thing, and uh also the HEB Turn Lane project that we've talked to you all extensively about is coming out of this fund as well.

All right, and then here again you will see just our budget being projected out.

Alright, so the goal of of these M funds truly is you know it's economic development, it's connectivity, it's beautification, it's equipment, um, it's all those things that we've talked about, and so this really does relieve the general fund in a lot of ways.

This is where all of our sales tax dollars go to, and so that's why it's important.

I think to truly show the community that it's not just your property tax dollars that are contributing to the amazing community you live in.

It's also the more you shop here, the more it directly gets you more of these things, right?

Some of those, some of the things that you know in hard times aren't necessities and can easily fall by the wayside, but still go to making a community what you want it to be to live in it, all right.

And here's our all component unit one-time funding.

We just wanted to list that out, although we've gone through that with you and give you the justification as to why and remind you how it connects to the strategic plan that you passed, right?

So looking at each request, seeing directly how it relates to the strategic plan, what's the justification, and then what is the cost.

So, again, as a reminder, it's a total cost of about 180,000 in one-time request across our in funds.

Can I ask what kind of tents they are that cost a thousand dollars a piece?

Sure.

There's actually a 10 by 20 tent that's a little bit more expensive than the other four.

Um, I don't know who is at May Says that saw our tents fly away, but we're tired of using the cheap ones that just keep breaking every year.

So these tents are um better durability for the frame, but also have like a ratchet strap system to where they can be anchored down, whereas the other ones are not as circumstances.

They're like aluminum.

Yeah.

So just a little bit more durability, so we can replace these year after year.

Thank you.

How many do we owe first as well?

Well, I mean, the big marquee tents, we have to rent those because we can't set those up.

Yeah, then we don't have anywhere to put them.

We usually keep between seven, you know, five to seven, it really just depends.

Um we have our parks and recent, which is like a 10 by 15, I think, um, like, okay.

Alright, we're gonna move on to our general fund overview.

Again, you've seen this before, but sometimes time passes, right?

And you might have a question from last time that you remember.

So we always when we bring you new information, we try to remind you of what we've already told you.

Um so forgive me if if you're like this is too fresh on my mind.

Okay, it's just a refresher.

All right, so our general fund revenues are gonna come in at about 21.2 million dollars.

We're projecting.

Um, and as you guys know, we rely on the property uh tax and the sales tax as our major revenue generators, and you'll see here that the majority comes from property taxes you all know, followed by our sales tax, and then some of those other uh more ancillary things there uh on the side to get us to 100%.

Our expenditures on the expenditure side again, our expenditures are higher than our revenues because we strategically use the fund balance to bring that down so that we're not hoarding the taxpayers' money, and we'll be strategic about how we're meeting some of our needs.

Um, the majority of our budget of all local government budgets is personnel.

Our people are our most expensive and our most important assets to get to get all the service delivery that this community requires and deserves, and then you'll see there followed by our materials and supplies and our contractual services make up a big chunk as well, all right.

Our functional areas, as we talked about before, um 12% goes to neighborhood services, and you'll see what's involved in those development services, economic development, parks and recreation.

Um the majority does go to our public safety between police and fire, administrative services costs about 22 percent.

That includes your your departments like city manager's office, city secretary, admin services, IT, finance, all of the kind of behind-the-scenes day-to-day operation, and then 13% to public works on the general fund side.

Don't forget that public works also gets a large chunk of money on the utility side.

This is what they get from the general fund.

Alright, and so we're just kind of breaking down so you can see even more drilled down by percentage how much is being expended by functional area.

And then here's our all general fund departments overview.

You'll see a six percent overall increase for all general fund departments, and that's just kind of on an average.

The FY27, what we are bringing to the table that contributes to some of this increase is two patrol officers.

Um we have budgeted for two elections.

I have a sneaky feeling we're gonna recapture some cost on at least one of those elections that we won't have to do.

Uh also some facility upgrades that we have to take care of and some maintenance needs that we need uh for the dis for the um facilities within the city as well, and then we have three departments that decreased um to due to some reclasses as well.

All right, the general fund one time expenditures.

We wanted to go ahead and lay those out for you as well again as well to make sure that you're still comfortable with this, or if you have any questions or changes, um, now is a great time to talk about that because the next time we come to you, we're coming to you with final numbers in a tax rate.

Um, and so just to go over those again uh really quickly, we always link it to the strategic plan and then provide a justification.

Uh, what department will um directly kind of manage the thing that we're asking you to purchase and then what the cost is.

So you'll see the list there again.

We're asking for about $253,000 in one-time funding from the fund balance this year.

And it crosses just about all departments.

You'll see there mostly it says IT, but that's because IT kind of manages our software, but it's really benefiting multiple departments, specifically when it says IT.

Do you guys want me to go over these?

Can you see them okay?

Do you have questions about these?

Any new concerns that may have popped up between the last meeting and this one.

Okay.

Alright, I'm gonna turn it back over to Berna, who is going to go over the utility fund, and then we'll close out with more questions and feedback before ending.

So I like to just kind of show you utility fund budget and the way it's developed, is not the exact same way as we do the general fund because there's different information that we require for the utility fund than we do for the general fund.

So it's still gonna be the debt issuance, and we still have to determine projects, but then when we move into because we're receiving the water from someone else, then the provider cost is going to be a large percentage of what we have to do to build my numbers on.

Now it's not going to change the rate analysis or the fee itself or what's going to go increase the water utility rates, but it's going to determine what the expense is.

I don't have these numbers yet because it the preliminary was not expected to be received before today, and so all this is built on what they gave me last year, and but we should be receiving some preliminary numbers from them soon, and then they give us some more numbers again on July, and then they have their board meeting, and they don't actually have the final numbers until July the September the 30th, and that's the reason why when we pass our budget, they may come back with something a little bit higher or a little bit lower than what they had originally projected.

And and it's just part of this timeline.

As we just move forward, we're gonna have those um work sessions on those rates on August the 18th when we do the fee schedule.

You originally had a work session scheduled for 7:31 for 727.

I'm sorry, 727.

And we're gonna need to change that to August the 4th, just because the numbers from the tax office is most likely not to be received in time enough to flush it all the way through and to be able to give you a good rate number.

So instead of having a meeting that is communicated that is not going to have any new information, we're gonna have to change that.

So this changes it from 727 to 84.

So we'll send out a cancel.

Candy will send out a cancellation to you guys for that meeting because that was just a budget meeting, and we're going to do it on the course so that you don't have to find new dates.

That's already a council night, so it's already on your calendars.

Um, what we're gonna do is make sure that the council agenda stays very slim, maybe one item so that we can roll directly into a budget work session and finish this out with the tax rate.

Any concerns, any schedule conflicts with August 4th.

If if you have them, please let Candy know as soon as possible.

We want to make sure, especially for our new council members, that you all are able to be there, because the tax rate is one of I mean that's one of the biggest pieces, right?

Of the budget, it's very important.

All right, thank you, Brenda.

So the adoption of the tax rate now changes from September the first to September the 15th in order to follow the timeline that the state statute allows for the public hearing and the way it lays out.

So that that moves back a council meeting.

So just to give you an idea, we like to show you what the cost of water, how we actually compare to Kroger and Costco.

So Kroger will not deliver you water unless you pay at least $10.

But with $10, they will they will shift you the one gallon of water.

Now, Costco is willing to bring money um bring your water out at five gallons, and their price per gallon is gonna be one point five ninety-eight.

But the city of Murphy is going to allow you to have water to your home.

If you spend even 47,500 gallons, here's your cost for your gallon of water.

It's a pretty good deal, I think.

So we still wanted you to know that the utility fund also has a position that is financially healthy, and that when you do look at all the years for the five years going out to 31, it does meet the minimum requirements.

It is set for the utility fund at 20% or equivalent of 75 days of operating expenses.

So this calculation it does either or so we're currently using the 20% reserve requirement, and we're about 73 days of operating expenditures with this analysis.

And this is where we just go into a little bit of detail with letting you know where the rates came from and then what was selected as that scenario structure and kind of the timeline of when we're anticipating doing that next analysis is projected around fiscal year 29 to get ready for the 2030 rates.

But all of this also is thought through because we're anticipating the new negotiated contract with North Texas to be occurring in fiscal year 28.

So we want to be able to capture the new contract, the new water distribution lines that public works will have already had swapped out, and then when we do the analysis, we'll be able to get ready for the fiscal year 30 rates, and it will include the issuances that they're planning for the debt as well.

So all that will go into being prepared.

So here's the way the projections lay out.2 in revenue, and is it's coming from the water increase, it's got your sewer service charge.

So your water revenue is at 12.2, the sewers at 5.

Impact fee is going to be transferred over 269.488, and then we've got um the historical, all the other fees contribute about 280,000.

Now this is where the analysis came from on the projected.

I said this was what I received in July of 2025.

So it's there's no change, but they were already able to go all the way out to 34, and knowing what they're bringing online, knowing what debt North Texas has, knowing what they had planned for the wastewater side, these are the annual increases that were already expected.

So this is what is built into the rate already, and this is what is built into what I think the expenses are gonna be, so that the total provider service charges is around 12 billion dollars, and that makes up 92% of our contractual total.

So you'll see utility fund budgeted for the last three years, it's gonna go up 1.5 million dollars, and that's an 8% change, but that's gonna be due in large part to the contractual changes in the provider, but I do go ahead and show it to you by transfers by contribution.

The utility fund will only contribute exactly what the lease of those vehicles are gonna be.

So here's the revenues just laid out side by side, so you can see that the reason why we are capturing the fees is so that we're paying for the water that we're actually needing to use.

And so the the water revenue makes up 67% of it, and the sewer portion is gonna be 28%.

When it comes to the expenditures.

Then again, the contractual services are 64%, and that's where we're paying for the water to North Texas, municipal water District.

Here's the three divisions that are in utility fund, water distribution, wastewater, and billing cycle collection.

And so then I know it's little, but it kind of gives you the percentage breakdown between those three.

And the total of these items are coming from directly from the utility fund are 934,000, about 5% of the expenditures.

Sure.

So we have some materials that we store, whether it be sand or rock or molds or whatever it may be.

Right now, it's just being spread on the dirt, and we have some little concrete barriers, and they're pretty torn up as you can imagine over the years.

They're not holding the material like they should.

We believe the 80,000 will get us the space we need, porter pad or the concrete walls, and we're hoping it'll be enough to get us some cover as well to keep that material dry.

For example, the rock we use during the uh during the freeze, we can keep it covered, it won't be frozen.

You know, there towards the end of that.

Some of that stuff is starting to freeze up, so it's hard to put out on the road.

That's what that would that's what that would do.

The South Maxwell Creek low water crossing.

We have some uh some big trunk mains on the uh on the other side of South Maxwell Creek that we can't access as unless we have a boat, and so we're looking to maybe put a um a low water crossing there where we can get over there to it and do some maintenance as of right now, it's very difficult to get to.

Is this a little underwater?

Huh?

What?

Low water crossing.

Low water crossing.

You want a tunnel?

No, no, no.

Sorry, no water crossing.

Okay.

So what is this on South Maxwell Creek?

Um, it is on the east side of the city, uh, kind of towards where the uh those truck mains leave the city limit and go towards the uh treatment plant.

We have uh several several hundred feet of main that we just can't access.

We can't get to the uh to the uh manholes to even get in there and clean them unless unless it's dry conditions, which are that seeing that creek seems like it's always running no matter what, so and then the rodeo elevated storage painting yellow.

Y'all are familiar with that one.

So we had a recommended we had a recommendation that we have those grapeiti artist kids that always tagging our sidewalks, we have them paint the outward one.

Oh, that's fine.

Yeah, that's good.

That means you can get a little less, yeah.

Much less expensive.

Very artistic, so here's the the personnel.

We're um requesting two additional crew leaders um in the wastewater side, and then there's gonna be a request for a reclass that would take as the public work superintendent to assistant director of public works.

These were included in some of the original discussion, but because this is the actual utility side, we just wanted to highlight it again for you.

None of these numbers have changed at all.

And so then just for the utility side, then it makes the um 19 in the utility, and then there's two in stormwater, and overall it there's 154.5 FTEs in general fund and utility fund.

So, this is where I just like to kind of remind us the reason why we're a little bit different than other cities, and so this has got some information that will help you with um questions from the residents.

Uh, the reason why we um are less than Richardson and some of the other cities is because we're a customer city and they're a member city.

Um we also like to tell you about the rising cost of North Texas and then the recommendations that um that we have coming forward that's where we would like to do the the analysis every three years now in the so Murphy is one of 36 customer cities, and then here's that new contract anticipated to be um negotiated in fiscal year 28.

And then of the 36 cities, Murphy actually uses the sixth highest, one of the six highest water consumers.

She has she said how come it's the people.

This is based off consumption.

How much total water is consumed within the city?

Big green yards, big lots in Murphy.

The majority, I mean, when you're Parker, the Parker's what, 6700 people.

They don't own water there for us.

There's no reason to get snarky about it.

Be honest.

I have someone that moved from Lucas across the street.

He doesn't even care about his yard.

Irrigation is always one of the big reasons for consumption of city water.

It's the grass.

Well is there anything we can do about conservation efforts related to.

I mean, I saw somebody watering their yard at 1.30 this afternoon.

Right.

I know when we had the water restrictions, there were times when we were allowed to water, my sprinklers ran long and I got a ticket, and I paid the ticket.

So let me let me answer that question.

Conservation is kind of a two-headed snake, right?

Um, we don't save any money if people conserve, right?

We pay the exact same amount, whether they use zero gallons or they use every ounce of what we have in the cap.

Right, we're actually starting saving money until we bust the cap because then we get a discount on anything above the cap.

So it's a two two-headed snake.

Uh on the other hand, if there is a need to conserve the water, right?

To make sure that we have low water that's in our reservoirs, and we need to make sure there's enough for everybody, then having conservation makes a lot of sense.

But for us in general, um, you know, as as much as I like the idea of conservation, I also like the the idea of revenue in the uh uh in the account.

More water we sell, the more uh the the lower the rate can be.

And we're under projections right now, just based on the fact that we've had too much rain and people haven't been watering.

So, I mean, even the rain hurts us as it's helping us at the same time.

It's filling up a reservoir, and then people aren't using it so as far as the revenue side.

Yeah, my usage is weighed up.

So I'm sure our revenue is way down as well.

It'll probably catch up.

It's it's the point where it's summertime and you're anticipating that you're gonna be lower going into summer and it's gonna look better later.

But as of right now, it is trending the same way it normally does.

We're waiting on that summer watering, and as long as North Texas doesn't have a drought restriction, then we normally don't have any type of restrictions either.

Um, but we aren't going to exceed the cap this year from where we projected, so that that's still good news.

And then we've got the just the sewer averaging, and the reason why we do the sewer averaging is just to be sure that we're only charging in the summer that what they really would use through the pipes related to sewer, and you can't do it any other time of the year, and so that it's strategically um built out so that we're excluding any kind of irrigation that might be happening at home so that the water that they're using doing on the sewer is truly just the water for their family, and that's what they're being charged.

This is a great slide for you all to have when you get questions from your constituents because these are some of the common things that they're gonna ask you about, so this is a great resource for you to keep.

That's all we have.

Anybody?

Any further questions?

Comments?

Any feedback?

See, now Scott, I don't want you texting me 25 questions tomorrow.

That's your question for me.

Y'all can just tell me right now.

All right.

Any anything else?

Yes, I do.

Uh, our next meeting is July 7th.

Um, it will start out as a council meeting and then it will roll into a work session.

And this is our PD focused work session.

So some of the things we'll be covering in that meeting are some of the policy concerns that have come up to me from council, we'll be um discussing a few staffing structure uh recommended changes, and we'll be addressing equipment.

This has been a hot button item.

So if there is a topic that is not included in what I just listed, you don't have to tell me now, or you can, or you can email me or however you want to do it, but please let me know if there are other topic areas that you want to discuss so that we can have a productive conversation and we're not having to say, well, I'll I'll cut I'll get back to you with that, right?

So this is dedicated to PD.

If there is a specific issue related to policy, right?

Related to things that um you all need to make decisions on.

Please let me know.

So staffing structure, equipment, policies.

I may dive a little bit into just the PD assessment that I've been going through, so maybe just like a morale check, just to kind of keep you guys updated on that.

Uh, but if there is something that I have not said, please let me know.

And the sooner the better because we got to get this finalized before next Tuesday.

All right.

That's it from me.

Thank you.

It'll be in the community room.

Oh, thank you.

The meeting will be in the community room.

Any other questions?

Concerns?

Anything?

Anything?

For during 7 32.

Thank you.