[00:00:01]
IS TRUE FOR SUCCESS, RIGHT HERE, HERE WE[1. Call to Order.]
HAVE FOUR OF THE FIVE UP HERE.SO WE'RE GO, WE HAVE A QUORUM, AND WE'RE GONNA GO AHEAD AND START THIS WORKSHOP FOR WILLAM
[2. Presentation by Wildan Financial Services and discussion on Revenue and Expense Optimization. ]
FINANCIAL SERVICES PRESENTATION ON THE REVENUE AND EXPENSE OPTIMIZATION.SO JIM, WE'RE GONNA START OFF, START US OFF PLEASE.
THIS IS AN OUTCOME OF THE 2050 PLAN, SO JIM'S GONNA WALK US THROUGH AND THEN INTRODUCE WILL DAN, BUT THIS IS, THIS IS, HAS BEEN ANTICIPATED SINCE WE DID THE EVAN 2050 PLAN, SO I JUST WANT TO GIVE YOU THE LITTLE BACKGROUND.
RIGHT, AND THAT'S WHAT I WAS GONNA SAY IS, UH, THROUGH THAT PROCESS, AS YOU KNOW, WE SELECTED A, UH, PREFERRED SCENARIO FOR DEVELOPMENT FOR EAST ADMIN AS WELL AS LOOKED AT THE, UH, THE REVENUE AND EXPENSE, THE COST AND EXPENSE OF, OF, UM, OF MAINTAINING INFRASTRUCTURE AND PROVIDING SERVICES TO EAST ADMIN.
THIS IS A NEXT STEP TO THE PROCESS TO FURTHER OPTIMIZE REVENUES AND EXPENSES, UH, FOR THE WHOLE CITY CITYWIDE, NOT JUST EAST EDMOND, BUT AS FOR THE CITY AS A WHOLE.
SO, WILL DAN HAS COMPLETED THEIR STUDY AND HE'S HERE TO SHARE HIS PRESENTATION WITH US.
AND THEN, UH, THE HOPE IS AT THE END OF THE, UH, MEETING THAT, UH, WE CAN GET SOME DIRECTION FROM COUNCIL.
I'M A VICE PRESIDENT, MANAGING PRINCIPAL WITH WILL AND FINANCIAL SERVICES.
UM, WE'VE, UH, WORKED ON YOUR WATER AND SEWER RATES, UH, FOR MANY YEARS.
UH, IN FACT, IN, UH, IN DISCUSSIONS WITH THE, UH, CITY STAFF, UM, GOT INTERESTED IN THIS PROJECT.
IT'S REALLY, IT'S A FUN, IT'S BEEN A FUN PROJECT TO WORK ON AND, AND, UH, APPRECIATE YOUR, UM, SUPPORT AS WE GO THROUGH THIS.
ROB ER IS HERE WITH ME, UH, FROM WILL THEN AS WELL.
AND THE IDEA BEHIND THIS PROJECT HAS ESSENTIALLY BEEN TO TAKE A LOOK AT WHAT ARE THE NEXT BEST STEPS AS FAR AS YOUR REVENUE OPTIMIZATION GOES, WHAT SOME COMPARATIVE ANALYSIS THAT WE TAKE A LOOK AT, UM, AND HOW DO WE KIND OF ZOOM OUT FROM WHAT'S GOING ON IN EDMUND TODAY, UH, TO LOOK AT THE SORT OF THE, WE CALL IT A CURRENT STATE ASSESSMENT AND BEGIN TO BETTER UNDERSTAND, UM, AT SORT OF THE MACRO LEVEL, UM, HOW YOU COMPARE, UH, BECAUSE I KNOW, UH, I SPENT 15 YEARS ON CITY STAFFS HAVE BEEN CONSULTING FOR 10.
UM, I KNOW THAT IT'S SO EASY TO GET SO LASER FOCUSED ON WHAT'S GOING ON IN YOUR COMMUNITY, UH, THAT SOMETIMES IT'S HELPFUL AND BENEFICIAL TO, TO TAKE A STEP BACK AND LOOK AT HOW OTHER FOLKS HAVE DONE IT AS WELL AND WHAT YOUR TRAJECTORY LOOKS LIKE AS WELL.
UM, AND SO THAT'S WHAT HAS BEEN THE, PROBABLY THE MOST INTERESTING PART ABOUT THIS IS WE CAN TAKE A LOOK AT NOT ONLY HOW YOU COMPARE, BUT WHAT SOME OF THAT TRAJECTORY LOOKS LIKE GOING FORWARD AS YOU LOOK AT, UM, WHAT THIS DEVELOPMENT, UM, YOU KNOW, PIECE LOOKS LIKE.
AGAIN, A LITTLE BIT MORE OF MY BACKGROUND.
UM, I SPENT 15 YEARS WORKING WITHIN CITY MANAGEMENT IN TEXAS, UM, IN VERY FAST GROWTH COMMUNITIES.
UH, FRISCO, TEXAS, ALLINA, TEXAS, MCKINNEY, TEXAS, UM, ALL JUST NORTH OF THE DALLAS METRO AREA, UH, WHERE WE WERE GROWING AT, UM, YOU KNOW, 4,000 BUILDING PERMITS A YEAR, GENERALLY SPEAKING IN ALL THOSE COMMUNITIES.
UM, AND SO I'VE, I GOT A, YOU KNOW, FIRST, UH, FIRST CHAIR LOOK IF YOU WILL, AT, UH, WHAT GROWTH, UM, YOU KNOW, THE, THE IMPACT OF GROWTH ON COMMUNITIES, BOTH THE EXISTING COMMUNITY AS IT STANDS, AND THEN ALSO HOW THAT GROWS OUT OVER TIME.
THIS LOOK IS BOTH, UH, AS JIM MENTIONED, UM, WE WANT TO MAKE SURE THAT THIS IS NOT JUST A, A GROWTH-ORIENTED PRESENTATION OR ANALYSIS.
UM, IT'S REALLY ABOUT HOW DO, HOW DO THE FINANCES OF YOUR COMMUNITY WORK IN COMPARISON WITH OTHERS? AND THEN AGAIN, WHAT DOES THAT TRAJECTORY LOOK LIKE OUT OVER TIME? I DO WANNA MAKE THIS CONVERSATIONAL.
UH, AND SO IF AT ANY TIME YOU HAVE ANY QUESTIONS WHATSOEVER, UM, PLEASE JUMP IN AND WE CAN DO THAT.
AND THEN OBVIOUSLY AT THE END OF THE PRESENTATION, WE'VE GOT SOME TIME SET ASIDE TO HAVE Q AND A AS WELL.
UM, BUT, BUT PLEASE DON'T HESITATE AT ALL.
WE'VE GOT A COUPLE OF PROMPTED, UM, SLIDES IN HERE TO HAVE SOME DISCUSSION.
UH, BUT AT ANY TIME YOU HAVE ANY QUESTIONS, DON'T HESITATE.
SO WITH THAT, WE'VE GOT BASICALLY SIX DIFFERENT SECTIONS THAT WE'RE GONNA WORK THROUGH.
AGAIN, A CURRENT STATE ASSESSMENT.
WE'RE GONNA TALK ABOUT SOME SPECIFIC REVENUE OPTIMIZATION OPPORTUNITIES.
UM, DO A, AN OVERVIEW OF IMPACT IN DEVELOPMENT FEES, UM, PUBLIC SAFETY DISTRICT OVERVIEW AS WELL, UM, GEO BOND FEASIBILITY ANALYSIS.
AND THEN, UH, SOMETHING WE CALL SERVICE LEVEL ADJUSTMENTS, BUDGETING, METHODOLOGY.
A LOT OF THIS IS BASED ON THE REVENUE SIDE.
UH, THE LAST TWO ARE ESSENTIALLY BASED ON THE EXPENDITURE SIDE, AND SO WE'LL LOOK AT BOTH, BOTH SIDES OF THE LEDGER, IF YOU WILL, AS WE MOVE THROUGH THE DAY.
SO THE CURRENT STATE ASSESSMENT, WHAT WE DO WITH OUR CURRENT STATE ASSESSMENTS IS TO TRY AND TAKE A LOOK AT SIMILARLY SITUATED COMMUNITIES.
SO I KNOW, UM, A LOT OF TIMES WHEN YOU'RE COMPARING YOUR OWN COMMUNITY, YOU HAVE A SORT OF BENCHMARK SET OF COMMUNITIES THAT YOU LOOK AT.
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THAT'S GEOGRAPHICAL, IT'S YOUR NEIGHBORS, THOSE KINDS OF THINGS.UM, OTHER TIMES IT'LL BE WHO YOU THINK YOU'RE, UM, YOU KNOW, KIND OF COMPETING AGAINST FROM AN EMPLOYEE STANDPOINT.
WHO DO YOU RECRUIT AGAINST, IF YOU WILL, UH, MIGHT BE FROM ECONOMIC DEVELOPMENT PERSPECTIVE, ALL OF THOSE KINDS OF THINGS.
AND SO WE DEVELOPED A LIST OF ABOUT 10 OR 12, I GUESS ORIGINALLY SAT DOWN WITH THE CITY STAFF AND WORKED THROUGH AND WALKED THROUGH WHAT ARE THE MOST COMPARABLE OF THESE COMMUNITIES, UM, THAT WE CAN TAKE A LOOK AT AT THE MACRO LEVEL.
UH, THERE'S NO WAY TO COMPLETELY COMPARE, COMPARE ANY TWO COMMUNITIES THERE.
THERE'S, UM, IT'S, IT'S ALWAYS A LITTLE BIT OF APPLES AND ORANGES.
AT LEAST SOME COMMUNITIES HAVE AN ELECTRIC UTILITY LIKE YOU DO.
UM, SOME HAVE, UH, YOU KNOW, AN INTERSTATE RUNNING THROUGH THEM, SOME DON'T.
ALL OF THOSE THINGS ADD UP, OBVIOUSLY TO MAKE SOME SIGNIFICANT DIFFERENCES.
BUT WE TOOK A LOOK AT A VARIETY OF DIFFERENT METRICS, IF YOU WILL, TO TRY AND VALIDATE AND MAKE SURE THAT THESE ARE REASONABLE COMPARISONS.
UH, AGAIN, JUST ALWAYS RECOGNIZING THAT WHILE WE'LL PUT NUMBERS UP AND WE, YOU KNOW, IN OUR SPREADSHEETS, WE'VE GOT 'EM ROUNDED OFF TO THE SCENT, UM, THE, THERE, THERE'S, IT'S ALWAYS AN IMPERFECT ANALYSIS WHEN YOU'RE COMPARING TWO DIFFERENT COMMUNITIES, THE AGE OF THE COMMUNITY MAKES A SIGNIFICANT DIFFERENCE ON HOW THEY SPEND THEIR MONEY, ALL OF THOSE KINDS OF THINGS.
SO IT SHOULD ALWAYS BE TAKEN AS A BROAD OVERVIEW AND A GENERAL CONCLUSIONS THAT HELPS YOU BETTER UNDERSTAND YOUR TRAJECTORY AS OPPOSED TO, WHY ARE WE SPENDING MORE OR LESS ON THIS OR THAT.
UH, THAT'S IMPORTANT TO KNOW, UH, BUT IT'S MORE IMPORTANT TO UNDERSTAND WHAT THAT TRA TRAJECTORY LOOKS LIKE AND THEN BE ABLE TO DIG INTO THOSE DETAILS TO THE EXTENT THAT THEY'RE IMPORTANT TO YOU.
UH, IT'S, IT'S, IT'S HELPFUL GENERALLY TO UNDERSTAND SORT OF THE OVERALL, UM, UH, FINANCIAL STATE OF THE COMMUNITY.
EVERY, EVERY CITY, AS YOU CAN PROBABLY IMAGINE, IS ORGANIZED DIFFERENTLY.
SO NOT ONLY DO THEY HAVE DIFFERENT DEPARTMENTS, BUT IN THEIR POLICE DEPARTMENT, SAY SOME INCLUDE THEIR CODE ENFORCEMENT AND POLICE DEPARTMENT, OTHERS DON'T.
UH, SOME INCLUDE ANIMAL CONTROL IN THEIR POLICE DEPARTMENT, OTHERS DON'T.
AND SO WHEN WE LOOK AT A CURRENT STATE ASSESSMENT, WE ALWAYS THINK IT'S MOST HELPFUL TO, AGAIN, ZOOM OUT A LITTLE BIT, TAKE A LOOK AT IT AND SAY, WHAT ARE THE GENERAL FUNCTIONS THAT YOU PROVIDE? WELL, PUBLIC SAFETY IS PUBLIC SAFETY FOR THE MOST PART.
AND IN YOUR ANNUAL FINANCIAL REPORT, JUST LIKE THE OTHER COMMUNITIES THAT WE'RE COMPARING YOU TO, UM, THEY HAVE, GENERALLY SPEAKING, A COUPLE OF DIFFERENT CATEGORIES OF SERVICES THAT ARE PROVIDED.
GENERAL GOVERNMENT AND PUBLIC SAFETY DEVELOPMENT SERVICES, THOSE KINDS OF THINGS.
AND SO THOSE AREN'T GONNA COINCIDE DIRECTLY TO YOUR DEPARTMENTS.
UH, BUT YOU'LL GET THE IDEA OF THE FUNCTIONS, UH, THAT WE'RE TALKING ABOUT HERE THAT MOST CLOSELY COMPARE WITH THOSE OTHER, UM, COMMUNITIES AS WELL.
BECAUSE AGAIN, UH, CODE ENFORCEMENT IS ALWAYS GONNA BE CONSIDERED A PUBLIC SAFETY TYPE FUNCTION, UM, IN THE AUDITS.
AND SO THAT'S WHERE WE'RE GETTING OUR, OUR INFORMATION AND OUR DATA THAT WE'RE USING PRIMARILY.
WE DID SCOUR THROUGH BUDGETS AS WELL, BUT PRIMARILY THROUGH AUDITS.
UM, BECAUSE THOSE ARE AUDITED FINANCIAL STATEMENTS, OBVIOUSLY, IT'S GONNA BE THE MOST RELIABLE, GENERALLY SPEAKING.
I ALSO WANNA MAKE SURE THAT WE POINT OUT THAT, UM, THE VAST MAJORITY OF TODAY IS GONNA BE LOOKING AT THE NONT UTILITY REVENUES.
THE UTILITY REVENUES OBVIOUSLY ARE INTENDED TO BE SELF-SUPPORTING.
YOU CHARGE RATES, UM, AND, AND FEES FOR THE SERVICES THAT ARE PROVIDED FOR YOUR ELECTRIC WATER, TRASH, UM, SEWER, ALL THOSE KINDS OF THINGS.
AND SO WHAT WE'RE TALKING ABOUT HERE ARE THE GENERAL GOVERNMENT TYPE ACTIVITIES, THE NON UTILITY TYPE ACTIVITIES.
SO SOME, SOME THINGS THAT WE LOOKED AT FOR COMPARISON.
WE WANTED INTENTIONALLY TO GET, OBVIOUSLY SEVERAL CITIES WITHIN OKLAHOMA AND THEN A COUPLE OF CITIES OUTSIDE.
UM, BECAUSE AGAIN, WE WANTED TO MAKE SURE WE WERE LOOKING AT IT FROM A ZOOMED OUT SCOPE A LITTLE BIT, AND, UM, RECOGNIZING WHAT ARE SOME OF THE SIMILARITIES AND DIFFERENCES THAT MIGHT BE DRIVING SOME OF THOSE THINGS.
UM, WE LOOK AT TOTAL LAND AREA, UM, THAT IS PROBABLY THE, THE, THE, THE LOWEST ELEMENT OF COMPARABILITY, IF YOU WILL.
IT'S IMPORTANT CLEARLY, UH, BUT THE DEVELOPED LAND MASS IS REALLY WHAT'S MORE IMPORTANT.
UM, YOU KNOW, IF, IF A COMMUNITY IS A HUNDRED SQUARE MILES, BUT ONLY 20 OF IT IS, IS REALLY DEVELOPED, UM, THAT'S ACTS AND FEELS MORE LIKE A 20 SQUARE MILE COMMUNITY THAN A HUNDRED SQUARE MILE COMMUNITY.
WE, WE, WE PAY ATTENTION TO IT, IT HAS AN IMPACT ON YOUR OVERALL COST OVER THE LONG TERM, BUT IT'S NOT THAT BIG OF AN ISSUE.
UM, THE 2010 TO 2020 TOTAL GROWTH IS A BIG ISSUE.
OBVIOUSLY, GROWING COMMUNITIES ARE FINANCED AND FUNDED AND EXPEND THEIR DOLLARS FAR DIFFERENTLY THAN COMMUNITIES THAT AREN'T GROWING AND YOU ARE GROWING, OBVIOUSLY.
UM, THE, THE PERCENT OF OWNER OCCUPIED HOMES GIVES US JUST A LITTLE BIT OF A DEMOGRAPHIC, DEMOGRAPHIC FLAVOR, UH, TO IT TO MAKE SURE THAT WE'RE NOT TOO MUCH COMPARING APPLES AND ORANGES.
MEDIAN HOME VALUE DOES THE SAME THING.
WE LOOK AT THE NON UTILITY GOVERNMENT SPENDING PER CAPITA TO TRY AND MAKE SURE THAT, AGAIN, WE'RE LOOKING AT COMMUNITIES THAT VIEW GOVERNMENT SERVICES IN GENERALLY SPEAKING THE SAME KIND OF TERMS. UM, WHAT LEVEL OF SERVICES ARE BEING PROVIDED.
AND ONE WAY TO DO THAT OBVIOUSLY IS
[00:10:01]
TO TAKE A LOOK AT, WELL, WHAT DO THEY SPEND PER CAPITA TOTAL.UM, AND THESE ARE ALSO COMMUNITIES THAT WE HAVE SOME FIRSTHAND KNOWLEDGE OF.
THEY'RE EITHER OUR CLIENTS WE'VE BEEN IN, WE SPENT TIME IN, UM, TALKING WITH YOUR STAFF.
THEY'RE, THEY'RE, UM, COMMUNITIES THAT WE FEEL COMFORTABLE ARE PROBABLY AS GOOD OF COMPARISONS AS WE'RE GOING TO FIND, RECOGNIZING THAT THERE IS NO PERFECT COMPARISON.
SO THE COMPARISON COMMUNITIES ARE OLATHA, KANSAS, UM, OBVIOUSLY EDMOND WOULD SORT OF BE THE BENCHMARK, MORE NORMAN AND BROKEN ARROW WITHIN OKLAHOMA, AND THEN DOWN IN TEXAS, GEORGETOWN, TEXAS.
UM, SOME OF YOU ARE, MOST OF, YOU'RE PROBABLY FAMILIAR WITH, AT LEAST MOST OF THESE.
UM, THE, WE CAN GET INTO THE DETAILS OF WHY WE SELECTED THOSE TWO PARTICULAR OUT OF STATE.
UM, IF YOU WOULD LIKE TO, IF YOU'RE FAMILIAR WITH THOSE COMMUNITIES, THEN I WON'T WASTE THE TIME ON THAT.
UH, BUT, UH, AGAIN, AT ANY TIME, JUMP IN, GOT ANY QUESTIONS, SO I WON'T GO THROUGH ALL THESE NUMBERS.
THESE ARE REALLY JUST KIND OF FOR YOUR, UM, BENEFIT OF TAKING A LOOK AT THE THINGS THAT WE LOOKED AT.
AND AGAIN, I, I'LL JUST SORT OF DRAW YOUR ATTENTION TO THE, YOU KNOW, OBVIOUSLY THE TOTAL POPULATION OF EDMUND BEING JUST UNDER A HUNDRED THOUSAND POPULATION.
UM, AND AGAIN, WE TRY TO USE STANDARDIZED DATA FOR ALL OF THIS.
SO THIS IS, I THINK YOUR 2021 CENSUS ESTIMATE, UM, THAT CAME THROUGH.
UM, THE AVERAGE OF THE COMPARISON COMMUNITIES WOULD BE ABOUT 103,000.
SO BE VERY CLOSE, OBVIOUSLY TO THE AVERAGE.
YOU GOT A COUPLE OF OUTLIERS THERE.
OBVIOUSLY NORMAN IS A FAIR BIT LARGER, MORE IS A FAIR BIT SMALLER, UH, BUT ON AVERAGE, UM, YOU'RE PRETTY CLOSE TO, UM, WHERE EDMOND'S AT THE, UH, GROWTH RATE BETWEEN 2010 AND 2020.
THE ONLY REAL OUTLIER THERE IS GEORGETOWN, A THREE AND A 5% GROWTH.
IT'S JUST NORTH OF THE AUSTIN AREA AND HAS SEEN AN INCREDIBLY FAST PACED OF GROWTH, UM, OVER THE PAST DECADE AND CONTINUES THIS DECADE AS WELL.
BUT EVERYBODY ELSE IS GENERALLY SPEAKING IN THE SAME BALLPARK OF WHERE YOU'RE AT.
OWNER OCCUPIED HOMES, OBVIOUSLY NORM'S GOT A SMALLER PERCENTAGE, UH, CUZ OF THE, THE, UM, LOCATION OF THE UNIVERSITY THERE.
UM, SO THAT'S, AGAIN, JUST THESE OUTLIERS YOU JUST KINDA HAVE TO KEEP IN MIND IS ALL.
UM, KEEP IN MIND AS YOU'RE LOOKING THROUGH THE INFORMATION, MEDIAN HOME VALUE ED IS, UM, HIGHER THAN I THINK EVERYBODY EXCEPT FOR GEORGETOWN ON THE LIST.
UM, BUT JUST A LITTLE BIT ABOVE THE AVERAGE AS A WHOLE LAND AREA.
YOU CAN SEE HOW YOU COMPARE THERE, MEDIAN HOUSEHOLD INCOME, AND THEN THE GOVERNMENT ACTIVITY SPENDING PER CAPITAL.
WE'RE GONNA GET THESE INTO GRAPHICAL FORM HERE AS WELL.
UM, SO YOU DON'T HAVE SO MANY NUMBERS TO LOOK AT ON, ON A SINGLE SLIDE, BUT JUST A QUICK OVERVIEW OF SOME OF THOSE BASIC I IDEAS.
AND AGAIN, WE STARTED WITH A LIST OF, OF, I THINK IT WAS ABOUT 12 AND BEGAN TO LOOK AND SEE ARE THERE AREAS, ARE THERE ISSUES HERE THAT KIND OF KNOCK THIS ONE OUT OF COMPARISON THAT DOESN'T MAKE SENSE TO INCLUDE AS PART OF THIS COMPARISON? WE WHITTLED IT DOWN, UM, TO THESE SIX.
SO WITH THAT, LET'S START GETTING INTO SOME OF THE DATA ITSELF.
GENERALLY SPEAKING, THE FORMAT THAT WE USE HERE IS THAT THE DARKEST IS, IS EDMOND'S.
UM, RESULTS, UM, FROM ANY ONE OF THESE CHARTS THAT YOU'LL SEE, THE GRAY ON THE TOP IS THE AVERAGE ACROSS THESE COMPARISON COMMUNITIES.
AND THEN THE LIGHT GREEN OBVIOUSLY ARE JUST THE RESULTS FROM THOSE OTHER COMMUNITIES.
UH, SO THE TAXABLE SALES PER CAPITA, UM, IS JUST AS IT SOUNDS, HOW HOW MUCH TAXABLE SALES DO DOES YOUR COMMUNITY BY PER CAPITA.
THAT DOESN'T MEAN THEY BUY IT IN EDMUND, BUT THEY BUY IT IN GENERAL.
WE PULL THIS DATA, UM, THROUGH A VARIETY OF DIFFERENT SOURCES INCLUDING, UM, CENSUS DATA.
WE HAVE A TOOL CALLED BUSINESS ANALYSTS THAT IS THE SAME TOOL THAT, UM, THAT RETAILERS USE TO TRY AND UNDERSTAND WHAT THE SPENDING LEVELS ARE LIKE IN DIFFERENT COMMUNITIES, THOSE KINDS OF THINGS.
AND YOU CAN SEE HERE THAT AS YOU MIGHT EXPECT WITH A HIGHER THAN AVERAGE HOUSEHOLD AVERAGE INCOME, YOU ALSO HAVE HIGHER THAN AVERAGE TAXABLE SALES THAT ARE BEING, UM, PURCHASED, UH, FROM YOUR CITIZENS.
AND SO IT'S JUST SLIGHTLY ABOVE AVERAGE WITH OLATHE AND GEORGETOWN BEING A FAIR BIT ABOVE AVERAGE.
UM, WITHOUT DIGGING INTO A TON OF DETAIL ABOUT WHAT'S TAXED AND WHAT'S NOT TAXED IN THOSE DIFFERENT STATES, UM, THIS IS ONE THAT YOU HAVE TO LOOK AT AND SAY, OKAY, WELL WHERE DO YOU REALLY FIT IN OKLAHOMA? BECAUSE TEXAS AND KANSAS MAY TAX THINGS DIFFERENTLY THAN YOU DO THIS.
THIS DOES MODERATE FOR THE TAX RATE.
UM, SO THE SALES TAX RATE IS, IS, YOU KNOW, FACTORED INTO THIS.
THAT'S WHY WE'RE LOOKING AT, AT IT AS WHAT ARE THE TAXABLE SALES AS OPPOSED TO THE TAX REVENUE PER CAPITA.
AND SO, YOU KNOW, AGAIN, OBVIOUSLY A LITTLE BIT ABOVE AVERAGE, A FAIR BIT ABOVE THE OKLAHOMA CITIES.
UM, AND YOU KNOW WHAT THIS CAN HELP TO SHOW IS AS YOUR TOTAL AVAILABLE, YOU KNOW, REVENUE STACK AS I'LL REFER TO SEVERAL TIMES TODAY, UM, HOW MUCH OF IT IS LIKELY TO BE RELIANT ON SALES TAX? EV I MEAN, OBVIOUSLY MOST OKLAHOMA COMMUNITIES ARE HEAVILY DEPENDENT UPON SALES STACKS OF VOLATILE REVENUE STREAM.
I'M NOT TELLING YOU ANYTHING YOU DON'T KNOW THERE, UH, BUT WE'RE GONNA GET INTO HOW MUCH MORE OR LESS SO IS ADMIN COMPARED TO OTHER COMMUNITIES.
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THIS NEXT CHART IS SALES TAX REVENUE PER CAPITA.SO THE LAST ONE WAS, HOW MUCH TAXABLE SALES ARE YOUR CITIZENS, UM, SPENDING PER CAPITA? THIS IS TAXABLE SALES TAX REVENUE TO THE COMMUNITY PER CAPITA AS A PERCENT OF MEDIAN HOUSEHOLD INCOME.
UH, THIS IS ONE WHERE EDMUND ENDS UP FAIRLY LOW ON THE LIST.
THERE'S A COUPLE OF THINGS LIKELY DRIVING THAT.
SO THIS IS YOUR SALES TAX REVENUE COMING INTO THE COMMUNITY AS A PERCENTAGE OF MEDIAN HOUSEHOLD INCOME.
YOU HAVE A RELATIVELY HIGH MEDIAN HOUSEHOLD INCOME, AND SO THE PERCENTAGE OF THE MEDIAN HOUSEHOLD INCOME THAT'S COMING INTO ADMIN AS SALES TAX WILL TEND TO BE A LITTLE BIT LOWER.
YOU HAVE A LARGER DENOMINATOR IN THIS CASE.
HOWEVER, IT'S INTERESTING TO, TO TO SEE THAT ACROSS ALL OF THESE COMMUNITIES, ALL OF THEM ARE WITHIN A PERCENTAGE POINT OF HOW MUCH THEY'RE SPENDING ON RETAIL ACTIVITIES.
SO WHETHER THE, THE MEDIAN HOUSEHOLD INCOME IS A HUNDRED THOUSAND DOLLARS OR $60,000, EVERYBODY'S SPENDING ABOUT 30 TO 35 PER, IT'S ABOUT 35% ON RETAIL SALES.
AND SO OBVIOUSLY THE DOLLAR AMOUNT IS DEPENDENT UPON WHAT THE MEDIAN HOUSEHOLD INCOME IS, RIGHT? BUT THE PERCENTAGE THAT THE COMMUNITY ACTUALLY RECEIVES, WHAT THIS TELLS US IS THAT YOU'RE VERY LIKELY EXPORTING SALES TAX DOLLARS.
YOUR PEOPLE ARE TAKING THEIR DOLLARS, YOUR CITIZENS ARE TAKING THEIR DOLLARS, AND THEY'RE GOING OUTSIDE OF THE COMMUNITY VERY LIKELY TO SPEND THOSE SALES TAX DOLLARS.
AND SOMEBODY ELSE IS GETTING THE BENEFIT OF THAT OKLAHOMA CITY OR WHOMEVER, RIGHT? AND SO AGAIN, I KNOW THAT THAT'S PROBABLY NOT SAYING ANYTHING THAT YOU DON'T ALREADY KIND OF KNOW, UH, BUT THIS IS A, A VERY GOOD, A VERY STRONG INDICATOR OF THAT, THAT THERE IS SOME EXPORTING OF SALES TAX DOLLARS GOING ON.
UM, AND SO DOES, DOES THAT KINDA MAKE SENSE? WHAT, WHAT I MEAN WHEN I SAY EXPORTING SALES TAX DOLLARS, IT'S DOLLARS THAT ARE GENERATED HERE THAT ARE YOUR CITIZENS ARE SPENDING, BUT THEY'RE SPENDING THEM SOMEWHERE ELSE.
SO THAT'S WHAT WE REFER TO AS LEAKAGE.
LEAKAGE, YEAH, LEAKAGE IS ANOTHER TERM THAT'S OFTEN USED.
UM, IT'S IT'S THE AMOUNT OF MONEY THAT IS GOING OUTSIDE OF THE COMMUNITY, UH, THAT SOMEBODY ELSE IS TAXING.
YOU'RE GETTING THE BENEFIT OF, UM, THAT YOUR CITIZENS AREN'T NECESSARILY, NOT DIRECTLY, AT LEAST.
NOW OBVIOUSLY THESE REGIONS DON'T, UM, THEY DON'T WORK AUTONOMOUSLY, RIGHT? SO, UM, IF YOU WANT TO GET ANYWHERE, YOU NEED THE ROADS THAT OTHER COMMUNITIES BUILD.
AND SO IT'S NOT AS THOUGH IT'S A HUNDRED PERCENT GOING TO FUND SOMEBODY ELSE CUZ YOU'RE GETTING SOME BENEFIT OUT OF IT.
BUT, UM, BUT I, YOU KNOW, AND, AND LIKEWISE, UH, THEIR CITIZENS NEED AS THOSE SAME ROADS TO COME TO YOU TO SPEND THEIR MONEY HERE.
UH, SO IT'S NOT A HUNDRED PERCENT LEAKAGE, IF YOU WILL, BUT THERE, THERE'S, THERE'S SOME OF THAT GOING ON VERY CLEARLY HERE.
GOVERNMENT ACTIVITIES, EXPENSES PER CAPITA.
SO THIS, THERE'S SOME TECHNICAL TERMS IN HERE.
SO AGAIN, WE'RE FOCUSED ON THE GOVERNMENT ACTIVITIES PORTION, UM, OF WHAT YOU DO.
SO THAT'S YOUR PUBLIC SAFETY, IT'S DEVELOPMENT SERVICES, IT'S YOUR ADMINISTRATION.
IT'S ESSENTIALLY YOUR NON UTILITY FUNCTIONS, UH, THAT YOU HAVE WITHIN THE COMMUNITY.
THE, THE EXPENSES PER CAPITA ON A THREE YEAR AVERAGE, WHICH WE TOOK A THREE YEAR AVERAGE BECAUSE THERE'S ALWAYS TENDS TO BE AN OUTLIER.
A BIG STORM HAPPENED IN ONE COMMUNITY THAT DIDN'T HIT ANOTHER OR WHATEVER THE CASE MAY BE.
AND SO WE TAKE A LOOK AT THAT THREE YEAR AVERAGE.
AND YOU CAN SEE HERE IN EDMOND, YOU'RE A LITTLE BIT ABOVE THE AVERAGE OF A THOUSAND, $27 IS THE AVERAGE.
YOU'RE AT 1,084 PER CAPITA, UM, IN GOVERNMENTAL EXPENDITURES.
SO IN ESSENCE, FOR EVERY, EVERY MAN, WOMAN, A CHILD IN ADMIN, THAT'S WHAT THE SPEND IS, SPEND RATE IS, UM, ON AN ANNUAL BASIS, THREE YEAR AVERAGE.
IT'S A LITTLE BIT ABOVE AVERAGE AND IT'S FAIRLY SIGNIFICANTLY ABOVE THE OKLAHOMA AVERAGE.
SO WHAT THAT SHOWS IS THAT PARTICULARLY IN A, IN, IN A COMMUNITY LIKE YOURS THAT HAS, UM, YOU KNOW, UH, UH, VERY LITTLE DEPENDENCE ON, UM, ANY KIND OF A PROPERTY TAX, IF ANY, YOU KNOW, DEFENDANTS ON A PROPERTY TAX, YOUR CITIZENS ARE GETTING A LOT OF SERVICES.
IT'S A HIGH LEVEL OF SERVICE COMMUNITY.
AGAIN, I KNOW I'M NOT TELLING YOU ANYTHING THAT YOU DON'T ALREADY SORT OF KNOW, UH, BUT THE DATA BEARS THAT OUT.
AND YOU LOOK AT, YOU KNOW, GEORGETOWN AND OLA, OLATHE BEING THE OLATHE BEING SORT OF THE, THE OUTLIER HERE AT OVER $1,200, UH, PER CAPITA EXPENDITURES.
YOU HAVE TO TAKE A LOOK AT THOSE OUT-OF-STATE COMMUNITIES, AGAIN, WITH A LITTLE BIT OF ADDITIONAL SCRUTINY TO SAY, OKAY, WELL WHAT KINDS OF THINGS MIGHT KANSAS COMMUNITIES BE, HAVE THE RESPONSIBILITY TO PROVIDE THAT PERHAPS IN OKLAHOMA THEY DON'T.
UM, SO WE LIKE TO INCLUDE THOSE TO GIVE SOME PERSPECTIVE.
UH, BUT YOU HAVE TO AGAIN, JUST HAVE A HIGHER DEGREE OF SCRUTINY ON IT.
BUT YOU TAKE A LOOK AT THE OTHER OKLAHOMA COMMUNITIES, AND YOU'RE A LITTLE BIT ABOVE, UH, NORMAN, A FAIR BIT ABOVE MORE AND A LOT ABOVE BROKEN ARROW, ABOUT 20%, ALMOST 20% ABOVE BROKEN ARROW ON WHAT'S ACTUALLY BEING SPENT.
SO THE, WHAT I, WHAT I'VE FOUND OVER THE YEARS IS THAT, UM, WHEN, WHEN WE LOOK AT THIS, WHEN WE'VE, WHEN WE'VE DONE SOME DUE DILIGENCE ON IDENTIFYING WHAT THE COMPARISON COMMUNITIES ARE, AND THEY REALLY ARE SIMILARLY TYPE, YOU
[00:20:01]
KNOW, SIMILAR TYPE COMMUNITIES IN A LOT OF WAYS, WHAT THIS COMES DOWN TO IS NOT THAT YOU'RE PAYING YOUR STAFF ANYMORE, IT'S NOT THAT YOU'RE PAYING MORE FOR PROJECTS.IT'S NOT THAT YOU'RE DOING ANYTHING LESS EFFICIENTLY OR ANYTHING LIKE THAT.
IT'S THAT YOU'RE PROVIDING MORE SERVICES AND THOSE SERVICES COST DOLLARS, RIGHT? UH, BECAUSE EVERYBODY DOES THE SAME KIND OF SALARY SURVEYS.
EVERYBODY DOES THE SAME KIND OF COST SURVEYS, THOSE KINDS OF THINGS.
AND SO THIS IS HOW MANY DOLLARS ARE BEING INVESTED BACK INTO YOUR COMMUNITY, UM, THROUGH THE CITY OF EDMOND.
AND AGAIN, IT'S, UM, A BIT ABOVE AVERAGE, PARTICULARLY A BIT ABOVE THE OKLAHOMA AVERAGE.
AN INTERESTING ASPECT OF THAT IS YOU SPEND RIGHT NOW LESS THAN 1% ON LONG-TERM DEBT INTEREST AS PART OF THAT $1,084 OR WHATEVER IT WAS, JUST A LITTLE LESS THAN $9 PER CAPITA ON ON INTEREST EXPENSE.
YOU CAN SEE HERE THE OUTLIER GEORGETOWN, UM, UP AT $95, UM, UH, FOR JUST INTEREST ON LONG TERM DEBT.
UM, THE OTHERS ARE OBVIOUSLY PRETTY CENTERED AROUND THAT.
YOU KNOW, $35 RANGE OF LATHE JUST UNDER 45, BROKEN ARROW JUST UNDER 40, UH, NORMAN AT 35, UH, JUST UNDER $35.
IT'S ABOUT 4% OF THEIR, UM, GOVERNMENTAL EXPENSES ON AN AVERAGE, UH, ON AN ANNUAL BASIS.
MORE AT JUST ABOUT $19 AND YOU'RE HALF OF THE NEXT ONE.
UM, SO THAT IN TAKING AN AGGREGATION WITH THE PREVIOUS SLIDE, UH, YOU'RE SPENDING $1,084 IN SERVICES PER CAPITA, AND ONLY $9 OF THAT IS, IS INTEREST.
IT JUST, IT JUST EXPANDS THAT LEVEL OF SERVICE, RIGHT? BECAUSE YOUR FOLKS ARE ACTUALLY GETTING, YOU KNOW, UH, $1,075 WORTH OF SERVICES AND THEY'RE SPENDING $9 ON INTEREST ON LONG-TERM DEBT.
WHEREAS IN THESE OTHER COMMUNITIES, THEY'RE GETTING ABOUT 95 ISH PERCENT OR SO AS OPPOSED TO 99% OF SERVICES.
SO THAT HAS IMPLICATIONS OBVIOUSLY, THAT WE'LL GET INTO HERE IN A LITTLE BIT AS WELL.
THERE'S OBVIOUSLY SOME GOOD THAT COMES WITH THAT.
AND THEN THERE'S SOME TRADEOFFS, UH, THAT COME WITH THAT AS WELL.
THE GOVERNING, UM, GOVERNMENT ACTIVITIES, EXPENSES PER ACRE, UH, IS PROBABLY MOST INTERESTING TO RECOGNIZE THAT THOSE COMMUNITIES THAT ARE MORE HIGHLY DEVELOPED AS PERCENTAGE OF DEVELOPMENT, UM, ARE A LOT MORE EXPENSIVE TO OPERATE AND MAINTAIN PER ACRE.
UM, AGAIN, THIS IS NOT ANYTHING OTHER THAN WHAT IS IT COSTING THEM PER ACRE? OLATHE AND MORE GENERALLY SPEAKING, OR SMALLER COMMUNITIES, THEY'RE MORE DENSELY DEVELOPED.
THEY DON'T HAVE AS MUCH OPEN LAND YET TO DEVELOP.
UM, AND SO THAT'S WHAT YOUR FUTURE LOOKS LIKE, I GUESS IS MY POINT.
WHERE RIGHT NOW YOU'RE SPENDING A LITTLE LESS THAN $2,000 PER ACRE, UH, BECAUSE THERE'S A LOT OF LAND THAT'S UNDEVELOPED IN EDMUND STILL.
UM, AS YOU BECOME MORE AND MORE DEVELOPED, YOU'RE GONNA GET UP TO $4,400 PER ACRE.
UM, SOMETHING IN THAT BALLPARK.
SO THOSE COSTS PER ACRE OBVIOUSLY ARE, THEY'RE NOT GONNA GO DOWN.
UM, THEY, THEY GO UP AS THE DENSIFICATION CONTINUES TO HAPPEN.
AND AS THOSE SERVICE DEMANDS CONTINUE TO HAPPEN THROUGHOUT YOUR COMMUNITY, AND THEY NOT ONLY GO UP, BUT THEY'RE GONNA AT LEAST DOUBLE PER ACRE, THIS ONE THAT GETS A LITTLE WONKY AS WELL.
SO I'LL TAKE A MINUTE TO EXPLAIN IT.
UM, WHAT'S YOUR, WHAT'S, WHAT'S CALLED YOUR NET REVENUE OR EXPENSE PER CAPITA? UM, THERE IS NO EXPECTATION ON, ON ANY LOCAL GOVERNMENT THAT I'VE EVER BEEN INVOLVED WITH, UM, THAT YOU DON'T HAVE A NET EXPENSE.
NET EXPENSE IS SIMPLY HOW MUCH ARE YOU SPENDING AND HOW MUCH ARE YOU BRINGING IN ON DIRECT CHARGES, WHETHER THAT'S FEES THAT YOU'RE TO, TO RENT A PARK PAVILION, OR WHATEVER THE CASE MAY BE.
THE FINES AND FEES THAT THE POLICE DEPARTMENT CHARGES OR THE AMBULANCE SERVICE PROVIDES, THOSE KINDS OF THINGS.
UM, WHAT'S THE DIFFERENCE BETWEEN HOW MUCH YOU'RE BRINGING IN VERSUS ESSENTIALLY WHAT HAS TO BE SUPPORTED THROUGH SOME KIND OF TAX DOLLARS? UM, RIGHT NOW YOUR NET EXPENSE PER CAPITA IN YOUR GOVERNMENTAL ACTIVITIES IS $825 A FAIR BIT ABOVE THE $700 AVERAGE.
UM, AND SO WHEN YOU TAKE A LOOK AT THAT, AGAIN, THERE'S, GO BACK TO THOSE PREVIOUS SLIDES, YOU'RE SPENDING MORE PER CAPITA, RIGHT? YOU HAVE SALES TAX LEAKAGE, UH, OR, OR EXPORTING YOUR SALES TAX DOLLARS TO SOME EXTENT.
AND SO WHAT THIS BOILS DOWN TO IS FOR, AGAIN, FOR, FOR EVERY PERSON WITHIN THE COMMUNITY, UM, YOU HAVE TO FIGURE OUT A WAY TO GET TODAY $825 WORTH OF SALES TAX DOLLARS IN TO FUND THOSE SERVICES.
THE REST GETS MADE UP, UP TO THE THOUSAND 84, UH, GETS MADE UP WITH USER FEES, CHARGES, THOSE KINDS OF THINGS.
YOU CAN SEE AGAIN, THERE'S CERTAINLY NOT AN OUTLIER.
UM, YOU GOT A OLATHE JUST A BIT ABOVE YOU.
UM, BUT THEN EDMUND IS SIGNIFICANTLY ABOVE ALL OF THE OTHER COMPARISON COMMUNITIES,
[00:25:01]
UH, GEORGETOWN AT A LITTLE UNDER 700, BROKEN ARROW BEING DOWN AT 5 62.AND SO AGAIN, THESE ARE IN DOLLARS.
UM, WE'RE ALSO GONNA SHOW THIS IN PERCENTAGE, UH, TO MAKE SURE THAT WE'RE ACCOUNTING FOR WHAT THE TOTAL SPEND IS PER CAPITA.
SO THIS KIND OF ADDS INTO WHAT WE CALL A COST RECOVERY RATIO.
AND THIS IS ON YOUR GOVERNMENT ACTIVITIES.
AGAIN, NOBODY EXPECTS, UM, THAT YOU'RE AT A HUNDRED PERCENT COST RECOVERY, UNLIKE YOUR UTILITY FUNDS.
YOU EXPECT THOSE TO BE AT A HUNDRED PERCENT COST RECOVERY.
THAT THOSE, THAT'S WHY IN YOUR AUDIT, IT'S CALLED A BUSINESS TYPE ACTIVITY CUZ YOU GOTTA COVER THE COSTS, RIGHT? UM, THESE ARE FOR THOSE FUNCTIONS THAT AREN'T INTENDED TO COVER.
THEIR COSTS ARE INTENDED TO BE SUPPORTED BY TAX DOLLARS.
RIGHT NOW THOUGH, IF YOU LOOK AT IT, ADMIN IS COVERING 24% OF ITS COSTS WITH THINGS OTHER THAN TAXES AGAIN.
SO THINK OF USER FEES, CHARGES, DEVELOPMENT FEES, ALL OF THOSE KINDS OF THINGS.
SO UNDER A QUARTER, UM, COST RECOVERY, THE AVERAGE IS ABOUT 32%.
AND YOU CAN SEE HERE EDMUND IS A LITTLE BIT OF AN OUTLIER.
UM, MOST PEOPLE ARE, THEY'RE KIND OF CLUMPED IN WITH 31, 32, 32, 35, AND 36, AND YOU'RE A FULL SEVEN PERCENTAGE POINTS LESS THAN THE, THAN THE NEXT, UM, ONE UP.
AND SO THAT BEGINS TO LEAD US TO SOME OF THE CONCLUSIONS AS WE PUT ALL OF THIS INFORMATION TOGETHER AND BEGIN TO ANALYZE IT AND SAY, WELL, SO WHAT, RIGHT? THAT'S WHAT WE'RE TRYING TO GET TO IS, SO WHAT DOES THAT MEAN? WELL, WHAT OPTIONS DO YOU HAVE? AND WHERE SHOULD YOU LOOK IN ORDER TO IDENTIFY OPPORTUNITIES TO OPTIMIZE REVENUES? AND THIS IS A, A, A SORT OF A, A BIG FLAG FOR US THAT LOOKS AND SAYS, OKAY, THERE'S AN OPPORTUNITY HERE.
THERE'S SOMETHING THAT'S BEING LEFT ON THE TABLE.
AND SO WE'LL TALK ABOUT THAT HERE IN A LITTLE BIT MORE.
AND AGAIN, THESE ARE THREE YEAR AVERAGES.
SO WE'VE TRIED TO TAKE OUT ANY OF THE EXTENUATING CIRCUMSTANCES IN ANY PARTICULAR COMMUNITY THAT HAPPENS IN ANY PARTICULAR YEAR.
UM, AND, AND AGAIN, UM, COMES OUT, UH, SIGNIFICANTLY, SIGNIFICANTLY LESS THAN, THAN THE AVERAGE IN THE REST OF THE COMMUNITIES.
IS THIS THE TYPE OF FORMULA WHERE IF EDMOND WAS THE SAME AS MORE AT 35%, IS THERE A DOLLAR AMOUNT ON THAT YOU TIE TO THAT? YEAH, IN THE, IN THE BACK END? YEAH, IN THE, IN THE BACK END.
THERE IS, UM, I DON'T HAVE THAT, UH, JUST OFF THE TOP OF MY HEAD RIGHT NOW, BUT YES, WE'VE GOT THAT DATA.
UM, WE'VE CALCULATED IT BASED ON THE DOLLAR AMOUNTS.
WHAT WE'RE TRYING TO DO HERE IS TO CONTROL FOR THAT TOTAL AMOUNT OF EXPENDITURES.
UH, BECAUSE IF WE SAID IT'S, UM, YOU KNOW, $300, UH, THAT'S BEING COVERED PER CAPITA, UM, ON A $800 TOTAL SPEND, THAT'S ONE THING ON A THOUSAND DOLLARS TOTAL SPEND, IT'S ANOTHER OKAY.
UM, IN, IN ESSENCE, AGAIN, WE'VE GOT THE DATA, WE CAN MAKE SURE YOUR STAFF HAS THAT.
UM, BUT IT'S JUST THE DIFFERENCE BETWEEN THIS NET RECOVERY, UM, AND THE TOTAL AND THE TOTAL SPEND.
AND AGAIN, THE IDEA HERE IS TO CONTROL FOR WHAT THE TOTAL AMOUNT OF EXPENDITURES IS SO THAT WE'RE GETTING AS CLOSE TO APPLES TO APPLES AS WE CAN ON COMPARISONS.
OKAY? SO WE DIG INTO THE DATA A LITTLE BIT FURTHER.
AGAIN, I SAID, UM, THAT, THAT REALLY KIND OF PRESENTED A, A, A LOOK TO SAY, OKAY, WELL HERE'S SOMETHING, UM, YOU'RE SIGNIFICANTLY BELOW AVERAGE ON YOUR COST RECOVERY.
WHAT IS, WHAT IS THAT O ITSELF TO, I MEAN, THERE'S A COUPLE OF DIFFERENT AREAS, UM, THAT WE LOOKED AT THAT WE, WE, WE STUDIED ALL OF THE, ALL OF THE AREAS.
UM, BUT THIS IS ONE THAT REALLY KIND OF POPPED OUT AGAIN AS BEING, UM, NOT JUST LOW, BUT SIGNIFICANTLY LOWER THAN THE AVERAGE CAPITAL GRANTS AND CONTRIBUTIONS.
AND THIS COMES DOWN TO, UM, EVERYTHING FROM, UH, DEVELOPMENT FEES TO OBVIOUSLY GRANTS, UH, JUST GRANTS THAT YOU GO OUT FOR WHERE THERE'S COMPETITIVE GRANTS, FEDERAL GRANTS, STATE GRANTS, ALL THOSE KINDS OF THINGS.
UM, BUT ALSO A LARGE PORTION OF THIS, UH, ENDS UP BEING DEVELOPMENT FEES.
AND WHERE YOU LOOK AT ON A PER CAPITA BASIS, EDMUNDS GETTING ABOUT $45 PER CAPITA IN THOSE KINDS OF REVENUE STREAMS THAT ARE COMING IN.
THE AVERAGE IS OVER A HUNDRED DOLLARS NOW, THE ONE ON THE PER ACRE.
BUT THAT, THAT HAS A LOT TO DO WITH THE AMOUNT OF UNDEVELOPED IT DOES LAND.
AND THAT'S, UH, YOU KNOW, AGAIN, WHY I WOULD TEND TO LOOK AT THIS AND SAY ON A PER CAPITA BASIS, WHEREAS IT, I LIKE TO SHOW THE OTHER JUST TO SEE DOES IT FALL OUT FAIRLY CLOSE OR IS IT SOMETHING THAT IS AN OUTLIER? AND SO WE LOOK AT IT BOTH WAYS.
AND WHEN I LOOK AT THIS AND I SAY IT'S ABOUT HALF OF AVERAGE ON PER CAPITA, THAT'S THE NUMBER I WOULD BE USING IN TARGETING TO SAY, IS THAT THAT SIGNIFICANT, ESPECIALLY IF IT MARRIES UP PRETTY CLOSELY WITH THE PER CAP, WITH THE PER ACRE.
AND OBVIOUSLY YOU'RE A, A LESS THAN A QUARTER, UM, PER ACRE THAN AVERAGE.
BUT AGAIN, THAT HAS TO DO WITH HOW MUCH, AND WE'VE GOT UNDEVELOPED ISH 50% THAT'S UNDEVELOPED, RIGHT? SO I'M GUESSING THE SCHEME OF THINGS, IF YOU THINK LONG TERM AND IT'S ALL DEVELOPED DOUBLE
[00:30:01]
ISH THAT YEP.AND THEN WE'RE BACK UP RIGHT UNDER GEORGETOWN.
AND SO THOSE TWO NUMBERS TO ME, UM, EQUATE ESSENTIALLY TO THE SAME THING, RIGHT? OF THERE'S, UH, ON, ON A PER CAPITA BASIS, YOU'RE LOW ON A CURRENT DEVELOPED STATE PER ACRE, YOU'RE LOW ON A FULLY DEVELOPED STATE PER ACRE, YOU'RE LIKELY STILL LOW JUST BASED ON HOW MUCH AVAILABLE LAND THERE IS LEFT TO DEVELOP.
AND SO AGAIN, THIS IS ONE OF THOSE THINGS THAT WE LOOK AT AND SAY, OKAY, WELL WHY IS THAT? WHAT'S DRIVING THAT? UM, WHERE, WHAT ARE THE POLICY DECISIONS THAT THIS GROUP, UM, YOU CAN BE INFORMED ON IN ORDER TO TAKE A LOOK AT THIS AND SAY, IS THAT WHERE WE WANT TO BE? UM, THERE IS NO RIGHT ANSWER IN ANY OF THIS, QUITE FRANKLY.
UM, AND I KNOW THAT'S, THAT'S EASY FOR A CONSULTANT TO SAY.
WE DON'T HAVE TO COME UP AND SAY, WELL, HERE'S THE POLICY, RIGHT? UM, BUT THE, THE REALITY OF IT IS, IS THE RIGHT ANSWER IS THE ONE THAT YOU INTENTIONALLY CHOOSE.
BUT WHAT, UM, I HATE TO SEE IS WHETHER IT'S A CONSULTANT OR AS A FORMER CITY MANAGER, IS A COMMUNITY THAT CONTINUALLY GOES DOWN A PATH AND THEY THINK THEY'RE MOVING TOWARDS THIS WAY, BUT IN REALITY, THEY'RE MOVING TOWARDS THAT WAY.
AND THAT'S ONE OF THE REASONS WHY WE DO THESE COMPARISONS, IS TO TAKE A LOOK AT IT AND SAY, UM, WHAT, WHERE IS THE INTENTIONALITY AROUND BOTH THE EXPENDITURES AS WELL AS THE REVENUE STREAMS THAT ARE COMING IN AND, AND HOW DO THEY MATCH UP IF YOU WANT TO BE A LOW FEE COMMUNITY THAT'S MATCHING UP WITH THE RESULTS, IF YOU WANNA BE A RELATIVELY AVERAGE FEE COMMUNITY, THAT'S NOT MATCHING UP WITH THE RESULTS.
AND SO THAT'S, THAT'S THE POLICY QUESTION AROUND THIS IS TO SAY, UM, WHAT DOES THAT LOOK LIKE IN THE SHORT TERM? WHAT DOES THAT LOOK LIKE IN THE LONG TERM? AND HOW DOES THAT IMPACT THE DEVELOPMENT AS A WHOLE? REMEMBER, EVERY ONE OF THESE COMMUNITIES IS IN THE BALLPARK OF WHERE YOU'RE AT FROM A DEVELOPMENT, UM, RATE, FROM A GROWTH RATE PERSPECTIVE, RIGHT? SO EVEN THOUGH OLATHE IS $202 PER CAPITA AND CAPITAL GRANTS AND CONTRIBUTIONS, THEY'RE GROWING AT VERY CLOSE TO THE SAME PACE THAT YOU ARE, THAT WOULD SUGGEST TO ME THAT WHATEVER DEVELOPMENT FEES AND CAPITAL GRANTS AND CONTRIBUTIONS THEY'RE GETTING IN, THEY'RE NOT DETERRING GROWTH ONE WAY OR THE OTHER.
AND THE LOW FEES AREN'T ENCOURAGING GROWTH.
UH, GEORGETOWN WAS THE FASTEST GROWTH COMMUNITY AT THREE AND A HALF PERCENT AVERAGE ANNUAL AVERAGE OVER THE PAST 10 YEARS, AND THEY'RE THE SECOND HIGHEST ON THE LIST.
AND SO AGAIN, WHAT WE'RE LOOKING FOR HERE IS TO TRY TO IDENTIFY SOME CAUSALITY, UM, WHAT'S CAUSING WHAT, AND THIS, THIS DOESN'T SHOW US WHAT'S CAUSING IT, UM, BUT IT AT LEAST ENABLES US TO, TO LOOK AT IT AND SAY, WELL, THE AMOUNT THAT'S BEING RECOVERED PER CAPITA OR PER ACRE, UM, IS NOT HAVING A SIGNIFICANT IMPACT ON THE RATE AT WHICH THE COMMUNITY GROWS.
THERE MAY BE OTHER THINGS THAT ARE HAVING A SIGNIFICANT IMPACT, BUT THAT'S NOT ONE OF 'EM.
I THINK HERE, AND I KNOW THIS IS A LOT OF NUMBERS, UM, WE'LL GET INTO SOME POLICY, POLICY DISCUSSION NEXT.
UH, BUT IN ESSENCE, WE WANTED TO TAKE A LOOK AT THIS AND WE, WHENEVER WE DO PART OF THIS, PART OF THESE ANALYSES, BECAUSE THERE'S NO GREAT WAY TO COMPARE COMMUNITIES, WE SLICE AND DICE THIS DATA AS MANY WAYS AS WE CAN FIGURE OUT HOW TO SLICE AND DICE IT TO TRY AND FIGURE OUT IS THERE SOMETHING THAT'S CAUSING A FALSE POSITIVE, RIGHT? TO TAKE A LOOK AT AND SAY, WE'RE GETTING A READING HERE THAT ISN'T QUITE MATCH UP WITH ALL OF THE REST OF THE DATA IN CONTEXT.
UM, I'LL SAY THIS IS THE, WE HAVEN'T IDENTIFIED ANY FALSE POSITIVES HERE.
THE DARK BLUE IS YOUR 2021 SALES TAX REVENUE PER HOUSEHOLD.
THE LIGHT BLUE IS YOUR THREE YEAR AVERAGE, UM, GOVERNMENTAL ACTIVITIES COST PER HOUSEHOLD.
IT'S A FAIRLY SIGNIFICANT GAP.
WE'VE GOT THE NUMBERS IN COMPARISON OF ALL THOSE COMMUNITIES.
YOU FALL OUT ABOUT WHERE YOU, WE WOULD EXPECT BASED ON THE PREVIOUS ANALYSIS THERE.
UM, A BIG PART OF THIS IS TO TAKE A LOOK AT IT AND SAY IF THERE'S A NET EXPENSE PER NEW HOUSEHOLD OR PER EXISTING HOUSEHOLD, EITHER WAY, UM, THAT NET EXPENSE ON YOUR GOVERNMENTAL ACTIVITIES DOESN'T SIGNIFICANTLY CHANGE BASED ON HOW MANY HOMES YOU HAVE.
THAT'S WHAT THE DATA SHOWS PRETTY CLEARLY.
SO YOU HAVE A NET EXPENSE OF 800 AND SOME DOLLARS PER HOUSEHOLD TODAY.
AS YOU CONTINUE TO GROW, YOU'LL HAVE A NET EXPENSE OF ABOUT 800 SOME DOLLARS PER HOUSEHOLD INFLATION ADJUSTED, WHICH UNFORTUNATELY TODAY IS MORE THAN IT USED TO BE.
UM, BUT THIS IS NOT A GROWTH VERSUS NO GROWTH CONVERSATION.
THIS IS A HOW DO YOU FUND THE SERVICES THAT YOUR COMMUNITY IS ASKING FOR BOTH TODAY AND AS YOU CONTINUE TO GROW BECAUSE YOU HAVE A LOT OF GROWTH LEFT, OBVIOUSLY THE REALITY IS, IS YOU DON'T GROW YOUR WAY OUT OF IT.
UM, AND AGAIN, I'VE WORKED IN VERY FAST GROWTH COMMUNITIES, UM, AS, AS CITY MANAGER AND I'VE BALANCED THOSE BUDGETS.
UM, AND YOU DON'T GROW YOUR WAY OUT OF IT,
[00:35:01]
JUST, IT IS JUST THE NATURE OF IT.UM, THE, AGAIN, THESE SERVICES ARE NOT INTENDED TO BE SELF-SUPPORTING.
AND SO UNLESS YOU HAVE A MAJOR REVENUE CENTER THAT COMES AS PART OF THAT GROWTH IN YOUR CASE, SOMETHING THAT PROVIDES A SIGNIFICANT AMOUNT OF RETAIL ACTIVITY, UM, YOU'RE NOT GONNA GROW YOUR WAY OUT OF THIS TREND AND NEITHER DOES ANYBODY ELSE, QUITE FRANKLY.
SO THAT'S NOT, THAT'S NOT, UM, SPECIFIC TO ADMIN.
ONE OTHER THING HERE, AND THIS IS NOT A, THESE AREN'T REAL NUMBERS.
THIS IS A TRAJECTORY CHART ESSENTIALLY.
AND AGAIN, THIS IS BASED ON, UM, NOT ONLY THE DATA THAT WE, UM, YOU KNOW, CAPTURED AS PART OF THIS STUDY, BUT JUST THE, THE, THE GENERAL EXPERIENCE THAT WE HAVE AS COMMUNITIES ARE GROWING.
YOU TEND TO, YOU TEND TO BE ABLE TO SPEND A LOT MORE ON SERVICES AND OPERATIONS, UH, BECAUSE ALL OF YOUR INFRASTRUCTURE IS STILL RELATIVELY NEW, OR AT LEAST A SIGNIFICANT PORTION OF IT IS RELATIVELY NEW.
IT'S WEARING OUT, RIGHT? BUT IT'S SIGNIFICANT.
YOU KNOW, IT'S, YOU DON'T HAVE TO SPEND A WHOLE LOT TO MAINTAIN A TWO YEAR OLD ROAD, HOPEFULLY.
UM, YOU DON'T HAVE TO SPEND A LOT TO MAINTAIN A TWO YEAR OLD PARK.
YOU GOTTA MAINTAIN THE GRASS, ALL THAT KIND OF STUFF.
YOU DON'T HAVE TO REPLACE PLAYGROUND EQUIPMENT, ALL THAT SORT OF THING.
AND SO AS A COMMUNITY GROWS, THE DOLLARS THAT YOU SPEND TEND TO BE HIGHLY PUSHED TOWARDS THE SERVICES AND OPERATIONS AS YOU CONTINUE TO GROW THEN.
AND AS YOUR COMMUNITY AGES AND THE INFRASTRUCTURE AGES, NATURALLY, YOU HAVE TO BEGIN TO SPEND MORE ON YOUR INFRASTRUCTURE AND MAINTENANCE.
AND WHAT WE TYPICALLY SEE IS THAT THE OLDEST COMMUNITIES ARE SPENDING UPWARDS OF 75% OF THEIR TOTAL BUDGET ON INFRASTRUCTURE MAINTENANCE AND REPLACEMENT.
AND THERE THAT LEAVES JUST A VERY SMALL AMOUNT, OBVIOUSLY, FOR PROVIDING SERVICES AND OPERATIONS.
AND SO WHEN YOU TAKE THAT IN COMBINATION WITH WHAT YOU HAVE BEEN ABLE TO PROVIDE SO FAR WITH A HIGH LEVEL OF SERVICES, REMEMBER THAT FIRST SLIDE THAT WE, THAT WE LOOKED AT? YOUR CITIZENS ARE RECEIVING A HIGH LEVEL OF SERVICES TODAY, THEY'RE RECEIVING THAT MUCH HIGHER BECAUSE YOU HAVE VERY LITTLE INTEREST BURDEN TODAY.
UM, THEY'RE RECEIVING $1,075 WORTH OF DIRECT SERVICES TODAY.
AS YOUR NEW INFRASTRUCTURE BEGINS TO WEAR OUT, YOU'VE GOT TWO OPTIONS.
REDUCE THE LEVEL OF SERVICES OR INCREASE YOUR REVENUE IN SOME WAY, SHAPE OR FORM, BECAUSE YOU'RE GONNA HAVE TO SPEND MORE ON INFRASTRUCTURE MAINTENANCE AND, AND REPLACEMENT.
SO SOME GENERAL OBSERVATIONS THAT I'M SORRY I DO HAVE.
SO DOES THAT TAKE INTO ACCOUNT THE, UM, WHOLE WATER TREATMENT REDOING, UM, IN THIS CASE? NO, BECAUSE AGAIN, THESE AREN'T, THOSE AREN'T REAL NUMBERS.
THIS IS A TREND, A GENERAL TRAJECTORY.
UM, I MEAN OTHER, ARE THEY IN THERE THE, BECAUSE THAT'S RENEWING INFRASTRUCTURE.
SO I WAS JUST WONDERING, WHEN YOU DID THIS, DID YOU USE THOSE NUMBERS IN THERE? WE DID NOT USE THE UTILITY REVENUES OR EXPENSES.
UM, AND A AND A BIG PART OF THAT IS BECAUSE THINGS LIKE THAT WHERE YOU'VE GOT A HUGE EXPENSE MM-HMM.
SO WHEN YOU'RE TALKING INFRASTRUCTURE, YOU'RE TALKING ROADS, RIGHT? STRIP THIS, THIS HAPPENS ON, ON EITHER SIDE, WHETHER IT'S UTILITY OR ON THE ROADS.
ALL THE NUMBERS THAT I SHOWED IN THOSE PREVIOUS, PREVIOUS CHARTS TAKE OUT THE UTILITY, UM, FUNCTIONS.
OKAY? BUT THIS, THIS PHENOMENON USES, HAPPENS REGARDLESS, BECAUSE AGAIN, I MEAN, AS YOU'RE SEEING, UM, YOU KNOW, WE'RE WORKING ON YOUR WATER RATE STUDY RIGHT NOW.
NOT ONLY ARE THEY VA VERY EXPENSIVE, THEY'RE CONSIDERABLY MORE EXPENSIVE TO PUT THOSE KINDS OF SERVICES INTO USE, UM, THAN THEY WERE JUST A COUPLE OF YEARS AGO.
AND THAT IS A TREND WE SEE OVER AND OVER AND OVER AGAIN.
UM, AS WE WORK WITH THESE COMMUNITIES ON THEIR WATER AND, AND SEWER RATES, GENERALLY SPEAKING, IT'S, YOU KNOW, CONSTRUCTION COST OF INFLATION IS NOT, WE WOULD LOVE IT TO BE EIGHT OR 9%
UM, AND SO THE PHENOMENON IS, IS ESSENTIALLY THE SAME.
YOU'VE GOT A BIG CAPITAL EXPENSE UP FRONT AND THEN YOU ARE ABLE TO, YOU KNOW, LIVE OFF OF THAT BASICALLY FOR THE NUMBER OF YEARS THAT THAT PLAN OPERATES.
AND THEN YOU HAVE A BIG CAPITAL EXPENSE AGAIN IN 40 OR 50 YEARS, OKAY? THE LINES WEAR OUT MORE EVENLY THAN THE, THAN THE PLANTS DO.
BUT, ALRIGHT, SO JUST SOME GENERAL OBSERVATIONS ON THIS FIRST PIECE.
THIS CURRENT STATE ASSESSMENT, YOU'VE BEEN ABLE TO PROVIDE A VERY HIGH LEVEL OF SERVICES TO YOUR COMMUNITY.
UM, AGAIN, WHEN YOU LOOK AT THAT, PARTICULARLY IN COMBINATION OF NOT ONLY WHAT'S YOUR TOTAL SPEND PER CAPITA, BUT HOW MUCH OF THAT IS GOING TOWARDS LONG TERM INTEREST? UM, IT'S CONSIDERABLY HIGHER THAN AVERAGE.
[00:40:01]
CREATES OBVIOUSLY NOT ONLY, UH, YOU KNOW, A GREAT COMMUNITY AS YOU WELL KNOW, BUT ALSO CREATES HIGH EXPECTATIONS.AND THEN THAT HAS TO BALANCE OFF WITH WHAT DO YOU DO AS YOU BEGIN TO AGE AND YOU'VE GOTTA START SPENDING HIGHER PERCENTAGE OF YOUR OVERALL BUDGET ON INFRASTRUCTURE REPLACEMENT AND MAINTENANCE.
IT'S A, IT'S A DIFFICULT POLICY ISSUE TO WRESTLE WITH, AND I APPLAUD YOU FOR TRYING TO GET AHEAD OF IT, UH, BECAUSE IT'S A, THIS IS A VERY, VERY IS, YOU KNOW, VERY IMPORTANT ISSUE.
IT'S WHY YOU SEE THE OLDEST CITIES, UM, THEY, THEY CAN'T FIX THEIR POTHOLES, UH, BECAUSE THEY JUST DON'T HAVE THE MONEY TO DO THAT AND PROVIDE ANY SERVICES AT ALL.
AND IT'S JUST THIS DOWNWARD SPIRAL, QUITE FRANKLY, THAT'S VERY DIFFICULT TO RECOVER FROM.
UM, THE LOW LONG TERM INTEREST.
COST DOES ENABLE A HIGH LEVEL OF SERVICES, BUT AT WHAT COST, UM, NOT ONLY IS THERE A COST OF CREATING THE EXPECTATION, UM, BUT THEN YOU LOOK AT IT AND YOU SAY YOU'RE ALSO FUNDING A SIGNIFICANT AMOUNT OF YOUR INFRASTRUCTURE DEVELOPMENT COST WITH CASH.
AND THOSE, THOSE CASH DOLLARS ARE, ARE BEING USED THEN TO FUND THAT INFRASTRUCTURE UP FRONT.
UM, AND THAT TAKES AWAY FROM THE SERVICES THAT CAN BE PROVIDED AS WELL.
SO THE LOW, LOW INTEREST COST IS, IS GOOD.
IT'S HELPFUL OBVIOUSLY FOR A LOT OF REASONS, UM, BUT IT HAS AN IMPACT ON WHO ENDS UP PAYING FOR THOSE SERVICES LONG TERM IN A SALES TAX DRIVEN COMMUNITY LIKE YOU ARE.
UM, YOU KNOW, YOU LOOK AT THAT AND SAY, WELL, IF WE CAN IMPORT SOME SALES TAX DOLLARS INSTEAD OF EXPORT, THAT'S GREAT.
UM, UNFORTUNATELY YOU APPEAR TO BE IN AN EXPORTING OR, OR LEAK, YOU KNOW, KNOW LEAKAGE SITUATION TODAY, THE NON-TAX, UM, COST RECOVERY RATIO IS SIGNIFICANTLY LOWER IN ADMIN THAN IT IS IN THE COMPARISON CITIES.
SO WHAT THAT AGAIN LEADS ME TO, AS AN OUTSIDER LOOKING IN IS, UM, YOUR REVENUE STREAM IS MORE HIGHLY VOLATILE THAN THOSE OTHER COMMUNITIES AS WELL.
UM, YOU HAVE A HIGHER DEGREE OF ASSURANCE ON FEES, FINES, THOSE KINDS OF THINGS THAN YOU DO ON SALES TAX, AS I'M SURE YOU, UM, FRETTED ABOUT AT LEAST, UM, DURING COVID, UM, THAT ENDED UP NOT BEING QUITE AS BAD, THANKFULLY, AS MOST PEOPLE EXPECTED IT MIGHT.
UH, BUT A HIGHLY, YOU'RE HIGHLY DEPENDENT ON MORE HIGHLY DEPENDENT ON SALES TAX THAN MOST, UM, EVEN IN A HIGH SALES TAX DEPENDENT STATE.
SO FROM OUR PERSPECTIVE, THAT REALLY ENCOURAGES A VERY STRATEGIC REVIEW OF NON-TAX REVENUE STREAMS. THERE ARE SOME THINGS YOU CAN DO WITH SALES TAXES AS WELL, OBVIOUSLY WE'LL GET INTO THAT HERE IN A SECOND.
UM, BUT BECAUSE YOU'RE COST RECOVERY RATIO IS REALLY ON THE LOW SIDE, UM, IT GIVES YOU AN OPPORTUNITY TO TAKE A LOOK AND SAY, OKAY, WELL WHAT, WHERE, WHERE ARE OTHER AREAS THAT WE CAN LOOK AT THAT HELPS TO DECREASE THE OVERALL VOLATILITY AND INCREASE TOTAL NUMBER OF DOLLARS COMING IN? SO I DID A, A QUICK, UM, SORT OF SWAT ANALYSIS, AND THIS IS WHERE I'D LOVE TO HEAR MORE OF YOUR THOUGHTS ABOUT WHAT ARE THE STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND THREATS AROUND THE INFORMATION THAT YOU JUST HEARD.
WHAT I SEE ON THE STRENGTHS THAT YOU WANT TO BUILD AND ENHANCE IS YOU GOT A HIGH LEVEL OF SERVICE BEING PROVIDED.
YOUR, YOUR, YOUR CITIZENS ARE, ARE GETTING AN EFFECTIVE LEVERAGING OF THE RESOURCES THAT YOU HAVE.
AND THAT WORD GETS AROUND, TRUST ME.
UM, AN OPPORTUNITY THAT YOU WANT TO EITHER EXPLOIT OR EXPAND IS YOU'VE GOT A LOW COST RECOVERY RATIO.
AND SO THERE IS SOMETHING THERE TO GO GET IF YOU CHOOSE TO GO GET IT.
UH, FROM A MARKETABILITY STANDPOINT, AT LEAST, UH, FROM A, FROM A MARKET COMPARISON STANDPOINT, YOU'RE, WHETHER IT'S DEVELOPMENT FEES, USER FEES, ALL OF THAT KIND OF STUFF THAT GOES INTO THAT COST RECOVERY RATIO IS RELATIVELY LOW.
YOUR CITIZENS ARE NOT HAVING TO PAY AS MUCH FOR THOSE KINDS OF THINGS AS THEY ARE IN OTHER COMMUNITIES.
AND SO THERE'S, THERE'S SOME, YOU KNOW, LOW HANGING FRUIT ESSENTIALLY, IF YOU WILL.
NOT THAT RAISING FEES IS EVER FUN.
I UNDERSTAND THAT, BUT AT LEAST YOU'RE WELL BELOW THE MARKET, UM, FOR THOSE KINDS OF THINGS.
AND SO YOU CAN LOOK AT IT AND SAY, WHERE DOES THAT LEAVE US? AND, AND IF WE, IF WE NEED TO RAISE SOME ADDITIONAL REVENUE, WHERE ARE SOME AREAS THAT WE CAN AND STILL BE MARKET COMPETITIVE, THAT'S ONE OF THEM A WEAKNESS THAT YOU WANT TO EITHER RESOLVE OR REDUCE.
UM, AGAIN, I I COME BACK TO THE SALES TAX VOLATILITY, RIGHT? UM, IF I'M IN, IF I'M IN YOUR SHOES, IF I'M IN SCOTT'S SHOES, THAT'S WHAT'S PROBABLY KEEPING ME UP AT NIGHT MORE THAN ANYTHING.
IS THE VOLATILITY OF YOUR REVENUE STREAM FOR YOUR GENERAL ACTIVITIES, UH, BEING SO SALES TAX DEPENDENT, WE'RE IN A CHANGING WORLD.
SALES TAX WISE, EVERYBODY KNOWS THAT.
UM, I DON'T KNOW THAT ANYBODY'S GOT A REAL BEAT ON WHAT SALES TAX LOOKS LIKE 10 YEARS FROM NOW, UM, WITH THE CHANGING RETAIL MARKETPLACE.
AND SO AGAIN, I, THAT'S WHAT WOULD KEEP ME UP AT NIGHT IS THAT HIGH DEGREE OF VOLATILITY.
SO IT'S NOT JUST ABOUT BRINGING MORE DOLLARS IN, IT'S ALSO ABOUT CHANGING THE STACK OF DOLLARS THAT YOU BRING IN.
[00:45:01]
THAT'S THERE BECAUSE OF YOUR LOW COST RECOVERY RATIO AND THEN A THREAT THAT YOU WANT TO AVOID OR THWART.THERE'S A FUNDING GAP THAT CURRENTLY EXISTS AND LIKE WITH ALL COMMUNITIES IN GENERAL, UM, GENERAL GOVERNMENT ACTIVITIES, UM, THE TREND WIDENS AS THE COMMUNITY AGES, AS AS THE COMMUNITY INFRASTRUCTURE AGES.
AND SO YOU BEGIN TO HAVE TO SPEND MORE AND MORE AND MORE ON MAINTAINING THE, TODAY YOU HAVE $350 MILLION WORTH OF ASSETS IN THE GROUND NET OF DEPRECIATION.
THAT'S A LOT, UM, OF, OF INFRASTRUCTURE THAT IS STEADILY WEARING OUT THAT WILL NEED TO BE REPLACED AND IS GROWING AND EXPANDING EVERY YEAR.
I'D LOVE TO HEAR FROM THE COUNCIL'S PERSPECTIVE SOME OF THESE KINDS OF THINGS.
WHAT ARE SOME STRENGTHS, SOME, WHAT ARE SOME WEAKNESSES, OPPORTUNITIES OR THREATS THAT YOU SEE OR THAT YOU HAVE HEARD NOT ONLY THROUGH THIS, BUT OBVIOUSLY THROUGH, UM, YOUR ENGAGEMENT IN THE COMMUNITY? THOUGHTS? WELL, I THINK THAT WE HAVE UNDERSTOOD THAT THE THREAT PARTICULARLY, AND WE HAVE, HAVE SOME ITEMS TO EXPLORE IN ORDER TO, TO HELP THAT.
THE, THE PROBLEM IS THERE ARE AREAS THAT ARE GONNA BE VERY DIFFICULT FOR US.
UM, WE BUILT THIS COMMUNITY ON SCHOOLS, SO WHEN WE GO TO THE SCHOOLS AND WE TRY TO GET A, A PORTION OF THAT PROPERTY TAX TO FUND THIS CITY, THAT'S NOT GONNA GO WELL.
IT'S NOT GONE WELL IN THE PAST MM-HMM.
UM, WE DID GET A LITTLE BIT OF HELP WITH TIFF, BUT WE HAD TO GIVE BACK A WHOLE LOT TO THE SCHOOLS IN ORDER TO GET THAT AS YOU KNOW, SO THERE, THERE
UM, I GET THE FEELING THAT THE COMMUNITY THINKS THAT WE'RE RICH, YOU KNOW, AND THAT, AND WE'VE GOT PLENTY.
BUT WHENEVER WE START CHARGING THEM HIGHER FEES, THEN THEY'RE GONNA UNDERSTAND THAT WE DON'T HAVE PLENTY AND THAT WE'RE TRYING TO PROTECT THIS CITY FOR THE FUTURE.
JUST PREDICTION, GOING OUT AND SEEING WHAT LIES AHEAD AND THE PEOPLE IN THE GENERATIONS THAT ARE GONNA FILL THESE SEATS IN THE FUTURE, THE DECISIONS THEY'RE GONNA HAVE TO MAKE.
I ALWAYS FELT LIKE THE LAST FOUR YEARS IN MY SITUATION, WE SHOULD HAVE BEEN MAKING THOSE DECISIONS TODAY.
I WANNA MAKE THOSE HARD DECISIONS SO THAT MY, SO THE FUTURE PEOPLE DON'T HAVE TO MAKE THEM, YOU KNOW, SO THAT WE CAN CONTINUE TO MAKE SMALLER STEPS.
UM, BUT WE'VE GOTTA START DOING IT.
AND SO THAT'S WHERE WE NEED YOUR HELP AND TO, TO GIVE US THE IDEAS.
UM, YEAH, AND THERE'S, AGAIN, AS YOU, AS YOU ADEQUATELY POINT OUT THERE IS, UM, THERE, THERE'S ALWAYS DIFFICULTY, PARTICULARLY ON THE TAX SIDE.
AND THAT'S ONE OF THE REASONS WHY WHEN WE LOOKED AT THIS AND, AND IT BEGAN TO BECOME CLEAR, UH, THAT ONE OF THE AREAS WHERE YOU'RE SIGNIFICANTLY LOWER THAN THE MARKET, UH, IS NOT ONLY ON THE INTEREST PAYMENTS THAT YOU'RE CURRENTLY UM, SUPPORTING, BUT ALSO ON WHAT THAT COST RECOVERY RATIO IS.
THOSE AREN'T TAX DOLLARS, YOU KNOW, THAT'S NOT A PROPERTY TAX THAT WE'RE LOOKING AT THERE.
UM, THOSE ARE DOLLARS THAT ARE COMING IN THROUGH USER FINES, FEES, THOSE KINDS OF THINGS.
NOBODY LIKES TO PAY THOSE THINGS AND MAYBE WE'RE WRONG.
MAYBE THIS COMMUNITY IS SIGNIFICANTLY MORE LIKELY TO APPRECIATE A TAX WE JUST PASSED 180 20 FOR SOMETHING THAT WE ABSOLUTELY DIDN'T NEED AND THEY WERE COMPLETELY OKAY WITH THAT.
MAYBE THEY'RE OKAY WITH PAYING MORE TAX, UH, FOR SERVICES.
CAUSE THE THING IS THE SERVICES WILL GO UP MM-HMM.
AND THE CITY'S MADE A, FOR THE LENGTH OF TIME THAT I'VE BEEN SITTING UP HERE, EITHER HERE OR OVER THERE, THAT WE MADE A CONCERTED EFFORT TO BE AS DEAD FREE AS POSSIBLE THAT WE, FOR THE, THE LAND THAT WE JUST BOUGHT FOR 22 ACRES, THAT WAS, THAT'S PAID FOR.
I MEAN WE, WE HAVE ONE MORE MONTH AND THEN, UH, IT'S, IT'S DONE.
UH, THE, THE PUBLIC SAFETY CENTER, THE TAX THAT WE PUT ON THAT LEVIED ON THAT, THAT WAS TO PAY FOR THAT BUILDING CASH.
AND SO WHAT I'M HEARING HERE YOU'RE SAYING IS THAT OUR, OUR MODEL OF PAYING CASH, WE SHOULD HAVE BEEN DOING MORE.
EVEN WE HAD SOME DEBT THAT WE IN THIS YEAR, DIDN'T WE, WE PAID OFF SOME DEBT BECAUSE THE RATE WAS SO LOW WE WERE GONNA GO INCREASE OUR DEBT THAN OTHER THINGS HAPPENED.
SO, AND I, I THINK THAT'S A BALANCING ACT MAYOR WITH, AND WE HAVE NOT PROBABLY USED LEVERAGE TO THE DEGREE THAT WE COULD HAVE MM-HMM.
[00:50:01]
SO WE'VE BEEN ABLE TO GET A LITTLE, WE'VE BEEN ABLE TO GET MORE SERVICE BECAUSE OF THE LACK OF INTEREST THAT WE'VE BEEN PAYING.AND HAD WE BEEN, HAD WE HAD THAT MONEY LEVERAGED, WE WOULD NOT HAVE BEEN ABLE TO DO THAT.
WE'VE BEEN A BIT SPOILED BECAUSE WE'VE BEEN DOING IT OUTTA CASH MM-HMM.
AND SO WE'RE GONNA HAVE TO INCUR DEBT TO GET THE, THE CURRENT WHICH WILL INCUR, WHICH WILL, WE'RE GONNA HAVE TO GET MORE REVENUE TO PAY THAT.
IT'S, IT IS THE BALANCING ACT AND IT'S A, YOU KNOW, AGAIN, THERE'S NO, UNFORTUNATELY THERE'S NO SILVER BULLET TO THIS, RIGHT? IT'S, IT'S A HOW FAR CAN YOU PUSH CERTAIN THINGS IN ORDER TO PROVIDE THE SERVICES AT THE LEVEL THAT YOUR COMMUNITY EXPECTS AT THE FINANCIAL INVESTMENT THAT THEY ALSO EXPECT.
AND IT'S A, IT'S A CONSTANT EFFORT AND A CONSTANT CHALLENGE.
AND I'LL ALSO SAY THAT NOT, UM, LESS FOR YOU, CUZ I, UNDER, I I'M SURE THAT YOU, YOU GET THIS AND MORE FOR THOSE THAT MIGHT BE WATCHING THIS.
BUT YOU KNOW, THE, THE FUNDING GAP IS NOT ONLY IN DOLLARS, IT'S ALSO IN TIME, RIGHT? FROM THE TIME THAT SOMEBODY DECIDES TO EITHER BUY OR BUILD A HOUSE IN EDMOND TO THE TIME THAT THEY'VE BEGUN TO PAY TAXES THAT ARE SUPPORTING THE SERVICES, THERE'S A GAP AT THAT TIME.
PROBLEM IS, IS YOU'VE GOTTA BE PLANNING FOR IT BEFORE THEY'VE EVEN THOUGHT ABOUT BUYING THE HOUSE.
UM, AND SO YOU'VE GOT TO START TO SPEND DOLLARS ON BUILDING A PUBLIC SAFETY CENTER OR DOING THOSE KINDS OF THINGS THAT WILL SUPPORT THE COMMUNITY OF THE SIZE THAT YOU WANT IT TO BE OR THAT, THAT IT WILL BE EVENTUALLY.
UM, AND YOU GOTTA PAY FOR THOSE THINGS TODAY AND YOU'VE BEEN TO THE EXTENT THAT YOU'VE BEEN PAYING FOR THEM IN CASH, UM, THOSE ARE, YOU KNOW, OBVIOUSLY TAKING DOLLARS AGAIN THAT ARE NON-LEVERAGED TODAY.
UM, AND SO THE QUESTION IS HOW SUSTAINABLE IS IT? UM, IT DOESN'T GET EASIER IS THE MAIN POINT OF SOME OF THOSE LAST, THOSE LAST TWO OR THREE SLIDES THERE IS THAT IT DOESN'T GET EASIER AS YOU GROW, UM, PARTICULARLY WHEN YOU HAVE RELATIVELY LOW COST RECOVERY.
UM, IT CERTAINLY DOESN'T GET EASIER WHEN YOU'RE NOT LEVERAGING DOLLARS.
WELL, AND DIDN'T YOU SAY IN ONE OF THOSE GRAPHS THAT IT HAS NOT DISCOURAGED DEVELOPMENT HAVING THEIR FEES MUCH HIGHER THAN OURS AND OURS ARE BELOW THE AVERAGE AND THAT THE DEVELOPMENT HAS NOT BEEN DISCOURAGED AT ALL, RIGHT.
BECAUSE THE GROWTH IS COMPARABLE TO OUR GROWTH.
AND THAT MATCHES UP WITH MY OWN PERSONAL EXPERIENCE AS WELL.
UM, AGAIN, IN BEING SOME IN, UM, I'VE BEEN, UH, I HAVE WORKED IN, UM, AT DIFFERENT TIMES THE FASTEST GROWING COMMUNITIES IN AMERICA, UM, THAT ALSO HAD HIGH DEVELOPMENT STANDARDS AND ALSO HAD HIGH DEVELOPMENT FEES.
UM, THE, THE FACT THAT THEY WERE FAST GROWING WAS DEPENDENT UPON LOCATION, LOCATION, LOCATION OF COURSE.
AND THE, THE SECOND FACTOR SCHOOL, SCHOOL SCHOOLS
BUT THE UNINTENDED CONSEQUENCES OF WHAT BOTHERS JOSH AND I, WHENEVER WE PUT AN IMPACT FEE ON A DEVELOPER THAT JUST MAKES OUR AFFORDABLE HOUSING EVEN WORSE.
UM, AND SO THAT'S, THAT'S WHERE IT REALLY GETS HARD.
AND AT THAT POINT, IT'S NOT MUCH DIFFERENCE THAN TAX ON THE PEOPLE.
MY QUESTION THOUGH IS, IS ARE THEY GONNA GIVE A DISCOUNT IF, IF, UH, IF YOU DON'T HAVE IT? WELL, I THINK THAT'S A FAIR QUESTION.
THEY'RE PROBABLY GONNA GET MARKET VALUE.
THEY'RE GONNA CHARGE MARKET VALUE.
THAT'S, BUT HOW, THE HARD PART IS AS WE'VE SAT UP HERE AND YOU START TO UNDERSTAND THESE, THE STRENGTHS AND WEAKNESSES OF WHAT'S NECESSARY TO RUN THE CITY, IS HOW DO YOU COMMUNICATE THAT TO A, A, A CITY THAT IS SPOILED FOR THE LEVEL OF SERVICES THEY HAD, THE BUDGETS, OUR BUDGETS HAVE TAKEN THOSE HITS TO, TO FUND THOSE, FUND THESE.
AND HOW DO YOU EDUCATE FROM, FROM GOING FROM A TO Z A COMMUNITY THAT YOU'RE HERE FOR SCHOOLS, YOU'RE HERE FOR SAFETY, YOU'RE HERE FOR THE COMMUNITY ITSELF.
AND THAT ALL OF THIS IS IMPACTED BY THAT.
AND THAT WE NEED TO CHANGE THIS BUSINESS MODEL FOR THE NEXT 50 YEARS, THE NEXT HUNDRED YEARS OF, FOR EDMONT, OKLAHOMA.
HOW DO WE, HOW DO WE, HOW DO WE, THAT'S EXACTLY WHAT'S GOING THROUGH MY MIND.
I, I REPRESENT EDMOND AT ACOG, WHICH IS ASSOCIATION OF CENTRAL OKLAHOMA GOVERNMENTS,
[00:55:01]
AND WE HAVE, I WANNA SAY 36, I MAY BE WRONG ON THAT NUMBER, 36 MEMBER COMMUNITIES ON THAT BOARD.AND SO I GO TO BOARD MEETINGS AND, AND TALK TO OTHER MAYORS AND COUNCIL MEMBERS FROM, FROM THOSE COMMUNITIES.
AND I WISH I COULD GET EVERYBODY FROM EDMUND IN THE CAR AND GO TO THOSE AND THEY, AND LISTEN TO THESE OTHER LEADERS, HOW THEY'RE, THEY'RE PRAYING FOR AN ARPA GRANT TO REPLACE TWO MILES OF, OF WATER PIPE WHEN WE'VE STARTED THAT PROJECT TWO YEARS AGO.
NOW IT'S, WE'RE NOT USING THAT MONEY SOMEWHERE ELSE.
UM, BUT IT SEEMS LIKE, I FEEL LIKE I'M TOOTING OUR HORN, OUR OWN HORN, BUT IT, IT HADN'T BEEN BY ACCIDENT.
IT'S BEEN CITY MANAGER AND, AND STAFF AND, AND LONG TERM PLANNING THAT, AND YOUR STUDIES THAT HAVE PUT A LOT OF THESE PROJECTS INTO PLACE THAT OTHER COMMUNITIES IN OUR AREA ARE JUST PRAYING TO, TO GET A GRANT FOR.
AND SO, UM, I, I DO, IT'S IN PART OF THAT MESSAGING OF SHARING WITH OUR CITIZENS THAT WE, WE HAVE BEEN AHEAD OF THE CURVE ON, ON A LOT OF CI ON MOST CITY SERVICES IN OKLAHOMA.
UM, BUT THE REASON WHY WE'RE HAVING THIS CONVERSATION RIGHT NOW IS THERE'S A CERTAIN POINT THAT WHEN AN INTERSECTION PROJECT GETS TO 15 MILLION AND YOU NEED SIX OF THEM DONE, YOU, YOU CAN'T BE AHEAD OF THE CURVE ANYMORE WITH, WITH, WITH THIS BUCKET OF MONEY THAT WE HAVE.
AND SO I THINK THAT'S THE TRICK IS WHEN WE'RE TALKING ABOUT THIS PLAN AND THIS POLICY OF HOW DO WE, HOW DO WE GET MORE DONE WITH THE, WITH THE DOLLARS THAT WE HAVE OR THE DOLLARS THAT WE, WE CAN GET STILL COMMUNICATE THAT WE'VE BEEN AHEAD OF THE, WE HAVE BEEN AHEAD OF THE CURVE AND WE'VE BEEN STRETCHING IT AS FAR AS WE CAN, UH, IN THAT WAY.
SO IT'S, IT'S TWO DIFFERENT MESSAGES AND THE NUMBERS SHOW THAT WE PROVIDED MORE SERVICES.
THAT'S EXACTLY WHAT I LOVE IT.
THAT I DIDN'T EXPECT TO SEE THAT TODAY AND I'M SO GLAD YOU DID, BECAUSE THAT TELLS THE STORY.
YOU KNOW, AGAIN, WE, WE DIG INTO THE DATA, UM, SINCERELY AGNOSTIC.
I, I DON'T GO IN THINKING THAT IT'S GONNA SHOW ANY PARTICULAR THING.
UM, WE DIG INTO THE DATA, AND AGAIN, WITH THE EXPERIENCE AND BACKGROUND THAT, THAT WE'VE GOT, WE LOOK AT IT AND SAY, WELL, WHAT ARE THE IMPORTANT TRENDS HERE? UM, AND, AND FOR ME, UH, FOR OUR TEAM, THE IMPORTANT TRENDS ARE THAT YOU'VE PROVIDED A VERY HIGH DEGREE OF SERVICES.
YOU'VE DONE THAT BY WHILE NOT USING MUCH LEVERAGE AT ALL.
UM, THAT SETS UP A QUALITY OF COMMUNITY.
UM, THERE'S ALSO RELATIVELY LOW DEVELOPMENT FEES, CHARGES, USER FEES, CHARGES, THOSE KINDS OF, AGAIN, NON UTILITY, BUT ON YOUR USER FEES, CHARGES, THOSE KINDS OF THINGS, YOU'VE GOT A HIGHLY VOLATILE REVENUE STREAM, PRIMARILY FUNDING THESE ACTIVITIES IN SALES TAX.
UM, THE QUESTION THEN BECOMES, HOW SUSTAINABLE IS THIS AS YOU CONTINUE TO GROW AND AGE, QUITE FRANKLY, THAT, THAT DEVELOPMENT CURVE THAT I SHOWED THAT I SAID WAS, UM, YOU KNOW, NOT THE REAL NUMBERS, BUT JUST SORT OF THE, THE TRAJECTORY.
THERE'S A COUPLE OF YEARS IN THERE WHERE COMMUNITIES ARE GROWING AT A RELATIVELY FAST PACE WHERE IT SEEMS LIKE THERE'S AN INFUSION OF CASH, UM, BECAUSE YOU'VE GOT A LOT OF HOME, YOU KNOW, PERMITS GOING UP AND YOU GOT NEW, UM, STORES IN TOWN AND THOSE KINDS OF THINGS THAT ARE GENERATING, AND IN SOME SHORT-TERM CASES, PERHAPS EVEN OUTSTRIPPING YOUR POPULATION GAME.
UM, BUT THAT STARTS TO SHIFT VERY QUICKLY.
AND IN MY EXPERIENCE, THAT STARTS TO SHIFT AROUND THE 70, 75,000 POPULATION RANGE.
UM, AND CERTAINLY IT BECOMES MORE AND MORE PREVALENT AS YOU GET UP TO A HUNDRED, 125,000 POPULATION RANGE, UH, WHERE YOU REALLY START TO LOOK AT IT AND SAY, THERE'S SO MUCH, AGAIN, WE'RE NOT TALKING ABOUT ONE INTERSECTION ANYMORE, AND WE'RE TALKING ABOUT FIVE OF 'EM, OR SIX OF 'EM, OR 10 OF 'EM OR WHATEVER.
AND AS YOUR COMMUNITY CONTINUES TO GROW, IT JUST CONTINUES TO GET THAT MUCH BIGGER.
AND SO WHERE THERE APPEARS TO BE, OR, OR IN THE SHORT TERM, VERY SHORT TERM ON A BUDGET YEAR BASIS, SOMETIMES A SORT OF AN INFUSION OF CASH THAT'S DELIVERED BY A GROWING COMMUNITY, THE BACKSIDE, UM, YOU KNOW, EXPENDITURES THAT COME ALONGSIDE THAT, UM, CAN, CAN GET, UM, THEY CAN GET AHEAD OF YOU AND, UH, AND ELSE CAN BE OUR WILL BE MADE EVEN WORSE BECAUSE WE'VE BEEN IN A DOING IT OUT OF CASH AND NOT PAYING THE INTEREST ON THE MONEY THAT WE'RE DOING THAT WORK WITH.
SO THAT WILL MAKE IT A LITTLE BIT MORE CHALLENGING.
IT GIVES YOU A LITTLE MORE ROOM, AGAIN, IN THE SHORT TERM.
UM, BUT IN LONG TERM IT'S MORE CHALLENGING CUZ YOU, YOU HAVEN'T LEVERAGED THAT.
AND THEN THERE'S THE GENERATIONAL EQUITY COMPONENT OF IT AS WELL OF, YOU KNOW, WHO'S PAYING FOR THE INFRASTRUCTURE.
[01:00:01]
IS IT SOMEBODY THAT HAS BEEN PAYING INTO THE, INTO THE, THE, YOU KNOW, THE KITTY BASICALLY OVER THE LAST FIVE YEARS WHILE YOU'VE BUILT ENOUGH, AMA ENOUGH CASH TO FUND THESE PROJECTS AND THEN THEY MOVE OUTTA TOWN? UM, OR IS IT THE PERSON THAT MOVES INTO TOWN FIVE YEARS AFTER IT'S BUILT AND IS RECEIVING ALL THOSE SERVICES BUT HADN'T, HADN'T HAD TO PAY FOR IT, ESSENTIALLY MM-HMM.UH, BUT THERE'S, THAT'S THE OTHER PIECE OF LEVERAGING.
IT'S NOT JUST A FINANCIAL, BUT THERE'S A, A POLITICAL AND SOCIAL, UM, ISSUE THAT GOES ALONG WITH IT AS WELL.
I WAS THINKING IT, I'LL JUST SAY IT.
I FELT LIKE THREE YEARS AGO WHEN I CAME ON COUNCIL, I, IT DOESN'T TAKES ABOUT FIVE MINUTES FOR YOU TO GET THE FEELING OF HOW VOLATILE WE ARE ON SALES TAX.
THAT'S, IT'S KIND OF OUR JOB TO SAY THAT AND SHOP LOCAL AND, AND, AND THAT'S WHY WE HAVE THE SIGNS OF PROJECTS THAT YOUR SALES TAX DOLLARS PAID FOR THIS.
BUT I, I DON'T, I MEAN, WE, WE, YOU KNOW, WE BUDGET ON A TWO OR 3%, UM, PROJECTION AND WE'RE LIKE 10 OR 15 AND, AND I KNOW INFLATION HAS SOMETHING TO DO WITH THAT AND SKEWS THE NUMBERS, BUT, UM, IF YOU LOOK AT EDMUND'S HISTORY, WE HAVE BEEN, WE HAVE CONSISTENTLY GROWN AT A, AT A STRONG RATE WITH OUR, WITH OUR SALES TAX.
SO I, IT DOESN'T SCARE, I UNDERSTAND THE, THE RISK OF BEING VOLATILE IN THAT WAY, BUT EVERY OKLAHOMA CITY IS, IS IN THE SAME BOAT ON THAT.
BUT I AM EXTREMELY PROUD OF WHATEVER HAS HAPPENED TO, AND IT'S, AND YOU CAN TIE TO BUILDING PERMITS SURE.
AND YOU CAN, YOU CAN TIE IT TO CONSTRUCTION AND, AND TO DEVELOPMENT AND GROWTH.
UM, SO I DON'T KNOW, I'M, I KIND OF GO BOTH WAYS ON.
WE'VE, WE WORRY ABOUT IT, BUT AT THE SAME TIME, IT JUST KEEPS SURPRISING US EVERY YEAR TOO.
YOU KNOW, AGAIN, THAT, THAT, THAT LEAKAGE OR THAT EXPORTING THE SALES TAX DOLLARS IS A DOUBLE EDGED SWORD.
UM, IF YOU'RE, IF YOU'RE LEAKING SALES TAX DOLLARS, WHAT THAT GENERALLY MEANS IS YOU'VE GOT CAPACITY IN YOUR COMMUNITY FOR MORE RETAIL TO TAKE PLACE HERE.
UM, AND SO THERE'S, AGAIN, THERE'S CAPACITY STILL.
IF YOU'RE, IF YOUR RETAIL SALES ARE OUTSTRIPPING YOUR POPULATION INCREASE AND INFLATION COMBINED, UM, THAT MEANS THAT YOU PROBABLY STILL HAVE CAPACITY HERE.
KEEP AN EYE ON IT, UH, BECAUSE IT'S PRETTY EASY TO GET TO THE POINT OF WHERE YOU'RE NOW AN GENERAL IMPORTER OF SALES TAX DOLLARS AND THEN THAT HEIGHTENS YOUR VOLATILITY THAT MUCH MORE.
AND SO IT'S, IT'S A, IT'S, IT'S A LITTLE MORE COMFORTABLE WHEN YOU'RE STILL AN EXPORTER.
UM, CUZ IT MEANS THERE'S STILL ROOM TO GROW HERE.
UH, BUT THAT'S SOMETHING TO, TO REALLY KEEP AN EYE ON VERY CLOSELY.
I'VE GOT A BUNCH MORE TO GO THROUGH HERE, SO LET ME, UM, KEEP, KEEP ROLLING.
THOUGHT WE DONE, HE HAS ALL THE ANSWERS.
SO I'M GONNA, I'M GONNA HIT JUST ON A BROAD OVERVIEW HERE.
FIVE DIFFERENT REVENUE OPTIMIZATION OPPORTUNITIES THAT WE SEE AS PART OF THIS.
UM, WE DON'T HAVE THE EXACT ANSWERS ON ANY ONE OF THESE.
THESE ARE TO TAKE A LOOK AT GENERALLY SPEAKING AND SAY, YEAH, THESE ONES LOOK LIKE THE, PROBABLY THE BEST AREAS TO FOCUS ON FIRST.
I THINK ALL FIVE OF THESE ARE GOOD OPPORTUNITIES.
UM, SO, UM, REVIEW AND RECALCULATE YOUR DEVELOPMENT FEES.
THAT'S AGAIN, THAT GOES DOWN TO THAT COST RECOVERY RATIO, COMPLETE A CULTURE AND RECREATION USER FEES STUDY.
UM, ONE OF THE OTHER PIECES, I DIDN'T PUT A SLIDE UP HERE FOR THE SAKE OF TIME, BUT IN ESSENCE, YOUR, YOUR CULTURE AND RECREATION COMPONENT OF USER FEES ARE ALSO WAY LOWER THAN AVERAGE PER CAPITA.
UH, SO SOMETHING TO TAKE A LOOK AT THERE.
UM, BUT AGAIN, THEY ALSO THEN BEGIN TO SET THE TONE OF IF, IF YOU WANT TO HAVE AN ELEVATED LEVEL OF SERVICES, THERE'S A COST THAT COMES ALONG WITH THAT.
UM, REVIEW ALL PUBLIC SAFETY FINES AND FEES.
AGAIN, THAT'S ANOTHER AREA THAT IS RELATIVELY LOW ON A, ON A COMPARATIVE UH, STANDPOINT.
RETAIN YOUR EXISTING RETAIL PROVIDERS.
SOMEBODY UP HERE SAID SHOP LOCAL AND THOSE KINDS OF THINGS.
UM, I, I SAW A STUDY NOT TOO LONG AGO CAME OUT OF THE INTERNATIONAL ECONOMIC DEVELOPMENT COUNCIL, UM, RETAINING VERSUS ATTRACTING, YOU GET ABOUT A FOUR TO ONE RETURN IF YOU CAN RETAIN THOSE THAT ARE ALREADY HERE AS OPPOSED TO TRYING TO GO OUT AND ATTRACT NEW RETAILERS.
AND SO IT'S REALLY, REALLY IMPORTANT THAT YOU KEEP A STRONG, VIBRANT LOCAL ECONOMY.
I HAVE A FEELING THERE'S BEEN SOME CONVERSATION AROUND THIS AS SHE PULLS HER HAIR OUT,
UM, DESTINATION RETAIL IS THE KINDA PEOPLE DRIVE MORE THAN, UH, FIVE OR 10 MINUTES FOR SPEND THEIR MONEY AND GO HOME.
IT'S, THEY, THEY SPEND THE MONEY AND THEY, AND THEN THEY LEAVE.
UM, AND THEY DON'T REQUIRE A LOT OF SERVICES AND THOSE KINDS OF THINGS.
SO ALL FIVE OF THOSE AGAIN, I THINK ARE GOOD STRATEGIES.
UM, I'M NOT SAYING DO ONLY ONE OF THESE OR DO ONE OF THESE AT THE EXPENSE OF ALL THE OTHERS,
[01:05:01]
UH, BUT YOUR STAFF AND YOU POLITICALLY, FROM A POLITICAL CAPITAL STANDPOINT, THERE'S ONLY SO MUCH TO GO AROUND, RIGHT? SO IN MY OPINION, THESE ARE AT LEAST FIVE OF THE BEST OPPORTUNITIES.UM, WHAT I'M GONNA ENCOURAGE AS PART OF THE CONVERSATION IS JUST TO COME BACK TO THIS SLIDE AND TAKE A LOOK AT IT AFTER WE'VE LOOKED AT THE REST OF THE INFORMATION HERE, UM, AND BEGIN TO HAVE SOME DISCUSSION AROUND WHICH OF THESE ARE BEST OPPORTUNITIES.
WE'VE GOT SOME MORE, UM, COMING UP HERE AS WELL.
SO IMPACT AND DEVELOPMENT, FEE REVIEW, IMPACT AND DEVELOPMENT FEES ARE INTENDED TO BE COST BASED.
UH, THAT'S HOW THE LAWS ARE WRITTEN IN EVERY STATE THAT WE WORK IN.
AND WE DO IMPACT AND DEVELOPMENT FEES IN PROBABLY 15, 15, 16 STATES RIGHT NOW.
UM, THEY'RE NOT INTEND, EVERYBODY WANTS TO KNOW HOW DO WE COMPARE TO THE MARKET ON DEVELOPMENT FEES.
UM, AND I GET THAT, I UNDERSTAND THAT YOUR DEVELOPERS AND HOME BUILDERS AND HOME BUYERS ARE LOOKING AT OTHER COMMUNITIES AS WELL.
AND I I THAT CAN'T BE LEFT OUT OF THE EQUATION.
UH, BUT AT THE END OF THE DAY, THEY SHOULD BE BASED ON WHAT IS THE COST TO PROVIDE THE SERVICES AS OPPOSED TO WHAT ARE, YOU KNOW, WHAT DID JIM PAY IN THE OTHER COMMUNITY THAT THEY JUST CAME FROM? UM, SO THEY, THEY, THEY'RE NOT INTENDED TO BE MARKET BASED FEES, BUT WE RECOGNIZE THAT IT'S MARKET BASED COMPARISONS ARE ALWAYS A COMPONENT OF IT.
UH, EDMUND'S GROWTH, ALONG WITH RELATIVELY LOW RECOVERY RATIO SUGGESTS THAT YOUR IMPACT AND DEVELOPMENT FEES ARE LIKELY, UM, SIGNIFICANTLY LOWER, UH, THAN THE COMPARISON COMMUNITIES.
NOW RECOGNIZING THAT THOSE COMPARISON COMMUNITIES AREN'T NECESSARILY THE ONES THAT YOU'RE DIRECTLY, UH, IN COMPETITION FOR, FOR PROJECTS ESSENTIALLY, UH, YOU KNOW, AGAIN, WE'RE, WE'RE AS FAR OUT AS BROKEN ARROW AND OLATHE, KANSAS AND THOSE KINDS OF THINGS, BUT YEAH, SO GUTHRIE AND OKLAHOMA CITY WOULD PROBABLY, OR YUKON OR MUSTANG OR WOULD PROBABLY AFFECT US MORE.
FROM A, FROM A MARKETABILITY, UM, IN A DEVELOPMENT IMPACT FEE PERSPECTIVE.
UM, THOSE AND AFFORDABILITY OF HOUSING IN THOSE MARKETS MM-HMM.
THOSE WOULD BE A BETTER COMPARISON.
AND YOU CAN SEE HERE BECAUSE IT'S COST BASED AS OPPOSED TO MARKET BASED.
WE DON'T GO INTO NEARLY THE LEVEL OF NUMBER DETAIL, UH, BECAUSE AGAIN, IT ALL DEPENDS ON WHAT, WHAT ARE YOUR COSTS IN THE FIRST PLACE AND WHAT'S YOUR RECOVERY RATIO THAT YOU'RE EXPECTING TO GET OUT OF THAT.
UM, DIFFERENCES IN STATE LAWS MAKE INTERSTATE COMPARISONS ESSENTIALLY INVALID.
UM, WE DON'T COMPARE THE DEVELOPMENT AND IMPACT FEES IN TEXAS OR KANSAS TO THOSE IN OKLAHOMA.
THEY'VE GOT SIGNIFICANTLY DIFFERENT LAWS THAT, UM, ALLOW THE CALCULATION OF THOSE FEES TO BE DONE DIFFERENTLY.
SO, UM, WE DON'T EVEN SHOW THAT AS PART OF THIS, JUST GENERALLY SPEAKING.
UM, IN THE OKLAHOMA COMMUNITIES, WE'VE LOOKED AT A VARIETY OF THESE DIFFERENT, UM, DIFFERENT DEVELOPMENT AND IMPACT FEE.
UM, AND YOU CAN SEE WATER, SEWER, TRANSPORTATION, PARKLAND, UH, BOTH PARKLAND.
DEDICATION FEE IS ALSO A PARKLAND DEVELOPMENT FEE, UM, THAT ARE FAIRLY COMMON, GENERALLY CONSIDERED JUST SORT OF THROWN IN THIS DEVELOPMENT FEE AND IMPACT FEE, UM, PERSPECTIVE.
RIGHT NOW YOU CHARGE WATER AND SEWER, UM, CONNECTION FEES.
UM, YOU DON'T REALLY HAVE A TRANSPORTATION DEVELOPMENT FEE PER SE.
UM, YOUR PARKLAND DEDICATION FEE, YOU'VE GOT A REQUIRED DEDICATION OF PARKLAND, BUT YOU DON'T HAVE A PARKLAND DEVELOPMENT FEE THAT GOES ALONG WITH IT.
UM, IN BROKEN ARROW, YOU CAN SEE THERE, THEY REQUIRE EXTENSIONS.
UM, THE PARKLAND DEDICATION FEE, THEY DO HAVE ONE, UH, THAT COMBINES PARKLAND DEDICATION AND DEVELOPMENT, UH, ALL INTO ONE FEE.
SPECIFICALLY, THEY SAY X AMOUNT IS FOR, UH, DEDICATION.
UM, IF THEY DON'T DEDICATE LAND, THEY HAVE TO PAY A FEE.
UM, AND REGARDLESS OF WHETHER THEY DEDICATE LAND OR NOT, THEY HAVE TO PAY A FEE TO DEVELOP.
AND SO THERE'S TWO DIFFERENT CALCULATIONS THERE THAT ARE ROLLED UP IN THE SAME ORDINANCE.
NORMAN, ESSENTIALLY THE SAME WAY PARKLAND DEDICATION AND DEVELOPMENT FEES ARE COMBINED.
UM, THEY'VE GOT A, A PARTIAL AND RECRUITMENT, UM, COMPONENT OF THE TRANSPORTATION DEVELOPMENT FEE, AND THEY DO HAVE WATER AND SEWER DEVELOPMENT FEES.
UM, WE'VE GOT DATA ON WHAT THESE LOOK LIKE IN THESE COMMUNITIES, BUT AGAIN, WE DIDN'T DO A DEEP DIVE BECAUSE THEY'RE NOT REALLY YOUR, YOUR MARKET COMPARISON FOR DEVELOPMENT AND IMPACT FEES.
UM, BUT WE WANTED TO LOOK AT WHO IS DOING THESE KINDS OF FEES, GENERALLY SPEAKING ACROSS THIS, UM, GROUP MORE.
YOU CAN SEE THERE, I WON'T READ THROUGH ALL OF THEM.
UH, THEY, THEY'RE THE ONLY OTHER ONES WITHOUT ANY, UM, PARKLAND DEVELOPMENT FEE, UM, UH, CURRENTLY.
AND SO YOU LOOK THERE AND SAY, YOU KNOW, THAT'S, THAT'S INTERESTING.
WELL, HOW DO WE COMPARE, YOU KNOW, AN ACTUAL DOLLARS WISE, RIGHT? AGAIN, WHEN YOU GO BACK TO THOSE PREVIOUS SLIDES THAT SHOWED THAT YOUR RECOUPMENT OR YOUR COST RECOVERY, UM, PER CAPITA, PER ACRE, HOWEVER YOU WANNA LOOK AT IT, IS SIGNIFICANTLY LOWER THAN THESE OTHERS.
UM, AGAIN, WITHOUT GETTING INTO A TON OF DETAIL ON WHO PAYS WHAT FOR WHAT, UM, YOU CAN SEE THAT YOUR FEES ARE GENERALLY SPEAKING MUCH LOWER THAN UM, THESE COMPARISON COMMUNITIES.
SO A COUPLE OF THOUGHT POINTS OR DISCUSSION POINTS HERE.
[01:10:01]
ADDITIONAL DEVELOPMENT FEES, IF THEY'RE COST BASED AND COST WARRANTED, UM, YOU COULD HELP LESSEN THE RELIANCE ON, ON THAT SAYS NON-SALES AND USE TAX SHOULD SAY ON SALES AND USE TAX.MADE A, MADE A MISTAKE ON THAT ONE.
UM, ESSENTIALLY FOR EVERY DOLLAR, ADDITIONAL DOLLAR THAT GETS BROUGHT IN THROUGH DEVELOPMENT IMPACT FEES IS A DOLLAR LESS THAT YOU HAVE TO BRING IN FROM YOUR MORE HIGHLY VOLATILE SALES TAX REVENUE STREAMS, UM, IN ORDER TO FUND THE SAME, UH, INFRASTRUCTURE AND SERVICES.
IT'S A REALLY IMPORTANT, I THINK THIS IS, AGAIN, I KNOW I'M PROBABLY PREACHING TO THE CHOIR ON THIS.
DEVELOPMENT FEES NEVER PAY FOR PROJECTS.
UM, THEY, THEY, THEY'RE THE FINISHING TOUCH PERHAPS THEY CAN PAY FOR DESIGN, THEY CAN PAY FOR, UM, A VARIETY OF PIECES AND PARTS OF PROJECTS.
BUT, UM, THERE IS NO DEVELOPMENT FEE IN ANYWHERE THAT WE WORK.
AT LEAST THAT A HUNDRED PERCENT FUNDS THOSE PROJECTS.
THEY'RE ALWAYS SUBSIDIZED BY TAX DOLLARS IN SOME WAY OR USER FEES IN SOME WAY, SHAPE OR FORM.
UM, AND REALISTICALLY BASED ON THESE COMPARISON CITIES, UH, COST-BASED DEVELOPMENT IMPACT FEES DON'T DETER DEVELOPMENT.
UM, I'M SURE THAT THEY WILL OCCASIONALLY DETER SPECIFIC DEVELOPMENT.
UM, THERE MAY BE BE SOMEBODY THAT WHEN THEY PENCIL OUT THAT PROFORM ON THAT DEVELOPMENT PROJECT, THAT'S THE DECISION MAKER FOR THEM MAYBE.
UM, I'VE WORKED ON LITERALLY BILLIONS OF DOLLARS OF DEVELOPMENT DEALS, UM, AND I HAVE A HARD TIME BELIEVING THAT THAT'S EVEN THE CASE ON ONE.
UM, BUT I'LL LEAVE OPEN THE POSSIBILITY I GUESS.
UM, BUT, UH, IT, IT JUST DOES NOT DETER QUALITY DEVELOPMENT.
UM, IN REALITY IT, IT CAN HAVE AN IMPACT ON AFFORDABILITY OF HOUSING.
UM, AGAIN, THOUGH I COME BACK TO THE QUESTION OF WHERE IT CAN LEAD TO AN INCREASE IN THE OVERALL MARKET COST OF A HOUSE, UM, I HAVE NOT SEEN WHERE IT ACTUALLY DECREASES THE MARKET COST OF A HOUSE.
UM, THE, THE HOME BUILDER AT THE END OF THE DAY IS GONNA GET WHAT THEY CAN GET.
UM, EXISTING COST AND REVENUE GAP REQUIRES VARIOUS METHODS TO OVERCOME AS ADMIN CONTINUES TO GROW.
AGAIN, YOU SAW THAT CHART WHERE ESSENTIALLY THEIR TRAJECTORY IS YOU'RE GOING TO BE ABLE TO SPEND LESS AND LESS ON PROVIDING DIRECT SERVICES AND YOU'RE GOING TO HAVE TO SPEND MORE AND MORE ON INFRASTRUCTURE MAINTENANCE, UH, AND REPLACEMENT.
SO WE'LL COME BACK TO A COUPLE OF THESE AS WELL.
BUT JUST GENERALLY SPEAKING, SOME, SOME THINGS TO, TO CHEW ON A LITTLE BIT.
MARY, CAN I JUMP IN FOR A SECOND? RIGHT HERE.
SO WE, WE UM, LOOKING OFF WHERE'S RANDY DEVELOPMENT STRATEGIES? WHO'S DOING THE AFFORDABLE HOUSING STUDY? WHEN'S THAT GONNA BE DONE? EIGHT MONTHS.
KICKS OFF THE US SO INTERESTING.
WE USED THE SAME COMPANY IN MY PREVIOUS CITY AND WHEN WE ASKED, CAUSE THERE'S A LOT OF QUESTIONS.
THE NO COMMUNITY, OH IMPACT FEES AND THIS, HOW'S THAT IMPACT THEIR ABILITY? IT WAS, IT WAS REALLY, REALLY SMALL.
WHAT THE IMPACT WAS OF IMPACT FEES ON AFFORDABLE HOUSING DEVELOPMENT.
THERE WERE SIGNIFICANTLY OTHER FACTORS THAT HAD BIGGER IMPACTS ON DEVELOPERS BEING ABLE TO PENCIL OUT DEVELOPMENT.
SO I THINK IT'LL BE AN INTERESTING THING AS WE TALKED DEVELOPMENT STRATEGIES AND YOU KNOW, IN THE COURSE OF THE DISCUSSION WITH THEM, WE CAN ASK THEM THAT QUESTION ABOUT WHAT IMPACT OR NON-IMPACT DO DEVELOPMENT IMPACT FEES HAVE ON DEVELOPMENT? IT GOES HAND IN HAND WITH CODE REDO.
IF WE CAN SAVE, IF WE CAN INCREASE DENSITY, IF WE CAN DO THINGS THAT, UM, THAT CAN HELP THE DEVELOPER, THEN I, THEN IT WILL HAVE A LOT, THEN IMPACT FEES WILL HAVE LESS IMPACT.
AND YOU CAN ALSO DESIGN IT WHERE IT'S AN INCENTIVE TO DO AFFORDABLE HOUSING CUZ THE CITY'S GONNA COME IN AND SAY, WE'LL PAY THE OFFSET OF DEVELOPMENT IMPACT FEE.
BECAUSE YOU ALWAYS HAVE TO MAKE UP THE IMPACT FEE FUND.
YOU CAN'T JUST WAIVE THE FEE THE CITY CAN CHOOSE TO SAY, HEY, WE'LL PAY THAT ON BEHALF OF THE DEVELOPER CUZ WE WANT THAT TYPE OF DEVELOPMENT TO OCCUR.
IT'S ANOTHER TOOL IN A TOOLBOX, RIGHT? UM, THE, THE, THOSE FEES PROVIDE AN OPPORTUNITY TO HAVE THOSE KINDS OF CONVERSATIONS.
IF YOU DON'T HAVE THE FEE IN THE FIRST PLACE, UM, THEN THAT, THAT'S JUST NOT A TOOL THAT YOU HAVE IN YOUR, IN YOUR BOX.
SOMETHING I WOULD ADD TO THIS IS WE SPENT, AND I THINK WE WERE, I THINK WE WERE AHEAD OF THE CURVE ON THIS, ON OUR 2050 EAST EDMOND STUDY, AND NOT ONLY DID WE TALK ABOUT PROJECT FUTURE DEVELOPMENT AND WHERE IT'S GONNA GO, WE, WE WENT INTO THE MODEL OF UM, WHAT TYPE OF DEVELOPMENT DENSITY, UM, VILLAGE CENTERS AND, AND WHEN YOU CAN ENTER A NEIGHBORHOOD COMMERCIAL COMPONENT INTO THAT, UM, WHAT KIND OF COST IS THAT LONG TERM.
UM, AND OBVIOUSLY A MORE DENSE NEIGHBORHOOD IS GONNA HAVE MORE CUSTOMERS AND, AND YOU START GETTING INTO SOME ECONOMY OF SCALE ON STREETS AND UTILITIES AND THINGS LIKE THAT.
SO IT, MY GENERAL STATEMENT IS I'M, I'M VERY, I'M EXTREMELY CAUTIOUS OF DEVELOPMENT IMPACT FEES, UH, JUST PERIOD.
[01:15:01]
AGAINST IT.BUT I DO THINK IF WE'RE KIND OF, IF WE'RE KIND OF BEHIND DELAYED ON THAT OR BEHIND THE CURB, I THINK WE HAVE AN OPPORTUNITY TO USE THAT TYPE OF THINKING IN NOT JUST DEVELOPMENT IMPACT FEES ACROSS THE BOARD, ANY DEVELOPMENT, BUT MAYBE WE CAN GET A LITTLE MORE CREATIVE IN WHAT TYPE OF DEVELOPMENT IT IS.
AND SOME IS MORE, SOME WE'VE LEARNED FROM THE STUDY THAT THAT SOME COST.
I DON'T KNOW IF THAT'S THE RIGHT THING TO SAY.
NOT THAT IT COSTS LESS OVER TIME TO MAINTAIN, BUT IT PAYS MORE OF ITS FAIR SHARE.
AND SO I'M MORE OPEN TO, I I WOULD, I PERSONALLY WOULD WANT TO GO THAT DEEP INTO, INTO HOW IT'S, UH, WHETHER YOU CALL IT AN INCENTIVE FOR, FOR DOING DEVELOPMENT THAT WE KNOW IS GOING TO PAY ITS FAIR SHARE AND OR PENALTY AND OR THE OTHER SIDE OF THAT WOULD BE A PENALTY FOR TYPE OF DEVELOPMENT THAT'S NOT GOING TO PAY ITS FAIR SHARE.
AND SO THAT'S WHERE, UH, IF, IF I WERE TO BE INVOLVED IN THAT, I WOULD WANT TO GO TO THAT LEVEL OF DETAIL JUST TO SHARE IN MY THOUGHTS WITH Y'ALL.
I JUST WANTED TO LET YOU KNOW YOU GOT ABOUT 25 MINUTES LEFT AT THE MOST.
PUBLIC SAFETY, THIS WILL BE RELATIVELY QUICK PUBLIC SAFETY DISTRICT DISCUSSION.
UM, A COUPLE OF DIFFERENT THINGS THAT CAME OUT OF THIS IN OUR, LOOK AT IT RIGHT NOW.
UM, EDMOND IS SPENDING ABOUT $608 PER CAPITA ON A THREE YEAR AVERAGE FOR PUBLIC SAFETY, UM, GOODS AND SERVICES AND PEOPLE AND PERSONNEL, ALL THOSE KINDS OF THINGS.
IT'S AT, IT'S AT THE HIGH END OF THE RANGE, UH, THE HIGHEST AND IT'S SIGNIFICANTLY ABOVE THE $489 AVERAGE.
YOUR CITIZENS ARE RECEIVING A LOT OF PUBLIC SAFETY, UM, EXPENDITURES WITHIN THE COMMUNITY, 24% IN FACT ABOVE THE SAMPLE AVERAGE.
AND OURS IS BETTER, I'M SAYING, AND I THINK THAT'S SOMETHING NO ONE WANTS TO TAKE.
VERY, VERY LIKELY THE CASE, AGAIN, MY EXPERIENCE, UM, BECAUSE I DON'T HAVE A DOG IN THAT HUNT, IF YOU WILL MM-HMM.
IT'S THE MORE THAT'S BEING SPENT MEANS THE BETTER SERVICE THAT'S BEING PROVIDED, RIGHT? I MEAN, IT'S NOT BECAUSE, YOU KNOW, YOURS ARE DRIVING AROUND AND CARS THAT ARE TWICE AS EXPENSIVE, RIGHT? IT'S MORE SERVICES BEING PROVIDED, A HIGHER DEGREE OF SERVICES BEING PROVIDED.
UM, ONE OF THE, YOU KNOW, OBSERVATIONS IS OBVIOUSLY, I THINK, AGAIN, I'M PROBABLY PREACHING TO THE CHOIR HERE, BUT PUBLIC SAFETY DISTRICTS ARE STILL A NEW TOOL, UM, IN OKLAHOMA.
UM, AND THAT DOESN'T MEAN STAY AWAY FROM THEM AT ALL COSTS, BUT IT'S THE, THE COMMUNITY AS A WHOLE, THE LOCAL GOVERNMENT COMMUNITY HAS BEEN VERY CAUTIOUS IN MOVING FORWARD WITH PUBLIC SAFETY DISTRICTS.
UM, AND SO THAT'S JUST SOMETHING TO KEEP IN MIND, UM, AS THIS, AS YOU CONTINUE TO LOOK AT THAT, THE REASON I PUT UP THE LAST SLIDE IS, UM, I WOULD, I WOULD HAVE A QUESTION, A LEGITIMATE QUESTION I THINK OF FOR WHAT, UM, IS IT TO OFFSET THAT $608 EXPENDITURE IN SOME WAY AND THOSE DOLLARS COME BACK TO OTHER ACTIVITIES? OR IS IT TO ENHANCE PUBLIC SAFETY THAT MUCH MORE? THAT'S A VERY REAL POLICY DISCUSSION THAT YOU WOULD NEED TO HAVE, UM, BEFORE UH, YOU MOVE DOWN THE PATH OF A POSSIBILITY OF A PUBLIC SAFETY DISTRICT.
THIS IS, THIS IS ONE OF THE RECOMMENDATIONS THAT GOT BROUGHT UP AS PART OF THE EAST EDMOND 2050S, WHICH IS WHY WE'RE COVERING IT HERE AT THE END OF THE DAY.
UM, WE'RE GONNA LOOK AT YOU AND SAY, THIS IS PROBABLY NOT ONE OF YOUR GOLDEN OPPORTUNITIES TO INCREASE YOUR REVENUE.
I'LL JUST JUMP TO THE, THE BIG POINT AT THE END.
UM, WHAT WOULD THE IMPACT BE ON, ON OTHER ASSESSED VALUE TAX ALTERNATIVES, WHETHER THAT'S THE SCHOOL DISTRICT OR REMEMBER, UM, MAYBE YOUR CAP, YOU KNOW, THE MILL RATE IS CAPPED AT, AT FIVE MILLS.
THERE'S A LOT OF DIFFERENT THINGS GOING INTO THERE.
I WOULD SAY WHAT I WOULD SUGGEST OUTSIDER LOOKING IN, KEEP AN EYE ON IT.
UM, BUT, UH, BASED ON THE HIGH DEGREE OF SERVICE THAT YOU'RE ALREADY PROVIDING WITHIN THE COMMUNITY FOR PUBLIC SAFETY AND ALL OF THE UNKNOWNS THAT COME ALONG WITH PUBLIC SAFETY DISTRICTS RIGHT NOW IN OKLAHOMA, I WOULD BE PRETTY CAUTIOUS OF IT.
GEO BOND FEASIBILITY ANALYSIS.
UM, YOUR, YOUR CURRENT LACK OF GEO DEBT, UM, LEAVES ACCORDING TO YOUR AUDITORS 123 MILLION, UM, DEBT CAPACITY, LEGAL DEBT CAPACITY.
NOT SUGGESTING YOU GO OUT AND SELL 123 MILLION WORTH THE BONDS.
UM, BUT THAT'S WHAT YOUR LEGAL DEBT CAPACITY IS.
WHAT THAT DRIVES ME TO LOOK AT IS TO SAY, OKAY, THAT'S FAR LESS A FINANCIAL DECISION THAN IT IS A POLITICAL DECISION.
UM, HOW DO YOU BALANCE, UM, THE APPROPRIATE AMOUNT OF GEO DEBT TO FUND SOME OF THESE PROJECTS WITH LONG TERM FINANCING AS OPPOSED TO CURRENT CASH DOLLARS? IT'S NOT A FINANCIAL MATTER FROM A, FROM A, YOU KNOW, BALANCING THE CITY'S BOOKS STANDPOINT, YOU'VE GOT A LOT OF LEGAL DEBT CAPACITY AND LEGAL DEBT MARGIN.
UM, THE MILL RATE REQUIRED, IT'S JUST KIND OF KEEP IN MIND, UM, TO, TO FUND DEBT SERVICE ON EACH 10 MILLION OF GEO BOND IS ABOUT FIVE POINT SI, 5.65 MILS.
UM, JUST TO KIND OF USE AS A, AS A RULE OF THUMB, IF YOU WILL,
[01:20:01]
UM, HIGH EXISTING LEGAL DEBT CAPACITY, GEO BOND FEASIBILITY, AGAIN, IT'S, IT'S MORE OF A, IT'S MORE OF A, A POLITICAL AND SOCIAL, UM, QUESTION THAN IT IS A FINANCIAL QUESTION.UM, YOU PROBABLY KNOW THAT BASED ON YOUR VERY LOW, UM, INTEREST LEVELS RIGHT NOW, UM, FROM A FINANCIAL PERSPECTIVE AND WHICH IS PRIMARILY WHAT WE'RE LOOKING AT, UH, FROM A POLITICAL AND SOCIAL PERSPECTIVE AND HOW THAT IMPACTS THE SCHOOL DISTRICT OR ANYBODY ELSE.
UM, AND VERY LIKELY FOR ANOTHER DAY, SINCE I'M DOWN TO ABOUT 15, UM, SOME THINGS TO CHEW ON HERE.
WHAT IS YOUR OUTLOOK ON GEO DEBT? UM, WHAT WE'VE, WHAT THE NUMBERS HAVE SHOWN US IS THAT YOU'RE VERY CLEARLY NOT ONLY RELATIVELY LOW, YOU'RE AN OUTLIER LOW, UM, FROM HOW MUCH INTEREST EXPENSE THAT YOU CURRENTLY HAVE, WHICH IS A DIRECT CORRELATION OBVIOUSLY WITH HOW MUCH DEBT YOU CURRENTLY HAVE.
UM, WHAT IS YOUR OUTLOOK ON THAT? THERE'S BEEN AN INTENTIONAL DECISION.
THE MAYOR, I THINK MENTIONED EARLIER THAT YOU WANTED TO CASH FUND AS MUCH AS YOU CAN.
NOTHING WRONG WITH FUNDING A LOT OF INFRASTRUCTURE WITH DEBT.
UM, I'M HERE TO HELP YOU UNDERSTAND WHAT THOSE CONSEQUENCES CAN BE, UM, AND TO DISCUSS THOSE AND HAVE A CONVERSATION AROUND THOSE THINGS.
UM, BUT, UH, BUT EACH, EACH METHOD, UM, HAS ITS OWN CONSEQUENCES.
UM, WHAT ARE YOUR KNOWN CAPITAL IMPROVEMENT FUNDING GAPS? AGAIN, NOT ON YOUR UTILITY SIDE, BUT ON YOUR, ON YOUR GENERAL FUND SIDE OR ON YOUR GENERAL ACTIVITIES LEVEL.
WHAT IS THAT IMPACT ON AFFORDABILITY GENERALLY WITHIN THE CITY? YOU HAVE A HIGH, UM, HOUSEHOLD, UH, MEDIAN HOUSEHOLD VALUE, UM, HERE.
SO WHAT IS HAVING ADDITIONAL AD VALOR AND PROPERTY TAXES DO TO THAT AFFORDABILITY AS A WHOLE? UM, I'D BE CURIOUS TO SEE IF THAT'S A PART OF THE STUDY THAT'S FORTHCOMING AS WELL.
ALL THINGS TO KEEP IN MIND, OBVIOUSLY.
UM, BUT AGAIN, A QUESTION, UM, TO YOU, UH, IS THE GENERAL OUTLOOK ON GEODE, IS IT ABSOLUTELY NOT, BASED ON WHAT YOU'RE SEEING TODAY? IS IT MAYBE INTERESTED? UM, WHAT, LOVE TO GET SOME OF YOUR THOUGHTS.
NOBODY'S ASKING FOR ANY COMMITMENTS OF ANY PARTICULAR SORT RIGHT NOW, BUT, SO WE, MY INITIAL THOUGHT IS, AND, AND IT'S BEEN THIS SINCE I'VE BEEN ON COUNCIL, THAT I THINK EDMUND WILL FUND, UM, TWO THINGS IN PARTICULAR PARKS AND SOMETHING THAT HELPS WITH TRAFFIC.
AND WE HEAR WE, THE 80 20 VOTE WAS HAD, THE MESSAGE THERE WAS WAS SAVING A PARK EVEN THOUGH IT WASN'T PARK LAND.
UH, IT WAS SAVING A PARK AND, AND OUR, AND OUR CITIZEN SUPPORT OUR OUR PARKS COMPLETELY.
THE OTHER IS ON OUR CITIZEN SURVEYS IS OBVIOUSLY TRAFFIC AND ROADS.
AND SO I DO THINK THAT, I THINK IT'S GOTTA BE MESSAGED EXTREMELY WELL.
UH, IT HAS TO BE SHOWN THAT, UH, THAT WE, WE STILL SUPPORT OUR SCHOOLS AND, AND FRANCIS TU AND LIBRARY AND OKLAHOMA COUNTY 100%.
UM, BUT AT SOME POINT YOU HAVE TO SAY, HERE IS THE SOLUTION TO, TO HELPING WITH, WITH TRAFFIC AND CONGESTION AND, UH, IT, WE HAVE TO THINK OF THE BEST WAY TO PAY FOR THAT.
AND SO WITH US BEING ONE OF THE ONLY CITIES OF OUR SIZE, OR MAYBE THE ONLY CITY OF OUR SIZE IN OKLAHOMA WITHOUT HAVING A GEO BOND, UNLESS THERE'S A BETTER ANSWER, I, I DON'T KNOW WHAT IT IS.
I FEEL LIKE THAT, THAT THAT'S OUR NEXT STEP.
AND AGAIN, I'LL, OUTSIDE OF LOOKING IN THE DATA WOULD SUGGEST THAT THERE'S, AGAIN, NOT ONLY LEGAL DEBT MARGIN ROOM, UM, BUT CERTAINLY FROM JUST A CITY FINANCIAL PERSPECTIVE, THERE'S, THERE'S ROOM THERE.
SHOULD WE THAT'S YOUR, YOUR TURN.
YEAH, I THINK JOSH IS ABSOLUTELY RIGHT.
I THINK IT ABSOLUTELY HELPS US A LOT IF IT'S PROGRAM SPECIFIC MM-HMM.
SO THAT YOU CAN PUT THE MESSAGE OUT THERE AS TO WHAT THAT MONEY'S SPECIFICALLY GONNA BE USED FOR.
THE SECOND ONE IS, UM, I DO THINK THAT WE CAN'T DO ANYTHING TO, OUR CITIZENS ARE NOT GONNA ALLOW US TO DO ANYTHING THAT ARE GONNA HURT OUR SCHOOLS.
AND SO IF THAT MESSAGE IS THERE, IT'S PROBLEMATIC FOR US MM-HMM.
AND SO WE HAVE TO OVERCOME THAT, UM, IN SOME WAY.
UM, EXACTLY HOW WE HAD TO DO THE TIF, YOU KNOW, WE HAD TO MAKE IT, WE HAD TO ENSURE THAT IT DIDN'T DO THAT MM-HMM.
UM, BUT CLEARLY WE ARE THE ONLY MUNICIPALITY OF OUR SIZE THAT DOESN'T USE THIS.
AND, AND THE LAST THING I'LL SAY IS, IS WE'VE GOT TO BECOME MORE, WE'VE GOT TO BECOME LESS, UM, DEPENDENT UPON SALES TAX AND THIS IS THE ONLY WAY WE CAN DO THAT.
UH, IT'S THE ONLY WAY THE STATE ALLOWS US TO DO IT.
[01:25:01]
UH, USER FEES AND CHARGES, THOSE KINDS OF THINGS.BUT YES, THIS CLEARLY HAS A DIRECT IMPACT ON THE VOLATILITY, VOLATILITY OF YOUR OVERALL REVENUE STACK.
I KNOW, AND I KNOW Y'ALL HAVE SOME STRATEGIC PLANNING WORKSHOPS COMING UP AS WELL.
I KNOW THIS IS GONNA BE A CONTINUED CONVERSATION, BUT, UM, IT'S IMPORTANT FOR THE STAFF AT LEAST TO BE ABLE TO GET A READ ON, UM, IS IT AN ABSOLUTELY NO.
WE WON'T SPEND TIME, MONEY, ENERGY, AND EFFORT ON IT.
UM, IF IT'S A POSSIBILITY, UH, THEN WE NEED TO LOOK INTO IT AND GET A LITTLE, DIG A LITTLE DEEPER AND GET A LITTLE FURTHER ON IT.
SO, ON, ON GEO BONDS, SPECIFICALLY ON OTHER MUNICIPALITIES THAT YOU'VE WORKED WITH ON THEM, ARE THEY, UH, WHAT KIND OF MIX DO YOU SEE IF YOU, IF YOU HAVE SAY, SIX PROJECTS IN, LET'S SAY SIX PROJECTS IN THE PACKAGE, IN THE BOND PACKAGE, WHAT KIND OF MIX DO YOU SEE IN THAT? DO YOU SEE ALL ROAD PROJECTS? DO YOU SEE A ROAD AND TRAIL PROJECT OR, YOU KNOW, OR MULTIMODAL? WHAT ARE, WHAT ARE YOU SEEING IN THAT TODAY? UM, WE SEE A LOT OF MIX, UM, A A LOT OF MIXTURE, UM, AS A WHOLE OF THEIR FUNDING STREAM TO FUND PROJECTS.
NOW, UH, AGAIN, THIS IS ANECDOTAL, SO TAKE IT FOR WHAT IT IS.
WE DIDN'T INCLUDE THIS AS PART OF THE STUDY, UH, BUT ANECDOTALLY, I WILL TELL YOU THAT WHAT I HAVE SEEN IS THAT THE MORE SPECIFIC YOU CAN GET WITH WHAT, YOU KNOW, HOW IS IT BEING, HOW, HOW ARE THOSE DOLLARS BEING PROGRAMMED, THE MORE SUPPORTIVE CITIZENS TEND TO BE YEAH.
WHAT, WHAT'S MOST IMPORTANT IS HOW SPECIFIC THAT IS AND THAT IT'S GOING TO A ONE SOURCE.
WELL, AND, AND HOW IT MATCHES UP WITH WHAT YOUR EXPECTATIONS ARE WITHIN THE COMMUNITY, RIGHT? MM-HMM.
UM, IN SOME OF OUR OTHER CLIENT C COMMUNITIES, UH, WHEN THEY JUST MISREAD THE COMMUNITY, YOU KNOW, THEY, THEY, THEY THOUGHT THIS WAS A BIG NEED AND CLEARLY IT'S NOT.
UM, YOU KNOW, AND SO THAT'S, THAT'S THE BIGGEST PIECE OF IT OBVIOUSLY, IS HOW WELL DOES IT ALIGN WITH THE EXPECTATIONS OF THE COMMUNITY.
UM, BUT THE, ONE OF THE WAYS THAT THEY CAN ASSESS THAT IS BY BEING SPECIFIC ON WHAT IT IS THAT YOU'RE, YOU'RE ASKING FOR.
AND THAT'S WHAT WE'VE DONE BEFORE ON A LOT OF OUR CIP PRO, ALL OUR CIP PROJECTS.
UH, AND THAT'S WHAT WE WERE, WERE GONNA BUILD.
AND IF WE HAVE A POSSIBILITY, SO GO BACK TO YOUR FIRST QUESTION, THE ANSWER IS NOT NO.
THE QUESTION, THE ANSWER, PART OF THAT ANSWER IS HOW DO WE MESSAGE IT? YEAH.
TO, TO THE RIGHT WAY, UH, FOR THE ENTIRE COMMUNITY.
UM, AND WHAT, WHAT WOULD THOSE SPECIFIC PROJECTS BE THAT ARE NEEDED TO BE, WHEN WE LOOK AT A LONG LAUNDRY LIST, WHAT ARE THE ONES THAT, THAT ARE UP HERE THAT NEED TO BE IN THAT LIST? I THINK THAT WOULD BE THE, IF, IF WE WERE TO GO IN THAT DIRECTION AND YOU'RE TRYING TO HIT THOSE NEEDS, IF TO GET THE COMMUNITY TO RESPOND TO THAT OR TO ACCEPT IT.
IT'S, I THINK THE CHALLENGE WOULD BE IN WHAT, WHAT'S THE HIERARCHY OF NEEDS CORRECT.
IN IF IT IS ROAD PROJECTS, WHICH ONES ARE THEY? I THINK IT'S STUFF THAT'S NOT GONNA HAPPEN UNLESS WE DO IT.
I MEAN, WE DON'T HAVE ANOTHER FUNDING SOURCE YEAH.
TO ACCOMPLISH IT UNLESS WE DO THIS.
I MEAN, NOBODY'S SHOWING UP WITH A MULTIMILLION DOLLAR CHECK JUST FOR, TO GET THAT DONE
AND IF NOT, THEN THEN WE DON'T DO IT, THEN WE CAN'T DO IT.
BUT I FEEL LIKE WE'VE, FROM MR. MANNIX'S DEPARTMENT AND HIS RANKING, AND I THINK WE'VE DONE SOME SURVEYS PRETTY CONSISTENTLY ON, Y'ALL KNOW, THE COMMUNITY SURVEYS ON DROP THE PIN ON THE, ON THE INTERSECTION THAT I THINK YOU HATE THE, THE MOST.
UM, AND SO I, I FEEL LIKE WE'VE BEEN, BEEN DOING THAT AS FAR AS RANKING.
GETTING, GETTING GOOD COMMUNITY INFORMATION IS, IS THE START OF IT, FOR SURE.
UM, LAST PIECE HERE, AND THIS IS GONNA BE JUST KIND OF BROAD IN GENERAL.
AGAIN, SERVICE LEVEL ADJUSTMENTS.
UM, THIS IS JUST A, A RECOMMENDATION ON THE EXPENDITURE SIDE AS WELL.
WELL, A PICTURE FROM OKLAHOMA CITY, IT IS NOT, IT'S, THAT IS A STOCK PHOTO, RIGHT?
I'M GONNA SHOW HOW YOU CAN, UM, EQUATE THAT TO OTHER TYPES OF OPERATIONS AS WELL, WHERE YOU IDENTIFY WHAT AN ACCEPTABLE LEVEL OF SERVICE IS.
HOPEFULLY YOU FORMALLY IDENTIFY WHAT THAT IS.
UM, EVEN IF IT'S A GENERAL FORMULATION OF WHAT THE SERVICE LEVEL SHOULD BE, THAT'S SOMETHING THAT'S AT LEAST A STARTING POINT AND YOU CAN GET TO THE POINT OF WHERE YOU GET A BETTER AND BETTER AT UNDERSTANDING WHAT THE, UM, WHAT THE ACCEPTABLE
[01:30:01]
LEVEL OF SERVICE IS.THIS BECOMES MORE AND MORE IMPORTANT AS THE AMOUNT THAT YOU HAVE TO SPEND ON GOODS AND SERVICES OR ON, ON, ON PUBLIC SERVICES, UM, GOES DOWN AND THE INFRASTRUCTURE IMPROVEMENT NEEDS TO GO UP.
UM, FIGURING OUT WHAT LEVEL IS ACCEPTABLE IS KEY.
UM, SERVICE LEVEL, BUDGET METHODOLOGY, FORMALIZES THAT METHOD INTO A, INTO THE ENTIRE BUDGET PROCESS AS A WHOLE.
AND SO, AGAIN, I'LL JUST GO A COUPLE OF DIFFERENT PIECES HERE.
ONE OF THE ADVANTAGES, IT'S DATA DRIVEN.
WHEN YOU KNOW WHAT THE NEED IS AND YOU KNOW HOW MUCH IT'S GONNA COST, AND YOU KNOW WHAT THAT GAP IS, IT GIVES YOU THE ABILITY TO SAY, IN ORDER TO MOVE FROM A C TO A B OR B TO AN A, UM, IT'S GONNA COST US MUCH AND ARE CITIZENS WILLING TO DO THAT OR NOT? UM, AND IF THEY ARE, GREAT, IF THEY'RE NOT, THEY'RE WILLING TO ACCEPT A LEVEL B AND SO BE IT.
UM, IT ALLOWS A DEEPER UNDERSTANDING OF THE INCREMENTAL IMPACT OF FUNDING ON SERVICES.
UM, I'VE, I'VE LONG BEEN A, A, A, UM, BELIEVER THAT SOMETHING LIKE BUILDING A NEW FIRE STATION IS EASY FUNDING THE OPERATIONS OF IT IS HARD.
UM, AND SO UNDERSTANDING WHAT THAT SERVICE LEVEL IS HAS TO DO NOT ONLY WITH THE INFRASTRUCTURE, BUT ALSO WITH THE SERVICES THAT ARE BEING PROVIDED, UM, FITS VERY WELL WITH LONG TERM STRATEGIC PLANNING.
UH, CUZ AGAIN, IT IDENTIFIES WHAT IT IS THAT YOU WANT TO DO, AT WHAT LEVEL, UM, WHAT LEVEL IS ACCEPTABLE SPECIFICALLY, AND THEN YOU TARGET YOUR RESOURCES DIRECTLY AT THAT AND PROVIDES CLEAR PERFORMANCE REPORTING STRUCTURE AS WELL.
DID WE HIT THE TARGET OR NOT? UM, BECOMES FAIRLY SIMPLE FROM THAT PERSPECTIVE.
UM, IT TAKES A LOT OF TIME, EFFORT TO GO THROUGH AND RELIABLY ASSESS WHAT LEVELS OF SERVICE.
I SEE A LOT OF STRATEGIC PLANS, A LOT OF BUDGET DOCUMENTS THAT SAY SOMETHING LIKE, WE WANT TO DECREASE OUR CALL, UM, CALL FOR SERVICE TIME.
OKAY, BY HOW MUCH? UM, BY A MINUTE, BY A MINUTE AND A HALF BY THREE MINUTES.
WHAT IS IT? WHAT ARE YOU LOOKING FOR IF YOU DON'T KNOW WHAT THAT TARGET IS? UM, BUT IT TAKES A LOT OF TIME TO GO THROUGH THAT, UM, AND GO THROUGH THE CITY OPERATIONS ON A WHOLE AND DO THAT, RIGHT? THERE'S AN INVESTMENT RISK FOR CHANGES IN BUDGET METHODOLOGIES AS A NEW COUNCIL COMES ON BOARD AND THEY SAY, NO, WE'RE NOT INTERESTED IN DOING THAT.
THAT THOSE 4,000 HOURS THAT YOU JUST PUT INTO IDENTIFYING THOSE SERVICE LEVELS ARE OUT THE WINDOW.
UM, AND THEN IF SERVICE LEVELS ARE NOT ESTABLISHED AND REGULARLY TESTED, IT CAN LEAST TO, IT CAN LEAD TO BAD INFORMED POLICY DECISIONS.
I KIND OF STACK THIS UP WITH THE, WHY DO WE DO IT THAT WAY? BECAUSE COUNCIL MEMBERS SO AND SO 15 YEARS AGO ASKED FOR IT AND WE HAVE NO IDEA WHETHER IT'S ACTUALLY PRODUCING THE OUTCOME THAT WE WANT IT TO ANYMORE.
I DON'T KNOW WHETHER THAT'S HAPPENING HERE OR NOT.
HAPPENS IN A LOT OF COMMUNITIES.
TRADITIONAL METHOD STARTING POINT IS WHAT, WHAT WAS YOUR LAST YEAR'S BUDGET AND HOW MUCH CAN YOU AFFORD TO INCREASE THAT BUY OVER THE NEXT YEAR? UNDER SERVICE LEVEL ADJUSTMENT IS WHAT ARE YOUR NEXT YEAR'S GOALS? AND OBVIOUSLY YOU HAVE TO START SOMEWHERE FROM A FINANCIAL PERSPECTIVE AS WELL, BUT HOW CLOSE ARE YOU TO HITTING YOUR GOALS THAT YOU HAD IDENTIFIED SPECIFICALLY AS PART OF IT FUNDING TARGETS IN THE TRADITIONAL METHOD IS BY DEPARTMENT.
YOU GET YOUR BUDGET BY DEPARTMENT, UM, AND, AND UNDERSTAND WHAT THAT LOOKS LIKE AND THAT'S HOW 90 PLUS PERCENT OF COMMUNITIES DO IT.
FUNDING TARGETS UNDER SERVICE LEVEL ADJUSTMENT IS WHAT'S THE DESIRED LEVEL OF OUTCOME.
AND SO IF IT'S, IF IT'S, UM, WE OFTEN LOOK AT THINGS LIKE RESPONSE TIME FOR PUBLIC SAFETY AND ATTRIBUTE THAT DIRECTLY TO THE POLICE DEPARTMENT OR FIRE DEPARTMENT.
WELL, IT'S GOT AS MUCH TO DO WITH THE TRAFFIC, YOU KNOW, TRAFFIC DEPARTMENT AND HOW GOOD ARE YOUR STREETS AND HOW WIDE ARE YOUR INTERSECTIONS? THOSE KINDS OF THINGS, AS IT DOES WITH HOW MANY COPS ARE ON THE STREET.
UM, SO YOU CAN ADD, GIVES THE STAFF THE ABILITY TO SAY YOU WANT TO DECREASE, UM, RESPONSE TIME.
WE'RE GONNA ADD A COUPLE OF OFFICERS, COUPLE OF VEHICLES, AND WE'RE ALSO GONNA WIDEN THESE TROUBLE SPOTS WITHIN THE COMMUNITY THAT PROVIDES BETTER TRAFFIC FLOW IN, IN THOSE CASES, UM, THE DEPARTMENT SUBMISSION IS HOW THE ALLOCATION, HOW THE TOTAL AMOUNT WILL BE SPENT, UM, UNDER THE SERVICE LEVEL ADJUSTMENTS.
WHEN THE DEPARTMENT SUBMITS IT, THEY SAY, HERE'S HOW WE'RE GONNA DO WHAT YOU'VE ASKED US TO DO, AS OPPOSED TO, YOU KNOW, HERE ARE THE DOLLARS THAT WE'RE GONNA SPEND.
AND THE DEBATE UNDER THE TRADITIONAL METHOD TENDS TO BE WHAT DO WE NEED TO CUT? AND THE DEBATE UNDER THE SERVICE LEVEL ADJUSTMENTS IS WHAT DO WE NEED TO KEEP IN ORDER TO KEEP THE SERVICE LEVELS WHERE WE WANT THEM TO BE? VERY QUICK, UM, CASE STUDY HERE.
WE WORKED WITH CITY OF HATO, TEXAS A COUPLE YEARS AGO.
UH, THEY HAD A, IT'S A VERY FAST GROWTH COMMUNITY, LIKE 10, 15%, UM, ANNUAL GROWTH COMMUNITIES RIGHT NEXT TO GEORGETOWN.
IN FACT, UM, THEY HAD A 30 DAY TURNAROUND ON THEIR PLAN SUBMISSION FOR BUILDING PERMITS.
UM, THEIR DEVELOPMENT COMMUNITY FOUND THAT UNACCEPTABLE, AND THE CITY COUNCIL ALSO FOUND THAT UNACCEPTABLE.
THEY IDENTIFIED A SERVICE LEVEL GOAL OF A THREE DAY TURNAROUND.
UM, AND WHAT THEY DID, THE WAY THAT THEY GOT THERE WAS THEY IDENTIFIED HOW MANY PERSONNEL, IN THIS CASE IT'S A VERY PERSONNEL HEAVY DECISION.
HOW MANY PERSONNEL IS IT REQUIRED TO CUT A DAY OR IN THIS CASE CUT EIGHT DAYS? UM, AND THEY COULD LOOK AT IT AND SAY, IF WE
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ADDED A BUILDING PERMIT TECH AND THREE PLANS REVIEWERS AND ONE CUSTOMER SERVICE REP THAT ALLOWS US TO CUT EIGHT DAYS.AND SO WE'RE GONNA DO THAT FOR A COUPLE OF YEARS AND BACKFILL FOR THE GROWTH AND THE LEVEL OF GROWTH THAT'S COMING IN.
AND THEY GOT TO THEIR THREE DAY TURNAROUND OVER THE COURSE OF A COUPLE OF BUDGET YEARS BY BEING VERY STRATEGIC AND FOCUSED ON WHAT THE OUTCOME WAS THAT THEY WERE EXPECTING AS OPPOSED TO AN INCREMENTAL BUDGETING APPROACH, WHICH IS AGAIN, VERY, VERY COMMON AND TYPICAL.
SO THIS DOESN'T CHANGE THE DOLLARS THAT YOU SPEND, IT DOESN'T, DOESN'T CHANGE THE AMOUNT THAT YOU SPEND IT, BUT IT CAN CHANGE HOW YOU SPEND IT.
SO JUST A, JUST A KIND OF A, AN IDEA AROUND THAT.
I HAPPY TAKE ANY QUESTIONS THAT YOU HAVE AND I'M GONNA GO BACK TO THE REVENUE OPTIMIZATION OPPORTUNITY SLIDE SO THAT WE CAN GET ANY MORE, UM, DISCUSSION ON WHICH OF THOSE, WHICH OF THOSE FIVE, UM, IN ADDITION TO DIGGING DEEP AROUND GEO BONDS, UM, THAT YOU WANT TO TAKE A LOOK AT.
ARE YOU ASKING WHAT WE SHOULD DO? I'M ASKING IF THERE'S ANY OF THESE THAT YOU DON'T WANNA TAKE A LOOK AT FIRST.
AND THEN SECOND, IF THERE'S ANY THAT WE, SO MATTER IF I CAN JUMP IN QUICK.
UM, WENT TO THE FIRST BUDGET CYCLE, PENN LEARNING AND GROWING MYSELF AND SEEING DIFFERENT THINGS AND WE WE'RE STARTING THIS PROCESS OF IMPLEMENTING SOME UPDATES TO OUR BUDGET PROCESS.
THEY HAVEN'T KEPT UP WITH THE COST OF SERVICES TODAY.
SO THAT WAS ONE THING THAT I'LL BE BUILDING IN AS WE MOVE FORWARD IN OUR BUDGETS, IS CONSTANTLY LOOKING OUR FEES AND CHARGES.
AND THAT'S NOT JUST ALWAYS GOING UP, BUT MAYBE THERE'S A DIFFERENCE.
YOU, THE COUNCIL SAYS, HEY, I WANNA LOOK AT SOMETHING DIFFERENT.
MAYBE THAT'S A BACKING OFF ON SOME, BUT I THINK I WAS OUT AT ARCADIA LAKE AND I THINK THEY WERE TELLING ME SOME FEES OF WERE IMPLEMENTED IN 1993.
WELL, IT'S A DIFFERENT ARCADIA LAKE PARK IN 1993 VERSUS TODAY.
UM, AS WE TALKED OUT THERE, IT'S, YOU KNOW, GOING FROM, I'LL JUST STAY A $5 CAMPING FEE TO A $7 CAMP FEE IS PROBABLY NOT GONNA CHANGE SOMEBODY'S DECISION, BUT IT MAY PROVIDE SOME FUNDING TO DEAL WITH ISSUES LIKE TRASH OR OTHER THINGS.
THEN, SO THAT'S GONNA BE, WE'RE GONNA BUILD THIS INTO OUR ANNUAL PROCESS OF BUDGET IS LOOKING AT ARE THERE FEES AND CHARGES WE SHOULD BE CONSISTENTLY LOOKING TO UPDATE.
THAT DOESN'T MEAN EVERY YEAR GONNA BE INCREASING FEES, BUT JUST ON AN ANNUAL BASIS, ARE YOU LOOKING AT YOUR FEES AND CHARGES TO MAKE SURE THEY'RE CONSISTENT TO WHAT THE MARKET IS SAYING SO YOU DON'T HAVE TO DOUBLE 'EM.
I MEAN, THAT'S THE PROBLEM THAT WE'RE IN RIGHT NOW, A STICKER SHOT.
WE'RE WE'RE FAR BEHIND AND SO WE'VE GOTTA MAKE VERY LARGE CHANGES.
IT'LL BE EASIER GOING FORWARD, BUT WE GOTTA GET TO WHERE WE, WE NEED TO BE NOW.
TO THAT VERY POINT, I MADE A COUNCIL PRESENTATION, UH, LAST MONDAY TO A COMMUNITY THAT HAD TO INCREASE THEIR FEES ON, ON A COMPONENT OF WHAT THEY DO BY 22% THIS YEAR AND 18% NEXT YEAR JUST TO CATCH UP.
THEY HADN'T, THEY PROBABLY HAVE NOT RAISED THEM IN A LONG TIME.
AND IT'S, IT'S DRASTIC, BUT THEN WHEN YOU GO BACK AND LOOK ON AN, ON AN ANNUAL AVERAGE BASIS, IT'S LIKE THREE, 3.8%, YOU KNOW? RIGHT.
IT WASN'T, UM, WASN'T DRASTIC ON AN ANNUAL AVERAGE BASIS, BUT FOR THOSE THAT ARE PAYING THOSE FEES NEXT YEAR AT 20 OR 25% MORE, IT'S A SIGNIFICANT HIT.
THANK YOU, SCOTT, FOR SHARING THAT.
I THINK THE OTHER THING I, WE TALKED ABOUT CASH FUNDING A LOT OF DIFFERENT THINGS.
I THINK ONE OF THE CHALLENGES OF, OF CASH FUNDING IS IF WE ARE ONLY HAVING A CASH FUND NEW CAPITAL, IT'S ONE THING, BUT WE PRESENTLY SPLIT OUR SALES TAX BETWEEN PUBLIC SAFETY, OPERATIONAL COST, AND THEN WE TRY TO DO CAPITAL.
SO IT'S NOT LIKE YOU CAN TAKE THAT ONE SENTENCE SALES TAX AND SAY, WE'RE JUST GONNA DEVOTE IT TO THIS.
WE'RE ALREADY SPLITING THAT SEVERAL DIFFERENT WAYS.
AND SO THE IDEA OF ALTERNATIVE SOURCES OF REVENUE IS MAYBE USING MORE OF THAT SALES TAX FOR ONGOING OPERATION MAINTENANCE VERSUS HAVING A CASH FLOW FOR NEW DEVELOPMENT, I CALL IT, FOR NEW CAPITAL INVESTMENT.
THIS CAPITAL OF IMPROVEMENTS COULD BE USED WITH THE JUNE BOND OR SOMETHING.
WE USE MORE OF THAT SALES TAX FOR ONGOING OPERATION MAINTENANCE.
IS IS PART OF THAT STABILITY VERSUS THE VOLATILITY? YEAH.
I THINK IN THIS AS A WHOLE, UM, IF CALLING IT THE STACK, IF WE INTRODUCE SOMETHING ELSE INTO THE STACK IS IF IT WERE A GEO BOND, I I I, MY SIMPLE MIND SEES IT RIGHT NOW, A HUGE CHUNK OF OUR ROAD PROJECTS ARE COMING FROM C I P AND, AND C I P PAYS FOR THINGS LIKE SPLASH PADS, ALSO SPLASH PADS, YOU KNOW, SWIMMING POOL OR ARCADIA LAKE IMPROVEMENTS OR KIND OF WHAT WE'D CALL THE FUN PROJECTS.
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AND SO, UM, WHERE WHAT I DO SEE IS IF IF, IF THERE WERE TO BE A SUCCESSFUL GO BOND, THEN THAT WOULD FREE UP, FREE UP THAT FOR THE C I P LIST TO MOVE FASTER AND, AND I THINK WOULD BE MORE FUN PROJECTS IN THAT WAY IN QUALITY OF LIFE PROJECTS.BUT WHERE WE'RE COMING INTO, UM, THE FEE STUDIES ON THOSE, THEN YOU HAVE OPERATION COSTS YEP.
THAT COME ALONG WITH THOSE BUILDINGS AND, AND THINGS THAT THOSE CREATE.
SO I THINK IT ALL, I THINK THE ANSWER, AND THIS IS IT ALL WORKS TOGETHER.
I I DON'T THINK THERE'S A RIGHT OR WRONG AT SOME POINT IN THE, IN THE EVOLUTION OF, OF ALL OF THAT WORKING TOGETHER.
YOU'VE GOTTA LOOK AT ALL OF THESE MM-HMM.
AND STAY CONSISTENT AND UP TO, AND UP TO DATE AND, AND BE, AND BE AHEAD OF THE CURVE ON IT.
THIS IS, YOU KNOW, I'LL, I'LL SORT OF END ON TWO THINGS.
ONE, THIS IS AT LEAST AS MUCH OF A, OF AN EFFORT TO LOOK AND SAY, OKAY, ARE THE, ARE THERE ANY OF THESE THAT ARE JUST OUT? BECAUSE IF THEY ARE, YOU DON'T WANNA SPEND THE TIME ON IT.
UM, IF THEY'RE NOT, YOU GOTTA START TO PRIORITIZE 'EM.
UM, AS I'M SURE YOUR STRATEGIC PLANNING PROCESS IS, IS HELPING YOU TO, TO SEE AND UNDERSTAND, UM, A GOOD PLAN AS A THOUSAND NOS FOR EVERY YES.
WELL, IT WOULD BE VERY INTERESTING TO SEE HOW OUR STRATEGIC PLAN SORT OF FITS INTO THESE BUCKETS.
YOU NEED ANYTHING ELSE OF ME AT THE MOMENT, SCOTT? NO, YOU HAVE PLENTY OF FIRE HOSES.
YOU JUST FIRED AT US, SO
WELL, AND I THINK THE INTERESTING THING IS, IS WE TALKED ABOUT MESSAGING IS PART OF IT IS NOW WE KNOW HOW ABOUT GOOD OF A, A VALUE THAT THE COMMUNITY IS RECEIVING FROM THE CITY AS FAR AS LEVEL SERVICES.
AND SO I THINK IT'S ALSO, YOU KNOW, WE NEED TO GET BETTER AT SHARING THE VALUE THAT WE PROVIDE TO OUR CITIZENS.
IT'S A GREAT VALUE THAT YOU MOVE INTO COMMUNITY WITH SUPER HIGH STANDARDS, WHETHER IT BE SCHOOLS OR PUBLIC SAFETY OR ROADS OR, OR WHATEVER IT MAY BE AT, AT VERY LOW, CURRENTLY A VERY LOW COST.
UM, AND SOONER WE ALL KNOW THAT THERE IS A COST THAT ONE DAY OR ANOTHER HAS TO START BE RECOUPED.
THAT IS ABSOLUTELY WHAT THE DATA SHOWS THOUGH, IS THAT YOU, YOU'RE PROVIDING A VERY HIGH DEGREE OF SERVICES AND THE DIRECT INVESTMENT BY USER FEES, CHARGES, THOSE KINDS OF THINGS IS BY FAR THE LOWEST OF ANY COMMUNITY THAT WE LOOKED AT.
I APPRECIATE THE FRANK CONVERSATION HERE.
UH, TYLENOL NAS BEING DISPENSED OUTSIDE.
THAT'S ALL FOR, FOR THIS WORKSHOP.
UH, THIS IS JUST, THIS IS NOT THE END.
THIS IS JUST THE BEGINNING OF A LOT OF CONVERSATIONS WE'RE GONNA HAVE TO HAVE FOR FUTURE.