City Council Work Session Transcript – 4/21/2026 Title: ATXN-1 (24hr) Channel: 1 - ATXN-1 Recorded On: 4/21/2026 6:00:00AM Original Air Date: 4/21/2026 Transcript Generated by SnapStream ================================== Please note that the following transcript is for reference purposes and does not constitute the official record of actions taken during the meeting. For the official record of actions of the meeting, please refer to the Approved Minutes. [9:01:23 AM] good morning everybody. It's 901 and I'll call to order the work session of the Austin city council on April 21st, 2026. We have a quorum of city council present and we are meeting in city council chambers located in Austin city hall at 301 west second street in Austin, Texas. Members. The way we'll go is we have some speakers, so we'll hear from our speakers, and then we will go into an executive session to take up discussion of two items. Once the executive session is complete, we will come out and we will hear. We will go with the briefing on the financial forecast, and we will follow that with the agenda item a6. So with that, I will turn to the city clerk and ask that you please call the speaker's. >> Thank you. Mayor, we're going to start with remote speakers. First speaker is Susana woody. >> Good morning, honorable mayor and council members. My name is Susana Ledesma. Woody and I serve as the president of [9:02:24 AM] the del valle community coalition. I am here today on behalf of our organization to express our support for the proposed economic development agreement for the hotel projects at circuit of the Americas. This development represents a real long awaited opportunity for del valle. For years, our community has needed a true economic anchor. Yet we have been consistently overlooked and underinvested. This project has the potential to shift that trajectory by bringing stable jobs and pathways for advancement, creating meaningful employment opportunities close to home for our youth, and attracting services, amenities and gathering spaces that we don't have in del valle and have to travel far to access. We respectfully ask for your support for this project, and we urge the city to ensure that revenue generated is reinvested into the del valle community within city limits. This is more than a development project. This is an opportunity to begin [9:03:27 AM] addressing years of underinvestment and ensure that del valle is not left behind. Thank you for your time and your consideration. If you have any questions, please contact us at at devcorp. Again, thank you for your time. Y'all have a good day. >> Next remote speaker for item a six is Luke Charlton. >> Good morning, mayor and council members. Luke Charlton I'm the chief operating officer of Rita, proposing to be the developer of the hotel. And I'm available for questions. When the item comes up. >> Thank you sir. >> We're going to switch to in-person speakers for item a six as your name is called. If you can, please make your way to the podium and state your name for the record. Rachel Melendez, bill bunch, Juan Rodriguez, April brown, and [9:04:30 AM] Michael Whelan. >> Good morning, mayor, council. Rachel Melendez. I'm the political director for unite here local 23 and here to speak on item a6. We are in strong support of this. We've worked with Rita across the country, particularly here in Houston, and we are very excited about them developing this hotel. I think, as the president of the neighborhood association said, this is a huge opportunity for working people in del valle, and I think as many of you know, we've been able to really increase wages and benefits for working people in the city of Austin, and we're very excited about this project. Yeah, that's that's really all I had to share. And I'm happy to talk with anybody about this project. So thank. >> You, thank you. Please. [9:05:33 AM] >> Good morning, honorable mayor and city council. My name is Juan Rodriguez. I'm the project manager for the vela community coalition, and I'm here to have a bbq today to support the agreement with potentially read agreement with the city of Austin and Dakota hotel happening at circuit of the Americas. Our organization has worked well with the Americas in the past, and this is an opportunity. We're very excited to have. A new partner like Rita helps expand the work at eastern crescent. As I mentioned previously, you know, this is an economic opportunity that that del valle has not had in the previous and in previous years. This will bring in jobs, it will bring in parklands, it will bring a lot of opportunity. And people really deserve to have a place to work and where they live without having to commute an hour and a half to here. But yeah, a little bit more. This kind of scale projects does not occur very often in our community wants and deserves more options and opportunities without having to go across the city to find them. But yeah, if you have any guys [9:06:34 AM] have any questions, please feel free to contact me, Jay rodriguez@abc.org. >> Thank you, thank you. >> I think April brown's waving for the clerk. Michael Whalen on behalf of Rita, as you've already heard, this is a transformative project to del valle creating a long awaited economic anchor for del valle and the eastern crescent. Rita takes on full financing, construction operations and risk. The project is estimated to cost more than $950 million and generate over $10 billion in overall direct and indirect economic benefit for the community over the next 30 years. The city has no upfront payment. None. This is completely performance based reimbursement. If Rita does not book rooms and generate hotel occupancy tax, the city of Austin rebates $0, and Rita is still on the hook for property taxes on the hotel itself. This is a model that other Texas cities have followed. Often in those cases with upfront payments or abatement of property taxes, neither of which are being sought here. [9:07:37 AM] Unforeseen events can occur, such as pandemic, war or fire that would reduce or eliminate guest reservations and therefore reduce or eliminate any reimbursement to Rita. Although property tax collection, which goes to the general fund, would continue at an estimated $600 million for all local taxing jurisdictions over 30 years, this includes over $160 million in property taxes to the city of Austin. And over $260 million to del valle independent school district. There will also be sales tax of at least $40 million over the 30 year term. More significantly this economic development agreement provides an opportunity to invest meaningfully in Austin's workforce. Rita will be entering a labor agreement with unite here local 23, which will create significant job opportunities for the community. Of the 900 permanent jobs on site, Rita estimates that 650 to 700 will be unite here jobs. This position, these positions and the project really serve as a workforce investment and a [9:08:37 AM] long term generator of new economic activity and revenue for the city. Of course, we are all available to answer any questions. Thank you. >> Thank you. >> If your name has been called, please make your way to the podium. Zenobia, Joseph and April brown. Okay. >> Thank you. Mayor. Council. I'm Zenobia Joseph as it relates specifically to item a006 circuit of Americas hotel. My position is to the language and backup, which specifies that you are approving an ordinance waiving the staff presentation, public announcement and portal set up, and public hearing requirements. I'm not quite sure why you [9:09:37 AM] would lack transparency on an item that I just heard is $950 million, so I would ask you to recognize that you do have a public participation plan through hud and specifically community development block grant is used in this, not necessarily in this area, but it is specified by hud. So I just want you to recognize the need to be more transparent. If this is such a wonderful project, I would ask you to brief the public. I would also ask you to recognize that your past agreements with Samsung and apple have not garnered the jobs that they have specified, and specifically, it was only $4.7 million for the metro rapid in 2020 to serve Samsung to apple. And to date, you have done nothing to provide low income residents in northeast Austin, northwest Austin access to the jobs. I'm not sure how you anticipate that anyone who lives north of us. 183 northeast specifically, would be able to get to the circuits [9:10:38 AM] of America jobs. And so I just want you to recognize, mayor, my comments, as they always are, are in the context of title six of the civil rights act of 1964, which prohibits discrimination based on race, color, national origin, and specifically, if you receive the federal funding, then all of your programs must be nondiscriminatory. And as you are aware, the transit system is discriminatory, and blacks and immigrants and also the hispanics northeast of us 183 have infrequent, unreliable, disconnected routes. So I would just ask you to be more transparent with the public. If you have any questions, I'll gladly answer them at this time. >> Thank you, miss Joseph. >> You're welcome. >> Continuing on to item B one, we have brydan Summers, David Cruz and Zenobia Joseph. [9:11:42 AM] >> Good morning, mayor and council. I'm brydan Summers, president of local 1624, the union that represents city of Austin and Travis county employees. I know we've all been waiting for this day. We're very excited to see what the sales tax projections are going to look like and start to dig into the budget. This is sort of a kickoff to the budget season because it sets parameters for that conversation. And in the spirit of setting parameters, I want to clarify where our union stands on projections. We saw last week for it savings that will be factored into the budget. To put it very clearly, afscme supports the application rationalization. The audit and finance committee received a briefing on last week. It's evident to our members, to the I.T. Workers throughout the city, that that money tied up in software and various contracts is not being spent wisely. And we want that money, too. We know that every dollar we're able to save represents a dollar that's available for employee raises, for social service contracts, for parks, facilities, and more so where the union can help support efforts to realize those savings. We're all ready and willing, partner, but I want to state just as clearly that a reorganization of the city's I.T workforce is not required [9:12:42 AM] to achieve these savings. You'll hear that the consolidation of hundreds of it personnel is a necessary cog in the wheel of savings from from application rationalization. But that wasn't the case on March 4th, when director director Leahy presented to the finance committee. That wasn't true. When director Lacey presented to Austin technology commission on March 19th, Lakey stated that even though those are both technology optimization initiatives, they are not the same initiative. And so what has changed is that the majority of the workforce have spoken up. And so now I want to stress that we can solve problems without creating new ones. I T spending decisions are choices. They can be improved by governance protocols, exploring and improved federated model and committing to sound contract management. I also want to take a moment as we start this budget process, to say that a 0% cost of living raise for city employees is not acceptable. It does not show value to our public servants. It drives away our talented workforce. And so that must be a top priority this budget cycle. Thank you so much. >> Thank you. Please. [9:13:44 AM] >> Good morning. My name is David Cruz. I am with acme 1624 stop one ATS campaign. Last week, director Leahy presented to the audit and finance committee on the application rationalization initiative. Over the last two months, I.T. Workers have expressed consistent support for this effort in public and in private. Afscme supports application rationalization because it shows that modernization doesn't require centralizing hundreds of it workers into one tiny department that is not ready to manage a high performing workforce with diverse specifications, reducing overlapping software, vendor contracts and licensing is the real path to savings. But today, when you hear from director Lang, she will call these savings one Atmos. Even though management has regularly said that one ATS and application rationalization are two separate initiatives. If one ATS and application rationalization have been represented as two separate initiatives until recently, how [9:14:45 AM] can we suddenly be told they rely on one another? Let's call this for what it is a sleight of hand to justify a high risk reorganization of over 1000 workers. Management is now trying to reframe oats as a budget optimization project. They can't defend consolidating the workforce on its own merits, but the level of detail around savings from application rationalization is proof that the city manager can show his work when he wants to. So where is the same level of detail for one ATS? Where is the public roi? Where is the cost benefit? Where is the proof that a dangerous reorganization is necessary to unlock those software savings? This rebrand is an attempt to paper over sloppy work and create a false choice between protecting public services and cost savings. It workers have repeatedly come before this dais to say we can cut costs from redundant software without enacting a risky, unpopular consolidation that has no proof it will lead to savings. Thank you. >> Thank you, miss Joseph. [9:15:46 AM] >> Thank you. Mayor. Council. I'm Zenobia Joseph. I just wanted to be specific as it related to title six and my comments quote. Additionally, the civil rights restoration act of 1987 defined the word program to make clear that discrimination is prohibited throughout an entire agency. If any part of the agency receives federal assistance that's in txdot federal transit administration title six recipients 2025, page three. I just want to call to your attention. I'm going to go back to the fy 2024 to 25 budget. On page 145, you'll see that there was a $550,000 earmark for movability. I want the city manager to recognize that there is no proof that you are taking any cars off the road. I would ask you to go northeast of us 183 and see 801 for yourself. Specifically, when you looked at the climate pollution reduction grant, I want you to recognize capital metro just to prove that $5 million yesterday. [9:16:47 AM] However, not taking cars off the road. Rob spiller said it was elusive. And so what I want you to recognize that your budget does include federal language, federal grants. It's in the operating budget as well as throughout the document. So there was nothing in backup for the public to actually know what miss Lang is actually going to present to council. And I want you to recognize that the staff has been circumventing the law because they do not post transparently what you're going to discuss. I want you to recognize as well that you've heard me mention ad nauseam, but when I testified last Tuesday before the committee, our last Tuesday, when I looked at the community development commission minutes, it said that I mentioned the shelters on mopac. I did not mention mopac. They are actually just trying to chill our speech. I recognize that being before you equates to a mere exercise in futility, but I am here nonetheless because you are violating title six of the civil rights act of 1964 and the fair housing act as well. I would ask the city manager to [9:17:48 AM] look at previous contracts. >> Thank you. Joseph. >> Mayor, all speakers have been called. >> Thank you very much, members, as you've just heard. That concludes the speakers on the public comment part of the work session. So what we'll do now is I've indicated and I'll just repeat it is we're going to go into an executive session. When we return from the executive session, we will take up item B one, which is the city's five year financial forecast, and that will be followed by item a six related to the hotel that we've heard discussion about. So the city council will now go into a closed executive session to take up two items pursuant to section 55107, one of the Texas government code, the city council will discuss legal issues related to item E one, discussing legal issues related to Cunningham et Al versus city of Austin et Al. D1-gn26002152 in the 261st district court in Travis county, Texas, concerning the city's [9:18:49 AM] transportation user fee. Also, pursuant to section 55107, one of the government code, we will discuss legal issues related to item E two, which is legal issues related to sb four passed during the 85th Texas legislative session regarding enforcement by local government entities of state and federal immigration laws. Is there any objection to going into a closed executive session on the two items announced? Hearing none, the council will now go into executive session at 9:19 A.M. Thanks, everybody. We'll see you in a little bit. [11:10:10 AM] Good morning everybody. It's 1110 and I'll. The city council is back in public session. We are out of the closed session and closed. And in that closed session we discussed legal issues related to items e1 and e2. So with that we will go to item b1 on our agenda, which are briefings and a presentation of the city's five year financial forecast. And I will recognize. Director Lang. Thank you. >> Good morning, mayor and council. Cary Lang, director of budget and organizational excellence. And I have with me deputy director Eric Nelson. We're here to talk to you today about our city's five year financial forecast. This forecast provides an initial point in time analysis of the city's projected revenue compared to base expenditure costs. The financial forecast report was distributed to mayor and council on last Wednesday, the 15th. The full report walks through the general fund and [11:11:11 AM] each of the city's enterprise funds. However, we will focus this discussion today on the general fund. The powerpoint packet that you have includes an appendix that provides an overview of each. Each enterprise department. If you have questions about those departments, we are happy to answer those as well. So today we'll start out by walking through the fiscal year 26, the current fiscal year financial update. Then we'll talk about the the 27 budget timeline. Provide you the general fund forecast, talk through our capital improvement program and then council priorities. >> Eric Nelson deputy director, Austin budget and organizational excellence, fy 26 year end general fund revenue collections are projected to end the year about $6 million, or 0.4% above budget. This is primarily due to stronger than anticipated sales tax collection, which were now expecting to end the [11:12:12 AM] year $16.5 million higher than budget, which would be a 2.5% growth rate in comparison with the -1% that was assumed in the budget. Property tax, on the other hand, is expected to end the year about $6.5 million below budget because of high levels of high levels of appeals activity. The property tax roll for this year currently sits about $1.8 billion, lower than it did as of the certified roll in July that we based the budget on. And so our actual tax levy is now lower than what we expected. And successful appeals from prior years are also leading to refunds of property tax payments from those years. We also expect to be a bit below budget in our other revenue category because of even weaker than expected telecommunications franchise fee collections, and because of the impact of the uncertainty surrounding our public health food establishment permitting fee structure, both of which are more than outweighing higher than anticipated parking fee revenue. [11:13:14 AM] >> So as we look at our general fund expenditures for this fiscal year, in aggregate, we expect the general fund departments to come within their expended their expenditure budget. We are seeing stabilization in our vacancy savings because of the hiring focus that the departments have done over the past several years. Departments are still seeing inflationary pressures that continue to. We continue to see that across expenditure categories. So everything from aquatics, chemicals, public safety uniforms, things like ems, medical and dental supplies, they're showing those inflationary pressures. And then departments will continue to work with us throughout the remaining of this budget process to refine their numbers as we get closer to the proposed budget. So looking at our timeline, we are here today on the 21st. We have received over 100 recommendations from our boards and commissions that [11:14:15 AM] was due on March 31st. These recommendations are being analyzed and will be sent to departments for further analysis. As we continue the budget process. We will be back in about a month to talk to the body about priority setting. Given the information that you're hearing today, thinking through what the next several steps and several months will look like, asking for some priority setting going forward, and then we will present the budget in July, mid July on the 16th. Following that, there will be several work sessions for approval in mid August. Now turn it back to Eric to talk through general fund revenue. >> Looking ahead to our fy 27 revenue collections, we're forecasting total revenue of $1.53 billion. If the city council adopts the voter approval property tax rate, it would be about $25.1 million less than that at the no. New revenue maintenance and operations rate, which will dive deeper into in a few [11:15:15 AM] slides. We'll also take a closer look at each of our major revenue categories. Overall, we expect property tax to inch a bit closer to comprising 50% of our revenue, with sales tax representing about one quarter and utility transfers and other revenue together, representing a bit more than a quarter. Total projected revenue growth for fy 27 is way down a bit due to the influence of one time transfers and fy 26 from our budget stabilization reserve and from planning sip that we are not anticipating will be repeated in fy 27. Other. Revenue is historically the slowest growing of our major revenue categories, and we expect that trend to continue. Interest earnings are projected to continue to decline from their fy 24 peak over the course of the forecast period, and that decline counteracts much of the moderate anticipated growth in many of the other revenue sources in this category. We anticipate that the combined [11:16:15 AM] transfer from our two utilities will grow by about $10.3 million next year, and by a further $37.9 million over the remainder of the forecast period. As both utilities continue to institute planned rate increases, this growth is projected to be a bit faster than the combined growth in our other revenue sources, and so we expect the utility transfer revenue to tick up a bit as a percentage of our total revenue, but it should still be well below the 15 to 20% level that was typical in the previous decade. Turning to sales tax, this chart illustrates the wild ride we've been on since the pandemic, including the two particularly lackluster years of growth we've just experienced. While we have seen some improved collections in recent months, our growth forecast for fy 27 and beyond remains conservative due to the weaknesses in economic fundamentals at the national and particularly local level. We consult with John Hawkins at txp incorporated for our [11:17:17 AM] economic forecasting. And unfortunately, his read on the data is that we are likely to continue to experience economic stagnation over the near term. Inflation has remained stubbornly, stubbornly high, and this hasn't been helped by the recent fuel price shocks associated with the Iran war. The stubborn inflation also means that the fed has appears to have paused its series of rate cuts, and rates remain too high to make financing many new developments or investments feasible. In Austin, specifically, economic growth is slowing, particularly in the technology sector. We are seeing occupancy challenges in office and multifamily properties. Household debt is at record levels, and there's a high degree of consumer uncertainty about the future direction of the economy. In short, there are no strong drivers of economic growth, and therefore, the expectation is that sales tax growth should roughly track growth in price levels. Core inflation is currently tracking around 2.3% in Texas, and that's the main factor driving our year end sales to sales tax growth [11:18:19 AM] estimate of 2.5%. That said, we've been experiencing some surprisingly strong monthly results, particularly with respect to our two most recent payments. Some of this strength is likely the result of comparison with especially weak months in the prior year where we experienced negative growth. But overall, we're frankly just witnessing collections that are stronger than the economic fundamentals suggest that they should be. And our fear is that we may begin experiencing more flat or negative months again as the fiscal year progresses. Ultimately, of course, we will reevaluate our projections as we receive more data and incorporate these results into the final projections that drive the proposed budget. This graph shows what could be called the cone of uncertainty with respect to sales tax projections. Over the course of the forecast period, we went back and looked at the 20 years prior to the pandemic and found our strongest five year run of sales tax growth and our [11:19:19 AM] weakest five year run. So we had one five year stretch where we grew at a compound average rate of 8.1% per year, and we had one five year stretch where we grew at only 0.8% on average per year. And actually these weakest five years immediately followed the strongest five years. We applied those two different growth rates to our fy 26 estimate estimate to generate this expanding cone, showing two extremes of potential sales tax growth. I say extremes, but I should add that 20 years is a small sample size, and it's certainly possible that we could experience five years where sales tax actually declines, or I suppose, where we achieve even stronger growth. But based on our recent historical experience, these are the two extremes. On the low end, that would mean an fy 31 total sales tax revenue is only $16 million higher than we expected it to be this year. But on the high end, it would mean that sales tax would be $178 million higher. Our forecast [11:20:20 AM] projections work out to a compound annual growth rate of 2.7%, which puts us about a quarter to a third of the way up into the cone. And these projections anticipate an additional $54 million in sales tax collections by fy 31. Moving to property tax based on preliminary data from the Travis central appraisal district, property values are projected to decline by 2.9% for tax year 2026, which would be the second straight year of declines. But the actual total will ultimately depend on the volume and outcome of protests, which are again expected to be at or near record high levels. New construction, which is exempt from the state property tax revenue cap, is projected at $3.1 billion, a decline of about 435 million from last year. As a result of the relatively subdued environment for new development over the past several years of high interest rates. Translating these projections into general fund revenue, we expect [11:21:20 AM] property tax revenue to reach $716.6 million at the no new revenue. Maintenance and operations rate and $741.6 million at the voter approval rate. Our typical homeowner would see a projected annual increase of about $96 at the no new revenue, no rate, and about $155 at the voter approval rate. The no new revenue rate is the rate that raises the same amount of revenue for maintenance and operations as in the prior year, from properties taxed in both years, net of state mandated adjustments. So we might expect the increase to our typical homeowner homeowner to be closer to zero at that rate. But there's another component of the property tax rate that generates revenue to service our voter approved and other eligible debt, which is driving much of that projected increase. This debt service property tax rate is projected to increase in fy 27, and the tax bill associated with this rate is projected to increase as well. [11:22:21 AM] We currently have over $1 billion in authorized but unissued debt associated with bond initiatives approved by the voters over the past several years, and the city's annual debt service requirements are projected to increase significantly over the forecast period. As we continue to issue this debt. I want to conclude this revenue component of our presentation with a quick true up versus our fy planned fy 27 plan budget projections. Many of the same dynamics we've discussed are driving the variances between the plan and our current forecast, particularly our improved sales tax results. Property tax is now projected to be a bit lower as a result of the appeals dynamic, and due to a lower than anticipated new construction number from tcad, utility transfer revenue has been revised slightly downward due to the true up between estimated and actual year end revenue at Austin energy and other revenue is a bit lower due to the. Due to the uncertainty surrounding public health permits and the lower collections and telecom [11:23:21 AM] franchise fees, and now send it back over to Kerri to discuss general fund expenditures. >> The inner circle of this chart talks through the revenue or shows the revenue that Eric just discussed. The outer ring is a breakdown of the general fund departments and the percentage of the overall budget each represents. The general fund has 13 departments and funding for social services. Police, fire, ems and forensic science make up 64.7% of general fund uses. The other nine departments and social services fund round out to 31.4% and then transfers. Others are at 3.9%. As we talk through our citywide cost drivers, these are the initial cost assumptions for these major expenses that impact all funds, including internal services, enterprise and general fund. For the fiscal year 27 planned year, there is [11:24:22 AM] no budget or no wage increase for civilians is assumed for this forecast period or for this forecast. Later in the presentation, we'll address the impacts of adding the wage increases and other cost drivers. Although there is no civilian increase currently, Austin human resources is conducting a citywide market study that will have an impact across the organization. In addition to the wage. When you look at the living living wage assumptions, there is no anticipated living wage increase for fiscal year 27. In. In addition to wages, our sworn employees. They are receiving wage increases per their contractual agreements. Our shared services allocation is projected or assumptions include a 5% increase. This is for our support services technology. Things such as our T C tech, our fleet maintenance and fuel allocations. We are projecting a 5% increase in our [11:25:22 AM] health insurance projections for city contributions, and then there's an increase for the statutory required payments for our three pensions. Moving forward to our base cost drivers for the general fund, our salary increases include, which, as you all know, is our largest expense, is it does include the insurance and pension contributions that I just mentioned, as well as the contract related labor agreements for police, fire and ems. It also includes the market study that Austin hr is completing now, and that's at 38.7 million. We are anticipating our including a projected 13.7 million increase to our budget stabilization reserve fund to get our reserves back to the 17% policy, and then 16.1 million across the general fund for our support services and internal services allocations. We're [11:26:24 AM] seeing contractual increases across across the departments at 3.9 million anticipated marshaling yard. That's the 3 million to to fully fund the marshaling yard operations in fiscal year 27. And then the transfer to Austin development services, supporting what we're calling the residential affordability stabilization initiative. This is to help reduce the increases to the residential development fees that have been associated with development services. 32 new fire positions are included in the forecast based on the work week schedule that is anticipated for October 27th, 2027, per the contract. And then we're anticipating a 2.9 million savings beginning in fiscal year 27 for the one arts initiative, as well as the reductions that we included in the planned year of reducing or eliminating the transfers to our capital rehabilitation fund [11:27:25 AM] and the housing trust fund, as well as reductions to our social service contracts. Looking at expenditures for the remaining of the financial forecast. We do anticipate, or we have included a 3% wage increase beginning in fiscal year 28 through fiscal year 31. That results in an increase of $173 million. The cost allocations for our internal services or our shared services functions are estimated to increase at 58 million and then contractual increases. And these are just the base increases that we're anticipating. That's 8.8 million for the life of the fiscal forecast. We are starting to anticipate increased savings from the implementation of one ATS, and that includes the application rationalization and some of the anticipated savings from the consolidation. So when we look [11:28:28 AM] at what we have in our fiscal year 27 forecast, in comparison to our planned year that was presented during the proposed budget process, we are anticipating a $1.5 million savings based on the reduction or removal of the living wage adjustment for fiscal year 27, as well as increases in our support services or our allocations based on the liability reserve and worker's compensation allocations. And then we are seeing a departmental adjustment decrease in expenditures because the public safety headquarters, although we're starting to move in, we're seeing deferred costs as we continue to have tenants at that location. And so we do not anticipate city costs for that location until fiscal year 28, as well as the warehouse, which is anticipated to be available beginning fiscal year 28. We have included the transfer to the budget stabilization [11:29:29 AM] reserve fund, as well as the new $2.9 million transfer to development services. When we look at our projections for our reserves, we are anticipating ending the year at 16.4%. That is better than the 15.7 that we anticipated at the amended budget. We are forecasting a transfer to reach the 17% level for fiscal year 27. And then for the life of the forecast, we are anticipating an average of 8.7 million to continue to meet the financial policy. We do not have any planned one time expenditures for fiscal year 27 are through the life of the forecast out of our budget stabilization reserve fund. So now that we've walked through the base forecast of both the expenditures and the revenue, this chart shows the combined revenue and expenditure to inform the overall outlook over the forecast period, showing [11:30:29 AM] expenditure growth at 3.2%, as well as both of the revenue scenarios, the voter approval rate growth is at 3.4% and then the no. New revenue maintenance and operations growth is at 1.7% over the forecast period. Of note, at the voter approval level, we will see an initial deficit in the first two years, the forecast beginning at 7.1 million, surplus beginning in fiscal year 29, growing to a 15.15 million surplus by fiscal year 31. And again, this is with our base forecast expenditures. This is not with any new investments. So looking at that voter approval rate scenario, we will have a deficit in fiscal year 27 of 1.3 million. That deficit grows to 15.1 million in fiscal year. Excuse me. That surplus indicates a 15.1 million surplus by fiscal year 31. Our [11:31:32 AM] cost saving measures are still included in this forecast period. So everything that we laid out in the fiscal year 27 planned year is included in these assumptions. And then again, meeting our reserve requirements in fiscal year 27 and ongoing looking at the no new revenue rate scenario, that deficit for the first year grows to 26.4 million, and then it grows to 122 million by the end of the forecast period. In addition to those planned year reductions that we mentioned earlier, we will also need to identify an additional 26.4 million in revenue collections or expenditure savings. And just to give some examples, these are not recommendations or ideas of reductions. But these next couple of bullets talk about some examples of what these dollars compare to. So when you look at that 26.4 [11:32:32 AM] million, it's equivalent to about 240 public safety positions across all of our sworn sworn departments. It's equivalent to all of our branch libraries, 17 of our community recreation centers. And then that amount exceeds the annual budget for several of our other departments. Now, again, we're not recommending these reductions, but we wanted to make sure it was understood of what this equivalent change would look like. If we were to add back in the fiscal year 27 planned reduction. This is this is a slide that states what the overall deficit will look like. So we would see a $50.6 million deficit with adding back in the social service contracts, adding our transfers to both the capital rehabilitation fund and funding our local housing voucher program, increasing our wage adjustments to 3% for civilians at that 7.3 million, [11:33:33 AM] and then restoring the fire over time. Funding to support the four person staffing that was agreed upon in the contract at 6 million. Adding these deficits back in or adding these programs back in, are these priorities back in would result in a $51.9 million deficit in fiscal year 27 growing, reducing to 38.7 million in 20 and 2031 at the voter approval rate. Of course, at the no new revenue rate, that beginning deficit is 76 million or 77 million, growing to 176 million in fiscal year 31. Over the last several months, staff has been working to analyze our social service contract funding, doing a complete analysis of the current budget of 74.2 million, as well as identifying about 20 additional million dollars across the general fund that provides services or grants to [11:34:34 AM] others. The team is finalizing the analysis that will ultimately ultimately place these contracts and grants into three tiers legally required or operational, essential or services that we are paying others to do on behalf of the city. And if we did not have these contracts, the city would still have to require, the city would still be required to provide these services. We would provide them directly. The second tier is identifying efficiencies. So looking at where there may be duplication of services through these contracts and grants. And then the third tier is looking at the performance of these contractors and these these services to make sure that they are providing the services as we plan, managing the funding that they've received and having the impact that was intended for these contracts. There have been several months of input and collaboration, including conversations with our government partners. Boards and commissions have provided their recommendations, community town halls and more recently we had meetings with [11:35:35 AM] our social service contract vendors and of course, with our partner departments to better understand how we are going to create this rubrics. And we are working to actually finalize the rubrics. And we'll come back to the public health committee in the beginning of may, and then talk to the full council mid- may. We still have arpa funds. We have about 11.7 million of encumbered dollars. Those dollars have to be spent by the end of December 31st of 2026. So we have about 7 or 8 months to finish spending those those funds you again, $11.7 million, about 1.9 million is in the public health department supporting the communications project and it project, as well as staffing and support. Economic development has about 1.4 million that is currently encumbered. Homeless strategy has 6.8 million funding, rapid [11:36:37 AM] rehousing, landlord engagement, homeless support services and capital investments. And then there's 1.5 and administrative costs that are still encumbered out of the arpa funds. Moving forward to our capital improvement program, this slide highlights our fiscal year 26 spend plan. The departments and the staff is still working on developing the fiscal year 27 spend plan, and that will be updated in the proposed budget. This chart indicates the spending across all departments, so enterprise as well as our public improvement bonds, Austin energy and Austin water continue to have robust capital programs. The dark green section represents aviation spending as they continue to make their large changes across the airport. Our public improvement bonds are pbs as it's listed on this chart. Those are the general obligation bonds that have been approved over the last ten [11:37:38 AM] years. And then other other primary planned spending, mostly represented represents the convention center spending. This slide just focuses on our public improvement bonds that we've had over the last 20 years, including the 2006 bond. It shows the two programs that were not approved by the voters in 2014, and a portion of the 2012 bonds showing the the totals for infrastructure specific and comprehensive bonds across that time frame. Looking at the spending of our active bonds, we currently have four active bond programs. 2016 is transportation and mobility focused and is 70% expended. Our comprehensive 2018 bond has about 83% expended so far, with a different breakdown on the different propositions within that bond. Transportation [11:38:40 AM] infrastructure of 2020 has 53% expended. And then the 2022 affordable housing bond has 29% expended. If you would note on slide 16, when Eric walked through the debt service, the debt rate for our tax rate, as these dollars are spent down, that has a direct impact on that debt rate. On slide 16. And now we're just going to have a brief conversation about council priorities. These are some of the unfunded priorities that council has given us through resolutions. Since March 1st of 2025, we received 132 council resolutions, with 12 of those being under review for fiscal impact in the current budget or in the current financial forecast, there are no there's no funding for these 12 approved ifc's. Of course, we're continuing to look at funding opportunities, and this is just a sample of that full list. You can see the [11:39:41 AM] full list in the financial forecast report. And with that, I am happy to answer any questions. >> Council members, any questions? Anybody who wants to start. Council member Alice. >> Thanks for the recognition. Mayor pro tem, I have just a couple of questions and they might bounce around on slide number 19. You mentioned the market study. What is the timeline for completion of that? Will it be implemented by October 1st, or is that going to push us into the next fiscal year? >> The plan is to implement that market study in fiscal year 27. >> Okay. And so is there not across the board pay scale increase for employees, because the market study will show that some of the salaries need to be increased and they will they'll be increased through that method. >> No. So the wage increase was not included per the planned year. So that was a separate analysis from the market study. [11:40:41 AM] I think Austin hr is working on a plan to incorporate or look at what the impacts of the market study will be compared to what the analysis will be for a potential increase across the board. >> Okay. That's helpful. And then I wanted to ask how our credit rating is doing. I know we have had discussions around debt capacity ongoing, you know, since the last budget that we adopted. But I'm curious to know if our budget stabilization reserve has been solid and if our credit rating is holding steady. >> It is holding steady. We are in the last rating cycle, we were upgraded by Fitch to triple a, which is the highest rating you can get. So we're currently triple a with Fitch and standard and poor's and double a+ with moody's. And all ratings are are listed as stable. >> Okay, that's good to hear. And then my last question for now, unless I come up with some more, is going to be the mention of the four person staffing. So is the fiscal year [11:41:45 AM] 26 to 27 proposal going to change four person staffing? >> There's no projected change to the four person staffing model. As you know, part of the contract, it was agreed upon to stay with the four person staffing. What this is saying is that we're looking at increasing the overtime budget for fire to address that that contract change. >> Okay, because I had seen it in the reduction list and it was saying if you change the reduction that's been forecasted, then it would increase the deficit. >> So in the fiscal year 27 planned year, and this was before the contract was approved, that $8.3 million was included in the planned year. And we're saying in order to rightsize the fire overtime budget, based on the current spend that we're seeing in the department, we would need to add that back in at $6 million. >> Okay, okay. That's helpful to know. I just remember the last time we had talked about it. We wanted to make sure we [11:42:46 AM] were addressing that comprehensively and making sure we're communicating with our fire department and understanding, you know, what staffing levels are needed and making sure that we have every person on hand to make sure that when it's needed, when there's a structure fire, that we've got ample staffing for those situations. That's all I have for now. >> Council member, council member Laine. >> Thank you. This is extremely helpful. Obviously take some time to digest, but I have a couple of questions. A few questions about the assumptions on page four. It mentions inflationary pressures on for all expenditure categories. I would like to better understand how your accounting for inflation in the projections even. You know, I know that frequently we use the stabilized rate over a long period of time. But I'm just wondering how you're handling that. >> So in the current fiscal year, we've just asked [11:43:47 AM] departments to manage it within their appropriation. And so what they've what they typically do is just move and find savings in other ways to stay within their appropriation. As we have conversations with them on budget development, they let us know of what increases they're anticipating, whether it's contractual. And we have conversations back and forth, whether these are baseline increases or these are enhanced requests. And we'll go through that process over the next several months to hone in on what costs are inflationary, to identify if any additional funding is needed in each department. >> Thank you. Are there any data sources that you're using to estimate? >> We typically work closely with the with the departments because some of those some of those inflationary costs are directly related to the categories that they are expending. And so so they may be seeing things, for example, in aquatics materials, they're seeing an inflationary, you know, increases in those chemicals to, to maintain the pools. And so as they're seeing [11:44:48 AM] those changes year, month over month, then we're we're having those conversations. >> Okay. So very helpful. And that's part of the reason why I have the concern is just because the inflationary pressures are so great, there are spikes in these 1 to 3 year windows, and it is one of most, a lot of these areas that really laid out sources that you were using to estimate and that sort of thing. And as we're looking at projections, it's an important factor in where we end up. And so I just want to highlight perhaps consideration of looking at if what we're using right now primarily is our is our own departmental resources to figure it out, maybe considering looking at actual inflation rate for the trailing 12 months as a basis for projection or bringing in national or local data sources. I think that Texas would be particularly instructive because or Texas or Austin, [11:45:50 AM] because of the handling of property taxes and recapture and all of those things really driving inflationary pressures higher in cities than we see other places. But I would just I would certainly welcome some data sources around inflation. And those who are on mobility committee with me have heard me ask those questions a lot. I wanted to turn to page 15. I am wondering if, as we think about the new construction that is exempt from the property tax caps, how do we have we looked at where the like, do we have any kind of a heat map or a visual representation of where that construction has happened in the last year, where it's where it is, where the pipeline is showing that it's happening? And I specifically asked this question because I think that we may want to look at where this growth is happening and how we can remove some structural barriers to promote [11:46:53 AM] it. And I think of my own district, where there are a ton of apartment complexes that have come online in the last three years, and there are a bunch of mid-rises right next to Lakeland station that are about to start. Lisa. But none of the. None of the approaches to making it easier or faster or less expensive to build. So far, those incentives are not available. Like they haven't been crafted in a way that opens up these processes a little bit more. Not a question. The only question is, is there any kind of a visualization of where construction has happened in the last 12 months, and where we think it will be happening based on the pipeline? >> Not currently, to my knowledge, but it's possible that we could have see if we could interface tcad system with our with our gis folks and see what we could, what we could come up with. >> Okay, we have a meeting coming up, my office with a demographer, so I'll ask her as well. And I have no urgenc to [11:47:54 AM] receiving that, but it may come as a budget question. Paige 17. The revenue forecast, sales tax. You. I'm not on 17 myself yet. This is the one area that was projected higher. And it caught my attention because so much sales tax comes from downtown. We have no convention center in the next couple of years, and it is well established that construction Zones impact sales. And so it just caught my eye a bit. Why are we projecting that one growing and not the others? >> Largely just due to the actual results we're seeing? I think that while tourism and convention activity has driven a lot of sales tax growth, Austin has just become so large that we have a pretty diversified sales tax base. And so even in in these years where [11:48:55 AM] the convention center isn't driving a lot of that activity, it's still possible to have growth just from because our base has become so large. >> Okay. Very helpful because I think I think there's a perception that sales tax is really perhaps more dependent on the downtown area than it sounds like it is super helpful. Thank you. I have a question on page 20 relating to the firefighter cost driver. And this also relates to kind of the vacancy estimate statements and that sort of thing. When we look at the need to staff up in fire, or is that already offset by reductions in overtime? Are we projecting reductions in overtime? How is overtime being and being and, and vacancies being handled in the public safety agencies? >> So for fire in particular, these 32 new firefighter positions are being added so that there is a stabilization of overtime. It should over as [11:49:56 AM] as they move forward with the reduced work week. These positions should help with that to stabilize overtime. >> Okay, so that would be more like in year two out or something like that. >> Yes. We'll see that. So so the overtime or excuse me, the reduced work week doesn't happen until fiscal year or fiscal year 27. No. Excuse me. Fiscal year 28 is when the actual reduction happens. We're hiring the positions now so they can be available and trained up for that reduced work week in fiscal year 28. >> Okay. Thank you. And then I recall early in the presentation, there was kind of a statement about vacancy stabilizing because of the hiring. And yet I, I think that I suspect that that is for not our public safety agencies, because we still have some pretty substantial vacancies being carried in our. Okay. I would love to learn a little bit more about the public safety part of that. And I don't know if it will, if that's a budgetary question [11:50:56 AM] that could come to public safety committee for a little bit of looking at it or elsewhere. But that is those are there will be questions for coming from me on that. If it doesn't end up in some sort of a briefing. Okay. And then finally, I wanted to touch on the unfunded resolutions. And I, I wanted to note the release, the importance of some of the resolutions in, in actually expanding effective services to all of our city and saving us saving money. Ultimately, it requires a little bit of investment, but as we are doing in some other things, but saving money potentially and delivering better services at the same time, and specifically wanted to call out the joint emergency communications department resolution that was passed almost it was passed last budget cycle. And I'm very I welcome getting receiving the report that had been scheduled for December in our main public safety committee meeting. I sponsored that and I sponsored [11:51:57 AM] it because of the exact issues that I'm bringing up and. I just hope that there's a lens on those types of investments as you're looking at the unfunded ifcs. And with that, I'm done. Thank you so much. >> Thank you, council member. Council member Fuentes, did you have your hand up? >> I think I'll reserve my questions and ask them offline. >> Okay. Councilmember qadri great. >> Thank you. Mayor pro tem, I appreciate the presentation for fourth time. Fifth time now because we had two budgets last time. So my first question relates to page 20 on the work session slide deck that y'all presented. It shows third line from bottom projected general fund savings from one arts initiative. It shows that the forecast includes 2.9 million in savings. Can you walk us through those 2.9 million savings? And by that I mean what system systems or contracts might be either eliminated or or consolidated? [11:53:00 AM] >> I'll respond to that. Council member Ed Benigno chief financial officer both the number on this page and the more substantial number shown on the second page, which is the amount over five years. In aggregate, they add up to $30 million. And those are at what I would say, conservative estimates based upon the consultant studies that we've seen. And we have two studies now, one by Gartner consultant looking at the organizational structure and benchmarking. And then the second consultant looking specifically at application consolidation opportunities. And both studies indicated substantial potential to save money depending upon how the city ultimately implements it. The low side of those estimates was around $60 million in total, and typically about half of the savings identified on it. Things come back to the general fund, and the other half would be expected to go to the [11:54:00 AM] enterprise department. So what you're seeing in this presentation is an indication, as we move through the through the process of identifying which applications are we going to actually be able to consolidate and when and how will the organizational dynamic changes result in savings? Trying to give a conservative approach here, but we don't have the details in terms of which five applications are we going to turn off in fiscal year 27 in order to get that savings? Or what other contractual changes might we be able to make? But we think these are very achievable over the timelines we've laid out in the forecast, based upon the consultant report and work that has been done to date. But the details will continue to evolve as we get into the fiscal year. >> Got it. Thank you. And then as a follow up on page 25, last sentence that talks about there are limited opportunities in outyears to fund new investments slash services as one atm savings materialize. [11:55:02 AM] Can you clarify what that means? >> Yes, going along with what Ed just mentioned as the anticipated savings in the out years that showed that resulted in a reduction in our overall expenditures. And so that debt that you see or that deficit that you see in fiscal year 27 and 28, you start seeing the surplus moving forward 29 through 31 at the voter approval rate, assuming that the reductions in the planned year continue. So there are a number of caveats that that go into showing that that savings and realizing a surplus in the out years. >> So are there constraints that limit council's ability to reinvest them into into new priorities? >> Say that one more time? >> Are there are there any constraints that would limit council's ability to reinvest them into new priorities? >> No there aren't. There aren't any constraints. [11:56:02 AM] >> Okay, great. >> I would I would say only around the funding sources. So again, going back to the point that we have enterprise departments and savings that are realized by these efforts in the enterprise department. We would want to stay that we would need to stay, have those savings be focused on that enterprise, as opposed to savings in the general fund or support services departments would have, you know, more global opportunity for addressing council priorities. >> Got it. And then I got two more questions. At the April 15th audit and finance committee, we heard that there would be $7.2 million in annual savings tied to 28 contract retirements over three years. How how is that factored in into the presentation that we saw today? >> So that would be part of the of the total $30 million that's reflected over the five years of this forecast of that $30 million savings, 7.2 million was the estimated savings from [11:57:04 AM] application retirement. But, you know, decisions haven't been made. This is based upon the initial consultant report and their recommendations. But we have to go through a process of evaluating those recommendations with our departments and making final decisions and recommendations on what applications we would retire and on what timeline these things are going to take time to realize, you know, if we're going to if we if we're going to get rid of some of these applications because we have redundant applications elsewhere in the city, it's going to take time to transition users, to transition data, to transition the reports, to conduct training. But that would be that 7.2 million there over a three year period would be part of what we're reflecting in this presentation. But that was on the kind of the that was the number that were things that the consultant was saying. We've been able to identify these savings. We've been able to review the contracts and identify these savings. They didn't say that was the only savings we'd be able to realize. And so that [11:58:04 AM] number will continue to grow as they continue to do their work. And we go through the process, the more detailed process of reviewing all of the applications and making decisions as a city on which applications we can retire, that 7.2 million in that presentation, we expect will increase to something more along the lines of the 30 million over five years reflected in this presentation. But it's not like they're not it's not 7.2 on top of the 30. That's 7.2 is part of what we think we can realize through the $30 million we're showing in the forecast. >> I have I'll come back to me. I'll. >> Thank you. Councilmember alter. >> Thank you very much. I appreciate all the work y'all been doing. Clearly, you've been scouring through everything to try to make this picture and these numbers add up. I do want to take a step back though, and I think, you know, from the outside looking [11:59:05 AM] in, if you look at, you know, whether it's the the five year forecast chart and you see the $1.3 million deficit or even surplus in the out years, the picture seems pretty rosy compared to the discussion we've had. But under the surface of all that, I think, is really what you showed on slide number 20. And that's the how we got here, right? That that really entering into this budget, we are $50 million in the hole. And that's on slide 28. And then you have taken that projected deficit and come up with ways to narrow it down to 1.3. Right? But to do that, we're talking about and you, you you're not hiding the ball. It's 16,000,016.8 million in [12:00:07 PM] social service cuts. Another 7.8 million in the loss of the housing voucher program. You know, deferring our capital rehabilitation fund. Of course, we know civilian wage increases. There are real pains being felt to get to the 1.3. So I just I don't want it to be lost in the conversation that, oh, we're only 1.3 million deficit. Everything is really rosy. There's a lot of pain to get even to that point. And the, the voucher, the loss of the local housing voucher program, I think is. That is something that throughout this process, I'm going to certainly be looking at ways we can avoid because we are taking commitments around our supportive housing and the operations of those units that we have poured literally hundreds of millions of dollars [12:01:08 PM] into. And if we don't have the operations dollars, those projects can't sustain. And so that is not something that I see as a realistic option for the city to just not do going forward. I do think we need to refine our social services and take a hard look at that. I do want to ask, and I don't have the slide in front of me, but you you outlined those tears on the first tier. It was, here we go. Slide 29. Those that are legally required from the city. Oh, we lost them. There we go. How have you incorporated? Because at the public health committee we had that resolution around and the council adopted, you know what, how we wanted to incorporate some priorities into that. One of those being really just like critical life safety, right? Something's keeping somebody alive, whether that's doing it [12:02:09 PM] at a city facility or somewhere else, that's a top priority. So how does that fit into the tier system? >> So we are also, we're working on a full rubric based on that, that instruction that we were given. And so these are the general aspects of that rubric. What we anticipate will happen is those things that are essential, even if they are not spaces that the city operates directly, they would rise to the level of these are things that we need to consider keeping because of that dynamic. When we when we started this review, we wanted to really begin by separating what we're calling social service contracts now, because those are contracts to do the services that we need to do versus grants that are services that are meaningful to the community, that help us move forward in several areas of the work that we do. But but they [12:03:11 PM] are not mandatory for us to do. So we're it's going to elevate both of those things, whether or not it is a operational requirement because it's our facility or life safety, because even if it's at another facility and when we walk through the full rubric and a couple of weeks, we'll be able to show you all those dynamics based on that resolution. >> Okay. Completely switching gears on a tax question, you talked about how we have less money because of the more successful protest rates. Do we have the authority to assume a higher protest success level? Like if if tcad in July says, you know, we this is our certified role, but we still have 5 billion in protest. Can we assume that, you know, 50%, [12:04:12 PM] 80%, whatever it is of those protests are going to be successful and set our rate accordingly? Or do we just have to go on what the role is on the day that they provide it? >> So we don't have a perfect 1 to 1 mechanism, but we have a practical mechanism where we could use our collection rate. Really, that's supposed to reflect delinquencies or non payments, but we could use that as a lever to reflect this erosion in the tax base that we've seen in the last couple of years. >> Okay. Well I'd like for us to look at ways to better project and I'd be interested to know like what happens if we over project? Does that just mean we don't get, you know, 3.5% next year? It's 3.4 or like, what's the, what are the risks associated with over projecting? >> There's no risk because the, the calculation will adjust that out. It's, it's not tied to our actual collections. It's tied to the value on the roll and our tax rate. [12:05:13 PM] >> Okay. Well, as we get closer to July and August, like to just see what, what assumptions we're using and how we might not find ourselves here. Again, I also wanted to ask about fire over time, a little different than what councilor Ellis was talking about, but we assumed in the current year's budget a reduction in. We assume we budgeted $8.3 million less in fire overtime than the year before, and at public safety committee a couple of weeks ago, one of the. On the presentation around overtime fire has already fully spent all their overtime that we've budgeted for this fiscal year. And we're only halfway through. And that's a $9 million spend. So. How what are we going to do for the next. I mean, I don't think the chief can have no overtime for the next six months. How do we balance that? >> You're correct. The chief [12:06:14 PM] can't have any no overtime for the next six months. We have been working with him and his team to identify whether they can find other savings in other areas. So we've been trying to scrub their budget some, and I fully anticipate that toward as we continue to refine departments budgets across the city, that usually we have savings across the across the different departments. I know we're dealing with some inflationary costs, but every year we've seen some level of savings across across the general fund. And so we'll look at that overall. And then as we get closer to the fire department potentially reaching their appropriation, then we'll decide at that point whether or not we need to come back and ask for an adjustment or an amendment to their budget to address that. But right now, we're working with them to try to mitigate that as much as possible. >> Okay. Because I know that conveniently, the number that we're thinking over the next [12:07:15 PM] six months, somewhere around that $6 million figure, which we also happen to be running $6 million over our estimates and, you know, be very easy to say, well, 6 million, 6 million, it's all, you know, we end it all even. But that's $6 million that if isn't spoken for in this year's budget or in the next year's budget, could almost fully solve the local housing voucher hole. Right? It's not just money that because it's left over, couldn't be used for a different appropriated purpose. So I just want to I know you're going to you, you do a magnificent job going through all the different budgets to to find the everybody's over. They might not love you by the end, but you make sure that all the departments are doing what what they're supposed to do. So I'm. >> Their favorite person. >> I also want to just kind of to step back as, as we're thinking about this over the [12:08:16 PM] next few months. And, and it's discussed in public, you know, I think you mentioned you confirm for this the, the expenditures over time, the growth rate is like three and a half or 3.3% is our compound annual growth rate over the next five year forecast period. As as it would so happen, I pulled up what our current annual and 12 month inflation rate is, and it's 3.3%, right? So we are growing not because we're doing more, we're just paying for the things that we can pay for. Right now. We also have a city have been growing slower but still 0.7%. So we're growing and things are getting more expensive and we're not even keeping up with that. So I think it's also important to context as we're talking about this, that the city's expenditures aren't growing because, you know, we're getting more bloated. We are [12:09:17 PM] barely, if at all, keeping up with what we're already doing. And that's just a I think people lose sight of that sometimes. I'll end this with. I would ask the manager and you, as we get to the proposed budget and we start working through this to come up with a list for the council of. If. If you had to take your proposed budget and cut $20 million worth of. What was in there and more, I know you did here kind of high level, here's here's a general sense of how you could find $26 million, right? And you did it by departments, but like I'm talking actual lines of, you know, $3 million to parks blank and $2 million to [12:10:20 PM] animal services, whatever, but actual appropriation. What how would you do that? And the reason kind of that number, you know, as I mentioned, the housing trust fund, the that is absolutely critical to have the local housing voucher. What impacts we're going to see to the social service cuts. I fear that we are going to be cutting in one area and just shifting the cost, probably to public safety. And so I want to us to be able to weigh those things, whether we we choose those levers, but we need to have the information of, okay, what's that next cut? If we're trying to weigh it against that thing, that first thing that's not funded, right? Because that's the struggle we have is we want to fund something, but we don't know what it's trading away from. And so being able to to weigh those against each other is really important. So that would be my ask. It can be budget question number two. But [12:11:23 PM] I just I appreciate arming us with that information. >> Thank you, council member alter let's go. Council member Velasquez, council member Siegel. And we'll go to council member duchen. >> Thank you, thank you. Thank you all for the presentation. I had a couple of questions. First, actually a request. The first one is on slide four. If can we get a list of the the vacant vacancy rate changes for this fiscal year for departments and the new vacant positions that are being eliminated due to that our vacancy policy. >> Yes. And we're actually working on vacancy dashboard that will give that information closer to real time. So yes, we can work on that. >> Thank you. On slide 20, what would our what would be our percent in reserves if we don't make that $13.7 million transfer. >> 16.1. >> Okay. And also on slide 20, [12:12:24 PM] what programs are going away or being impacted by the reduction in the housing trust funds? And do we have a listing of those yet? >> So it's primarily local housing vouchers. There are other programs that have been funded historically through the housing trust fund, such as emergency rental assistance. I'm not sure of the exact amount of that. And then there are some funding that is going to continue because it's funded through the downtown Disney bonus program. So there's it's a mixture of two funding sources, general fund and, and db, but we can get you a full list of what has historically been funded and whether or not those are were one time in function or if they were ongoing programs. >> Thank you. And earlier you mentioned I'm looking at slide 36. Earlier, you mentioned being people's favorites. I know that I'm you in the city manager's favorite, so I'm sure we'll resolve the fjc being on [12:13:24 PM] that unfunded list before we get to, to budget. So I just wanted to throw that out there for my colleagues to know that I'm first in line. >> Thank you. Councilmember. Councilmember Cecile. >> Councilmember Velasquez, you said you are his favorite or you're not. Yeah, that's not what he told me. Well, thank you staff. And to our favorite person, director Lang and to my colleagues for some really important questions. I guess first, I just want to reiterate what councilmember alter said about 3.3% inflation. And, you know, related aspect to that is that if we're not giving our civilian staff any raise at all, they're essentially taking a pay cut, right? In terms of actual buying power of their wages. So in kind of connection to his request for, you know, $20 million of cuts, I mean, to me to try to understand if we didn't make further cuts to social services contracts, and if we gave civilian employees a cost of living adjustment, what would that budget look like? Is one of my my big picture [12:14:25 PM] questions, but I did want to build a little bit on what councilmember qadri asked about with the one tz initiative. And I guess I'll direct my questions to you, cfo Benigno. And I want to say I really appreciated the arts director's presentation to audit and finance in terms of all the really benefits the city could could reap from this application rationalization initiative. I think there's some question about what is one arts, what's encompassed within it, but I'm going to assume that application rationalization is one aspect of one arts. Is that a fair way to say it? Mr. Benigno. >> Yeah, I would say staff is using the term one arts more broadly to capture all of the it optimization efforts around organizational design, application rationalization, contract negotiations. You know, we not only do we have multiple redundant software packages, sometimes we have multiple contracts with the same software vendor. So just broadly, the idea of a one city [12:15:26 PM] approach to technology services. >> So it was really exciting to hear. Director, is it lake's report? That we could reap potential savings between 49 million and 142 million if we fully implement the application rasooli rationalization initiative. >> That's based upon the report, and that's obviously a very broad range. But what they what the consultant informed the audit committee was, it really has to do with the city management decisions on where we think it makes sense for the city to consolidate applications, and where we don't, there still is going to be a lot of work and discussions with departments and staff about what consolidations can we really make work and which ones don't we want to pursue? But, you know, based upon those decisions, low end 42 million, high end, 150 million ish, 100, 100, 149 million to 142 million. >> Right on. Thank you. And [12:16:26 PM] then in terms of how one ATS connects to the financial forecast, is it just the the savings from the application rationalization that's built into the five year forecast, or are there other savings that are built in? >> It's, I would call it more of a placeholder based upon the anticipated savings from all the initiatives we've talked about. So certainly the application rationalization would be a big part of that. But also, you know, we are also working with Gartner on contract negotiations. So the big contracts we have with large software vendors and as we consolidate, how do we renegotiate those contracts to optimize our our value? So it's all of the initiatives collectively. Again, it's not just one thing. A lot of it certainly would come from the application rationalization, but this is more of a placeholder for anticipated results that we think are on the conservative end of the spectrum that we've been advised by our by our [12:17:27 PM] consultants that they think we can realize. >> In regards to the proposal to move from, I guess, what we call a federated model of technology services, where we have information technology and operational technology staff across departments. And, you know, the proposal to move those folks under the ATS shop in terms of the consolidation of staff and the transfer of staff, is that reflected in the economic forecast? Is that expected to reap financial savings that we can count on? >> I think there will be savings that result from there. You know, regardless of savings. We think it's an important component of the overall efforts because the reason we are where we are, where we have so many redundant applications and multiple instances of the same application across departments, a lack of a cohesive strategy is because of the way we've been organized and the way we've governed our it decisions over decades. You [12:18:30 PM] know, one of the stories we heard from our application rationalization consultants is if all you do is go through a process of rationalizing your applications and consolidating and saving money, you know, typically they see within 3 to 5 years, you just get back to where you were without implementing organizational changes and governance changes that go along with the rationalization process. So I think certainly as you look at and when we talk about staff, it's not just city staff. There's also a lot of staff augmentation. So these systems will have sometimes they're highly specialized. So just one that I'm familiar with micro strategies. Sometimes on the very complicated reports, we have to have a expert from micro strategies or a consulting firm that has expertise in that application that can come and develop reports for us, for our financial systems and all the different business intelligence tools will have those types of staff augmentation contracts associated with them. If you go from 14 business intelligence [12:19:31 PM] tools to 2 or 3, we don't need as many consultants, staff augmentation to, to manage all those different reports and all those different systems. So when we talk about staff and the numbers you saw in the in the Gartner report is looking at all of city staff and all the augmented staff that we get through consulting contracts. But certainly as we reduce the number of contracts, the number of bodies needed to maintain all of those contracts is going to streamline. >> So as we stand here today, are you able to parse out what the savings could be if we maintain a federated model, maybe with some improvements, but went through with the application rationalization? Or is that something you've studied? >> Yeah, I'd have to. We, I think we'd want to sit down with our consultants and our it staff to see if the, you know, the data we have, what it would take to come up with projected savings from alternative models. >> Have you considered, you [12:20:31 PM] know, my understanding is that, you know, there are at least 400 employees that could be impacted by the consolidation proposal. Have you priced out what it would take to incorporate those folks into a new department, the type of training, other type of resources that would be necessary to make that consolidation more seamless? >> Well, I mean, you know, we're not reflecting any savings from staff reductions in the fiscal year 27 budget or, you know, you know, other than in the, the, the broader 2.9 2,000,027 and 30 million over the five years. But, you know, right now, all of those staff positions are looking to move them into existing roles within the one ATS model. So there's no reductions in staffing that we're proposing as a part of the fy 27 forecast that you're seeing here. >> But wouldn't you need more supervisors, more training, more structures to incorporate those people into a new department? [12:21:34 PM] >> I think broadly over time, you might need fewer supervisors. You know, as as you look at a consolidated approach to various it functions where, you know, currently you might have a database manager spread across five, six, seven, eight departments and needing supervisors for those employees across all those departments, you probably have a need for fewer supervisors and a consolidated model. Now, training, certainly as we start looking at the application side of things, we are going to have to invest in training costs to train users who are used to using system X. Now we're going to be using system Y, so we're going to have to train the employees on moving to the new system Y. But in terms of the centralization effort, we may still need to do some training. But trying to think of any exceptions to this and you know, may have any. But if you're currently a database manager, you're going to continue to be a database manager working on databases. So networking people [12:22:34 PM] are going to continue to need to do networking, albeit in a more cohesive and consolidated fashion. But, you know, there may be need to be some training involved in that, but. >> Good morning, council members. Specific to the training piece of that, we do, number one, in-house training on some of our internal systems. And then often with the contracts we have with our software vendors, our technology vendors, there are opportunities from training directly from those vendors or they're already associated in with the contract. So, you know, we have situations where people aren't leveraging the training that's out there and available to them. So our focus is really to leverage what we have within those different contracts. And as we renegotiate those contracts, make sure that training is available both to [12:23:34 PM] the technical professional. And then for the end user. >> Thank you. Director. Refresh my recollection. How many employees in the department right now? 361 so if we add over 400 more, am I hearing that that's not going to increase costs for management. >> Many of those people are coming over in supervisory titles. Some are not. And they are being aligned with existing supervisors and managers. And there will be some opportunities for new positions and new manager levels. But we also have vacancies that we would want to repurpose. So we would not be adding any net new positions into the organization. >> Yeah, I'm not so much asking about new positions, but I mean, I can move, we can move on, but I'm just it doesn't seem right to me that you could double the size of a department without [12:24:35 PM] having investment in, in new organizational infrastructure, leadership, infrastructure, training, infrastructure. I don't see how you can just magically transfer 400 plus people. >> Thank you. Council member Siegel. Councilmember duchen. >> Thank you, mayor pro tem. I've got some questions, particularly around helping me understand better debt services. I know we're short on time. We've got to get to the last agenda item. But if we go to slide 34, I think. It says that we've got total authorized, but unissued public improvement bonds, a little over $1 billion. The main thing I'm struggling with is we met with capital delivery services recently. I got a number from them for what was what they're calling an obligated. And I'm just trying [12:25:36 PM] to standardize how we want to talk about this, because I get different numbers depending on what we look at. And even in the chart here, when I add up the the encumbered and the balances, I don't get to 1.02 billion. So can you walk me through what the different. I think it's a terminology problem. Can you walk me through what that is? >> Sure. So they're talking about spending and this is talking about bonds. So in terms of spending obviously right. You got money that's out the door. Checks have cleared. The money has been expended. We issue our bonds to reimburse ourselves. So we incur the expenses first, and then we issue bonds to reimburse ourselves for the spending that's occurred. So you've got spending, and then you've got funds that have been encumbered that haven't been spent yet. We don't issue the bonds for encumbered funds. So, you know, we might be entered into a contract on a large project. We [12:26:37 PM] have the consultant on board and we encumber the funds. We we lock them and set them aside in the system to make sure we're able to pay that contractor as their work progresses. And then there's a, you know, could be an obligated piece where we haven't reached a point yet where we have a contract in place or we haven't encumbered the funds, but we are at a stage where the funds are considered to be obligated, obligated to that project. The project's far, far, far enough along that the department's considering that a an obligated fund. So that's when they talk about we have X amount of unobligated dollars left. That's what they're talking about is what's left after we take into account money that's been spent, money that's been encumbered, or money that's been obligated, the bonds are only sold for the money that's already been expended. And so when we talk about unauthorized or authorized, but unissued bonds, that's what we're looking at here. And so it'll be about the money that's been encumbered probably gets expended largely over the course of the next year. And [12:27:38 PM] then after it's been expended the year after that, we will issue the bonds. So there's always going to be. >> A lag time. There is a lag time behind every year. Okay. I just want to make sure that as I communicate numbers out to constituents that I'm talking about the most relevant information I can talk about for their purposes. And so I want to take this conversation and link it back to the earlier slides. I think it's slide 16. That's about their own annual property tax debt, which is increasing from what looks like 450 to $512. And I'm assuming that increase is connected to some combination of. Oh, maybe I should just ask y'all. But my guess is that that's connected to issuing the that that gap, issuing the bonds for the, for the projects that are now [12:28:39 PM] encumbered or as we're spending through it. And then I think. And then the other question that's connected to that is making sure that from the total cip spending, which is slide 32, that we're just talking about the public improvement bonds, or is there other things that are driving that increase of $62? >> You said 532, but you're talking. Do you mean the 512 here, the. >> Four 5552 512 yeah, the $62 is the delta between the two years, the year on year increase. >> Yeah. So that increase is reflecting bonds that we would have sold last year that are now going to be showing up in the next year's tax rate. >> Just the public improvement bonds. >> Just general obligation bonds and bonds. Yeah. So the of the general obligation bonds, I mean in aggregate, about two thirds of those are public improvement bonds. And about a third are non voter approved sources for certificates of obligation or short term [12:29:40 PM] contractual obligations. >> Where do those wind up being in? Slide 32. Out of curiosity. On slide. Are they in the other category? >> Yes. >> Those are included in the other category. >> Okay. I guess it'd be useful. And we can connect afterwards to see if I can get a better breakdown of what the other category looks like. So I can understand, because I think the notes from some of the other slides were a lot of that was convention center. But but I'd like to understand what the CEO portion of that is as well. >> We can break that out. >> But so far everything I just said is mostly accurate. Other than the the point you made about being both pb as well as CEO. Yes. For what's making up the $62 increase from year to year. Okay. The other question [12:30:41 PM] I've got is, and this is building on customer qadri is and a number of other questions, to the extent that this year we're seeing one ATS and other things reflected in the budget change, but it sounds like we have yet to understand any of the other impacts. And I think you've got some stuff there for the social services contracts you're accounting for. But in terms of like the consulting audit, in terms of other aspects of shared services, consolidation, in terms of audit, or anything else that we've touched on in the last couple of months or year that could impact the budget in a whether debit or credit, that is too early to understand what those impacts will be. Is that fair? Outside of the ones that are listed in this report? >> Say that one more time, [12:31:41 PM] please. >> So you've you've accounted for. You've accounted for some changes that are reflected as far as one oats or one Atmos you've accounted for. I think some changes in social services contracts or things that we anticipate doing once we've got full clarity around it. But I don't see here anything regarding like the consulting contracts and the audit. I don't see anything regarding maybe other shared services work or other aspects of one Atmos. Especially given some of the things that are listed in the Gartner report, I. Then there's the audit that was passed earlier this year. So I'm just curious when when do you anticipate some of the things being reflected in future forecasts? >> So we'll have a little bit more information on the progress made on shared services in the coming months. And so determining what, if any, immediate savings that would then be reflected in the proposed budget as we continue [12:32:42 PM] to work and review the contract span, will identify if there are savings there. So that's continued work that's happening, that we were not further far enough along in this timeline to anticipate any savings that could come from that. It's still very much in the discovery and review part, and so we'll have to make those updates as we get further along in the forecast. I mean, the proposed budget process. >> Okay, I'll look for those updates when you're able to share them. And I'm hoping that they come ahead of July 15th if possible. The last thing is just a very first of all, appreciate all the work that went into this and the work that's still being done. And just final comment, which is just. Other folks that have worked in this space have advised me to first go after the slow fat rabbits and then go after the sacred cows. And my fear is that we get to a place where we've decided some [12:33:46 PM] processes are so unpalatable we can't talk about them. And I'm just hopeful that if. We want to have conversations about priorities, about, say, funding wage increases for city staff, that we probably need to have most of these things, if not everything on the table for this discussion in the next couple of months. So with that, I'm looking forward to those updates. Thank you. >> Thank you. Councilmember. Councilmember Fuentes, you're okay, I got it. I have just a couple of quick questions. Do we have any FEMA fund reimbursements, any FEMA reimbursements pending, or have we received all of our FEMA reimbursements from our numerous winter storms? >> I think we've received most of the dollars. We don't have reimbursements included in our forecast at the moment. I think we've received most of the dollars that anticipate. We are appealing some of the decisions [12:34:48 PM] that have been made, so there may be some funding that comes back in, but we don't have additional dollars anticipated right now. >> Thank you. And with regard to the utility revenue being down, is that both utilities, the majority electric, majority water, any sense of that? >> Yeah, I think there was still up year over year is just their year end actual came in a bit below estimate at arco and a bit above at water. And the net effect when you run it through the three year average calculation was that $1.6 million change. >> Okay. And then the last question would be on the housing vouchers. Those vouchers in particular, council member alter mentioned the ppsh, the ones that we're using to support our numerous psh projects at this point. Do we know what the effect of zeroing out housing vouchers would be [12:35:48 PM] on those projects? In other words, do we have a sense of exactly how much of that money is going to support those psh projects? And what would be the effect of of cutting off that flow? I see some stirring in the background there. So. >> Dean, director of Austin housing, yes, the amount that we're looking at for this current fiscal year, 7,700,000. And the impact of that would be those resources are spread out amongst several ps properties. And the absence of that subsidy would drastically impact the cash flow of those properties, thereby making them difficult to operate. Without that [12:36:50 PM] infusion. >> And, and just so I'm clear on how we, we operate that essentially the, the permanent supportive housing will get somebody who was on the streets into housing with supportive services. And then the city is essentially paying their rent or a portion thereof with the housing voucher. Is that essentially how it works? >> Yes. That's correct. >> Okay. So not only will it impact the operations of the overall facility, because obviously the permanent supportive housing is not going to get that revenue. But do you know what the effect would be on the on the people that are in the rooms? >> Yes, there are, I believe, approximately 300 to 350 individuals that would be displaced if the housing voucher program was not funded. >> Great. I just want to highlight that because, I mean, we can't let that happen both for our our projects and for the people that are in them. We need to have stable psh [12:37:51 PM] projects and we definitely don't need to put, you know, 300 to 350 additional folks back on the streets, especially if they're hopefully, you know, getting stabilized and looking toward a better future. Thank you very much, miss Dean. Appreciate it. Last quick question. I saw there was a health insurance increase that we're looking at. Do we have any sense right now of of how much the city is going to bear and if any will be passed on to the employees? >> That 5% is the city contribution. That's what that indicates. We'll be working with hr to understand any plan changes in the next couple of weeks and months. I don't have that information to date. >> Got it. No problem. I just wanted to highlight that. And to council member Siegel's comments. You know, inflation, everybody's getting pinched by inflation. And I, I don't think that a 0% again, I'm only going [12:38:51 PM] to speak for myself. But my sense is that there's a number of council members that would agree with me that I don't know if 0% is realistic given the inflationary situation. I mean, I don't know if we're going to be able to give 4% like we have virtually every year that I've been on the dais. But I just I can't imagine not giving our employees some level of cost of living increase. And I'll leave it at there. Any further questions on the financial forecast? Thank you all very much. And we'll go ahead and move on to the pulled item item number six, and I will turn it over to council member Fuentes. >> Yes. Thank you. Colleagues. I wanted to talk about this item. It's a potential city partnership agreement with a proposed hotel conference center development in del valle. Want to be sure? We had time as a dais for us to have a conversation to answer any questions you may have about the proposal, and also to share why I believe that this is a del valle strong proposal that is of great significance to our del valle community. And as [12:39:53 PM] you've heard from commentary earlier today, as you can see from the community, they want to see what will be kind of first of its kind and meaningful city investment. This potential partnership brings a major economic hub that the del valle community needs. It's 900 permanent, full time jobs above the city's living wage, reliable health benefits and pension. This agreement includes local hiring provisions to ensure our neighbors are prioritized so that people will always. For the people who have always called this community home are first in line to benefit from its growth. This partnership also delivers nearly 12 acres of dedicated public parkland, fully developable, fully public and built for our del valle neighbors, and that includes two full size soccer fields constructed and donated by code-a, valued at 2 million. And that is significant. As someone who has long time championed the expansion of soccer field access, I have [12:40:53 PM] many areas of my district that are earmarked for future soccer field development, but we don't have the funding to actually develop it. So for this proposal to come forward with that level of commitment, it is significant. It also sets aside additional parkland, which the city could use for a future recreation center in del valle, as well as establishes and builds on a del valle ISD internship program. And so the timing of this proposal is ideal. There's no upfront cost to the city. And at a time when we just got the financial forecast and understanding the budget, financial constraints that were under this project will generate long term tax revenue for the city and del valle independent school district, as well as the other taxing jurisdiction, acme central health and councilmember Alyssa, I believe you commented on this earlier. This potential partnership also provides a direct investment into our affordable housing trust fund, which we know is [12:41:54 PM] months away from being zeroed out later this year as we approach our budget conversation. So with all of this in mind, I wanted to ensure that staff made themselves available to answer any questions you have and to also highlight. I did print out copies for you. There is a draft motion sheet that I hope to add to the conversation that is ever evolving, but it really just provides some direction to the city manager as he moves. As council considers this proposal and should he get the authorization and negotiate the agreement, that we ensure that this agreement does not bind the city to use any of our general fund revenue. And since it would be leveraging the hotel occupancy tax revenues, I want to ensure that we have some clarity on that particular usage. And so again, that is just a draft motion sheet for your consideration. We're still working through the finer details of that motion sheet, but just wanted to flag it for your awareness. >> Thank you very much. Council member doctor Johnson thoughts comments. >> Yes. Doctor Johnson [12:42:55 PM] assistant city manager, council member Fuentes, thank you for the great overview. And we're basically here to answer any questions to help the council on this issue. >> Great. Well, then we'll open it up. Any. Councilmember alter. >> I appreciate councilmember Fuentes pulling this item. You know, I think oftentimes these agreements confound the public, right? They think we're writing a check to some third party. And of course, in a day when we talk about all the money we don't have, they say, how can how can you be doing that and not funding our parks or our social services? And, and those things are not that's not how it works, right? We so help just explain both the dollars that are being generated from this, that will contribute to the general fund. So grow that pie, but also the terms under which the payments would be made and where that money is [12:43:56 PM] coming from and what that money can be used for currently. >> Okay. Great question. Let me turn it over to Matt to drill down into that, and I'll chime in as necessary. >> Sounds good. Good afternoon. Matthew Schmidt, division manager with Austin economic development. So really, I mean, this is a public private partnership where we're making an investment into this hotel development to really stimulate that tourism oriented development in the del valle area. Based on initial estimates. What we really do is we do a fiscal impact model based on the capital investments that are made through this project, and then we project out what those impacts could make to the city of Austin based on those revenue streams, specifically to property tax, sales tax, and the hotel occupancy tax that's specifically going to be generated from this project. Based on those specific figures we have received through the application, 985 million, as mentioned, and capital investments specifically for the construction of the hotel and the conference center of that, $985,000,450 million has [12:44:59 PM] been tagged as being most likely being sourced taxable purchases within the city of Austin as well. So we're able to generate again, what is that sales tax going to be generated for the city of Austin? Based on those figures, we've kind of come up to a very conservative figure of about 200 million that would be directly going to the general fund over the 30 year term of the specific agreement. And that's a mixture of the property taxes that are being generated by this project itself, as well as some residential property taxes, based on what we assume will be generated on the new jobs that are being created and brought into the city of Austin. We look at that as a very conservative estimate as well, because we don't look at the full hotel operations over that 30 years. So there's other additional taxable purchases or sales that will be attributed to this project that will most likely see that number increase over the life of the term of the agreement. And then we've had some just a general assumptions with the actual hotel occupancy portion, but we recognize that that's such a variable just due to the nature [12:46:00 PM] of the economic forecast between now and 30 years, that it's hard for us to truly pin down a specific number related to those impacts as well. >> And then in terms of the benefits they're receiving, they're not getting dollars out of the general fund, but instead dollars from the hotel taxes that they're going to be generating and getting a share of that back. Correct? >> That is correct. The way this is currently structured is that we would look at their performance based on their occupancy rates and their room revenues, and then return a portion of that back to the project to support the goals of this project. Okay. >> Yeah. Councilmember. Let me draw an additional distinction. The 985 million investment is deployed probably within the first 3 or 4 years. Our rebate of the hot tax is over a 30 year period. So when you do a present value analysis on that, it represents roughly 88%, 88.8% private, 11.2% public. [12:47:01 PM] And when you look at ratios in the world of economic development, that is a really good number because the standard when you look at economic development research is more like anything 15% or below is considered a good use of public dollars. But I think it's important to know that when you look at it from a present value analysis, our money is stretched over 30 years, not paid upfront, which makes a big difference because their money is deployed upfront. So when council member Fuentes talked about the collective benefit of this, we've also been looking at that strategy to see how it looks in terms of deploying city resources, where we ultimately pick up 200 million plus or whatever in new property tax, which I think is important for the city. So I just wanted to make that distinction because when you look at it from a ratio like financial ratio perspective, it's actually it's actually pretty good deal. >> Very good. Well, I appreciate councilmember Fuentes work on this. I know [12:48:03 PM] it's been a very difficult and moving target, but it's going to be great not only for district two but for the city as a whole. We'll we'll figure out all the details here between now and Thursday, but this is going to allow us to do more as a city. And that is that is really important. So appreciate all your work. >> Councilmember Siegel. >> Thank you, mayor pro tem and councilmember Fuentes for pulling this item. I guess, doctor Johnson, I just want to give you a chance to, you know, explain a little bit more about why this deal is really beneficial to the community. And I guess part of what I've noticed is in addition to, as Matthew shared, the direct property tax revenue, there's also going to be increased sales tax revenue. Also, not only contributions to the city, but also to the county del valle ISD. We heard some speakers earlier. And so and also, you know, good jobs for where, you know, people working [12:49:03 PM] at the hotel can likely afford to live in the city, which is of course, a wonderful thing. So if you could just share any other thoughts you have on why this is a good deal for the city. >> Great question. Councilmember Siegel. I think fundamentally, the ability to help transform del valle, I think that's an important part of this. But when you really start to look at just the collective pieces from the jobs to the parks to the soccer fields, to the contribution to the trust fund, I don't know when you start to look at it collectively, it's actually pretty. It's a good deal, right? I think when you also look at the additional taxes generated, and particularly in a time where it's going to be important for us to focus on growing that tax base, I think it sends a pretty good message in terms of where we're trying to go. Is there things we need to work out? Yes. Will we figure them out? Yes. But I think in terms of what I believe Austin stands for, I think structurally the deal has all of those important elements, [12:50:05 PM] and that's what I really think. >> Thank you Sarah. And I just want to thank councilmember Fuentes for this motion. I really like the idea of how do we protect, you know, historic preservation dollars and cultural arts dollars as a part of this deal. So I look forward to further discussion. Thank you. Mayor pro tem. >> Thank you, councilmember. Councilmember Laine. >> I'm sorry. Thank you. I just want to thank you both for the hard work that's gone into this and and also to councilmember Fuentes for such strong leadership, bringing together economic development deals with the strong fundamentals is no easy task anywhere. And I appreciate the thoughtfulness that's gone into it and the willingness and availability to answer questions offline as we have them. Thank you so much. >> Thank you. >> Thank you all very much. A quick final question from me. So then the just to clarify, the money that we get from this project for the general fund, property taxes and sales taxes, there are no rebates coming out [12:51:07 PM] of those sources of revenue. Is that correct? >> That's correct. >> Thank you very much. And with nothing further. With nothing further than this. Work session will be adjourned at 1251. Thank you all very much.