Good afternoon.

The time is now 2.05 p.m.

on Wednesday, January 21st, and the City of San Antonio B session is called to order.

Madam Clerk, please call roll.

Councilmember Corps.

Councilmember McKee Rodriguez.

Present.

Councilmember Viegadon.

Here.

Councilmember Mungia.

Councilmember Castillo.

Councilmember Galvan.

Here.

Councilmember Alderete Camito.

Here.

Councilmember Mesa Gonzalez.

Present.

Councilmember Spears.

Councilmember White.

Mayor Jones.

Mayor, we have Core.

Great.

Thank you.

All right, today is uh one of, I know one of the uh most awaited of the year, right?

Our our debt management plan.

Um unfortunately it's not wonderful news.

Um, but it is um, I don't know if you all remember during the budget season when Troy announced this number of 500 million.

I don't think my job was the only one that dropped, right?

Uh, when we consider what our bond capacity has traditionally been 800 million in 2017, 1.2 billion in 2022, and has he will, as he will present, we are well well short of that um, even as we anticipate what it may be in in 2027.

So as we look at balancing, as we have routinely talked about, right?

The needs between major um investments downtown with the needs in our in our community.

Uh this number, which is going to be roughly half uh of what it was in in 2022, is really going to call for us to be thoughtful about how we prioritize, identify and then prioritize those needs across the across the council, uh across the city, rather.

Okay, Eric, over to you.

Thank you, Mayor.

Good afternoon.

Um, Mayor and Council.

So as the mayor uh laid out, this is uh the work that uh we talked about doing following our August conversation on uh the debt management plan.

So Troy is going to we we went back in um internally and with our financial advisors, looked at uh our underlying assumptions that we've been utilizing for some time now, um, looking to see how uh other major metropolitan cities in the state are addressing these issues.

Um we'll lay out kind of an overview of of that work.

Uh Troy will do that on the first part of the presentation.

The second part of the presentation, Mike Shannon will walk through because we wanted to talk high level about what a bond process um is, what a bond program process is, um, what the relative timeline is with it.

Um I'll talk a little bit about more uh a little bit more about that on the back end.

Uh we're not asking you today to um size the bond program.

Um we uh will come back based on the the feedback that we received today um uh to you later on in the year.

Um and you know the the the last thing I'll say and then hurry up and hand it over to Troy so we can begin.

You know, uh a bond program, a municipal bond program is one of the basic things that we do.

Um, and there is a fair amount of assessment in terms of need, capacity, um, community engagement.

And um, you know, as I look around uh the dais, there are um three council members that were here during the last process, and so we wanted to take the time today to walk through, you'll see different two different scenarios.

We have timelines associated with a May 27 bond program and a November 27 bond program, right?

Just so you can see the steps necessary um uh to get to a point where the council could be in a position to call for an election uh of the voters of the of the bond program.

So um Troy.

Thank you, Eric.

I probably did take you by a bit of surprise by talking about the capacity.

I think when you look at how we manage our bond programs historically, though it makes sense how that capacity is produced, especially in light of the fact that our property values have flattened out or have moderate moderate growth.

Also, we talked about circling back around in addition to looking at options of how maybe we can influence or increase our bonding capacity.

Is it a possibility to pair it up with the issuance of stormwater revenue bonds so that we can actually between the two have a higher capacity amount that we can issue in terms of debt one through our geobond program and one through a revenue bond program with our stormwater program.

During the budget process, we talk a lot about property taxes, but we tend to focus on the maintenance and operation portion of the property tax.

Today's presentation, we're going to shift a little bit to having a conversation about the debt service component and then how that debt service component actually influences the amount of debt that we have outstanding.

Our property tax rate today is 54 cents per 100 dollars of taxable valuation.

Talk a little bit about taxable valuation because that is going to be a term that we use throughout the presentation.

When we talk about taxable uh taxable valuation, it is really a project of Bear County Appraisal District appraising or assessing our values.

And then there's a number of exemptions, about 21, that we actually deduct from that assessed value to come back to taxable value.

That taxable value is the basis of what our property tax is applied to, and what produces the revenue that supports our general fund and our debt service fund.

Our M and O tax rate at 33 cents, that generates about 472 million dollars in support of our general fund operations.

On the flip side, our 21 cent tax rate for our debt service fund generates about 302 million, and it supports our 2.6 billion dollars in outstanding debt right now as part of our ad valorem debt uh debt program.

There's primarily three components of our ad valorum debt.

The biggest are general obligation bonds, which we're gonna be talking about a lot today during a bond authorization or bond program.

About 1.7 billion dollars outstanding that supports our 2022 bond program that we held last in terms of our infrastructure in terms of our streets, drainage, facilities, parks, and things of that nature.

Um we also have our tax notes, our tax notes about 92 million dollars outstanding.

Those are relatively short in duration, about seven years, and our certificate of obligations, typically about 20 year debt, about 800 million outstanding.

We use our certificates of obligations and our tax notes to really fill in between our major bond programs.

Every year we're gonna have additional needs that come forward through our CIP, and we use that capacity to fill in for tax notes and certificates of obligations between those five-year bond programs.

Focusing on property taxes a little bit a little bit more.

Um, we talk about the MO.

There are certain statutory caps that are in place today.

You know, I think you're familiar with SB2.

We talked about that a lot.

It locks our growth in at 3.5%.

New improvements are uncapped.

Um, city council does have the discretion to increase that rate up to 3.5%, and again, that affects and supports our general fund.

It does not support and cannot be used to support our debt service.

Um council adopted a tax rate which was our same tax rate at 33 cents.

And just for context, if we would have gone up from 33 cents to that 3.5% cap, we would have had an additional penny or 1.6 cents that we could have increased the tax rate above and beyond that 33 cent tax rate up to about 35 cents.

So there was capacity in 2026, but we um working with you as counselor during the budget process, we did not want to raise the tax rate.

Anything above that 3.5% would require a vote of the public.

Similarly, on the debt service tax rate, there are caps in place.

There's two different caps.

There is a statutory cap and there is a city charter cap.

Um, and just backing up a little bit, when we look at our debt service tax rate, and you're gonna see this in a lot of the slides that I present.

Our debt service tax rate has not changed since fiscal year 2004.

When we size our debt our the capacity for our debt service, our debt service tax rate is sized to be sufficient to cover our current annual debt service and requirements.

In terms of the statutory cap, we cannot exceed 10% of our total assessed valuation.

That would mean that we could go up to would not do this, but we can go up to 21.2 billion dollars in debt capacity under that statutory cap.

In comparison, our current outstanding debt is roughly $3.1 billion for all ad valorum debt, um, not taking out our self-supporting.

Compared to that 10% cap, it puts us at about 1.5% of the total assessed valuation.

So there is room under that cap to um for our flexibility to adjust the tax rate.

Similarly, under the city charter, property taxes levied for debt cannot exceed $1.50 per $100 of total assessed valuation.

Today we're, as I mentioned, we're at $21 cents.

That would give us another $1.28 above that 21 cents to go up to $1.50.

So similarly, a lot of capacity there as well.

When we look at our debt management historically, bond can bonding capacity has historically been a function of four or five different primary components.

The first of which is maintaining a debt service debt maintaining a stable debt service tax rate of 21 cents.

As I mentioned, we have not changed that through 2004.

The other piece is property values.

When we look at our growing capacity, and I have a slide I can share with y'all in a little bit of how that bonding capacity has increased, has really been a function of that stable tax rate, and then our increasing property values over time.

The other lever, other item that we pull within our debt management model is the duration of our debt is the average life.

On the first slide, I think it was roughly our average debt life is about over six years.

By maintaining a short average life, it provides us with a lot of flexibility and a lot of levers to actually manage our debt management plan and our program in terms of capacity.

By having a short average life, it allows us to pay our debt down faster and also allows us to pay lower interest costs across the life of that debt.

Then lastly, based on the current economy and market conditions, what the prevailing interest rates are at the time we're issuing our debt, as well as how those interest rates are influenced by the credit ratings assigned by the three major credit rating agencies.

And then underlying foundationally in all of our assumptions, being moderately conservative in our projections.

The green bar or the green line, dotted line across the, I guess the center of the table, that basically is our tax rate as seen by the debt service tax rate access on the left side at 21 cents.

It has not changed.

In comparison, you can kind of see our property values that are signified by the individual bars.

In 2004, those property values were roughly about 40 billion dollars.

Fast forward to today in 2026, about 159 billion dollars.

So by having that stable tax rate, our bonding capacity has been influenced by those the growth in those property values.

To put that in perspective, over that 20 somewhat year period, we've had average growth of about 6.3% over that period.

If you look towards the middle, about 2010 through 2013, out of those 20 plus years, there's been four years that you've seen we actually had declining growth.

The rest have had growth throughout the entire term.

Also wanted to kind of layer on to that just to kind of give you an idea of what our assumptions are going into our debt model.

The green bars on the right, that is what is included in our current forecast.

So on the left, you have how that value has grown over time, that taxable value.

And then your forecast shows in 2026, which is based on the certified role for this year, our growth was less than 1%.

Our forecast assumes in 2027 less than half a percent.

And then we see start based on our modeling a recovery of 1.75%, 2%, and 2.5%, and then our model has 3% out in the outer years.

So when you layer in our stable tax rate over since 2004, and you can kind of start to see the picture of how our bonding capacity was influenced over time, and now with our growth moderating, you um it impacts our capacity, and that's what drove um drove about our 500 million dollars in capacity we talked about last time.

This basically shows that bonding capacity that we have had historically.

So the graphics I showed you on the prior two slides began in 2004.

As those property values increased in 2007 by those blue bars at the base of each of those stacks.

We had $550 million in our GO bonding in 2007, that grew to $592 million in 2012, $850 million, based on the values $1.2, and then based on the moderation, the $500 million that I spoke about last August.

We have our certificates of obligations, our tax notes, and our self-supporting debt.

Those were issued between those major bond programs to actually fill in in each of those debts and provide support for our CIP.

Another thing that another slide I thought that would be a value to show you, this is our debt ratio.

This is our property tax debt outstanding as we compare it to our taxable assessed valuation.

When you look at that debt ratio back in 2007, 2008, 2009, fluctuate between 1.5, 1.48, and 1.6.

You fast forward to today, it's in that same range.

So in terms of layering on debt compared to our assessed valuation, we're comparable to where we were back in 2007.

So in my mind, that debt ratio shows that we're being responsible in terms of our debt issuance and management, and those debt levels comparison to our taxable assessed valuations are comparable to where it was in 2007.

If you look at that center piece going from about 2009 to 2016, that increase in the center there is largely because our debt programs were increasing and our values were dropping.

So you saw that increase in our debt ratio from 2009 and dropping back down again in 2015.

So that kind of covers kind of historically how we've managed our debt plan.

It really is a function of primarily our tax rate and our values and the direction our values are trending.

Want to provide you with an object option for y'all's consideration as we move forward.

And I think when you look at the needs in the community in terms of infrastructure, streets, our drainage, our buildings, our facilities, and you balance that off between property taxes and the investment that our residents are making in property taxes, this provides you an alternative or an option that hopefully provides a little bit of balance between the size of our bond programs and investment in our community and the tax rate.

So what we would suggest, or what we would ask for y'all's input on is rather than having our values and where they are with the stable tax rate drive our capacity, look at what do we want to target in terms of capacity.

Based on that targeted capacity, if it's a billion, if it's 1.2 billion, then we would need flexibility in managing our debt service tax rate.

So in periods of time where you have very, very high growth years, we could maintain that tax rate, or we could look lower the tax rate in order to meet our capacity needs.

On the flip side, if we're seeing our values and our taxable values decline, stabilize or just flat, we may need some flexibility and increase that tax rate to basically be able to support that capacity that we may need.

As I mentioned on those graphics, we saw historically property taxes, our property values have increased over time on average, about 6% over the 20 plus years.

And so if history repeats itself, then there is an opportunity to build in that capacity and actually potentially even lower the tax rate over time.

But there may be years if we're targeting a capacity that we would have to actually look at increasing that tax rate.

One of the things before actually bringing, if this is an option or a that the council would like to pursue, we would develop a financial policy to help guide how that tax rate would be managed, what levers we would pull and win in terms of the duration of our debt, the tax rate, and how we manage that.

And that would kind of guide us in the future as far as how we would actually establish that tax rate.

The tax rate would probably be the last lever we would pull.

We'd look at other things before even moving in that direction.

As far as the actual scenarios we looked at, and we've talked a lot about the 500 million in bonding capacity.

Um that 500 million, those assumptions have not changed.

It's still 500 million.

The only thing that changed today is that we would not be targeting a 2025 election, of course.

That's passed.

Now we're being moving forward.

So we provided additional scenarios one through three.

Come on, the underlying assumptions that are embedded in here is a 25-year authorization.

Historically, we go back, we're looking at 20-year authorization, we have extended those a little bit to actually extend and gain more capacity.

Like to continue looking looking at that.

Our goal would be to shorten that, but to get to these capacity numbers, we use 25 years as a as a base.

This also includes 150 million dollars in taxable bonds for affordable housing.

To the extent council would want to increase that above and beyond the 150 million dollars in taxable bonds, that does have an impact on our modeling because taxable debt is more expensive, and we'd have to include that.

For example, if council wanted to move from 150 that's included in our ship program to 175 or 200 million or some other level.

So scenario one, simply moving to the May 2027 bond election, or no sooner than the May 2027 bond election, we could gain capacity up to 625 million dollars in bonding based on those assumptions I just laid out.

There are other options, and that maintains a stable tax rate at 21 cents to get to that 625 million in bonding capacity.

Under the second scenario, if we wanted to target $1 billion in bonding capacity, we would still target a debt service tax rate of 21 cents, but we would have to our property taxable valuations would have to grow to 3.25% starting in 2028, which is different than what we have in our moderately conservative assumptions.

For 2028, we have 1.75%.

So there's a delta between what we have in our assumptions.

In the event our growth is below 3.25%, a tax rate could be required to make up for a lower value growth, or there could be other levers we could evaluate based on the financial policy that would be in place.

On the flip side, in higher growth periods, the tax rate could be lowered.

And as you've seen historically, looking back, four years out of the 20 plus years, we actually had a decrease in values, which may require a tax rate increase looking at that historically.

Over time, I think more likely it would be that you would have a tax rate reduction over time.

So it's gonna be a little bit of a give and tank take, tax rate flexibility may have to be increased or may have to be lowered to hit that billion dollars in capacity.

Scenario three, very similar, it's 1.2 billion dollars in bonding capacity.

Again, a constant debt service tax rate of 21 cents.

We'd have to we'd have to hit a growth of 3.5.5 percent to provide that 1.2 billion in bonding capacity.

Same assumptions in terms of the tax rate would be in place for the 1.2 billion versus the 1 billion.

This just gives you a little different look at it.

So for the 625 million in our first scenario, base growth of 2% based on an average of our forecast.

Assumed assumed a bond election no sooner than May of 2027 with a debt service tax rate of 21 cents.

625 625 million based on our current debt plan would be very manageable.

In the event that we wanted to move to scenario two or three, we would have to hit growth levels of 3.25% and 3.5 percent in scenario three.

Again, targeting a bond election no sooner than May of 2027, and then as far as a debt service tax rate, again, we would target 21 cents, but there would need to be some flexibility under our financial policies to be able to move up or down on that tax rate to make sure that we can service our debt associated with a billion dollar program or a 1.2 billion dollar program.

Wanted to talk a little bit why I chose the 3.25 percent and the 3.5 percent on the prior slides.

Again, going back to those property value trends, there were only four years in which historically we were below 3.25 percent or 3.5 percent.

So over that 22-year period, the majority of those years we saw positive property tax growth.

Some years were pretty substantial, above 10% in those four years were in the negatives, but overall, about six percent growth over those years.

The other item we committed to go back and look at is our stormwater revenue and our stormwater revenue fund.

To provide a little bit of history and background, our monthly stormwater fees were established in May of 1993 in response to the requirements of the Federal Water Quality Act of 1987.

In 2016, the rate structure was changed based on areas in previous cover and a five-year phased-in rate increase to fund additional mowing, storm, storm drain inventory assessment, high water detection detection maintenance and capital projects.

Our last stormwater rate increase was in 2020, and this was to provide service enhancements to the storm drain tunnel maintenance and new capital projects.

We do have a little bit of an opportunity and a little bit of flexibility when it comes to our storm revenue bonds.

Currently outstanding, we are nearing the end of paying those off.

We have about 24.5 million dollars in outstanding debt.

That 24.5 million dollars is really the remnants of bonds that were issued in 2020.

We originally issued 44.15 million to support 46 projects.

Again, we had an issue of 61 million in 2005 for an additional 41 projects.

Then in 2013, we came back and refunded those bonds in the amount of 70 million dollars.

Those bonds today, they mature in uh fiscal year 2030, and again about 24.5 million dollars outstanding, and they are currently callable, which gives us an opportunity to restructure those bonds if we need to, and also create some additional capacity for the future.

In terms of the stormwater rates today, uh current rates are divided into two different components.

You have your residential and your non-residential or commercial.

In terms of the residential rates, there are three tiers, and they are monthly fees are basically established based on the areas of impervious cover.

Tier one is for areas of impervious cover less than 2,750 square feet at a monthly fee of $3.75.

Tier 2 is from that last tier up to $4,220 areas square feet for $4.94.

And then the final tier in the residential component is tier three is greater than $4,220 square feet at $10.45 on a monthly fee.

On the non-residential side, you have four tiers based on the percent of impervious cover.

You can see the tiers below less than 20%, and then last year greater than 65.

And you can see the monthly fees ranging from 0.31 in the first tier through 0.73 in this in the last.

Also thought there was value to show kind of in our adopted budget what our stormwater generates today in terms of stormwater revenues, about $56.8 million, roughly about 53 or 54% of that is generated by the commercial revenues with the balance on the residential side.

Then you have $59 million in expenses, which supports our stormwater operations, about $7 million in debt service, and $5 million in CIP or paygo for capital projects.

Couple scenarios for your four year consideration.

The first scenario basically is with no rate increase, you know what it can do in terms of bonding capacity.

With no rate increase for a 25-year term, the bonding capacity is fairly small in terms of $10 million.

And the reason why that happens is because I mentioned on this prior page in your fund schedule, a large large portion of that is operations.

Those operations will grow over time and are performing, and they didn't eat into that capacity, so it generates about $10 million over a 25-year term.

We also have three other scenarios that contemplate potential rate increases.

Scenario two over the next five years, starting in 27, looking at putting in place a 2% increase every year for a total of 10% over a 25-year term could generate restructuring our existing bonds, and using the rate in the additional revenue could generate an additional 16.7 million dollars in bonding capacity for stormwater projects.

The third scenario looks at putting a 5% rate increase in the first year, and then 2% for thereafter from 28 through 3331 for a total of a 13% increase over the five years, an additional $140 million in bonding capacity.

Then finally, 5% increases in the first two years, 2% in the last three for a total of 16.2% over a 25-year term, looks at $174.3 million dollars in bonding capacity.

There's also an opportunity here to kind of leverage the geo bond authorization combined with the stormwater revenue bonds.

We could do some structuring and look at how we could generate and use our geo bond authorization to do the design for our stormwater projects, drainage, flood control, freeing up more capacity for streets or additional drainage in the geobond program, and then sometime in the future flip back and use our revenue bonds solely for construction because the design would have been completed under the geobond program.

So that would be another thing for consideration working and pairing in tandem with our geobond authorization.

In terms of what does that mean as far as an impact on our residential rate payer?

We have about 366,000 residential accounts.

Of that, 50% fall within tier two of our stormwater rate.

And so one to kind of show for purposes of the impact of the of the rate increases for each of the scenarios, what that would have on a tier two customer.

So our tier two residential accounts currently pay, as I mentioned, $4.94 per month, roughly $60 per year.

If you move to scenario two, which had the 2% increase year over year for a total of 10% for the year, it has a dollar 20 impact in 2027.

Doubles in 2028 again in 29 and 30.

It finishes up with an annual increase of $6.12 cents.

If you move to scenario three, for example, where we had the 5% increase in the first year and 2% they're out.

In 2027, you would have an increase for the year of $3 through 2031 of $8.16.

And then you can also see in scenario 4 the two 5% increases in 27, 28, 2% thereafter, the rate increases that it has on an annual basis of $3 to $10.

The last area I wanted to focus on and is our airport revenue bonds.

And you can see how that's kind of allocated out between our general airport revenue bonds at 106 million, our passenger facility charge revenue bonds of 68.1 million, customer facility charge revenue bonds of 113, then our airport system revenue and refunding bonds, our interim financing of 452.

The reason why I wanted to show this and start putting it on your radar is as you know, council approved the guaranteed maximum price contract with Hensel Phelps in December 18th, about 1.3 billion dollars.

We're starting to gear up or been working with the airport now, putting the finance plan together, and when we're going to issue those bonds.

So we plan on bringing to city council for consideration in April 2nd, the issuance of an approximate amount of billion to 1.2 billion dollars in revenue bonds in support of our terminal development, and also the enabling projects or our CIP out at the airport.

What that means is provide some cash and time to invest into the terminal development program with closing or closing on the bond on July 15th, and then we would actually go to market in the June 16-17 time frame.

So this slide is really the main point of I wanted to make to the council is that we will be coming back to you and asking for your approval to issue those revenue bonds in support of the TDP and our CIP.

So in summary, we covered a lot.

We talked about our historical approach to approaching bonding capacity and how we've managed that bonding capacity.

We talked about some alternatives, uh, giving us flexibility with our tax rate to actually generate above and beyond 625 million up to potentially a billion or 1.2 billion or anywhere in between.

We talked about stormwater revenue bonds and what we can do in terms of pairing that up with our geo bonds.

And by layering in stormwater rate increases over time, how we can actually increase our bonding capacity for the revenue for stormwater revenue bonds.

We also talked about the airport revenue bonds and the timing for the upcoming revenue bond issuance.

With that, I'd like to turn it over to Mike, who's gonna talk about all the effort that needs to go into to actually put in place a bond program or a bond authorization.

Mike.

Thank you, Troy.

Um, good afternoon, Mayor and Council, Mike Shannon with Capital Delivery.

And I'm gonna go over just in a few slides to wrap it up, but really I want to talk to you about a general bond program development timeline.

It is not a short process, it is needed to be relatively long because there's a lot of steps in it.

It is designed to not only identify and prioritize a list of projects, hundreds of projects that our our community needs.

Uh, it's designed to have a lot of conversation with you in different settings, most of them through the B sessions you'll see up there, and then a lot of community input that we uh do uh in a number of different ways uh near the end uh through some bond development committees.

So uh what I have up here on the slide is uh if we were to move forward uh you know today or sometime soon, uh say let's shoot for a May 27 uh uh election, uh which would be in our typical five-year cycle that we've had since uh you know the last uh four or five cycles, uh, we would start by program initiation and development.

Uh city staff has ideas on projects that we know uh were priorities even five years ago that didn't make uh the cut based on our 1.2 million dollar budget.

So there are several of those.

There are also several of those projects uh that we've heard from community, you all, other areas, either committees.

So we we have a uh list to start with that we will start with some recommendations, but that list will grow after more conversations uh with community and our streets and advisory board.

We have two boards uh that we interact with on a monthly or bi-monthly basis.

So that would be the first part that we would start now, winter 2026.

Um shortly thereafter that moving into the next uh phase or milestone, uh we would uh do two things.

One, we would start looking for a consultant or consultants to help us scope and estimate the project.

So out of these hundreds of projects, how much is the estimate for each of these?

Uh so we can start tallying up what the cost would be or the need would be for all these projects.

We would certainly uh start having uh more conversations with you in settings like this.

Uh B sessions, we would propose an overview, what is our overall infrastructure needs, our guiding principles.

I'll talk about that uh in a bit.

And that will continue the process into the summer where we really start looking at project scoping and estimating, coming back to you all with uh actually staff recommended projects, so things that we think uh our priorities that score well with uh like maybe a scoring system that we and the boards will use.

Uh also uh talking about our community meeting and our processes and our progress to that point.

In the fall, we would have additional conversations with you uh as the work continues, uh, but we would actually start talking about our propositions and our projects that you feel are important, giving us some guidance.

Uh we would then uh continue to work on uh determining from a staff perfection uh staff perspective uh what is our operational impact, what will it do, what can we do more of better uh for the community.

Uh we will also start talking to you about committee appointments, those those bond committees.

Uh last time in 2022, we had 163 bond uh committee members on five committees, so there's a lot of input where you are selecting people to serve on these uh that will help us run these projects through a process to eventually bring back to you in approximately January, February of next year.

Uh, that would be an A session where uh you all you actually decide on and vote on the list of projects, and then shortly thereafter uh we would have a call for an election.

Uh now the reason January, February is important is because uh by law, I think it's 78 days or prior to the 78 days of the election, uh, you would have that call for election, so we would follow those rules for the May uh vote.

Now, that is just a guideline of the meetings, the big rocks I have for meetings with you all and some of the big steps.

A lot more happens in between there.

Uh what I also show on this slide is if we were to not shoot for May 27, and we went for November 27 for the call, we just shift those uh those milestone categories uh by several months, and we get started with a similar process.

So that is the process that we've used several bonds now in some format, but it is designed to be essentially a year plus uh process, and um rightfully so.

There's a lot of work to be done uh by staff, a lot of work to be done with you and your staff, and and especially with our community and our committee appointments.

The next slide is I want to talk just to remind us uh in the 2022, these were the bond program propositions that we landed on, and actually going back to 2007, they were generally about the same with the exception of the housing component.

The housing component was added in 2017 with a 20 million dollar initial first-time uh housing proposition, um, and then last year was the larger really large one, uh last uh bond cycle 2022 uh was the 150 million dollars.

But streets, of course, streets and sidewalks, drainage and flood control, parks and wrecks, library facilities, public safety, that is a constant set of needs.

Now, those are not set in stone, uh, but certainly those uh do tend to call out uh the buckets of where our needs uh have landed, and uh we could use those again or modify as needed.

And then lastly, before I hand it back to Eric, I just wanted to talk a little bit about the guiding principles.

One of the things that we will talk to you about and really re-establish or or modify uh based on uh the will of the mayor and council, of course, is guiding principles that should help us along to identify and prioritize projects.

Uh certainly things like connectivity, right?

Uh, how do we connect the city through through opportunities with adopted plans, those type of things that we've spent uh a lot of time and effort as a city to do?

Public health and safety, of course, resiliency, funding commitments, leveraging funding, those are the types of things that we will use or identify and solidify up front in one of those early uh phases with you all that will help not only city staff uh but the rest of the process move forward uh to that essentially approval of the projects and the call for election.

Uh so with that that's just a broad overview again.

With that, I'll hand it off to Eric to kind of wrap it up for us.

Thank you, Mike.

Um, so we're looking for feedback and policy conversation today on a on a number of the things that we've laid out.

Again, we're not let me reiterate, we're not setting the bond program amounts or timelines today.

Um we just wanted to come and lay out the alternatives we talked about in August.

So looking for feedback on the size of the bond program, some feedback on the alternatives.

You can tell from uh Troy's presentation, there are some basic financial assumptions that um haven't changed in 21 years.

Um and so looking for some feedback from you all on that.

The the stormwater revenue piece um you you saw where the city issued stormwater uh revenue bonds in 2003 and 2005.

We've not done that since then.

Um we haven't had the ability to do that, but because we're nearing the end of that that that debt uh and it's callable now, um now's the time to start talking through what does that look like, and more importantly, some feedback from you all about how we should integrate and leverage a potential general obligation bond process.

Um and then and then you know, lastly, the the um the the timeline um potential, right?

Uh both Ben and I'm sorry, both Troy and and Mike said no sooner than May of 27.

We gave you uh one other alternative, looking for some feedback from you all.

And and I just want to reiterate that a municipal bond program, um, based on your feedback today, we will go back and design um and lay out a process because there are a number of steps that we have to go through with you all, both internally and both with you all publicly.

Um the um the investment in our infrastructure, whether it's maintaining old or new, is critical and um in in a large part um goes back to and is directly tied back to obviously the things you guys are well aware of the quality of life, the services, the economic development potential um that we have uh here in the city uh going forward.

So a very important part of what we do, and uh looking forward to the conversation and um and uh your feedback today.

Thank you, Mayor.

Can we go to it wasn't um part of our initial deck, but it's a very helpful slide.

Um thanks for incorporating it, Ben and Troy.

Can we go to slide six, please?

Which is the five-year outcast.

Uh seven seven, please, thanks.

In case it helps with anybody else's uh questions.

Um we talked about this the last time, unfortunately, we saw a similar dip, right?

Was shortly after 2008 and the recession there.

So can you help us understand what your assumptions are as to why this dip here would only be a matter of potentially three years versus what we historically saw?

Well, maybe much on the point based on historically when we've seen a recovery.

We've seen a recovery, you know, going back to 2000, as you mentioned, and for the recession.

We saw a dip about four years, and we saw a recovery after that.

So using those same type of assumptions and modeling, you know, and looking at historically property values have driven six percent over the last 22 years.

Um I don't think property values are gonna start going down anytime soon.

I think we will see kind of comparable growth in the future.

Um it's just the question is when does the recovery begin?

So help me understand that but the point that if I heard you correctly, you don't expect property values to decrease.

Okay.

There was a local outlet that just reported 86% of San Antonio area homes lost value over the last year.

So help us rectify those two points.

What he's saying is we don't anticipate it happening forever.

But we're we're in a period right now.

We're we're kind of in the period if you look at the chart from 2010 to 2013, right?

Where it was it decreased, and and you know, if you juxtapose the bond program back then, the 2012 bond program was 592, 592 million.

The the bond program before was 550.

So the council in 2012 was dealing with much of the some of the same conditions, and and that's why there was no large growth from it.

I think the previous bond program was 550, the next one in 2012 was 592.

We're kind of in that in that same period, and and the question, and this is something we're gonna talk about when we do the mid-year budget as well, because it affects our operating budget.

When does when does it start to change, right?

Because and and that's the part that we are we're being pretty conservative in the sense right now, but um you know, you in our use in our forecast, and this was last year's forecast, you'll see the updated figures in May.

Um we're we're anticipating it taking a couple of years to get back up there, but that's just from a and generally we're pretty conservative in that sense.

Okay.

Go to my colleagues here.

Um, Councilman Viegadon.

Thank you.

That was funny.

Generally, you're conservative.

You guys are conservative.

Um so our view of the city's debt management plan is a critical step in ensuring we continue to meet our infrastructure needs while maintaining long-term fiscal stability.

Um the debt management plan ensures the city is clear about what debt we carry, how it's structured, and how it will be will be repaid over time.

For district three, this matters, and and I'll give this speech again because traditionally we were redlined, we were forgotten, and we are uh still trying to make up for the street improvement we need, the drainage, the sidewalks, the flood mitigation, and it depends on the city maintaining uh sound financial responsibility which you have by being fiscally conservative and uh in for inform how much capacity we can responsibly ask voters to consider for future bond programs.

So can we pull up slide number 11?

So as I look at as I look at slide number 11 and as I have been here uh for the last bond and then watch the city grow uh as a city uh employee and then just as a resident, a lifelong resident of San Antonio is we need to continue to move forward in our bonding capacity.

I think scenario number two is the one I feel most comfortable about, but I I will entertain any of my counsels who want to talk uh regarding or if we could get some more data data regarding scenario number three because we know that the asks this that the needs are are well beyond the 1.2 billion uh that we need for infrastructure.

Um but again, as we look at this, the debt service tax rate has remained unchanged since twenty two thousand and four.

Um twenty two years.

Twenty years, and we have been able to grow so much, but I think the t we cannot afford to do we cannot afford to wait anymore.

We cannot afford to just wait and see um where we the climate and the um situation we live in right now is going to take action, and we need to be financially responsible before we are uh set sent backwards basically.

So I think when we look at that, we need to look at scenarios number two and three.

I think on if you could pull up slide number 17.

I think here uh with the stormwater fee and the increase, I think we do need to look at scenario two and three uh regarding the data and and how that would uh play out, and thank you for the information regarding what it would look like.

Things are just getting more expensive all around, and to pretend like they're not and do no rate increase gives us nine point eight million dollars to deal with a severe problem in terms of stormwater, as I see uh when we do have the torrential rains, it all heads south.

So we are constantly on an ongoing discussion at the state level regarding our limits on property tax, our revenue growth.

We constantly face struggles every two years at session about what we are going to defend and how can it affect our ability to support additional debt.

So I encourage my council colleagues as we look at this bond on um that we I'm hoping we can get done in May 2027 that we look towards the future and we look at San Antonio growing um and making sure that we are strong financially for the future.

So if we can go to slide number 22.

Um I I want to continue these discussions.

I support it being measured, I support it being data-driven, but I more than anything support a San Antonio solution.

So we have been doing bonds for uh at least until 2004.

Well, we've been doing bonds for I don't know how long, Eric, and we have been conservative, and we have we have taken it to the voters every time.

And I think as we move forward, we need to make sure that they understand that we are competent in this city that is growing.

And I understand that home values are going down, but I also see the growth of new homes coming in and around the southern sector in the south side of San Antonio.

So I when I look at that, I know that our tax revenue, our property tax revenue is going to increase because these are new homes that are not on the rolls yet, truly.

Because I think waiting even the few months that we do, I'm concerned on how it will impact our our stormwater um the projects we need to do on stormwater.

And so Mike, uh if you could come up and answer regarding stormwater, because that that's where my scenario two and three is kind of I've what do we need to make sure that we keep the city safe?

Because I know it's not I know it's not 9.8 million.

Uh, but is is scenario, but I don't want to I don't want to ask for more than we need.

So is scenario two sufficient to make sure we don't see the the large-scale flooding that we see, or does scenario three need to be considered more.

Well, I think um I might ask Art to come up and help me with this.

Uh public works uh art will oversee the stormwater and the need, so it's significant, uh, but I don't want to misspeak.

So Art, welcome to San Antonio.

Thanks, Mike.

Uh Art Reinhardt, Public Works, uh, nice to be back.

So just uh councilwoman, just to kind of put it in perspective, uh, citywide drainage need, we're still close to about four billion dollars of drainage need.

A lot of work's been done over the last 20 years, close to two billion dollars, probably worth of work.

Uh a lot of those needs are localized needs as well.

Um so the the more we can do the better.

But um that that's kind of the perspective.

Yeah, no, and I appreciate that, Art, because you you've been with the city before and you know how it floods and and the risks we have, and then the fact as we talk and we move forward with our our homeowners in our houses is is if they are not insured properly for uh what we see when the rains come.

So I really want to make sure that we're conscious, understanding and and I appreciate the efforts about sustainability where we um where we look at what how the climate is changing.

And in number 24, if you could bring up number 24, um slide number 20 uh okay, I'm I'm sorry.

Um go back to the one with our the one before this with all all the no, all the little three 23.

That one.

I love the committees that we have.

I think though, right now, as we think about our future and we think about our children and we think about our youth, is that in each of these categories, they need to be considered as something that we are going to prioritize.

And I know you didn't ask for that, but I do want to look at that as we as as they face the challenges that they do moving forward.

Uh so um thank you for the presentation.

Um Eric, if I didn't answer, I think I got sizing of the bond, stormwater.

Yes, I want a coordinated effort, and in terms of timeline, May 2027 looks good.

Thank you.

Um, just one other thing that I didn't want to take up your time, councilwoman, but just on the stormwater rate, um we haven't we haven't changed that rate since 2019 and and and that stormwater rate primarily funds the the ongoing maintenance and uh of of our uh drainage ways.

Um we have we have employees that are funded out of that.

And as you know, aside from this conversation about leverage leveraging future debt out of that out of that fund and that of that rate, we were at some point gonna need to talk about increasing that rate because the cost of that service has gone up.

Now we haven't had that conversation, and the concept that we're bringing you today is look if we're gonna if we're gonna go through a rate exercise with stormwater, then part of the we we all know that you all know certainly and the public knows that there are there's drainage work needs to be done, that we do that so that we can we can address the construction or the the capital needs.

We still have the operations that we need to continue to monitor every year and manage.

I spoke to one of you yesterday about the clearing of a drainage um uh easement.

That's constant.

And so um, regardless of today's conversation about the bond, at some point we were gonna talk about that because that's a that's a necessary function, and and certainly we could probably mow and clear twice as much as we do now in the size of our city.

So thank you, Mayor.

Councilman White.

Thank you, Mayor.

Um I'll begin by just noting councilwoman Spears had to leave, but she asked me to to relay that she is opposed to the the rate increases and Eric and said that she'll she'll get with you um soon on that.

And uh and I agree it is um it's really unfathomable to me that we would be sitting here today uh talking about raising the tax rate um on our citizens, and um no mayor or city council, I guess as we've heard has has raised this rate on the citizens since 2004, and now is most certainly not the time to do it.

Um when you look at what is ahead this year, um we're talking about raising raising the tax rate here, the the stormwater rate.

We we know we've got saws coming and asking to raise rates uh here in a couple months.

Um CPS energy um raised rates, you know, a couple of years ago uh and are coming again uh later this year uh to ask for a rate increase again.

Um solid waste fees um have increased recently um as well, and now we want uh to raise the tax rate on the citizens.

Um it is again as I said it's unfathomable to me uh that we would do that.

And uh I I would hope that this council would um would seriously think twice before moving forward in this regard.

Um infrastructure is important, of course.

Um a 625 million dollar bond is still a significant um investment in the community, and if we need more money than that, uh then we need to do what we did um during this past budget cycle, um, which is look within.

Um and when we did look within we found what 30 million or so uh inefficiencies without cutting service in this last cycle, and I think it is gonna approach around a hundred million over the two-year budget cycle.

We gotta look within ourselves.

We cannot continue to pile debt onto the citizens of San Antonio and take more money out of their pockets by by raising their rates.

Um question on slide three.

How much of the 2.6 billion in outstanding debt are we uh retiring over the next 10 years?

Do we know that we have that?

I don't have it on me today, but I can certainly provide that to you.

Awesome.

Thank you the most majority of our debt, like we talked about at the very bottom of the slide, the average life is 6.72 years.

So the majority of our debt within the next 10 years will be significantly declining.

Okay.

And thank you for the presentation, by the way.

I I uh I do want to say that because I know how much work and everything you you and your team um put into this.

Um so I do appreciate that.

Um you know, uh on the scenarios chart where we're where we talk about um, you know, if we go with scenarios two or three, the rate uh could could be lowered if we hit a certain growth amount, um, but it doesn't necessarily mean mean that it would, right?

So uh under what scenarios would would would we keep the rate uh the increased tax rate it really depends.

I mean, um over time you look at that historical slide and you see that property tax and the property values going up.

I mean, I think that would those would be considerations or options for the future council and for future bond programs if you wanted to increase that capacity, then you can maintain that you can maintain the turn tax rate, or you could decline decrease it based on where those property values are at the time.

Yeah, so which really is what I'm asking is is there there really aren't any safeguards that that are in place here to avoid shifting that financial pressure on on to future councils, right?

I mean that there will always be something that we can spend or that a future council can spend the extra money on.

Yeah, I mean there's gonna be always be needs in the community.

We one things that we would do through the drafting of this financial policy is try to put that guideposts up that would guide us of when we would increase the tax rate and when we when we would decrease the tax rate based on the factors at the time.

Yeah.

Um so you know, I I just I just wanted to make that point that you know the the thought that the tax rate will somehow go down during during higher growth periods.

Um I just I just frankly don't believe it, right?

There will always be uh something else that that we can say we need to spend the money on uh and the tax rate will remain at uh at whatever we raise it to.

So, you know, I I don't I don't have much more on this, Mayor.

Uh I I just you know, again, no no mayor or council has done this in in over 20 years, and um in the fiscal climate that we're in um right now, uh we should not be taking more money out of people's pockets.

Thank you.

Eric, did you have something?

Yes, ma'am.

Um so you know that councilman, we we thought long and hard on any financial metric, especially with the city like San Antonio that has frankly the reputation of being very well financially managed and governed.

Um what this meant, right?

And and uh assumptions change and conditions change.

Um the you know, and I kind of want to I want to make sure that that we're clear that the scenario two and three say could on both sides, right?

And and Troy talked about the levers that we use now that we would need to continue to use.

We have an average life of 6.72 years.

If we make the average life 8.72 years, then that's a financial lever we have to manage.

And so um, it doesn't necessarily mean that the rate would have to go up.

It says it could go up, just like it could go down.

And the and the the opposite is true on the chart that shows the 21 cents staying flat since 2021.

Had that been the case for the last 21 years, if this was a different if we were dealing with a different financial assumption, that number would have ebbed and flowed with values, and it would allowed multiple councils over that 21 year period to evaluate that.

But um it's not a given, it's a cushion to allow us to be able to make that.

Um and and certainly it is something that you know it's one of the reasons why we took a couple of months to get this through this homework because we wanted to think through how are other cities doing this from that standpoint.

Um it it it is um we are an outlier to say that we have uh uh the same debt service rate for the last 21 years, given the growth.

And uh we've been able to manage through that.

But uh I just wanted to make sure that that the public watching doesn't take away from here that the rate's gonna go up if we do uh a billion dollars in bonds potentially.

The rate could go down, right?

That's that's it the the word could is in both sides of that formula.

And and like Councilwoman Vigran reiterated, we're conservative.

Our average annual growth is 6.4%, and we set the marker at 3.25 of the 3.25 of the 6.4 percent on average, we're getting about 2% on new improvements.

So two-thirds of that 3.25 are new improvements, new homes, new commercial, and we don't expect that to uh ebb and flow um like uh the overall values.

Yeah, and and I'll just say that that I I understand that, and I'm not I'm certainly don't want to debate you on that, but but I I think the the reality is the practical reality is you you give the flexibility to raise the rate, the rate's gonna be raised.

Once it's raised, it's not gonna be it's not gonna be lessened.

Okay, that's just that's just how how things work, right?

You you put you put three cookies in front of a kid, he's gonna eat all the cookies, he's not gonna leave one there.

Okay.

I mean, there there is always going, there are always going to be needs, and that we will continue to spend, spend, spend and put it on the citizens.

So um I hear you that could is in both of those, but I do not see the tax rate being raised and then lessened.

We shouldn't raise it at all.

Councilman Gulvin.

Thank you, Mayor.

Uh thank you, Troy, for the presentation, and thank you for all the work on the back end to put this together.

Um a couple of quick um questions around the capacity.

I'm trying to see where some notes I had.

Um for slide 10.

Um do these scenarios include uh utilizing a storm revenue bond or some water revenue bond, or is it all the play then?

The scenarios that we showed on 11, 12, and 13 were all focused on the general application bond, which is separate from the slides in the in the later on in the presentation that were focused on the revenue bonds for stormwater.

Got it.

Do we anticipate any um with coordination with both of them?

Do we anticipate any uh increased capacity within the geo bonds by using the stormwater revenue bonds?

I think it's within.

So for example, if you if council wanted to move forward with the billion or 1.2 billion dollars, depending on how we structure the propositions, you could do a focus on stormwater design, which would free up and utilize the revenue bonds for the stormwater for the construction in the future.

That would free up additional capacity within the 1.2 billion dollars for potentially streets or if you want to do additional drainage.

But it gives you more flexibility as a council between the DO bond and another 100 million in a revenue bond.

And do we don't anticipate the revenue bond would cover capital costs?

Just it could.

Got it.

Okay.

That's helpful.

Um I know you mentioned something about the housing bond.

Um if we increase that number from 150 billion to or 150 million to higher, uh, that'd be more costly.

Could you go through that again a little bit or expand upon it?

Yeah, the form our charter was changed to basically allow us to issue bonds for affordable housing.

Affordable housing certainly is a public purpose, but for IRS IRS tax purposes, it is what we consider a private activity.

And so that has um it has to be you have to issue taxable bonds, which costs more in the market.

So and look in terms of our assumptions for tax exempt debt, we may focus on a 4.5% or a 5% rate, but it may cost us 6% for taxable bonds for affordable housing.

So it costs more to issue bonds for affordable housing than for a public use.

Right.

That's is that just because of uh different financing or what's the reason behind that?

Just because to pay it off or no, just because another IRS code, taxable debt is more expensive.

Okay, got it because of the type of use that it is.

I see, I see.

Thank you.

Um there are any different assumptions between the November 2027 and May 2027 bond capacity?

I know it's a small difference in terms of timeline, but I'm sorry, between which ones?

Between if we had the election in May 2027 versus November, are there any differences in the bond capacity for the yeah?

There'd be very little because it would be really contingent upon it.

I mean, at that point in time, we've already set the capacity number.

Right.

We would potentially have another certified role in there, but that would give us more insight into where we're sitting the tax rate, not so much the bond capacity.

Got it.

Okay, thank you.

On the um the stormwater one again, I just wanted to kind of look a bit more into that one.

Do we have any data on um how much stormwater, how much revenue we're getting from stormwater fees per council district?

Um I do not have that.

I don't know if art.

If we don't have it now, we can send it later.

So councilman, I don't have a breakdown with me, but okay.

There's approximately 400,000 uh counts citywide.

So we would need to go in and parse that out per district.

That's something we could follow up on if that's of interest.

That'd be great.

And I know we only focus on residential ones, uh, but I'd also be interested in the non-residential and just seeing the comparison between the total revenues from both both ends as well as within each council district.

Yeah, I can talk at a high level on that.

So of the 400 or so thousand, approximately 50,000 are non-residential.

Um but that makes up about 55% of the overall revenue and about 80% of the total impervious cover associated with all the counts.

You just said 80% of the impervious cover?

That's correct.

Wow, okay.

Um is there any way that we could structure it to where the non-residential would be the we could increase the rate on the non-residential versus the residential.

So uh just a brief bit of history.

So uh when we went through this process 10 years ago, it was a lengthy process, a lot of stakeholder outreach.

Uh, and so the rate was designed specifically to recover the revenue that we needed for the overall operation.

Sure.

Uh so that's something that we we would need to look at over a lengthy uh period of time.

What would that time frame look like?

Would it be any time for the bond?

Uh councilman, I think we'd let me make sure I understand your question, right?

You're talking about increasing the rate or making rate changes just on non-residential, right?

Yes, for stormwater.

Um I I think we'd need some time to think through whether or not uh we could do that.

Mike and I can uh we can get back to you on that.

Okay.

I'd be curious to look at then just to see how ways we can I mean if we could do it, I think especially when we look at not only the amount of stormwater that comes off because it was impervious cover, it's your point eighty percent coming from these non-residential uh places.

Um I think that just anticipates increased need for stormwater.

Uh as well as if we're looking at our climate goals, right?

Trying to make sure that we're reducing impervious cover, it makes sense to try to do a little bit of a stick approach, but also maybe some kind of care in some way.

Um that's just my thought on that.

I I would be interested to see if we could do that for this bond in particular.

Um leave that one there.

But thank you.

Um I'm also interested, I guess, uh what would um how much we have for each parcel maybe too much to get into the detail, but I'm interested in given the fact that uh impervious cover goes by square footage, and if impervious cover for smaller sized homes, is the stormwater fee higher for those households versus larger households that have maybe more previous cover from yard larger yard size, larger so yeah, so for the residential, so the structure is a little bit different between residential and non-residential.

So for the residential, so the structure is a little bit different between residential and non-residential.

Uh the residential is broken into three tiers.

Uh rather than trying to measure impervious cover on 300 plus thousand, it was broken into tiers with the range.

So the tiers that have the smaller percent pay a a lesser fee because they're less impervious.

I don't know if that answers your question.

Similar concept on the non-residential, it's just a cost per thousand square feet.

So uh that the cost is less if you have less impervious cover.

Yeah, no, that is helpful.

I think my my question I'm trying to get at, I think it'll be helpful with the council district breakdown is trying to see in some parts of the areas.

I'm thinking about like some of the my more dense areas in the district in terms of even the single family housing, uh, that there's smaller lot sizes, um, but therefore like likely larger uh impervious cover given the fact it's mostly building on that lot size, would we see a higher not a higher rate, but maybe more revenue from that one versus another larger household.

So on the residential, it's square footage of impervious cover.

Okay.

Not lot size.

The the prior rate model was purely lot size.

So you could have two one-acre lots.

One could have 10% impervious cover, one could have 90, but they paid the same amount.

Yeah.

Yeah, so uh they pulled the the tiers back up if that helps you.

So you can see there for uh residential tier one that's less than 2750 square feet of impervious area.

Um so that's the size of the house, driveways, anything else.

Uh so that's a a lesser fee than if you pay if you have more impervious cover.

Got it.

Okay.

Thank you.

That's helpful.

Um the housing bond.

I know we're not giving numbers, but I anticipate a larger number, I think, for the future one.

Um so I'll wait for that one to talk more about that.

I do still think that it if we can uh identify a way to put it within the housing trust fund or another similar affordable housing fund to create that kind of permanent uh capacity with our housing dollars.

I think that'd be really important for any kind of bond that we do in the future with housing for housing bond dollars.

Um I think generally with any kind of larger guidelines with the bond, I'd be really inter I'd be interested in seeing.

I know I mentioned this early on about ways that we can incorporate more complete streets and sustainability efforts within our bond programming.

And a little bit too about what that would look like for our cost of service for maintenance in the future.

Um I know uh my team reached out to the transportation department a bit about that to see what ways that uh if we are looking at using our bond dollars for infrastructure improvements, uh largely for complete streets improvements as much as possible.

Uh, how much will we get in terms of a maintenance return?

Um we have we just have less maintenance cost in terms of actually improving the streets or maintaining potholes, because I believe there's less potholes on the bike lane or such.

Um I'd be interested to see what that would look like, and then hopefully maybe see if that bounces out with some of our bond expectations for different areas of our city.

Um I think those are all my questions for now.

Oh, I wanted to ask, I guess I know uh during Mike's portion, we talked about the kind of timeline uh for community engagement, and we mentioned that bond committees to come around in fall 2026.

Um is there any way or any reason as to why we don't have well I'll say anyway.

Is any way that we could have uh bond committees before uh we had the exact project scoping and cost estimates?

No, there's no reason.

I mean, that's part of the the if we if we stay on a track for a May 27 that guiding principles conversation with the council and B session, that is that is a potential for you all to adjust um the timeline part.

Okay.

I'd be interested in seeing, I guess, if it's possible to have uh community engagement earlier than that in terms of the bond committee, so that we can have our residents kind of give a bit more input on what we're looking for.

Of course, we have our recommended list.

Um but I think I prefer our residents to be able to give some kind of guidance uh during that conversation prior to giving them a kind of listen saying this is what we can only approve, not approve, adjust minorly, uh, and then we miss some of the things beforehand.

Um those are my cons for now.

Thank you, Mayor.

Um Eric, can you clarify the comment that you just made um that uh the input that the councilman was asking for, you said was um attainable by sticking to the May timeline?

Why is it specific to the May timeline?

Well no, I was just using that as an example, Mayor, on the on the the because we gave you two timelines, but if if um if um if if the council if we did if the city moved towards a May 27 timeline and we use the 22 process and the 2017 process, well, I think the councilman's point is that the citizen bond committees happen at the end of the council determination to review the council proposed list, and then the the council committee or the citizen committees come back to the council with any suggested changes and you guys consider and adopted.

I think what the councilman is suggesting, can that process happen earlier?

And and the answer is yes.

Councilman McKee Rodriguez.

Thank you.

I was hoping uh Councilman Wy would be back in time for me to say unfathomable.

Good.

On slide 25, if we can, um generally, you know, we've considered a number of rate increases in my town council, and I don't think I've ever voted in support of one.

And uh the reason why is that is they aren't to be taken lightly.

Uh, and I hold two core beliefs if I were to ever support uh a rate increase.

And one is that um if residents are paying more, then the service that they're receiving should improve.

And so you should see an improvement to the worst streets in our city.

You should see community centers and senior centers improve and expand and grow uh as well as all of their offerings.

Libraries should expand their reach, their service and their capacity, public safety facilities should meet our growing need, uh, and we should be making our built environment safer.

And so I think about all of those things that uh our bond our bond program allows us to do, and then balance that with the with the second core belief, which is that the folk who will feel the increase the most should feel the benefit.

And so where the need is overlaps almost perfectly with who would be who would most feel the impacts of any sort of rate increase.

And so I think should we move forward with uh any any sort of rate increase, I think we do need to double down on our equity lens, and we need to double down on making sure that uh we're investing in where it is needed the most.

Um all that to say that uh you know committing to equity, not the bastardized definition of equity that I'm starting to see creep up in dialogue around around the city.

Uh so as it relates to do number two and three, uh I'm in support.

Um I'm in support, I believe, um, at least for some options and for us to consider continue considering it.

Um and then uh Councilman Galvan asked my question about bullet four, which was you know, what is there a major difference in May and November of 2027?

And if the capacity isn't that much greater in 20 in November, then I would much prefer we go with May, just because I've seen how long it takes to get from the start of the or the approval of the 2022 bond program to the design process, and so I and to the construction phase starting, and so I think just our bet our constituents would benefit from seeing their projects come to life significantly quicker, uh, which is a that's gonna be a uh our own accountability thing as well.

Uh with slide 24, I also on the issue of um bond funding and looking specifically at that last one and leveraging funding from outside agencies and project continuation.

We had this conversation um uh with the budget this year, and it was largely about you know, you have to put on your own life raft first, or you're to put on your own mask first if you're if your plan is going down, and we were considering you know what kind of what what could our partnerships look like and can we afford to continue supporting nonprofits at the rate that we do?

And I think as it relates to the services that our constituent expect and need that we can't provide, I you know, I think we should absolutely be doing that.

I struggle a little bit more with the bond when we've you know I've I know that we've all received presentations and requests from a number of organizations, and we cannot afford to spend 30 million dollars on a single organization's project when you know we have senior centers and community centers at that need just as much.

And so, you know, you all that said, I'm gonna I'm gonna leave that there, but I think that definitely we want to think we should be thinking about that uh as we're setting our projects.

I also think um, if we could go to slide 22, okay, phasing my so I think going back to what Councilman Galvan was saying, I I struggle a little bit with that shift.

I do think it's important that we identify some potential projects on our end that maybe constituents don't always use.

I think a lot of our constituents aren't going to use our public safety facilities, they're not you know, they wouldn't have necessarily thought to support uh a veterinary hospital, and so those were projects that we were able to issue to um to introduce to them.

I think what we could do, and what um uh what my plan has always been was to convene my own group of of constituents who I think I would want to serve on the bond committee anyway, and we start having our own our own meetings, our own input gathering, and we start, we come to those committee meetings prepared with what we want, what we need, uh what community feedback uh we've received so far.

So I think it's a it's possible to do both.

Uh that being said, I think what day is it?

Is today Wednesday?

We had our um we had our transportation infrastructure committee meeting yesterday, um, and we had two presentations.

One was on uh status of uh the creation of facility condition index as well as which would include all of our city owned facilities, uh, which is over 500, uh, and parks and whatnot.

And then the second one was about the disposition process of our of our surplus property.

And there were two reasons.

One for the first for the first presentation, I think it's important that as we propose bond projects and as we're making decisions as it relates to our bond program, we know that we know exactly what the need is.

We're not gonna be surprised if uh you know we want a minor renovation to this community to this community center, and then we get to the bond, we get we get it through the list and what nine we find out that it you know it needs way more than what we had originally thought, and then we have to start cutting projects and whatnot.

It's it I'd like us to be able to make at least some of those preliminary uh identifications of projects.

I'd like to be able to make that informed by data, as well as of course the qualitative and the use that it was that it has, all of that.

Uh but then in addition, there's some opportunity, I think, with some of our vacant city owned property that uh you know, one of my goals is to turn so many properties into parks in my in my district to create to improve our park score and increase access to green space and the like.

And so uh you all should be receiving fairly soon a list of all this all the surplus properties in your district, and maybe you can use that to think creatively.

Um all that to say I'm I'm super I've been excited about the bond process since 2022.

I'm ready to get this one started, and uh I think that we owe our constituents the best the best possible, and I don't think we can get that uh if we leave things as is at the 625 amount, we just won't.

And I'll touch on a few things since I have a little bit more time.

I want to lay out to y'all um what we're what's happening in district two right now.

So we had uh major facilities as a part of the facility, the one of the facility bond propositions.

Uh one was Ella Austin Community Center, which is going to need some more, it's gonna need some more funding.

We thought it was going to be done with that uh with this last bond.

I think it's gonna need more.

Uh the Carver Library, we got to the design phase, found out that we're gonna have to cut it into two phases, it's gonna cost twice as much.

So we're gonna need several million dollars to complete that project.

We have need at Davis Scott YMCA, we have a senior center that's currently in design right now that I'd like to see funded.

And so I say all that to say I have a lot of facilities, right?

And I don't see a world in which district two eats up the entire facilities bond.

And so, what I would like my c my colleagues support in is we have the inner city tours in my district, and I would like to uh work with city staff to try to fund some of our projects that are that are facilities that would otherwise be really competitive in a in a bond.

I'd like to try to fund them in alternative mechanisms that would require them to go to the tours board and then to come to council, and so I would ask that as those start to arrive, if if and when they do, that you guys keep that lens in mind that that's the purpose for it.

It's not just a bunch of uh frivolous projects for the sake of it, it's projects that uh the community really wants and has been asking for.

Thank you, Mayor.

Councilman Mesa Gonzalez.

Thank you, Mayor.

Thank you for the presentation.

Um how to let me see where do I start?

So I get I I guess I'll start with.

I think you mentioned earlier if our valuation is higher, uh, I think then in 2022 you said why is the bond capacity lower?

Did you say that it was higher in 2022?

I'm not sure what you're referring to, Councilman.

If bond capacity was higher in 2022, is there a specific slide I can refer to?

Um, or is it?

I thought it was in was it six?

Can't remember where I saw that.

Was our evaluation higher?

I guess in terms of capacity.

I'm not sure this is your question, but if you look at the values I presented on slides six and seven, you can kind of see a direct correlation to this slide in terms of how it translates into capacity.

So as those values grew based on those slides in 2004, we were able to layer in our capacity based on that stable tax rate, and then the rising um taxable values.

So from 550 million dollars in 2007 to 2022 based on those values to generate 1.2 billion dollars in 2022.

I'm not sure if that answers your question.

Yeah.

So councilwoman, is your question when you go back to this slide?

Before our values have been growing since 2022, why is our bond capacity dropping?

Right.

Is because the 2022 bond program, we still have a significant amount of debt to issue that.

You do design up front, you do construction on the back end.

So we've got to layer in all that debt that we still have to issue to complete 2022, and then you're trying to layer in a new bond program, and we're doing it in a cycle where our our our taxable assessed valuation is kind of flattened out on us.

Yeah.

That five-year projection you see there is a projection.

Obviously, it's going to change every year.

We just don't know when that change is going to occur.

That thing will cycle back up.

So the flexibility we're asking for on the tax rate is really target 21 cents, but you flex a little bit above or a little bit below, depending upon what values are doing, would take out some of the timing.

We just happen to be on a down cycle where we're trying to finish 22 2022's bond program and size of new bond program.

Right.

Okay.

I appreciate that.

Thank you.

And have we ever decreased the rate in the past for bonds?

Prior to go back and look prior to 2004.

Prior to 2004, that rate was fluctuating.

There have been times during the um the past 33 years where we have shifted the rate between debt service and ONM.

So it has gone down, but not since 2004.

And overall, our rate has gone down seven times in the last two years, Councilman.

Yeah, overall, the last 33 years, I thought I think our rate has gone down, and I have to go back and I haven't looked at this in a while, but I think it's gone down a total of five cents.

Okay.

On scenario on slide 10, if growth is slower, is there an op would there be any opportunity to scale back the issuance of debt so it does not impact the homeowner, or is well once once we would go for a bond authorization, and I'd have to talk to bond council, but we've we've made a commitment to our community to deliver those projects.

Okay.

Um, if the rate or if values continue to decline, I think as Ben we talked about, we'd look at other options or other levers that we can pull before pulling pulling the trigger on a rate increase, but we'd look at how we're layering in the life of our debt.

There's also gonna be a lot of other factors and assumptions that are gonna change depending on what the feds do in terms of rates.

Um depend on how the economy starts moving again.

Um so there's a lot of things and a lot of assumptions that we'd be looking at at that time in addition to the levers that we would be pulling.

Okay, and I think too, I appreciate the um explanation of how our previous plans were where tax rate drives capacity, and so this is where we are now allowed to be a little bit more um sway a bit, right?

So, but I also think that to your point, uh, councilman uh Rodriguez that it requires us to be more intentional too of what we're putting in those packages because the need is so clear in our communities, right?

Um, district two, district eight, district one.

Um, and so I've seen in other bond cycles where projects come in at the end where you're like, well, where did that come from?

Um, and so wanting to make sure that we're more intentional.

I I do appreciate the process, the bond oversight committee.

Um, I think those are all valuable tools with you know 130 plus residents participating sooner than later.

Um, and so I want to be supportive of of of scenario two uh in slide 10, um, and also in scenario two or three in slide 15.

Um, but just making sure again that we're much more intentional of what projects make their way to that list um of bond projects because uh the need is great and we know that, and um so yeah, I think that's it for now.

I'll come back my second round.

Councilwoman Castillo.

I think Mayor, thanks, Troy, for the presentation.

Troy, you mentioned on slide seven that our current uh forecast is similar to what was of 2007.

Uh, would that comparable also apply to the certificates of obligation tax notes, so on and so forth?

It would.

I mean, our certificate obligations and our tax notes are all supported by our Advil or property tax.

So when we're looking at capacity, it not only impacts our general obligation bond, but it would actually influence the amount of COs and tax notes that would be available as well.

Okay, thank you for that.

And then uh similar to my colleague in terms of the storm water rates, I'm curious to what it would generate if we look at the non-residential rates and bring them to an equal of the residential in terms of rates, and what would we potentially generate if we increase uh non-residential monthly fees?

Is that something that y'all could provide to us?

So, councilwoman, uh could you rephrase that?

So, just one of the points I mentioned earlier is on the non-residential side, about 55% of the overall revenue is coming from the non-residential, uh, but they have about 20% of the overall number of counts.

Yes, understood.

Uh my question is can we see how much the non-residentials could generate if their monthly fee is equal to the current rates of residential ratepayers?

So the well, the monthly fee again, um, the way it's designed, the non-residential monthly fees are much much higher than residential.

So, on average, the residential fee is uh on one of the slides was about four and a half dollars per month.

On average, the non-residential fee is roughly 110 dollars.

That's on average.

So these non-residential fees range from about $65 a month all the way up to over $10,000 a month for some of the big users.

So it's it's a drastic uh variation based on the amount of impervious cover.

Yeah, and I would like to see again going back to what that would look like uh if it's equal to the residential uh users.

And I know the councilman requested specific by district, and I think there'd be value in seeing uh that as well, just based off of the density and the size of the parcels within our districts.

Um but thank you for that.

Um I I share a similar sentiment, right?

We're having conversations about uh CPS SAW's rate increase, and I think there's a responsibility as for us to uh move forward with intention with balancing what's financially sustainable for the city, but also reasonable for the residents.

Uh and as folks have highlighted, there is so much need without uh within uh our specific council districts.

I think it is important that we do set parameters in which uh we prioritize city-owned facilities in terms of investing bond dollars because right now we're working with um you know a very fixed budget, and we don't know what we're going to generate based off of the scenarios that are proposed to council.

Uh so I'd like to see us really focus on city-owned facilities for that proposition.

Uh, I do believe that there's value with the citizens oversight committee that was established with the 2022 cycle.

Uh, I know my constituents felt included, like they're heard, and ultimately that council did reflect the will of San Antonio residents in terms of which projects were included uh within each proposition.

Uh again, right?

I I I wanted to hear the conversation from my colleagues because uh I want to ensure that this isn't a regressive tax, right?

We know we want to have the greatest impact within our communities, um, but we want to make sure that we have the the buffers in place that we are seeing the greatest impact with the projects that do move forward through council uh deliberation.

Um I I wanted to pivot to or a segue to the the housing bond, and this is something that I've shared before, uh, and I do believe there is value in increasing the the capacity from the 150 to maybe 250 million, um, but with the focus primarily on land banking, uh, because what we know is there is a lot of parcels within the urban core where there's back taxes.

So those are taxes that are not collected.

And if we prioritize land banking, sometimes you have to spend money to make money, right?

So a lot of these parcels are sitting uncollected.

Uh and I know Councilman Monguillas brought this up uh in terms of uh properties that have liens.

Uh how can we clear those liens to make sure that they are tax generating properties rather than sitting there uh serving as nuisance properties and then taxes are not being collected.

So that's something that I would like to see.

Um again with the storm water fee, there are billions of dollars uh in drainage needs all throughout the city, and I know district five uh bears a lot of that need.

Uh so I just want to ensure that as we explore what that stormwater fee could look like, um, that we're also following the the drainage, the drainage advisory board and their recommendations on how we prioritize those projects uh to be funded because there's just so much need.

Um, but I I wanted to ask if there's opportunity for this end, right?

Like for example, uh I know it was mentioned that potentially the stormwater fee, if increased could be used to support planning and then the bond to support construction, but just given the vast need, uh I I wouldn't want to see us um focus primarily on planning and not necessarily the construction and implementation of those plans.

But ultimately it could be a this and that, not just an either or.

Okay.

I appreciate that.

And uh this morning I did have a conversation with uh several constituents, and they were talking about just the overall impact that the potential sports district is going to have in increasing property taxes all throughout the city.

Uh and their ask was that if there is um a request, which we know there's going to be in terms of the sports district, that it is its own proposition.

Uh, they did share with me some data which shows that uh overwhelmingly uh, you know, in other Bear County municipalities, like those almost Park, Alamo Heights, Terrell Hills, Chavanau Park, Castle, so on and so forth, they overwhelmingly voted um for the the sports propositions, whereas within San Antonio it was a close 5248.

So folks overwhelmingly who are not going to pay with this bond uh are supportive of it.

So we should allow San Antonio residents an opportunity to say yay or nay in terms of a sports district funding uh through the the the bond.

Um so I I think that's something that I would be hopeful that there's council uh support uh to allow San Antonio residents a say a vote at the at the ballot box uh if they are supportive of these infrastructure dollars for a sports district.

Thank you, Mayor.

Um, and the Gabito kids are here to specifically advocate for parks in the bond.

Is that why we are here, ladies?

Council, I think I'll be down.

Thank you.

Well, yeah, these girls do love their parks.

Um thank you for the presentation, Troy.

It was uh extremely helpful.

Uh I I echo the sentiment of a lot of my colleagues.

You know, bonds are extremely important and they do much needed work uh across our city.

This will be um the first time I'm going through the bond um process on council, so I definitely want to get my colleagues' feedback on what's worked and what hasn't worked in the past.

Um and kind of understand especially you know what's worked and hasn't worked with with community input.

Um, I liked with what Councilman Castillo said uh focus on um city facilities, what you know, facilities that serve that serve many.

Um and so would that um hold on, let me look.

You know, I'm I'm for the um crap, hold on one second, I forget what slides on for the debt management plan.

Uh, you know, I'm supportive of scenario two and three, but but mostly two.

Also to regarding stormwater, you know, and it's because of how you know, we we've heard Christine Drennan and other folks talk about how the city has been built and and kind of chasing the tax base up north, and because of that, like Councilwoman Castillo, y'all see the drainage issues in in District 5.

You know, uh we too see a lot of drainage issues uh in district seven, and so I I think that it's important to continue to invest to make that right for for all parts of town, although I would say all districts fill it somewhat, and so regarding the stormwater fee increase, I'm definitely supportive of scenario three, um, even potentially uh scenario four for that.

Um also too, you know.

I think when we don't and we keep pushing off the stormwater fee increase, uh what happens is that more of our residents find themselves on the FEMA flood flood map, and so they end up having to pay a ton of money in flood insurance, and so I think it's um incumbent on us as a city to try to mitigate that as best as possible.

And Art, thank you for um mentioning you know, we have billions of of stormwater um work to be done, and so I think that we need to be um aggressive on that front.

Um those are all my comments.

Thank you.

Councilman Mungia.

Thank you, Mayor, and then thank you again for the presentation.

And while I wasn't a council member, I certainly was here on staff for both bonds, and that provides some good historical context.

And I remember 2017, uh Mayor Taylor called it the back to basics bond, even though there was last minute push for a baseball stadium uh that didn't happen back then, and there was a lot of downtown funding uh that was in that bond that was so unpopular that in 2022, you know, we really didn't have that citywide bond categories or projects anymore because at the end of the day they're all in districts.

Um so I think that's important context to remember.

The other thing I'll say is leverage partnerships um can be a little tricky because although they do have private funding involved in that, um, you know, there are some restrictions.

Anything that has a leverage funding is not 100% public uh and therefore has some restrictions.

So we have some beautiful notatoriums in district four.

Uh you know, the public can't access those 24-7, like they could have public pool uh for those hours.

So I think the leverage partnerships are a little tricky uh because they do bring money, but again, they they do limit the public consumption of that benefit.

And I'll also add that I support uh true equity and bond.

I think the the several past several bonds have been roughly equal for districts.

Uh of course that means that you know one district might have more in the streets and sidewalks and then less in drainage and then vice versa.

But ultimately, every district had roughly amount of the same amount of money invested, and that has put has kept some districts behind, including mine on the south side and southwest side of San Antonio, especially when we look at uh one of my favorite topics, clay soil, right?

That's in certain parts of the city.

And if you look at Zarzomora in my district, which was a 2012 bond program, and you compare it to another 2012 bond program somewhere else in the city, uh mine is gonna be significantly worse, and it is.

Uh and so we have to reinvest in a previous bond program uh project, uh, which is just not great for our district.

So I do support the intention of it.

I think this this bond would really have to be a back to basics bond, especially if we're going toward scenario two, which I do support.

Um, and I think it it's time to to really invest in a lot of streets sidewalks and all those types of things.

We're just not gonna get very much with 500 million dollars or 625 divided by 10 if that's equal, that's that's hardly anything when you talk about large projects of that nature.

Uh and so quick question.

The you mentioned earlier the federal interest rates go up, uh they could go up.

What effect would that have on our current bonds that we are repaying if the interest rate if interest rates increased?

On our current bonds that we've already issued, those those rates are established and we have agreement with the investors.

So it wouldn't impact those.

The only time that would be impacted is when the rates went down, we'd look at refinancing or refunding those bonds.

But if they go up, we're set.

It would be no impact.

And of course, if they increase and we go up for a bond, that's just less that we're able to bond for, correct?

The only impact it would have is not so much on the bonds, but if the federal interest rates go up and we have cash that's being invested, there is an arbitrage return that we have to pay back to the IRS.

But as far as what we're paying in our debt service, there would be no impact.

Great, thank you.

And you know, I think it would be helpful because we talked about uh a three and a quarter, three and a half percent growth.

Um kind of walk me through this a little bit because I kind of heard my colleague earlier talk about increased taxes for folks.

So if the growth was above that percentage uh in property taxes, people would be paying that right through their tax bill.

So in the event based on the tax, if I understand your question right, based on an established tax rate, if values go up, they would be paying higher taxes.

That's your question.

Yes.

So if we went with scenario two and we were hoping for three and a quarter growth, so obviously if we didn't meet that, we would have to increase the uh debt service tax.

But if that growth came, we wouldn't have to increase the debt service tax, but people would pay more regardless.

Um I I guess the only thing I would add is that in the event looking at the two different scenarios, that in the event that we didn't meet the 3.25 assumption, before we recommended to this council to increase the tax rate, we'd look at other things that we can adjust before coming back.

In the event that that tax rate goes above and beyond our assumptions, it'd be a discussion with this council if you'd want to maintain that tax rate.

Um, but staff would probably be recommending as we look at our assumptions a possibility of decreasing that tax rate to align with our capacity analysis.

Yeah, and doing less.

Yeah, and in the other the answer to the other part of your question is um if value goes up and the rate doesn't change, then the homeowner or the property owner isn't paying anymore.

Their values are going up, but if the rate doesn't change, they're not paying anymore.

Whether it's the school district or the city or the county or UHS or whatever.

It it regardless of what the value change, it's gotta be it's gotta be tied to the rate.

So in your question, just because values go up doesn't mean necessarily individuals property owners are gonna pay more.

Just means their the property is worth more.

Okay.

So the taxable value raises and that's what causes folks to pay more.

It does.

But if but the rate doesn't change, it doesn't change.

Yeah, I hear you on that.

Okay.

Uh no, I hear you on that.

I think it's it's certainly worth uh taking a look.

And I guess I would be interested in what kind of the average cost would be, right?

I know it's hard to pinpoint that, but if you had you know a 250,000 dollar home, uh, and we had to increase the debt service, what kind of cost that puts on the homeowner if we were to go like scenario two or three?

I think some numbers with that would help me talk to residents about that.

And we can do that.

We can look at your your average homestead value, which is about 233,000, and we can show you that for what would happen with a half cent increase or a full cent increase, we can provide that to you.

Yeah, I think that's helpful because if folks end up paying five dollars you know a month or it's a hundred dollars a year, and we're going to get you know double the bond capacity.

I think that's a really stark number that folks need to know uh and pay for.

So that's an important data point that just helps us relay that information.

And I guess also the stormwater fees would also be helpful too.

Um so especially I would like us to look into scenario two for that one.

Okay.

But and the stormwater of course, right?

That's collected through Saw's bill, correct?

It is it's on that's a line item on the sauce pull.

Okay.

Yeah, I think that's very important to include in that projections.

And then I'll say to um, you know, to be intentional.

I I've talked about this at before.

Trying to to ask my residents to pay more for a CPS rate increase, is a little difficult, right?

When I tell them it's gonna make this cheaper, but you have to pay more.

Uh and this is is quite different to say you might have to pay more, but this is you know, five miles or Zarsamora that's gonna get done, or three miles of railison, or perhaps a pool on the south side.

My district only has one public pool, and that's on the north northern side of our district.

Um, those are some some big numbers for folks to kind of listen to, and I think that's uh a good talk.

So I think that's oh, and to my colleague's point earlier about tightening the belt more.

I I don't see that happening here.

Uh when the budget when the budget is 80 plus percent staff, and 66 percent of our budget is public safety, there's not much room to cut.

Uh and that's two separate tax uh line items, right?

There's the maintenance and operation and debt service.

So there's two lines there.

Um and of course you could pay M and O maintenance and operation tax for debt, right?

So to cover those types of projects, but you couldn't do it vice versa, correct?

You can it's very hard to shift the tax rate between the two because it's still gonna be subject to SB2.

Um definitely cannot shift the tax rate over to the ONM without an election potentially.

Um also for any shifting of the ONM tax rate or the M and O tax rate to the debt service, it's gonna certainly have budget implications.

Yep.

Thank you.

And I do support Councilman Castillo's mention, I've talked about it to several of my colleagues that any sort of sports-related uh or entertainment district bond has to be a completely separate bond proposition.

Uh and the public input might even be you know parallel but separate to the general obligation typical bond process that was outlined on the slides.

So thank you, Mayor.

That's all.

Councilwoman Corr.

Mayor, just um councilman.

Let me just double back because uh Maria, John, and Ben behind me told me I didn't quite answer your question.

But did I answer your question?

Okay, all right, okay.

Thank you, Mayor.

Uh thank you, Trevor, for this presentation.

I have a couple of questions, and going off of some of the um lines of questioning, just to better understand.

And I'm sorry if I just missed this.

So you are projecting in next year to have like a 68 um cent raise, right?

Can you go to that slide, the one that I don't have in mind?

Uh it's the yeah, the forecast so you're projecting a 0.86% increase in property tax values, right?

Yeah, the 2026, that's based on the certified role that we received and presented to y'all during the budget.

So that's actually what it was.

That is based on a certified role.

And that may change a little bit, but that's based on certified role.

And so are you saying that you're projecting that in scenario two, we would be projecting 2027 to be 3.25% and anything short of that, we would increase the tax rate to cover.

Well, we're saying in those scenarios, and it focuses on 2028 to basically go up to 3.25 or 3.5.

Is that if our forecast that currently 1.75 would move to those rates?

And does that assume 0.4% for 2027?

Yes, ma'am.

Okay.

So 26 and 27 would be intact, and then 28% we would have the adjusted growth that the 3% of the So you're assuming that you are like conservatively budgeting 50% less than what we would expect in 2028.

Well, this is based on the forecast.

What we're saying that is in the event that we would move to scenario two or three, and yeah, I understand that, but you're basically saying that in the event that something changes in the economy that we have not forecasted for, and it is less than 3.25%, we would then change the debt service rate property tax rate.

Yes.

And how much if it's if it stays at this forecast of 1.75% for 2028, how much would the debt service tax rate have to increase to get to that 3.25% projection for our bond capacity?

So for these guys, correct me if I'm wrong, but when we looked at scenario two, um, if our if we came in at our forecast and we did not hit the 3.25%, it would be about a half cent increase in our tax rate.

So if we came in at 1.75% and instead of the 3.25, we would have to increase the debt service tax rate by half a cent.

That's correct.

And that would that would basically be in based on our modeling that would be there throughout the course of our model for the scenario three.

If we hit our forecast the numbers and we um did not make the 3.5%, I think it's roughly a full cent increase in the tax rate.

Okay.

So I did the math really quickly, and I could I could be wrong, so I hope I don't know if someone can check this, but you said the homestead value is 233,000.

You divide that by 100, multiply that by half a cent, and it seems to come out as like 11 and a half dollar increase in the bill.

You are really close.

So 233,000 homestead, a half cent would be about 11 dollars and 70 cents.

Okay.

And a full cent increase would be 23.39.

Okay.

So for scenario two, the I think the value in going from a 400 million dollar increase in our bonding capacity versus 11 dollars in our in our homestead tax owner bill makes uh it more relatable for community members to say.

And the reason why I'm saying that is because uh I get calls every single day about a sidewalk.

Y'all have heard me rant about sidewalks for days, uh, about parks.

We have a list of 50 park improvements that folks want, whether it's shade covering, and we did a big push for that, but we still have additional whether it's um dog parks or uh maintenance of spaces that are already existing, trees, we always get requests for trees.

We have a list of 50 park projects and a list of four uh about 200 sidewalks and 150 streets that have it that we've had requests for and have no funding for.

So, and that's just in district one, and I'm sure every single one, and I know uh councilmember McKee Rodriguez mentioned a few of the projects that he has for his facilities.

We have all of the arts facilities in downtown are already planning for what they want to ask for in the 2027 bond project.

I went to go visit um a facility in district five and the um the historic theater there, and they're already asking for like thinking about what they want to do to revamp that theater.

So I think every single one of our facilities is going to um ask for additional funding and support, and there is just so much need, and I think it is really important for us to make really judicious decisions about how we're spending these dollars.

I'm gonna double down on what council member McKee Rodriguez said.

Uh, just because we are 10 districts and we're single member districts, doesn't mean the need is the exact same across every single district.

So we have to make sure we are uh building this bond plan very strategically that uses data to demonstrate where the highest needs are and investing in those highest needs areas.

So I think that's important.

Um the second thing I think is making sure that, and I understand that I know this conversation about the entertainment district came up, but making sure we're figuring out what truly is the entertainment district versus what just my neighborhoods need, right?

Because uh Lavaca sidewalks should not be considered in that um in that same comprehensive program or traffic, uh traffic calming study around Florida and Carolina, that needs to be and all the traffic adjustments that need to occur there need to occur there regardless.

So I just want to make sure that we have a conversation about what exactly is specifically for the sports and entertainment district when we're talking about this bond, so we know what we're separating if we choose to go that way before we just say everything downtown gets nixed in its own category, because to me, my downtown is a neighborhood that I think we I I want to represent just the way that we all represent each of our neighborhoods as well.

Um that being said, I would be supportive of two and potentially even scenario three.

Anything that I've looked up from like financial literature is that a variable uh debt service rate is helpful from a financial perspective to be able to manage debt.

Our property our our um debt service, uh um the amount that we're paying for debt service fluctuates based on what is happening in the market.

So we need to be able to be reactive and adjust to that.

So uh I would support that option with continued engagement, of course.

Um the second question that I just have on that specifically is in just as because you mentioned that the housing bond was um in a separate category, but on this chart, let me go back to slide.

Um what's the chart with the all of the 2022 bond that showed all the historical bonds?

Oh, I found it.

Slide seven.

So in the tax notes on this, so this is listed as a 1.2 general obligation bond, and the housing bond was in the geo bond.

But I thought the housing bond had to be a uh tax note.

It doesn't have to be a tax note, it just has to be taxable in terms of how we issue it.

So what's is maybe I have a different this slide.

What's in the tax notes on this slide for 2022?

Uh tax notes, these we use tax notes to basically fund items in our CIP on an annual basis.

For example, there may be an SAPD helicopter in there or things of that nature.

Typically, we align the use of that life with a seven-year tax note.

So the tax note is just a tool we use to fund um needs of our CIP.

Okay.

Um thank you for that clarification.

The the on the stormwater conversation, can you help me better understand?

This is what Councilmember Golvana and Councilman Castilla were talking about on slide 14.

And I I I could tell Art was like, we did this a long time ago to include, I think I'm a slide off because I don't I'm the previous version, so it's the next slide.

Yeah, it's the next one.

Uh oh, not this one either.

Um it's where you talk about the difference in current rates in impervious area monthly.

This one.

Okay, so help me understand.

I know you said there was historical context, but how does this what percentage is coming from residential?

I know you say there's approximately 360, like the you explain how many residential accounts, but I don't understand how much of the funds are coming from residential versus non-residential.

Okay.

Do you know what the breakdown is by any chance?

Yeah, councilwoman.

So just in a brief recap, so uh prior to 2015, the rate structure was based solely on the amount of land.

So a three-acre property, uh, regardless of how much impervious cover had paid it pays flat rate.

With the new rate design, we looked at impervious cover, unlike water meters that you can measure there's no direct measurement, right, for stormwater.

So correlation, the best correlation is impervious cover.

So what we looked at was of the user group, which is about 400,000 accounts, approximately the 366,000 that you saw on the slide is residential.

The remainder, the 50,000 or so is non-residential.

So that's the accounts.

But then when we're looking at impervious cover, uh the statistic I mentioned earlier was roughly uh it's I think it's more like 77%, but roughly 80% of the impervious cover is associated with those non-residential accounts.

Um that's that's just based on the land area of uh impervious cover.

The revenue coming from those uh non-residential is more like 55% of the overall revenue.

So it's a fraction of the accounts, but they're making up more than half of the revenue.

I think that's the number.

Okay.

I'll come back on the next time.

Thanks, Mayor.

Thanks, sir.

Councilman Godlin.

Thank you, Mayor.

Just a couple less quick clarifying questions, then I'll make sure I clarify my points on some of those uh asks here.

Um for the stormwater one, uh I just wanted to ask uh how much would the for any of the increases in revenues, how much of that would be strictly for uh bonding versus operations between the different scenarios.

I can't we can get to the exact numbers.

But when we actually worked with a home bee to actually model this, the perform I had an assumption you have a base operations, those operations are growing by about three percent into the future.

Okay.

And so this rate would cover the growth in operations based on those assumed increases based on CPI in the future.

And then we use the balance also to leverage in the additional debt service.

Okay, got it.

Yeah, if we can send some information over, I'd like to review it just because I think you know, if we're gonna be building more things related to capital improvements for stormwater, and then we're gonna have to need to maintain them too.

I don't want to get stuck in a situation where we're still outpacing um our capital needs with uh literal maintenance, or vice versa, outpacing maintenance versus capital needs.

Um Mike as well.

Uh I know this is still ongoing, but what things are changing to deliver our bond projects on time or within budget.

I know we talked about earlier on about making sure that the goodnight construction ordinance could be looked at and things like that.

I don't know where those things are at in the timeline, but we had those ready to kind of discuss or showcase by the time we really look at implementing this.

Yeah, you really teeing me up for uh we're gonna be at uh the transportation and infrastructure committee in a few weeks or a couple weeks, talking about uh some of the department changes we've made, some that we're planning to make as we uh not only are working on the projects that we have, the 200 plus projects uh that are currently active, but uh you know, moving into this discussion.

But you know, certainly things like you know, just separating the department, we are focused on our bond projects.

We are we're letting public works focus on the other infrastructure uh maintenance needs, so that that has helped.

Um we have kind of structurally reorganized a little bit within.

Uh we've implemented some things like incentives on the contracts.

So many of the contracts that you have uh seen in the last couple of months included an incentive clause for the contractor to finish early, not just the the penalty clause, liquidated damages.

Uh so we have a number of things that we're implementing.

Hours of construction, like our construction, um, good night, good night, uh, that I uh worked on a few years ago.

That may be something we we want to mod you want to uh kind of uh either modify a little bit uh so that people can work a little bit longer to get those jobs closure.

So I think a lot of those uh some of those have been done, some of those are still in the works.

Um I know we'll have a conversation not only with the committee, but I expect some of that will be part of that first B session when we talk about projects, okay, the process, and and how we can deliver again more on time and more in budget.

So uh it's kind of a timely question, but that's where my my thoughts are right now.

Thank you for that.

That's helpful.

Last couple quick points.

Um I feel the May 2027 timeline is fine.

Uh, I think needed if we're talking about making sure that we're staying on time with the needs that our residents are asking for to be addressed.

Um I support the sport district uh facilities or infrastructure specific funding propositions for the bond program.

Um scenario two and three for the bond capacity, uh as well as open scenario two, yeah, I'll say two for stormwater.

Um I think to the comments earlier um about this hasn't happened in a long time.

Um I think about Olga Some Road has been flooding my entire life in District 6, same thing with Pin Road, and I've seen it consistently where the road is completely unusable, uh, where people have died.

I have a best friend uh who has severely trapped in Olgressum Road, and I think 20 years of waiting and saying we'll hopefully get the money next time, hopefully get the money next time is not worth it.

Um I think 20 years of traffic-related deaths on Calebra on Grissom on Marbach, on Callahan, on New Gilbo, on Silent Sunrise, is simply too long to say that we know this street's dangerous, we know what the improvements could be.

We can't keep waiting for a hundred thousand dollars of NAMP funding to hopefully improve it.

We need big changes on some of these major roads, including the ones in my district.

And I think 20 years of minimal improvements to libraries, parks, community centers, despite service increases, despite population growth, is just um is just not talking about the reality that we're facing here in our city and for our growing city to be um you know one of the best, I think, frankly, in our city.

We talk about all kinds of things that make our city um a higher quality place to live in.

This is where we meet the moment.

This is where our city really comes in.

I think a lot about um different folks who have uh push for things at the local level um across the country when they talk about um how do you make sure that our tax dollars that our residents are paying for the highest quality and the best possible services possible?

Um I think it's with our tax dollars.

And anything less of that, we are failing our residents.

And so if it means that we have to do a little bit of a push on some things, we have to do it if we want to really deliver for our residents.

And of course, our residents get the opportunity to vote on that and say whether or not they support that or not.

So I'll leave that there.

Thank you, Mayor.

Councilwoman McKee Gonzalez uh Mesa Gonzalez, excuse me.

You're right, I'm sorry.

You're right.

Miki Rodriguez and then Mesa Gonzalez.

Thank you.

Well, again, gotta take what you can.

Um forgot to support uh Councilmember Galvan's request for information regarding the disrup the district by district breakdown uh as well as the non residential rate increase and whether we can adjust that rate without adjusting residential.

I think that's also an interesting question.

Uh and to echo Councilwoman Castillo for specifically if we were to look at a rate equal to residential rates, even if we were just to up it up to what the first three tiers are for um for residential, um, and then also echo a sports district proposition specifically, and I think to answer answer councilwoman core's uh concerns there is if not for Project Marvel, which projects would not be we would would we not be considering what would we have considered to be totally as a part of that that bond proposition if we were just doing it in isolation?

I think that to me is the that's the separation point.

Um and I'm sure that it will be popular and that it will pass overwhelmingly.

Um I did can you just real quick just uh for my curiosity because slide 16 the stormwater rates?

This will be another art question.

Um this doesn't I just don't know that uh when was this when was this read reworked?

So uh it was approved by council back in 2015.

Uh it was about a two-year process at the time.

Thank you.

And I wonder um, I'm a little concerned because I think the different measurement methods create a pretty stark imbalance.

And I wonder if percent impervious um cover ign well one, it does.

Uh percent impervious uh area ignores um scale.

So you know, you could have a small lot that's mostly paved, and that can easily fall into tier four, whereas you could have a really large corporate campus that has some landscaping, has some uh green buffers and the like and whatnot, and that could fall into tier one and tier two, and um then they pay lower rates and then res the residential tier jumps up very steep from 494 to 1045 between tier two and tier three, and I just I feel as though we should be looking at this anyway, just as a structure, because it doesn't I understand businesses who use more want to pay less per unit of measure, but that doesn't make sense to that does not make sense to me.

Um, and I don't I think I don't think that's equitable.

I think it's uh like councilman uh Castillo mentioned a regressive tax uh where the all the smaller users are subsidizing the much larger users despite the fact that the larger users make up what was it, an eighth of the total base the total uh universe of if it's 400,000 it's 50k, right?

Right, so about about a little less than 20 percent of the total accounts are non-residential, if that's what you're asking for.

So fifth, what was I looking at?

One uh users are there?

There's about 400,000 415,000, I think.

415,000.

So just councilman, I and I I know I don't want to take too much time, but the way this structure was built, uh so the the tiers of the residential, it was really looked at um breaking down the user group into quartiles so that that middle tier is roughly 50 percent of the total residential accounts.

So from there is a detailed analysis on what does the rates need to be within those tiers to recover the revenue we were looking for at the time.

And then the way the the non-residential was broken down to there's a there's a flat base fee that you don't see on this chart.

That's about 67.

So that flat fee covers some of the costs that are not harder to judge on the amount of impervious cover like mowing or street sweeping.

Uh so that was parsed off into a flat fee.

So residential um is there's a $67 flat fee, and then you see these costs in that far column, 31 cents.

That's per thousand square feet.

So it um it's a a graduated cost as you go through the tiers of the non-residential accounts.

Okay.

And just because that math just threw me off a second ago, you said there are 50,000 non-residential correct accounts.

Accounts, non-residential accounts.

There are 400,000 accounts total.

Rough, yeah.

415, I think.

415,000.

Can somebody please really quickly divide 50,000 by 415?

Uh it's roughly I think 12%.

120%.

That's not a fifth.

I just wanted to I thought I would I really thought I was being crazy, and I'm like, that's embarrassing.

I'm about to was not gonna be okay for me.

Um yeah, I mean, I just w I just want to revisit that.

That's the point, but wanted to echo all those things, and I think I didn't say it clearly, but I would lean towards uh uh scenario three for the bond, the rate, the the that one, not the stormwater one.

Um I don't know.

Did you say that you could sorry, did you say that you could not because I think Councilman Galvana asked this question, and it was about um what percent what amount of that total raised is for operating needs versus the bond of capacity, and did you say that you didn't you couldn't answer that?

Can you go back to the one with this force the four scenarios for stormwater?

Four scenarios?

Yeah, there were or was it no force?

It was four little slides.

It was green, it was stormwater.

It was the green slide.

That one.

So at the bottom, I'm looking at say for scenario for 174.3 million, how much of that is would be used for projects versus the operating needs that we have?

We can go back and pull that for you because we have an operating performer that shows you over the life of the 25-year term how those operating costs are growing at about three percent.

So you can kind of see what portion of that is gonna be leveraged for the operating costs.

But the 174 and 140%.

Oh, that's pure capacity.

Okay, yeah.

Yeah, gotcha.

Okay.

There's underlying the pro forma we can we can lay out over 25 years the operating, but those those smaller boxes would be the capitalized work.

Then what I would want to do, I'm sorry, I know I'm running significantly over my time.

What I would like to do is look at you know what is our total drainage need, what are the what are the largest threats to us, and you know, what can we afford to let go of?

But thank you, Mayor.

Uh Councilman Messi Gonzalez.

Thank you.

Just a couple of questions.

I know in August you mentioned um possibly some shorter bond cycles, uh, because we traditionally do every five years.

So has that been part of your analysis?

Or where are you all on that idea?

We didn't run we didn't run shorter bond programs.

We looked at sensitivity analysis on basis some of the assumptions.

If that's something the council would want us to go look at specifically and come up scenarios, we could do that.

But these are assuming a five-year bond program.

And we did not, we we could, like Troy said, we could look at um 2028.

You know, what what is it what is another year?

You could you change the timeline, but but the the change on um on doing it sooner um we we would you all would need to have we would have needed we would have need to be in the bond process in the fall.

Okay, and in that point right now.

So but but in terms of further changes to the timeline, if that's something you guys are interested in looking at, we can run different analysis on that with those assumptions.

No, I was just curious because it was brought up in August, so I didn't know if that just completely went away or um and have we ever incentivized removal of impervious cover?

Or is that like the river authority?

Do they do that or so the the the fee structure itself does in incentivize less impervious parcels by the the tiers um being a lower tier?

There were also some credits that were talked about as part of the original process uh for low impact development, um, and then even saws you know has rebates you know built into some of their practices.

Okay, all right, thank you.

That's all Councilman White.

Yeah, I I just want to know I mean what would be too much, right?

I mean, we hear this, it's only 11.

I mean, what what what's what's the number where where we would say it's it's too much?

We got 11 dollars here, right?

Saws, I think if their plan goes forward, um, according to this article, it's about a 20 dollar a month um increase in the water bill by 2029, 19 dollars to be to to be exact, couple bucks in solid waste, who knows what CPS is asking for, add it all up.

When when is enough enough?

And when you consider the fact that wages aren't rising, then what somehow other mayors and other city councils have made it the last 22 um years without touching the tax rate.

I mean, they they they've had needs, they've wanted to spend money on infrastructure.

So some somehow we we haven't had to do it then, but but now we need it so badly that that we've got to do it and and councilman Galvan brought up um I guess that road in in your district and and some of those other areas that that that need attention.

I would submit to you all that if that's the case, right?

And that that road is is is as bad as it is.

I mean to me that's a problem in in how we go about budgeting every year and and and the priority of our projects I mean that sounds like a pretty important one that we need to get on tomorrow so again the the the thought that that it's only a little bit of money or we have to do this to address these areas where people's lives are in danger um I just I I reject that if if people's lives are in danger in a particular road or crossing somewhere in San Antonio we shouldn't be waiting for a bond to do it we should get out there and start doing it tomorrow that's all I have mayor council and core so I'm not an asphalt engineer but the thing that I have learned in the last two years is asphalt requires maintenance the reason why we are in this problem right now is because of suburban sprawl we built so far out and kept saying developers go build go build go build and then we don't have any money to maintain all of this roadway and so I went to this urban land institute um session once and I was telling Eric about this and they basically talk about how the amount of roadway we have in San Antonio could take us from San Antonio to the east coast to like Vegas somewhere and back.

Like it's insane the amount of roadway we have but we have this roadway now and when we don't fund maintenance of it the holes get bigger and our offices get more and more calls because the problems are just going to increase if you don't maintain asphalt.

Unfortunately it's not one of those things where you can just pour it and forget about it.

You have to come back over and over again and the policy that public works has been trying to do has been a great like let's do our best to try to like keep the stuff that's not failing not failing so like trying to maintain but unfortunately the stuff that's a little too far gone just keeps getting piled up and piled up and piled up and those projects cost more and more money and so we got to figure out a way to fund them and the only way that we have right now is our bond.

And so unless we prioritize those big projects in our bond we won't have a way to address them.

And so I agree with you this next bond should include that street it should include Bassie.

I don't want another call about Bassie Road right council member Mungia and I'm sure each of us can tell you a big project that we have that has need.

And I get it I understand your question of what's too much but we have to make sure we're considering the right numbers for each individual right this would be an 11 dollar increase in an annual property tax bill not a monthly bill and then second it's I think our job to figure out what are the programs we're gonna put into place to make sure that the people that are truly really feeling the pain of that don't suffer the most and that was what I think my council colleague and quite frankly I think the city over the last couple of years we're in this problem because everybody is actually doing those workshops that's showing them how to um uh fight their property tax bill and it's like okay we're really good at fighting our property tax bill and so now we're in in this space but I think that's important we have to keep doing that because the people that are engaging in that need it and that is what we have to figure out a way to continue to do.

Are there more innovative ways to make sure under homestead they don't stay and I don't even know if that's possible is it a way to differentiate tax rates for folks under homestead and values no so I think we have to keep considering different ways to ensure that we're helping the most affected folks.

Okay I'm done my rant the last question I have about this art sorry you wait what um the last question I have about the the impervious cover situation.

So this is 31% for how much of each like what what is that um 31 cents sorry for uh less than 20% so what is their monthly fee come out to be so I'll I'll give you a quick example I I ran a number on tier three as a so typically commercial properties are more like that 65% so like a three acre site that's usually like a small retail site perfect 65% impervious cover if you do the math on 58 cents that's so that's 58 cents per thousand square feet so just it's not noted there.

That comes out to around 46 dollars but then add there's a 67 dollar base fee so it's like 116 a month per for a three acre property.

Okay.

And the monthly fees for residential are just flat monthly flat fee for that group of that range of impervious cover.

I think what would also be helpful just because it I actually think the tier one, tier two, three structure helps for um that residential impervious area, because if you think about it, those are really like the bigger lots have more need for watering, right?

And so, and an additional other things that affect those big areas.

But I think I would like a little bit more to kind of what my colleagues said of how can we look at this breakdown and see which uh members in our uh like what percentages in our district, like what percentage do we have in tier one, two, two, three.

I know 50 percent overall, but what does that break down look like?

And is there other another level that we can split up there?

But um, I understand the logic of that.

And if there is a way, that's good art.

Um, if there is a way to help increase the residential a little bit, I would also, or non-residential, excuse me, a little bit, I would support that um prior to looking at an increase for our residents.

But again, I think storm water is really important as well.

All right, thanks, Mayor.

Councilwoman Viegeron.

Uh, thank you.

Uh I'm gonna stick with the stormwater rates before I go and uh answer some questions that were asked earlier.

Is um I think I think we need to look at increasing the monthly fees because I think we need to get serious about our environment and we need to have at let less impervious uh areas.

So I I'm in support of that.

Um we have the technology, we have the ability to get creative about how we have uh what we have on our business's fronts.

Uh what is too much?

Um a hundred dollars, a hundred and fifty dollars.

Because what I don't want to see is loss of life again, and that's what I saw.

Down military drive, a mother crossing the street, trying to get back to her apartment, the light not working, getting hit, having her family tell me what I what we want is her her death not to be in vain.

That's why I want scenario two or scenario three.

That's why I'm willing to pay because his mother's life was cut short, and you ask why can't we do it overnight?

Because we we did once once she lost her life, we were able to work faster.

But when you ask us to have to coordinate with the county and the state in how we take care of our streets and our infrastructure, it takes a while.

I don't know.

I and and public works would have to tell me, and and Rosie was the one, what it cost and where we had to take from to change that yellow flashing light to a red flashing light.

What it took to move, you'd have to ask via what it took to move that bus station from one location to the other.

The amount of staff hours it took my staff and city staff to make sure that we got that done.

So if it's gonna cost another $30 a year in my property taxes, I'm willing to do it because my residence life is worth that much.

And I am in agreement that we need to prioritize city facilities and city streets, and we need to show the state our commitment to keep our streets safe and to keep them drivable.

Because like um Councilman Gia, part of it is the accidents, um is the fact that we have clay roads and people are taking those dips and losing mufflers through it out.

So that is what it's worth.

I am not I do not want to lose any more lives that we don't have to if we can be thoughtful and work in coordination beforehand.

And this is this is our job as city council members, and so when you talk about what is too much, I don't know that there is anything if we can save lives by by investing in infrastructure, and we can we shouldn't have to think about it like that, but we do.

Thank you.

Councilman Aldebigavito.

Thank you, Mayor.

I did just want to chime in also because um I I'm in complete agreement.

We we do need to prioritize our streets.

What councilman Galvan was saying about um the street that's been long overdue that you're you know, your best friend encountered.

I think there's a lot of us on a certain part of the city who face that.

I mean, I know district seven has the second highest uh F-rated streets in the city, and you know, quite frankly, we just don't have enough in our uh in our um IMP or our NAMP budgets to cover it.

I mean, we're our backlogs are just too great, probably greater than some other districts, and so it it's constant, and so we unfortunately we do have to rely on bonds to to make things right, um, as they were saying.

Also, though, too, I know other councils before didn't approve it, but I don't think that that should be our standard because you know, sometimes you we are put um in a place to make hard decisions, and um, you know, it sure it's easy to pass the buck, but I think that we're elected to to sometimes do hard things, and so I think that we need to to realize that and take that to heart.

Um also too, what councilman Councilwoman Corr was saying, you know, asphalt, we do have to maintain that.

And you know, this is just the the nature of the city's history.

I mean, we were chasing the tax base up north, and so that doesn't mean that we should leave out the rest of the city, particularly the city's um southeast and west sites.

And so I think that we just we we have to this council set with balancing all of the those needs, and um, yeah, sometimes it's a hard decision, but I think we got to do what we gotta do.

Thank you.

Has everyone spoken on this issue that'd like to speak?

Okay, great.

Thank you, Troy uh and Ben for the for the presentation.

Um I think in this instance, as many of you alluded to, um, you know, this is a time of great economic uncertainty, um, as we are balancing not only um requests for rate increases from SAWS um from CPS, um, actually, and the SAWS point is a is related to the point that many of you have made, which is um the SAS story is really a story of delayed maintenance, right?

They just kick the can down the road.

So now we are paying that, and unfortunately, we're paying it at a time of tariffs, higher labor costs, et cetera, et cetera.

So we recognize the risk of of continuing to delay these things, to the point also that Council Via Gran made.

Um, there's not just the the cost in terms of financial, but there's also the cost in terms of loss of life if we're not um if we're not making these investments where where we need to.

Um time helps us.

When I spoke to Ben, um, it sounded like we could actually revisit this entire conversation as well in in July, and by that time, the economy will be in better focus.

Um, by that time, we will also have a better idea of what that initial bond for the downtown infrastructure needs to be.

Um, so I think those are important uh before we um commit ourselves to some some level of of bond capacity here.

I think what we also need as part of that, um, and I know Ben is working on this, is we need to truly understand um what of the PFC is going to cover the infrastructure related to this downtown investment.

Um I think it's really important that we are frankly squeezing as much as we possibly can out of that.

Um as the councilman uh councilman McKee Rodriguez pointed out, the infrastructure, the things that we'd be working, we wouldn't be working on if not for that.

I think we also have to be creative.

I think I know Ben, you and I have had a conversation.

I asked, you know, how exactly is infrastructure defined as part of what's allowable under the PFC.

Um if affordable housing is not part of that infrastructure for the PFC.

I would request if we need to take that to the state legislator legislature to make some type of amendment that we do.

Uh we have said we want affordable housing.

We are now look facing a reality where we have a much lower bond capacity.

And I think frankly, majority of us around this table would make a strong argument that affordable housing is very important infrastructure for the people that are going to be working at each of these um major facilities.

So I'd I'd want to to understand if that's not if that's a change that we can make at the council level in terms of how we define infrastructure, if that's something that we need to take to the state legislature.

We have to be creative uh in in terms of meeting the very real needs that have just been described here.

Um please go to the slide where it's got um where to go the debt ratio slide, please, where it talks about net taxable assessed valuation over property tax outstanding debt.

I've got slide eight, but I know there were some additional slides that were added.

Okay, here.

Um so we're at 1.52 um at the end of 2025, and so that means of the 2.6 billion in property um property tax outstanding debt.

Um, my understanding then is that is the the denominator there is 171 billion, right, Ben, as as you mentioned in the in the in my pre-brief.

Okay.

So that is what is net taxable, right?

So that means there are when we look at gross, though, that's a much higher number.

And I say that because we're talking here about what what the projects we want to put in there, our capacity, et cetera.

The other compliment, I think, to this discussion though, is our understanding of the property taxes that we are forgoing, right?

That we are foregoing, whether you talk about um tours, whether you talk about some of these other economic incentives, cemeteries, right?

All these things that contribute to a smaller uh taxable base, which then obviously we are seeing here results in our lower bond capacity.

Um so I think what's we need to be thoughtful about, and um Councilman Mungee, I I'd look to you leading the planning committee uh for your committee to put some thought into what are some thoughtful policies that we can protect the taxable value, potential taxable value in the city.

Case in point, yesterday I had a conversation with um uh with CPS at a piece of property they were looking to acquire, um, and I said, where is that?

And let's just say it was in a very um uh um um valuable piece of land downtown.

And I said, well, if you buy that, will you pay property tax?

And they said they wouldn't.

And I said, well, maybe I as the city don't want you to buy that, right?

Maybe we there's another option there, because again, it at the end of the day, it's property taxes when it either comes to our general fund or it comes to our bonded capacity.

So these are the types of things that we need to be looking at.

I mean, do is there a moratorium on cemeteries in the city limits, right?

Et cetera, et cetera.

Um, these are the things that we've got to help ourselves with.

And I know we've had this discussion, I know we're due for a refresh, um, Eric, in terms of our economic development, uh, excuse me, economic incentive um discussion, the policy on that, having a really strong um data-driven approach that shows that the ROI of these economic incentives in fact make up for our lost ability, for example, when it comes to bonding capacity.

Bill um, sorry, Bill.

Um Ben, for context, can you give us an idea of you know if we were taking uh what what is the gross number for the property tax value?

I know you said right now net is 171 billion, but what would gross be?

So mayor, roughly 209 billion.

29 billion, okay.

Yes.

Okay.

So Marin, I'll get you the the schedule in the in the budget document, we'll get to the the page number, but there's a schedule in there that walks down from the gross valuation down to our taxable valuation, so it has our exemptions in there.

Yeah.

Um, not that one.

It's the other one.

I'll we'll get it for you.

Okay.

So just so everyone's clear, right?

38 billion dollars is what is not coming into um coming into the the taxable um assessed value as a result of what we are foregoing.

So an accounting of that to help everybody understand what could come back into us would be would be helpful.

So thanks for laying that out, Ben.

And when we do have that other conversation about um TURS, right?

This this is this is why that conversation is important.

Um the stormwater um discussion, I want to echo some of the comments that some of my colleagues raised.

Um when we go to this slide about the options, though, what I'd like is um, I I think we still need to, I know sometimes we compare ourselves to ourselves, I think be really helpful just like we did in the budget season, though, uh, to compare how we our rate, our tiered structure with, you know, show me versus Dallas or Houston or Austin, so we understand where there may be some lessons learned that would be helpful here.

Um, because if we don't have that rate instruct that that tiered um rate structure correct, then these numbers may not be correct, right?

Additionally, um once we are able to look at that option, I'd like to understand an option that uh gets us to a number that we are comfortable with that has no impact on residents.

Going back to the um the forecast slide, please.

The five-year forecast slide.

Yeah, and councilwoman court hit upon this.

Um, and so uh to be very clear though, um option one, which is the do nothing option, even that we don't assume we don't see the assumed two percent increase until 2029, correct?

So it may be even possible that we have a bond capacity that is less than 625, is that right?

625 on this line we see 2% as an average.

Well, we're looking when we're modeling, we're modeling that those forecasted numbers into our models and produces $625 million dollars.

Yeah, no, understood.

But on your option slide, you assume each year at least 3.25, correct?

Right.

On that scenarios two and three.

That's right, that's right.

If we look at this though, you even on the first option, you assume two percent.

You actually, even in your own forecast, you don't get to two percent until 29, correct?

That's that's correct.

And I guess let me say something else.

No, it's like a step back that that's an average of two percent on that 625 million.

The model actually assumes those percentages in the forecast.

So for purposes of that one slide, that two percent.

That is an average.

These um forecasted numbers are actually included in our model for the six and produce a six hundred and twenty-five million dollars.

Yeah, understood.

Um I share the skepticism though of some of my colleagues where we would go from point four to quadruple that, if not more, in one year based on what we're already seeing.

Yeah.

Interested.

Okay.

Um, in terms of the the timing of the bonds, I uh am always going to support a November election.

That is when we just hear from more voters.

Um I don't I don't think that's going to the the May versus November, we're not gonna see an expedited number of projects just because we do it in in May.

So hearing from more voters, giving us more time to understand, because again, we're not just seeing these rate increases on our utilities.

Um we will have a better idea of how we intend to or how the city manager intends to um propose uh proposals on how to close the gaps, right?

We may have, we still have a hundred and forty-two million dollar budget gap going into FY27 that we need to account for.

Um, and we'll have a better idea of how our community is dealing with the implementation of the one big beautiful bill, right?

Cuts to Medicare, Medicaid, chip, and SNAP.

So I think time here really helps us understand um uh what makes the most sense economically on the bond.

Um, and I've I appreciated the comments here in terms of being intentional because of the the lower capacity.

I know I've also had conversations with many of you kind of one on one in terms of yeah, like like let's make sure we never fund that kind of thing again.

And so what I would ask is that um we also are intentional about the things that we will not fund, right?

Um, not just prioritizing, but what are those things that we're gonna not fund, right?

Some of you have said, you know, we should not fund another university's gym, right?

Some of the what are these other projects um that we know we should not be uh we should not be funding.

Um councilwoman uh Via Gara, I'm gonna put you on the spot with the leading the economic and workforce development committee.

If you'd um kind of help steer that conversation, um I've appreciated your feedback on that.

So welcome list of things that we are going to not fund, right?

Guardrail ourselves from to be able to afford the projects, the type of very good projects that you identified.

Oh, did you want me to answer more?

No, no, no.

No, no, no.

No, no, no.

Thanks.

Okay.

Good.

Okay.

Got it.

Um as we have all very clearly identified the needs in our community, um, and we are uh balancing it with what you know potential investment downtown may look like.

Um, you know, this is exactly why we do the due diligence on things.

Um and so for those folks to say, you know, how much is too much, um you know, that's why you do the due diligence before you sign the community up for 489 million dollars when you have all these other needs potentially without a true understanding of the impact of those uh of those investments.

Um and and why it's important that we not only have give people a say in in whether or not some of these projects um go forward, um, but also continue to ask more uh for what can go into the general fund to pay for these very real needs in our community.

So I look forward to working with my colleagues on that on that project.

I will share we just had a conversation in governance earlier about uh the CBA uh CV, the CBA, just as we talked a lot about infrastructure here, um the CBA 2.5 million dollars annually, um speed bumps being 16k a pop, that's 156 speed bumps a year.

That's all that CBA covers annually.

So you know when we have opportunities to ask for more for what our community needs and deserves, we should absolutely do that.

Um there isn't any additional resources coming our way.

Okay.

Um, thank you again to the uh to the staff for the presentation.

I appreciate all my colleagues' very thoughtful comments and and feedback.

Thank you.

The time is now 4.45 p.m.

on January 21st, 2026.

The city council, the city of San Antonio will now meet in executive session to consult with the city attorney's office pursuant to chapter 551 of the Texas government code and to deliberate or discuss the following items.

Economic development negotiations pursuant to section 551.087, the purchase exchange lease or value of real property pursuant to section.

Can I get quiet in the room, please?

Thanks.

The purchase exchange lease or value of real property pursuant to section 551.072 and legal issues related to litigation involving the city emergency preparedness and collective bargaining all pursuant to section 551.071.

The time is now 6.26 p.m.

on Wednesday, January 21st, and the San Antonio City Council will now reconvene an open session.

No official action was taken in executive session.

The time is now 6.27 as meetings adjourned.