[00:00:02]
ALL RIGHT. IT IS 1:06 P.M. AND WE HAVE QUORUM.
[Finance Committee on May 26, 2026.]
I WANT TO WELCOME EVERYONE TO THIS MEETING OF THE COMMITTEE ON FINANCE ON MAY 26TH, 2026.WE WILL START OFF THIS MEETING WITH THE APPROVAL OF THE MINUTES FROM APRIL 21ST, 2026.
DO I HAVE A MOTION TO APPROVE? MOTION TO APPROVE.
MOTION AND SECOND. ALL THOSE IN FAVOR, SAY AYE.
ANY OPPOSED? MOTION CARRIES. OKAY. TODAY WE'RE JUST GOING TO GO STRAIGHT DOWN THROUGH THE AGENDA.
WE'VE GOT A LOT OF MEATY ITEMS WE NEED TO TALK ABOUT IN THE MEMOS.
SO I'M NOT GOING TO GET RID OF THOSE AS EARLY AS I USUALLY DO.
SO WE'RE JUST GOING TO START OFF WITH BRIEFING ITEM A.
THE ANNUAL REVIEW OF PROPERTY TAX EXEMPTIONS, OVER 65 DISABLED HOMEOWNERS.
LET'S JUST TRY TO KEEP THESE BRIEFINGS 6, 7 MINUTES, OKAY? AND THEN WE'RE GOING TO LEAVE IT ALL FOR DISCUSSION TIME.
THANK YOU. GOOD AFTERNOON. THANK YOU, CHAIR WEST.
I WILL DO MY BEST. I'M JANETTE WEEDON, BUDGET AND MANAGEMENT SERVICES.
JOINING ME THIS AFTERNOON, SUZANNE ZEEMAN, ASSISTANT DIRECTOR.
MOVING TO SLIDE NUMBER TWO. THIS IS JUST AN OVERVIEW OF WHAT WE'LL TALK ABOUT TODAY.
ON SLIDE NUMBER THREE, YOU ALL HAVE SEEN THIS INFORMATION BEFORE.
PROPERTY TAX, AS YOU KNOW, IS OUR SINGLE LARGEST REVENUE SOURCE AT THE CITY, $1.55 BILLION SPLIT BETWEEN THE GENERAL FUND AND THE DEBT SERVICE FUND. MOVING ON TO SLIDE FOUR. THE CURRENT TAX RATE IS $69.88 PER 100 VALUATION.
THIS IS THE RATE THAT WAS ADOPTED BY CITY COUNCIL ON SEPTEMBER 17TH.
AND JUST A REMINDER, CITY COUNCIL HAS LOWERED THE TAX RATE FOR THE LAST TEN YEARS.
ON SLIDE FIVE, THE PROPERTY TAX VALUE IN DALLAS IS $226.5 BILLION FOR FISCAL YEAR 26.
PROPERTY IS CATEGORIZED BY PROPERTY USE OR PURPOSE.
CURRENT EXEMPTIONS THAT ARE AUTHORIZED BY THE CITY AND THAT CAN BE MODIFIED BY THE CITY INCLUDE THE HOMESTEAD EXEMPTION, THE OVER 65 DISABLED EXEMPTION AND THE CHILD CARE EXEMPTION.
SLIDE SIX SHOWS YOU THE GROWTH OF EXEMPTION VALUES STARTING IN FISCAL YEAR 8 AT $22 BILLION AND OUR CURRENT VALUE AT $62.6 BILLION. THE HOMESTEAD EXEMPTION IS DETAILED HERE ON SLIDE SEVEN.
CITY COUNCIL AUTHORIZED THIS EXEMPTION IN 1988.
IT IS CURRENTLY IN EFFECT FOR ALL HOMEOWNERS, AND THIS IS THE MAXIMUM AMOUNT ALLOWED BY STATE LAW.
CITY COUNCIL AUTHORIZED THIS EXEMPTION IN 1986 FOR $50,000.
IT WAS LATER INCREASED TO $64,000 IN THE SAME YEAR.
ON SLIDE TEN, YOU CAN SEE THAT, BASED ON CURRENT HOMESTEAD EXEMPTION OF 20%, THE CURRENT OVER 65 EXEMPTION AT $175,000, ELIGIBLE HOMEOWNERS WITH A PROPERTY MARKET VALUE OF $218,750, OR LESS, PAID NO CITY TAXES. THE OVER 65 EXEMPTION ACCOUNTS FOR $9.8 BILLION IN VALUE, EXEMPT FROM TAXATION, AND THAT'S ABOUT $68.2 MILLION IN REVENUE FOREGONE. THE CHART ON THE BOTTOM PROVIDES THE HISTORICAL CHANGE OF THIS EXEMPTION IN FISCAL YEAR 24, 25 AND 26. THE CHART ON SLIDE 11 REFLECTS THE REVENUE FOREGONE STARTING IN FISCAL YEAR 17 TO OUR CURRENT YEAR.
THE CHART ON SLIDE 12 REFLECTS THE HISTORICAL OR THE NUMBER OF PARCELS CLAIMING THIS EXEMPTION FROM FISCAL YEAR 17 TO THE CURRENT FISCAL YEAR. AS PREVIOUSLY MENTIONED, THE ANNUAL REVIEW OF THIS EXEMPTION IS REQUIRED PER CITY POLICY.
ANNUALLY, WE COMPARE THIS EXEMPTION TO TWO THINGS.
[00:05:01]
THE MOST RECENT ANNUAL CONSUMER PRICE INDEX FOR THE ELDERLY AND THE YEAR OVER YEAR CHANGE IN MEDIAN RESIDENTIAL MARKET VALUE.SO WE'RE COMPARING TWO THINGS AS REQUIRED IN OUR FINANCIAL POLICY.
ON SLIDE 14, WE ARE SHOWING THE RESULTS OF THE ANALYSIS.
THE CHANGE IN CONSUMER PRICE INDEX FOR THE ELDERLY INCREASED BY 3.78%, AND THE MEDIAN RESIDENTIAL MARKET VALUE INCREASED BY 0.72% FROM $381,000 TO $384,000. ON SLIDE 15, YOU CAN SEE THE ANALYSIS OF EACH SCENARIO.
SCENARIO A REFLECTS THE CHANGE IN CPIE. WITH THIS OPTION, THE EXEMPTION WOULD INCREASE FROM $175,000 TO $181,600. AND BASED ON THE NUMBER OF ACCOUNTS, ESTIMATED REVENUE FOREGONE IS $3.4 MILLION, AND THIS OPTION RESULTS IN A TAX BILL CHANGE SAVINGS OF $46.12.
OPTION B REFLECTS THE CHANGE IN MEDIAN VALUE, WHICH IS 0.72%.
THIS OPTION INCLUDES ABOUT $96.8 MILLION IN VALUE AND $700,000 IN REVENUE FOREGONE, AND A CHANGE IN THE TAX BILL OF $9.08. ON SLIDE 16, WE ARE PROVIDING OTHER TAX RELIEF OPTIONS THAT ARE AVAILABLE TO RESIDENTS AGE 65 OR OLDER, INCLUDING QUARTERLY PAYMENTS, AS WELL AS OTHER TAX DEFERRAL OPTIONS.
AND THEN NEXT STEPS. RECEIVE FEEDBACK FROM THE COMMITTEE AND A RECOMMENDATION.
SO, AGAIN, THE FMPC REQUIRES THAT THE CITY COMPARE THE EXEMPTION TO CPIE AND THE YEAR OVER YEAR CHANGE IN RESIDENTIAL MARKET VALUE, AND PROVIDE THE ANALYSIS OF EACH SCENARIO TO CITY COUNCIL FOR CONSIDERATION.
THE ANALYSIS HAS BEEN PROVIDED. THE COMMITTEE CAN MAKE A RECOMMENDATION TO MOVE FORWARD WITH A CHANGE TO THE OVER 65 DISABLED EXEMPTION, OR RECOMMEND NO ACTION. IF ACTION IS CONSIDERED, IT WILL BE PRESENTED TO CITY COUNCIL ON JUNE 10TH.
I WOULD LIKE TO POINT YOUR ATTENTION TO THE APPENDIX.
WE HAVE ADDED A MAP IN THE APPENDIX THAT SHOWS OVER 65 DISABLED PROPERTIES IN DALLAS, AND THESE PROPERTIES CHOSE THE PROPERTIES THAT HAVE AN OVER 65 OR DISABLED EXEMPTION JUST FOR YOUR AWARENESS.
AND SO SLIDE 17 CONCLUDES OUR PREPARED REMARKS.
SO COLLEAGUES, YOU GUYS HAVE ALL BEEN AROUND FOR AT LEAST ONE TERM.
YOU KNOW WE DO THIS EVERY YEAR. AND I KNOW STAFF IS ASKING FOR SOME FEEDBACK FROM US.
I WOULD LIKE TO END THIS DISCUSSION AFTER WE GET DONE WITH IT, WITH A RECOMMENDATION TO COUNCIL FOR AN OPTION, WHETHER THAT IS TO GO WITH THE CPI, WHICH IS WHAT WE USUALLY RECOMMEND, WHICH IS 3.78%.
WE GO MAYBE CONSIDER GOING TO THE YEAR TO YEAR CHANGE, WHICH WOULD BE 0.72% OR SOMETHING ELSE.
AND SO WITH THAT BEING SAID, I'M GOING TO START.
WOULD YOU LIKE TO START, VICE CHAIR. OKAY. DEPUTY MAYOR PRO TEM, WOULD YOU LIKE TO KICK US OFF? SURE. AS WE LOOK AT THIS, I MEAN, IT'S HARD TO LOOK AT THIS JUST ALONE WHEN WE LOOK AT OUR NEXT AGENDA ITEM AS WELL AS OTHER THINGS BEFORE OUR RESIDENTS.
SO I WAS JUST WONDERING, WHEN IT COMES TO OVER 65 AND DISABLED, WE KNOW THAT THERE ARE, IN ADDITION TO SOME INCREASES THAT WE HAVE ON PROPERTY VALUES THAT MIGHT TAKE EVEN IF WE LOWER THE PROPERTY TAX RATE, IT STILL MAY FEEL LIKE MORE. BUT I WAS WONDERING, SINCE SO MANY PEOPLE RECEIVE SOCIAL SECURITY INCOME WHAT THE PROJECTED COLA IS ON THAT, BECAUSE THEY DO GET A COLA, COST OF LIVING ADJUSTMENT ON THAT, JUST SO WE UNDERSTAND THE WHOLE PICTURE OF, YOU KNOW, WHAT KIND OF BENEFIT SOMEONE MIGHT BE DERIVING.
WE'RE LOOKING THAT UP. WE'LL COME BACK TO THAT QUESTION.
OKAY. OH, IT LOOKS LIKE FOR 2026 IS 2.8%. AND THEN PROJECTION INTO THE NEXT YEAR? I DON'T THINK IT'S RESOLVED UNTIL THE FALL. WE'LL HAVE TO GET BACK.
BUT RIGHT NOW WE'RE SHOWING 2.8% FOR 2026. SO THAT'S RETROACTIVE.
THAT WAS ALREADY DONE. AND SO, DEPUTY MAYOR PRO TEM, I'VE ALSO REACHED OUT TO DAVID ETHERIDGE AT ERF, AND HE'S TRYING TO SEND ME SOME INFORMATION TO ANSWER YOUR QUESTIONS, SO. SURE.
HOPEFULLY WE CAN ANSWER IT BEFORE.
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OKAY. I'D SEEN A FLUX BETWEEN AROUND 3.9 TO 4.2.SO JUST TO THINK ABOUT THAT KIND OF OFFSET TOO.
THANK YOU. OKAY. CHAIRMAN GRACEY, GO AHEAD. THANK YOU.
ONE, I WANT TO START WITH THIS APPENDIX JUST SO I CAN MAKE SURE I'M UNDERSTANDING I'M LOOKING AT THIS CORRECTLY. IS THIS BASED ON THE VALUE OF THE HOMES, THIS KIND OF LOOKING AT THE BLUE OR IS THAT WHAT THAT IS WHY YOU WOULD SEE MORE OF THE DARKER BLUE IN THE NORTH BECAUSE THE VALUES ARE HIGHER? IS THAT. SO IT'S NOT THAT PEOPLE AREN'T FILING FOR THEIR EXEMPTIONS.
IT'S JUST THE VALUES. THAT'S WHAT MAKES THESE SHADES DARKER VERSUS THE LIGHTER. CORRECT.
OKAY. SO IF YOU LOOK AT THE SCALE ON THE TOP PART OF THE CHART.
YEAH. IT'S SHOWING YOU THE CITY VALUES AND THERE'S A BREAKDOWN OF THE VALUES.
PERFECT. OKAY. ALL RIGHT. ALL RIGHT. AND THEN, JUST FOR CLARITY, OUR OPTIONS ARE ON SLIDE 15, MR. CHAIR, JUST IN TERMS OF WHAT WE'RE NEEDING TO DECIDE TODAY BETWEEN LEAVE IT THE SAME OPTION, SCENARIO A OR SCENARIO B? THAT IS CORRECT. SO THE FMPC REQUIRES AN ANNUAL REVIEW TO LOOK AT CPIE OR MEDIAN VALUE AND MAKE A RECOMMENDATION. HISTORICALLY, WE'VE CHOSEN WHICHEVER IS GREATER.
AND THAT'S HOW THE FMPC READS. OKAY. ALL RIGHT.
WELL AND JUST TO CLARIFY, THOSE ARE TWO OPTIONS.
WE COULD ALSO CHOOSE TO DO NO INCREASE WHATSOEVER OR SOMETHING IN BETWEEN THOSE, FOR EXAMPLE.
THAT IS CORRECT. THE FMPC REQUIRES AN ANNUAL REVIEW AND THE ANALYSIS PROVIDED TO CITY COUNCIL.
THAT'S THE WAY I FRAMED IT. BUT WE DON'T HAVE TO STICK WITH THAT.
THANK YOU, MR. CHAIR. I JUST WANT TO MAKE SURE I WAS THINKING THE SAME WAY. MAYOR PRO TEM. THANK YOU, CHAIR. I BELIEVE IT'S PAGE 29 WHERE IT HAS THE CITY MAP. IT'S 20. 20. I'M SORRY. IF WE CAN GO TO PAGE 20.
AND SO THE DARKER AREAS ARE WHERE WE'RE SEEING MORE HOME EXEMPTIONS FOR OUR SENIORS? NO. SO THE WAY TO READ THIS MAP, IT'S SHOWING YOU ALL.
THE PROPERTIES LISTED ON THIS MAP RECEIVE AN OVER 65 DISABLED EXEMPTION.
SO EVERYTHING ON THIS MAP ARE PROPERTIES RECEIVING THE EXEMPTION.
CORRECT. AND SO WHEN YOU LOOK AT CITY TAX VALUES, THERE'S A SCALE.
SO ANYTHING IN THAT LIGHT BLUE, THE VALUE IS $219,000 OR LESS.
OKAY. DO WE HAVE ANY CORRELATION OR OVERLAY ON HOME OWNERSHIP? SO ARE WE SEEING MORE EXEMPTIONS IN THE NORTHERN SECTOR, BECAUSE WE HAVE INDIVIDUALS THAT THEY OWN THEIR PROPERTY VERSUS IN THE SOUTHERN SECTOR? SO I THINK, TO REPHRASE YOUR QUESTION, SO ARE YOU ASKING FOR AN OVERLAY OF ALL OF THE PROPERTIES TO SEE WHO IS ELIGIBLE FOR AN EXEMPTION AND WHO'S TAKING THE EXEMPTION? THAT'S RIGHT. AND THE REASON I BRING THAT UP IS THAT WE WERE GOING TO NATURALLY SEE HOME OWNERS BE ABLE TO TAKE ADVANTAGE OF THE SAVINGS, BUT THE RENTERS ARE GOING TO HAVE THAT PASSED ON REGARDLESS OF PROPERTY TAXES.
AND SO THIS IS BENEFITING THOSE WHO HAVE HOME OWNERSHIP, BUT NOT NECESSARILY RENTERS.
AND SO I'M JUST TRYING TO SEE HOW WE'RE ABLE TO SEE THAT CORRELATION BETWEEN THE TWO.
SO YOU ARE ABSOLUTELY CORRECT. SO THIS MAP IS SHOWING.
THE TWO EXEMPTIONS THAT ARE AVAILABLE ARE AVAILABLE TO PROPERTY OWNERS.
SO IT'S THE 20% HOMESTEAD EXEMPTION, YOUR OWNER OCCUPIED LIVING IN THE HOME AND THEN THE OVER 65.
SO THE PROPERTY OWNER MAKES THEIR DECISION ON WHAT THEY INCLUDE IN THE RENT, WHETHER THEY INCLUDE THE TAXES, HOW THEY DEAL WITH THAT. BUT ANY CHANGE TO A PROPERTY TAX EXEMPTION DOES NOT BENEFIT A LANDLORD OR AN OWNER OF A RENTAL PROPERTY,
[00:15:08]
BECAUSE THESE EXEMPTIONS ONLY APPLY IF YOU OWN THE HOME AND LIVE IN IT, AND IN THIS CASE, ARE OVER 65. ALL RIGHT. THANK YOU. I'M CURIOUS, WHEN WE'RE DOING THE COMMUNITY SURVEYS, IF THIS IS A QUESTION THAT'S ASKED OF OUR RESIDENTS, THE BENEFITS OF THE TAX BREAKS FOR PROPERTY TAXES FOR OUR SENIOR RESIDENTS, IS THAT SOMETHING THAT IS EVALUATED? NO, THAT'S NOT A QUESTION ON OUR COMMUNITY SURVEY, BUT WE CAN CERTAINLY EXPLORE IT AS AN OPTION.WE DO ASK THE QUESTION IN TERMS OF THE VALUE OF THE VALUE OF THE SERVICES THAT YOU RECEIVE IN RELATIONSHIP TO THE TAXES THAT YOU PAY. SO THAT'S THE QUESTION WE ASKED RELATED TO TAXES.
SO UNDERSTANDING THAT WE'RE GOING INTO SOME TIGHT BUDGET CONSTRAINTS, OBVIOUSLY EVERY PENNY, EVERY DOLLAR MATTERS. AT THE SAME TIME, WE KNOW THAT WE'RE SEEING TAX RATE INCREASES FOR UTILITIES AND FOR FEES WITHIN THE CITY OF DALLAS.
SO I HAVE SOME CONCERN ON LOWERING THE RATE OR KEEPING IT FLAT JUST BECAUSE I DO KNOW THAT OUR SENIOR RESIDENTS ARE ALSO JUST LIKE THE CITY ARE STRUGGLING AS WELL.
SO THANK YOU. THANK YOU, VICE CHAIR STEWART. THANK YOU, CHAIR.
SO A COUPLE QUESTIONS. ON SLIDE 12 WHERE WE HAVE AN INCREASE IN THE NUMBER OF PARCELS, WHAT CONTRIBUTES TO THAT NUMBER? MORE PEOPLE LIVING IN THE CITY WHO ARE OVER THE AGE 25? SEEMS LIKE THAT WOULD BE THE CATEGORY WHERE YOU SEE THE INCREASE.
SO IT'S AN INCREASE IN THE NUMBER OF PEOPLE WHO ARE TAKING ADVANTAGE OF THE EXEMPTION.
SO IT'S PROBABLY A COMBINATION OF BOTH. AND I KNOW THAT THE TAX OFFICE, THEY HAVE A VERY.
AND AS YOU INCREASE THE EXEMPTION, MORE PROPERTIES FALL UNDER THAT LEVEL.
SO WHEN WE HAD AN EXEMPTION OF JUST 64,000, THAT WAS FEWER PROPERTIES.
WHEN WE INCREASED IT TO 100,000, MORE PROPERTIES FELL UNDER THAT THRESHOLD.
AND JUST AS A POINT, ON THE MAP THAT JANETTE REFERENCED, FOR ANY PROPERTY THAT IS BELOW $218,750, THEY DO NOT OWE CITY PROPERTY TAXES, BECAUSE IF YOU HAVE A 20% HOMESTEAD EXEMPTION AND A CURRENT $175,000 OVER 65 EXEMPTION, THE MATH IS THAT IF YOUR PROPERTY IS VALUED AT $218,750 OR LESS, THOSE TWO EXEMPTIONS WIPE OUT YOUR TAXABLE VALUE.
AND THAT'S WHY THE CUTOFF ON THE MAP, ON THE LEGEND, THE FIRST COLOR IS UP TO $219,000.
TRYING TO CAPTURE FOR YOU WHERE THOSE PROPERTIES AND BELOW FALL.
THAT'S HELPFUL. THANK YOU. AND THEN. AND YOU MAY HAVE COVERED THIS AND I JUST MISSED IT.
IN THE PAST, WHICH METHOD HAVE WE RELIED ON? THE A OR THE B? HAVE WE LOOKED AT THE CPI OR THE ANNUAL GROWTH? SO THIS FMPC WAS CHANGED IN MARCH OF LAST YEAR.
AND SO WE'VE LOOKED AT A NUMBER OF DIFFERENT THINGS.
BUT THE WAY IT CURRENTLY READS, IT'S CPIE OR MEDIAN VALUE, WHICHEVER IS GREATER.
PRIOR TO LAST YEAR, IT WAS THE AVERAGE. SO IN 2021, WE WERE FROM 2021 TO 2025. WE WERE LOOKING AT THE AVERAGE RESIDENTIAL VALUE, WHICHEVER IS GREATER.
AND THEN IN 2017, FROM 2017 TO 2021, WE WERE ONLY REVIEWING IT EVERY OTHER YEAR.
SO NOW WE'RE REVIEWING IT ANNUALLY AND WE'RE LOOKING AT THE MEDIAN VALUE.
OKAY. THAT'S HELPFUL. AND THE CPI. I'M SORRY.
ARE YOU FINISHED? CHAIRMAN RIDLEY. YEAH. THANK YOU, MR. CHAIR, FOR ALLOWING ME TO PARTICIPATE IN THE DISCUSSION.
22,000 JUST LAST YEAR AND ABOUT 15 PLUS THE PREVIOUS YEAR.
[00:20:05]
THAT'S A DIFFICULT TREND TO MAINTAIN WITHOUT MAKING SIGNIFICANT INROADS IN OUR PROPERTY TAX REVENUE.I THINK IT'S TIME THAT WE TOOK STOCK OF OUR FINANCIAL SITUATION AS A CITY, CONSIDERING THE CURRENT BUDGET ANTICIPATED BUDGET SITUATION BEING VERY TIGHT.
AND THE FACT THAT WE HAVE RAISED THESE EXEMPTIONS SUBSTANTIALLY IN THE PAST FEW YEARS.
AND I WOULD SUGGEST THAT WE KEEP THE CURRENT LEVEL OF $175,000 FOR THE OVER 65 EXEMPTION IN ORDER TO AVOID REDUCING OUR REVENUES. I NOTE FROM THE TABLE OF OUR OPTIONS THAT THE CPI OPTION WOULD FOREGO $3.4 MILLION IN REVENUE, WHICH WOULD BE ENOUGH TO KEEP ALL OF OUR BRANCH LIBRARIES OPEN THEIR NORMAL HOURS AND LEAVE $800,000 FOR OTHER PURPOSES. SO THAT'S A MATERIAL AMOUNT OF MONEY IN OUR CURRENT BUDGET.
I APPRECIATE YOU BEING HERE AND FOR YOUR COMMENTS TODAY.
OKAY. WE'VE GONE THROUGH EVERYBODY FOR ROUND ONE.
DOES ANYONE HAVE A ROUND TWO AT THIS POINT? I'LL MAKE SOME COMMENTS AS WELL.
I FORGOT I HADN'T DONE THAT ALREADY. I AGREE WITH WHAT MR. RIDLEY JUST POINTED OUT. I THINK WE HAVE WE WANT TO DEFINITELY TAKE CARE OF OUR SENIORS AND OUR HOMEOWNERS.
BUT WE ALSO HAVE A DUTY TO THE CITY TO PAY FOR SERVICES.
MAKE SURE THAT WE MEET OUR OBLIGATIONS TO OUR RESIDENTS.
BUT I'LL ASK AT THIS POINT IF ANY OF MY COLLEAGUES HAVE A MOTION TO RECOMMEND.
OKAY, WE'LL TAKE A QUESTION AND THEN WE'LL GO BACK TO THE MOTION.
SORRY. THANK YOU, MR. CHAIR. EXCUSE ME. ON THAT MAP AGAIN, DO WE KNOW HOW MANY OF OUR RESIDENTS THAT DO QUALIFY, HAVE NOT FILED FOR THOSE EXEMPTIONS? AND I DON'T KNOW THAT THERE'S A WAY WE CAN GET THAT KIND OF INFORMATION, BECAUSE I'M INCLINED TO KEEP IT FLAT AS WELL.
BUT I ALSO WANT TO KNOW, IF WE DO KEEP IT FLAT, ARE THERE RESIDENTS THAT HAVE NOT, THAT COULD BENEFIT FROM THIS? SO YOU HAVE THAT LOOK. SO I'LL WAIT FOR THE RESPONSE.
WE CAN INCREASE OUR OUTREACH EFFORTS TO GET THE WORD OUT, BUT.
WELL, AND I WAS GOING TO SAY, AND I KNOW THERE'S ORGANIZATIONS AND IF THEY'RE LISTENING, FORGIVE ME BECAUSE I CAN'T CALL THE NAMES RIGHT NOW, BUT I KNOW THEY'VE HAD SOME, IN MY DISTRICT, IN FACT, WHO HAVE OUT BEEN OUT WORKING TO ENSURE THAT THERE'S.
IN FACT, I WENT OUT AND WALKED WITH THEM, WHICH I HATE. I CAN'T REMEMBER THE NAME, BUT I KNOW THEY'RE THERE. I JUST WANT TO MAKE SURE. AGAIN, I'M INCLINED TO KEEP IT FLAT AS WELL, BUT I JUST WANT TO MAKE SURE FOR THOSE WHO DO QUALIFY, WE STILL CONTINUE THOSE OUTREACH EFFORTS. THANK YOU, MR. CHAIR. THANK YOU. DO WE HAVE A MOTION? YES. I MOVE THAT WE KEEP THE OVER 65 AND DISABLED EXEMPTION AMOUNT AT $175,000. SECOND.
ALL RIGHT. THAT'S A MOTION AND A SECOND. ANY COMMENTS? MAYOR PRO TEM. THANK YOU. I'M NOT GOING TO SUPPORT THE MOTION.
LOOK FORWARD TO WHAT MY COLLEAGUES HAVE TO SAY AT FULL COUNCIL.
AND OBVIOUSLY, THEY'VE COMMITTED TO OUR CITY FOR GENERATIONS AND, YOU KNOW, FEEL THAT IT'S OUR DUTY TO ENSURE THAT WE ARE LOOKING OUT FOR THEIR BEST INTERESTS AS WELL, BUT I LOOK FORWARD TO THE DISCUSSION AT FULL COUNCIL. THANK YOU. THANK YOU.
[INAUDIBLE]. NO, I WANT TO ACKNOWLEDGE THAT IT IS A BALANCE.
AND MAYOR PRO TEM HAS MADE THAT POINT. WE DO NEED TO LOOK OUT FOR THOSE WHO ARE ON A FIXED INCOME, AND THIS IS A DIFFICULT FINANCIAL DECISION FOR THEM, OR OBLIGATION FOR THEM.
SO I DO WANT TO GET THAT INFORMATION AS WELL.
AND WE DO NEED TO MAKE SURE WE CONTINUE TO DO OUTREACH.
WE NEED TO DO ALL THAT WE CAN TO MAKE SURE EVERYONE IS TAKING ADVANTAGE OF THIS EXEMPTION, AND THAT THIS EXEMPTION IS, IN FACT, WORKING FOR THE VAST MAJORITY OF OUR RESIDENTS.
[00:25:02]
ON THE OTHER HAND, WE HAVE A BUDGET. DARE WE CALL IT CRISIS.OR CERTAINLY WE HAVE A BUDGET WITH A LOT OF PRESSURES ON IT.
AND SO WE ARE GOING TO HAVE TO FIND WAYS AND LOOK FOR WAYS TO FIND ADDITIONAL REVENUE FOR SOME OF OUR BASIC SERVICES. AND THAT WOULD BE LIBRARIES, REC CENTERS, FIXING POTHOLES.
WHEREVER WE USE OUR GENERAL FUND, WE NEED TO TRY TO PRESERVE AND FIND THE DOLLARS THAT WE NEED TO FULFILL OUR OBLIGATIONS THERE. SO IT IS A BALANCE. IT'S A DELICATE BALANCE.
AND IT'S ABSOLUTELY TRUE THAT WE SHOULD BE LOOKING AT EVERYTHING.
BUT I DO ENCOURAGE US TO KEEP THAT BALANCE IN MIND AS WE MAKE THIS DECISION.
THANK YOU. THANK YOU VERY MUCH. ALL RIGHT. I DON'T SEE ANY OTHER LIGHTS.
SO ALL THOSE IN FAVOR OF THE MOTION ON THE FLOOR, SAY AYE.
AYE. ANY OPPOSED? OKAY. WE GOT TWO NAYS AND WE GOT THREE AYES.
SO THE MOTION CARRIES. THANK YOU. ALL RIGHT. NEXT WE'RE GOING TO MOVE ON TO ITEM B.
THIS IS THE ATMOS DALLAS ANNUAL RATE REVIEW FILING FOR 2026.
NICK, COME ON DOWN. ALL RIGHT. THANK YOU FOR BRIGHTENING OUR DAY.
YEP. SORRY ABOUT THAT. THANK YOU, CHAIRMAN. IT'S NICE TO BRIGHTEN THE DAY WHEN I HAVE TO GIVE SUCH WONDERFUL NEWS ABOUT A RATE INCREASE, BUT ANYWAY. PURPOSE TODAY IS TO UPDATE THE COMMITTEE ON THE CURRENT DALLAS ANNUAL RATE REVIEW, OR DARR FILING BY ATMOS. I'D LIKE TO BRIEFLY LOOK AT LAST YEAR'S CASE, GO OVER THE CURRENT CASE.
THE PROPOSED SETTLEMENT AGREEMENT, THE OPTIONS FOR THE COUNCIL AND CITY MANAGER'S RECOMMENDATION.
THE CITY DID SETTLE THAT RATE CASE ON MAY 28TH, 25.
BY ORDINANCE, WE SET RATES GRANTED A $27.9 MILLION INCREASE.
BUT THAT'S HISTORY. LET'S TALK ABOUT THE CURRENT YEAR.
JANUARY 15 TO 26, ATMOS FILED ITS ANNUAL RATE REVIEW ONCE AGAIN THIS YEAR, THEY WERE SEEKING $38.1 MILLION FROM CUSTOMERS WITHIN THE CITY OF DALLAS RATES TO BECOME EFFECTIVE JUNE 1ST. ALTHOUGH ATMOS HAS HAD SOME CHANGES IN THEIR OPERATING EXPENSES, THE MAIN DRIVER IN THIS RATE CASE IS THE AMOUNT OF MONEY THEY'RE INVESTING IN NEW PLANT PIPE IN THE GROUND AND VIRTUALLY ALL OF WHICH THEY HAVE IDENTIFIED AS SAFETY RELATED. THEY SPENT OVER $321 MILLION ON NEW CAPITAL INVESTMENT TO REPLACE 36 MILES OF PIPE WITHIN THE CITY OF DALLAS, AS WELL AS REPLACING 3500 SERVICE LINES IN THE CITY OF DALLAS.
THE CITY RETAINED NEW GEN STRATEGIES AND SOLUTIONS TO HELP US REVIEW THE FILING.
IT'S OUR FIRST TIME USING THIS FIRM. WE WANTED A FRESH SET OF EYES ON IT.
UNDER THE PROPOSED SETTLEMENT, ATMOS WILL INCREASE THE RATES WITHIN DALLAS BY $34.1 MILLION.
THAT'S ABOUT A $4 MILLION SAVINGS OFF THE REQUEST.
RATES WILL BECOME EFFECTIVE JUNE 1ST. FOR THE AVERAGE RESIDENTIAL CUSTOMER.
THAT'LL BE A BILL INCREASE OF 946 PER MONTH. FOR THE AVERAGE COMMERCIAL CUSTOMER, THAT'S $32, $35 PER MONTH. AND ATMOS WILL REIMBURSE OUR EXPENSES IN REVIEWING THE CASE.
AND THOSE ARE NOT PASSED ON TO CUSTOMERS. I WANTED TO TOUCH BRIEFLY ON THIS CONCEPT OF THE AVERAGE BILL, BECAUSE IT'S A LEGAL REQUIREMENT FOR ATMOS TO GIVE NOTICE OF THE AVERAGE BILL, AND THE AVERAGE RESIDENTIAL CUSTOMER IN DALLAS USES 46.900 CUBIC FEET, OR CCF OF GAS. REALISTICALLY, NO ONE ACTUALLY USES THAT AMOUNT IN ANY GIVEN MONTH.
THE AVERAGE CUSTOMER IN JANUARY USES 122 CUBIC FEET, BUT IN AUGUST ARE ONLY USING ABOUT 13.6 CCF.
SO THIS YEAR, WE DID PUT IN A CHART COMPARING WHAT THAT AVERAGE BILL IS, AS WELL AS WHAT A AVERAGE WINTER BILL OR AUGUST BILL IS, COMPARING FROM THE CURRENT RATES TO THE REQUESTED RATES, TO THE SETTLEMENT RATES AND GIVING THE SAVINGS THERE.
THE SETTLEMENT RATES WILL SAVE THAT AVERAGE CUSTOMER ABOUT $1.10 A MONTH.
[00:30:04]
WE GOT A LOT OF FEEDBACK ON RATE DESIGN THAT CUSTOMERS DIDN'T LIKE THE HIGH CUSTOMER CHARGE.SO IT WAS TRYING TO GIVE A LITTLE MORE FLEXIBILITY THERE.
THE OPTIONS AVAILABLE TO THE CITY ARE TO, NUMBER ONE, ADOPT THE PROPOSED SETTLEMENT.
RATES WOULD INCREASE BY $34 MILLION EFFECTIVE JUNE 1ST, OUR EXPENSES ARE REIMBURSED.
THE CITY COUNCIL COULD SET RATES AT SOME AMOUNT LESS THAN THE PROPOSED SETTLEMENT.
HOWEVER, ATMOS WOULD HAVE THE RIGHT TO APPEAL THAT DECISION TO THE RAILROAD COMMISSION OF TEXAS, AND IF THEY FILE THAT APPEAL, THEY CAN IMPLEMENT THE FULL AMOUNT OF THE REQUESTED RATES SUBJECT TO REFUND, WHILE THAT APPEAL IS PENDING. THE COUNCIL COULD ALSO JUST DENY THE REQUEST.
BUT AGAIN, ATMOS COULD APPEAL THAT DECISION, IMPLEMENT THE FULL AMOUNT OF THE RATE REQUEST.
IT'S NOT REALLY LISTED AS AN OPTION FOUR BECAUSE IT'S NOT VIABLE.
SO THE CITY MANAGER DOES RECOMMEND ADOPTING THE PROPOSED SETTLEMENT.
I WOULD SAY DALLAS RESIDENTS, $4.1 MILLION ANNUALLY.
ALSO AVOIDS THE ADDITIONAL EXPENSE IN LITIGATING A CASE THERE.
AND RATE CASE EXPENSES WOULD BE SURCHARGED TO CUSTOMERS IF IT WENT ON APPEAL.
I BELIEVE THAT'S ITEM 32 ON YOUR AGENDA. OUR DEADLINE IS MAY 30TH.
IN ADDITION, THE CITY IS GOING TO WORK WITH ATMOS TO HELP EDUCATE RESIDENTS ABOUT THE AVAILABLE BILL ASSISTANCE PROGRAMS. THERE ARE A NUMBER OF THEM THAT ATMOS HELPS FUND.
AND WITH THAT, I WILL OPEN IT UP TO ANY QUESTIONS.
OKAY. THANK YOU FOR YOUR PRESENTATION. I'LL GO TO MY RIGHT.
MAYOR PRO TEM, DO YOU HAVE QUESTIONS? NOT YET? OKAY. ALL RIGHT, DEPUTY MAYOR PRO TEM.
THANK YOU. SO I WANT TO GO BACK THROUGH THE ANNALS OF HISTORY AND GO BACK TO PAGE 22.
THIS MAY BE IN THE APPENDIX. SO, YOU KNOW, BECAUSE RESIDENTS, THEIR REACTION IS, NO, DON'T DO THIS.
DON'T WANT IT. AND THEY DON'T UNDERSTAND THE PROCESS THAT WE SEEM TO GO THROUGH ANNUALLY ON THIS.
SO IT LOOKS LIKE IN 2008, THE CITY OR ATMOS REQUESTED AN INCREASE OF $9 MILLION.
IS THAT IT? THAT IS CORRECT. I WOULD LIKE TO.
THE 2008 WAS A FULL RATE CASE, NOT AN ANNUAL REVIEW.
IN THE FULL RATE CASE, THE MAIN DRIVER ON THAT WAS RATE OF RETURN, AS WELL AS COST ALLOCATIONS, DEPRECIATION, CAPITAL STRUCTURE. THESE ARE ISSUES THAT WE CAN LITIGATE AND PREVAIL AT THE RAILROAD COMMISSION.
THE RATE OF RETURN BEING ONE OF THE BIGGEST ITEMS. AND YES, THEY HAVE EXPERTS THINKING THEY SHOULD GET 12% ON INVESTED CAPITAL.
AND WE SAY EIGHT AND WE SETTLE SOMEWHERE IN THE MIDDLE.
THE ANNUAL RATE REVIEW, WHICH WE HAVE BEFORE US NOW, IS JUST ABOUT THEIR CHANGES IN THE INVESTMENT.
THEY'RE NOT APPLES TO APPLES. YEAH. YOU CAN'T REALLY COMPARE A FULL CASE TO JUST A REVIEW.
IF YOU LOOK AT THE RATE REVIEW HISTORY ON PAGE 21 WHERE WE WERE DOING OUR CASES, YOU'LL NOTICE IN 17, THE COUNCIL REJECTED THE SETTLEMENT AGREEMENT THAT WE HAD NEGOTIATED.
IT WENT ON APPEAL AT THE RAILROAD COMMISSION.
THEY HAD ASKED ORIGINALLY FOR 10.7, AND THE RAILROAD COMMISSION GAVE THEM 9.9.
THE NEGOTIATED SETTLEMENT THAT YEAR WAS $7.8 MILLION.
IT'S NOT A FAVORABLE VENUE FOR CONSUMERS OR CITIES.
I'M SORRY. THERE'S A LOT OF CROSS TALK, AND I DON'T KNOW WHAT'S GOING ON IN THAT BACK ROOM, BUT IT NEEDS TO SETTLE DOWN. BUT COULD YOU PULL THAT MIC CLOSER TO YOU BECAUSE THIS IS LIKE A BIG CAVERN AND IT'S HARD TO MAKE OUT WHAT YOU'RE SAYING? OKAY. IS THAT BETTER? WELL, WE DON'T HAVE TO GO THROUGH ALL OF THAT, BUT I'M JUST SAYING YOU'RE CALLING OUT SOME DISTINCTIONS OF WHERE WE CHALLENGED.
[00:35:01]
YES. AND ON PAGE 21, WE WENT THROUGH THE DARR CASE REVIEW.OUT OF THE $10.7 MILLION THEY REQUESTED, THE RAILROAD COMMISSION GAVE THEM 9.9 ON APPEAL.
PRETTY MUCH EVERYTHING THEY'D ASKED FOR, THAT WAS.
SO GOT A COUPLE MILLION MORE THROUGH THAT PROCESS.
AND THEN THE WHAT YOU'RE COMING BACK WITH IS $4 MILLION.
SO TELL ME WHAT COMPRISED THAT. I GUESS IT SAYS COPY ATTACHED.
I'M SORRY, I DON'T KNOW IF I BROUGHT THAT IN WITH ME.
WHAT I MEAN, WERE THERE SOME STICKING POINTS IN THERE? I MEAN, CLEARLY, YOU KNOW, BETWEEN YOU AND NEXT GEN, IT WAS DETERMINED THAT THERE WAS, YOU KNOW, $5 MILLION MORE THAT GOT LEFT ON THE TABLE. THERE ARE SEVERAL ISSUES GOING THROUGH THAT CONSULTANTS REPORT, AND SOME OF THEM ARE QUITE TECHNICAL. ON INCENTIVE COMP FOR EXECUTIVES, WE HAVE A DIFFERENT OPINION.
ATMOS, IN OUR LAST FULLY LITIGATED CASE FOR THE CITY OF DALLAS, WE PREVAILED ON THOSE ISSUES.
SO THAT'S ONE OF THOSE THINGS THAT WE DIFFER ON.
I'M NOT SURE WHICH WAY YOU GO IF WE FULLY LITIGATED THE CASE, BUT THE DARR TARIFF KEEPS A LOT OF THE RATE DESIGN STRUCTURES AND THESE OTHER ISSUES THAT WERE RESOLVED IN OUR LAST CASE, STRICTLY SEPARATE AND.
HAVE THEY WON THOSE ISSUES IN OTHER CITIES? YES.
BUT WE DON'T THINK THEY APPLY TO US. SO WE HAVE A DISCREPANCY THERE.
THERE ARE SOME TREATMENT OF TAXES IN THERE THAT, AGAIN, WE DISAGREE ON.
I'M TRYING TO REMEMBER ALL THE ISSUES IN THE CONSULTANT.
SO, UNCOLLECTIBLE EXPENSE ADJUSTMENT. SO I GUESS FOR THE UNCOLLECTIBLE, YOU KNOW, THE CITY OR THE RESIDENTS OF DALLAS ARE GETTING HIT WITH THAT.
OKAY. I MEAN, SOME OF IT SEEMS LIKE VERY MINOR ADJUSTMENTS.
SO, I MEAN, THE DOWNSIDE IS, IF WE WERE TO APPEAL, THE RATES COULD GO INTO EFFECT IMMEDIATELY.
LOOKS LIKE, YOU KNOW, THAT TAKES A YEAR AND A HALF TO PLAY OUT.
AND THEN IF THE CITY PREVAILED, THEN IT WOULD BE A REIMBURSEMENT SITUATION.
THEY WOULD BE REFUNDED BACK TO CUSTOMERS IF WE PREVAILED.
BUT AS I SAID, THE RAILROAD COMMISSION IS NOT A FRIENDLY FORUM, AND IT'S REAL EASY FOR THEM TO APPROVE RATES IF THEY'RE ALREADY IN PLACE BECAUSE THEY'RE ALREADY BEING CHARGED. OPEN IN 2017, THERE WAS FAVORABILITY TO THE TUNE OF $2 MILLION.
IS IT A DIFFERENT. I MEAN, WE'VE GOT DIFFERENT PEOPLE PRESENT.
ARE YOU SAYING THE CLIMATE IS DIFFERENT? NO, IT'S.
WELL, IT'S A DIFFERENT RAILROAD COMMISSION, DIFFERENT COMMISSIONERS NOW.
BUT ON THAT. I MEAN, I REALIZE THIS IS, YOU KNOW, BEST GUESS.
YEAH. I MEAN, THE REQUEST ON THAT WAS 10.7 AND THEY AWARDED 9.9.
THAT $800,000 WAS PROBABLY TECHNICAL CORRECTIONS THAT WE DID IDENTIFY.
AS FAR AS THE ISSUES, RAILROAD COMMISSION DID NOT RULE IN OUR FAVOR ON ANY OF THAT.
YEAH, I JUST I MEAN, IT'S GREAT THAT WE BREAK THIS DOWN SO THAT YOU LOOK AT IT BY THE MONTH, BUT IT'S STILL $114 FOR THE AVERAGE RESIDENT.
I MEAN, IT SOUNDS LIKE WE GO THROUGH THE SAME EXERCISE EVERY YEAR.
I'M JUST, YOU KNOW, TRYING TO UNDERSTAND ALL THOSE TECHNICAL POINTS IN THE $9 MILLION PUT ON THE TABLE, YOU KNOW, WHY WE CAME BACK WITH FOUR. AND THE MAIN DRIVER IN THIS CASE IS THEIR INVESTMENT IN PLANT, WHICH UNDER THE STATUTE, THEY'RE ENTITLED TO RETURN, GET A RETURN ON THEIR INVESTMENT AND DEPRECIATION.
SO IT'S THAT INVESTMENT IN PLANT THAT'S DRIVING IT.
AND I HAVE NEVER PREVAILED ON ARGUING TO REMOVE INVESTMENT OUT OF RATES.
[00:40:06]
THAT'S PRETTY CLEAR CUT IN THE STATUTE. IF THEY ACTUALLY PUT PIPE IN THE GROUND, SPEND THE MONEY FOR IT, THEY GET A RETURN ON THAT. AND THAT IS VERY HARD TO OVERCOME.SINCE 2016, ATMOS HAS BEEN DOING A LOT OF PIPE REPLACEMENT.
AND I'M NOT GOING TO SAY DON'T REPLACE PIPE, BUT IT'S COSTING A LOT OF.
I MEAN, IT'S REALLY HELPFUL IF YOU LOOK AT WHAT HAS BEEN DONE.
I MEAN, IT'S EVIDENT. AND THEN WHEN YOU SEE IN THE RED, YOU KNOW WHAT'S COMING DISTRICT BY DISTRICT, I MEAN THAT'S MEANINGFUL. WE KNOW THE IMPLICATIONS OF NOT STAYING ON TOP OF THAT.
SO I UNDERSTAND THAT. I'M JUST, YOU KNOW, WE'RE HERE TO LOOK OUT FOR OUR RESIDENTS.
AND SO THIS IS THE MOMENT. AND SO THAT'S WHY I'M ASKING.
IT'S AN UNPLEASANT SITUATION, TO PUT IT MILDLY.
ALL RIGHT. THANK YOU. CHAIR GRACEY. THANK YOU.
BASIC QUESTION. IF WE DO NOT INCREASE THESE RATES, IF WE DON'T APPROVE THIS GOING FORWARD, DOES THAT MEAN. AND THIS IS NEW. AND AGAIN THANK YOU TO THE TEAM FOR AGAIN HELPING ME KIND OF GET A BETTER UNDERSTANDING THIS.
I'M NOT GOING TO SAY THE JOKE PUBLICLY, BUT I JUST. I DID TELL THEM FYI, BUT IF WE GO THROUGH THESE, IF WE DON'T, IF WE KEEP THIS FLAT, DOES THAT MEAN THAT THESE PLANNED PIPE REPLACEMENTS AND THINGS LIKE THAT, DOES THAT MEAN THAT DOES NOT HAPPEN OR IT HINDERS THAT? MAKING SURE I UNDERSTAND THE QUESTION RIGHT. BUT.
WELL, LET ME REPHRASE IT THIS WAY. SO THE WAY I WENT THROUGH THIS PRESENTATION, THE WAY I GATHERED THE UNDERSTANDING MY CONVERSATIONS WITH ATMOS, WE GO THROUGH THESE RATE INCREASES ARE REALLY TO FUND THE PROJECTS AND THINGS THAT HAPPEN IN AND AROUND THE CITY AS IT RELATES TO THE PIPE REPLACEMENTS AND THINGS LIKE THAT. IN THIS CASE, A PLANT OF SOME SORT. MY QUESTION IS, IF WE KEEP THESE RATES FLAT, DOES THAT MEAN THAT THESE PROJECTS IN RED THAT ARE PROPOSED PIPELINE REPLACEMENT PROPOSED. DOES THAT MEAN THAT THOSE PROJECTS THEY DON'T HAPPEN? THEY WILL CONTINUE REPLACING PIPE. BECAUSE AGAIN, THE MAJORITY OF THAT IS SAFETY RELATED AND THEY HAVE AN OBLIGATION TO DO THAT.
SO THEY'RE GOING TO KEEP INVESTING CAPITAL AND REPLACING PIPE.
IF WE DENY THE RATES, THEY WILL PROBABLY GO TO THE RAILROAD COMMISSION ON APPEAL AND GET THE MAJORITY, IF NOT ALL, OF WHAT THEY'RE REQUESTING. SO CAN WE STOP THEM FROM RAISING RATES? ONLY TEMPORARILY. IN THE LONG RUN, IF THE CITY IS DENYING RATES EVERY YEAR, THAT MAY AFFECT WHAT THEY HAVE TO PAY AS FAR AS RETURN ON CAPITAL, BECAUSE SHAREHOLDERS MAY GET A LITTLE NERVOUS AND SAY, WE DON'T WANT TO INVEST IN A COMPANY THAT'S CONSTANTLY AT LITIGATION OVER THEIR RATES.
I CAN'T SAY I'M NOT AN EXPERT ON RATE OF RETURN.
I DO HAVE A DEGREE IN ECONOMICS, BUT THAT'S NOT MY EXPERTISE.
SO IN OTHER WORDS, IF WE, YOU KNOW, DON'T MOVE THIS, THEY COULD GO TO AN APPEAL.
AND HISTORICALLY, GIVEN THE JUSTIFICATION FOR THE REASON, IT'S MOST LIKELY THAT THEY WOULD PREVAIL IN THAT APPEAL BASED ON YOUR EXPERIENCE. AND HYPOTHETICALLY, IN THE LONG RUN, IF THEY COULD NOT GET A RETURN ON THEIR INVESTMENT IN RATES, YES, THEY WOULD PROBABLY STOP INVESTING BECAUSE IT WOULDN'T MAKE ECONOMIC SENSE.
OKAY. OKAY. ALL RIGHT. ALL RIGHT. THANK YOU. THANK YOU, MRS. CHAIR. WHERE DO YOU WANT ME TO GO? MAYOR PRO TEM.
THANK YOU. SO, YOU KNOW, MY OBLIGATION IS TO THE RESIDENT, NOT TO THE SHAREHOLDER.
AND LOOKING AT THE RETURNS, THERE'S OBVIOUSLY AN INVESTMENT.
THERE'S RETURNS COMING IN TO THOSE SHAREHOLDERS.
SO MY QUESTION IS, AS WE'RE LOOKING AT PIPE REPLACEMENT, ARE THERE OTHER SOURCES ASIDE FROM RATE HIKES TO PAY FOR THOSE TO OFFSET IT, WHETHER THEY'RE BONDS, WHETHER THEY'RE RETURNS FROM THE PROFITS? OBVIOUSLY THEY HAVE TO PAY FOR THE PIPE ONE WAY OR ANOTHER.
YOU GET INTO A QUESTION ON WHAT THEIR RETURN SHOULD BE, AND IT'S MUCH CHEAPER FOR THEM TO BORROW MONEY FROM SELLING BONDS THAN IT IS TO GET STOCKHOLDERS, BECAUSE YOU HAVE TO PAY STOCKHOLDERS A HIGHER RETURN THAN YOU DO ON BORROWED MONEY.
THAT'S NOT EARTH SHATTERING. RIGHT NOW, ATMOS HAS A LITTLE OVER 52% OF THEIR EQUITY IS SHAREHOLDER.
[00:45:05]
ONLY 48% IS BORROWED. COULD THEY LEVERAGE AND BORROW MORE? YES, IT WOULD BE CHEAPER, BUT I DON'T KNOW HOW YOU GET THERE FROM WHERE THEY ARE NOW BECAUSE THEY'VE ALREADY HAD THE SHAREHOLDERS.UTILITIES HAVE ALWAYS BEEN ABOUT A 50-50 SPLIT BETWEEN EQUITY AND BORROWED.
SO AT SOME POINT IT WOULD BALANCE OUT. BUT. OKAY.
AND THEN AS WE'RE LOOKING AT THE BREAKDOWN OR THE INCREASES BETWEEN RESIDENTIAL AND COMMERCIAL, IS THERE FLEXIBILITY THERE TO GO HIGHER ON COMMERCIAL AND LOWERING THE RESIDENTIAL? WHERE ARE WE? IS THERE SOME CRITERIA? WE CAN GET INTO COST ALLOCATION, BUT WE SHOULD HAVE SOME BASIS FOR THAT. THE OTHER CITIES AROUND US, ARLINGTON, FORT WORTH, THE OTHER CITIES ARE IN A COALITION, THEY HAVE THE CITY STEERING COMMITTEE. THEY HAD A LITIGATED CASE THAT WAS AFTER HOURS.
THEY HAVE A RATE CASE PENDING, MUCH LIKE OUR DARTS AND OUR END THERE THAT WHEN THAT GETS THROUGH ITS PROCESS, WHICH SHOULD CONCLUDE IN OCTOBER, THEIR RESIDENTIAL RATES WILL BE SLIGHTLY HIGHER THAN OURS.
LASTLY, HELP ME UNDERSTAND APPEALS TO THE RAILROAD COMMISSION.
DOES THAT REQUIRE CITY STAFF TO GO DOWN AND MAKE OUR CASE? WHAT DOES THAT LOOK LIKE? IS THERE ANY COST TO THE CITY OF DALLAS FOR GOING IN FRONT OF AN APPEAL BOARD? IF IT'S APPEALED, RAILROAD COMMISSION. ATMOS ESSENTIALLY FILES A NEW CASE THERE.
IT'LL BE PRETTY MUCH IDENTICAL TO WHAT THEY FILED WITH US.
BUT IT'S A NEW CASE. WE WOULD HAVE CITY STAFF AND OR OUTSIDE CONSULTANTS, OUTSIDE COUNSEL AT THE RAILROAD COMMISSION PRESENTING EVIDENCE, PRESENTING OUR CASE, AND WHY THE RATE SHOULD BE LOWER THAN WHAT ATMOS IS REQUESTING.
SO, YES, WE WOULD BE TRAVELING TO THE RAILROAD COMMISSION IN AUSTIN FOR HEARINGS.
WE'D BE DOING ANOTHER ROUNDS OF DISCOVERY FILING, WRITTEN TESTIMONY.
PROBABLY GOING TO ORAL ARGUMENTS, THE WHOLE MESS AND.
THANK YOU. THANK YOU, CHAIR. CHAIRMAN JOHNSON.
THANK YOU. I WANT TO ECHO WHAT OUR COLLEAGUES HAVE SAID FROM DEPUTY MAYOR PRO TEM TO MAYOR PRO TEM.
OUR RESPONSIBILITY IS TO OUR RESIDENTS AND OUR COMMUNITY.
I HAD A MEETING WITH YOU GUYS, I THINK ABOUT TWO MONTHS AGO, MAYBE 90 DAYS AGO.
WE HAD A STANDING MEETING AND I WAS WITH ATMOS WHEN I WAS STANDING, BUT WE HAD A MEETING ON, I THINK IT WAS ON TEAMS AND IT CAUGHT MY ATTENTION.
I WAS GOING OVER MY NOTES THAT I HAD HERE THAT YOU GUYS WERE ASKING THE RATES TO BE INCREASED.
AND MY QUESTION WAS, WELL, WHAT IF THE COUNCIL DOES NOT SUPPORT THAT? AND IT'S LIKE WHEN I SEE IT HERE THAT YOU GUYS WILL JUST GO TO THE RAILROAD COMMISSION, IT'LL PROBABLY BE MORE THAN WHAT YOU GUYS WANT FROM US, WHICH IS PRETTY MUCH LIKE STRONG ARMING IN MY OPINION.
ATMOS IS EXTREMELY HIGH, LIKE OFF THE ROOF HIGH.
WHICH MEANS IN MY OPINION, THERE'S NO COMPROMISE OR COMMUNITY CONNECTION, IS WHAT YOU PAY.
AND IF YOU DON'T PAY IT, IT IS WHAT IT IS. IT'S NOT ABOUT THE COMMUNITY.
AND THAT'S MY CONCERN. I SAID THAT, THEN I SAY IT PUBLICLY NOW.
IN THE NOTES, BEFORE I ASK MY NEXT QUESTION. AND IT'S PROBABLY BEEN ASKED BEFORE, BUT WHY ARE WE ASKING FOR AN INCREASE? WHY ARE YOU GUYS ASKING FOR AN INCREASE? SO WHEN I ASK THE QUESTION, WHEN I WAS ON THE PHONE ABOUT THE INCREASE THAT
[00:50:05]
ATKINS IS ASKING FOR, THE INCREASE IN THE RATES, I WOULD LIKE TO KNOW WHAT'S YOUR ANSWER TO THAT ABOUT THAT.LET ME JUMP IN HERE. WOULD WE WANT TO MAYBE INVITE ATMOS TO ANSWER THAT QUESTION OR DO YOU THINK YOU CAN ANSWER FOR THEM? I'D BE HAPPY TO LET ATMOS ANSWER IT. WOULD ATMOS LIKE TO ANSWER THE QUESTION? YOU HAVE A REPRESENTATIVE WHO'D LIKE TO ANSWER THAT? WE INVITE YOU TO COME DOWN. THANK YOU, CHAIR.
OH, WHILE HE'S COMING DOWN, I LOVE YOUR SUIT.
I LIKE IT. SO WHEN I DO A PINK SUIT, I DON'T WANT NOBODY SEEING.
GOOD AFTERNOON. CHRIS PHELAN WITH ATMOS ENERGY, I RESIDE AT 5420 LBJ FREEWAY.
THAT'S OUR OFFICE LOCATION. DALLAS, TEXAS. SO THANK YOU FOR COMING.
WHY IS THE RATE INCREASING? WHAT WAS THE REASONING? YES, SIR. SO AS MR. FEHRENBACH HAD POINTED OUT DURING HIS PRESENTATION, EACH YEAR WE INVEST CONSIDERABLE AMOUNT OF DOLLARS INTO THE CITY OF DALLAS, REPLACING PIPES, SERVICE LINES, THE NECESSARY WORK THAT'S NEEDED FROM A STATE AND REGULATORY PERSPECTIVE.
AND I BELIEVE COUNCILMAN GRACEY ASKED A QUESTION THAT IF THE COUNCIL DOES NOT APPROVE THIS WITH THE WORK CONTINUED, I THINK YOUR ANSWER WAS IT WILL CONTINUE THE PIPES AND WHAT YOU JUST MENTIONED WILL CONTINUE TO DO THE WORK BECAUSE IT FALLS UNDER SAFETY MAINTENANCE, CORRECT? YES, SIR. OUR PRIORITY, FIRST AND FOREMOST IS THE SAFETY OF OUR SYSTEM AND YOUR RESIDENTS AND OUR CUSTOMERS.
CERTAINLY THAT IS OUR NUMBER ONE PRIORITY. BUT AS MR. FEHRENBACH SAID, IT DOES REQUIRE A SIGNIFICANT AMOUNT OF RESOURCES TO CONTINUE THAT LEVEL OF ACTIVITY.
SO THEREFORE WE WOULD NEED TO GET RECOVERY OF THOSE DOLLARS BECAUSE, AS YOU MAY OR MAY NOT KNOW, THE INVESTMENT HAS ALREADY BEEN MADE. LAST YEAR, AGAIN, AS MR. FEHRENBACH POINTED OUT, $321 MILLION INVESTED IN THE CITY OF DALLAS INFRASTRUCTURE.
SIGNIFICANT INCREASE FROM THE YEAR PRIOR TO THAT, IT WAS $217 MILLION.
I BELIEVE IT WAS ALMOST A 48% INCREASE IN CAPITAL INVESTMENT.
IN MY MEETING, I WROTE DOWN THE NOTES. WE WAS TALKING ABOUT THE RATE INCREASE.
IT WAS TALKING ABOUT COMMUNITY SERVICE YOU GUYS GIVE TO THE COMMUNITY AS WELL.
NOT JUST THE WORK, BUT I GUESS THE COMMUNITY OUTREACH PART.
AND THAT WAS ALSO A PART OF THE REASON WHY THE RATE INCREASE. CAN YOU EXPOUND ON THAT? SO NO, THE COMMUNITY OUTREACH PIECE IS NOT INCLUDED IN OUR RATES.
SO A LOT OF THOSE, FOR EXAMPLE CUSTOMER ASSISTANCE THAT WE PROVIDE IT'S SHAREHOLDER FUNDED.
THERE'S MANY THINGS. WHEN YOU SAY CUSTOMER CONTRIBUTIONS, WHAT DO YOU MEAN WHEN YOU SAY THAT? SO FOR EXAMPLE, THERE'S WHAT WE CALL SHARING THE WARMTH. SO SOME OF OUR CUSTOMERS, FOR EXAMPLE, CAN MAYBE ROUND THEIR BILL UP EACH MONTH THAT HELPS OUT CUSTOMERS IN NEED.
WE ALSO MATCH THOSE DOLLARS. SO ANY CUSTOMER THAT DONATES TO THAT FUND, WE ALSO MATCH THOSE DOLLARS.
WE HAVE OUR PUBLIC AFFAIRS THAT ENGAGE IN WHAT WE CALL BLITZES WHERE WE HELP INDIVIDUALS IN THE COMMUNITY THAT HAVE A HARD TIME PAYING THEIR BILL. FOR EXAMPLE, IN FISCAL 25 IN THE CITY OF DALLAS ALONE, THERE WAS $1.4 MILLION OF ASSISTANCE THAT WAS OFFERED TO OUR CUSTOMERS, TO YOUR CITIZENS.
AND I GUESS THAT WAS SOMETHING THAT WAS VERY CONCERNING TO ME, BECAUSE I KNOW WHAT I DO, AND I CAN IMAGINE WHAT MY COLLEAGUES DO WHEN WE'RE TALKING ABOUT GIVING BACK TO THE COMMUNITY AND HELPING OUT, SEEM LIKE WE ARE REIMBURSING YOU FOR HELP OUT, REIMBURSING YOU FOR THE COMMUNITY SERVICE THAT YOU DO TO OUR COMMUNITY, FOR OUR RESIDENTS.
SO WHEN I HAD THE MEETING, THAT WAS CONCERNED, LIKE, WHY WOULD I REIMBURSE YOU FOR JUST BEING A GOOD PARTNER WITH THE RESIDENTS? THAT'S NOT A QUESTION. THAT'S ACTUALLY WHAT ONE OF MY CONCERNS WERE.
RIGHT. NO, WE DEFINITELY WANT TO BE A GOOD COMMUNITY PARTNER.
AND MANY OF THOSE THINGS THAT WE DO, OR THE MAJORITY OF THOSE THINGS, 100% OF THOSE THINGS, ACTUALLY. ANY CHARITABLE CONTRIBUTIONS, ANYTHING THAT WE DONATE TO THE DALLAS PUBLIC LIBRARIES, ANY OF THOSE DONATIONS THAT WE MAKE ARE NOT INCLUDED IN RATES.
IT'S PART OF OUR COMMITMENT TO BE A GOOD STEWARD, GOOD MEMBER OF THE COMMUNITY.
WE ARE A PROUD MEMBER OF THE CITY OF DALLAS, AND WE ENGAGE IN A LOT OF THOSE ACTIVITIES WITH YOUR FOLKS AND OUR CUSTOMERS, AND WE ARE NOT GETTING THE RETURN ON THAT. THAT IS NOT REIMBURSED.
THAT IS SOMETHING THAT WE DO AS BEING A CORPORATE PARTNER WITHIN THE CITY OF DALLAS.
WELL, I'M GLAD YOU CLEARED THAT UP BECAUSE IN MY NOTES, THAT'S WHAT I WROTE DOWN BECAUSE I REMEMBER THOSE CONVERSATIONS. AND WHEN THAT WAS SAID, THAT WAS VERY CONCERNING BECAUSE I KNOW A LOT OF PEOPLE THAT GIVE AND WE DON'T GIVE WITH THE EXPECTATION OF RECEIVING ANYTHING BACK.
[00:55:03]
IF YOU'RE DOING IT FROM THE HEART OR IF A COMPANY OR BUSINESS IS TRYING TO DO IT TO BE A GREAT PARTNER IN OUR COMMUNITY.MOST OF MY DISTRICTS ARE SENIOR CITIZENS. SO I UNDERSTAND THAT IF WE SAY NO, THE WORK WON'T STOP.
THANK YOU, COUNCILMAN GRACEY FOR ASKING THAT QUESTION.
OUR RESPONSIBILITY IS TO OUR RESIDENTS AND OUR COMMUNITY.
AND IT'D BE ONE THING IF, YOU KNOW, IF IT JUST.
MY RESIDENTS AND THE SENIOR CITIZENS ARE CONCERNED ABOUT THE RATE NOW AND THE PRICING THIS OF THE RATE NOW, BUT WE GOT YOUNG PEOPLE, BUSINESS OWNERS AND BABY BOOMERS, IF YOU WILL, AND SOME OF THE YOUNGER GUYS THAT ARE SAYING THE SAME THING, THAT YOU GUYS ARE ASKING FOR MORE MONEY AND IT'S ALREADY EXPENSIVE.
SO IT'LL BE HARD FOR ME TO SUPPORT THIS, CHAIR BECAUSE, I MEAN, I DON'T UNDERSTAND WHY WE CONTINUE TO GIVE YOU GUYS WOULD GIVE ANOTHER RAISE WHEN WE'RE ALREADY EXPENSIVE. SO I DON'T THINK FROM.
I WOULDN'T SUPPORT THIS. THANK YOU SO MUCH. I APPRECIATE THE COMMENTS.
THANK YOU, STAFF, FOR THAT IS ON SLIDE 11. AND SO OPTION ONE IS ADOPT PROPOSED SETTLEMENT AGREEMENT, WHICH STAFF HAS ENTERED INTO PROPOSED WITH ATMOS.
TWO IS TO PROPOSE SOME DIFFERENT AMOUNT. OR THREE IS TO DENY THE RATE REQUEST, KEEPING THE CURRENT RATES FLAT, UNDERSTANDING THAT ATMOS CAN AND LIKELY WILL APPEAL TO THE RAILROAD COMMISSION.
SO WITH THAT BEING SAID, I'LL ENTERTAIN A MOTION FOR RECOMMENDATION TO FULL COUNCIL.
CHAIR. I'LL MAKE A MOTION THAT WE DO NUMBER THREE, DENY THE REQUEST.
KEEP THE CURRENT RATES IN EFFECT. OKAY. WE HAVE A MOTION.
DO WE HAVE A SECOND? SECOND, THERE'S A MOTION AND A SECOND.
ANY COMMENTS? CHAIRMAN GRACEY. YEAH MAYOR PRO TEM MORENO HAD A GREAT SUGGESTION.
I DIDN'T KNOW IF THIS IS THE TIME WHERE WE GO TO COUNCIL TO TALK ABOUT IT.
AND WHAT WOULD THAT INCREASE NEED TO BE TO NOT INCREASE RESIDENTIAL? OR IF THAT'S SOMETHING THAT WE COULD DISCUSS OR IF IT'S FLAT OUT, NO, DOES THAT COME BACK AT THE COUNCIL LEVEL TO DISCUSS? LET ME ASK FIRST IF THAT. CITY ATTORNEY, IF THAT IS A GERMANE TOPIC RELATED TO THIS, IF WE CAN GET INTO THAT.
I MEAN, IT'S VERY INTERESTING QUESTION. CAN YOU REPEAT THE.
SORRY, CAN YOU REPEAT THE. YEAH, I WAS TRYING TO DETERMINE, BEFORE WE TAKE THIS MOTION FORWARD WITH COUNCIL, MAYOR PRO TEM MORENO BROUGHT UP THE IDEA OF INCREASING THE COMMERCIAL RATE AND NOT THE RESIDENTIAL RATE.
AND I WAS TRYING TO FIGURE OUT AT WHAT POINT, IF WE MAKE A MOTION TO DENY, WE WON'T HAVE THAT OPPORTUNITY TO DISCUSS THAT AT THE COUNCIL LEVEL, I DON'T BELIEVE. CORRECT? THAT'S RIGHT.
I'M SO SORRY. HANG ON JUST ONE SECOND, PLEASE.
OKAY. I THINK YOU NEED TO SWITCH MICS. YEAH.
CHAIR, SINCE THAT'S A DIFFERENT MOTION, COULD WE GO WITH THIS MOTION IN ACT COUNCIL? MAYOR PRO TEM COULD ALSO STILL RECOMMEND THAT BRING THAT MOTION UP AS WELL.
YEAH. BY WORKING WITH THE ATTORNEY? THAT'S OKAY. YOU KNOW, WHAT WE DO, IT'S NOT GOING TO BE BINDING ON COUNCIL, RIGHT? IT'S JUST A RECOMMENDATION. SO WE COULD ALWAYS BRING THAT BACK UP IF YOU'RE OKAY WITH THAT. THAT'S WHAT I WAS TRYING TO GET CLARITY ON. WE'RE TAKING THE MOTION TO DENY IT TO COUNCIL, WHICH WHEN IT COMES ON THE AGENDA, I WOULD ASSUME THAT IT WOULD BE A MOTION TO DENY.
AND IF IT IS. SO. WOULD THAT RESULT REQUIRE ANOTHER MOTION? YEAH. OKAY. SO FOR CLARIFICATION IT IS ON TOMORROW'S AGENDA, AND IT WAS POSTED TO DENY RIGHTS AS PROPOSED BY ATMOS AND TO ACCEPT THE SETTLEMENT AGREEMENT. THAT'S THE WAY IT IS WRITTEN.
AND YOU ALL CAN MAKE A MOTION TO APPROVE HOWEVER YOU WANT TO TOMORROW.
BUT THAT IS THE WAY WE WROTE IT. THE DEADLINE, I BELIEVE, IS THE 30TH OR 31ST OF THIS MONTH.
SO WE HAVE A MOTION ON THE TABLE. WE HAVE A SECOND.
ANY MORE COMMENTS? ALL THOSE IN FAVOR SAY AYE.
AYE. AYE. ANY OPPOSED? MOTION CARRIES. ITEM C.
[01:00:02]
SO, CHAIRMAN, IF I MAY, I JUST WANT TO CLARIFY.THE MOTION FROM THE COMMITTEE IS TO DENY RIGHTS.
TO RECOMMEND FOR COUNCIL. YES SIR. I JUST WANT TO MAKE SURE I HEARD CORRECTLY.
OKAY, WHO DO WE HAVE FROM ITEM C? LET'S KEEP THIS MOVING.
WEST. IT'S STEVE FREELAND FROM THE CITY ATTORNEY'S OFFICE.
SORRY ABOUT THE DELAY, BUT WE DID DETERMINE THAT QUESTION WOULD BE GERMANE TOMORROW.
OKAY, GREAT. WE'LL TALK ABOUT IT TOMORROW, THEN.
THANK YOU. GOOD AFTERNOON. JANETTE WEEDON, BUDGET AND MANAGEMENT SERVICES PRESENTING WITH SUZANNE ZIMAN, ASSISTANT DIRECTOR IN BUDGET AND MANAGEMENT SERVICES. THIS IS ITEM C.
FISCAL YEAR 26 BUDGET APPROPRIATION ORDINANCE, OUR MID-YEAR AMENDMENTS.
SO ON SLIDE NUMBER TWO, I'LL QUICKLY WALK THROUGH THE BACKGROUND, TALK ABOUT THE RULES THAT GOVERN BUDGET APPROPRIATIONS, PROVIDE AN OVERVIEW OF THE AMENDMENTS, RECOMMENDATIONS AND NEXT STEPS.
SECTION THREE, COUNCIL ADOPTS AN ANNUAL APPROPRIATION ORDINANCE.
SECTION FOUR, CITY COUNCIL IS AUTHORIZED TO MAKE BUDGET AMENDMENTS DURING THE YEAR.
AND THEN SECTION SIX PROHIBITS THE EXPENDITURE OF CITY FUNDS WITHOUT SUFFICIENT APPROPRIATION.
ON SLIDE NUMBER FOUR, YOU WILL HAVE AN ORDINANCE PRESENTED TO YOU ON JUNE 10TH.
IT WILL INCLUDE THE USE OF CONTINGENCY RESERVE THAT WAS ALREADY APPROVED ON APRIL 22ND, A REALLOCATION OF FUNDING BETWEEN PROGRAMS AND SERVICES IN THE GENERAL FUND, REALLOCATION OF. OR, I'M SORRY. APPROPRIATION ADJUSTMENTS AND GRANT TRUSTS AND OTHER FUNDS, AS WELL AS ENTERPRISE FUNDS, CAPITAL FUNDS, AND THEN, OF COURSE, APPROPRIATION ADJUSTMENTS THAT WERE PREVIOUSLY APPROVED BY CITY COUNCIL.
ON SLIDE FIVE, THIS SLIDE PROVIDES AN OVERVIEW OF THE ADJUSTMENTS THAT ARE INCLUDED IN THE MIDYEAR.
THE ADJUSTMENT TOTALS $813.3 MILLION, AND IT'S PRIMARILY DRIVEN BY OUR CAPITAL FUNDS.
ON SLIDE NUMBER SIX, WE'LL START WITH THE DIFFERENT SECTIONS OF THE BUDGET.
SO I'LL START WITH THE GENERAL FUND AMENDMENT OVERVIEW.
ON SLIDE SEVEN, WE ARE SHOWING NEW APPROPRIATION REQUESTS AND GRANT TRUSTS AND OTHER FUNDS, REALLOCATION BETWEEN FUNDS. AND THIS IS REALLY BASED ON REORGANIZATIONS THAT WERE PART OF THE FISCAL YEAR 26 ADOPTED BUDGET.
ON SLIDE EIGHT, YOU SEE THE NEW APPROPRIATION REQUESTS IN THE ARPA REDEVELOPMENT FUND.
WE HAVE BEEN SHOWING NEW PROJECTS THAT HAVE BEEN ADDED SINCE OCTOBER 1ST.
WE SHOW THAT EACH MONTH IN OUR ARPA MONTHLY REPORT, AND THEN, SO THIS MIDYEAR ACTION WILL ESTABLISH APPROPRIATIONS FOR THOSE PROJECTS. OTHER ITEMS INCLUDED ON THIS PAGE INCLUDE APPROPRIATION ADJUSTMENTS FOR THE OPIOID ABATEMENT TRUST FUND, CDBG, DALLAS ANIMAL SERVICES, AND OUR PUBLIC IMPROVEMENT DISTRICTS.
ON SLIDE NUMBER NINE, WE'RE SHOWING APPROPRIATION ADJUSTMENT REQUESTS FOR OUR ENTERPRISE FUNDS.
PLANNING AND DEVELOPMENT, THEY HAVE ADDITIONAL REVENUE TO SUPPORT THEIR INCREASED COSTS.
AND SO WE ARE SHOWING AN APPROPRIATION ADJUSTMENT BASED ON THEIR INCREASED REVENUE.
SO THEY'VE GOT 4.7 MILLION IN THE MARCH BUDGET ACCOUNTABILITY REPORT.
THEY HAVE AN ADDITIONAL $4.7 MILLION IN REVENUE.
FOR DALLAS WATER UTILITIES, THEY ARE USING FUND BALANCE TO TRANSFER $21 MILLION TO THEIR CAPITAL CONSTRUCTION FUND, AND THEY HAVE SUFFICIENT FUND BALANCE TO SUPPORT THIS TRANSFER.
ON SLIDE NUMBER TEN, WE ARE SHOWING APPROPRIATION ADJUSTMENTS FOR CAPITAL.
[01:05:10]
CAPITAL. ON SLIDE NUMBER 11, WE ARE SHOWING ON ADJUSTMENTS THAT WERE PREVIOUSLY APPROVED BY CITY COUNCIL.AND SO WE TRACK ALL OF THOSE CHANGES THROUGHOUT THE YEAR.
ON SLIDE 12, THERE'S NEW APPROPRIATION REQUESTS FOR CAPITAL.
THEY HAVE ADDITIONAL REVENUE TO SUPPORT A $1.3 MILLION TRANSFER TO CAPITAL CONSTRUCTION.
FOR TIF, WE HAVE TWO NEW PROJECTS. THERE'S $1.2 MILLION FOR THE CABANA MIXED INCOME HOUSING PROJECT, $600,000 FOR THE TRINITY STRAND PROJECT, AND THEN THE ADMINISTRATIVE COST OF ABOUT $200,000 ASSOCIATED WITH THOSE TWO PROJECTS.
THERE'S CAPITAL CONSTRUCTION OR CAPITAL GIFTS AND DONATION REQUESTS FOR PARK AND RECREATION.
AND THEN THE LAST ITEM IS JUST OUR CONTINUED CLOSE OUT OF OGO BOND FUNDS.
AND SO IN ORDER TO CLOSE OUT THE FUNDS, WE DO REQUIRE APPROPRIATION.
THAT EXCESS CASH IS TRANSFERRED TO THE DEBT SERVICE FUND.
AND THAT GOES TO SUPPORT OUTSTANDING OBLIGATION DEBT.
SO NEXT STEPS ON SLIDE 13. STAFF IS RECOMMENDING AN AMENDMENT TO THE FISCAL YEAR 26 BUDGET APPROPRIATION ORDINANCE, REALLY TO ALIGN FUNDING WITH UPDATED NEEDS. CITY COUNCIL WILL CONSIDER THE ORDINANCE ON JUNE 10TH.
AND SO THIS CONCLUDES OUR PREPARED REMARKS. WE ARE HAPPY TO ANSWER ANY QUESTIONS YOU MAY HAVE.
OKAY. I'M GOING TO START ON MY RIGHT THIS TIME.
NO QUESTIONS. I'M GOING TO GO TO MY LEFT. DEPUTY MAYOR PRO TEM.
THANK YOU. AND I THINK, JANETTE, YOU WERE STILL WAITING ON A COUPLE OF ANSWERS.
I'M LOOKING AT PAGE 12 BECAUSE IT LOOKS LIKE SOME OF THIS IS TRANSFERS.
AND SO I GET THAT, YOU KNOW, BUT IT'S WHERE THERE MAY BE SOMETHING NEW.
I'M JUST RECONCILING, YOU KNOW, THE SITUATION THAT WE ARE IN WITH, YOU KNOW, IF SOMEONE'S GETTING NEW MONEY FROM A SOURCE, I'M TRYING TO UNDERSTAND THAT. AND SO LIKE ON THE PARKS CAPITAL PROJECTS, THAT'S A REQUEST FOR $800,000 IN NEW FUNDS. SO IT'S ADDITIONAL APPROPRIATION IN THEIR CAPITAL GIFTS, MATCH DONATION AND DEVELOPMENT FUND.
SO THEY HAVE ADDITIONAL CASH. THEY'RE WANTING ADDITIONAL APPROPRIATION TO SPEND.
THE USE OF FUNDS, IT JUST SAYS TO SUPPORT PARK CAPITAL PROJECTS.
I AM WAITING ON A LIST FOR THE CAPITAL PROJECT TO BE SUPPORTED.
NO, THIS IS ONLY IN THEIR CAPITAL FUND. AND THIS IS NOT THE GENERAL FUND.
IT'S A CAPITAL GIFTS MATCH DONATION FUND. SO IT IS ANOTHER FUND.
CORRECT. OKAY. CORRECT. THAT'S DIFFERENT. AND THEN.
OKAY, I THINK THAT YOU HAD SAID THE FUND CLOSURES WERE GOING TO GO TO DEBT SERVICE.
CORRECT. SO THERE'S TWO FUNDS, THE 2012 GEO REFUNDING BOND FUND.
IT'S A FUND THAT WE USE FOR FEES TO ISSUE THE DEBT.
THERE'S ABOUT $362,000 THERE. AND THEN THERE'S A CLOSEOUT OF A 1998 GEO BOND FUND.
SO ANYTIME WE CLOSE OUT OWED DEBT SERVICE FUNDS.
GEO FUNDS. THE DEBT OR THE CASH GOES TO THE DEBT SERVICE FUND.
OKAY. THANK YOU. YOU'RE WELCOME. THANK YOU, VICE CHAIR.
ALL RIGHT. NO QUESTIONS, BUT WE DO HAVE A MOTION.
I MEAN, WE STILL HAVE QUORUM HERE. OKAY, GREAT.
GO AHEAD. OKAY. ALL RIGHT. I MOVE THAT THE COMMITTEE RECOMMEND THAT CITY COUNCIL ADD THE PRORATED TEXAS MUNICIPAL LEAGUE MEMBERSHIP EXPENSE IN THE AMOUNT OF $32,794.50 TO THE MID-YEAR BUDGET FOR FISCAL YEAR 2025-2026, TO BE FUNDED FROM A SOURCE TO BE IDENTIFIED BY THE CITY MANAGER ON JUNE 10TH.
RECEIVED. SECOND. ALL RIGHT. WE HAVE A MOTION AND A SECOND.
[01:10:03]
DO WE HAVE ANY COMMENTS? OKAY, I WOULD JUST. WELL, DO YOU WANT TO DO QUESTIONS? AND THEN I'LL WRAP UP. SURE. GO AHEAD. DEPUTY MAYOR PRO TEM.I KNOW THAT WE ARE. NATIONAL LEAGUE OF CITIES HAS SOME REQUIREMENTS THAT YOU'RE PART OF YOUR STATE LEAGUE IN ORDER TO PARTICIPATE IN CERTAIN ASPECTS OF NATIONAL LEAGUE OF CITIES.
AND I DON'T THINK THEY ESTABLISH THEIR VALUE WITH US VERY WELL.
I MEAN, IF YOU LOOK AT THEIR AGENDAS AND THEIR PROGRAMING, IT IS VERY MUCH GEARED TO THE VILLAGES AND TOWNS AND MID-SIZED CITIES IN TEXAS, AND NOT SO MUCH TO THE BIGGER CITIES THAT ARE GRAPPLING WITH THE BUDGET WOES WE'VE GOT WITH ISSUES WITH THE LEGISLATURE AND HOW WE CONTINUE TO PROVIDE SERVICES TO OUR RESIDENTS AND PROVIDE THEM WELL IN SUCH A LIMITED ENVIRONMENT.
THAT IS JUST NOT ACCEPTABLE. SO I'M GOING TO THINK ON THIS.
THANK YOU. THANK YOU. ANY OTHER COMMENTS ON THE MOTION? OKAY.
IT ENDS AT THE END OF. IT BEGAN NOVEMBER 1ST AND GOES THROUGH OCTOBER 31ST.
IT LOOKS LIKE THE PRORATED AMOUNT IS NOT FOR VERY LONG PERIOD OF TIME.
SO THE ANNUAL MEMBERSHIP, 65,589. SO IT LOOKS LIKE WE'RE PAYING FOR ABOUT HALF.
BUT. OKAY, BUT I THOUGHT I WAS READING IN HERE.
SO. OKAY, SO WE'RE PAYING APPROXIMATELY. THAT WOULD BE JUNE, JULY, AUGUST, SEPTEMBER.
5TH MONTHS. SO APPROXIMATELY HALF. CHAIR. YES.
AND BRING BACK THE CONCERNS DURING THE BUDGET? DURING THE BUDGET. I THINK THAT'S THE IDEA IS THAT RIGHT NOW WE JUST DON'T HAVE ANY REPRESENTATION WITH THAT ORGANIZATION AND WE HAVE NO ABILITY TO INFLUENCE IT.
SO THIS IS MAYBE A TEST TO SEE IF WE CAN GET IN THERE AND HAVE SOME INFLUENCE.
BUT AT THIS POINT, WE'VE GOT ZERO REPRESENTATION AT THAT ORGANIZATION AND TML.
SORRY. AND SO THE IDEA IS THAT WE WOULD DO THIS FOR A LIMITED TIME, A LIMITED NUMBER OF MONTHS, AND SEE IF WE CAN HAVE SOME INFLUENCE WITH THEM REPRESENTING OUR INTERESTS AS WELL AS THE INTERESTS OF OTHERS.
SO THAT'S WHAT I WOULD SAY. I THINK THAT'S PROBABLY THE COMPROMISE WHERE WE ARE.
SO THE MOTION ON THE FLOOR IS TO APPROVE OF ADDITIONAL FUNDING TO BE MEMBERS OF TML FOR THE REST OF THE FISCAL YEAR 2025-26, WITH THE FUNDS TO BE IDENTIFIED BY MR. IRELAND AND HIS VERY CAPABLE TEAM. OKAY. AND WE HAVE A SECOND.
SO, ALL THOSE IN FAVOR, SAY AYE. AYE. ANY OPPOSED? GOT ONE. CARRIES. ALL RIGHT. WE'RE MOVING ON TO THE MEMOS.
SO THE FIRST MEMO IS ITEM D, WHICH IS THE UPDATE OF ANTICIPATED IMPACTS FOR HOT TAX AND SHORT TERM RENTALS ASSOCIATED WITH FIFA WORLD CUP 2026. I'M NOT GOING TO ASK FOR A BRIEFING HERE.
ACTUALLY, LET'S BRING STAFF UP FOR JUST A SECOND.
COME ON DOWN. Y'ALL BEEN SITTING OVER THERE PATIENTLY.
HELLO, HELLO. WE JUST WANT TO ASK FOR SOME HIGHLIGHTS.
YOU DON'T HAVE TO GO LINE BY LINE. WELL, GOOD AFTERNOON AND THANK YOU FOR THE QUESTION.
[01:15:06]
IF YOU ALSO LOOK AT THE ARD&A WEBSITE, IT ALSO GIVES SPECIFIC INSTRUCTIONS, WHICH I GOOGLED THIS LAST WEEK OR A COUPLE OF WEEKS AGO AND SAW THEY WOULD ACTUALLY TELL YOU, YOU HAD TO PAY THE TAX SEPARATELY TO US.YOU COULD NOT PAY IT THROUGH AIRBNB OR VRBO. SO WE HAVE MADE, YOU KNOW, AS YOU CAN TELL, QUITE A BIT OF PROGRESS IN COLLECTING TAX AND HOLDING PEOPLE ACCOUNTABLE THAT DIDN'T PAY TAX.
MY EXPECTATION IS THAT WE WILL HAVE MUCH MORE VOLUME AND HIGHER PRICES.
WE WILL HAVE TO GO AND TRY TO GET PEOPLE THAT MAY HAVE, FOR LACK OF A BETTER TERM, TURN THEIR HOME INTO AN AIRBNB FOR THIS SHORT PERIOD OF TIME BECAUSE WE WOULDN'T KNOW THEM FROM BEFORE. AND SO THAT'S WHAT I HAVE.
LANCE SEEHORN, ASSISTANT CONTROLLER, AND ADRIANA MENZEL, WHO IS THE MANAGER OF THE HOT TAX PROGRAM AND HAS BEEN VERY INSTRUMENTAL IN US COLLECTING THE $5.5 MILLION IN TAX THAT WE'VE CAUGHT PEOPLE, YOU KNOW, CHEATING.
THANK YOU FOR THAT. AND I'M LOOKING AT THE MEMO HERE AND JUST I WAS REMINDED BY STAFF THAT THIS MEMO COMPLETELY JUST DISCUSSES THE REVENUES COMING IN. SO WE'RE NOT REALLY GOING TO BE ABLE TO TALK ABOUT ENFORCEMENT TODAY, EVEN THOUGH WE'D LOVE TO DO THAT HERE. I'LL KICK IT OFF, A COUPLE QUESTIONS.
THE FIRST CHART THAT YOU HAVE ON PAGE TWO OF YOUR MEMO IS THE HOTEL AND STR COUNTS.
SO I'M LOOKING AT THE TOTAL ACTIVE COUNT. AND JUST TELL ME IF I'M READING THIS RIGHT.
SO LET'S SEE, FISCAL YEAR 2026 THROUGH MAY 1ST WAS 2539 STRS.
IS THAT HOW MANY YOU'RE TRACKING OR HOW MANY YOU BELIEVE ARE IN THE CITY? LANCE SEEHORN, ASSISTANT CONTROLLER. SO THE 2539 IS MADE UP OF 2271 SHORT TERM RENTALS AND 268 HOTELS. ARE THOSE UNITS THAT ARE PAYING THE TAXES? YES, SIR. YEAH. THEY'RE REGISTERED. AND YEAH, THAT'S THE QUESTION.
THOSE ARE REGISTERED. THAT IS NOT PEOPLE THAT WE ARE STILL PURSUING.
GOT IT. AND IS THAT NUMBER BELOW THAT LINE, THE 1902.
IS THAT THE NUMBER YOU BELIEVE IS OUT THERE THAT YOU'RE PURSUING? YES. SO WE BELIEVE THERE'S 1902 UNREGISTERED STRS THAT ARE NOT PAYING TAXES.
YES. OKAY. WHAT'S OUR ABILITY TO HOLD THEM ACCOUNTABLE FOR COMING INTO COMPLIANCE? SO EVERY MONTH WE DO SEND OUT REMINDER LETTERS, LETTING THEM KNOW THAT WE'VE IDENTIFIED THEM AS OPERATING AS A SHORT TERM RENTAL.
WE SHOW THEM THE ADVERTISEMENT AND THE LETTER THAT WE SEND TO THEM.
AND WE REQUEST THAT THEY REGISTER WITH US AND BEGIN PAYING THE TAX.
WHEN THEY DO REGISTER WITH US, WE WORK WITH THEM TO COLLECT THE BACK TAXES AND GET THEM CURRENT.
AND IN SOME CASES, WHENEVER THEY DO NOT FOLLOW UP WITH US, WE DO ESTIMATE THE TAX WHEN WE CAN AND WE SEND A BILL TO THEM AND WE TURN IT OVER TO THE CITY ATTORNEY'S OFFICE AS WELL, IF THE DOLLAR AMOUNT IS SIGNIFICANT ENOUGH.
YEAH. AND I WOULD ADD TO THAT ALSO, THEY'RE ALSO A SIGNIFICANT PROBLEM, AS SOME OF YOU ARE AWARE, DUE TO DISTURBANCES, WE MAKE EXTRA SURE TO MAKE SURE WE'RE LOOKING AT HOW MANY REVIEWS THEY HAVE AND EXTRAPOLATE THE TAX THEY OWE.
AND THE CITY ATTORNEY'S OFFICE HAS COOPERATED VERY WELL WITH US.
BUT WE ARE TAKING A HARD LINE ON TRYING TO MAKE THESE FOLKS COME INTO COMPLIANCE AND PAY.
AND IF THEY DON'T, WHAT IS THE REPERCUSSION? A LIEN, PROPERTY LIEN.
PROPERTY LIEN. OKAY. AND THAT'S BEEN SUCCESSFUL.
WE GOT 112,000 ON CLOSING ON ONE PROPERTY THAT'S SOLD IN YOUR DISTRICT IN THE LAST YEAR.
IN MY DISTRICT? OKAY. BISHOP ARTS, I'M ASSUMING THAT'S YOUR DISTRICT.
I COULD GIVE YOU THE STREET ADDRESS. I KNOW THE STREET ADDRESS.
WELL, THAT'S GOOD TO HEAR. I KNOW WE'VE GOT SOME PROBLEM PROPERTIES OVER THERE.
AND SOME GOOD OPERATORS TOO. THERE'S BOTH. MY LAST QUESTION.
[01:20:02]
AND I SEE THAT COMPARING 2024 TO 2025, OUR REVENUES ACTUALLY WENT DOWN DESPITE THE FACT THAT YOU IDENTIFIED AND BROUGHT MORE OPERATORS INTO THE FOLD.MAYBE LESS RENT, MAYBE THEY'RE RENTING LESS. THE UNITS ARE RENTING LESS.
THAT WAS KIND OF WHAT I THOUGHT. I THINK THAT'S PROBABLY TRUE.
IT COULD BE THAT AS WELL. ALL RIGHT. THANK YOU.
I'M GOING TO GO TO MAYOR PRO TEM NEXT. THANK YOU CHAIR.
THANK YOU ALL FOR YOUR WORK. HELP ME UNDERSTAND HOW YOU IDENTIFY SHORT TERM RENTALS.
I KNOW I JUST GOT A CALL ON THE 400 BLOCK OF PEACH STREET.
CODE. WHAT OTHER WAYS. ARE PEOPLE IDENTIFY. ARE YOU GUYS IDENTIFYING SHORT TERM RENTALS? WE HAVE A SOFTWARE VENDOR THAT WE'VE HAD FOR QUITE A WHILE THAT WILL SCRAPE THIS OFF.
AND THESE FOLKS CAN MAYBE EXPLAIN IT BETTER THAN ME AND GIVE US THE SUSPECTED ADDRESS.
THEN WE LOOK UP WHO OWNS THAT. WE SEE IF THEY'RE REGISTERED.
WE SEND THEM THESE LETTERS AND THEN THE ONES THAT BECOME QUITE A BIG PROBLEM, WE ALSO LOOK FOR THEIR REVIEWS AND SAY, HERE'S YOUR REVIEWS, HERE'S YOUR PICTURE. YOU NEED TO PAY.
ADRIANA FOUND THAT HE OWNED TWO OTHER ONES, BUT THEY WERE NOT TRUTHFUL WITH US AND HOW MUCH THEY OWED, AND THAT THEY'D EVEN BEEN DOING IT. AND THE CITY ATTORNEY'S OFFICE PURSUED IT AND GOT THEIR RECORDS FROM AIRBNB AND VRBO AND PROVED IT OUT.
SO WE ARE DOING EVERYTHING THAT WE POSSIBLY CAN FROM, YOU KNOW, NEIGHBORS CALLING, YOU ALL COMING TO US USING THE SCRAPING SERVICE. AND ADRIANA CAN EXPLAIN A LOT MORE IF SHE WANTS TO, HOW THEY GO THROUGH, BUT THEY'VE ACTUALLY FOUND SOME MORE PROPERTIES THAT WERE ACTIVE AND THEN WEREN'T ACTIVE THAT SHOULD BE PAYING US.
SO WE HAVE AN AUDITOR THAT WORKS FOR ADRIANA THAT WE'RE ACTUALLY INCREASING THAT.
WE ALSO LOOK AT. AND THIS IS NOT FOR STRS, BUT FOR THE STATE.
WE HAVE DEVELOPED A ROBUST PROGRAM OF. I'M AN EX-AUDITOR, AND SO THAT'S WHAT WE'RE DOING.
SO I THINK I'M FAMILIAR WITH THE SCRAPING PROCESS.
WHEN IT COMES TO CODE AND DPD, WHEN THERE'S PROPERTIES THAT CODE IS HAVING TO GO OUT, OR DPD, IS EITHER CODE OR DPD ASSISTING IN THE REPORTING OF SHORT TERM RENTALS TO YOUR OFFICE? AND IF SO, HOW MANY PROPERTIES HAVE BEEN IDENTIFIED THROUGH DPD OR CODE? I'M NOT FAMILIAR WITH AN EXACT NUMBER OF THAT.
I THINK THAT WE ARE ACTUALLY GETTING COMPLAINTS PRIOR TO THAT, THROUGH NEIGHBORS OR THROUGH YOURSELVES, THROUGH CITY COUNCIL MEMBERS OF ONES THAT ARE.
THEY'RE USUALLY NOT UNKNOWN PROBLEMS, LET'S PUT IT THAT WAY.
I'M NOT AS FAMILIAR WITH THAT. HELLO. ADRIANA MENZEL, HOTEL OCCUPANCY TAX MANAGER.
WE DON'T GET REFERRALS FROM DPD. SOMETIMES WE DO FROM CODE.
IT'S NOT MANY. I DON'T HAVE A NUMBER, BUT OKAY, WE CAN BEGIN TRACKING IF YOU WOULD LIKE TO KNOW.
SURE. SO I HAVE A. I WAS SPEAKING TO COUNCILMEMBER CADENA WHO'S HAD SOME ISSUES HERE RECENTLY.
YOU KNOW, A CONCERN OF HERS IS THE INCONSISTENCIES BETWEEN REPORTING FROM DPD AND HAVING THEM REGISTERED. WE KNOW THAT DPD IS GOING OUT AND THEY'RE TRYING TO TYPICALLY GO IN AFTER THERE'S AN ISSUE.
[01:25:03]
AN AREA THAT WE CAN IMPROVE ON. SINCE DPD IS ALREADY GOING OUT THERE AND THEY MORE OR LESS KNOW IF IT'S OPERATING AS A SHORT TERM RENTAL, BUT THEY MIGHT NOT KNOW THAT IT'S REGISTERED OR UNREGISTERED.SO I THINK THAT'S AN AREA THAT WE COULD POSSIBLY IMPROVE ON. AND WE, AND I WILL WORK WITH THE CHIEF DATA OFFICER TO SEE IF THERE'S A WAY THAT, YOU KNOW, IN THE SCRIPTING OF THE CALLS, HOW THEY DO THINGS FOR OTHER KIND OF LIKE SEX TRAFFICKING, THERE MIGHT BE KEY WORDS THAT WE COULD GET AND SEE, BUT USUALLY THE ONES THAT HAVE DPD INVOLVEMENT HAVE A CODE INVOLVEMENT AND THEY'RE KNOWN TO US, BUT WE CAN CERTAINLY I CAN INQUIRE ABOUT THAT AND LET YOU ALL KNOW.
THANK YOU. THANK YOU, CHAIR. THANK YOU, CHAIRMAN JOHNSON.
YES. LET ME ASK YOU A QUESTION. THERE'S THERE'S ONE THAT WE'VE DISCOVERED IN IN MY NEIGHBORHOOD ON BROOK VALLEY AND THE 500 BLOCK OF BROOK VALLEY. AND I CALLED ON IT. ONE OF MY NEIGHBORS CAME AND LET ME KNOW WHAT WAS GOING ON.
AND SO HE TOOK A FIVE BEDROOM HOME AND CUT IT UP TO BE A 12 BEDROOM HOME AND PUT SOME GRAVEL IN THE BACK OF THE YARD AND STARTED HAVING LIKE WHERE YOU LITTLE STOP POST.
SO WHAT, WHAT, WHAT CAN WE DO ABOUT THAT? IF THERE'S HE DIDN'T PULL THE PERMITS TO GET THAT STUFF DONE, BUT IT'S BEING DONE. HE'S ACTUALLY TRYING TO OPERATE IT AS IF IT'S LIKE A MINI HOTEL, ETC..
AND, AND I DON'T WANT THAT EITHER, ESPECIALLY WHEN YOU DIDN'T GO BY THE CITY POLICY.
FROM WHAT YOU'VE DESCRIBED, I THINK THAT MAY BE A LAND USE ISSUE.
IF THEY'RE SPLITTING UP THE HOME IN DIFFERENT WAYS, ADRIANA MAY CAN ANSWER YOU AS WELL.
BUT I HAVE HEARD OF THAT AND I WILL GET THE ADDRESS, MAKE SURE I HAVE THE ADDRESS AND WE WILL LOOK INTO THAT AND WORK WITH OUR COLLEAGUES IN THE CODE DEPARTMENT. AND CODE HAS CODE IS ON IT.
BUT I JUST WANT TO KNOW BECAUSE I KNOW MY COMMUNITY IS CONCERNED ABOUT THAT.
WITH SOME OF THE, SOME OF THE CHALLENGES THAT WE HAVE WITH THOSE AIRBNBS AND IN SOME CASES IT HAS WORKED TO SUPPORT SOME OF OUR STUDENTS AND TEACHERS THAT WERE GOING THROUGH TRANSITION.
BUT IN THE MAJORITY, IT HAS BECOME A PROBLEM PROPERTY.
SO THAT'S WHY I WAS ASKING, ESPECIALLY WHEN WE, WHEN SOME OF THEM DO NOT FOLLOW THE PROTOCOL OF THE CITY WHEN IT COMES TO REMODELING, ETC. SO THAT'S WHAT I'M TRYING TO GET TO. BUT I WILL GET YOU THAT INFORMATION SO YOU CAN LOOK INTO IT AS WELL.
THANK YOU SO MUCH. IF YOU GUYS HAVE A STATEMENT OR A QUESTION, THANK YOU, THANK YOU.
THANK YOU, VICE CHAIR. I THINK MY QUESTION IS GOING TO GO TO ENFORCEMENT AND TO REPORTING OF ENFORCEMENT, AND I WOULD LIKE TO SEE A SYSTEM THAT BOTH DPD AND CODE HAVE TO REPORT ON EVERY PROPERTY THEY GO TO, WHETHER OR NOT THEY SUSPECT THAT'S AN STR OR NOT.
I MEAN, THIS IS AN EASY CHECK OF A BOX, RIGHT? AND THEN YOU ALL CAN DO PERHAPS THE INVESTIGATION OR MAYBE CODE, WHICHEVER DEPARTMENT THEN WOULD TAKE OVER THE INVESTIGATION.
BUT IF WE ARE GOING TO A PROPERTY ON A REGULAR BASIS OR EVEN ONE TIME WITH VERY SERIOUS COMPLAINTS, THERE IS NO REASON WE SHOULDN'T CHECK INTO THE OWNERSHIP AND THE USE OF THAT PROPERTY, THE LAND USE OF THAT PROPERTY.
THAT'S TO ME, THAT'S THE BASICS. THAT'S WHERE YOU START.
SO I KNOW I'M TALKING ABOUT ENFORCEMENT AND EVERYONE'S LIKE, NO, YOU'RE IN THE FINANCE COMMITTEE.
I GUESS WHAT WE'RE SAYING IS THAT THERE IS A CONCERN ABOUT ENFORCEMENT.
AND IF WE COULD JUST TAKE OUR CONCERNS AND HAVE THEM ADDRESSED IN ANOTHER SETTING, ANOTHER COMMITTEE, I'M NOT SURE WHICH ONE PUBLIC SAFETY OR WHATEVER WOULD WOULD HANDLE THAT, BUT IT' CLEARLY AN ISSUE.
AND SO YOU'RE IT'S JUST GOT TO BE MANAGED. WELL, I THINK THAT AT SOME POINT WHEN COUNCIL HAS AN APPETITE FOR IT, WE REALLY SHOULD PICK THIS ORDINANCE BACK UP.
I MEAN, IT WAS IT'S LIKE A HOT POTATO. NO ONE REALLY WANTS TO TOUCH IT.
BUT I THINK WE WOULD DO JUSTICE FOR THE CITY IF WE ACTUALLY COME THROUGH AND GOT IT, GOT IT RIGHT, INSTEAD OF LEAVING IT IN LITIGATION. BUT THAT'S A WHOLE NOTHER THING.
THAT'S JUST MY OPINION. SO I MOVE ON TO DEPUTY MAYOR PRO TEM TIMELY.
SO THE HOT POTATO IS WITH THE TEXAS SUPREME COURT, AND I HOPE THEY MAKE NOTE OF THE HOMICIDE INVESTIGATION UPDATE THAT WE GOT, YOU KNOW, FROM THREE FATALITIES AT THE POLICE TOOK CARE TO ADD THAT IT WAS AT A SHORT TERM RENTAL, A PARTY AT A SHORT TERM RENTAL. AND I KNOW THAT THERE'S SOME GOOD OPERATORS OUT THERE, BUT MISS KOWALSKI AND TEAM, WHEN I SEE THIS MEMO AND I SEE THAT IN FISCAL YEAR 2025, THE ACTIVE COUNT OF SHORT TERM RENTALS WAS 2394.
[01:30:03]
YET THE STR POTENTIAL COUNT, IT WAS 1817. SO, YOU KNOW, MAYBE 6040 IN THERE.BUT THAT'S A LOT THAT ARE OPERATING THAT MAYBE AREN'T ABIDING BY THE SAME RULES THAT OTHERS ARE.
AND SO THAT'S A CONCERN. BUT I WANT EVERYONE TO KNOW THIS IS A TEAM OF BULLDOGS RIGHT HERE.
AND THEY HAVE RECOVERED SO MUCH REVENUE. AND YOU ALL ARE GOING AFTER THOSE OPERATORS.
SO THE NEIGHBORS KNOW IF THERE'S A SHORT TERM RENTAL ON THEIR BLOCK.
AND IF THEY LET US KNOW ABOUT A PARTY OR EVEN JUST STAYING.
IF THEY SAY, I SAW ACTIVITY THIS PARTICULAR WEEKEND AND WE SEND IT TO YOU ALL AND SOMEBODY HASN'T PAID THEIR HOT TAX FOR THAT, THESE ARE THE TOOLS THAT THIS TEAM USES TO BE ABLE TO PUT THAT CASE TOGETHER.
AND TO THE POINT IN DISTRICT ONE, I MEAN, $112,000.
I MEAN, YOU ALL ARE GOING OUT AND BACKFILLING ON THE END THAT, YOU KNOW, WE'RE SUFFERING WITH, YOU KNOW, WHEN IT COMES TO LAGGING SALES TAX OR, YOU KNOW, OTHER ISSUES THAT HAVE GONE OVER BUDGET.
SO IT'S REALLY CRITICAL THAT WE HAVE YOU. I WAS CURIOUS ABOUT THIS TOOL.
SO WE USED TO USE NEO GOV AND NOW IT LOOKS LIKE PNEUMO.
IS THIS A CHANGE IN VENDORS. IT'S JUST I THINK IT'S AN.
I THINK IT'S THE SAME KIND OF TOOL. IT'S JUST THAT MARKET HAS CONSOLIDATED THE GOV.
IS MY UNDERSTANDING, IS THAT CORRECT, ADRIANNA? OKAY. WELL, I WASN'T SURE ABOUT THAT, BUT ONE CONCERN I HAVE IS I KNOW THAT PROPERTY HOSTS AND OTHERS ARE SOLICITING PEOPLE TO SIGN THEIR HOMES UP DURING FIFA.
AND SO I AM CONCERNED THAT PEOPLE DON'T KNOW THE RULES.
YOU MENTIONED A WEBSITE OR WHERE DO YOU SEND PEOPLE TO BE SURE THEY KNOW HOW TO COMPLY? WE HAVE A WEBSITE THAT THEY CAN REGISTER ON, BUT IN ADDITION TO THAT, WE DID A CAMPAIGN WITH THEIR COMMUNICATIONS DEPARTMENT TO SAY, YOU KNOW, IF YOU'RE GOING TO DO THIS, YOU NEED TO REGISTER.
IN ADDITION TO THAT, I LOOK SEPARATELY TO SEE WHAT KIND OF INFORMATION THERE WAS OUT THERE ON HOW IF YOU WERE GOING TO REGISTER YOUR HOME AND AIR D AND A ACTUALLY HAD A SITE THAT WOULD TELL YOU, IF YOU'RE GOING TO DO IT IN DALLAS, YOU NEED TO PAY DALLAS.
THERE'S OUTREACH NOT JUST FROM US, BUT THERE'S OUTREACH FROM OTHER PLACES.
THE OTHER THING I LOOKED AT IS WHAT DID PEOPLE REALLY THINK WAS GOING TO HAPPEN? AND IT WAS MORE THAT THEY THOUGHT THAT THE VOLUME WOULD BE DOUBLE OR TRIPLE AND THAT THE PRICES WOULD BE DOUBLE OR TRIPLE, NOT THAT MANY PEOPLE WOULD TAKE THEIR WHOLE HOUSE AND CONVERT IT BECAUSE, YOU KNOW, IT'S SUMMER, YOU WOULD HAVE TO MOVE EVERYTHING OUT. AND YOU HAVE CHILDREN.
IT'S A IT'S A LOT OF WORK. WE'LL LET THEM SORT THAT PART OUT.
I JUST WANT TO BE SURE THAT THEY ARE COMPLYING. AND THE OTHER SIDE OF THIS IS I DO HEAR AN INTERSECTION WITH OUR DATA AND BUSINESS ANALYTICS GROUP FOR I MEAN, DPD JUST GOES TO EMERGENCY CALLS. THEY'RE NOT COMBING THROUGH WHETHER IT'S A SHORT TERM RENTAL OR NOT.
AND WE REALLY DON'T WANT THEM TO. WE JUST WANT THEM RESPONDING TO 911 CALLS.
AND I KNOW THAT OUR DATA AND BUSINESS ANALYTICS IS HELPING IN OTHER CATEGORIES LIKE HUMAN TRAFFICKING, RIGHT. AND CAN PULL OUT WORDS. SO PERHAPS IF WE WORK WITH DPD ON BEING, YOU KNOW, IF THEY KNOW THAT THAT'S THE CASE, THEY INCLUDE IT. AND THEN THE ALGORITHM CAN SEND THOSE ADDRESSES TO YOU ALL SO YOU CAN CHECK IT.
YES, I WILL TALK TO DOCTOR ANDREW CHEUK ABOUT THAT AND SEE IF WE CAN'T WORK SOMETHING OUT.
BECAUSE YOU ARE RIGHT. THERE'S BEEN MORE THAN ONE HOMICIDE AT STRS AND ALSO WERE GUNSHOTS.
HAVE YOU KNOW, GONE THROUGH WHERE CHILDREN ARE SLEEPING FROM WHAT I RECALL.
THANK YOU VERY MUCH. I APPRECIATE YOUR WORK. OKAY.
THANK YOU. ALL RIGHT. WE HAVE A WE DO NOT HAVE A MOTION.
WE DON'T NEED ONE. THANK YOU FOR YOUR YOUR PRESENTATION.
OKAY. COLLEAGUES, WE ARE GOING TO LOSE QUORUM HERE IN A FEW MINUTES.
I WANT TO MOVE ON TO ITEM N AS IN NOVEMBER AND CHAT ABOUT THIS TEMPORARY SANITATION FIELD LABOR.
CAN I GET JACK OR SOMEONE FROM STAFF TO GIVE US A LITTLE OVERVIEW OF WHAT THIS ITEM IS AND WHY IT'S ON THE AGENDA TODAY? I'LL GIVE YOU THE LAYMAN'S TERMS, IS THAT IF YOU LOOK AT THE MEMORANDUM THE CURRENT CONTRACT AMOUNT THAT WE'RE PAYING IS $20.31 PER HOUR. FOR OUR SANITATION WORKERS.
THE LIVING WAGE IS OF COURSE 1523 PER HOUR. SO WE'RE ALREADY PAYING ABOVE THAT.
[01:35:05]
IN ACCORDANCE WITH THE COUNCIL POLICY, I BELIEVE WE ARE SET TO INCREASE THE OVERALL CONTRACT RATE UP TO $29.63 AN HOUR FROM OUR $20.31 AN HOUR, WHICH IS A 46% INCREASE.AND THERE'S ALSO A CONCERN THAT WAS BROUGHT UP BY ANOTHER COMMITTEE MEMBER THAT JUMPING UP THAT HIGH GOES ABOVE THE MARKET RATE FOR THIS TYPE OF LABOR, WHICH THEN CAN CAUSE PROBLEMS FROM THE MARKET IN GENERAL.
SO I'M GOING TO TURN IT OVER TO STAFF HERE TO TAKE IT AWAY.
I'M AVAILABLE FOR ANY, FOR ANY QUESTIONS THAT YOU MAY HAVE REGARDING THE MEMO OR THE UPCOMING ITEM.
MY LEADING QUESTION HERE IS LIKE, WHAT IF, IF WE WERE TO TAKE A DIFFERENT DIRECTION, WHAT KIND OF GUIDANCE WOULD YOU NEED TODAY? AND WHEN IS THIS UP FOR A VOTE AT COUNCIL? THIS WILL BE UP FOR A VOTE TOMORROW.
SO THIS IS AN ESSENTIAL SERVICE FOR SANITATION.
AT THIS POINT, MY RECOMMENDATION IS THAT THE COUNCIL PROCEED WITH APPROVING THE ITEM.
YOU KNOW, THIS IS THE LIVING WAGE. THE CONTRACT RATE IS HEAVILY AFFECTED BY THE LIVING WAGE.
BUT TO BRING THIS FORWARD FOR YOUR CONSIDERATION.
AND SO CHAIRMAN WEST, PERHAPS, I MEAN, CLIFF NEEDS THE TEMPORARY LABOR TO PICK UP THE SOLID WASTE, ETC.. HOWEVER, IT MAY BE SOMETHING THAT THE COMMITTEE WANTS TO LOOK AT APART FROM THIS PARTICULAR ITEM FOR THE IMPACT ON THE OVERALL BUDGET, BECAUSE IT'S NOT JUST THIS PARTICULAR CONTRACT, BUT THERE'S OTHER CONTRACTS THAT ARE BEING IMPACTED BY THIS.
BUT I'M VERY SENSITIVE TO HIS IMMEDIATE NEED AND HIS CONTRACT THAT'S EXPIRING.
OKAY. I THINK THAT'S A GREAT ITEM TO BRING BACK NEXT MONTH FOR A DISCUSSION ON THE LIVING WAGE POLICY IN GENERAL, BECAUSE THAT'S LEADING INTO YOUR BUDGET WORK IN THE FALL.
SO FOR NOW WHAT WOULD YOU I DON'T WANT TO PUT YOU ON THE SPOT NECESSARILY, BUT GIVE US A RANGE THAT YOU THINK WOULD BE REASONABLE FOR, YOU KNOW, AS COMPARED TO WHAT IS IN THIS MEMO.
I THINK IF THE COUNCIL WERE CONSIDERING MARKET WAGE SCENARIOS, THAT'S GOING TO WELL, FIRST, I WOULD DEFER TO THE HUMAN RESOURCES DEPARTMENT. BUT IF THERE'S NO ONE HERE FROM THAT, I WOULD I WOULD SAY THAT'S GOING TO BE THE MARKET RATE.
MARKET RATE IS GOING TO BE DIFFERENT FOR EVERY SINGLE POSITION FOR THIS POSITION, WE'RE PROBABLY PRETTY CLOSE TO WHAT THE MARKET IS AT THE CURRENT RATE OF 1523 AN HOUR. CAN WE MAKE A RECOMMENDATION TOMORROW OR TODAY THAT WOULD THEN BE CONSIDERED BY COUNCIL FOR STAFF TO SET THIS AT THE MARKET RATE AND NOT GIVE YOU A RATE SPECIFIC. AND THEN YOU COULD USE WHATEVER THE MARKET RATE.
SO WE'RE GOING TO ASK MR. ORTIZ FROM PROCUREMENT OFFICE TO HELP ANSWER THAT.
IN REGARDS TO THE SOLICITATION THAT OCCURRED FOR THIS PARTICULAR CONTRACT.
JUANITA ORTIZ OFFICE OF PROCUREMENT SERVICES.
SO IN THIS INSTANCE, BECAUSE WE'VE ALREADY GONE OUT TO BID AND WE'VE CLOSED THE SOLICITATION, WE CANNOT CHANGE THE LIVING WAGE REQUIREMENT.
THE LIVING WAGE REQUIREMENT IS SET IN THE RESOLUTION THAT ESTABLISHED IT.
AND IT SAYS IT HAS TO BE AT THE RATE I THINK IT'S 23.
NO, 222205. AND SO WE CAN'T CHANGE IT AT THIS POINT.
WE'D HAVE TO NOT AWARD THE CONTRACT AND GO BACK OUT FOR A SOLICITATION IF WE CHANGED IT.
AND I THINK ON THAT, CLIFF WOULD HAVE TO ANSWER THE IMPACT ON IF YOU DO CHOOSE TO REJECT THE BIDS AND GO BACK FOR SOLICITATION, I BELIEVE HE MENTIONED AND MENTIONED IN AUGUST, CLIFF, I'LL LET YOU ANSWER THAT.
IF WE DID THAT, THE LIVING WAGE POLICY WOULD NEED TO CHANGE THE.
THERE WOULD HAVE TO BE SOME POLICY AROUND THE MARKET WAGE ADOPTED.
THEN THE CITY WOULD HAVE TO STUDY THAT. ALL THAT WOULD BE BEFORE WE COULD SOLICIT.
SO YOU'RE PROBABLY TALKING, YOU KNOW, MONTHS BEFORE WE COULD EVEN RE SOLICIT.
[01:40:09]
I DON'T KNOW WHAT THAT IS. CONTRACTS DO HAVE THE TERMINATION FOR CONVENIENCE.WE COULD DO THAT. CORRECT. OKAY. YOU GUYS ANY QUESTIONS ON THIS? YES. DEPUTY MAYOR PRO TEM, THANK YOU. ON THE OVERALL CONTRACT, REGULAR HOURLY COST.
SO THE LIVING WAGE IS 2205. HOWEVER THE RATE THAT WE'LL PAY IS 29 AN HOUR.
THAT INCLUDES THE LIVING WAGE RATE PLUS THE CONTRACTORS OVERHEAD COSTS.
SO WE PAY 2905. THEY TURN AROUND AND PAY THEIR EMPLOYEE.
2205 SO THAT'S GOING TO SOUND HIGH TO FOLKS, BUT THIS IS OUR BACK OF THE TRUCK STAFF.
IT'S HOT, IT'S COLD. IT'S, YOU KNOW, CAN BE UNPLEASANT.
AND THEN IT'S HARD TO IT'S GETTING HARDER TO GET PEOPLE TO PARTICIPATE.
SO WHEN I LOOK AT THIS RATE, I'M JUST THINKING, IS THIS WHAT IT'S GOING TO TAKE TO KEEP THOSE TRUCKS OPERATING? THAT IS A VERY VALID POINT AS WELL. I WOULD ABSOLUTELY, YOU KNOW, CHAMPION THESE FOLKS THAT DO THIS VERY DIFFICULT JOB.
SO WE'RE ALSO GOING TO HAVE TO TAKE THAT INTO CONSIDERATION.
ONCE THIS IS ADOPTED, AS WELL AS TO WHAT THAT'S GOING TO DO TO OUR SANITATION TRUCK DRIVERS RATE OF PAY, AND THEN ANY EFFECTS THAT HAS WITH OTHER CITY DEPARTMENTS WITH TRUCK DRIVER POSITIONS AS WELL.
SO IF WE LOSE QUORUM, HE CAN STILL EXPLAIN SOMETHING TO US, BUT WE JUST CAN'T TAKE.
I'M JUST STILL CURIOUS. I MEAN, IF WE SAY NO AND WE REJECT THIS, ARE WE GOING TO HAVE PEOPLE WORKING ON THE BACK OF SANITATION TRUCKS? IT WILL BECOME A PUBLIC HEALTH AND SAFETY ISSUE.
AND I WILL PROVIDE THE SERVICE AND THEN BRING IT TO THE COUNCIL TO RATIFY LATER.
SO WE JUST HAVE TO APPROVE IT AFTER THE MONEY IS SPENT? RETROACTIVELY. SO YOU'RE SAYING THAT'S A DISRUPTION.
POTENTIAL DISRUPTION TO SERVICE FOR PARTICULARLY THOSE CUSTOMERS THAT WE HAVE TO SERVICE USING THOSE TRUCKS, WHICH ARE PRIMARILY THOSE ALLEY CUSTOMERS. I MEAN, I JUST WANT TO PUT IT IN LAYMAN'S TERMS BECAUSE WE KNOW HOW EMOTIONAL THIS ISSUE IS.
THERE ARE A LOT OF PEOPLE CONCERNED ABOUT IT. SO IF IT'S YOU KIND OF HAVE TO PAY THIS OR NOT HAVE THE SERVICE, I THINK WE'VE GOT TO LAY IT OUT THAT CLEARLY.
OKAY. THANK YOU FOR EXPLAINING THAT. THANK YOU.
MAYOR PRO TEM, DID YOU HAVE ANY QUESTIONS? ALL RIGHT.
AT THIS POINT WE'VE GOT FOLKS WITH WITH OTHER COMMITMENTS.
WE'RE GOING TO HAVE TO GO AHEAD AND ADJOURN THE COMMITTEE. I WOULD JUST ASK IF ANY
COLLEAGUES HAVE ANY QUESTIONS, JUST EMAIL STAFF AFTER THIS. THANK YOU.
* This transcript was compiled from uncorrected Closed Captioning.