[Budget Town Hall Meeting on April 8, 2026.]
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          TO RESPECT EVERYONE'S TIME, WE'RE GOING TO ACTUALLY START ON TIME. BEFORE I START, I WANT TO ACTUALLY INTRODUCE TWO OF OUR COUNCIL MEMBERS. COUNCIL MEMBER LETICIA HUGHES AND COUNCIL MEMBER KEN WATERS. THANK YOU FOR BEING HERE. THANK YOU, MEMBERS OF THE PUBLIC FOR BEING HERE AS WELL. WE VERY MUCH APPRECIATE YOU. WE HAVE A SHORT PRESENTATION ON THE BUDGET, AND THEN WE'RE GOING TO TURN IT FOR QUESTIONS AND ANSWERS FOR FOR THE NEXT, I GUESS, TEN MINUTES. IS THAT GOING TO BE OKAY? JUST INTRODUCING MYSELF. MAJID JAFFREY, CITY MANAGER, CITY OF DESOTO. AND WITH ME IS LAKITA SUTTON, WHO'S OUR FINANCE DIRECTOR, AS WELL AS OUR DEPUTY CITY MANAGER'S. I AM CAMERON ADRIANA CASTANEDA AND, AND OUR AWESOME STAFF IN THE BUDGET OFFICE, ANYA PENTON AND ASHLEY, AS WELL AS OUR FIRE CHIEF AND OUR DIRECTOR OF UTILITY, FIRE CHIEF, CHIEF AND DIRECTOR OF UTILITY SERVICES. IF I CAN SEE HIM FROM THE DARK. BRANDON. THANK YOU FOR BOTH, FOR BEING HERE AS WELL. SO WITH THAT, I'M GOING TO TURN IT JUST TO STRAIGHT TO NIKITA. AND SHE CAN WALK US THROUGH THAT PRESENTATION. THANK YOU, CITY MANAGER. THANK YOU EVERYONE FOR ATTENDING THIS EVENING. AGAIN, I WILL BE REMISS IF I DIDN'T BRING SPECIAL ATTENTION TO OUR ASSISTANT FINANCE DIRECTOR, ANYA PENTON, AND ASHLEY BLANTON, WHO IS A VERY INTEGRAL PART OF THE BUDGET PROCESS. SO WHAT WE'RE GOING TO DO IS JUST WALK THROUGH SOME OF THE PHASES AND SOME OF THE STEPS THAT ARE GOING TO COME ALONG WITH OUR FISCAL YEAR 2027 BUDGET AND PLANNING OUR AGENDA FOR THIS EVENING, WE'RE GOING TO LOOK AT SOME CITY COUNCIL INITIATIVES, TAKE A LOOK AT OUR SUPPLEMENTAL REQUEST PROCESS, LOOK AT PRIORITY BASED BUDGETING AS WELL. DISCUSS OUR OUR ANNUAL BUDGET PROCESS, LOOK AT OUR CALENDAR AND KEY DATES, TALK A BIT ABOUT THE CITY FUNDS AND HOW THEY WORK AND SOME GUIDING PRINCIPLES. AND LASTLY, WE'LL LOOK AT REVENUES AND EXPENDITURES BY MAJOR FUND. AND A QUICK LOOK AT OUR CAPITAL IMPROVEMENT PROGRAM. WE HAD A CITY COUNCIL STRATEGIC PLANNING SESSION IN FEBRUARY. AND DURING THAT TIME WE LOOKED AT SOME INITIATIVES AND SOME INITIATIVE HIGHLIGHTS, AND THEY'RE ALL LISTED HERE. EVERY YEAR WE'RE GOING TO HAVE A SET OF CITY COUNCIL INITIATIVES AND BUSINESS GOALS THAT ARE GOING TO GUIDE US TOWARDS OUR BUDGET PRINCIPLES FOR THE YEAR. SIMILARLY, WE WILL HAVE A SET OF STRATEGIC PRIORITIES FOR THE NEXT FIVE YEARS THAT THAT WILL COME OUT OF THAT SESSION THAT WE HAD IN FEBRUARY. THIS IS A QUICK LOOK AT THE THE PRIOR PLAN THAT WE HAVE, WHICH IS WHICH WAS A FIVE YEAR PLAN THAT SPANNED BETWEEN FISCAL YEAR 2020 AND 2025. AT THAT TIME, WHAT WE WERE DOING WAS LOOKING AT HISTORICAL PERFORMANCE, COUNCIL GOALS, RISK AND COMPLIANCE IMPACTS. WHEN IT CAME TO HOW WE WERE SETTING OUR GOALS FOR THAT YEAR. SO WHAT'S CHANGING FOR FISCAL YEAR 27 AND 2028? ARE WE ARE LOOKING AT SOME OF THOSE SAME CATEGORIES, BUT WE'RE ALSO LOOKING AT OUR KPIS AND OUR SCORING MATRIX. WE ARE GOING TO BE TAKING A LOOK AT KEY PERFORMANCE INDICATORS THAT ARE GOING TO HELP GUIDE THE DEPARTMENTS TOWARD THEIR GOALS AND INITIATIVES FOR FISCAL YEAR 27. AND WE'RE ALSO IMPLEMENTING A SCORING MATRIX. 
          WE'VE DEVELOPED A BUDGET COMMITTEE THIS YEAR THAT'S GOING TO ASSIST THE FINANCE DEPARTMENT WITH GOING THROUGH AND SCORING SUPPLEMENTAL REQUESTS AND REQUESTS THAT ARE OUTSIDE OF WHAT OUR BASELINE BUDGET NUMBERS WERE. THE GOAL HERE IS TO ENSURE THAT THE THE INITIATIVES FOR EACH DEPARTMENT ARE GEARED TOWARDS COUNCIL'S STRATEGIC INITIATIVES. PRIORITY BASED BUDGETING. BUDGETING IS SOMETHING THAT WE ARE INTRODUCING THIS YEAR. FOR FISCAL YEAR 27. WE'RE GOING TO TAKE A LOOK AT A DIFFERENT FRAMEWORK FOR HOW WE BUDGET. WE WILL BE USING SUPPLEMENTAL BUDGET REQUESTS AS WE NORMALLY DO. WHAT WE DO IS START WITH OUR BASELINE BUDGET, THE BUDGET THAT WE HAD IN THE PRIOR YEAR. IF DEPARTMENTS ARE GOING TO BE REQUESTING ANY SUPPLEMENTAL FUNDS IN ADDITION TO THAT, ANYTHING OVER $1,000 WILL BE 
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REQUIRED TO SUBMIT A SUPPLEMENTAL BUDGET REQUEST FROM THE DEPARTMENT WITH VERY SPECIFIC INFORMATION ABOUT WHAT THE REQUEST IS AND WHAT THE CONSEQUENCES WILL BE IF THEIR REQUEST IS NOT FUNDED. THOSE WILL BE CAREFULLY EVALUATED BY THE BUDGET COMMITTEE BEFORE THEY ARE BROUGHT TO THE CITY MANAGER'S OFFICE. THEY WILL ALSO BE SCORED SO THAT DURING THIS TIME, WE'LL HAVE A MORE STRATEGIC PROCESS WHEN WE BRING FORWARD THE SUPPLEMENTAL REQUESTS THAT THE DEPARTMENTS HAVE REQUESTED. AND WHAT IT DOES IS INCREASES TRANSPARENCY AND HOW OUR GOVERNMENTAL POLICIES TRANSLATE INTO SPENDING. WE WANT TO FOCUS ON THE OUTCOMES. WE WANT TO START AT THE TOP WITH THE CITIZENS FIRST, THEN CITY COUNCIL, AND THEN THAT TRICKLES DOWN INTO CITY MANAGEMENT, INTO THE DEPARTMENTS. WE WANT TO SPECIFICALLY LOOK AT OUTCOMES OF FUNDED PROGRAMS RATHER THAN JUST HISTORICAL BUDGETING. OF COURSE, WE'LL ALWAYS LOOK AT HISTORICAL NUMBERS AND HOW WE'VE PERFORMED IN THE PAST, BUT WE ALSO NOW THIS YEAR, WE WANT TO TIE IT BACK TO THE BROADER COUNCIL INITIATIVES. 
          HERE ARE SOME EXAMPLES OF HOW WE LOOK AT ALIGNING THE SUPPLEMENTAL REQUESTS WITH COMMUNITY PRIORITIES. AS AS YOU ARE AWARE, WE DO HAVE CITIZEN SURVEYS. WE ALSO WILL BE OFFERING A QR CODE AT THE END OF THIS TRAINING WHERE WE WANT TO HAVE THE CITIZENS TO GO IN AND ENGAGE WITH US ABOUT THE PRIORITIES THAT MATTER MOST TO THE COMMUNITY. BUT HERE ARE SOME EXAMPLES OF SOME OF THE INITIATIVES THAT WE'VE HEARD FROM THE PUBLIC IN THE PAST IN REGARDS TO PUBLIC SAFETY. CITIZENS HAVE WANTED VISIBILITY OF POLICE IN NEIGHBORHOODS AND EFFORTS BY POLICE IN THE COMMUNITY TO PREVENT CRIME. OUR LIBRARY, WE HAVE A ROBUST STATURE OF PROGRAMS OVER IN THE LIBRARY. WE WANT BETTER QUALITY PROGRAMS FOR CHILDREN AND TEENS. 
          WE WANT TO INCREASE THE AVAILABILITY OF MATERIALS AND THE QUALITY OF THE PROGRAMS FOR ADULTS AS WELL. IN DEVELOPMENTAL SERVICES, WE KNOW ONE OF THE MAIN THINGS WE HEAR ABOUT IS ROADS AND ROADS NEEDING REPAIR. SO WE'RE GOING TO BE LOOKING AT THE CONDITION OF MAJOR CITY STREETS. CODE ENFORCEMENT HAS BEEN A BIG TALKING POINT AS WELL. 
          ENFORCING THE MAINTENANCE OF RESIDENTIAL CODE ENFORCEMENT THROUGHOUT THE CITY OF DE SOTO, WATCHING FOR THINGS SUCH AS MOWING AND TRIMMING GRASS, WEEDS AND THINGS LIKE THAT ON PRIVATE PROPERTIES AND STREETS, PARKS AND RECREATION, WALKING AND BIKING TRAILS. SENIOR CENTER, THE MAINTENANCE OF CITY PARKS. WE ALSO KNOW THAT WE HAVE THE ARC THAT'S OPENING ACTUALLY THIS WEEKEND ON SUNDAY. SO THESE ARE SOME OF THE PRIORITIES, EXAMPLES OF PRIORITIES THAT SPAN AMONG THE DIFFERENT DEPARTMENTS. THESE ARE GOING TO BE THE BASIC STEPS THAT YOU'LL SEE AT MOST GOVERNMENT ORGANIZATIONS AS THEY IMPLEMENT THEIR BUDGET. WE HAVE THE DEVELOPMENT, THE BUDGET REVIEW BY CITY COUNCIL, THE ADOPTION AND IMPLEMENTATION. 
          AS WE KNOW, THESE ARE THE BIG FOUR. BUT LOTS OF STEPS ARE GOING IN BETWEEN THESE MILESTONES TO ENSURE THAT WE KEEP ON TRACK WITH THE LEGISLATIVE LEGISLATIVE DEADLINES, AS WELL AS KEEPING ON TRACK WITH OUR INTERNAL BUDGET CALENDAR THAT WE'VE DEVELOPED. HERE ARE SOME OF THE ACTIVITIES ASSOCIATED WITH OUR BUDGET. WE HAD A BUDGET KICKOFF MEETING IN FEBRUARY OF THIS YEAR. WE'VE HAD BUDGET TRAINING FOR STAFF RIGHT NOW, MYSELF AND THE REST OF THE BUDGET TEAM ARE IN THE PROCESS OF HAVING DEPARTMENTAL MEETINGS BETWEEN FINANCE AND THE DEPARTMENT, SPECIFICALLY LOOKING AT OUR. THIS IS OUR FIRST LOOK AT THEIR SUPPLEMENTAL REQUEST TO SEE WHAT OUR DEPARTMENT'S ASKING FOR THAT ARE GEARED TOWARDS THE COUNCIL INITIATIVES. AND THEN LATER, AFTER WE SCORE THOSE SUPPLEMENTAL REQUESTS, WE'LL BE BRINGING THEM TO THE CITY MANAGER'S OFFICE TO REVIEW. OUR PLAN IS TO SUBMIT OUR FISCAL YEAR 27 BUDGET TO THE CITY COUNCIL ON JULY 6TH, 2026. THERE WILL BE A CITY COUNCIL BUDGET WORKSHOP JULY 30TH THROUGH 31ST 2026. SO WE DO INVITE YOU TO GO AND PARTICIPATE IN THAT WITH US. HERE ARE THE APPROVAL AND ADOPTION STEPS. AS YOU KNOW, PROPERTY TAX IS A MAJOR REVENUE SOURCE HERE IN THE CITY OF DE SOTO. IT ACCOUNTS FOR MORE THAN 70% OF THE REVENUE THAT WE RECEIVE IN THE GENERAL FUND. THE TAX ROLL IS WHAT WE WILL BEGIN TO RECEIVE IN APRIL OF THIS YEAR. A LITTLE BIT LATER THIS MONTH, WE'LL RECEIVE SOME 
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PRELIMINARY NUMBERS FROM THE APPRAISAL DISTRICTS AND TAKE A LOOK AT HOW OUR PROPERTY VALUES HAVE INCREASED OVER THE PAST YEAR. WE WILL WE'RE GOING TO TAKE A RECORD VOTE ON THAT ON AUGUST 18TH, 2026. WE ACCORDING TO THE LAW, WE HAVE TO HAVE TWO PUBLIC HEARINGS, ONE ON THE BUDGET AND ONE ON THE TAX RATE. THOSE ARE GOING TO TAKE PLACE IN SEPTEMBER AS WELL. AND THEN OUR PLAN IS TO HAVE A SECOND TECH TAX RATE HEARING IN SEPTEMBER ON THE 15TH, AS WELL AS THE BUDGET ADOPTION ON SEPTEMBER 15TH, 2026. AND THEN OF COURSE, ON OCTOBER 1ST IS WHEN THE BUDGET BEGINS. HERE ARE SOME KEY DATES, SOME OF THESE MILESTONES WE'VE ALREADY REACHED. COMING UP NEXT, WE'RE GOING TO HAVE OUR FOLLOW UP MINI BUDGET WORKSHOP WITH THE CITY COUNCIL ON MAY 11TH. ON JULY 6TH. AGAIN, WE'RE GOING TO DELIVER THE PROPOSED BUDGET TO THE CITY COUNCIL ON JULY 30TH. THE 31ST IS WHEN WE WILL HAVE MORE DISCUSSION WITH CITY COUNCIL. AT BUDGET WORKSHOPS, WE HAVE A RESOLUTION ACCEPTING THE TAX ROLL IN AUGUST. BUDGET ADOPTION ON SEPTEMBER 15TH. AND AGAIN. THE FISCAL YEAR STARTS ON OCTOBER 1ST, 2026. AT THIS TIME, I WANT TO TAKE YOU THROUGH SOME OF THE FUNDS THAT WE USE HERE AT THE CITY OF DE SOTO. AND THIS. THIS IS HOW WE ACCOUNT FOR THE REVENUE AND EXPENDITURES AND THE DIFFERENT MILESTONES THAT ARE OCCURRING. THE GENERAL FUND, OF COURSE, IS OUR CHIEF OPERATING FUND FOR THE CITY. WE REPORT OUT ON THIS FUND EVERY SINGLE MONTH. YOU WILL FIND A SET OF CITY FINANCIALS ON THE WEBSITE EVERY MONTH. THERE ARE ALWAYS GOING TO INCLUDE BUDGET VERSUS ACTUAL FOR THE CHIEF OPERATING FUND. CHIEF OPERATING FUND IS WHERE WE FUND POLICE, FIRE STREETS, PARKS AND RECS ADMINISTRATION. ALL OF THE CRITICAL DEPARTMENTS THAT KEEP THE CITY GOING ON A DAILY BASIS. WE ALSO REPORT OUT ON OUR SPECIAL REVENUE FUNDS. THESE FUNDS ARE DESIGNATED FOR SPECIFIC PURPOSE AND ARE NOT GROUPED INTO THE CITY'S GENERAL FUND DEBT SERVICE FUNDS. THIS IS WHERE WE PAY OUR BONDS FROM. WE DO HAVE A CAPITAL PROJECTS FUNDS AS WELL. THE DEBT SERVICE FUNDS AND THE CAPITAL PROJECT FUNDS WORK HAND IN HAND. WE ISSUE DEBT AT LEAST EVERY YEAR, OR IF NOT EVERY YEAR, EVERY OTHER YEAR, TO KEEP ON TRACK WITH OUR CAPITAL PROJECTS PLAN. 
          OUR ENTERPRISE FUNDS ARE OUR BUSINESS TYPE ACTIVITIES, OUR BUSINESS TYPE ACTIVITIES ACCOUNT FOR OPERATIONS THAT ARE FINANCED AND OPERATED IN A MANNER SIMILAR TO A PRIVATE BUSINESS ENTERPRISE. WE HAVE OUR WATER SEWER FUND, OUR SANITATION FUND, AND ALSO OUR GOLF CLUB FUND, WHO ARE ALL ENTERPRISE FUNDS WITHIN THE CITY. HERE ARE SOME OF OUR GUIDING PRINCIPLES. WE HAVE MANAGED A TAX RATE AT 0.68493 FOR OVER THE PAST TWO YEARS. WE WANT TO PRESENT A PROPOSED BALANCED BUDGET, WHICH MEANS WHEN WE PRESENT THE BUDGET TO THE CITY COUNCIL, WE WANT TO HAVE MORE REVENUE THAN WE DO EXPENDITURES SO THAT WE HAVE SOMETHING TO ADD TO THE FUND BALANCE. AT THE END OF THE YEAR, WE WANT TO FOCUS ON ACHIEVING A BUSINESS PLAN. PRIORITIES IN THE STRATEGIC PLAN. AGAIN, EVERYTHING STARTS THERE WITH THE CITIZENS FIRST, THE CITIZENS COME FIRST. AND THEN AT THAT POINT, THE CITY COUNCIL HAS SET DOWN AND ESTABLISHED THE BUSINESS PLAN AND PRIORITIES. THEN WE WANT TO FOCUS ON A PRIORITY BASED BUDGET MODEL AND ADOPT SMART PERFORMANCE METRICS. THOSE ARE OUR KEY PERFORMANCE INDICATORS. THOSE WILL ALSO BE INCLUDED IN OUR BUDGET BOOKS SO THAT OUR CITIZENS CAN GO, GO. I'M SORRY. TAKE THAT BOOK AND FLIP THROUGH IT AND FIGURE OUT HOW THE KPIS ARE TIED TO THE CITY COUNCIL'S INITIATIVES BY DEPARTMENT. NOW LET'S LOOK AT SOME NUMBERS HERE. 
          THIS IS OUR FISCAL YEAR 2026. REVENUES AND EXPENDITURES BY MAJOR FUND. SO YOU CAN SEE FOR FISCAL YEAR 26 WE'VE LISTED A FEW OF OUR MAJOR FUNDS. OUR GENERAL CHIEF OPERATING FUND, OUR PUBLIC UTILITY FUND, OUR SANITATION AND OUR DRAINAGE FUND. AS YOU CAN SEE, FOR EACH ONE OF THESE FUNDS, WE DO HAVE MORE REVENUE COMING IN THAN WE HAVE EXPENDITURES. AND THAT IS THE GOAL FOR EACH OF THE FUNDS, WHETHER IT'S A GENERAL FUND OR A SELF-SUPPORTING FUND, THE ONE THAT DOES NOT HAVE MORE IS THIS YEAR'S REVENUE IN THE GENERAL FUND IS 69 MILLION VERSUS 71 
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MILLION IN EXPENDITURES. WHEN WE ORIGINALLY ADOPTED THE BUDGET THIS YEAR, WE DID HAVE IT BALANCED. BUT WITH THE OPENING OF THE ARK, WE HAVE SOME PRIORITIES AND SOME DIFFERENT THINGS THAT ARE STILL FLUID. WE HAVE SOME MOVING PIECES THERE, OF COURSE, WITH THE OPENING OF A NEW FACILITY. SO AT THIS TIME, WE BUDGETED OUR REVISED BUDGET IN THE GENERAL FUND IS 69.9 MILLION, AND OUR EXPENDITURES ARE 71.2 MILLION. OUR CIP PROGRAM, WE ARE A CITY WHO HAS DEVELOPED A CIP. EACH YEAR WE SIT DOWN WITH THE DEPARTMENT HEADS AS WELL AS CITY MANAGEMENT, TO LOOK AT THE CAPITAL IMPROVEMENT PROGRAM, HOW WE'RE DOING, WHAT PROJECTS WE WANT TO FOCUS ON, AND HOW MUCH OF A BOND SALE WE MAY WANT TO PROPOSE FOR ANY GIVEN YEAR. 
          THESE ARE SOME OF THE PROJECTS THAT WE'VE HAD LISTED ON THE CIP IN THE PAST. SOME OF THEM ARE PROJECTS THAT ARE ALREADY UNDERWAY, AND SOME OF THEM ARE ANTICIPATED FUTURE PROJECTS. 
          AGAIN, THIS IS JUST AN EXAMPLE. OUR CIP FOR FY 27 IS IN PROGRESS. STAFF DOES PLAN ON BRINGING A BOND SALE TO THE CITY COUNCIL FOR FISCAL YEAR 27. WE WILL NEED A BOND SALE TO CONTINUE WITH OUR. OUR STREET INFRASTRUCTURE IMPROVEMENTS AND TRAFFIC SIGNAL LIGHT RENOVATION AND CONSTRUCTION. THESE ARE JUST SOME OF THE EXAMPLES OF PROJECTS THAT WE WILL BE LOOKING AT. UP TO 1.2 MILLION IN TRAFFIC SIGNAL RENOVATIONS. WE STARTED SOME TRAFFIC SIGNAL RENOVATIONS FOR FISCAL YEAR 26 IN THE FISCAL YEAR 25 BOND SALE, AND WE WOULD LIKE TO CONTINUE SOME OF THAT. SO LATER IN THE SUMMER WHEN WE PROPOSE CAPITAL IMPROVEMENT PROJECTS TO CITY COUNCIL AND A POSSIBLE BOND SALE, YOU WILL SEE SOME RECOMMENDATIONS IN THERE FOR CONTINUED WORK ON TRAFFIC SIGNAL IMPROVEMENTS WITHIN THE CITY. WE ALWAYS ASK FOR SELF-SUPPORTING DEBT AS WELL, WHICH IS MAINTAINED IN THE WATER AND SEWER FUND. SOME OF THE PROJECTS THAT ARE LISTED HERE ARE SOME OF THE PROJECTS THAT WE ADOPTED WHEN WE DID THE FY 2025 BOND SALE, THE WESTMORELAND PUMP STATION REHABILITATION AND SOME OF THE OTHER PROJECTS ARE LISTED HERE. IN THE LAST BOND SALE, WE ASKED FOR $10 MILLION FOR WATER SEWER CAPITAL IMPROVEMENT, AND WE PLAN TO ASK FOR ABOUT $13 MILLION WORTH OF WATER SEWER CAPITAL IMPROVEMENTS IN THE FY 27 BOND SALE. ALSO, AS WE KNOW IN THE WATER UTILITY FUND ITSELF SUPPORTS. SO WE DO REVIEW OUR WATER RATES EVERY YEAR. WE HAVE A FORMAL WATER RATE STUDY EVERY FIVE YEARS WHERE A CONSULTANT COMES IN AND REVIEWS THE RATES AND OUR REVENUE IN OUR EXPENDITURES AND OUR OUR STRUCTURE TO ENSURE THAT THE FUND CAN KEEP SUPPORTING ITSELF. IT ALSO CONSIDERS THE DALLAS WATER UTILITY RATES MOST. MOST YEARS WE EXPECT A RATE FROM DALLAS WATER UTILITIES. THAT IS WHERE THE CITY PURCHASES ITS WATER FROM, AS WELL AS T R A, WHO MANAGES OUR WASTEWATER SYSTEM. WE HAVE NOT YET PROPOSED ANY FEE CHANGES THIS YEAR. THAT IS A CONVERSATION THAT'S CURRENTLY ONGOING. THAT IS SOMETHING THAT WE WILL BE UPDATING THE COUNCIL ON VERY SOON IN THE NEXT BUDGET SESSION. THIS IS OUR QR CODE. 
          WE WOULD LOVE FOR YOU TO GO ONLINE AND ENGAGE WITH US AS WE GO THROUGH AND LOOKING AT PRIORITIES FOR OUR FISCAL YEAR 27 BUDGET. THIS IS OUR OPPORTUNITY TO HEAR FROM YOU AND TO ENGAGE WITH THE PUBLIC. AND AT THIS TIME, I WOULD LIKE TO TURN IT OVER. IF ANY OF OUR CONSTITUENTS WOULD LIKE TO ASK ANY QUESTIONS OF US THIS EVENING BEFORE WE DO THAT, WE HAVE A MICROPHONE. SO IF ANYONE WANTS TO ASK A SPECIFIC QUESTION, WE CAN BRING THE MICROPHONE TO THEM. I DO WANT TO RECOGNIZE OUR MAYOR, MAYOR PROCTOR, WHO'S IN THE AUDIENCE NOW, AND COUNCIL MEMBER PARKER IN THE AUDIENCE AS WELL. THANK YOU FOR YOUR ATTENDANCE. 
          QUESTIONS. JUST RAISE YOUR HAND, WILL THE MICROPHONE TO YOU. DID AN AMAZING JOB. SO THERE'S NO 
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QUESTIONS. I THINK ONE OF THE ONE OF THE CLARIFICATIONS, JUST THAT THAT COUNCIL MEMBER PARKER POINTED OUT TO US FOR NEXT YEAR, ONE OF THE SLIDES ACTUALLY TALKS ABOUT EXPENDITURES AND REVENUES. WE ACTUALLY HAVE MORE EXPENDITURES THAN REVENUES. CORRECT. IN OUR GENERAL FUND FOR FISCAL YEAR 26. YES WE DO. OKAY. JUST WANTED TO PUT THAT ON THE RECORD. WE HAVE ONE QUESTION. SURE. 
          OKAY. ACTUALLY, YOU WERE MENTIONING WHAT I WAS GOING TO SAY. IF YOU GO BACK TO SOME SLIDES AND I THINK THE PEOPLE ONLINE, I DON'T THINK THEY CAN SEE THIS SCREEN, BY THE WAY. BUT ANYWAY, SO WE'RE MILLION DOLLARS SHORT, RIGHT? SO. YOU KNOW, WE GOT TO MAKE A MILLION BUCKS SOMEWHERE, RIGHT. BUT YOU MENTIONED THAT JUST THAT'S WHAT I WAS GOING TO ASK, BUT YOU WERE MENTIONING THAT. SO I JUST WANT TO CLARIFY THAT THIS IS PRELIMINARY NUMBERS. WE STILL HAVE A COUPLE OF MONTHS TO WORK ON THOSE NUMBERS, THOSE ACCOUNTS THAT WE HAVE TO RECONCILE. WE HAVE CAPITAL IMPROVEMENT PROGRAM THAT WE HAVE TO ALSO RECONCILE. AS FAR AS THE NUMBERS, ASHLEY AND I STILL HAVE A LOT OF WORK TO DO WITH THE DEPARTMENTS, WITH THE DIFFERENT DEPARTMENTS, AS WELL AS WITH THE SUPPLEMENTAL BUDGET REQUESTS, AS WELL AS WITH THE ADDITION OF THE NEW STAFF. ALL OF THAT IS GOING TO BE RECONCILED, AND WE'RE VERY CONSERVATIVE WHEN IT COMES TO REVENUE. AND WE ALSO PUT KIND OF WORST CASE SCENARIO WHEN IT COMES TO EXPENDITURE. AND THAT'S GOOD FINANCING TOOL TO, TO DO. THAT'S, THAT'S, THAT'S GOOD PRACTICE. AND SO COMMENDATION TO, TO THE TEAM FOR DOING AN AMAZING JOB FOR THAT. THANK YOU. THANK YOU FOR YOUR QUESTION. AND THEN YES TO THE CITY MANAGER'S POINT FOR FISCAL YEAR 27. OF COURSE THERE ARE THE NUMBERS ARE STILL VERY FLUID. BUT TO COUNCILWOMAN PARKER'S POINT, THESE NUMBERS ARE OUR BUDGET FOR FISCAL YEAR 26. SO I WANT TO BE CLEAR WITH THAT. WHENEVER WE ORIGINALLY BROUGHT THE FISCAL YEAR 26 TO COUNCIL AND IT WAS ADOPTED IN SEPTEMBER, LAST SEPTEMBER, WE ADOPTED A BALANCED BUDGET WITH ABOUT A $300,000 SURPLUS. BUT WITH THE OPENING OF THE ARC, WE HAD TO ADD SEVERAL STAFF POSITIONS, OF COURSE. AND SO THAT IS WHY WE ENDED UP BRINGING A BUDGET AMENDMENT IN NOVEMBER OF 2025, WHEN WE BROUGHT THAT BUDGET AMENDMENT TO COUNCIL, WE APPROVED A DIFFERENCE OF ABOUT 700,000. 
          THAT WOULD HAVE US A LITTLE BIT OF A DEFICIT THERE. NOW, WHAT WE HAVEN'T DONE YET WAS BROUGHT BACK REVISED REVENUE NUMBERS FOR THE ARC. SO WE DID ACCOUNT FOR THE EXPENDITURES BECAUSE WE NEED PERMISSION TO ADD THOSE POSITIONS AND TO SPEND THE MONEY. BUT WE HAVE NOT YET ACCOUNTED FOR REVENUE. SO WHAT WE'RE HOPING IS THAT OUR REVENUE WITH MEMBERSHIPS AND THE OTHER REVENUE SOURCES AT THE ARC WILL CLOSE THAT GAP THAT CURRENTLY EXISTS FOR FISCAL YEAR 2026. OKAY. THANK YOU FOR THAT PRESENTATION AND PROVIDES A LOT OF CLARITY. SO I'M WONDERING, AND YOU MAY HAVE ALREADY ANSWERED THIS, SO I'M WONDERING, IN TRYING TO MEET THE THE REVENUE GOAL OR MAKE, YOU KNOW, WILL YOU IS IT POSSIBLE TO BORROW FROM THOSE OTHER FUNDS, THE PUBLIC UTILITY FUND BORROWED FROM THAT LINE ITEM TRANSFER THE THE OVERAGE FROM THOSE LINE ITEMS INTO THE GENERAL FUND. AND THEN THE SECOND QUESTION IS OR LESS A PART B TO THAT QUESTION IS, AND I UNDERSTAND THAT IT MAKES SENSE THAT THE ARC CREATED A NEED FOR AN AMENDMENT. BUT WHEN WE WERE PROPOSING FOR THE ARC, DID WE TAKE INTO ACCOUNT THAT THERE'S GOING TO BE SOME EXTRA EXPENDITURES DUE TO STAFFING, EQUIPMENT CONSTRUCTION AND THOSE KINDS OF THINGS? SURE. THANK YOU. THANK YOU SO MUCH FOR YOUR QUESTION. THE FIRST QUESTION, UNFORTUNATELY, NO, WE CANNOT TRANSFER ANYTHING FROM THE OTHER FUNDS TO THE GENERAL FUND TO MAKE UP ANY DIFFERENCE. THESE OTHER FUNDS ARE SELF-SUPPORTING FUNDS AND THEY 
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HAVE THEIR OWN NET POSITION. SO IN THE GENERAL FUND, AS I STATED IN THE BEGINNING, WE DID ADOPT THE BALANCED BUDGET. BUT IF YOU REMEMBER, AT THAT TIME WE HAD AN AGENCY THAT WE BUDGETED FOR THAT WAS GOING TO COME IN AND MANAGE THE ARC FOR US. AND AT THAT POINT, WHEN COUNCIL MADE A DECISION FOR STAFF TO RUN THE ARC, INSTEAD, WE HAD SEVERAL POSITIONS THAT WE HAD TO ADD, AND ADDING THOSE POSITIONS IS WHAT BUMPED IT UP. NOW, OF COURSE, THERE WILL BE SOME SAVINGS WITH SALARIES AS WELL, BECAUSE WE'VE ADDED THOSE POSITIONS IN NOVEMBER. WE'RE NOT OPENING THE ARC UNTIL APRIL, SO THAT WILL CREATE SOME SAVINGS AS WELL. SO WE WE STILL VERY MUCH HAVE AN OPPORTUNITY TO CLOSE THE GAP FOR FISCAL YEAR 26. BUT WE CANNOT DO IT BY TRANSFERRING ANYTHING FROM ANY OF THE OTHER FUNDS. THAT WAS A GREAT QUESTION THOUGH. SO I HAVE A FOLLOW UP, IF YOU DON'T MIND. SURE. SO WILL WE. AFTER RECONCILIATION, WE STILL FIND OURSELVES SHORT IN THE GENERAL FUND. AFTER WE RECONCILED EVERYTHING. WILL WE GO INTO THE NEXT CYCLE, THE NEXT BUDGET CYCLE IN THE DEFICIT AND OR PART THAT'S PART A. PART B IS IF WE STILL FIND OURSELVES IN A DEFICIT AFTER WE RECONCILE EVERYTHING, DO WE BORROW FROM THE FUND BALANCE? THAT'S A GREAT QUESTION. THANK YOU. FIRST, I WANT TO START BY SAYING WE HAVE A VERY, VERY HEALTHY FUND BALANCE IN OUR GENERAL FUND. WE HAVE ABOUT NINE MONTHS WORTH OF RESERVE, WHEREAS IN TYPICAL CITIES, WE'RE THEY'RE REQUIRED TO HAVE ANYWHERE BETWEEN 30 TO 60 DAYS. SO WE HAVE WE'RE STARTING WITH A VERY HEALTHY FUND BALANCE. 
          OUR GOAL IS TO ALWAYS PRESENT A BALANCED BUDGET. SO WE DO ANTICIPATE BRINGING A BALANCED BUDGET FOR FISCAL YEAR 27. IF WE DO HAPPEN TO END THE YEAR WITH MORE EXPENDITURES THAN WE DO REVENUE, THAT WILL MEAN THAT WE WILL DRAW DOWN ON THE FUND BALANCE. SO IF WE START WITH THE $32 MILLION FUND BALANCE, AND WE NEED TO DRAW DOWN ON THAT BY 200,000 OR 300,000, WHAT WILL HAPPEN IS WE WILL SIMPLY DRAW DOWN ON IT. NOW, THAT IS NOT A PRACTICE THAT THE CITY HAS TYPICALLY DONE. THAT IS NOT A PRACTICE THAT THE CITY TENDS TO ADOPT. OUR CHARTER REQUIRES US TO BRING A BALANCED BUDGET, AND THAT IS WHAT WE INTEND TO DO. ALSO, I DO WANT TO NOTE AGAIN, NO REVENUE FOR THE ARC, NO AMENDED REVENUE HAS BEEN ADDED TO THE FISCAL YEAR 2026 BUDGET. ONCE WE HAVE A BETTER IDEA OF WHAT THOSE MEMBERSHIPS AND THOSE DIFFERENT REVENUE SOURCES ARE GOING TO BRING IN, WE WE ARE PLANNING TO STILL END THE YEAR WITH THE SURPLUS. I'D KIND OF LIKE TO FOCUS ON THIS, THIS SHORTFALL THAT'S OCCURRED, WHICH SOUNDS LIKE IT'S A DIRECT RESULT OF EXPENDITURES RELATED TO THE ARC. IT LOOKS LIKE THE SHORTFALL IS 1,000,003 PLUS THE 300,000 EXCESS THAT YOU STARTED WITH. SO SAY 1,000,006. THE ARC IS GOING TO BE IN OPERATION FOR HALF THE YEAR. IT'S OPENING IN FOUR DAYS. IS IT FAIR TO SAY THAT AS WE GO FORWARD, THE ARC IS GOING TO CONSUME 3 MILLION TO 3 MILLION, TWO OF ADDITIONAL EXPENSES? AND AT WHAT POINT DO YOU EXPECT YOU WILL KNOW WHAT THE REVENUE IS FROM THE ARC? ARE YOU GOING TO HAVE TO OPERATE IT FOR. ARE YOU GOING TO HAVE TO. IT'S KIND OF LIKE BUILD IT AND THEY WILL COME. YOU'RE JUST GOING TO HAVE TO OPERATE IT FOR A YEAR TO FIND OUT. THAT'S MY QUESTIONS. THANK YOU. THANK YOU FOR YOUR QUESTION CITY MANAGER. YEAH, SO SO IN A TYPICAL BRAND NEW OPERATION OF A, OF A FACILITY OF THIS MAGNITUDE AND THIS SIZE, IT'LL TAKE US ABOUT A YEAR TO REALLY FIGURE OUT THE EXACT EXPENDITURES. OBVIOUSLY, THE SITUATION IS FLUID WHERE WE'RE LOOKING AT ALL KINDS OF CONTRACTS, ALL KINDS OF OPERATIONS. WE'RE ADDING NEW PROGRAMS. WE'VE ADDED 46 NEW PROGRAMS TO THE AQUATIC CENTER. 
          THOSE ARE REVENUE GENERATORS. SO AGAIN, AND WE'RE UP TO 406 MEMBERSHIPS THAT HAVE BEEN BOUGHT ON THE 11TH. WE EXPECT TO HAVE ANOTHER 4 TO 500 SIGNEE FOR THAT. SO THOSE ARE THOSE 
          [00:30:03]
ARE NUMBERS THAT ARE FLUID IN THE FIRST SIX MONTHS. AND THAT'S TYPICAL IN AN OPERATION OF ANY CORPORATION OR ANY BUSINESS. NO DIFFERENT IN THE CASE OF THE AQUATIC CENTER. SO WE SHOULD BE ABLE TO LOOK AT THE FIRST YEAR AND BASED ON THE FIRST YEAR, BE ABLE TO PROJECT WHAT THE NEXT FIVE YEARS SHOULD BE. YOU SAID YOU SAID YOU EXPECT BY THE 11TH TO HAVE ABOUT 900 MEMBERSHIPS TOTAL. THAT'S WHAT DOES THAT MEAN IN TERMS OF REVENUE? WHAT THAT'S WHY I'M SAYING IT'S IT DEPENDS ON THE MEMBERSHIP, IF THAT'S ANNUAL MEMBERSHIP OR IF THAT'S MONTHLY MEMBERSHIP AND WHAT ADD ONS THAT THEY WILL HAVE. SO WE DON'T KNOW AT THIS STAGE WHAT THAT IS, BUT THAT'S SOMETHING THAT WE'RE ACTUALLY WE'RE MONITORING RIGHT NOW. AND WE'RE GOING TO LOOK, IF YOU HAVE NEW PROGRAMS THAT YOU SIGN UP FOR, IF YOU WANT TO PLAY IN A LEAGUE, IN A PICKLEBALL OR VOLLEYBALL, OR, YOU KNOW, WE HAVE WE HAVE AREAS FOR RENTAL, THOSE ARE SOME OF THE ADDITIONAL THINGS THAT WE HAVE IN THERE. SO THOSE ARE SOME OF THE THINGS THAT WE LOOK AT. AND THAT'S, YOU KNOW, THAT'S UNPREDICTABLE. OF COURSE, WE HAVE A FORECAST THAT WE CAN RECOUP IN YEAR NUMBER FOUR, 3 OR 4. BUT THOSE ARE FLUID NUMBERS. AND NOT UNTIL WE HAVE THE ACTUAL NUMBERS IS WHERE WE CAN GAUGE THAT. BUT THE COST IS REALLY GOING TO BE MORE THAN $3 MILLION A YEAR. I DON'T WANT TO SAY, I THINK I WANT TO SEE THE NUMBERS TO BE ABLE TO, YOU KNOW, TO BE COMFORTABLE OR CONFIDENT IN THE NUMBERS THAT WE'RE GOING TO SHARE IN TERMS OF REVENUES AND EXPENDITURES. YOU DON'T HAVE AN ANSWER. I DO HAVE A PROJECTION, BUT I DON'T BELIEVE IN PROJECTIONS. I WANT TO SEE THE REAL NUMBERS. I DON'T BELIEVE IN PROJECTIONS EITHER. 
          THANK YOU. THANK YOU. I'D LIKE TO CORRECT ONE POINT THAT WAS MADE FROM THE CITIZEN. WE DIDN'T WE DID NOT HAVE A SHORTFALL WHEN WE BEGAN THE YEAR. SO THE 300,000 THAT YOU SPEAK OF, THAT WAS A SURPLUS. WHEN WE ADOPTED THE BUDGET, IT WAS A $300,000 SURPLUS. WITH THE ORIGINAL ADOPTION OF THE FISCAL YEAR 26 BUDGET, AND THAT SURPLUS NO LONGER EXISTS. SO YOU KIND OF HAVE TO ADD THAT TO THE TO THE BUDGET SHORTFALL TO DETERMINE HOW MUCH EXTRA EXPENDITURE WE HAD. THE ORIGINAL BUDGET. YES, IT WAS A SURPLUS, BUT THE AMENDED BUDGET IS NOT A SURPLUS. CORRECT? YEAH. THANK YOU. WHAT OTHER QUESTIONS DO WE HAVE? IF WE DON'T HAVE ANY QUESTIONS? THANK YOU SO MUCH FOR YOUR ATTENDANCE. WE REALLY APPRECIATE YOU. WE'RE OUR FINANCE DEPARTMENT IS MEETING WITH EACH DEPARTMENT RIGHT NOW TO FINALIZE THE BUDGET WILL BE PRESENTING TO THE CITY COUNCIL, AND YOU WILL HEAR MORE ABOUT IT. THERE'S GOING TO BE PLENTY OF COMMUNICATION REGARDING THE DISSEMINATION OF INFORMATION ABOUT THE BUDGET THAT YOU COULD FIND IN THE LIBRARY, SOCIAL MEDIA, ALL OF THAT. SO WE'RE WORKING ON THAT AS WELL. THA
* This transcript was compiled from uncorrected Closed Captioning.