Closed Caption Log, Council Worksession
Wednesday, May 22, 2002

Note: Since these log files are derived from the Closed Captions created during the Channel 6 live cablecasts, there are occasional spelling and grammatical errors. These Closed Caption logs are not official records of Council Meetings and cannot be relied on for official purposes. For official records or transcripts, please contact the City Clerk at (512) 974-2210.

MAYOR GARCIA: WE DO HAVE A QUOARP OF THE COUNCIL IN THE ROOM. GOOD MORNING. GOOD MORNING. THE CITY MANAGER IS RUNNING ABOUT — ABOUT FIVE MINUTE LATE. SO WE WILL — WE WILL WAIT UNTIL SHE GETS HERE SO WE CAN START. SHOULDN'T BE BUT A FEW MINUTES. THANK YOU.

MAYOR GARCIA: THE CITY MANAGER HAVING ARRIVED, WE ARE READY TO GO. THIS SESSION IS — IS SCHEDULED, IF IT STAYS ON — ON TIME, SCHEDULED TO END AT 3:00 P.M. AND IT HAS — IT HAS SIX MAJOR STEPS, ONE OF THEM BEING REAL EASY, WHICH IS LUNCH. [ LAUGHTER ] BUT WE WILL START WITH THE CITY MANAGER'S RECAP BUDGET AND RETREAT DAY 1. AND THEN WE WILL HAVE STRUCTURAL POLICY DECISIONS, WITH — WITH — WITH THE — WITH THE ONES THAT WE TALKED ABOUT WHEN WE DID DAY 1, THEN WE HAVE THE ONE-TIME BUDGET DECISIONS WE DISCUSSED AND WE WILL AGAIN — AGAIN THIS — THESE TWO RECTANGLES IN TAB 7 AND 8 ARE — ARE DECISIONS THAT EITHER — THAT EITHER HAVE BEEN CONSIDERED AND WILL BE DISCUSSED A LITTLE BIT MORE TODAY, AND THEN — THEN AS YOU NOTICED, IN THE — IN THE — IN THE TWO RECTANGLES, IN TAB 7 AND 8, ITEMS THAT ARE BETWEEN THE TWO RECTANGLES, THE WORD CONSIDER. AND WHAT I WOULD PROPOSE TO THE COUNCIL IS THAT — IS THAT WE CONSIDER THIS ITEM — THESE ITEMS AS — AS GIVING DIRECTION TO THE CITY MANAGER SO THAT IN — AS SHE PREPARES THE BUDGET, SHE KNOWS WHAT THE — WHAT THE DESIRE OF THE COUNCIL IS WITH REGARD TO THESE ITEMS. SO — SO THESE DECISIONS ARE NOT SET IN STONE. BECAUSE WE DON'T DO THOSE DECISIONS UNTIL — UNTIL SEPTEMBER WHEN WE DO THE BUDGET, WE WILL START AT — THE BUDGET PROCESS SOMETIME IN JULY AND GO ALL THE WAY THROUGH SEPTEMBER THE 15th WHEN WE MAKE THE DECISION. THERE WILL BE — MY HOPE IS THAT AS WE MOVE THROUGH THIS PROCESS, THAT THERE WILL BE DISCUSSIONS SIMILAR TO THE ONES THAT ARE IN THE EDITORIAL PAGES OF THE LOCAL DAILY. WHERE WE TALK ABOUT — WHERE THEY TALK ABOUT THE LIBRARIES AND THE FACT THAT — THAT, YOU KNOW, WE SHOULD NOT BE CLOSING LIBRARIES THAT — THAT — THAT CITIZENS AND — AND CORPORATE CITIZENS AND OTHER FOLKS OUGHT TO COME TO THE AID OF THE CITY SO THAT WE MAKE SURE THAT LIBRARIES ARE A CRITICAL PART OF THE SOCIAL FABRIC EQUATION IN THIS CITY, TO STAY OPEN. I HOPE THAT THOSE DISCUSSIONS CONTINUE. AS WE YOU KNOW STRUGGLE, I DON'T WANT TO USE THAT TERM BACK OFF — AS WE MOVE THROUGH THE PROCESS AND — AND PUT ON THE TABLE ALL OF THE DECISIONS THAT — THAT THE COUNCIL WILL HAVE TO MAKE IN THE BUDGET DISCUSSIONS. CITY MANAGER?

FUTRELL: WELL, GOOD MORNING MAYOR AND COUNCIL. I THINK JUST BEGINNING THE DISCUSSION BY MENTIONING THE PAINFUL DECISIONS THAT WE'VE HAD TO MAKE LIKE THE ONE DAY CLOSURE OF PAIRED LIBRARIES. IT IS AN EXAMPLE OF HOW DIFFICULT THE DECISIONS ARE IN FRONT OF US FOR THIS BUDGET. WITH A MUCH LARGER GAP AND MANY OTHER MEASURES THAT MAY HAVE TO COME. WE HAVE RESERVED FOR LATER IN THIS DAY A DISCUSSION OF WHAT WE ARE TRYING TO DO WITH THE LIBRARIES AND SOME IDEAS AND ALTERNATIVES ABOUT WHAT WE MIGHT CAN CONSIDER. BASICALLY, HERE, WELCOME TO DAY 2 OF THE COUNCIL BUDGET RETREAT. OUR STAIRWAY TO HEAVEN. I THINK LAST WEEK WAS AN EXTREMELY SUCCESSFUL WORK SESSION. WE SHOWED A GREAT DEAL OF INFORMATION AND I THINK THE COUNCIL HAD A VALUABLE DIALOGUE. AND YOU PROVED MY HEAVEN ANALOGY WRONG. THAT BALANCING A BUDGET IS LIKE GOING TO HEAVEN, THAT EVERYONE WANTS TO DO IT, BUT NOBODY WANTS TO DO WHAT IT TAKES TO GET THERE. WELL, YOU NOT ONLY AGREED ON WHERE YOU WANT TO GO, THAT STRUCTURAL BALANCE OR HEAVEN IS WHERE WE WANT TO GO. BUT YOU HAVE AGREED ON SOME OF THE MAJOR FUNDAMENTALS ON WHAT IT WILL TAKE TO GET THERE. MANY OF THOSE WE ARE GOING TO RECAP TODAY AND ASK FOR A LITTLE MORE FORMAL DIRECTION FROM COUNCIL ON THOSE DECISIONS. BUT WHEN WE WENT BACK THROUGH WHAT WE ACCOMPLISHED LAST WEEK, WHAT STRUCK ALL OF US WAS THE LEVEL OF AGREEMENT ON MANY OF THE CORE CONCEPTS OF FUNDAMENTALS OF GETTING TO A STRUCTURALLY BALANCED BUDGET. SO UNLIKE — SO NOT UNLIKE ACTUALLY THE OLD LED ZEPPLIN LYRIC, TODAY WE CONTINUE TO CLIMB THAT STAIRWAY TO THEY HAVE VIN. TO NOT SIMPLY BALANCE THE BUDGET THROUGH A HEAVY RELIANCE ON AN ENDING BALANCE OR ONE-TIME SOLUTIONS, TO NOT MERELY DEFER AND COMPOUND A BUDGET GAP FOR THE FOLLOWING YEAR, BUT TO FOCUS ON SOLVING OUR BASIC IMBALANCE AND REVENUES AND EXPENDITURES. IN SHORT, TO NOT PASS THE BUDGET WE CANNOT FULLY IMPLEMENT. BECAUSE THE $72 MILLION GAP WE ARE FACING IS ONE OF THE MOST SIGNIFICANT GAPS PRESENTED TO THE CITY COUNCIL, BECAUSE IN LEAN TIMES WE MUST DO THINGS DIFFERENTLY, OPERATE DIFFERENTLY, PLAN DIFFERENTLY AND PARTNER DIFFERENTLY. IN THE '90'S, WE FOCUSED ON HOW THE CITY COULD BEST USE ALL OF THE ADDITIONAL AND EXCESS REVENUES, RESOURCES. THIS YEAR WE MUST FOCUS ON HOW TO MANAGE WITH FEWER RESOURCES. HOW DO WE LEVERAGE OUR RESOURCES, IMPROVE OUR PROCESSES AND FIND EFFICIENCIES. IN THE '90'S, THE CITY MANAGER PRESENTED A POLICY BUDGET IN JUNE, A PROPOSED BUDGET IN JULY WITH VERY LITTLE TO NO FEEDBACK ON THE FRONT END FROM COUNCIL. THIS YEAR, THE BUDGET PROCESS IS AND MUST BE MORE INTERACTIVE. SO THROUGH THESE BUDGET RETREATS, THE COUNCIL AND THE CITY MANAGER ARE PARTNERING ON THE POLICY FRAMEWORK THAT WILL BE USED IN PREPARING THE CITY MANAGER'S PROPOSED BUDGET. I DO WANT TO CLARIFY SOMETHING AT THIS POINT. THE POLICY ISSUES THAT WE DISCUSSED LAST WEEK WERE INCORRECTLY CHARACTERIZED BY SOME AS THE CITY MANAGER'S BUDGET PLAN. WHAT WE HAVE BEEN DISCUSSING AND WHAT I'M PRESENTING IS NOT A PLAN. IT'S A WAY TO GET POLICY DIRECTION FROM COUNCIL ON HOW I SHOULD PREPARE A PROPOSED BUDGET PLAN. MY BUDGET PLAN IS THE PROPOSED BUDGET THAT YOU WILL THEN REVIEW AND DECIDE ON HOW YOU WANT TO MOVE FORWARD AND APPROVE. THAT WILL BE PREPARED AND PRESENTED IN LATE JULY. THAT PROPOSED BUDGET WILL INCORPORATE THE GUIDANCE THAT YOU PROVIDE TO ME TODAY AND YOU PROVIDED LAST WEEK AND WILL PROVIDE IN FORUMS BETWEEN NOW AND LATE JULY. HOWEVER, AS YOU SAW LAST WEEK, WE WILL BE FAR FROM BALANCED AT THE END OF THE DAY TODAY. THE BUDGET RETREATS WERE NOT INTENDED TO COMPLETELY BALANCE THE BUDGET. PROPOSING A BALANCED BUDGET IS MY TASK BETWEEN NOW AND THE END OF JULY. BUT WHAT WE ARE TRYING TO DO, BECAUSE OF THE SERIOUSNESS OF THE GAP, IS GET CLEAR POLICY DIRECTION FROM THE COUNCIL ON THE CORE DECISIONS THAT GO INTO PROPOSING AND PREPARING A BUDGET. NOW, LET'S TURN TO TODAY'S AGENDA. WE HAVE ATTEMPTED TO GROUP THE FINANCIAL AND BUDGET DECISIONS A LITTLE DIFFERENTLY THIS WEEK. BASED ON OUTCOMES FROM LAST WEEK. SO WE HAVE GROUPED THEM IN FOUR DIFFERENT AREAS. FIRST, STRUCTURAL POLICY DECISIONS. SECOND, ONE-TIME BUDGET DECISIONS. THIRD, DECISIONS REQUIRING MORE POLICY WORK. AND FINALLY, FOURTH, NEXT STEPS. WE WILL BE ASKING FOR COUNCIL VOTE. A VOTE JUST ON DIRECTION. ON EACH OF THE FIRST TWO DECISION CATEGORIES, THE STRUCTURAL POLICY DECISIONS, AND THE ONE-TIME BUDGET DECISIONS. ALL OF WHICH ARE ITEMIZED ON YOUR AGENDA. EACH OF YOU HAS BEEN GIVEN A SMALL NOTEBOOK, SHOULD LOOK SOMETHING LIKE WHAT I HAVE GOT IN MY HAND, IT HAS AN AGENDA, A TABLE OF CONTENTS AND BACKUP INFORMATION ON EACH OF THE DECISIONS BEHIND CORRESPONDING TAB DIVIDERS. THE FIRST CATEGORY, STRUCTURAL POLICY DECISIONS HAVE A MULTI YEAR EFFECT. THE ONLY WAY TO ADDRESS STRUCTURAL IMBALANCES IS TO PERMANENTLY REDUCE EXPENDITURES AND/OR PERMANENTLY INCREASE REVENUES. UNTIL WE RESTORE THAT BALANCE, WE WILL CONTINUE TO HAVE SHORTFALLS EACH YEAR. WE WILL CONTINUE TO PASS BUDGETS THAT CANNOT BE FULLY IMPLEMENTED. THAT REQUIRE US TO SCALE BACK BUDGETED EXPENDITURES ALMOST AS SOON AS YOU APPROVE THE BUDGET. SO LAST WEEK, THROUGH A VERY UNIQUE COLLABORATION, WE HAVE FORMED THROUGH THESE RETREATS, COLLABORATING ON THE FRONT END OF THE BUDGET PROCESS, YOU WILL REACH PRELIMINARY CONSENSUS ON A NUMBER OF IMPORTANT DECISIONS TO END THAT STRUCTURAL IMBALANCE. THE SECOND CATEGORY, ONE-TIME BUDGET DECISIONS ARE A SERIES OF KEY OR CRITICAL ANNUAL BUDGET DECISIONS. YOU MAY OR MAY NOT CONTINUE THOSE IN FUTURE YEARS. AND I BELIEVE THAT LAST WEEK YOU ALSO REACHED PRELIMINARY CONSENSUS ON A NUMBER OF THOSE ONE-TIME BUDGET DECISIONS. THE THIRD CATEGORY ARE DECISIONS REQUIRING ADDITIONAL POLICY WORK. AND THEY REPRESENT SOME VERY TOUGH CHOICES. TOUGH CHOICES FOR THE COMMUNITY, FOR THE COUNCIL, AND FOR THE STAFF. FOR THIS REASON, YOU ASKED FOR ADDITIONAL TIME AND INPUT INTO THESE DECISIONS. THERE ARE THREE AREAS THAT FALL INTO THIS CATEGORY, SOCIAL SERVICE FUNDING, HOUSING FUNDING, SMART GROWTH DIRECTION AND ALL THESE OF THESE KEY DECISIONS ARE BEING REFERRED TO SPECIFIC WORK GROUPS THAT YOU DEFINED LAST WEEK FOR FURTHER EVALUATION. AND THE FOURTH AND FINAL CATEGORY, WHICH IS NEXT STEPS. SO IN NEXT STEPS I WILL HIGHLIGHT KEY EXPENDITURE INCREASES THAT YOU MAY WANT TO BRIEFLY DISCUSS TODAY, THAT ARE PROPOSED FOR NEXT YEAR. THEY ARE INCLUDED BUT ARE NOT THE ONLY THINGS IN APPENDIX B OF YOUR FIVE-YEAR FORECAST. UNDER NEXT STEPS IS WHERE WE WILL ALSO PRESENT A COMPARATIVE REVIEW OF OUR EMPLOYEE BENEFIT PROCESS AND PACKAGE, THIS IS SOMETHING THAT YOU ALSO REQUESTED FROM LAST WEEK'S RETREAT. AND WE WILL BE HAVING OUR OUTSIDE CONSULTANT ON BENEFITS HERE TO DO PART OF THAT PRESENTATION AND ANSWER QUESTIONS. AFTER WE ARE THROUGH TODAY, AFTER WE TRY TO GET THROUGH STRUCTURAL DECISIONS, ONE TIME BUDGET DECISIONS, REVIEW OUR POLICY DECISIONS AND NEXT STEPS, THEN I WILL, IN ACCORDANCE WITH THE CITY CHARTER, BEGIN PREPARING THE CITY MANAGER'S PROPOSED BUDGET FOR YOUR CONSIDERATION. BUT BECAUSE DIFFICULT TIMES CALL FOR DOING BUSINESS DIFFERENTLY, THE COUNCIL MANAGER COLLABORATION THAT WE STARTED WITH THESE RETREATS WILL CONTINUE. I WILL MAINTAIN A PRACTICE OF SCHEDULED TIME WITH EACH OF YOU WEEKLY AND ONE ON ONE MEETINGS AND OTHER FORUMS TO GAIN INSIGHT TO YOUR BUDGET PRIORITIES AS POLICY MAKERS. SO WE HAVE A TEAM IN FRONT OF US, VICKI AND JOHN ARE GOING TO TAKE YOU THROUGH TODAY'S DISCUSSION, STARTING WITH THE FIRST CATEGORY, STRUCTURAL POLICY DECISIONS. AIDING YOU IN THAT DISCUSSION IS A FAIRLY LARGE PACKET OF INFORMATION THAT WE HAVE PROVIDED. THESE ARE RESPONSES TO YOUR FOLLOW-UP BUDGET QUESTIONS. ATTACHED TO THE FRONT IS AN INDEX. AND THAT INDEX BASICALLY CATEGORIZES EACH OF THE FOLLOW-UP QUESTIONS AS A WAY FOR YOU TO KIND OF ACCESS OR USE THIS PACKET FOR EASIER REFERENCE. WITH THAT, I WILL TURN IT OVER, WHO IS STARTING? VICKI OR RUDY?

RUDY. [ LAUGHTER ] RUDY DREW, THE — DREW THE BEAN. GO AHEAD, RUDE..... RUDY.

CITY MANAGER, JUST FOR CLARIFICATION, WE ARE GOING TO TAKE ONE AT A TIME AND STOP AT EACH ONE. JUST TO RECAP, MAYOR, COUNCIL, THE FIRST ITEM THAT WE ARE GOING TO REVIEW IS STRUCTURAL POLICY DECISION NUMBER 1, WHICH IS LOCATED BEHIND TAB 1. THE RECOMMEND — THE RECOMMENDATION THAT WE ARE MAKING HERE IS THAT WE — THAT WE ARE PROJECTING AN ENDING BALANCE IN THE CURRENT YEAR OF $26 MILLION. THAT'S BASICALLY INCORPORATING ALL OF THE SAVINGS INITIATIVES THAT WE HAD — THAT WE PUT INTO PLACE THIS YEAR. IN SPITE OF THE REVENUE LOSSES, THOSE EARLY ACTIONS THAT WE TOOK ALLOWED US TO — TO REALIZE THIS TYPE OF SAVINGS. PART OF THE Q AND A, THEN ALSO PART OF THE SHEET, YOU CAN SEE THAT THERE'S OTHER RESERVES THAT WE MAINTAIN ASSET BY FINANCIAL POLICY. OUR CONTINGENCY RESERVE WHICH IS SEPARATE FROM THIS PROJECTED ENDING BALANCE, OUR EMERGENCY RESERVE WHICH IS ALSO A SEPARATE COMPONENT AND OUR CAPITAL CONTINGENCY RESERVE, WHICH IS AGAIN A SEPARATE COMPONENT OF OUR ENDING BALANCE. SO OUR PROJECTION, BASED ON THE DATE THAT WE HAVE — DATA THAT WE HAVE AVAILABLE AT THIS TIME IS THAT OUR ENDING BALANCE WILL BE $26 MILLION.

FUTRELL: SO WHAT WE ARE GOING TO DO HERE, MAYOR WHAT WE TRIED TO DO ON YOUR ACTUAL AGENDA DOCUMENT IS PUT SOME LANGUAGE AS A STARTING PLACE FOR A DISCUSSION AND AN ACTION FROM COUNCIL. SO WHAT WE ARE ASKING ON THE FIRST STRUCTURAL BUDGET DECISION, WHICH IS HOW TO HANDLE OUR SAVINGS BALANCE, IS TO CONSIDER TO DIRECT THE CITY MANAGER TO CONSIDER USING 50% OF THE GENERAL FUND BEGINNING BALANCE AMOUNT TO FUND 2003 EXPENDITURES. I USE THE WORD CONSIDER BECAUSE I KNOW WE MAY NEED SOME FLEXIBILITY AS WE TRY TO GET THROUGH BALANCING THIS BUDGET. BUT OUR GOAL WOULD BE TO ONLY USE 50% OF THAT AS A WAY FOR US TO MOVE TOWARDS CLOSING THAT STRUCTURAL IMBALANCE. COUNCIL, QUESTIONS ON THAT PARTICULAR ISSUE? THIS IS AGAIN TO GIVE THE CITY MANAGER DIRECTION. WE DISCUSSED THIS LAST WEDNESDAY, IF A MOTION IS MADE, IT WOULD BE TO GIVE THE CITY MANAGER DIRECTION TO PROCEED WITH USING — CONSIDER USING THE 50% OF THE GENERAL FUND BEGINNING BALANCE TO FUND THE '03 EXPENDTURES. I WILL ENTERTAIN A MOTION ON THAT. WE ARE GOING TO GO THROUGH THESE ONE AT A TIME. COUNCILMEMBER WYNN?

WYNN: I WILL MOVE APPROVAL. I DO HAVE A QUESTION. I WANT TO MAKE SURE THAT I UNDERSTAND THE RATIONALE.

MAYOR GARCIA: THERE'S A MOTION AND A SECOND. AGAIN, TO — TO EXPLAIN WHAT WE ARE DOING HERE, WE ARE NOT SAYING THIS IS HOW THE BUDGET IS GOING TO LOOK. THIS IS TO GIVE DIRECTION TO THE CITY MANAGER THAT THIS IS SOMETHING THAT THE COUNCIL WILL LOOK AT [INAUDIBLE] AS WE GO THROUGH THE PROCESS. THE DECISION ON THE BUDGET WILL BE MADE IN SEPTEMBER. AND THINGS MAY CHANGE BETWEEN NOW AND SEPTEMBER. DISCUSSION?

WYNN: MAYOR? SO CITY MANAGER, BY — EXCUSE ME. BY RECOMMENDING THAT WE TAKE 50%, ONLY 50% IN '03 TO START ADDRESSING THIS STRUCTURAL IMBALANCE OR, YOU KNOW, THE CROCODILE GRAPH, IS WHAT YOU ARE SAYING — THAT YOU THINK IT WOULD TAKE — IT'S GOING TO TAKE 24 MONTHS TO — TO FIX THAT STRUCTURAL IMBALANCE? THAT IS IF — AS AN EXAMPLE, IF THE COUNCIL WANTED TO USE 75% OF — OF THE — OF THE SAVINGS, THE CARRY FORWARD, THEN THAT ONLY LEAVES US 25% FOR THE FOLLOWING YEAR. SO THAT WOULD THEN REQUIRE THIS — THIS, YOU KNOW, STRUCTURAL IMBALANCE TO BE CORRECTED IN — IN, YOU KNOW, 15 MONTHS, NOT 24 MONTHS. ARE YOU LOOKING AT IT — IS THAT THE CONTEXT THAT YOU ARE LOOKING AT IT? YOU THINK IT'S GOING TO TAKE TWO YEARS OF REALLY ADDRESSING THE —

FUTRELL: YES.

WYNN: THE PROBLEM THAT WE HAVE.

FUTRELL: I THINK THAT YOU HAVE HIT IT RIGHT ON. VICKI AND RUDY, I'M GOING TO LET YOU JOIN IN IF THERE'S ANYTHING THAT YOU WANT TO ADD. YES, I DO NOT BELIEVE THAT YOU CAN CORRECT THIS SIZE OF A STRUCTURAL IMBALANCE IN ONE YEAR. WE ARE NOT ATTEMPTING TO DO IT IN ONE YEAR. WE ARE GOING TO TRY TO REDUCE THE STRUCTURAL IMBALANCE. ONE OF THE WAYS TO DO THAT IS NOT TO TAKE YOUR ONE-TIME MONEY AND LOAD IT INTO ONGOING EXPENDTURES. SO THE MORE YOU LOAD INTO THE BUDGET, THE MORE TIME IT'S GOING TO TAKE US TO ACTUALLY CLOSE THAT STRUCTURAL BALANCE AND RUDY, VICKI, ANYTHING TO ADD TO THAT?

WYNN: THEN ARE YOU SAYING THAT IT'S LIKELY TO — THAT WE WOULD LIKELY BE USING THE REMAINING 50% IN '04 TO FURTHER THE SORT OF STRUCTURAL WORK THAT WE ARE DOING?

THAT'S THE PROJECTION AT THIS TIME, COUNCILMEMBER, THAT IN '04 WE WOULD USE THE REMAINING AMOUNT AND IMPLEMENT ADDITIONAL ACTIONS IN '04 TO PERMANENTLY — HOPEFULLY PERMANENTLY SOLVE OUR FUNDING IMBALANCE.

WYNN: SO I GUESS THE QUESTION IS DOES IT TAKE US 24 MONTHS OR COULD WE DO THAT IN A SHORTER PERIOD OF TIME? IF WE COULD DO IT IN A SHORTER PERIOD OF TIME, IN THEORY WE COULD USE MORE, A LARGER PERCENTAGE OF THIS YEAR'S CARRY FORWARD FOR '03. BUT YOUR RECOMMENDATION IS IT'S GOING TO TAKE TWO BUDGET CYCLES OR 24 MONTHS TO REALLY ADDRESS THE — THE STRUCTURAL ISSUES THAT WE HAVE?

RIGHT. BASICALLY THE ONLY WAY TO DO IT SOONER WOULD BE TO — TO IMPLEMENT OTHER PERMANENT ACTIONS, EITHER ADDITIONAL REDUCTIONS TO THE BUDGET OR GENERATING NEW ADDITIONAL REVENUES TO FREE THIS MONEY UP. SO THAT WOULD BE THE ONLY OPTION THAT WE HAVE AND BASED ON OUR PROCESS LAST WEEK IT'S GOING TO BE DIFFICULT TO COME UP WITH ANY ADDITIONAL EXPENDITURE REVENUE ACTIONS.

FUTRELL: AND ALSO JUST A CLARIFICATION, I MEAN, OUR HOPE WAS THAT WE COULD DO THIS IN TWO YEARS. OBVIOUSLY, A LOT OF THAT IS GOING TO DEPEND ON WHAT HAPPENS. WITH OUR REVENUE STREAM. SALES TAX, PROPERTY TAX IN THE FUTURE. THE ECONOMY REBOUNDS QUICKER. PROJECTIONS FOR — FOR NEW PERMANENT REVENUE ARE LARGER. WE COULD MOVE MORE QUICKLY. MY CONCERN IS, I THINK MANY OF YOU SAW IT, I THINK IT WAS TWO DAYS AGO, IN THE PAPER, AFTER A COUPLE OF MONTHS OF LEADING INDICATORS, BEING POSITIVE, WELL, GUESS WHAT? SEE — I DON'T THINK ANYONE CAN SEE THE GRAPH, BUT THEY HAVE GONE DOWN AGAIN. IT'S JUST — WE ARE JUST NOT SURE WHAT'S GOING TO HAPPEN. THINGS ARE BOUNCING UP AND DOWN AND KIND OF A RELIABLE PREDICTION RIGHT NOW ISN'T SOMETHING THAT I CAN GUARANTEE YOU.

MAYOR GARCIA: FURTHER QUESTIONS? AGAIN, I GUESS THE BEST WAY TO SAY THAT THIS IS A PRECAUTIONARY MOVE ON THE PART OF THE COUNCIL. WHICH DEVIATES FROM THE MANNER IN WHICH WE HAVE DONE THIS IN THE PAST. IN THE PAST, WE HAVE USED THE WHOLE ENDING BALANCE TO — TO BALANCE THE BUDGET. WHAT THAT DID IS THE DAY WE APPROVE THE BUDGET OR 15 DAYS AFTER THAT, CITY MANAGER START CUTTING THINGS SO THAT THERE COULD BE AN ENDING BALANCE. THIS ONE, YOU KNOW, USES A DIFFERENT APPROACH. SO I — I THINK IT'S A BETTER APPROACH. AND ONE THAT I HOPE WE WILL — WE WILL — WILL GET US TO WHERE WE NEED TO GET. DISCUSSION OR QUESTIONS ON THIS ITEM? MAYOR PRO TEM?

GOODMAN: MAYOR, JUST A COMMENT. I ASSUME, THOUGH, THAT WE ARE EXPECTED TO BE FAIRLY — FAIRLY SOLID IN OUR RECOMMENDATION IN THAT WE ARE ACTUALLY TAKING A VOTE ON DIRECTION RATHER THAN JUST ASSUMING A CONSENSUS.

MAYOR GARCIA: WE ARE TAKING THE VOTE MERELY SO THAT THE CITY MANAGER KNOWS THAT THIS IS SOMETHING THAT WILL PLAY RIGHT AS WE GET TO THE BUDGET DECISIONS. WE ARE NOT MAKING THE BUDGET DECISIONS. AND AS WE MOVE THROUGH THIS, AS SHE MOVES THROUGH THE PROCESS, AND DISCUSSES ALL OF THIS DURING JULY AND AUGUST, THIS THING COULD CHANGE. IF SALES TAX, YOU KNOW, RECOVERS, WHICH IS — YOU KNOW, SOMETHING THAT NOBODY IS PREDICTING, YOU KNOW, WE COULD DO A LITTLE BIT OF ADJUSTING. IF IT — IF IT DROPS FURTHER, WE HAVE ANOTHER CHALLENGE. BUT IN SETTING UP THIS — THESE MEETINGS, WHAT I WANTED TO DO WAS HAVE THE DISCUSSIONS EARLY SO THAT THE COUNCIL WOULD HAVE SOME WAY OF TELLING THE CITY MANAGER HOW WE WANTED TO PROCEED WITH STRUCTURING IN BUDGET. AND WHAT WERE THE THINGS THAT WE THOUGHT WE COULD DO AND WHICH ONES WE THOUGHT WE COULDN'T DO AT THIS STAGE. BECAUSE THIS IS — THIS IS — WE ARE WALKING BASICALLY ON EGG SHELLS, YOU KNOW, AS WE SPEAK. NOT KNOWING EXACTLY WHEN WE ARE GOING TO STEP IN A HOLE.

GOODMAN: I FEEL THEM ON THE BOTTOM OF MY FEET. [ LAUGHTER ]

MAYOR GARCIA: OKAY. FURTHER QUESTIONS?

FUTRELL: WE DID TRY TO WORD THE LANGUAGE SOFTLY TO CONSIDER AS A WAY FOR US ALL TO ACKNOWLEDGE JUST WHAT THE MAYOR SAID, THAT WE DON'T KNOW WHAT'S GOING TO HAPPEN THE NEXT TWO MONTHS SALES TAX AND IT MAY BE THAT WE HAVE TO COME BACK AND ASK FOR — WE MAY PRESENT A BUDGET THAT USES MORE OF THE ENDING BALANCE BECAUSE THAT WAS THE ONLY WAY THAT WE COULD GET TO A BALANCE. BUT THAT OUR GOAL IS TO START CLOSING THAT IMBALANCE.

MAYOR GARCIA: OKAY. FURTHER QUESTIONS? ALL IN FAVOR, SIGNIFY BY SAYING AYE.? OPPOSED, NO. MOTION CARRIES. AGAIN THIS IS FOR THE CITY MANAGER TO CONSIDER USING IT. TAB 2 IS THE — TO CONSIDER LIMITING ONE-TIME REVENUES TO ONLY NON-RECURRING EXPENDITURES SUCH AS CAPITAL EQUIPMENT, IMPLEMENTATION OF NEW SYSTEMS OR C.I.P. PROJECTS. CITY MANAGER, IF YOU COULD EXPLAIN THE RECOMMENDATION AND THE PROPOSED POLICY AMENDMENT TO THE GENERAL FUND POLICY NUMBER 16, WHICH IS ON TAB 2.

FUTRELL: ALL RIGHT. JUST AS THE MAYOR SAID, IF YOU MOVED TO TAB 2, THAT'S WHERE THE ORIGINAL SHEET IS THAT WE DISCUSSED. AND RUDY, VICKI, WHO IS GOING TO TAKE THIS ONE TO WALK THROUGH IT? RUDY?

MAYOR. LET ME START OFF BRIEFLY JUST BY INTRODUCING IT. YOU SAID SOMETHING THAT IS REALLY — REALLY RIGHT ON POINT AND THESE ARE PRECAUTIONARY STEPS. SIMILAR TO USING THE FUND BALANCE, RELYING ON ONE-TIME REVENUES FOR RECURRENT EXPENDITURES JUST CREATES — JUST DEFERS OUR PROBLEMS. WHILE WE DON'T EXPECT THAT THERE WILL BE A GREAT DEAL OF OPPORTUNITIES FOR US TO HAVE WINDFALLS THIS YEAR AS IN THE PAST WHERE WE HAD WINDFALLS AT SALES TAX, DEVELOPMENT FEES, FRANCHISE FEES. IN PRIOR YEARS WE WOULD REALIZE THOSE WINDFALLS, PLUG THEM INTO THE FUND BALANCE OR PLUG THEM INTO THE BUDGET, USE THEM FOR RECURRENT EXPENDITURES AND THEN TODAY WE ARE FACED WITH THE $72 MILLION GAP. WHAT WE ARE ASKING HERE IS THAT WE STRATEGICALLY USE THOSE ONE-TIME REVENUES FOR ONE — EXPENDITURES THAT ARE ONE-TIME IN NATURE. THE AMENDMENT TO THE FINANCIAL POLICY THAT YOU SEE THERE ON — BEHIND PAGE — TAB 2, WE HAVE AN EXISTING POLICY WHICH — WHICH ADDRESSED THAT ISSUE SPECIFICALLY RELATED TO ONLY SALES TAX. WHAT WE ARE — THE AMENDMENT NOW IS JUST EXPANDING THAT POLICY SO THAT ANY OTHER WINDFALLS THAT WE MAY REALIZE WE SET ASIDE AND UTILIZE ONLY FOR — FOR ONE-TIME RELATED EXPENDITURES.

MAYOR GARCIA: AND THIS, TODAY WE ARE JUST GIVING DIRECTION. THIS PARTICULAR AMENDMENT TO THE FINANCIAL POLICY NEEDS TO GO TO THE ORDER AND FINANCE COMMITTEE AND THEN COME UP TO THE COUNCIL SOMETIME IN THE JULY TIME FRAME.

JESS.

MAYOR GARCIA: A — THE LATTER PART OF JUNE OR EARLY UP JULY SO THAT THE COUNCIL THEN CAN CONSIDER THE AMENDMENT TO THE FINANCIAL POLICY. I THINK THAT'S CORRECT. I THINK — I THINK THAT THE COUNCIL HAS TO — THE AUDIT AND FINANCE COMMITTEE I DON'T THINK HAS THE AUTHORITY TO — TO APPROVE — APPROVE POLICY CHANGES.

MAYOR, ACTUALLY WHAT WE DO IS WE INCLUDE ANY REVISIONS TO THE FINANCIAL POLICIES AS A PART OF THE PROPOSED BUDGET SO THAT WHEN YOU ADOPT THE BUDGET, YOU ADOPT THE CHANGES. WE DO BRING THOSE TO THE AUDIT AND FINANCE COMMITTEE MEETING BEFORE WE — BEFORE THE PROPOSED BUDGETINGS FOR THE VOTE.

MAYOR GARCIA: THAT'S HOW WE DO IT, OKAY. THANK YOU VERY MUCH. SO IN THIS ONE, THE — THE MOTION IS TO CONSIDER LIMITED — LIMITING ONE-TIME REVENUES TO ONLY NON-RECURRING EXPENDITURES SUCH AS CAPITAL EQUIPMENT, IMPLEMENTATION OF NEW SYSTEMS OR C.I.P. PROJECTS. FURTHER QUESTIONS FOR THE CITY MANAGER OR STAFF?

GOODMAN: NOT A QUESTION. BUT I JUST WANTED TO MAKE IT VERY CLEAR BECAUSE USUALLY DURING THE BUDGET PROCESS WHEN COUNCILMEMBERS ARE CONTEMPLATING AMENDMENTS THAT THEY WILL MAKE FROM THE DAIS, THE RECOMMENDATIONS FROM CITY STAFF AND AS FAR AS I KNOW THOSE HAVE ALWAYS BEEN TAKEN BY COUNCILMEMBERS, WAS THAT A ONE-TIME ITEM ALWAYS COME OUT OF ONE-TIME REVENUE AND NOT — NOT ROLL INTO THE — THE CONTINUING OPERATIONAL COSTS. SO IF THAT HAPPENED, WHAT I UNDERSTAND IS THAT ONLY — IT ONLY HAPPENED IN ASSUMING THAT SALES TAX WOULD CONTINUE TO BE ROLLED INTO NORMAL OPERATIONAL — ASSUMPTIONS AND — AND EXPENDITURES. BUT — BUT I JUST WANTED TO BE CLEAR BECAUSE I THINK THAT SOME PEOPLE COULD MANAGES READ OR MISHEAR — MISREAD OR MISHEAR THE WAY THAT WAS JUST PRESENTED.

MAYOR GARCIA: LET ME SAY THAT THIS ONE IS — I GUESS A MORE — IT'S NOT A DIRECT DIRECTION TO THE CITY MANAGER BECAUSE WE ARE NOT GOING TO BUDGET ONE-TIME INCREASES IN REVENUE BECAUSE WE DON'T THINK THERE'S GOING TO BE ANY. BUT YOU BROUGHT UP A VERY GOOD POINT. THAT IS, YOU KNOW, LET'S SAY IN DECEMBER, THE SALES TAX REVENUE GOES UP. DOES THAT BECOME A ONE-TIME REVENUE? I DON'T THINK SO IT'S..... BECAUSE IT'S SO VOLATILE. SO I THINK THERE NEEDS TO BE A WAY FOR US TO ADDRESS THE ISSUE OF HOW WE ARE GOING TO DETERMINE WHEN THERE IS EXCESS REVENUE. I WOULD SUSPECT THAT WE WOULD NEED SOME GUIDANCE FROM YOU ALL AS TO HOW THIS WOULD PLAY OUT. WOULD WE HAVE TO HAVE TWO OR THREE MONTHS IN WHICH WE SEE A TREND OR WOULD WE SPEND THE DOLLARS AS SOON AS THEY COME IN.

NORMALLY WHEN WE PREPARE THE PROPOSED BUDGET, THAT'S — THAT USUALLY HAPPENS AROUND THE THIRD QUARTER. BY THAT TIME WE HAVE A REAL GOOD FEEL OF — OF WHAT OUR YEAR-END ESTIMATES ARE. WE MIGHT KNOW EARLY ON, BUT BEING CONSERVATIVE, IT'S JUST — IT'S JUST TOO RISKY TO — AFTER THE FIRST QUARTER TO ASSUME THAT IT'S GOING TO CONTINUE. SO AT THE TIME WE PREPARE THE PROPOSED BUDGET, WE WILL HAVE A MUCH BETTER FEEL.

MAYOR GARCIA: ALL RIGHT.

WYNN: MAYOR?

MAYOR GARCIA: COUNCILMEMBER WYNN?

WYNN: I THINK A RELATED TOPIC OR QUESTION, OUR POLICY CURRENTLY WHEN WE HAVE — WHEN WE HAVE ON BOND PACKAGES IS THAT IT'S MY UNDERSTANDING IS, YOU KNOW, SAY THE VOTERS APPROVE A — YOU KNOW, A MAJOR SERIES OF BOND — OF BOND PROJECTS, WE OF COURSE IN THE SALE OVER A PERIOD OF TIME THAT THE PERCENTAGE OF, YOU KNOW, A ROAD PROJECT OR A PARKS PROJECT OR A LIBRARY PROJECT EVEN IS — IS, YOU KNOW, SET ASIDE AS — AS, YOU KNOW, OPERATING EXPENSES FOR THAT PARTICULAR DEPARTMENT. THAT IS THERE'S SORT OF AN ADMINISTRATIVE, YOU KNOW, CUT, TAKEN OUT OF — OF DEBT MONEY, YOU KNOW, UNDER THE — UNDER THE PRETEXT THAT, WELL, TAKE CITY STAFF, TIME, EFFORT, YOU KNOW TO — YOU KNOW, TO — TO BUILD THESE PROJECTS. I WOULD LIKE TO SEE SOME ANALYSIS, YOU KNOW, OF THAT. WHAT I DON'T WANT TO SEE US DOING, I THINK IT'S SIMILAR TO THIS POLICY, IS THAT ESSENTIALLY WE WERE RELYING ON — ON DEBT. WE ARE RELYING ON, YOU KNOW, VOTER APPROVED BOND PROJECTS EVERY THREE, FOUR, FIVE, SEVEN YEARS. TO FUND A — TO FUND PROBABLY A RELATIVELY SIGNIFICANT PORTION OF OUR JUST ONGOING CITY OPERATIONS. SO — SO I DON'T KNOW HOW THAT PLAYS INTO THIS EXACTLY.

WELL, I THINK, LET ME CLARIFY TO BE SURE THAT WE ARE LOOKING AT THE RIGHT THING. THE ONLY THING, I'M GOING TO ASK FOR EVERYONE TO JUMP IN AND HELP ME HERE A LITTLE BIT. THE ONLY THING THAT WE WOULD EVER TAKE OUT OF BOND, BONDS ARE DEBT TOWARDS A CONSTRUCTION PROJECT WOULD BE THE CONSTRUCTION PROJECT MANAGEMENT COST. IN OTHER WORDS, WHAT IT TAKES TO BUILD THAT PROJECT. BUT WOULD NEVER TAKE OPERATING MONEY, OPERATING OF THAT FACILITY, SO —

WYNN: I MISSPOKE. I DON'T MEAN OPERATING THAT FACILITY. I MEANT ESSENTIALLY AN ADMINISTRATIVE CUT, YOU KNOW, FOR — FOR STAFF. AND SO — SO WHAT I JUST WANT TO UNDERSTAND AND MAKE SURE THAT I'M AWARE OF IS THAT, YOU KNOW, ON ANY, YOU KNOW, IF WE BUILD A BRIDGE OR WE BUILD A BRANCH LIBRARY, I WOULD JUST LIKE TO SEE AND UNDERSTAND THE — WHAT I BELIEVE TO BE THE POLICY OF — OF — I DON'T KNOW WHAT WE CALL IT, BUT AN ADMINISTRATIVE OVERHEAD BECAUSE I WOULDN'T WANT US TO SEE — IN THIS SAME REGARD, SEE US ESSENTIALLY HAVING TO RELY ON — ON, YOU KNOW, CONTINUING —

MAYOR GARCIA: SURE. IS THERE ANOTHER WAY, IN LOOKING AT C.I.P. PROJECTS, YOU NEED TO MAKE SURE THAT AT THE COMPLETION OF THAT PARTICULAR PROJECT, WE DON'T HAVE AN ADDITIONAL REGULAR EXPENSE THAT WOULD HAVE TO BE COMING OUT OF THE — OF THE [INAUDIBLE] FUND BUDGET.

WYNN: THAT AND IF THERE IS AN ADMINISTRATIVE CUT THAT'S NOT DISPROPORTIONATELY MORE THAN WHAT WOULD BE, YOU KNOW, THE TRUE COST TO STAFF TO OVERSEE THIS PROJECT AND NOT HAVE THIS SORT OF ROUNDABOUT WAY TO — TO, YOU KNOW, FUND THIS ONGOING CITY —

MAYOR GARCIA: LET'S SAY YOU BUILD A BRIDGE. A BRIDGE IS NOT GOING TO HAVE PERSONNEL, EQUIPMENT, MAINTENANCE IN THE SAME MANNER AS A REC CENTER OR A LIBRARY. SO, YOU KNOW, WE WOULD HAVE TO LOOK AT THOSE PROJECTS BECAUSE IF WE HAVE A — IF WE HAVE THE CAPITAL TO BUILD IT AND WE HAVE THE — THE MONEY TO PAY THE — THE DEBT SERVICE, YOU BUILD THAT PARTICULAR FACILITY AND YOU DON'T HAVE PERSONNEL TO BRING ON BOARD. MAYBE SOME MAINTENANCE, BUT THAT WOULD BE IN LATER YEARS. WHEREAS SOME OF THE OTHERS WHEN YOU BUILD THEM, YOU START INCURRING EXPENSES RIGHT AWAY. WHEN WE GET TO APPENDIX B WE WILL BE TALKING ABOUT SOME OF THOSE THINGS.

FUTRELL: I WANT TO CLARIFY ON THIS, RUDY, VICKI, I SEE YOU ALL CONFERRING.

BASICALLY, WE DO HAVE AN ESTABLISHED OVERHEAD RATE THAT OUR PUBLIC WORKS DEPARTMENT CALCULATES. THAT RATE IS CALCULATED ANNUALLY AND APPLIED CONSISTENTLY THROUGHOUT EACH PROJECT. THAT IN ADDITION TO — TO ACTUAL REIMBURSEMENT FOR — FOR STAFF TIME, BASED ON, YOU KNOW, TIME — ACTUAL TIME SPENT ON A PROJECT AND WE CAN GIVE YOU MORE DETAILS ON THE — ON THE RESPONSE.

AND THERE IS A COMPONENT OF THAT, THAT DOES GO TO THE SUPPORT SERVICES FUND TO SUPPORT — IT'S ALLOCATED JUST AS WE WOULD ALLOCATE COSTS TO — TO THE WATER AND WASTEWATER UTILITY OR THE GENERAL FUND OR ANYWHERE ELSE BECAUSE OBVIOUSLY COUNCIL SPENDS TIME CONSIDERING CONSTRUCTION PROJECTS, THE LAW DEPARTMENT SPENDS TIME CONSULTING ON IT. WE PAY THE SALARIES AND PROCESS CHECKS FOR THE PROJECT. SO IT'S — IT'S A — A COST ALOE CASE PLAN WITH A METHODOLOGY THAT IS INTENDED TO COVER COSTS ASSOCIATED WITH THOSE PROJECTS JUST AS IF THEY WERE BEING MANAGED BY AN OUTSIDE PARTY WHO HAD SIMILAR COSTS.

FUTRELL: AND IF I REMEMBER CORRECTLY, VICKI, WE RECENTLY DID SORT OF A REVIEW OF HOW PRIVATE CONSTRUCTION PROJECTS CALCULATE AND CHARGE OVERHEAD INTO THEIR BIDS WITH WHAT WE HAVE DONE INTERNALLY AND I WILL PROBABLY TRY TO ADD THAT SO THAT YOU CAN SEE HOW OUR DOLLARS AND OUR FORM LA AND OUR METHODOLOGY FOR THE CONSTRUCTION AND SUPPORT FOR THAT CONSTRUCTION MATCH UP. DOES THAT HELP?

THAT HELPS. BUT I'M JUST CAUTIOUS THAT WE GET INTO A — A POLICY TO WHEREAS AN EXAMPLE, IF A SIGNIFICANT BOND PROPOSAL ISN'T APPROVED BY VOTERS AND SAY WE DON'T SELL HUNDREDS OF MILLIONS OF DOLLARS WORTH OF C.I.P. PROJECTS OVER A FIVE YEAR PERIOD, IF OUR PUBLIC WORKS DEPARTMENT IS PROPORTIONATELY FUNDED BY THE OVERHEAD PORTION OF THESE LIKELY FUTURE C.I.P. PROJECTS, IF THE VOTERS REJECT THEM, I MEAN, YOU KNOW, WE HAVE THESE FIXED EXPENSES IN PUBLIC WORKS, WE ARE NOT HIRING NEW PEOPLE. IF VOTERS DON'T APPROVE THEM, THERE'S NOT GOING TO BE THE OVERHEAD PORTION GOING TO PUBLIC WORKS, THERE MIGHT BE SORT OF FURTHER —

FUTRELL: IN FACT, WERE WE FOR EXAMPLE TO DECIDE AS A COMMUNITY WE WEREN'T GOING TO DO A NEW BOND PACKAGE, THAT WE WERE GOING TO TAKE A BREATHER AND NOT ISSUE DEBT AND FUND NEW FACILITIES AND CONSTRUCT THEM, WE WOULD HAVE REDUCTIONS IN THAT PORTION OF THE PUBLIC WORKS DEPARTMENT. THEY TRY TO MAINTAIN A CERTAIN LEVEL OF STAFFING THAT ALLOWS THEM TO FLEKS UP AND FLEX UP AND FLEX DONE THROUGH ATTRITIONS AND VACANCIES. BUT YOU ARE RIGHT IF THERE'S A PERIOD OF TIME TIME WE CHOOSE NOT TO TAKE OUT DEBT OR BONDS, WE WOULD HAVE TO LOOK AT THE STAFFING LEVEL OF THE PUBLIC WORKS DEPARTMENT.

MAYOR GARCIA: OKAY. IT'S THERE A MOTION ON TAB 2? ON THE ONE-TIME REVENUES.

GOODMAN: MOVE APPROVAL, MAYOR.

MAYOR GARCIA: THERE'S A MOTION BY THE MAYOR PRO TEM. SECONDED BY COUNCILMEMBER SLUSHER. DISCUSSION? ALL IN FAVOR, SIGNIFY BY SAYING AYE.

AYE.

OPPOSED, NO. MOTION CARRIES. ON A VOTE OF 7 TO 0. TAB 3 IS CONSIDER INCREASING THE 2002-2003 ELECTRIC UTILITY TRANSFER TO THE MAXIMUM RATE OF 9.1.

MAYOR AND COUNCIL, OUR CURRENT ELECTRIC UTILITY TRANSFER IS AT — IS SET AT 8.8% IN THE YEAR 2002. THAT BROUGHT IN ABOUT $68.9 MILLION, IN 2003 IT'S PROJECTED TO BRING IN $70.2 MILLION.

MAYOR GARCIA: 8.8 OR 9.1.

AT 8.8. COUNCIL DOES HAVE A RESOLUTION THAT IT PASSED IN 1999 THAT STATES THAT THE RANGE OF THE TRANSFER COULD — CAN VARY FROM 6.6 TO 9.1. THIS IS SOMETHING THAT — THAT THE BOND RATING AGENCIES ARE WELL AWARE OF. AND WE BELIEVE THAT WE CAN RAISE THE — THE TRANSFER TO THE 9.1 LEVEL WITHOUT EXPERIENCING ANY SERIOUS BACKLASH FROM THE RATING AGENCIES. AND I BELIEVE THAT WOULD GET US IN APPROXIMATELY $2.3 MILLION, IS THAT CORRECT?

UH-HUH.

MAYOR GARCIA: SO THE 9.1% PRODUCES HOW MUCH IN TOTAL?

FUTRELL: I HAVE 2.5.

MAYOR GARCIA: 2.5 OVER 69.8 OR —

OVER THE 70.2.

OKAY. SO IT WOULD BE LIKE 73?

YES, SIR.

72.7.

72.7.

YES, SIR.

MAYOR GARCIA: OKAY, SO THAT'S LIKE $3.8 MILLION MORE THAN WHAT — WHAT 8.8 WAS PRODUCING IN '02? CORRECT?

MAYOR GARCIA: IS THAT THE NUMBER THAT YOU USED AT THE TIME THAT YOU DID THE DELTA AND CAME DOWN.

YES, SIR, WE USED $2.5 MILLION.

MAYOR GARCIA: 2.5?

YES.

THE FORECAST INCLUDED THE 70 MILLION.

MAYOR GARCIA: OKAY, ALL RIGHT. DISCUSSION?

FUTRELL: I THINK OUR RECOMMENDATION HERE IS TO KEEP YOU WITHIN YOUR RESOLUTION, BUT TO TRY TO MAXIMIZE THE INVESTMENT THAT AUSTIN ENERGY IS GIVING BACK TO THE — BASICALLY THE SHAREHOLDERS IN AUSTIN.

MAYOR GARCIA: I WILL ENTERTAIN A MOTION TO THIS ONE.

SLUSHER: SO MOVE.

MAYOR GARCIA: MOTION BY COUNCILMEMBER SLUSHER, I AM SECOND THIS ONE — I WILL SECOND THIS ONE MYSELF. DISCUSSION? ALL IN FAVOR, SIGNIFY BY SAYING AYE.

AYE.

OPPOSED, NO. MOTION CARRIES. MAY I ASK YOU ALL A QUESTION. I DON'T KNOW, DID WE BRING EXTRA COPIES FOR EVERYBODY? WE HAVE A DOCUMENT LIKE THIS AT OUR OFFICE PREPARED. DO YOU HAVE ANYTHING LIKE THIS, RUDY.

I'M NOT SURE WHAT THAT IS, MAYOR.

MAYOR GARCIA: IT'S THAT — STARTING WITH A GAP OF 71.8, MOVING THROUGH, WE HAD GOTTEN DOWN TO — TO ABOUT 29.5.

WE CAN USE THIS. THIS IS PROBABLY GOOD ENOUGH HERE.

MAYOR GARCIA: OKAY. PAUL, YOU CAN MAKE SOME COPIES FOR THE COUNCIL.

FUTRELL: BASICALLY, THIS OF OUR RUNNING TOTAL OF DECISIONS THAT YOU HAVE MADE IN ESTIMATED AMOUNTS THAT THIS GOES TOWARDS REDUX, REDUCING OUR GAP.

THE NEXT ONE IS TO CONSIDER ESTABLISHING A RESERVE OF $33 MILLION IN THE HOSPITAL FUND AS A SAFEGUARD AGAINST THE LOSS OF DISPROPORTIONATE SHARE FUNDING.

FUTRELL: THIS IS BEHIND TAB 4. VICKI ARE YOU GOING TO TAKE THE LEAD ON THIS ONE.

I WILL TALK ABOUT THIS ONE.

THE HOSPITAL FUND HAS MAINTAINED A BALANCE IN EXCESS OF $30 MILLION FOR SEVERAL YEARS. AS WE EXPLAINED LAST WEEK, OUR LARGEST SINGLE SOURCE OF MONEY COMING INTO THE HOSPITAL FUND IS DISPROPORTIONATE SHARE FUNDING. AND THE WAY WE USE THAT IS TO FUND OUR PRIMARY CARE CLINICS, TO THE TUNE OF ABOUT $8 MILLION A YEAR. AND THEN ABOUT $3 MILLION IN THAT RANGINGS TO GENERAL FUND-RELATED ITEMS ASSOCIATED WITH THE SETON CONTRACT, SUCH AS INFLATION FACTORS FOR — FOR IF I..... PHYSICIANS, SERVICES AND DENTAL CARE. THEN A FEW STAFF-RELATED COSTS. WHAT HAPPENS IS WE GET DIRECTLY 16% OF THE DISPROPORTIONATE SHARE REVENUE AND THEN THROUGH THE SETON LEASE, THEY PAY US ANOTHER 46.2%. THE OTHER IS THE TOBACCO SETTLEMENT FUNDING, YOU CAN SEE ON THE SHEET NEAR THE BOTTOM, THERE IS HISTORICAL INFORMATION ON TOBACCO SETTLEMENT. IT HAS BEEN STEADILY DECLINING, WE EXPECT IN THE FUTURE THAT IT WILL RANGE IN THE 3 TO $400,000 PER YEAR AMOUNTS.

MAYOR GARCIA: WHAT MIGHT BE HELPFUL IS ON PAGE 10 OF THE NOTEBOOK, THERE IS A FUND SUMMARY THAT OUTLINES BRACKENRIDGE HOSPITAL FUND AND — AND — BEGINNING BALANCE FOR — FOR — THIS IS THE ESTIMATED COLUMN ON THE RIGHT, WE COULD ACTUALLY GO TO THE ACTUAL COLUMN ON THE LEFT AS — ACE BETTER ONE. BUT THAT WAS 2001-2002. THE ONE THAT — I MEAN 2001. THE ONE ON THE RIGHT IS THE ONE THAT I THINK WE WOULD USE, THAT ONE HAD AT THE BEGINNING $35 MILLION. — SHOWS WHAT THE REVENUE ENDS. IT HAS AN ENDING BALANCE OF 41 MILLION DOLLAR. YOU ARE SAYING OF THAT, THE POLICY SHOULD BE THAT WE KEEP 33 MILLION IN THE — IN THE RESERVE AS A SAFEGUARD AGAINST —

THE LOSS OF FUTURE FUNDING.

DISPROPORTIONATE SHARE. THAT WOULD GIVE US TIME TO FUND THE CLINICS IN THE GENERAL FUND COST FOR A THREE YEAR PERIOD — OVER WHICH — OVER WHICH TIME WE COULD LOOK FOR OTHER SOURCES OF REVENUE TO COVER THIS. IN ADDITION I BELIEVE WE ARE RECOMMENDING THEY ARE AS NEAR THE BOTTOM A RESERVE OF A MILLION FOR THE DISCONTINUANCE OF OPERATIONS. I RECOMMEND THAT STAY IN PLACE, ALSO, SO THE TOTAL FUND THAT WE KEPT WOULD BE ABOUT 34 MILLION.

IN THIS — IN THIS SCHEDULE, WE HAVE — WE HAVE DISPRO AT 3.2 MILLION AND THEN AN ADDITIONAL LEASE PAYMENT, I GUESS THAT'S DISPRO MONEY, TOO, OF 9 MILLION. ARE WE TALKING ABOUT THAT, THE LOSS OF THAT ONE OR THE LOSS OF — OF THE FIRST ONE?

WELL, IT WOULD BE — WERE DISCONTINUED IT WOULD GO AWAY. I DON'T THINK WE ANTICIPATE LOSING THE ADDITIONAL LEASE PAYMENTS. IT'S IF DISPRO DRIVES UP, IF THE FEDS DON'T FUND IT ANYMORE, WE WOULDN'T GET EITHER PART OR WE MAY GET MUCH LESS OF EITHER PART.

JOHN, DID YOU HAVE SOMETHING THAT YOU NEEDED TO ADD THERE.

YEAH, I JUST WANTED TO ADD —

FUTRELL: THIS IS WHAT HAPPENS WHEN YOU HAVE AN ACTING AND CURRENT CFO, DOUBLE BANG FOR THE BUCK.

UNDER THE WORST CASE SCENARIO OF DISPRO WERE TO GO AWAY ALTOGETHER, WE WOULD LOSE BOTH OF THOSE LINE ITEMS.

MAYOR GARCIA: THAT'S NOT REALLY SOMETHING THAT I HAVE HEARD ANYBODY SAY THAT IT'S GOING TO GO AWAY TOTALLY.

IT'S NOT, BUT IT'S ALSO, IT'S A FUNDING SOURCE THAT WE REALLY DON'T HAVE A LOT OF CONTROL OVER. IT'S NOT A TAX THAT WE LEVEE, NOT A FEE THAT WE ASSESS. IT COMES FROM A — ESSENTIALLY FROM A — INITIALLY FROM FEDERAL POLICY AND THEN THROUGH THE STATE. THE NUMBERS HAVE GONE UP AND DOWN OVER THE YEARS. IT STARTED OUT WITH A BIG BANG IN THE EARLY TO MID 90s AND THEN WAS REDUCED SUBSTANTIALLY. IN FACT IT HAS GONE UP THIS YEAR BECAUSE OF SOME CHANGES THAT THE STATE HAS MADE IN TERMS OF THE ALLOCATION OF DISPRO. BUT I WOULD NOT CHARACTERIZE IT AS AN ENTIRELY STABLE FUNDING SOURCE.

MAYOR GARCIA: I UNDERSTAND THAT IT'S NOT A STABLE FUNDING SOURCE. BUT — BUT THEN THE QUESTION IS — THE QUESTION IS WHAT IS THE — WHAT IS THE PROJECTION FOR LET'S SAY THE NEXT FIVE YEARS. I SUSPECT THAT OUR FOLKS IN WASHINGTON MAY BE ABLE TO TELL US, YOU KNOW, WHAT THE PICTURE IS LOOKING LIKE. THIS IS ALL FEDERAL MONIES ISN'T IT?

YES, IT IS.

MAYOR GARCIA: NOW, YOU DON'T NEED TO LEAVE — YOU CAN STAY — THE POLICY IS TO TAKE $40 MILLION AND — AND OUT OF THIS 40 — I MEAN 33 OUT OF THE 40 AND THEN THE BALANCE WOULD THEN GO AGAINST THE — THE DEFICIT FOR THIS YEAR?

YES, SIR.

MAYOR GARCIA: WHICH WOULD BE — WOULD BE 6.5 MILLION.

FUTRELL: ABOUT 6.5 MILLION.

MAYOR GARCIA: SO THAT'S WHAT THIS DECISION IS ABOUT, TRANSFERRING 6.5 MILLION AND BY DOING SO OUR FQHC FUND — OPERATION CAN STILL BE FUNDED OUT OF — OUT OF THE HOSPITAL FUND. OKAY.

FUTRELL: AND YOU HAVE A THREE-YEAR BACKUP PLAN. IF SOMETHING WENT WRONG, THE FEDS FOR ANY REASON WERE TO CHANGE AND DROP DISPRO DRAMATICALLY OR GET RID OF IT. IN FACT WHEN WE WERE ORIGINALLY NEGOTIATING THE SETON LEASE WAS WHAT WE ALL THOUGHT WAS GOING TO HAPPEN AND DIDN'T. YOU WOULD HAVE THREE YEARS TO FIND ALTERNATIVE FUNDING SOURCES FOR THE CLINICS. WITHOUT HAVING TO TAP INTO THE GENERAL FUND.

MAYOR GARCIA: COUNCIL QUESTIONS?

FUTRELL: I KIND OF LIKE THE DOUBLE TEAM.

MAYOR GARCIA: I WILL ENTERTAIN A MOTION, THIS CONSIDERS REDUCING THIS AMOUNT BEING TRANSFERRED TO THE GENERAL FUND WOULD REDUCE THE — WOULD REDUCE THE DEFICIT BY 6.5 MILLION. AND LEAVES 33 MILLION IN THE FUND AND ALSO LEAVES ALL THE REVENUE THAT'S GOING TO BE COMING IN FROM DISPRO AND OTHER FUND SOURCES INTACT THEIR '03.

GOODMAN:

GOODMAN: THE BOOKKEEPING IN THIS ONE IS A LITTLE BEYOND ME, BUT I WILL MOVE APPROVAL.

MAYOR GARCIA: OKAY. SO THAT WE CAN GIVE YOU THE ASSURANCE THAT THE — THAT THE ACCOUNTING AND BOOKKEEPING IS OKAY, I WILL SECOND IT — WELL, ACTUALLY, COUNCILMEMBER GRIFFITH SECONDED THAT. WHAT WE HAVE IS AT THE END OF THIS YEAR WE WILL HAVE 40 MILLION. WE ARE GOING TO PUT 33 MILLION ASIDE AND MAKE SURE THAT OUR CLINICS OPERATE THE WAY THEY SHOULD AND, YOU KNOW, MR. PENA IS HERE, I'M SURE THAT'S ONE OF THE THINGS THAT HE'S LOOKING AT IS HOW ARE WE GOING TO ENSURE THAT WE PROVIDE STREAM OF SERVICES IN THOSE PARTICULARLY CRITICAL AREAS. WE DO. THIS ALLOWS US TO TAKE SOME MONEY AND REDUCE THE — THE FUND — THE FUND IMBALANCE. THERE'S A MOTION AND SECOND. ALL IN FAVOR OPPOSED, NO. MOTION CARRIES. TAB 5 IS ONE THAT ALWAYS HAS A LOT OF DISCUSSION. THE CITY MANAGER WILL PROBABLY HAVE MORE DISCUSSION IN JULY AND AUGUST ON THIS ONE. INCREASING FEES TO BRING FEES MORE IN LINE WITH COSTS OF SERVICES AND TO INTRODUCE SOME NEW FEES FOR ESPECIALLIZED SERVICES WHICH ARE CURRENTLY PROVIDED AT NO COST TO USERS. THAT ALWAYS IS AN INTERESTING SUBJECT DURING THE BUDGET SESSIONS.

FUTRELL: THERE'S A LOT OF INFORMATION THAT WAS PROVIDED IN FOLLOW-UP QUESTIONS THAT COUNCILMEMBERS ASKED TO SEE THE REPORT, TO SEE SOME OF THE DETAIL OF THE STUDY THAT WE HAD DONE ON FEES. AND AS WE TALKED ABOUT LAST WEEK, THE CONSULTANTS CAME UP WITH A MUCH LARGER NUMBER THAT THEY THOUGHT WE COULD GAIN THROUGH FEES. NEW FEES AND FEE INCREASES. WE DO NOT BELIEVE THAT ALL OF THOSE ARE VIABLE HERE. AND — IN THIS COMMUNITY FOR A VARIETY OF REASONS, INCLUDING ACCESS TO SERVICES, BUT WE DO BELIEVE THAT THERE ARE SOME BENEFITS TO BE GAINED HERE. OUR VERY, VERY ROUGH ESTIMATE IS ABOUT — ISN'T IT ABOUT 2.3?

YES.

FUTRELL: MILLION, THAT WE THINK WE CAN GET IN NEW OR RAISED FEES. THIS IS A VERY GENERAL DIRECTION. WE ARE JUST ASKING THE QUESTION, WOULD YOU LIKE US TO LOOK AT AND SEE AS PART OF THE PROPOSED BUDGET, WHERE WE THINK THERE ARE APPROPRIATE COST OF SERVICE INCREASES AND/OR NEW FEES? AND TO TEMPER THAT, WITH — WITH UNDERSTANDING THAT IN HARD TIMES, HARD TIMES FOR OUR CITIZENS, ALSO MEANS THAT ACCESS TO SERVICES AND RAISED FEES CAN PRESENT A PROBLEM. SO WE INTEND TO BE VERY CAREFUL AND CAUTIOUS ABOUT WHAT WE RECOMMEND. IN ADDITION TO THAT, WE HAD MANY COUNCILMEMBERS EXPRESS A CONCERN OF — ON DEVELOPMENT FEES. THAT BY GOING TO AND RAISING DEVELOPMENT FEES WE MIGHT ACTUALLY EXACERBATE THE COST OF HOUSING. IN THE COMMUNITY AND IN OUR PRELIMINARY RECOMMENDATION WE DO NOT HAVE INCREASES TO DEVELOPMENT FEES. OUR DEVELOPMENT FEES IN COMPARISON WITH OTHER COMMUNITIES ARE ALREADY SUBSTANTIAL. RUDY, VICKI, DID YOU HAVE ANYTHING ON THIS ONE WE WANT TO ADD?

[ONE MOMENT PLEASE FOR CHANGE IN CAPTIONERS]NO CARRIERRINGCONNECT 1200 IRKSZ AND —

AND AGAIN THE MANAGER IS CORRECT THAT AS PART OF THE PROPOSED BUDGET WE WOULD HAVE ACTUAL FEES WE WOULD COME FORWARD WITH. THIS IS JUST A PRELIMINARY PROPOSAL WE HAVE DONE TODAY.

MAYOR GARCIA: SO THAT ONE IS 2.4 MILLION, AND IT GETS US DOWN TO A SHORTFALL OF ABOUT 47.4 MILLION. AND I GUESS THIS IS MORE OF A GENERAL DIRECTION BECAUSE I DON'T THINK WE'RE TALKING ABOUT SPECIFIC FEE SCHEDULES HERE, ARE WE?

NO.

MAYOR GARCIA: SO WE'RE GOING TO LOOK AT THE FEES THAT WE HAVE TO SEE WHETHER THEY COVER THE COST OF SERVICE AND ALSO LOOK AT HOW OUR FEES COMPARE WITH OTHER JURISDICTIONS.

ALVAREZ: MAYOR, I DID WANT TO GET SOME INFORMATION ON THE ANIMAL REGISTRATION FEE. IT'S KIND OF HARD TO TELL FROM THE BACKUP WHAT THE PROPOSAL IS, BUT IN TERMED OF WE HAVE A SCHEDULE RIGHT NOW FOR THE INDIGENT OR PEOPLE WITH LIMITED RESOURCES. AND THEN THERE'S THE REGULAR RATE. I'M TRYING TO FIGURE OUT — I THINK WHEN I SAW IT LAST WEEK WE JUST HAD ONE RATE AND I JUST WAS WONDERING HOW THAT WOULD BE HANDLED AND IF WE WERE GOING TO INCREASE THAT ANIMAL REGISTRATION FEE.

FUTRELL: I COULDN'T GIVE YOU THE DETAIL ON IT YET, BUT I KNOW WE'VE BEEN VERY CAREFUL IN ALL OF OUR ANIMAL CARE AND ANIMAL REGISTRATION PROCESSES TO MAKE SURE THAT WE HAVE SLIDING FEES AND SCALES FOR THE INDIGENT. FOR EXAMPLE, WE HAVE LOW COST SPAY AND NEUTER PROGRAMS IN PLACE FOR CITIZENS OF AUSTIN. WE HAVE — WIBL WE — I BELIEVE WE ALSO HAVE SOME SLIDING FEES SCALES ALSO ON ADOPTION AND I THINK THEY ARE ALSO INCORPORATED IN THE ANIMAL REGISTRATION FEE. BUT I WOULD NEED TO GET YOU BETTER DETAIL. AND CERTAINLY IF AS WE TALK ABOUT THESE AND MOVE FORWARD, IF THERE'S AN INTEREST IN A FEE, BUT YOU WOULD LIKE TO HAVE SOME SAFEGUARDS FOR CERTAIN COMPONENTS OF THE COMMUNITY, THOSE ARE THINGS WE CAN EXPLORE AND TRY TO PUT INTO PLACE.

MAYOR GARCIA: FURTHER QUESTIONS ON THE FEE ISSUE?

GOODMAN:: MAYOR, NOT A QUESTION, BUT SOME COMMENTS HAVE BEEN COMING IN FROM FOLKS WHO SERVE IN THE COMMUNITY ACTION NETWORK AND AFFORDABLE HOUSING COMMITTEE, NOT SPECIFICS THAT THEY WANT TO OFFICIALLY RECOMMEND, BUT WHEN WE LOOK AT THE DIFFERENT FEES, I KNOW A COUPLE OF THEM SAID FEES, COUNCIL COULD STOP WAIVING SO MANY FEES UNLESS THERE'S A CLEAR AND SPECIFIC CRITERIA FOR A HARDSHIP CASE OR SOMETHING LIKE THAT. BUT THE OTHER ONE WAS A SUGGESTION THAT ON DEVELOPMENT FEES THAT PERHAPS WE COULD REDUCE THE FEES FOR DEVELOPMENT IN THE DESIRED DEVELOPMENT ZONE OR RESTORE PART OF THEM, BUT MAKE THE WAIVER FEES ONLY THERE FOR SMART HOUSING, NOT FOR HIGH DLR GENTRIFICATION — DOLLAR GENTRIFICATION OR HOUSING THAT COULD CONTRIBUTE TO GENTRIFICATION. ANYWAY, THERE SEEMS TO BE A WIDE RANGE ON THE MENU THAT WE MAY BE ABLE TO LOOK AT IF WE LOOK AT FEES. SO BY TAKING THIS ACTION WE'RE NOT TAKING SPECIFIC ACTION ON ANY FEES, SUCH AS THE ONE THAT COUNCILMEMBER ALVAREZ MENTIONED, RIGHT?

FUTRELL: THAT'S RIGHT. AND IN ADDITION TO THAT, THE MAYOR PRO TEM HAS MENTIONED THE FACT THAT AS SMART OF SMART GROWTH, PROBABLY THREE, FOUR YEARS AGO, WE REDUCED BOTH DEVELOPMENT FEES AND CAPITAL FEES IN THE DESIRED DEVELOPMENT ZONE. SO AS A WAY TO HAVE DEVELOPERS START THINKING ABOUT BUILDING AND MOVING FROM THE DRINKING WATER PROTECTION ZONE TO THE DESIRED DEVELOPMENT ZONE, WE MADE THE FEES CHEAPER. AND WE DID THAT ON A PRO RATA SLIDING SCALE. THEY WERE THE CHEAPEST IN THE URBAN CORE, THE CITY LIMITS THEY WERE LITTLE LARGER AND IN THE ETJ THEY WERE A LITTLE LARGERMENT IT'S SORT OF OUR SPRAWL WALL SON SEPTEMBER. BUT IT'S PART OF WHAT YOU WILL BE DISCUSSING LATER, WHICH IS THE ITEMS THAT NEED ADDITIONAL POLICY WORK, THE WHOLE SMART GROWTH COMPONENT, INCLUDING DO YOU WANT TO CONTINUE TO HAVE FEE WAIVERS AND FOR WHAT? MAYBE THIS IS NO LONGER DIED TIDE TO LOCATION. MAYBE IT IS TIED TO AFFORDABLE HOUSING OR OTHER GOALS. SO WE EXPECT A FULL DISCUSSION AND POSSIBLY A NUMBER OF DIVISIONS IN YOUR POLICY AND PRACTICE ON SMART GROWTH. ALSO IN ANY OF THE SPECIAL WORK GROUPS THAT YOU'VE TALKED ABOUT, AND ONE OF THOSE INCLUDED K.A.N. — C.A.N. ARE SWRD INTERESTED IN PARTICULAR FEES OR PARTICULAR ITEMS, WE CAN DO BUDGET PRESENTATIONS SO WE GET THEIR FEEDBACK' THE PROPOSALS.

MAYOR GARCIA: LET ME SAY THAT LIKE YOU HAVING BEEN ON THE CAMPAIGN TRAIL A LITTLE BIT BEFORE YOU, THAT DISCUSSION WAS VERY PREVALENT DURING THOSE FORUMS AND I THINK IT'S ONE THAT EVERYBODY WOULD LIKE TO RE REVISIT. I THINK COUNCILMEMBER GRIFFITH AND I TALKED ABOUT THAT. AND I GUESS WHAT THE COUNCIL IS SAYING IS WE NEED TO LOOK AT THAT TO SEE IF WE CAN LOOK AT THE FEES IN THE DESIRED DEVELOPMENT ZONE GIVEN WHAT WE HAVE IN THE WAY OF INVENTORY AT THIS TIME. COUNCILMEMBER WYNN, YOU PROBABLY ARE A BETTER JUDGE OF HOW THAT CAN TAKE SHAPE.

FUTRELL: AND I THINK, COUNCILMEMBER WYNN, DREW THE SHORT STRAW ON THAT ONE LAST WEEK ANYWAY AND I THINK THE SMART GROWTH DISCUSSION IS GOING TO BE DEFERRED TO THE ECONOMIC DEVELOPMENT TASKFORCE TO GET SOME SUGGESTIONS AND IDEAS.

SLUSHER: I'M SORRY, I HAD TO STEP OUT FOR A MINUTE. SO YOU'RE SAYING THAT ON THE SMART GROWTH MATRIX THAT YOU WOULD LIKE TO DO SOMETHING ABOUT — BECAUSE THEY ALL DO SEEM TO BE OR THE VAST MAJORITY OF THE HOUSING DOWNTOWN THAT'S COMING IN SEEMS TO BE HIGH END. SO YOU'RE WANTING TO ALTER IT TO TRY TO BRING IN SOME AFFORDABLE AND REASONABLY PRICED HOUSING?

MAYOR GARCIA: AND ALSO — CONSIDER REDUCING THE BENEFITS TO THE HIGH-END HOUSING.

SLUSHER: OKAY. I'M IN AGREEMENT WITH THAT.

MAYOR GARCIA: OKAY. I'LL ENTERTAIN A MOTION ON THAT ONE.

SLUSHER: SO MOVE.

MAYOR GARCIA: AND I'LL SECOND THAT. FURTHER DISCUSSION? ALL IN FAVOR, SIGNIFY BY SAYING AYE?

AYE.

MAYOR GARCIA: NUMBER 6 IS TO CONSIDER ELIMINATING 50% OF THE VACANT POSITIONS IN THE YEAR 2003. AND CITY MANAGER, I DON'T KNOW HOW MANY POSITIONS WE HAVE FROZEN AND I DON'T KNOW HOW MANY 50% WOULD BE.

FUTRELL: 50 WILL GIVE YOU A QUICK OVERVIEW OF THIS. REMEMBER AS WE STARTED THE YEAR WE DID SEVERAL JOB FREEZES AS OUR SALES TAX FIGURE GRADUALLY WORSENED. WHERE WE ARE RIGHT NOW IS 75% OF ALL POSITIONS ARE FROZEN. IT'S ALL THE THE VACANCIES, NOT THE POSITIONS THEMSELVES. THE DEPARTMENTS HAVE BEEN CHOOSING WHICH OF THE 25 PERCENT MOST IMPACTS THE SERVICE DELIVERY AND THEIR FEELINGS ON THAT 25%. THE PROPOSAL HERE IS THAT OF THAT 75% THAT'S FROZEN AT THE BEGINNING OF THE YEAR, WE WOULD ELIMINATE 50% OF THEM. THAT WILL GET YOU SIX MILLION, I BELIEVE.

MAYOR GARCIA: 6.2.

FUTRELL: TOWARDS THE REDUCTION IN THE GAP. MOST OF THOSE POSITIONS ARE POSITIONS THAT HAVE BEEN — WERE IN THE FIRST PHASE OF VACANCY SAVING. WE HAVE NOT IDENTIFIED SPECIFICALLY THE 50%. WE'LL BE GOING THROUGH A PROCESS TO DO THAT, BUT WE REACHED THAT NUMBER BECAUSE THERE'S ABOUT THAT NUMBER OF POSITIONS THAT HAVE BEEN OPEN FOR OVER A YEAR. AND WE WERE IN THE EARLY PHASE OF THE BUDGET FREEZES, MEANING THE DEPARTMENT FIRST ON IDENTIFIED THEM AS THE POSITIONS LEAST LIKELY TO MOST IMPACT THEIR SERVICES. AND VICKY, WHAT ELSE CAN WE ADD THERE, NUMBER OF POSITIONS?

YEAH. ON PAGE 36 OF YOUR PACT THERE'S A SUMMARY OF THIS INFORMATION. THE FIRST TWO COLUMNS TALK ABOUT PHASE 1, WHICH IS WHEN WE FROZE POSITIONS IN JANUARY. AND TOTAL FOR SUPPORT SERVICES AND GENERAL FUND DEPARTMENTS AT THAT TIME WAS 146 POSITIONS. PHASE 2 WAS OUR MOST RECENT FREEZE, WHICH WAS THE 75% OF ALL — OF THE DOLLAR VALUE OF ALL THE VACANT POSITIONS. AND THAT MEANS 141 POSITIONS FOR A TOTAL OF ABOUT 288 POSITIONS. ON AN ANALYZED — ANNUALIZED BASIS, IT IS ABOUT $12.4 MILLION. IN ADDITION JUST FOR YOUR INFORMATION, I BELIEVE YOU HAD REQUESTED INFORMATION ON SPECIFIC POSITIONS IN DEPARTMENTS, AND THAT BEGINS ON PAGE 37, JUST SO YOU'RE AWARE OF IT. I DON'T BELIEVE WE HAD INTENDED TO GO THROUGH ANY OF THAT TODAY, BUT YOU HAD REQUESTED INFORMATION ON THE DETAIL BEHIND THIS. I THINK THE ONLY OTHER THING I WOULD ADD IS REAFFIRMING WHAT TOBY SAID, AND THAT IS THAT WE WANT TO TAKE 50% OF THE POSITIONS. WE'RE NOT SAYING 50% PER DEPARTMENT. WE NEED TO LOOK AT IMPACT ON VARIOUS PROGRAMS AND MAKE SURE THAT THE DECISIONS WE MAKE ARE BALANCED.

FUTRELL: I THINK THAT'S PARTICULARLY IMPORTANT BECAUSE THERE'S A DISPROPORTIONATE NUMBER OF POSITIONS FROZEN IN TWO AREAS THAT WE KNOW ARE SORELY LACKING RIGHT NOW, ONE BEING PARKS AND ANOTHER BEING LIBRARIES. SO ANOTHER PART OF THIS IS EVALUATING WHERE THAT 50% FALLS. ALSO KNOW THAT THERE'S A SIGNIFICANT PORTION OF THESE VACANCIES THAT WE'RE PROPOSING TO CUT THAT ARE IN ADMINISTRATIVE AND SUPPORT SERVICES, NOT DIRECT SERVICES. AND THAT'S PART OF OUR COMMITMENT TO YOU, AS WE DISCUSSED LAST WEEK, OF OVER FOUR, FOUR AND A HALF MILLION DOLLARS' WORTH OF REDUCTION, WE ARE DOING ADMINISTRATIVELY AND IN SUPPORT SERVICES AS PART OF TRYING TO CLOSE THIS GAP AT A FIRST BLUSH.

MAYOR GARCIA: I HATE TO BE — TO GIVE YOU A HARD TIME, BUT THE MANAGEMENT SERVICES AND THE CITY CLERK HAD NO FROZEN POSITIONS?

FUTRELL: THAT'S TERRIBLE, ISN'T IT? AND YOU WILL SEE A DIFFERENCE IN THAT. WE ACTUALLY DO HAVE A POSITION RIGHT NOW THAT IS NOT FILLED THAT IS A FAIRLY HIGH LEVEL POSITION. IT'S AN ASSISTANT CITY MANAGER POSITION. AND IT IS VACANT NOW AND WILL BE FOR THE REST OF THIS YEAR.

MAYOR GARCIA: ON THE NEIGHBORHOOD PLANNING AND ZONING, MS. GLASGO'S SHOP, IS THIS FREEZE, 24% OF THE BUDGET, THIS IS GOING TO AFFECT OUR ABILITY TO RENDER SERVICES TO THE COMMUNITY?

I'M NOT SURE ABOUT THE SECOND PHASE AND HOW IT'S IMPACTED US. I KNOW WHEN WE DID THE INITIAL FREEZE IN JANUARY, MS. GLASGO I BELIEVE CAME AND TALKED TO YOU ABOUT HOW THEY PLAN TO APPROACH THE NEIGHBORHOOD PLANNING A LITTLE BIT DIFFERENTLY TO TRY TO MAKE — GROUP SOME OF THE AREAS TOGETHER AND TAKE THEM THROUGH THE PROCESS AND PERHAPS STREAMLINE SO THAT SHE COULD ACCOMPLISH THE PLAN, BUT JUST IN A DIFFERENT MANNER. AND SO TO THAT EXTENT I DON'T THINK IT DOES — THESE LAST FOUR POSITIONS, I'M NOT SURE THAT I HAVE A GOOD FEEL FOR THAT.

FUTRELL: AND I WILL TELL YOU THAT I THINK WE SHOULD BE FRIEWLGHTS BRUTALLY HONEST IN THESE DISCUSSIONS. THE THE SECOND PHASE OF THE FREEZING OF THESE POSITIONS IS AFFECTING THE DELIVERY OF SERVICE. IT IS A LARGE PART OF EVEN WHAT WE'RE HAVING TO DO WITH THE LIBRARY. AND IT'S A CUMULATIVE EFFECT OVER TIME. SO I DON'T WANT ANYONE TO THINK THAT WE'RE GOING TO CLOSE THIS GAP WITHOUT PAINFUL AND SERVICE-RELATED IMPACTS, BECAUSE THERE WILL BE. I DO THINK THE FIRST PHASE, WHICH IS ABOUT WHAT WE'RE SUGGESTING BEING ELIMINATED, WERE THE ONES THAT HAD THE LEAST IMPACT ON SERVICES. THEY WERE HAND PICKED BY THE DEPARTMENT FOR THAT PURPOSE. BUT AS WE HAVE MOVED FURTHER INTO THE VACANCY SAVINGS WITH OUR BASTROP DROP IN THE SALES TAX, SERVICES ARE FRAMED AROUND THE EDGES AND THERE ARE IMPACTS TO SERVICE DELIVERY.

MAYOR GARCIA: LET ME ASK YOU A QUESTION. PARKS HAS ABOUT 58 POSITIONS FROZEN. AND IF WE TAKE HALF OF THIS 12.4, AND YOU SAY WE'RE GOING TO REDUCE THE BUDGET EXPENDITURES BY 6.2, DOES THAT MEAN THAT IF OUR REVENUE STREAM IS AS WE EXPECT, THEN WE COULD PUT BACK 29 PEOPLE SHOULD THAT REVENUE STREAM HOLD TRUE?

FUTRELL: YES. AND YOU MAY PUT BACK MORE THAN THAT IN PARKS AND LESS IN ANOTHER DEPARTMENT. SO IT'S NOT ACROSS THE DEPARTMENT WHERE ALL THESE VACANCIES ARE NOW. TAKE THE TOTAL NUMBER OF VACANCIES, GET THE 50% AND THEN WE'RE GOING TO GO THROUGH AND LOOK FOR WHERE WE CAN MINIMIZE SERVICE DELIVERY IMPACTS. AND I DON'T THINK THERE'S ANY DOUBT THAT THERE'S A DISPROPORTIONATE SHARE OF POSITIONS IN LIBRARIES AND PARKS IN PARTICULAR, AND IT IS HAVING AN EFFECT. SO IT MAY BE THE DECISIONS ARE NOT PROPORTIONATE TO WHAT YOU SEE HERE. THIS JUST HAPPENS TO BE WHERE THE VACANCIES WERE, WHERE THEY FELL WHEN THEY HAD TO GO INTO OUR SAVINGS MODE.

MAYOR GARCIA: ALSO IN THE HEALTH WE HAVE 28.75 POSITIONS FROZEN. IS THAT IMPACTING OUR SERVICE DELIVERY? IT'S EIGHT PERCENT OF THE HEALTH DEPARTMENT. I DON'T SEE ANYBODY HERE FROM THE HEALTH, BUT THE ASSISTANT CITY MANAGER IN CHARGE OF HEALTH IS HERE.

I'M ACTING CHIEF OF STAFF MICHAEL McDONALD. CURRENTLY IN THE HEALTH DEPARTMENT WE HAVE A CUT BACK ON ANY OF THE SERVICES THAT WE'VE LINED OUT IN THE BEGINNING OF THE BUDGET HERE, BUT AGAIN, AS WE MOVE INTO THE — TO THIS NEXT STAGE AND WE GO TO 50% BEING CUT, THEN WE ARE GOING TO HAVE TO TAKE A LOOK AT WHAT SERVICES WE WOULD HAVE TO MAKE AN ADJUSTMENT BECAUSE THAT WOULD BE MORE OF A PERMANENT VENTURE.

FUTRELL: HEALTH HAS DONE A REALLY GOOD JOB ON BOTH SIDES OF THE TABLE IN TERMS OF PROCESS IMPROVEMENTS AND EFFICIENCIES AND I THINK THEY HAVE MANAGED PROBABLILY MORE SO THAN OTHER OPERATIONS FOR A VARIETY OF REASONS. HAVE BEEN ABLE TO FIND SOME EFFICIENCY AREAS AND NOT HAVE THE SAME SORT OF OVERT OBVIOUS EFFECT ON SERVICE DELIVERY. DEPARTMENTS HAVE HAVE HAD MAINTENANCE BACKLOGS AND MORE YOUR PARKS AND LIBRARIES HAVE BEEN STRUGGLING WITH LIMITED RESOURCES FOR A NUMBER OF YEARS, THAT'S WHERE I THINK YOU'RE SEEING THE BIGGER SERVICE IMPACT. I HAD A CALL TODAY FROM A GENTLEMAN WHO VOLUNTEERS AT THE SILLER BOTANICAL BAR AGAINS. AND THIS IS A GENTLEMAN WHO SPENDS A GREAT DEAL OF HIS OWN TIME FOR THIS EFFORT IN THE COMMUNITY. AND HE TELLS ME THAT THE ROSE GARDEN DIED AND HAD TO BE COMPLETELY REPLANTED. THERE ARE IRRIGATION PROBLEMS. MY INSTINCT IS THAT WITH THE LAYERS OF CUTS AND RESOURCES WE'VE HAD IN THESE TWO DEPARTMENTS THAT THERE ARE SERVICES AND PROGRAMS FRAYING AROUND THE EDGES AND THAT'S AN EXAMPLE OF ONE.

MAYOR GARCIA: THE HEALTH ISSUE, CHIEF, THIS IS THE HEALTH DEPARTMENT AND NOT CLINICS, BECAUSE THE CLINICS ARE FUNDED OUT OF THE HOSPITAL FUND, IS THAT CORRECT?

YES, SIR.

MAYOR GARCIA: SO WE HAVEN'T AFFECTED THE CLINICS THEMSELVES BECAUSE THAT BUDGET IS STILL PRETTY MUCH FINE.

OF COURSE, WHAT WE'VE BEEN ABLE TO DO IN THE CLINICS, IS WE'VE INCREASED THE LEVEL OF PATIENTS THAT WE'RE SEEING BY ABOUT 17%.

MAYOR GARCIA: OKAY. AND THAT ALSO — GOING BACK TO THAT BUDGET — I GUESS IT'S ON 3?

4.

MAYOR GARCIA: WE HAVE HAD AN INCREASE IN SELF-PAY ALSO, RIGHT?

YES. WHAT HAS OCCURRED, PARTICULARLY SINCE 9-11, IS OF THE NUMBER OF CLIENTS THAT WOULD FALL INTO THE SELF-PAY HAS INCREASED. IN FACT, WHAT WE'VE HAD TO DO IS CAP IT. AND BASICALLY THE WAY SELF-PAY WORKS IS WE ACTUALLY SERVE PATIENTS UP TO THE 200% BRACKET, WHICH MEANS ABOVE THE POVERTY LEVEL, WHICH IS ABOUT 36,000. AND SO IT'S A SLIDING SCALE, SO THOSE THAT FALL IN TO, FOR EXAMPLE, THE 200% PAY 75% OF THEIR OWN COST WHZ WE SEE THEM IN THE CLINICS. WE'VE SOON SOOEN A DRASTIC CLES INCREASE IN A PARTICULAR CATEGORY AFTER 9-11, SO WHAT WE'VE HAD TO DO WAS CAP IS TO ANY NEW PATIENTS THAT WE'RE NOT SERVING RIGHT NOW THAT FALL INTO THAT CATEGORY, WE'RE NOT ABLE TO SERVE THEM AT THIS POINT. BUT WE'RE TRYING TO DO EVERYTHING WE CAN TO REFER THEM TO OTHER SERVICES.

MAYOR GARCIA: AND IN THAT SCHEDULE ON 4, THAT 238,000,, OTHER REVENUE, THAT'S SELF-PAY?

YES, SOME OF THAT IS SELF-PAY.

ACTUALLY, MAYOR, THAT IS ALL THE HOSPITAL FUND. YOU YOU DON'T HAVE A PRYNARY CARE. WHAT HAPPENS IS THE HOSPITAL FUND TRANSFERS MONEY INTO THE HUSC FUND. AND I HAVE A COPY —

MAYOR GARCIA: SO THE SQHC, WHICH WE SEND TO THEM 7.34, THAT'S WHERE WE SENT IT AND THEY EEP COOEP THE REVENUE FROM THE REFUSE-PAY?

AND THEY GET QUITE A BIT OF FEDERAL MEDICAID AND MEDICARE. THE BUDGETED SELF-PAY FOR THIS YEAR IS $1.7 MILLION, UP FROM 1.4. I BELIEVE WHAT THE CHIEF IS SAYING, WE EXPECT IT TO BE EVEN HIGHER THAN THAT THIS YEAR. OVERALL OTHER SOURCES OF REVENUE IN THE CLINICS, INCLUDING FEDERAL AND SELF-PAY, IS BUDGETED AT ALMOST NINE MILLION DOLLARS. AND SO YOU'VE GOT THE SEVEN THAT COMES FROM THE CITY AND ANOTHER NINE FROM THE OTHER REVENUE SOURCES.

MAYOR GARCIA: BUT THE CLINICS ARE IN THE GENERAL FUND, AREN'T THEY?

NO, SIR. THERE IS A SEPARATE FUND, THE FQHS FUND WHERE THE CLINICS RESIDE.

MAYOR GARCIA: IS THAT AVAILABLE?

SURE.

MAYOR GARCIA: THE FQHC. OKAY.

MAYOR, THIS MAY NOT BE THE APPROPRIATE TIME, BUT I BELIEVE OUR CLINICS ARE REALLY BURSTING AT THE SEAMS AND THERE ARE MANY PEOPLE THAT WE'RE NOT SERVING RIGHT NOW. AND I WOULD APPRECIATE IT IF THE CITY MANAGER COULD LOOK TO SEE IF WE COULD START SOME EFFORTS TO GET SOME FEDERAL GRANT FUNDS AND ALSO AGAIN TO GET A PLAN OF OPERATIONS TO DO A CLINIC EXPANSION OF A 7 BY 24 SYSTEM THAT WOULD HELP WITH THE CLINIC AND ALSO HELP WITH THE EMERGENCY ROOM. AND I WOULD APPRECIATE AT LEAST IF YOU WOULD LOOK AT THAT.

IN FACT, WE'VE ALREADY STARTED. WE HAD THIS DISCUSSION LAST WEEK THAT THERE WAS AN INTEREST FROM SEVERAL OF THE OUR COUNCILMEMBERS TO TRY TO FIND A 27/7 CLINIC. — 24/7 CLINIC. ONE OF THE THINGS THAT MAY HELP US HERE IS A GREAT NUMBER OF THE FEDERAL GRANTS THAT ARE AVAILABLE SINCE 9-11 ARE HEALTH CARE RELATED. WE'RE HOPING THERE MAY BE SOME SYNERGY ON SOME OF THESE GRANTS THAT WE'RE LOOKING AT THAT COULD BE APPLICABLE TO A CLINIC SETTING. SO IT MAY BE THAT WE'RE GOING TO HAVE SOME SUCCESS HERE ON THIS ONE. AND WE ARE LOOKING AT THAT ALL KINDS OF WAYS. THE IDEA HERE BEING WHEN THE 24/7 CLINIC WOULD SERVE A DUAL PURPOSE, NOT ONLY THE INCREASE IN DEMAND WITH BOTH THE WORKING POOR AND OTHERS, BUT ALSO A RELIEVER VALVE ON THE TRAUMA AND EMERGENCY ROOM AT BRACKENRIDGE.

MAYOR GARCIA: IN THIS DRAFT SESSION WE'RE TALKING ABOUT MONEY AND WE SOMETIMES DON'T FIND A LOT OF HUMOR, UNLESS YOU LOOK FOR IT. AND WHAT WE HAVE HERE IN THE WAY OF HUMOR IS THAT A FORMER ASSISTANT MANAGER IS NOW SHIFTING GEARS TO BECOME A COUNCILMEMBER. [ LAUGHTER ]

I'D LIKE TO ASK THE FINANCIAL STAFF WHAT THE TOTAL AMOUNT OF SAVINGS THAT WE COULD GET FROM THE 50% — FROM SUPPORT SERVICES AND GENERAL FUND.

IT'S A LITTLE OVER 6 MILLION.

GOODMAN: WE BELIEVE IT'S ABOUT 6.2 MILLION.

MAYOR GARCIA: THE SCHEDULE IS ACTUALLY ON PAGE 36 AND IT SHOWS THAT A TOTAL SAVINGS OF FROZEN POSITIONS IS 12.4. AND WE'RE SAYING THAT WE'RE GOING TO ELIMINATE 50% OF THE FROZEN POSITIONS.

BUT PART OF THE SUPPORT SERVICES IS NOT — NOT ALL OF SUPPORT SERVICES A FUNDED. IS THIS JUST THE GENERAL FUND PORTION OF IT? NOT ALL OF SUPPORT SERVICES IS FUNDED BY THE GENERAL FUND. SO I WAS TRYING TO FIGURE OUT WHAT THE PARTS THAT SHOULD BE ALLOCATED TO THE GENERAL FUND. PROBABLY ABOUT HALF OF SUPPORT SERVICES.

AGAIN, THE APPROACH THERE IS THAT WE ARE SAVING 50% BASICALLY OF THE DOLLARS, SO IT MAY END UP BEING MORE THAN 50% OF THE POSITIONS OR LESS, DEPENDING ON THE POSITIONS SELECTED.

BUT MY QUESTION IS ARE ALL OF THOSE DOLLARS, CAN ALL OF THOSE BE ALLOCATED TO THE GENERAL FUND IF THEY'RE COMING OUT OF SUPPORT SERVICES WHEN THE GENERAL FUND DOESN'T PAY ALL SUPPORT SERVICES?

FUTRELL: I THOUGHT THE 6.2 WAS THE GENERAL FUND COMPONENT OF CUTS.

ACTUALLY, I THINK —

FUTRELL: ONE MILLION MAYBE?

YEAH. I THINK IT'S ABOUT MAYBE HALF A MILLION OFF OF THE 6.2.

FUTRELL: OKAY. SO IT COULD BE A LITTLE LESS THAN SIX MILLION IF YOU TAKE OUT THE NON-GENERAL FUND COMPONENT OF SOART SERVICES. WE ARE LOOKING AT OUR SUPPORT SERVICES. AND THE REASON YOU SEE THERE'S A FOCUS THERE NOT JUST ON GENERAL FUNDS IS BECAUSE WE'RE ALSO LOOKING TO TRY TO REDUCE PROPOSED RATE INCREASES. SO WE'RE LOOKING TO REDUCE ADMINISTRATIVE AND SUPPORT ACROSS THE BOARD AS A WAY NOT — NOT TO JUST CLOSE OUR GAP, BUT ALSO TO HELP PREVENT OR TO DECREASE THE PROPOSED RATE INCREASES.

WYNN: SO CITY MANAGER, IF I UNDERSTAND THIS CORRECTLY, IF YOU'RE RECOMMENDING THAT ONLY 50% OF THE CURRENT FROZEN POSITIONS BE ELIMINATED, ARE YOU SUGGESTING THAT THERE WILL BE MORE CITY EMPLOYEES NEXT YEAR THAN THEY ARE TODAY? — THAN THERE ARE TODAY?

NOT NUMBER OF POSITIONS. THERE WILL BE FEWER, BUT WE'RE PROPOSING THAT THERE WILL BE MORE FILLED VACANCIES THAN THERE ARE TODAY. MORE FILLED POSITIONS THAN THERE ARE TODAY.

WYNN: THERE WILL BE MORE CITY EMPLOYEES NEXT YEAR THAN THEY ARE CURRENTLY.

FUTRELL: IN RAW NUMBERS, THAT IS RIGHT. NOW, ONCE AGAIN, THIS IS A PRELIMINARY — AND VICKY, I SEE A LOOK ON YOUR FACE.

I GUESS AS AN EXAMPLE, ONE OF THE THINGS WE TALKED ABOUT LAST WEEK WAS THAT IN THE SUPPORT SERVICES AREA AND INFORMATION SYSTEMS, WE WERE GOING TO COME UP WITH ANOTHER TWO MILLION DOLLARS IN SAVINGS. I THINK A PORTION OF THAT IS GOING TO HAVE TO COME FROM F.T.E. VACANT POSITIONS BEYOND THE 50% THAT WE'RE TALKING ABOUT HERE.

FUTRELL: BUT EVEN THEN IT WOULD BE MORE THAN THE 75% THAT ARE FROZEN RIGHT NOW, THE NUMBER OF POSITIONS THAT WE WOULD HAVE FILLED.

YES, PROBABLY. BUT — THAT'S CORRECT, BUT I DO THINK THAT AS WE GO THROUGH AND ATTEMPT THE BALANCE THE BUDGET, SOME OF — THERE MAY BE TIMES WHERE WE TAKE SOME ADDITIONAL POSITIONS IN A DEPARTMENT.

FUTRELL: AND IF YOU WENT DEPARTMENT BY DEPARTMENT, THAT WOULD ALSO BE TRUE. RUDY JUST MENTIONED THE FACT AND WE TALKED ABOUT IT EARLIER IN THE DISCUSSION THAT THE DISPROPORTIONATE SHARE OF THE VACANCIES, FOR EXAMPLE, IN PARKS AND LIBRARIES, WE KNOW IN THE LIBRARY AREA WE CERTAINLY WANT TO LOOK AT HOW MANY OF THOSE POSITIONS CAN WE FILL. BUT I ALSO WANT TO CAVEAT THIS THAT DEPENDING ON WHERE ELSE WE HAVE TO HEAD TO CLOSE THE REST OF THIS GAP, IT MAY BE THAT WE HAVE TO GO BEYOND THIS AMOUNT. BUT THIS IS OUR TARGET, OUR GOAL RIGHT NOW.

MAYOR GARCIA: OKAY.

THAT WOULD STILL LEAVE YOU WITH, WHAT, ABOUT 150 POSITIONS THAT YOU WOULD BE ELIMINATING?

MAYOR GARCIA: ABOUT 143, 144.

SLUSHER: MAYOR, I WOULD MOVE APPROVAL ON THIS ITEM.

MAYOR GARCIA: MOTION BY COUNCILMEMBER SLUSHER. IS THERE A SECOND? SECONDED BY COUNCILMEMBER ALVAREZ. FURTHER DISCUSSION?

THOMAS: YES, SIR. I STILL WOULD LIKE A BREAKDOWN ON THE POSITIONS. AND THE KNOW THE LIBRARY MAY BE IN HERE —

FUTRELL: CAN YOU SHOW WHERE THAT BACKUP IS? I KNOW WE'VE GOT A LOT OF PAPERWORK IN HERE.

LIBRARY BEGINS ON PAGE 42 AND PARKS BEGINS ON PAGE 43.

THOMAS: OKAY. I GOT YOU. THAT IS A LOT OF PAGES. [ LAUGHTER ] OKAY. THANK YOU.

MAYOR GARCIA: YOU RECEIVED, COUNCILMEMBERS, A SCHEDULE CALLED GENERALLY QUALIFIED HEALTH CENTER FUND. AND THE '02 BUDGET HAD FUNDS OF 18.9 MILLION IN OPERATING EXPENSES. AND OTHER REQUIREMENTS OF 18.6. SO THIS PARTICULAR FUNCTION OF THE CITY IS ABOUT $18.6 MILLION IN REVENUES. OKAY. —

GOODMAN:: MAYOR?

MAYOR GARCIA: MAYOR PRO TEM.

GOODMAN:: I HAD A COUPLE OF QUESTIONS ABOUT THE MECHANICS OF THE FORMULA HERE BEFORE I GO FOR IT. AND ALSO IF I COULD GET THE SAME HELP THAT COUNCILMEMBER THOMAS ASKED FOR IN TRYING TO FIGURE OUT WHAT SPECIFIC FUNCTIONS ARE NOT GOING TO BE FURTHERED, ESPECIALLY IN PARKS AND LIBRARY. AND I KNOW IT'S HARDER IN LIBRARY, BUT SHOULD BE EASY IN PARKS BY KEEPING THEM FROZEN. COULD I ASK THE WAY THIS IS PHRASED TO US IS THAT WE WILL UNFREEZE 50% OF THE VACANT POSITIONS, RIGHT? SO WHY THAT FORMULA IN PARTICULAR? HOW DOES THAT TRANSLATE INTO THE DOLLARS THAT YOU ESTIMATE? AND SO THEN ARE YOU GOING TO TRY TO MAKE SOME KIND OF BOTTOM LINE DOLLAR AMOUNT AND THEN MAKE THE PEOPLE OR THE POSITIONS FIT INTO THAT DOLLAR AMOUNT OR HOW —

MAYOR PRO TEM, THAT'S A GREAT POINT. I THINK THE WORDING SHOULD READ, RELEASE THE NUMBER OF POSITIONS THAT WILL REALIZE 50% IN SAVINGS, PERMANENT SAVINGS. WHICH MAY OR MAY NOT BE 50% OF THE POSITIONS. YOU'RE EXACTLY RIGHT.

THAT'S A GOOD POINT.

MAYOR GARCIA: ONE OTHER THING I NEED TO MENTION IS THAT THE GENERAL FUND ACTUALLY TRANSFERS ABOUT $2.4 MILLION INTO FQHC, AND THAT IS NOT BEING TOUCHED EITHER. SO THE WHOLE 18 MILLION IN THE '02 BUDGET WILL STAY THERE. SHOULD WE VOTE ON THE —

FUTRELL: THE MAYOR PRO TEM HAD A LANGUAGE CHANGE, RUDY. DO YOU WANT TO REPEAT HOW WE WOULD LIKE TO FRAME THE DIRECTION?

THE CONSIDERATION WOULD BE TO ELIMINATE THE NUMBER OF POSITIONS REQUIRED IN ORDER FOR THE GENERAL FUND TO REALIZE SAVINGS OF APPROXIMATELY $6.2 MILLION.

MAYOR GARCIA: EVERYBODY UNDERSTAND THAT? ALL IN FAVOR, SIGNIFY BY SAYING AYE?

AYE.

MAYOR GARCIA: OPPOSED NO. MOTION CARRIES. NUMBER 7 IS THE INCREASE IN THE WATER UTILITY TRANSFER TO A RATE OF 9.1, CITY MANAGER?

FUTRELL: THIS IS A BRAND NEW ITEM. WE TALKED A LITTLE BIT LAST WEEK AND THE QUESTION CAME UP WHAT ABOUT THE TRANSFER FROM WATER AND WASTEWATER. AND WE HAD NOT LAID THAT ON THE TABLE FOR DISCUSSION. SO REALLY WHAT WE'RE DOING HERE IS JUST PUTTING A PROPOSAL ON THE TABLE TABLE FOR SOME DISCUSSION AND GOING BACK AND TRYING TO ANSWER SOME OF THE FOLLOW-UP BUDGET QUESTIONS. THERE WERE A LOT OF QUESTIONS ABOUT WHY A PARTICULAR RATE WAS CHOSEN, A PARTICULAR PERCENT, THE METHODOLOGY, THE HISTORY. AND PARTICULARLY ON THE WATER SIDE, IT?PPEARS THAT IN THE BEGINNING THERE WAS AN ATTEMPT TO TRY TO MATCH THE PERCENTAGES FROM AUSTIN ENERGY AND WATER AND WASTEWATER. AND WE MOVED AWAY FROM THAT A LITTLE BIT WHEN AUSTIN ENERGY WENT INTO A VERY DIFFERENT ARENA WITH DEREGULATION AND A DIFFERENT DISCUSSION. SO WHAT WE'RE PUTTING ON THE TABLE IS IF YOU WERE TO RAISE THE WATER AND WASTEWATER UTILITY TRANSFER TO WHAT WE ARE PROPOSING FOR AUSTIN ENERGY, 9.1, YOU WOULD REALIZE — GUYS, CORRECT ME IF I'M WRONG — ABOUT ANOTHER $2.1 MILLION. NOW, I SAY THIS FOR DISCUSSION PURPOSES. WE ALSO KNOW WATER AND WASTEWATER HAS MAJOR MAINTENANCE AND FACILITY EXPANSION PROJECTS AND DEBT COMING UP? THEY HAVE MAJOR PROPOSED RATE INCREASES THAT WILL BE ON THE FUTURE HORIZON. IN ORDER FOR US TO KEEP UP WITH TREATMENT CAPACITY AND SUBSTANTIAL DEFERRED MAINTENANCE. SO I PUT THAT OUT THERE IN THE CONTEXT OF THIS DISCUSSION BECAUSE EVERYTHING THAT WE GO TO WATER AND WASTEWATER ON, FROM THE SMART GROWTH INCENTIVES TO A VARIETY OF OTHER THINGS, WE LOOK TO WATER FOR, IS GOING TO REALLY SHOW UP FOR THE FIRST TIME OVER THE NEXT FIVE YEARS WHEN THEY HAVE TO GO INTO FACILITY EXPANSION AND MAINTENANCE MODE. AND WITH THAT I'LL JUST OPEN IT UP. AND I THINK, MAYOR PRO TEM, YOU'RE THE LEAD.

GOODMAN:: OH, YEAH. COMMENTS — ACTUALLY, I HAVE A QUESTION. OKAY. JUST TO BE REALLY CLEAR, THE PROJECTED INCREASE IN REVENUES FROM THE WATER AND WASTEWATER UTILITY DOES NOT YET INCLUDE THAT RATE INCREASE IN THIS NUMBER, RIGHT?

I BELIEVE THAT IS TRUE. JOHN?

THAT IS CORRECT.

GOODMAN:: OKAY. BUT THE SCHEDULE FOR THE RATE HEARINGS AND INTRODUCING THOSE HIGHER RATES WOULD COME WITHIN THE NEXT FISCAL YEAR.

IT WOULD COME AS A PART OF THE BUDGET PROCESS FOR 2003.

GOODMAN:: OKAY. SO IS THAT ADDITIONAL REVENUE THEN?

THE RECOMMENDATION IS — THIS RECOMMENDATION DOES NOT GO TO THE RATES THAT ARE CHARGED THE CUSTOMERS OF THE WATER AND WASTEWATER UTILITY, PER SE. I THINK AS THE CITY MANAGER SAID, THIS IS TO CONSIDER THE POSSIBILITY THAT IF WE CAN MITIGATE THE EFFECT ON THE RATEPAYERS TO THE WATER AND WASTEWATER FUND, THAT WE CONSIDER RAISING THE TRANSFER TO THE GENERAL FUND. COUNCIL APPROVED, I BELIEVE IN MARCH PA, A STUDY THAT IS CURRENTLY UNDERWAY WHERE PUBLIC FINANCIAL MANAGEMENT IS ASSESSING THE WATER AND WASTEWATER UTILITY NOW. AND DEPENDING ON THE OUTCOME OF THAT STUDY AND DEPENDING ON OTHER WORK THAT WE DO WITH THE UTILITY TO ASSESS THEIR CAPITAL NEEDS, THIS MAY OR MAY NOT BE A FEASIBLE RECOMMENDATION I THINK IS WHAT THE MANAGER IS SAYING. BUT WHAT WE'RE LOOKING FOR TODAY FROM COUNCIL IS THE DIRECTION THAT THE MANAGER, IF APPROPRIATE, COULD INCLUDE THIS AS AN INCREASE TO THE WATER AND WASTEWATER TRANSFER TO PUT IT AT THE SAME LEVEL AS AUSTIN ENERGY.

GOODMAN:: OKAY. THAT'S WHAT I'M TRYING TO FIGURE OUT TOO, WHETHER THIS IS A WASH IN ESSENCE. BECAUSE IF WE HAVE TO RAISE THE RATE TO MAKE UP, IF THAT NUMBER IS COMPARABLE AT ALL TO THE 2,000,001 THAT WE GET HERE, THAT'S WHAT I'M TRYING TO FIND OUT.

THERE'S A POINT IN THE RATE INCREASE AND I THINK WHAT WE CAN'T TELL YOU RIGHT NOW IS WHETHER THIS WOULD BE A TRIGGER POINT FOR THAT, BUT I JUST WANTED TO WARN YOU AND HAVE AS PART OF THE DISCUSSION THAT AS YOU'RE SAYING, WE KNOW WE HAVE — WE KNOW WE HAVE SOME RATE INCREASES ON THE HORIZON JUST BECAUSE OF THE FACILITY EXPANSION AND MAINTENANCE REQUIREMENT OVER THE NEXT FIVE YEARS. WHAT WE ARE GOING TO DO, MUCH LIKE WE DID SEVERAL YEARS AGO WITH AUSTIN ENERGY, WE ARE GOING IN WITH TWO OTHER UTILITIES, TWO OTHER ENTERPRISE FUND, SOLID WASTE SERVICES AND WATER AND WASTEWATER. AND WE'RE DOING FULL OPERATIONAL AND RESIDENTIAL REVIEWS OF THOSE TWO DEPARTMENTS TO SEE WHAT WE CAN DO WITH EFFICIENCIES AND FINANCES. AND AS PART OF THAT WE WILL HAVE A BETTER UNDERSTANDING OF RATE TRIGGERS.

GOODMAN:: IS IT POSSIBLE, MAYOR, THAT BEFORE WE TAKE ACTUAL MOTION AND ACTION ON THIS, THAT WE GET A LITTLE MORE ANALYSIS ON THE IMPACT THAT THIS WOULD MAKE ON WATER AND WASTEWATER'S OPERATIONS FOR THE COMING YEAR AND CONSIDER WITH AND WITHOUT RATE INCREASES OR THE PERCENT OF RATE INCREASES?

MAYOR GARCIA: WHAT WE CAN DO IS WE CAN MOVE THIS DOWN TO THE BOTTOM OF THE LIST. OTHERS WILL BE CONSIDERED BEFORE WE GET TO THIS ONE. AND THE CITY MANAGER CAN LOOK AT IT AND DURING THE DISCUSSIONS THAT SHE HAS WITH THE COUNCILMEMBERS ONE ON ONE IN JUNE AND JULY, SHE CAN GET MORE INFORMATION MUCH AND LET YOU HAVE A BETTER IDEA OF WHAT THE IMPACT IS.

FUTRELL: MAYOR PRO TEM, WOULD THIS ALSO BE A POTENTIAL SOLUTION? IF THE INTERESTS THAT WE COULD LOOK AT A UTILITY TRANSFER INCREASE, IF IT WAS NOT THE TRIGGER FOR AN ADDITIONAL RATE INCREASE?

GOODMAN:: YEAH.

FUTRELL: IF THAT'S AN AMENDMENT WE COULD MAKE TO THIS CONSIDER AND DIRECT, THEN THAT WOULD ALLOW US TO GO AHEAD AND START THAT ANALYSIS, KNOWING THAT YOUR INTEREST IN THE UTILITY TRANSFER INCREASE IS TEMPERED, IS TIED TO NOT HAVING TO BE A TRIGGER FOR A RATE INCREASE.

GOODMAN:: AND THE UNDERLYING REASON FOR THAT IS BECAUSE IN THE BIG PICTURE WE HAVE FOLKS WHO ARE IN BAD ECONOMIC TIMES, INDIVIDUALS AND FAMILIES, WHO ALREADY HAVE A HIGH WATER AND WASTEWATER RATE. AND INCREASING THAT RATE MAY DO A LITTLE SOMETHING FOR OUR GENERAL REVENUES, BUT IT TRADES OFF BY MAKING IT MORE DIFFICULT FOR THOSE TO PAY THEIR BILLS.

VERY TRUE. AND SINCE WE KNOW WE HAVE RATE INCREASES ON THE HORIZON HERE WITH ALREADY HIGH RATES.

MAYOR GARCIA: SO EVERYBODY UNDERSTANDS THE MOTION BY THE MAYOR PRO TEM?

GOODMAN:: TO GO AHEAD WITH THE MOTION, BUT WITH THE ADDITIONAL ISSUE OF LOOKING AT IT — THE ANALYSIS FROM THAT ANGLE.

MAYOR GARCIA: IS THERE A SECOND? SECONDED BY COUNCILMEMBER THOMAS. DISCUSSION?

WYNN: MAYOR, JUST KNOWING THAT THERE'S GOING TO BE RATE INCREASES IN THE FUTURE FOR OUR WATER AND WASTEWATER DEPARTMENT, I JUST THINK WE'RE GOING TO FIND THAT, YES, THIS WILL BE PART OF AN ONGOING PRESSURE ON THE RATE. SO I WON'T BE SUPPORTIVE OF THIS. I JUST THINK IT'S SORT OF, YOU KNOW, A PETER AND PAUL ARGUMENT. SO I'LL JUST GO AHEAD AND ANNOUNCE NOW THAT I WON'T BE SUPPORTIVE OF IT.

MAYOR GARCIA: FURTHER DISCUSSION?

GOODMAN:: MAYOR, COULD I ASK COUNCILMEMBER WYNN TO EXPAND PANNED ON THAT A LITTLE. I DIDN'T FOLLOW.

WYNN: JUST PICKING UP ON YOUR POINT. AND I THINK OUR WATER AND WASTEWATER DEPARTMENTS — JUST THE — YOU KNOW, IT'S NOT EVEN A WISH LIST, JUST THE NEEDS LIST IS SO DRAMATIC THAT I THINK WE'RE STARING AT RATE INCREASES OVER THE NEXT SHORT-TERM ALREADY, AND FROM THE CONSUMER STANDPOINT IT IS THE SAME, YOU KNOW, CHECKING ACCOUNT THAT THEY'RE HAVING TO WRITE A WASTEWATER BILL FOR THAN THEY DO FOR THE TAX RATE AND EVERYTHING ELSE. SO I JUST THINK IT'S — YOU KNOW, I THINK THAT — THEY'RE NOT GOING TO HAVE ENOUGH FUNDS IN THE FUTURE ANYWAY, AND I THINK WE NEED TO FIGURE OUT HOW TO MAKE THAT INDIVIDUAL DEPARTMENT AS — AS APPROPRIATELY FUNDED AS WE CAN. AND I JUST — I SEE WE'RE TAKING MONEY OUT OF ONE FUND TO PUT BACK IN THE GENERAL FUND AND IT'S NOT GOING TO GAIN US ANYTHING.

GOODMAN:: OKAY. WELL, THAT'S WHAT I THOUGHT YOU WERE SAYING. I WANTED TO MAKE SUREMENT AND I'M ALSO SAYING THAT, BUT I'M SAYING GO AHEAD AND SHOW THE ANALYSIS THAT GIVES US PROOF.

MAYOR GARCIA: DID YOU UNDERSTAND THAT? OKAY. I SUSPECT THAT WHEN WE DO THE CHART, YOU'D BETTER LEAVE THIS ONE OFF AS NOT SHOW IT AS REDUCING THAT. OKAY. ALL IN FAVOR, SIGNIFY BY SAYING AYE?

AYE.

MAYOR GARCIA: OPPOSED NO.

WYNN: NO.

MAYOR GARCIA: MOTION CARRIES WITH A VOTE OF SIX TO ONE, COUNCILMEMBER WYNN VOTING NAY. NEXT IS TO CONSIDER THE CURRENT — THAT ONE I THINK WE OUGHT TO GIVE THAT ONE FOR THE TIME BEING. I THINK THIS WOULD PROBABLY COME AT THE END. SO LET'S MOVE 5-A TO THE BOTTOM AND DO IT AT THAT TIME.

FUTRELL: ALL RIGHT. WOULD PUTTING A HOLD ON TAB WILL, WHICH IS THE DISCUSSION OF THE TAB 8, WHICH IS THE DISCUSSION OF THE TAB 9. THE DISCUSSION IS BASICALLY ANNUAL DECISIONS THAT YOU MAKE THAT YOU MAY OR MAY NOT SAY OR DO IN FUTURE YEARS. THE FIRST THREE THERE APPEAR TO BE SOME GENERAL CONSENSUS FROM THE DISCUSS LAST WEEK. I THINK WHEN WE GOT TO TABS 12, WE DIDN'T REALLY GET A CLEAR SENSE OF WHERE THE COUNCIL WANTED TO BE. SO WE WOULD START WITH TAB 9, WHICH IS CONSIDER REDUCING THE FORECAST FUNDING FOR VEHICLE REPLACEMENT BY 50%. RUDY, I THINK YOU'RE TAKING THE LEAD ON THIS.

JUST VERY QUICKLY, THE FORECAST FOR FISCAL YEAR '03 INCLUDED FUNDING FOR SEVEN MILLION DOLLARS FOR NUMEROUS VEHICLES TO THE GENERAL FUND DEPARTMENTS. IN WORKING CLOSELY WITH OUR VEHICLE MANAGEMENT FOLKS, WE PREPARED A COUPLE OF THINGS OR ONE SUMMARY OF INFORMATION THAT YOU SEE BEHIND THERE IS JUST A REAL QUICK RECAP OF OUR REPLACEMENT ACTIVITY AND THOSE OTHER GENERAL FUND APARTMENTS, NON-PUBLIC SAFETY RELATED. AND THE RECOMMENDATION IS THAT FOR FISCAL YEAR '03 THE FUNDING BE REDUCED TO THE LEVEL THAT WE ARE FUNDING THE PUBLIC SAFETY NEEDS AND FOR GO FOR ONE YEAR ADDITIONAL REPLACEMENT IN THE OTHER FUNDS — IN THE OTHER DEPARTMENTS.

MAYOR GARCIA: WHAT'S THE AMOUNT OF THAT ONE?

IT WOULD BE 3.5 MILLION.

FUTRELL: I HAD 3.9. WHAT DO YOU ALL HAVE?

YES, 3.9.

MAYOR GARCIA: SO WE REDUCE FUNDING FOR VEHICLES IS ABOUT 3.9 MILLION?

YES, SIR.

MAYOR GARCIA: AND THAT'S A ONE-YEAR ITEM?

THAT WOULD BE A ONE-YEAR ITEM.

FUTRELL: AND I'D LIKE TO SAY THAT WE ARE DEFINITIVELY NOT RECOMMENDING THAT YOU DO THIS ANOTHER YEAR IN A ROW BECAUSE I THINK AT SOME POINT WE LOSE ANY BENEFITS WE WERE GAINING BY HOLDING ON TO OUR VEHICLES LONGER. THIS IS ONE OF THOSE THINGS IF YOU DO FOR MULTIPLE YEARS WILL PUT US INTO THE POSITION WE WERE IN IN THE '80'S, THRA THA OUR COSTS WERE GREATER THAN ANY SAVINGS WE WERE HAVING.

THOMAS: MAYOR?

MAYOR GARCIA: COUNCILMEMBER THOMAS?

MAYOR GARCIA: I WAS ASKING THAT QUESTION. CUTTING THIS 50% AND TWO OF THE DEPARTMENTS THAT I KNOW IN PUBLIC SAFETY, WOULD THAT STILL AFFECT THEM DOING WHAT WE NEED TO DO?

NO, COUNCILMEMBER, WHEN WE MET WITH OUR VEHICLE MANAGERS, OUR MAINTENANCE MANAGERS, WE FEAR THAT OUR FLEET AT THIS POINT IS NOT — WE ARE NOT COMPROMISING ANY OF THE SERVICES, BUT DEFINITELY I CONCUR WITH THE CITY MANAGER. THIS IS SOMETHING WE WILL NEED TO DO NOT MORE THAN ANOTHER YEAR.

MAYOR GARCIA: THE IDEA IS TO TREAT THOSE VEHICLES CAREFULLY. AND I THINK THE FLEET MAINTENANCE PEOPLE HAVE DONE A GREAT JOB, AS REPORTED BY THE MANAGER.

I THINK IN FACT THAT GOOD JOB HAS BOUGHT US THIS POTENTIAL SAVINGS FOR ONE YEAR.

MAYOR GARCIA: I'LL ENTERTAIN A MOTION ON THIS ONE.

THOMAS: SO MOVE.

MAYOR GARCIA: MOTION BY COUNCILMEMBER THOMAS, SECONDED BY COUNCILMEMBER WYNN. FURTHER DISCUSSION ALL IN FAVOR, SIGNIFY BY SAYING AYE?

AYE.

MAYOR GARCIA: OPPOSED NO? MOTION CARRIES. TAB 10?

LAST WEEK WE GAVE YOU A NUMBER OF IDEAS. I THINK VICKY WILL GIVE YOU A LITTLE MORE DETAIL AND POINT TO YOU WHERE WE ANSWERED SOME OF YOUR QUESTIONS. HERE IS WHERE WE DON'T HAVE THE QUANTIFIABLE SAVINGS. WHAT WE'RE REALLY ASKING FOR IS TO LOOK AND SEE IF WE CAN IDENTIFY DEFICIENCIES BY THOSE COMBINATIONS. AND WE HAD THREE OR FOUR AREAS WE THOUGHT HAD THE POTENTIAL FOR GETTING US BOTH SOME ENGINENER JIS AS WELL AS SOME — SYNERGIES AS WELL AS SOME FINANCIAL ABILITIES.

IF YOU WILL LOOK AT PAGE 56 OF YOUR NOTEBOOK, IT SHOWS YOU KIND OF WHAT WE TALKED ABOUT LAST WEEK THAT RECAPS THE AREAS THAT WE WILL BE LOOKING INTO. THIS IS NOT AN EXCLUSIVE LIST, BUT A LIST OF THINGS THAT WERE READILY AVAILABLE OR READILY CAME TO MIND FOR US. THE FIRST THING IS PURCHASING, LOOKING AT THE PURCHASING FUNCTION IN SEVERAL AREAS. I BELIEVE LAST WEEK WE TALKED ABOUT SOME SOUTHWESTS WE HAD WITH AUSTIN ENERGY, AND THERE IS SOME FOLLOW-UP INFORMATION ON THAT. I BELIEVE THERE WERE QUESTIONS ABOUT HOW WE ACHIEVED EFFICIENCIES. WE'RE LOOKING AT THE CIP MANAGEMENT FUNCTIONS, EVEN THOUGH WE HAVE CIP MANAGERS IN A NUMBER OF DIFFERENT DEPARTMENTS. WE TALKED ABOUT THE CALL CENTER. AND TWE ACTUALLY DID TAKE I BELIEVE IT WAS THE 1 POINT WILL-MILLION-DOLLAR AMOUNT FOR THE CALL CENTER.

FUTRELL: ACTUALLY, THAT IS SOMETHING WE CAN ADD TO OURSELF, AND I BELIEVE YOU HAVE IT. WE HAVE MULTIPLE CALL CENTERS ALL AROUND THE CITY, DIFFERENT HOURS, DIFFERENT TIMES, DIFFERENT FUNCTIONS. ONE OF THE CONCERNS WAS THAT IN CUT BACK MANAGEMENT THAT WE HAVE A SINGLE PLACE THAT CITIZENS CAN CALL 24/7 TO GET QUESTIONS ANSWERED AND REPORT PROBLEMS. THAT START-UP COST IS HIGH, BUT WE THOUGHT IT WAS AN IMPORTANT PROJECT FOR A CITY OF OUR SIZE TO HAVE THAT SERVICE. WHAT WE HAVE DONE IS FOUND HAVE WAY TO USE SOME SYNERGY WITH THE INFRASTRUCTURE ALREADY IN PLACE AT AUSTIN ENERGY CALL CENTER AND WE WILL REMOVE 1.8 MILLION FROM THE GAP, FROM THE FIVE-YEAR FORECAST WITH THAT PROPOSAL.

AND THEN THE LAST AREA WAS CONSOLIDATED MANAGEMENT OF ALL PEACE OFFICERS EXCEPT FOR THOSE AT AVIATION. AND THOSE ARE SOME OF THE AREAS WE WOULD BE FOCUSING ON.

THAT WOULD BE PARKS POLICE — WHAT ELSE?

MARSHALS.

FUTRELL: IT COULD BE ANIMAL CONTROL, CRUELTY INVESTIGATOR. AND I BELIEVE THERE ARE ONE OR TWO PEACE OFFICERS IN CODE ENFORCEMENT.

MAYOR GARCIA: AND THOSE FOLKS WILL ALL BE WORKING FOR CHIEF KNEE?

THEY WILL BE UNDER THE MANAGEMENT OF APD IN A CONSOLIDATED MANAGEMENT STRUCTURE. THERE WERE SEVERAL THINGS WE WERE HOPING TO GAIN HERE. ONE, WE COULD HAVE SOME SAVINGS IN THE MANAGEMENT STRUCTURE, BUT TWO — AND THIS IS LESS A COST SAVINGS THAN TO HAVE A SINGLE SET OF STANDARDS AND TRAINING AND PROTOCOLS, STANDARD OPERATING PROCEDURES IN PLACE FOR PEACE OFFICERS, BASICALLY ANYONE CARRYING A GUN IN THE CITY OF AUSTIN.

MAYOR GARCIA: I GUESS ONE OF THE CONCERNS THAT HAVE BEEN EXPRESSED IN SOME QUARTERS IS IS THIS THE FIRST STEP TO WHERE WE WOULD HAVE JUST ONE POLICE DEPARTMENT AND ALL OF THEM BASICALLY INVOLVING THE MEET AND CONFER PROCESS.

THE PROPOSAL IS NOT TO MAKE THESE PEACE OFFICERS CIVIL SERVANTS. AND IN FACT, IN THIS PROPOSAL WE ARE NOT PROPOSING TO REMOVE THEM FROM THEIR ORGANIZATIONAL FOCUS. SO PARKS POLICE WOULD REMAIN FOCUSED ON PARKS AND MARSHALS WOULD REMAIN FOCUSED ON WARRANTS. BUT WE WOULD BE ABLE TO DELETE SOME OF THE MANAGEMENT, DECENTRALIZED MANAGEMENT STRUCTURE AND USE A STRONGER, MORE CONSOLIDATED A.P.D. MANAGEMENT STRUCTURE TO BRING THEM UNDER ONE SET OF CONTROLS.

MAYOR GARCIA: ONE OTHER QUESTION. THE AUDITOR CAME OUT YESTERDAY WITH THE REPORT ON THE INFORMATION — THE E-GOVERNMENT TYPE OF THING. I SUSPECT THAT THAT REPORT DOESN'T POINT TO ANY AREAS WHERE WE CAN HAVE SAVINGS IN THE '03 BUDGET. SO I THINK THOSE THINGS MAY COST US MORE TO GET STARTED IN THE UPGRADES. IS THAT SOMETHING THAT WE HAVE IN THE BUDGET TO ADDRESS, THOSE ISSUES, OR IS THAT SOMETHING WE CAN DO GIVEN THE ADMINISTRATION STRUCTURE THAT WE HAVE?

MANY OF THE RECOMMENDATIONS ADDRESS COMING UP WOULD CITYWIDE STANDARDS AND APPLYING CITYWIDE MODELS TO PROJECT MANAGEMENT FOR INFORMATION AND SYSTEMS PROJECTS. AND I BELIEVE WE DO HAVE THE STAFF TO DEVELOP THOSE MODELS AND GET THEM IN PLACE. WHETHER OR NOT IN POSITION OF THAT VERY STRUCTURED MODELINGS AND STANDARD PROCESS IS GOING TO INCREASE THE COST OF INDIVIDUAL PROJECTS IS GOING TO BE DIFFICULT TO TELL. YOU DO HAVE TO GO THROUGH A LOT MORE STEPS TO ENSURE YOUR RISK AND ALL THOSE SORTS OF THINGS AND THEN YOU MAY SLIGHTLY INCREASE THE COSTS OF AN TI PROJECT, BUT — IT PROJECT, BUT I DON'T THINK WE SEE THAT HAPPENING IN SHORT-TERM BECAUSE WE WILL BE USING EXISTING RESOURCES TO DEVELOP THOSE STANDARDS.

AND ALSO BECAUSE I.T. PROJECTS ARE RISKY FINANCIALLY AND OPERATIONALLY, WE THINK THAT IT'S A GOOD IDEA TO HAVE A CITYWIDE STRATEGIC PLAN AND STANDARD WIDE STANDARD ZONE. THERE IS A GREAT DEAL OF RISK WHEN YOU'RE MOVING LARGE I.T. PROJECT CONVERSIONS AND NEW PROGRAMS.

MAYOR GARCIA: DOES THIS BUDGET HAVE ENOUGH MONEY TO ADDRESS THE ISSUES THAT WERE BROUGHT UP, THE '03 BUDGET? OR IS THERE ANYTHING IN THOSE RECOMMENDATIONS THAT HAVE NUMBERS, YOU KNOW?

JOHN IS OVER I.S. LET'S LET HIM TAKE A LOOK AT IT. BUT I DON'T THINK I SAW YEAR ONE HAVING ANY SIGNIFICANT COSTS. ANYTHING I MISSED?

MAYOR AND COUNCIL, WE — ONCE AGAIN, WE DO NOT HAVE A BUDGET YET, BUT WHEN THE BUDGET IS DEVELOPED, WE WILL PUT IN AN APPROPRIATE AMOUNT OF FUNDING TO BRING THE NETWORK UP TO THE STANDARDS THAT IT NEEDS TO COME UP TO. WE INCLUDED A RESPONSE TO ONE OF THE QUESTIONS FROM COUNCIL ON THE STATUS OF THE NETWORK IN YOUR INFORMATION PACKETS. I'M NOT SURE EXACTLY WHAT PAGE IT IS ON, BUT TO BASICALLY RECAP WHAT THAT RESPONSE SAYS, WE ARE WORKING NOW WITH INFORMATION SYSTEMS TO REALLY SCRUB DOWN THE NUMBERS THAT WILL BE NEEDED TO TAKE THE GAT IT TEN NETWORK TO REALLY SORT OF THE NEXT LEVEL. WE'RE MOVING IT FROM ONE TYPE OF NETWORK UNDER WHICH THE EQUIPMENT IS OLDER EQUIPMENT TO A NEWER TYPE OF NETWORK. AND I THINK ONCE WE SCRUB THE NUMBERS DOWN THAT WE WILL BE ABLE TO FIT THAT IN THE BUDGET FOR THIS YEAR. THE OTHER THING THAT WE'RE LOOKING AT IS A REPLACEMENT OF OUR FINANCIAL SYSTEM THAT IS CURRENTLY ON — RUNNING ON THE MAIN FRAME IN THE DATA CENTER THAT ISD OPERATES. IF WE MOVE IN THE DIRECTION THAT I THINK WE'LL LIKELY MOVE IN WITH THE ACCOUNTING SYSTEM, AND THAT IS TO MOVE IT TO A SMALLER OPERATING PLATFORM, THEN I THINK — THAT IS THE LAST — AFTER THE COMBINED PUBLIC SAFETY PROJECTS, WHICH ARE ALSO CURRENTLY GOING TO MOVE OFF OF THE MAIN FRAME, AND THOSE ARE IN THE PROCESS NOW, AS YOU WELL NOW. THE FINANCIAL SYSTEM WILL BE THE LAST APPLICATION THAT'S ACTUALLY RUNNING ON THE MAIN FRAME. SO WE ARE GOING TO LOOK VERY HARD AT WHAT EFFICIENCIES WE CAN GAIN WITH THE DATA CENTER AND ISD BECAUSE AT THAT POINT WE WILL ESSENTIALLY NOT BE OPERATING A MAIN FRAME. AND A MAIN FRAME IS VERY, VERY RESOURCE INTENSIVE. IT'S A VERY — IT DEMANDS A LOT OF ATTENTION THAT I THINK — SO I THINK THERE WILL BE SOME SAVINGS ULTIMATELY FROM THAT.

MAYOR GARCIA: BUT WE CAN'T QUANTIFY THEM NOW?

WE CAN'T DO THAT NOW, BUT WE WILL BRING FORWARD WHAT WE NEED TO MAINTAIN THE NETWORK RELIABILITY IN THE BUDGET FOR ISD.

MAYOR GARCIA: SO IS THERE A NUMBER ON THIS CONSOLIDATION THAT WE CAN — FUTURE WE DON'T HAVE A NUMBER YET. —

FUTRELL: WE DON'T HAVE A NUMBER YET. THE 1.8 MILLION FOR THE CALL CENTER IS A NUMBER YOU CAN TAKE OFF THE GAP BECAUSE WE HAVE MOVED THAT PROCESS, THAT CONSOLIDATION OUT OF THE GENERAL FUND AND WE ARE GOING TO BE USING EXISTING AUSTIN ENERGY INFRASTRUCTURE TO TRY TO ACCOMPLISH THAT GOAL. VICKY, GO FROM THERE.

OTHER THAN THAT I DON'T THINK WE'RE FAR ENOUGH ALONG. I THINK WE SEE SEVERAL OF THESE PROJECTS AS LONGER TERM AND MAYBE NOT EVEN BEING FULLY IMPLEMENTED BY THE END OF THE YEAR SO THAT WE WOULD SEE SAVINGS FOR THE ENTIRE YEAR. BUT THIS IS SOMETHING THAT WOULD HELP POSITION US BETTER FOR FISCAL YEAR TWOOU BECAUSE O.O. — 2004 BECAUSE WHEN YOU ARE TRYING TO GO INTO A PURCHASING AREA AND EVALUATE ALL THE STEPS THEY GO THROUGH IN TRYING TO COME UP WITH THE EFFICIENCIES, IT COULD TAKE A LITTLE WHILE. IT MAY NOT BE THAT IT HAPPENS — DOESN'T HAPPEN UNTIL THE BEGINNING OF FISCAL YEAR 04, BUT I DON'T THINK IT WILL BE IN PLACE ON OCTOBER 1ST OF 2003.

FUTRELL: AS AN EXAMPLE, WE HAVE A LARGE PURCHASING CENTER IN HEALTH DEPARTMENT. AND THERE ARE SOME SORT OF ANOMALIES LIKE THAT THROUGHOUT THE DEPARTMENTS. NOW, THERE'S A REASON THEY BECAME LABOR INTENSIVE OVER TIME, SO WE WANT TO GO THROUGH AND MAKE SURE WE'RE NOT MISSING ANY OF THE INTERNAL CONTROLS AND STEPS THAT ARE NEEDED FOR THE PARTICULAR FUNCTIONS IN THOSE DEPARTMENTS. BUT WITH WE THINK THERE ARE SOME EFFICIENCIES THERE.

MAYOR GARCIA: SO I GUESS THE ONLY THING CERTAIN ON THIS ONE IS 1 .8 MILLION? I'LL ENTERTAIN A MOTION. MOTION BY COUNCILMEMBER GRIFFITH. IS THERE A SECOND? SECONDED BY COUNCILMEMBER THOMAS. DISCUSSION?

GOODMAN:: COULD I ASK ONE MORE QUESTION OF THE CITY MANAGER?

[ONE MOMENT, PLEASE, FOR CHANGE IN CAPTIONERS]NO CARRIERRINGCONNECT 1200

FUTRELL: ... A LOT OF QUESTIONS AND CONCERNS. SO I KNOW THAT BY EVEN TALKING ABOUT THIS. WE ARE GOING TO RAISE SOME OF THOSE AGAIN. BUT IT IS OUR INTENT TO LOOK AT A CONSOLIDATED MANAGEMENT STRUCTURE. NOT MOVING FUNCTIONS, NOT — BUT SIMPLY THE SYNERGY AND EFFICIENCIES AND CONTROL THAT YOU GET WITH THE SINGLE MANAGEMENT STRUCTURE.

AS OPPOSED TO FORCING SOME VACANCIES INTO BEING?

FUTRELL: YES. AND THE REASON THE MAYOR PRO TEM IS MENTIONING THAT, I THINK AS COUNCILMEMBER THOMAS KNOWS, THERE ARE DIFFERENT REQUIREMENTS, DEPENDING OF WHAT SECTION YOU ARE IN IN THE CITY, SO A PARK POLICE HAS A DIFFERENT REQUIREMENT AS A PEACE OFFICER, THAN DOES, FOR EXAMPLE, AN A.P.D. OFFICER. SO THERE'S ALWAYS THAT QUESTION OF ENTRY LEVEL STANDARDS AND REQUIREMENTS AND PEOPLE WHO ARE IN POSITIONS NOW.

GOODMAN: THANKS.

MAYOR GARCIA: OKAY, THERE'S A MOTION AND A SECOND ON THIS ONE. MS. DUNKERLY?

HAVE YOU ALL VOTED ON THIS ONE YET?

MAYOR GARCIA: NOT YET.

I WILL WAIT UNTIL THAT ONE IS FINISHED.

MAYOR GARCIA: WE WILL VOTED ON THIS AS SOON AS WE FINISH THIS DISCUSSION.

THIS MAYBE DOESN'T FALL IN THAT. I WOULD LIKE YOU TO TAKE YOUR VOTE.

MAYOR GARCIA: IN THE NEXT STEP. ALL IN FAVOR, SIGNIFY BY SAYING AYE.

AYE.

OPPOSED, NO. MOTION CARRIES.

WYNN: MAYOR?

NOW I HAVE A QUESTION.

WYNN: IF I CAN, AS FAR AS — I WAS TRYING TO GET THIS IN BEFORE THE VOTE. I TRUST WITH ALL DUE RESPECT OUR CITY MANAGER DOESN'T NEED THE CITY COUNCIL TO SAY — TO GIVE YOU PERMISSION TO CONSIDER DEPARTMENTAL AND FUNCTIONAL CONSOLIDATION WHERE EFFICIENCIES MAY BE IDENTIFIED. THAT'S RIDICULOUS.

FUTRELL: LET ME TELL YOU WHY —

WYNN: I UNDERSTAND THE PEACE OFFICER THING IS A POLICIES DECISION THAT WE CAN TALK ABOUT. BUT FOR — YOU KNOW, YOU TO ASK OUR PERMISSION FOR YOU TO CONSIDER DEPARTMENTAL AND FUNCTIONAL CONSOLIDATION WHERE EFFICIENCIES MAY BE IDENTIFIED, WELL —

MAYOR GARCIA: LET ME —

WYNN: THAT'S PATHETIC.

MAYOR GARCIA: LET ME TELL YOU WHY I TALKED ABOUT THIS BECAUSE I BROUGHT THIS ONE UP. THIS IS IN THE BUDGET, OKAY? WE ARE LOOKING AT A $72 MILLION SHORTFALL. AND I ASKED HER, WHAT CAN WE DO IN EFFICIENCIES AND I WANTED THE COUNCIL TO SAY TO THE CITY MANAGER, WE WANT YOU TO DO THIS BECAUSE WE ARE IN A TIGHT TIME. NOW I AGREE WITH YOU THAT MAYBE THIS SHOULDN'T BE SAID —

WYNN: I MEAN SOMEBODY — I TRUST WE HAVE PEOPLE THAT WAKE UP EVERY SINGLE MORNING, BUDGET SEASON OR NOT, SANDS SAY, "WHAT CAN WE CONSOLIDATE? WHERE IS THERE INEFFICIENCIES IN THIS CITY GOVERNMENT?" YOU KNOW, JUST — I'M SORRY, JUST THE WAY I FEEL ABOUT THIS.

MAYOR GARCIA: THE FACT OF THE MATTER IS THAT THAT ROUTINELY DOESN'T HAPPEN. OKAY.

WYNN: OBVIOUSLY.

MAYOR GARCIA: SO — SO I ASKED THAT THIS ITEM BE PLACED SO THAT — SO THAT THE MANAGEMENT GETS DIRECTION FROM THE COUNCIL THAT WE WANT THIS DONE AT THIS TIME.

FUTRELL: YOU ALSO HAVE AN ISSUE THAT'S COME UP IN THE PAST, COUNCILMEMBER, I THINK IT WAS ONE OF THE OTHER THOUGHTS BEHIND THIS, THERE'S THE ISSUE OF THE FACT THAT THE COUNCIL APPROVES REORGANIZATIONS. NOW, OBVIOUSLY THAT WOULD HAPPEN WHEN WE SUBMIT THE PROPOSED BUDGET. THAT COUPLED WITH — WITH SOME OF THE CONFLICT THAT WE'VE HAD IN THE PAST, WHEN WE HAVE LOOKED AT, THIS IS AN ISSUE FOR EXAMPLE THAT'S NOT ON THE TABLE TODAY, BUT PRIVATIZATION AND CONTRACTING OUT. THERE'S BEEN SO MUCH CONTROVERSY ON CONSOLIDATIONS AND PRIVATIZATIONS AND SINCE WE ARE LOOKING AT MULTIPLE FUNCTIONS IN MULTIPLE AREAS, IT SEEMED APPROPRIATE TO SORT OF SAY THIS IS WHERE WE ARE GOING TO HEAD. AND IS THERE CONCERN ABOUT IT?

MAYOR GARCIA: WHAT I — THE POINT THAT I MADE TO THE CITY MANAGER IS THAT WE DON'T DO THE ORGANIZATIONAL STRUCTURE BECAUSE THAT'S THE PREROGATIVE OF THE MANAGER, BUT WE FUND IT. OKAY? WE FUND IT AND THAT'S OUR POLICY DECISION, BY WAY OF THE BUDGET. SO IF WE ARE GOING TO DISCUSS IT, WE WILL DISCUSS IT AT THE TIME THAT WE DO THE BUDGET.

GOODMAN: MAYOR? TO FOLLOW UP ON THAT, THERE ARE OCCASIONS WHERE IT'S A REAL POLICY DECISION TO CONSOLIDATE OR NOT AND SOME FOLKS OUT THERE ARE CONCERNED THEN ABOUT WHICH — WHICH DEPARTMENT WILL IN ESSENCE HAVE CONTROL ET CETERA, ET CETERA. AND THEY DON'T WANT SOME OTHER DID DEPARTMENT'S FUNCTION TO BE LOST OR SUBVERTED BY THE PRIORITY OF ANOTHER ONE. SO I THINK IT'S A GOOD IDEA TO FIND OUT WHERE EVERYBODY STANDS AHEAD OF TIME AND NOT BE BLIND SIDED BY OPPOSITION.

MAYOR GARCIA: OKAY. TAB 11 IS CONSIDER REDUCTIONS IN THE CURRENT EMPLOYEE PAY FOR PERFORMANCE PACKAGE. AND IF YOU GO TO PAGE — WELL, I — I'M NOT GOING TO DO THE STAFF WORK. I'M ON THE COUNCIL.

FUTRELL: IF YOU GO BEHIND TAB 11 [ LAUGHTER ], I WOULD LIKE TO DO AN INTRO TO THIS ONE. AND AS WE TALKED ABOUT LAST WEEK, WE ACTUALLY HAD LAST WEEK LEFT THIS TO THE VERY, VERY LAST. THIS IS A — THIS IS A PAINFUL DISCUSSION FOR US EVEN PARTICULARLY OBVIOUSLY FROM A STAFF SIDE IN THE TIME WHEN EMPLOYEES BECAUSE OF THE FROZEN VACANCIES ARE DOING MORE WITH LESS, MANY PEOPLE DOING NOT JUST THEIR JOB BUT PARTS OF AND SOMETIMES COMPLETE JOBS THAT HAD BEEN FILLED BY OTHER PEOPLE. SO WITH — WITH AN INCREASE — IN INCREASING THE WORKLOAD, A DOWNTURN IN THE ECONOMY, WITH THIS GAP, WHAT WE HAVE UNDER THIS ITEM IS LOOKING TO SEE WHETHER OR NOT WE SHOULD OR COULD CONSIDER A REDUCTION IN THE PAY PACKAGE FOR EMPLOYEES. I DON'T THINK WE ARE AT THE POINT OF SAYING THAT THAT IS TAKING IT TO ZERO. IF YOU WERE, FOR ONE YEAR, TO TAKE IT TO ZERO, IT IS ABOUT, CORRECT ME IF I'M WRONG, 3.8 MILLION. WE WANT TO LOOK VERY CAREFULLY AT INCREASES IN HEALTH CARE COSTS, BECAUSE IF YOU WERE, FOR EXAMPLE, TO APPROVE A BUDGET THAT HAD A ZERO PAY PACKAGE FOR ONE YEAR, IT'S POSSIBLE THAT OUR EMPLOYEES ARE ACTUALLY GETTING A PAY REDUCTION BECAUSE OF ANTICIPATED INCREASES TO HEALTH CARE BENEFITS AND WE HAVE A WHOLE SECTION WE ARE GOING TO BE TALKING ABOUT LATER IN THE DAY TO TALK THROUGH BENEFITS AND COMPARABILITY OF OUR PACKAGE AND OUR COST OF OUR PACKAGE. BUT WITH A GAP THIS SIZE SOMETHING WE NEED TO TALK ABOUT, SOMETHING TO PUT IN THE POOL ON THE TABLE. WITH THAT, VICKI ANYTHING THAT YOU CAN ADD OR RUDY ARE YOU DOING THIS ONE? SEE, NO ONE WANTS TO DO THIS ONE.

JUST TO CLARIFY, I KNOW — IT'S A LITTLE CONFUSING WHEN I FIRST SPOKE ABOUT [INAUDIBLE] FOR PERFORMANCE, WE TALKED ABOUT A $5.1 MILLION AMOUNT. THE MANAGER JUST CLARIFIED THAT IT IS 3.8 IF WE SUSPENDED THE CURRENT PROGRAM FOR ONE YEAR. THE DIFFERENCE BETWEEN 3.8 AND THE 5.1 IS SIMPLY THE AMOUNT THAT WAS REQUIRED TO FULLY FUND THE PAY FOR PERFORMANCE THAT WAS IMPLEMENTED THIS YEAR. I JUST WANTED TO MAKE SURE THAT WAS CLEAR.

MAYOR GARCIA: THE PAY ADJUSTMENTS RUN GENERALLY TO DECEMBER 31st AND BUDGET RUNS OCTOBER 1 TO —

EXACTLY.

MAYOR GARCIA: SO THAT EXTRA THREE MONTH PERIOD THE SALARIES WILL REMAIN THE SAME, OCTOBER, NOVEMBER, DECEMBER OF '02, EVEN THOUGH IT'S IN FISCAL YEAR '03 BUDGET, THE INCREASE WOULD STILL BE THERE.

EXACTLY. EXACTLY RIGHT. THEN THAT'S WHAT HAPPENED AND SO I JUST WANTED TO MAKE SURE THAT THAT WAS CLEAR.

MAYOR GARCIA: DOES THAT — SO WHEN YOU DO THE BUDGET FOR THE NEXT YEAR, YOU TAKE THAT AND YOU ALSO ADD THE — THE WHAT WOULD HAPPEN AT JANUARY 1, '03.

YES, SIR, THAT'S WHAT THE 3.8 IS. IMPLEMENTING A NEW ONE IN JANUARY.

AND THE — THE SCHEDULE ON PAGE 70, SAYS THAT IF THE CITY WAS TO SAY WE WERE NOT GOING TO FUND PA PAY FOR PERFORMANCE BUT WE ARE GOING TO GIVE EVERYBODY A ONE PERCENT INCREASE CITY-WIDE, THEN THAT WOULD GO DOWN TO 2.3? ACTUALLY —

THE TOTAL WOULD BE 2.3. THE — IF WE —

MAYOR GARCIA: I THINK THAT SCHEDULE MAY HAVE AN ERROR BECAUSE IF WE — WE ARE TALKING ABOUT 3.8 AND SUBTRACT 980 FOR THAT 1 PERCENT, THAT SHOULD LEAVE ABOUT 2.8. AND — IN THIS TOTAL COLUMN ON THE RIGHT. UNLESS THAT TOTAL COLUMN IS SOMETHING ELSE.

ACTUALLY THAT TOTAL COLUMN IS INTENDED TO BE WHAT THE COST OF THE PAY PERFORMANCE WOULD BE. YOU ARE CORRECT THE DIFFERENCE BETWEEN THE 5.1 THAT IS IN THE FIVE YEAR FORECAST AND THE 2.3 THAT IT WOULD ACTUALLY COST IS 2.8. SO THE SAVINGS, IF WE JUST DID A 1% GENERAL WAGE INCREASE WOULD BE $2.8 MILLION.

MAYOR GARCIA: 2.8.

YES, SIR.

MAYOR GARCIA: OKAY. SO IF WE DO — IF WE SUSPEND PAY FOR PERFORMANCE IT WOULD GO INTO EFFECT JANUARY 1, AND FROM JANUARY 1 TO SEPTEMBER 30th , THE SAVINGS WOULD BE 3.726, ACTUALLY. IS THAT CORRECT?

THAT'S CORRECT.

MAYOR GARCIA: IF WE DECIDE THAT WE ARE NOT GOING TO DO PAY FOR PERFORMANCE, BUT EVERYBODY IS GOING TO GET A 1% INCREASE CITY-WIDE, WHICH INCIDENTALLY IS NOT FAR FROM COST OF LIVING. COST OF LIVING IN THIS PAST HERE HAS BEEN ABOUT 1.6 OR 7, SO — SO THAT'S THE POLICY DECISION AND THE QUESTION THAT I HAVE FOR YOU GUYS IS DO YOU WANT TO THINK ABOUT THIS ONE SOME MORE? OR DO YOU WANT TO GIVE SOME KIND OF DIRECTION TO THE CITY MANAGER?

JUST ONE LAST THING THAT I WOULD LIKE TO SAY QUICKLY IS THAT ONE OF THE REASONS WE HAVE THIS ON THE TABLE IS — IS BECAUSE IF — WITH THE SIZE — WITH A GAP THIS SIZE, OUR PRIMARY GOAL IS NOT TO LAY OFF PEOPLE. FOR PEOPLE NOT TO LOSE THEIR JOBS. IF THE TRADEOFF IS A ONE YEAR REDUCTION OR ONE YEAR SUSPENSION OF PAY, I BELIEVE MOST CITY EMPLOYEES WOULD RATHER DO THAT THAN HAVE OTHERS LOSE THEIR JOBS. NOW, I JUST CALL THE AUDIT ONCE AGAIN WITH THE FACT THAT WE KNOW HEALTH CARE BENEFITS ARE PROBABLY ALSO ON THE RISE. BUT WE ARE SECOND — SECOND LARGEST EMPLOYER IN THE CITY AND — AND WHAT WE DO WITH OUR WORKFORCE HAS AN IMPACT ON THE ECONOMY ALL AROUND.

SLUSHER: MAYOR? I THINK THAT WAS VERY UNPLEASANT. UNFORTUNATELY I DO THINK THAT WE DO HAVE TO PUT THIS ON THE TABLE. I THINK THE CITY MANAGER IS RIGHT THAT MOST OF THE CITY EMPLOYEES WOULD PREFER THAT — PHOTO HAVE AN INCREASE RATHER THAN TO HAVE SOME — SOME LAID OFF. AND THAT WILL ALSO MEAN BETTER SERVICE DELIVERY IF WE DON'T HAVE LAYOFFS AND I THINK IT'S PRETTY CLEAR THAT IF — THAT IF — SOMEHOW WE WERE TO GET — IF THE ECONOMY WERE TO TURN AROUND, WE HAD MORE FUNDS, THIS WOULD BE ONE OF THE FIRST THINGS TO BE REINSTATED. BUT I THINK WE DO HAVE TO PUT THIS INTO THE PACKAGE AS AN OPTION. FOR THE CITY MANAGER. AND I THINK THE CITY MANAGER IS RIGHT, WE NEED TO KEEP IN MIND THE INCREASING HEALTH COSTS AND HAVE THAT AS PART OF THE CONSIDERATION. I DON'T KNOW EXACTLY WHAT TO DO WITH THIS ITEM, BUT I DO THINK THAT IT NEEDS TO BE CONSIDERED. SO I WOULD MOVE APPROVAL.

OKAY.

SECONDED BY COUNCILMEMBER WYNN. DISCUSSION? MAYOR PRO TEM?

GOODMAN: COULD WE ALSO GET A LITTLE DATA, IF WE HAVE IT, ABOUT HOW MANY POSITIONS WE HAVE MOVED TO MARKET RATES THIS PAST YEAR? AND MAYBE THE YEAR BEFORE THAT IF WE ALREADY HAVE IT DONE. AND WHETHER OR NOT WE HAD — HAD INTENDED TO — TO PUT SOME MORE POSITIONS AT MARKET RATE THAT AREN'T CURRENTLY FOR NEXT FISCAL YEAR?

THAT'S ACTUALLY A VERY GOOD POINT. PROBABLY IN, GOSH, I DON'T REMEMBER THE YEAR NOW, MAYBE FOUR YEARS AGO, POSSIBLY, RIGHT AROUND FOUR YEARS AGO, IT HAD BEEN A LONG TIME SINCE THE CITY HAD DONE A SYSTEMATIC REVIEW OF MARKET. SO WE EMBARKED ON A VERY AMBITIOUS PROCESS AND LOOKED AT EVERY POSITION IN THE CITY AND — AND TRIED TO TAKE IT TO A CERTAIN PERCENT OF MARKET. IT WAS ENORMOUSLY EXPENSIVE AND I WANT TO SAY THE NUMBER THAT STICKS IN MY MIND IS CLOSE TO $20 MILLION FOR THAT ONE-TIME FIX. IT HAD BEEN ALMOST A DECADE. WITH THE BOOMING ECONOMY AT THE TIME, OUR TURNOVER RATES, OUR ABILITY TO RETAIN EMPLOYEES WITH SUFFERING, PARTICULARLY IN PARTICULAR AREA, SO WE PUT A HUGE INVESTMENT IN BRINGING POSITIONS UP TO MARKET. AFTER THAT WAS COMPLETE, IT WAS, I DON'T KNOW, ABOUT TWO OR THREE YEARS TO COMPLETE IT. WE PUT ABOUT A MILLION A YEAR IN CHANGING MARKETS IN SPOT AREAS WHERE THINGS WERE CHANGING. WHAT WOULD WE BE PROPOSING HERE IS THE POTENTIAL FOR MARKET NO AND NO PAY INCREASE. I DON'T BELIEVE THE FIVE YEAR FORECAST HAD A MARKET NUMBER IN IT.

DID NOT.

FUTRELL: SO WE HAD ALREADY REMOVED THE MARKET FROM THE GAP THAT YOU HAVE IN FRONT OF YOU. SO THAT ALL THAT'S LEFT IS THE DISCUSSION OF THE PAY.

GOODMAN: MAYOR PRO TEM, THAT'S ANOTHER ISSUE WITH REGARD TO MARKET THAT IS THAT THE MARKET HAS CHANGED DRAMATICALLY IN THE PAST 15 TO 18 MONTHS, DRAMATICALLY, PEOPLE NOT MAKING WHAT THEY WERE MAKING 15, 18 MONTHS AGO. WITH — PARTICULARLY SINCE THE HIGH TECH SIDE WHERE THEY WERE AVERAGING 70 AND $75,000, THOSE JOBS, YOU KNOW, ARE GONE. THE MARKET HAS CHANGED. I DON'T KNOW HOW MUCH IT HAS CHANGED. I WOULD — I WOULD NOT — I WOULD NOT SPECULATE, YOU KNOW, IN ANY WAY, SHAPE OR FORM THAT THIS — HOW THIS IS GOING, BUT I THINK THE CITY MANAGER IS CORRECT, I THINK THE PEOPLE THAT ARE WORKING FOR THE CITY WOULD LIKE TO KEEP THEIR JOB. THEY KNOW WHAT HAPPENS WHEN — WHEN PEOPLE, YOU KNOW, WHEN THERE'S A MASSIVE LAYOFF. MS. DUNKERLY.

I THINK ANOTHER CITY, CITY MANAGER, IF YOU COULD LOOK AT THIS, DEPENDING ON WHAT OUR RESOURCES DO FROM NOW UNTIL JULY WHEN YOU ACTUALLY DO THE PROPOSED BUDGET, YOU MAY WANT TO CONSIDER SOME LESS EXPENSIVE BENEFITS THAT COULD HELP THE EMPLOYEES. FOR EXAMPLE, LIKE ANOTHER PERSONAL HOLIDAY THAT IN LIEU OF THE PAY FOR PERFORMANCE THAT MIGHT BE CONSIDERABLY LESS EXPENSIVE OR SOMETHING ON THAT ORDER.

FUTRELL: WE WANTED TO HAVE SOME DISCUSSION, IF THIS IS SOMETHING THAT YOU ALL ARE INTERESTED IN US SCLORG FOR EXACTLY THE KINDS OF THINGS THAT COUNCILMEMBER ELECT DUNKERLY TALKED ABOUT. ONE IDEA MIGHT BE IF WE REDUCED OR SUSPENDED THE PAY FOR YEAR THAT WE GAVE ALL EMPLOYEES ONE ADDITIONAL PERSONAL HOLIDAY. THAT WAY EMPLOYEES WOULD BASICALLY COVER FOR ONE ANOTHER TO ALLOW ONE MORE DAY OFF TO BE WITH FAMILY OR DO SPECIAL THINGS AS ONE WAY TO TRY TO COMPENSATE. THERE MAY BE OTHER IDEAS OUT THERE. REALLY WE ARE JUST ASKING FOR THE ABILITY TO SORT OF EXPLORE THIS AND SEE WHETHER OR NOT THIS IS A TOOL WE NEED TO USE.

MAYOR GARCIA: COUNCILMEMBER THOMAS?

THOMAS: I WOULD JUST LIKE TO, ALSO, DO WE HAVE ANY IDEA ON THE HEALTH CARE, HOW MUCH INCREASE THAT'S GOING TO BE? MAYOR YOU SAID COST OF LIVING 1.6 OWE.

MAYOR GARCIA: ROUGHLY.

THOMAS: I'M SURE A LOT OF PEOPLE DON'T WANT TO GET LAID OFF, DON'T WANT TO LOSE THEIR JOB, WE AT LEAST OUGHT TO KEEP IT AS [INAUDIBLE] AS WE CAN, TO KEEP THE ONES THAT WE DO HAVE. WOULD IT AFFECT IF WE WENT TO THE 1.6, DO YOU THINK?

FUTRELL: YOU MEAN JUST GIVE ONE PERCENT.

THOMAS: 1.6 INSTEAD OF JUST THE ONE PERCENT?

FUTRELL: I THINK ALL OF THOSE ARE OPTIONS. IT MAY BE THAT YOU SIMPLY WANT TO REDUCE WHAT WE ARE DOING THIS YEAR TO SOMETHING LESS THAN THE 3%, 5%?

ACTUALLY THAT 1.6 FIGURE IS NOT FROM THE DEPARTMENT OF LABOR. THAT WAS JUST SOME — SOME ROUGH FIGURES THAT WERE DONE IN CONJUNCTION WITH AN ARTICLE THAT'S IN THE WALL STREET JOURNAL THAT SAID THAT WE ARE REACHING PRICE STABILITY NOW. AND THAT WE COULD GO INTO A PERIOD OF DEFLATION. I DON'T THINK THAT — THAT WE ARE GOING THERE. EVERY TIME WE TALK ABOUT THAT, SEEMS THAT INFLATION SEEMS TO START ALL OVER AGAIN. SO — BUT I — BUT I THINK THAT — THAT FOR THIS PARTICULAR DIRECTIVE, COUNCILMEMBER, I WOULD PREFER THAT WE DO THE 3.8 AND THEN WE CAN — BETWEEN NOW AND SEPTEMBER WE CAN GET A BETTER READING MAYBE AND WE MIGHT BE ABLE TO DO SOMETHING DIFFERENT.

FUTRELL: COUNCILMEMBER, YOU MAY BE ADDING SOME LANGUAGE THAT SAYS AS WE LOOK AT THIS, THAT WE CONSIDER THE COST OF LIVING, THE — THE INCREASE IN HEALTH PACKAGE AS PART OF OUR ANALYSIS OF WHAT IS RECOMMENDED. BECAUSE THAT WE WERE GOING TO VERY DEFINITIVELY BE DOING.

MAYOR GARCIA: DOES THE — IS THE MAKER OF THE MOTION AND THE SECONDER OKAY WITH THAT.

YES.

YES.

MAYOR GARCIA: ANY FURTHER DISCUSSION? EVERYBODY UNDERSTAND THE MOTION? ALL IN FAVOR, SIGNIFY BY SAYING AYE.

AYE.

OPPOSED, NO. MOTION CARRIES ON A VOTE OF 7 TO 0. TAB NUMBER 12 IS — IS THE FEE WAIVERS AND THAT'S NOT A LARGE AMOUNT. THAT'S 200,000 BUCKS.

FUTRELL: I HAVE A FEELING IT'S GOING TO BE A LARGER DISCUSSION THAN IT IS A LARGE AMOUNT. WE HAVE IT OUT THERE IN FRONT OF YOU. YOU HAVE A LIST OF HOW MUCH WE HAVE AND I THINK COUNCILMEMBER ALVAREZ YOU HAD ASKED FOR A LIST OF ALL OF THE CO-SPONSORED EVENTS, THAT IS IN YOUR BACKUP, THE DOLLAR AMOUNTS. OVER TIME, MANY OF THE EVENTS THAT WE WAIVED FEES REPEATEDLY ON HAVE BECOME CITY CO-SPONSORED EVENTS. WE — WE WERE NOT RECOMMENDING CUTTING CITY CO-SPONSORED EVENTS, ALTHOUGH THAT'S AN OPTION. WHAT WE DID PUT ON THE TABLE ARE — ARE DO YOU WANT TO DO SOMETHING DIFFERENT WITH THE ADDITIONAL FEE WAIVERS THAT ARE FOR SPECIAL EVENTS THAT COME UP ON A ONE-TIME BASIS EACH YEAR. THE DOLLAR AMOUNT VICKI, THERE, IS SOMEWHERE AROUND 200,000, 300,000, SO IT IS NOT A BIG TICKET ITEM. BUT — BUT IT IS SOMETHING THAT'S GOTTEN A LOT OF DISCUSSION. SO WE — WE PUT THE PROPOSAL IN FRONT OF YOU, VICKI IS THERE ANYTHING THAT WE SHOULD ADD ON THIS ITEM?

I DON'T BELIEVE SO. THE ONLY OTHER THING THAT I WOULD SAY IS THAT THE CO-SPONSORED EVENTS IS ABOUT 54,000. THE AMOUNTS WAIVED BY COUNCIL WAS ALMOST 200,000. THOSE ARE SHOWN ON PAGE 73 FOR ABOUT A ONE-YEAR PERIOD IS WHAT COUNCIL WAIVED. AND ON PAGE 74 IS A LIST OF THE CO-SPONSORED CURRENTLY CO-SPONSORED EVENTS.

MAYOR GARCIA: COUNCILMEMBER WYNN?

WYNN: THANKS, MAYOR. IN LINE WITH ONE OF THE EARLIER MOVES WE MADE ABOUT LOOKING AT INCREASING FEES TO BRING THEM MORE IN LINE WITH THE COST OF SERVICE, REMIND ME, ON — YOU KNOW, ON — WITH MOST OF THESE BEING SORT OF STREET CLOSURE, YOU KNOW, STREET EVENT TYPE OF THINGS, WHAT IS THE COST TO THE CITY? ARE THERE SERVICES THAT WE PROVIDE WHEN THERE'S A — WHEN THERE'S A STREET EVENT?

YEAH. THERE'S A WHOLE VARIETY OF THINGS THAT ARE LOADED IN THIS AND YOU HAVE EVERYTHING FROM, AND SOMETIMES THE ITEMS THAT ARE BROUGHT FORWARD SPECIFY WHAT PARTICULAR PARTS OF THIS YOU WANT TO WAIVE. THERE ARE BARRICADES. THERE ARE — THERE'S SECURITY. THERE'S THE COST OF INSURANCE WITH A REQUIREMENT FOR INSURANCE. THERE ARE E.M.S. AND FIRE SOMETIMES COVERAGE DEPENDING ON THE EVENT. AND THEN THERE'S THE ACTUAL — WHAT ELSE, VICKI, IS LOADED IN THIS?

I THINK THERE'S JUST AN ACTUAL FEE, A CERTAIN TYPE OF FEE —

FUTRELL: LIKE A RATE OF WAY, STREET CLOSURE FEE.

BUT I THINK THAT YOU HAVE COVERED MOST OF THE CATEGORIES.

FUTRELL: SOMETIMES WE ARE ASKED TO GIVE THE E.M.S. TIME, YOU KNOW, AT AN EVENT OR TO GIVE THE POLICE SECURITY TIME. NOW, THAT'S GENERALLY OVERTIME AND THAT'S A COST THAT GETS LOADED INTO THE DEPARTMENT. AND THEN OTHER TIMES WE ARE ASKED SIMPLY TO WAIVE THE PERMIT FEE. THAT IS OF COURSE IN A DIFFERENT REVENUE SECTION. REVENUE FUND WHERE WE COLLECT PERMIT FEES.

ONE OF THE THINGS THAT WE TALKED ABOUT IS THERE'S PROBABLY LIKE SIX EVENTS THAT ARE BASICALLY CITY-WIDE. BY DATE IT STARTS WITH THE MLK PARADE, THEN CINCO DE MAYO, THEN JULY THE 4th , THEN — THEN — HUM? JUNETEENTH, DIEZ Y SIES AND THEN —

MEMORIAL DAY. VETERAN'S DAY.

MAYOR GARCIA: MLK, CINCO DE MAYO, JUNETEENTH, FOURTH OF JULY, MEXICAN INDEPENDENCE DAY, VETERANS DAY, THOSE HAVE BEEN TRADITIONALLILY WHAT WE CO-SPONSOR. PROBABLY IN THE NEIGHBORHOOD OF 70 TO 90,000 TOTAL. FOCUSED TO ONE OR THE OTHER, THE LIST IS IN YOUR TAB. WHAT I THOUGHT THAT WE COULD DO WOULD BE TO SAY AGREE THAT THIS OR — THESE ARE THE SIX AND THEN SAY COUNCILMEMBERS IF YOU HAVE X AMOUNT OF DOLLARS FOR THE ONES THAT EACH ONE OF YOU WANT TO SPONSOR, AND LEAVE THE MAYOR OUT OF IT SO THAT — SO THAT I DON'T HAVE TO BE — I CAN JUST SAY, THEY DIDN'T GIVE ME ANYTHING. SO — SO I'M OUT OF HERE. I'M IN ENOUGH TROUBLE ALREADY. AS IT IS. ANYWAY, WHAT DO YOU GUYS WANT TO DO ON THIS ONE BEFORE WE GO TO LUNCH. YOU WANT TO TALK ABOUT IT AT LUNCH? YOU CAN'T TALK ABOUT IT AT LUNCH. LET'S HAVE LUNCH AND WE WILL BE BACK HERE AT 1:15, WE WILL RECESS UNTIL 1:15. FIFTH FLOOR.

FUTRELL: I WAS TOLD HEAD UP TO THE FIFTH FLOOR.

MAYOR GARCIA: BOX LUNCHES ON FIFTH FLOOR. THEN ABOUT AN HOUR AND 45 MINUTES.

MAYOR GARCIA: I'M GOING TO CALL BACK TO ORDER THE COUNCIL — CITY COUNCIL BUDGET RETREAT. FOR FISCAL YEAR 2002-2003 BUDGET. IT'S MAY 22nd AND WE ARE IN — IN ONE TEXAS CENTER, THIRD FLOOR, MEETING ROOM. AND WE ARE TO ITEM NO. 5. WHICH IS ADDITIONAL POLICY WORK IN THE — NEEDED, I GUESS. DETERMINE FUNDING LEVELS FOR SOCIAL SERVICE AGENCIES. CITY MANAGER?

FUTRELL: REALLY, ON THESE THREE ITEMS, 13, 14 AND 15, THE DIRECTION THAT WE GOT FROM LAST WEDNESDAY IS THAT THESE ARE THREE AREAS WHERE YOU WOULD LIKE ADDITIONAL INPUT, MAYBE EVEN SOME OUTSIDE FEEDBACK AND INPUT AND ADDITIONAL TIME TO WORK ON THE ISSUES. SO ONE WAY TO — MAYBE JUST TO TRY TO KNOCK THESE ITEMS OUT IN GENERAL IS HOW WE WERE PLANNING ON MOVING FORWARD. UNDER 13 DETERMINE FUNDING LEVEL FOR SOCIAL SERVICE AGENCIES. WE INTENDED TO REFER TO C.A.N. AND TALK OVER THE — THE SITUATION, WHERE WE ARE, LOOK FOR A RECOMMENDATION, AND THEN COME BACK FROM THERE. I THINK THAT —

MAYOR GARCIA: SORRY ABOUT THAT. I HAD ASKED RUDY TO GIVE US A SCORE CARD OF WHERE WE ARE. AS SOON AS WE STARTED.

HERE, HERE, HERE, QUICK.

GO A LITTLE BIT LOWER.

MAYOR, WHAT I HAVE INCORPORATED HERE STARTED AT OUR STARTING POINT WITH 71.8. THE COLUMN I GUESS SHOWN UNDER H, ON THE FAR RIGHT, IS JUST A CUMULATIVE TOTAL OF EVERYTHING THAT — THAT THE COUNCIL HAS — HAS DISCUSSED THIS MORNING. SO — SO THE ONLY ITEM THAT WE — I GUESS GOING DOWN THROUGH TAB 11, IT'S 31.7 IS THE REMAINING GAP. THERE'S A COUPLE OF OTHER ITEMS THAT MAY HAVE A FINANCIAL — POTENTIAL IMPACTS BUT THOSE ARE LEFT BLANK. HOWEVER THERE WAS ONE ITEM THAT WE DID NOT DISCUSS TODAY, BUT WE TALKED ABOUT LAST WEEK, THAT'S THE ADMINISTRATIVE COST REDUCTIONS. THAT HAS AN IMPACT OF 2.4. SO INCORPORATING EVERYTHING THAT WE HAVE DONE TODAY, PLUS THE 2.4 MILLION IN ADMINISTRATIVE COST REDUCTIONS, RIGHT NOW WE SIT AT AN ESTIMATED GAP OF 29.3 MILLION.

MAYOR GARCIA: OKAY. THEN AGAIN WE WILL FILL IN THE GAPS IF WE GO TO THE OTHER ITEMS.

MAYOR GARCIA: THANK YOU, RUDY. BACK TO YOU, CITY MANAGER.

FUTRELL: REALLY, IF WE ARE LOOKING AT THAT FROM WHERE WE STARTED, THAT'S A TREMENDOUS AMOUNT OF WORK AND VERY SOLID DIRECTION TO HAVE AT THIS POINT IN THE BUDGET PROCESS. THE ADDITIONAL TABS UNDER ADDITIONAL POLICY WORK, 13, 14 AND 15, ON 13 IT'S DETERMINED FUNDING LEVEL FOR SOCIAL SERVICE AGENCIES. WE INTEND TO REFER THIS TO C.A.N., TO HAVE A — TO HAVE STAFF SUPPORT AS WE TAKE THE — THE RECOMMENDATIONS THROUGH C.A.N. AND COME BACK TO COUNCIL. TAB 14 IS DETERMINED FUND — DETERMINE FUNDING LEVEL FOR AFFORDABLE HOUSING. MY UNDERSTANDING WAS THAT THE COUNCIL'S DESIRE WAS THAT WE WOULD MOVE THIS TO THE MAYOR PRO TEM'S AFFORDABLE HOUSING TASK FORCE AND TO LOOK FOR SOME AND GIVE SOME STAFF SUPPORT AND TO LOOK FOR SOME EVALUATION, ANALYSIS AND RECOMMENDATION TO COME BACK. ON TAB 15, EVALUATE POLICIES GOVERNING SMART GROWTH AND INCENTIVES FOR SMART GROWTH. OUR UNDERSTANDING WAS THAT WE WOULD TAKE THIS INTO COUNCILMEMBER WILL WYNN'S ECONOMIC DEVELOPMENT TASK FORCE AND ONCE AGAIN LOOK FOR SOME RECOMMENDATIONS, ANALYSIS TO COME BACK TO COUNCIL. SO ON THESE THREE, IS — I GUESS WE COULD JUST OPEN THIS UP FOR DISCUSSION, MAKE SURE THAT THE DIRECTION THAT WE ARE HEADED IS WHERE YOU WANTED US TO GO WITH THIS. AND MAYBE ONE CAVEAT, VICKI I CAN SEE THAT YOU HAVE SOMETHING TO ADD, IS A TIMING ISSUE. KNOWING THAT BY CHARTER I NEED TO HAVE A PROPOSED BUDGET TO YOU BY THE END OF JULY, WHICH SO JULY 31st IS THE CITY MANAGER'S PROPOSED BUDGET. IF WE WERE NOT TO GET CLEAR DIRECTION PRIOR TO THAT, NOTHING WOULD PRECLUDE US FROM WORKING AND INCORPORATING DIRECTION AS WE MOVE THROUGH THE NEXT SIX WEEKS TO GET YOU TO ADOPT A BUDGET. BUT THERE IS A TIME LINE TO HAVE RECOMMENDATIONS INCORPORATED AS PART OF THE CITY MANAGER'S PROPOSED BUDGET. VICKI, DID YOU HAVE SOMETHING ELSE THAT YOU WANTED TO ADD?

JUST ONE THING. I KNOW THERE ARE SOME QUESTIONS LAST TIME ABOUT THE VARIOUS SOCIAL SERVICES AGENCIES. IN YOUR QUESTIONS ON PAGE 131, WE START WITH INFORMATION ON THE SOCIAL SERVICES CONTRACT. IN YOUR Q AND A PACKET, YES.

FUTRELL: ALL RIGHT. SO THE VERY LARGE PACKET.

I JUST WANTED TO POINT OUT THAT THAT WAS IN THERE —

FUTRELL: THERE WAS ALSO SOMETHING WE WEREN'T ABLE TO ACCOMPLISH. RUDY, DO YOU WANT TO TALK ABOUT THIS. WE HAVE PARTIAL INFORMATION THAT YOU ASKED FOR.

THERE'S A REQUEST FOR STAFF TO GO BACK TO 1991 AND FORWARD, IDENTIFYING TOTAL FUNDING LEVERAGED FOR EACH OF THE SOCIAL SERVICE CONTRACTS. WE WERE ABLE TO SUCCESSFULLY GET 2002 2001. STAFF IS CONTINUING TO WORK AND I BELIEVE BY THE END OF TODAY WE WILL BE DONE WITH FISCAL YEAR 2000. THAT — THAT IS POSING A CHALLENGE. BUT SOMETHING WE CAN COME UP WITH, IT JUST GOING TO TAKE SOME MORE TIME TO PUT TOGETHER TO GO BACK THAT FAR.

FUTRELL: SO YOU HAVE TWO YEARS —

ACTUALLY BY THE END OF TODAY WE WILL HAVE THREE YEARS.

FUTRELL: THREE YEARS OF HISTORY. THE THINK THE QUESTION WAS TO TRY TO GO BACK 10 YEARS. AND SO MAYBE ONE OF THE THINGS THAT WE WOULD LIKE TO KNOW IS HOW IMPORTANT — THERE'S A LOT OF STAFF TIME THAT WILL TAKE TO GO INTO TRYING TO GO BACK 10 YEARS AND LOOK THOSE TRENDS. WE CAN TOO.... DO IT. I GUESS WE NEED TO KNOW IS THAT SOMETHING THAT YOU WANT US TO KEEP MOVING ON.

MAYOR GARCIA: MY GUESS, CITY MANAGER, ARE YOU TALKING ABOUT THE C.A.N. STUFF, IS THAT WHAT YOU ARE TALKING ABOUT?

SOCIAL SERVICE AGENCIES, YES, SIR.

MAYOR GARCIA: MY GUESS IS THAT GOING BACK 10 YEARS REALLY DOESN'T GIVE US WHAT I WOULD CONSIDER TO BE ACCURATE DATA. BECAUSE IF YOU GO BACK 10 YEARS, WE WERE IN A MODE IN WHICH WE FUNDED AGENCIES. AND THEN SOMEWHERE ALONG THE WAY, ABOUT '95 OR SO, '96, SOMEWHERE IN THERE, WE CHANGED OVER TO BUYING SERVICES. SO FROM THAT FIRST YEAR IN WHICH WE WENT TO BUYING SERVICES AS OPPOSED TO FUNDING AGENCIES, THAT PROBABLY WOULD BE — YOU KNOW, PROBABLY — I SUSPECT SINCE — SINCE THAT — SINCE THAT MODEL HAS — HAS STAYED IN PLACE, YOU KNOW, WE COULD GO BACK, YOU KNOW, THREE YEARS.

OKAY.

AND 00 AND 20012001, THAT WOULD GIVE US A GOOD PICTURE OF HOW THIS THING IS WORKING. NOW, THE MAYOR PRO TEM AND COUNCILMEMBER ALVAREZ WILL SERVE ON THE C.A.N. — WHO SERVE ON THE C.A.N. NEED TO COMMENT ON IT. THE — THE ECONOMIC DOWNTURN AND THE 9-11 STUFF HAS COST SOME — HAS PUT SOME STRAIN ON THIS WHOLE BUDGET FOR SOCIAL SERVICES AND MAYOR PRO TEM I THINK THAT YOU MAY WANT TO TALK ABOUT THIS, HOW THAT — HOW THE C.A.N. AND THE SOCIAL SERVICE AGENCIES ARE ADDRESSING THAT. YOU KNOW.

GOODMAN: OKAY. RELATIVE TO THE QUESTION ON PAGE 131, TOO, I THINK AS WELL AS YOU ARE ABLE TO DO THAT, TO LIKE TRACK AN AGENCY AND CORRELATE THAT TO SERVICES, WOULD BE GOOD. IT WOULD BE GOOD TO JUST SEE SOME GOOD, HARD NUMBERS. BUT RELATIVE TO WHAT THE MAYOR WAS SAYING, I THINK IT WILL BE VERY DIFFICULT TO TRACK AN AGENCY FURTHER BACK THAN A FEW YEARS BECAUSE IT'S APPLES AND ORANGES NOW. AND WHAT YOU WOULD BE TRACKING IS AN AGENCY WHICH IS NOW A PART OF A LEVERAGED ALMOST CONGLOMERATE OR PARTNERSHIP. BECAUSE THAT'S HOW C.A.N. WENT TOWARD ASSESSING, YOU KNOW, HOW EFFICIENTLY THE DOLLARS WOULD BE PURCHASING THOSE SERVICES. SO THEY WERE LOOKING FOR COLLABORATION, ALWAYS. SO I DO THINK IT WOULD BE DIFFICULT TO TRACK IT BACK 10 YEARS. BUT, HOWEVER, IF YOU FEEL ABLE TO PUT THE DOLLAR AMOUNTS DOWN, IT WILL GIVE US A SENSE, IF NOT THE EXACT INFORMATION, THAT — THAT WE MIGHT NORMALLY EXPECT. NOW THE COMMUNITY ACTION NETWORK IS THE PLACE WHERE FOLKS WHO SEE THE NEEDS IN HEALTH AND HUMAN SERVICES, SOCIAL SERVICES, SOCIAL EQUITY AREAS COME WHEN THERE IS A CRISIS OR WHEN THERE ARE INCREASED DEMANDS AND THE CRISIS SOMETIMES ALSO INCLUDES A DECREASING SUPPORT FROM STATE, WHICH — WHICH IN MOST CASES DOESN'T START OUT TO BE TRULY SIGNIFICANT IN TERMS OF MEETING THE NEEDS IN THE FIRST PLACE. SO — SO THEY COME TO C.A.N. KNOWING THAT THE ONLY CASH ON THE TABLE LIKELY TO BE ABLE TO BE BROUGHT BACK INTO THAT MIX WOULD BE FROM THE CITY AND FROM THE COUNTY. AND SO IN THE PAST, TWO OR THREE YEARS, WE ESTABLISHED A PROCESS FOR ANALYZING EMERGENCY REQUESTS. THERE HAVE BEEN SOME DEFINITE INCREASED NEEDS WHERE THE CITY AND THE COUNTY BOTH WENT BACK TO THEIR RESPECTIVE FINANCE DEPARTMENTS AND GURUS AND SCRAPED UP EVERY CENT THEY COULD IN ORDER TO GET PAST A CRISIS AND THEY WERE TRULY CRISES. SO TO BE SAYING NOW DO WE HAVE AN OPTION FOR CUTTING BACK ON THAT FUNDING AND PERHAPS AN UNSPOKEN PART OF THAT IS CAN THERE BE A MORE STREAMLINED OFFERING OF — OF SERVICES AND BIGGER BANG FOR THE BUCK IN PURCHASING THOSE SERVICES? I DON'T THINK YOU ARE GOING TO FIND THAT — I THINK THAT AS ALWAYS WITH SOCIAL SERVICE PROVIDERS, THEY WORK ON A SHOE STRING AS IT IS, THEY — THEY MAXIMIZE THE POWER OF ONE CENT TO DO THE JOB OF 10 ALREADY. AND WHEN WE GIVE THEM THAT EXTRA MONEY, THEY GO BEYOND WHAT IN ESSENCE THAT MONEY IS ABLE TO PURCHASE BECAUSE PEOPLE IN — IN — IN PROVISION OF SERVICES ACTUALLY SUBSIDIZE THE PROVISION OF SERVICES THEMSELVES. IT'S THE KIND OF PEOPLE WHO GO INTO IT. SO I WOULD NOT WANT YOU TO THINK THAT — THAT I WOULD BE READY TO SAY WE NEED TO CUT BACK ON WHAT WE DO. EVEN IN THE BEST OF TIMES WE HAVE NOT SIGNIFICANTLY INCREASED THE AMOUNT OF DOLLARS. IT HAS BEEN VERY STABLE. AND ALTHOUGH WE HAVE BEEN ABLE TO THROUGH PARTNERSHIPING AND OTHER COLLABORATION TO ADD TO THE RESOURCES THAT WE PUT INTO THOSE AREAS, THE DOLLAR AMOUNT STILL HAS STAYED RELATIVELY STABLE AND WE HAVE REALLY NOT INCREASED. SO — SO NOW WHEN THEIR DEMANDS ARE INCREASING, EVEN BEYOND WHAT THEY WERE ALREADY, THAT WE WEREN'T MEETING, FOR US TO SAY WE ARE GOING TO FURTHER DECREASE WHAT WE PUT IN THERE I THINK IS THE LAST THING THAT THE COMMUNITY NEEDS FROM US IN ORDER TO TRY TO SURVIVE THIS PARTICULAR ECONOMIC POSITION. I DON'T KNOW IF COUNCIL — IF COUNCILMEMBER ALVAREZ WOULD AGREE WITH THAT. I TEND TO THINK THAT HE WOULD BE SYMPATHETIC AT LEAST TO WHAT I'M SAYING. SO JUST TO FORWARN ANYBODY, NO, I COULDN'T POSSIBLY SAY LOOK AT WHERE WE ARE PARED BACK THERE, WE HAVE DONE THAT IN THE PEST OF TIMES AND THEY HAVE BECOME THE MOST STREAMLINED AND EFFICIENT SERVICE PROVISION AGENCIES THAT WE HAVE EVER SEEN. AND THEY ARE EVEN — OUTCOME MEASURES, PERFORMANCE MEASURES, SO THEY CAN PROVE THAT THEY ARE DOING THE WORK OF 10 CENTS WITH THAT ONE PENNY. THANKS, MAYOR.

MAYOR GARCIA: I AGREE WITH YOU. THE — THE AMOUNTS THAT WE HAVE IN THE BUDGET FOR SOCIAL SERVICES, ARE THEY IN CORE, SEMI CORE?

MOST OF THE SERVICES ARE IDENTIFIED AS SEMI CORE. TO THE CITY. AND THE BASIS FOR THAT IS BECAUSE OF THE CRITERIA — THE CRITERIA THAT MAKES THEM SEMI CORE IS THAT THEY ARE THE CORE SERVICE OF ANOTHER AGENCY OR ENTITY. SO — SO WHILE THEY ARE CORE TO THAT ENTITY, THEY WOULD BE SEMI CORE TO THE CITY. STRICTLY BASED ON THE CRITERIA, NOT SIGNIFYING THAT THEY ARE —

MAYOR GARCIA: NOTICE IN REGARDS TO THE NATURE OF THE SERVICE, BUT IN REGARDS TO WHO DELIVERS IT.

EXACTLY, THAT'S EXACTLY WHAT THE CRITERIA IS MEANT TO YOU.

MAYOR GARCIA: BY DEFINITION IF WE WERE TO APPLY THE PRINCIPLE THAT THESE SERVICES HAVE THESE CHARACTERISTICS, THOSE WOULD MOVE TO CORE.

THAT'S CORRECT.

FUTRELL: ANOTHER THING THAT'S PROBABLY IMPORTANT AS YOU GO THROUGH THIS DISCUSSION IS WHAT'S LOAD UNDERSTAND YOUR FIVE YEAR FORECAST. WHAT'S LOADED IN YOUR BUDGET GAP IS LEVEL FUNDING, AM I CORRECT?

THE ONLY CHANGE IS WE ARE NOT, WE WERE NOT FORECASTING THE ADDITIONAL HALF A MILLION THAT WAS ADDED. IF YOU RECALL WE ADDED $500,000 BASICALLY AS EMERGENCY NEEDS.

BASIC NEEDS.

FUTRELL: SO THAT WOULD BE GOOD INFORMATION THEN. EVERYTHING IS STATUS QUO WITH THE EXCEPTION OF THAT ADDITION WHICH IS EVIDENTLY NOT IN YOUR NUMBER NOW THAT HAS THE ADDITIONAL $500,000. BUT WE DID INCLUDE, IF I REMEMBER CORRECTLY, THE ADDITIONAL FUNDING FOR SAFE PLACE.

THAT IS CORRECT. HOWEVER, THAT IS NOT SHOWN IN THIS — IN THE $13 MILLION BECAUSE WE FUNDED SAFE PLACE SEPARATELY FROM THE — FROM THE NORMAL PROCESS.

FUTRELL: IN OTHER WORDS IT'S FUNDED.

CORRECT. THAT'S I'M TRYING TO SAY. IT IS FUNDED AT THE ADDITIONAL AMOUNT. EVERYBODY IS STATUS QUO WITH THE ADDITIONAL AMOUNT THAT YOU DECIDED TO GIVE TO SAFE PLACE, WHICH I THINK WAS ANOTHER $300,000. BUT THE ONE-TIME BASIC NEEDS MONEY THAT WE LEVERAGED WITH THE COUNTY DOLLARS IS NOT IN YOUR GAP NUMBER.

THAT'S CORRECT.

MAYOR GARCIA: OKAY. FURTHER QUESTIONS, COMMENTS?

SLUSHER: SO WE ARE JUST GOING TO — WE ARE GIVING INSTRUCTIONS NOT TO TOUCH THAT ONE AT ALL?

MAYOR GARCIA: THE MAYOR PRO TEM LAID OUT SOME CRITERIA. DO YOU WANT TO HEAR IT AGAIN?

SLUSHER: I MISSED THE PHYSICIAN PART OF IT. — I MISSED THE FIRST PART.

GOODMAN: WHAT I WOULD LIKE TO PROPOSE, TOTALLY ASIDE FROM WHAT WE DISCUSS TODAY ABOUT THE PARTICULARLY SERVICES AND CORE AND SEMI CORE, WHAT HAVE YOU, IS THAT THE COMMUNITY ACTION NETWORK BE ABLE TO TAKE THIS INTO A WORKING GROUP AND ON FAST TRACK LOOK AT WHAT THE PROPOSALS ARE AND ALSO OFFER US ADDITIONAL INFORMATION ABOUT THE INCREASED NEEDS AND THE REASON THAT WE HAD TO ASK FOR THAT ADDITIONAL HALF MILLION LAST YEAR. AND OFFER COMMENT TO YOU ON THE CONDITION OF — WELL, THE GENERAL COMMUNITY CONDITIONS RIGHT NOW IN THE — AND THE INCREASED DEMANDS AND WHETHER AT THIS JUNCTIONTURE IN — JUNCTURE IN HISTORY LEAVING THOSE FUNDS STATIC OR WITHOUT THE ABILITY TO MEET CRISES WILL HAVE ANY IMPACT ON US IN OTHER WAYS AND THE COMMUNITY ACTION NETWORK FOLKS ARE USED TO COMING TOGETHER WITH SPECIAL COMMITTEES, SPECIAL CALLED MEETINGS, I MEAN THEY CAN WORK FAST. WE HAVE A LOT OF EXPERTS ON HAND AND — AND VOLUNTEERS. AND SO BEFORE WE TAKE A SPECIFIC STEP HERE ON THIS PARTICULAR BUDGET DECISION, I WOULD ASK THAT YOU WAIT FOR C.A.N.'S COMMENTS.

SLUSHER: OKAY. WELL THAT SEEMS REASONABLE. I JUST — THIS IS AN AREA WHERE WE ARE GETTING INCREASING DEMAND BECAUSE OF THE ECONOMIC SITUATION. BUT AT THE SAME TIME I JUST DON'T WANT TO TAKE ANY AREA OF THE BUDGET AND SAY "OKAY, WE CAN'T LOOK AT ANY SAVINGS." BUT YOU ARE SAYING C.A.N. MIGHT COME FORWARD WITH SOMETHING ALONG THOSE LINES.

GOODMAN: I THINK SO, BECAUSE THAT WAS THE REASON THAT I WENT INTO THE PERFORMANCE MEASURES AND OUTCOME MEASURES THAT HAS BEEN A PART NOW FOR YEARS OF OUR SOCIAL SERVICE FUNDING AND EQUITY ISSUE FUNDING, PURCHASE OF SERVICES. THERE IS, I WOULD — I WOULD BE WILLING TO WAGER, THERE'S VIRTUALLY NO PLACE WHERE IT'S NOT STREAMLINED AND SUPER EFFICIENT AND PRODUCING SERVICES FOR THE LARGEST NUMBER OF USERS POSSIBLE. SO — SO THE SAVINGS POTENTIAL I THINK WOULD BE NEXT TO NOTHING. IF WHAT YOU ARE LOOKING FOR IS BETTER BANG FOR YOUR BUCK.

SLUSHER: YEAH, I THINK SO. OKAY. I WILL GO WITH THAT.

MAYOR GARCIA: OKAY. SO THERE'S A MOTION AND A SECOND ON THAT. FURTHER DISCUSSION? ALL IN FAVOR, SIGNIFY BY SAYING AYE.

AYE.

VOTE OF 6 TO 20 TO 1 WITH — 6 TO 0 TO 1 WITH COUNCILMEMBER WYNN TEMPORARILY OUTSIDE THE — OUTSIDE THE MEETING ROOM. THAT DOESN'T HAVE ANY FISCAL IMPACT, RUDY.

[ONE MOMENT PLEASE FOR CHANGE IN CAPTIONERS]NO CARRIERRINGCONNECT 1200

FUTRELL: AND THEN JUST AS A REMINDER, HERE WHAT WE WERE RECOMMENDING WAS A REDUCTION, A ONE-YEAR REDUCTION IN THE FUNDING. BUT I BELIEVE WE HAVE LOADED IN THE FIVE-YEAR FORECAST, SO IN OUR GAP NUMBER WAS LEVEL OR STABLE FUNDING, IS THAT RIGHT?

THAT'S CORRECT.

FUTRELL: OKAY.

MAYOR GARCIA: AND THE NEXT ONE IS TAB 15, WHICH IS EA VALUATE THE GOVERNANCE POLICIES FOR SMART GROWTH.

FUTRELL: AND ONCE AGAIN, HERE WE INTENDED, IF WE UNDERSTOOD YOUR DIRECTION COLLECTLY, IS TO TAKE THIS INTO COUNCILMEMBER WYNN'S TOIRS, MUCH LIKE THE MAYOR PRO TEM'S HOUSING TASKFORCE AND HAVE THEM GIVE US AN ANALYSIS AND RECOMMENDATION.

MAYOR GARCIA: ON THE BACKUP, RUDY, ON THE BACKUP, YOU TALK ABOUT PRIMARY EMPLOYEE INCENTIVES OF 34.2 MILLION. THAT'S OVER WHAT PERIOD?

FUTRELL: SINCE THE INCEPTION, WHICH WOULD BE THREE OR FOUR YEARS, MAYBE FOUR YEARS.

MAYOR GARCIA: AND THE SMART GROWTH MATRIX HAVE BEEN IN PLACE TWO YEARS?

THAT'S BEEN NOT QUITE AS LONG ADD THE PRIMARY EMPLOYER, SO I WOULD SAY YES, ABOUT TWO OR THREE YEARS. IT'S PROBABLY A YEAR LAGGING THE PRIMARY EMPLOYER.

MAYOR GARCIA: WE HAD PRIMARY EMPLOYER INCENTIVES GOING BACK MANY, MANY YEARS.

FUTRELL: AND THIS NUMBER DOES NOT CAPTURE ALL OF THOSE. THIS NUMBER CAPTURES THESE TWO THINGS. ABOUT FOUR YEARS AGO, MAYBE FIVE, BUT PROBABLY CLOSER TO FOUR, WHEN WE SORT OF TERMED THE WORD SMART GROWTH, WE CREATED REALLY THREE SETS OF PROGRAMS. ONE YOU'VE ALREADY TALKED ABOUT TODAY, WHICH IS WHERE WE INCREASED FEES IN SOME CASES IN THE DRINKING WATER PROTECTION ZONE, AND DECREASED THEM IN THE DESIRED DEVELOPMENT ZONE. THAT WAS SIMPLY AN ACROSS THE BOARD DECISION TO MAKE IT EASIER FOR PEOPLE TO MOVE OVER AND DEVELOP IN THE DESIRED DEVELOPMENT ZONE. THE SECOND ONE INVOLVED PRIMARY EMPLOYERS. UNDER THE PREMISE THAT WHERE A PRIMARY EMPLOYER GOES, THE SUPPORT SERVICES, RETAIL, HOUSING, WOULD GROW UP AROUND THE PRIMARY EMPLOYER AND PROVIDE INCENTIVES FOR BUSINESSES WHO ARE ALREADY HERE, WHO ARE EXPANDING, TO EXPAND FROM SITES THEY HAD LOCATED IN THE DRINKING WATER PROTECTION ZONE, TO THE DESIRED DEVELOPMENT ZONE. IT STARTED WITH MOTOROLA, DELL, CSC, IBM ACTIVELY. AND WE ALL KNOW WHEN WE FIRST HIT OUR FIRST ROCKS ON INTEL, THAT TIVOLI. WHAT WAS THE OTHER ONE, VIGNETTE, THAT ACTUALLY NEVER GOT OFF THE GROUND AT ALL. BUT IN ALL CASES THOSE WERE WAIVED FEES AND INFRASTRUCTURE INVESTMENTS. I READ IN THE PAPER AGAIN THE OTHER DAY A LETTER TO THE EDITOR THAT TALKED ABOUT TAX ABATEMENTS. NONE OF THOSE PROJECTS HAD TAX ABATEMENTS AS PART OF THEM. THEY WERE INFRASTRUCTURE INVESTMENTS, PUBLIC INFRASTRUCTURE INVESTMENTS AND FEE WAIVERS. SO THAT ONE NUMBER IS TIED TO THOSE PROJECTS. AND THE THIRD AND FINAL PROGRAM WAS SMART GROWTH MATRIX, WHICH WAS LESS ABOUT WHERE DEVELOPMENT IS LOCATED AND MORE ABOUT THE TYPE OF DEVELOPMENT, MORE URBAN DESIGN RELATED. SO ANY PROJECT COULD GO THROUGH ITS SITE PLAN A MATRIX THAT WOULD GIVE THEM POINTS BASED ON HOW PUBLIC TRANSIT FRIENDLY THEY WERE OR WHETHER THEY HAD PUBLIC ART, WHETHER THEY HAD, YOU KNOW, BUS TURNOUT LANES, CEBLGHTING SIDEWALKS — CONNECTING SIDEWALKS, MIXED USE. AND THROUGH THAT ALSO GET SOME TYPE OF PUBLIC INFRASTRUCTURE INVESTMENT AND WAIVED FEES. SO THOSE RELATE TO PRIMARY TWO PROGRAMS BECAUSE THE OTHER ONE WAS AN ACROSS THE BOARD FEE CHANGE.

MAYOR GARCIA: A COUPLE OF QUESTIONS IN REGARDS TO THAT. NUMBER ONE IS HOW DO YOU HANDLE BUDGETARILY THE FEE WAIVERS, LET'S SAY, IN THE SMART GROWTH MATRIX? DO YOU BUDGET THE REVENUE AND THEN WHEN IT'S WAIVED AND IT DOESN'T COME IN, OR —

WILL LET SOMEONE ELSE ANSWER THAT, MAYOR.

MAYOR GARCIA: TIPLY THE MIC WORKS. TYPICALLY THE MIC WORKS.

IT'S ANOTHER LOW BID SITUATION.

TYPICALLY THE REVENUES FOR DEVELOPMENT FEES AND THINGS LIKE THAT ARE PROJECTED BASED ON HISTORIC TRENDS AND ANTICIPATED POSSIBLE GROWTH IN THE FUTURE. SO IT'S REALLY NOT AN INSTANCE THAT YOU — THAT THAT IS TOUGHLY TAKEN INTO ACCOUNT EXCEPT FOR THE FACT THAT IT BECOMES BUILT INTO YOUR HISTORICAL TRENDS, THEN IT AFFECTS WHAT YOU PROJECT OUTWARD. SO THERE'S NOT A SPECIFIC WAY THAT WE GO ABOUT BUDGETING IT.

MAYOR GARCIA: SO IN THE '03 BUDGET DO YOU HAVE SOME REVENUE THAT WE MAY NOT BE ABLE TO REALIZE BECAUSE WE WAIVED FEES?

I THINK IT'S PROBABLY THE OTHER — NO, I DON'T THINK SO BECAUSE WE'VE BEEN WAIVING FEES THIS YEAR, WE ARE ASSUMING THAT WE WOULD CONTINUE WAIVING THEM KIND OF AT A SAME LEVEL FOR THE SAME TYPES OF PROJECTS. AND SO WE HAVE NOT INCLUDED THAT, THOSE WAIVERS, IN THE '03 BUDGET.

MAYOR GARCIA: SO IN THE '02 BUDGET THERE WAS PROBABLY LIKE TWO MILLION DOLLARS IN WAIVED FEES MAYBE? BUT THE 6.7 IS THREE YEARS APPROXIMATELY.

YEAH. IT SHOULDN'T HAVE BEEN VERY MANY THAT HAPPENED IN THE LAST YEAR. LAST YEAR THERE WERE PROBABLY VERY FEW THAT KICKED IN.

MAYOR GARCIA: IN '02?

YEAH. IT WOULD PROBABLY BE SPLIT BETWEEN '01 AND 2000.

> SO THE FISCAL IMPACT, SO WE SAY WE'RE GOING TO SPLIT THE FEES FOR ONE YEAR. WHAT WOULD BE THE FISCAL IMPACT?

THAT WOULD BE A POSITIVE IMPACT BECAUSE WE WOULD START TO REALIZE REVENUES THAT WE PREVIOUSLY HAD NOT.

MAYOR GARCIA: OF HOW MUCH?

FUTRELL: I THINK IT WOULD BE VERY HARD TO GIVE YOU AN ACCURATE NUMBER RIGHT NOW PRIMARILY BECAUSE THESE TYPE OF PROJECTS HAVE SLOWED DOWN JUST BECAUSE OF THE ECONOMY.

MAYOR GARCIA: SURE.

FUTRELL: REALLY HERE I THINK IT WAS, LES, AND CORRECT ME IF I'M WRONG ON THIS, BUT I BELIEVE UNTIL WE HIT OUR TURN DOWN THIS — DOWNTURN THIS YEAR, WE NEVER CAME IN BELOW BUDGET ON SMART GROWTH ON DEVELOPMENT FEES, IS THAT CORRECT?

NO, NOT FOR A LONG TIME. I MEAN BACK IN THE 80'S —

FUTRELL: THAT'S WHAT I MEANT, THE LAST THREE, FOUR YEARS.

YEAH.

FUTRELL: BECAUSE WE WERE REALLY AT THE TAIL END OF THE BOOM, WE WERE ALWAYS MAKING A LITTLE MORE DEVELOPMENT FEE REVENUE THAN WE HAD ACTUALLY ANTICIPATED OR BUDGETED, EVEN WITH SMART GROWTH INITIATIVE. BUT I DON'T BELIEVE THAT IF YOU WERE TO WAIVE THESE FEES FOR NEXT YEAR, YOU WOULD HAVE A SUBSTANTIAL, A SUBSTANTIAL INCREASE IN WHAT WE COULD ADD TO THE REVENUE SIDE, PRIMARILY JUST BECAUSE OF THE ECONOMY. WE'RE NOT EXPECTING A GREAT DEAL OF THESE PROJECTS COMING FORWARD.

I WOULD AGREE WITH THAT AT THIS POINT.

MAYOR GARCIA: THERE'S NOT GOING TO BE ANY EFFECT ON THE 29th OR WHATEVER IS LEFT?

MAYBE SOME SMALL.

JUST A GUESS WOULD BE MAYBE TWO, THREE HUNDRED THOUSAND DOLLARS, SOMETHING LIKE THAT.

MAYOR GARCIA: SO I GUESS THE QUESTION FOR THE COUNCIL IS DO YOU ALL WANT TO SUSPEND FOR ONE YEAR THE INCENTIVES FOR SMART GROWTH? IT WOULD BE A GENERAL DIRECTION AND I DON'T THINK IT HAS ANY BUDGETARY IMPACT, SO I THINK THAT THAT'S MORE A POLICY ISSUE THAN IT IS A BUDGET ISSUE.

SLUSHER: BUT MAYOR, DIDN'T WE ON AN EARLIER ITEM ASK THE MANAGER TO LOOK AT CHANGING SOME OF THE CRITERIA TO TRY TO GET MORE AFFORDABLE HOUSING DOWNTOWN? AND I THINK TO ME THAT'S A GOOD INVESTMENT TO MAKE AT THIS TIME IN HISTORY. SO THAT WOULD SEEM IF WE DIDN'T DO IT FOR A YEAR, THEN WE WOULD BE ABLE TO DO THAT.

MAYOR GARCIA: SO THE DIRECTION IS TO THE EXTENT THAT WE'RE TALKING ABOUT AFFORDABLE HOUSING, THAT WE WANT TO KEEP THE POLICIES IN PLACE, CORRECT? IS THAT WHAT YOU'RE SAYING?

LUSHER: YES. AND WHAT I WOULD DO IS LOOK AT THE WHOLE THING, HAVE THE CITY MANAGER LOOK AT THE WHOLE SITUATION, THE WHOLE PROGRAM. AND DEFINITELY STRENGTHEN — STRENGTHEN THE AFFORDABLE HOUSING INCENTIVES PARTS OF IT. AND I THINK — THIS IS A SITUATION I THINK WHERE WE MIGHT BE ABLE TO TURN CRISIS INTO OPPORTUNITY BECAUSE THE LAND PRICES MAY NOT BE LOWER, BUT THEY'RE GOT GOING UP AS FAST AND SOME MAY EVEN ARE LOWER DURING THE SITUATION AND THAT WOULD BE THE TIME WHEN SOME AFFORDABLE HOUSING — MORE AFFORDABLE HOUSING COULD BE BUILT BOTH BY THE PRIVATE SECTOR AND THE PUBLIC SECTOR.

MAYOR GARCIA: THERE ARE SOME PROJECTS OUT THERE THAT FALL INTO THAT CATEGORY. FORTUNATELY MOST OF THOSE ARE TAX CREDIT PROJECTS. THE REGULAR PROJECTS REALLY DON'T HAVE THE ECONOMIC STRUCTURE TO BE ABLE TO MAKE THEM AFFORDABLE. THERE ARE SOME PROJECTS IN EAST AUSTIN THAT ARE COMING IN WITH SOME PRETTY HIGH PRICED LIVING UNITS. OKAY.

SLUSHER: AND I WOULD JUST WANT TO INSTRUCT IN WHAT I JUST SAID IN THE FORM OF A MOTION AS WELL AND WE MIGHT LOOK AT REDUCING SOME OF THE INCENTIVES AT THIS TIME OR DURING THIS TIME. I STILL THINK IT'S IMPORTANT TO STEER THE GROWTH THAT WE DO HAVE AWAY FROM THE HEWARD'S AQUIFER. I WOULDN'T JUST WANT TO ABANDON THAT PROGRAM. ANOTHER THING I WOULD LIKE TO SEE IS IF WE COULD CALCULATE HOW MUCH OUR TAX BASE AND OUR TAX INTAKE HAS INCREASED DUE TO THE PREVIOUS PACKAGES THAT WE'VE HANDED OUT. BECAUSE WE MIGHT FIND OUT THAT THOSE ARE ACTUALLY HELPING US DURING THIS TIME. SO I WOULD LIKE TO SEE ALL THAT INFORMATION BEFORE WE MAKE A DECISION ON EXACTLY WHERE TO GO WITH IT, BEYOND THAT WE DO WANT TO INCREASE THE OUTPUT FOR AFFORDABLE HOUSING.

MAYOR GARCIA: I THINK THE ADDED VALUES FOR NOT INCREASING THE VALUE OF THE PROPERTY THAT WAS THERE BEFORE BEFORE — WHAT DO THEY CALL THAT, IMPROVEMENTS? BUT THEN FROM LAST YEAR TO THIS YEAR REMAINED PRETTY STEADY. FUTURE AND WE DO HAVE SOME ANALYSIS OF THOSE NUMBERS THAT WE CAN GIVE YOU. SO IF I UNDERSTAND WHAT WE'RE GOING TO DO HERE, ON THE HOUSING FUND THAT WILL GO TO THE HOUSING TASKFORCE, AND THAT WILL INCLUDE A LOOK AT SMART HOUSING AND SMART HOUSING INCENTIVES. AND ON THE SMART GROWTH, THAT WILL GO TO COUNCILMEMBER WYNN'S ECONOMIC DEVELOPMENT GROUP WITH SOME STAFF SUPPORT TO COME BACK WITH A WHOLE OOOH LOOK AT THE SMART GROWTH INITIATIVE. IS THAT THE DIRECTION?

SLUSHER: YES. WITH PARTICULAR FOCUS AT ONE THING THAT THE COUNCIL IS CLEAR THAT WE WANT OUT OF THAT IS THAT WE THINK THE HOUSING THAT'S GOING DOWNTOWN, WE'VE BEEN SUCCESSFUL IN GETTING HOUSING APPROXIMATE IN THE DOWNTOWN, WHICH A FEW YEARS AGO THERE WAS VIRTUALLY NONE AND NOW THERE'S BEEN QUITE A BIT OF SUCCESS ON THAT, BUT THE OVERWHELMING MAJORITY IS ON THE VERY HIGH END. AND WE'RE GOING TO GIVE INCENTIVES FOR HOUSING DOWNTOWN AND WE WANT IT TO BE — TO TRY TO BALANCE OUT THE PRICE RANGES OF THAT HOUSING.

OKAY.

GOODMAN:: MAYOR, CAN I SAY SOMETHING? I THINK WITH WE SAY SMART GROWTH WE HAVE REALLY GONE BEYOND A BUDGET ITEM. SMART GROWTH AS A CONCEPT AND A PHILOSOPHY NEVER REALLY HAD THE OPPORTUNITY TO GROW AND MATURE AND PERHAPS EXPAND IN SOME WAYS AND PARE BACK IN OTHERS SO THAT THERE'S STILL NO CLEAR DEFINITION. SO IF WE WERE TO WIPE IT OUT AT THIS MOMENT, WE HAVE NOTHING ELSE TO TAKE ITS PLACE. THE CONCEPT IS STILL A POSITIVE ONE. IT WAS THE PERIPHERAL ISSUES THAT GOT PRETTY ROCKY ROADED. I STARTED TO MAKE A NOWN INTO A VERB. NOUN INTO A VERB. I THINK THE FEES ARE THE PLACE WHERE WE'LL HAVE PERHAPS MORE OF A RANGE OF POSSIBILITIES THAT WILL IMPACT THIS AND THEN THE POLICY I THINK WILL BE ABLE TO DEFACT TOW TRAVEL ALONG WITH THOSE FEE ISSUES. SO WITHOUT SAYING YEA OR NAY AS TO WHETHER SMART GROWTH WORKS OR IT DOESN'T, WE KNOW THAT IT'S THE ONLY UMBRELLA THAT WE HAVE RIGHT NOW THAT WE CAN PUT THIS UNDER. SO I WOULD CONFER WITH COUNCILMEMBER SLUSHER THAT THIS IS NOT THE TIME TO CRATER IT, BUT WE DO NEED TO FIND THE OTHER MECHANISM OUTSIDE THE BUDGET DELIBERATIONS TO HELP SMART GROWTH EVOLVE AND MATURE AND BE ALL THAT IT NEEDS TO BE, WHICH PERHAPS MEANS IT'S READY FOR A NEW NAME.

FUTRELL: WE PROBABLY SHOULD HAVE HELPED MAKE THAT DISTINCTION BECAUSE TAB 13 AND 14, HOUSING AND C.A.N. AND SOCIAL SERVICE, DEPENDING ON WHAT YOUR RECOMMENDATION IS, COULD HAVE AN IMPACT, REALLY A QUANTIFIABLE IMPACT ON THE BUDGET. 15 REALLY IS MORE ABOUT REVISITING AN OVERALL STRATEGIC POLICY AND WE'LL PROBABLY HAVE LESS QUANTIFIABLE EFFECT ON THE BUDGET FOR NEXT YEAR.

MAYOR GARCIA: OKAY. THE NEXT ITEM ARE CALLED NEXT STEPS PROCESS AND SCHEDULE. AND UNDER TAB 16 WE HAVE THE HIGHLIGHTS FROM APPENDIX B AND WE HAVE FIVE ITEMS, SOME OF WHICH WE ALREADY HAVE TALKED ABOUT, THE EVALUATION OF THE CITY HALL CENTER I THINK WE'VE DONE ALREADY. BUT CONSIDER DELAYING THE FACILITIES AND MAJOR CAPITAL EXPENDITURES, EVALUATE PUBLIC SAFETY STAFFING PROPOSAL, EVALUATE THE DEPARTMENTS WITH THE PREPARING — [ INAUDIBLE ] AND EVALUATE LIBRARY SERVICES. AND CITY MANAGER, DO YOU WANT TO —

FUTRELL: UNDER NEXT STEPS, WHAT I WAS TRYING TO ACCOMPLISH IS — AND YOU SAW ON OUR RUNNING TALLY, WE MADE A GOOD STAB AT SOME DIRECTION IN HOW TO CLOSE THAT GAP.

MAYOR GARCIA: COUNCILMEMBERS, DO YOU ALL HAVE THIS BOOK?

MAYOR, WE DID BRING A FEW EXTRAS IF THE COUNCILMEMBERS NEED A COPY.

MAYOR GARCIA: WE'LL BE TALKING ABOUT APPENDIX B, WHICH IS ON PAGE 48 OF THIS BOOK. IF YOU COULD GET ONE FOR COUNCILMEMBER GRIFFITH. MAYOR PRO TEM, DO YOU HAVE ONE?

GOODMAN:: NO, I FORGOT.

WE'LL GET THOSE PASSED OUT.

FUTRELL: ALTHOUGH WE ARE AVAILABLE TO ANSWER LINE ITEM QUESTIONS ON APPENDIX B, IF YOU HAVE QUESTIONS, WHAT WE TRIED TO DO IS CATEGORIZE SOME OF THE LARGE TICKET ITEMS THAT ARE INCREASES IN EXPENDITURE FOR NEXT YEAR IN YOUR GAP. AND JUST TALK TO YOU A LITTLE BIT ABOUT HOW WE WOULD APPROACH THOSE AS PART OF TRYING TO CLOSE THE GAP AND GET SOME INFORMAL FEEDBACK FROM YOU ON HOW YOU VIEW EACH OF THESE AREAS. SO, FOR EXAMPLE, ON NUMBER ONE, WHICH IS DELAYING FACILITIES AND/OR MAJOR CAPITAL, THIS IS SOMETHING IN A BUDGET CRUNCH YOU WOULD ROUTINELY DO. YOU WOULD TAKE A LOOK AT YOUR BIG TICKET, BRICK AND MORTAR, LARGE CAPITAL ITEMS, AND SEE WHICH OF THESE THINGS COULD BE POSTPONED TO A BETTER YEAR. IN THE CASE OF DELAYING A FACILITY, ONE THAT YOU MIGHT CONSIDER AND THAT WE MIGHT WANT TO LOOK AT AS PART OF BALANCING THE BUDGET IS WHERE WE CAN PUT OFF FOR A YEAR SOMETHING LIKE A FIRE/E.M.S. STATION. AND WE BELIEVE THERE IS ONE IN APPENDIX B WHERE WE COULD STILL MEET OUR ANNEXATION REQUIREMENTS, THAT WE'RE ACTUALLY AHEAD OF THE CURVE ON, THAT WE COULD DELAY FOR ONE YEAR. THERE ARE ALSO SOME MAJOR CAPITAL ITEMS THAT WE WOULD LIKE TO SCRUB AND LOOK AT TO SEE COULD THESE BE POSTPONED FOR A YEAR. SO THAT'S JUST THE GENERAL CATEGORY ITEM THAT WE WOULD LOOK AT TO TRY TO CLOSE THE BUDGET THE REST OF THE WAY. THERE ARE A NUMBER OF PUBLIC SAFETY STAFFING ITEMS THAT ARE LOADED INTO YOUR GAP UNDER NUMBER 2. THERE ARE RELATIVELY LARGE TICKET ITEMS AND THEY ARE POLICY DECISIONS ON HOW YOU WANT TO MOVE FORWARD IN ROUGH ECONOMIC TIMES, BUT ALSO TRICKY SECURITY TIMES. THIS WOULD INCLUDE EVERYTHING FROM MOVING TO 2.0 OFFICERS PER THOUSAND TO FIRE TASKFORCE STAFFING. AND YOU CAN SEE THOSE ITEMIZED IN APPENDIX B. ON NUMBER 3, WE INTENDED AND MADE AN AGREEMENT IN AN AMENDED CONSENT AGREEMENT TO BRING SPRING WOOD MUDS INTO THE CITY NEXT YEAR. THEY HAVE APPROACHED US ABOUT NEGOTIATING A STRATEGIC PARTNERSHIP WITH THE CITY. THAT WOULD HAVE TO BE NEGOTIATED BEFORE THE END OF THIS YEAR IN ORDER TO MEET THE REQUIREMENTS WE WOULD NEED IN STATE LAW. SO ONE OF THE SUGGESTIONS WE WOULD HAVE IS THAT WE GO INTO THOSE NEGOTIATIONS AND SEE IF WE CAN INDEED GET A STRATEGIC PARTNERSHIP ON SPRINGWOOD M.U.D., WHICH WOULD DELAY A NUMBER OF EXTENSIVE INFRASTRUCTURE INVESTMENTS THAT WE WOULD HAVE TO MAKE WHEN WE TOOK ON THAT AREA. REMEMBER, MUCH OF THAT AREA WE ALREADY HAVE THE COMMERCIAL IN THE CITY LIMITS BECAUSE WE DID A PHASE ANNEXATION. SO WITHOUT LOSING A GREAT DEAL OF REVENUE, WE COULD PUT OFF SOME CAPITAL EXPENDITURES. WE'VE ALREADY TALKED ABOUT THE CALL CENTER AND GAINED 1.8 MILLION THERE. AND WE ADDED NUMBER 5 LESS BECAUSE IT IS LISTED AS AN ITEM IN APPENDIX B AND MORE THAT WE KNOW IT'S A TOPIC OF A GREAT DEAL OF DISCUSSION RIGHT NOWVMENT NOW. IT IS A PAINFUL CUT AND DECISION TO MAKE. AS I'VE SAID, IT'S RAISED A GREAT DEAL OF DISCUSSION IN THE COMMUNITY. IT WAS VERY CAREFULLY THOUGHT THROUGH AND RECOMMENDED TO US BY BOTH THE LIBRARY STAFF AND THE LIBRARY COMMISSION AS A WAY FOR THEM TO CATCH THEIR BREATH AND CATCH UP WITH WHERE THEY WERE. WE TRIED TO MAKE SURE THAT EVERY AREA HAD A CLOSE-BY FACILITY THAT WAS OPEN, AND WE ALSO MADE SURE THAT NO FORMAL YOUTH PROGRAMMING WAS CUT OR CANCELLED AS PART OF THIS. I'LL TELL YOU SOMETHING THAT HAS TAKEN ME A LITTLE BIT BY SURPRISE, SOMETHING I DIDN'T RECOGNIZE WHEN WE MADE THIS RECOMMENDATION, WHICH WAS REALLY THE NUMBER OF PEOPLE WHO ACTUALLY USED THE LIBRARY ALMOST LIKE A CHILD CARE FACILITY. NOW, THAT RAISES ANOTHER PROBLEM. IT SURFACES ANOTHER GAP IN THE COMMUNITY, BUT I THINK IT HAS EXACERBATED THE REACTION TO THE ONE-DAY A WEEK CLOSURE OF PAIRED LIBRARIES. THE GOAL WAS TO GET THROUGH THE SUMMER, ACCRUE THOSE COST SAVINGS AND THE STAFF DID NOT HAVE TO OPEN THE LIBRARY ON THAT ONE DAY, CATCH UP, PUT BOOKS ON THE THE SHELVES, MOVE TO OTHER LIBRARIES THAT COULD BE FULLY STAFFED AND OPEN AT THE SCHOOL YEAR. AS PART OF THE 25% OF THE VACANCIES THAT LIBRARY IS HIRING, THEY HAVE HIRED OR ARE HIRING — YOU MIGHT HAVE TO HELP ME WITH THIS, MIKE, BUT THEY'RE HIRING THEIR VOLUNTEER COORDINATOR. ONE OF THE THINGS WE HOPE TO DO, AND I THINK IT PARALLELS VERY NICELY WHAT THE EDITORIAL SAID TODAY, IS THAT WE'RE HOPING TO TRY TO MOBILIZE VOLUNTEER SERVICES, WE'RE OBVIOUSLY OPEN FOR PRIVATE/PUBLIC PARTNERSHIPS. THAT COULD HELP. IN LOOKING FOR SOME SOLUTION TO WHAT CAN WE DO DURING THE SUMMER ON THE LIBRARIES. SO I JUST WANTED TO LAY OUT A LITTLE BIT OF THE STRATEGY. CHIEF McDONALD IS HERE. HE CAN TALK ABOUT THE PROPOSAL IN MORE DETAILS IF YOU HAVE QUESTIONS. AND IF THERE'S ANYTHING YOU WOULD LIKE TO TELL US ON THESE LARGE ITEMS, THAT YOU WOULD LIKE US TO CONSIDER, THAT IT'S PRIORITY TO YOU IN TERMS OF HOW WE APPROACH EVALUATING THE EXPENDITURES OR OTHER THINGS IN APPENDIX B, MANY OF THEM ARE KIND OF OFFSETTING COSTS AND I THINK WE'VE PULLED THE LARGE ONES OUT. SO THAT'S THIS PART OF THE DISCUSSION. IT'S WHAT ARE OUR NEXT STEPS. FOR US AFTER THIS WORK SESSION, WE NEED TO GO AWAY AND PUT TOGETHER THE PROPOSED BUDGET. WE'LL CONTINUE TO DO VERY CLOSE ONE ON ONE CONTACTS WITH YOU TO GET A SENSE OF YOUR PRIORITIES, AND WE'LL BE LOOKING BASICALLY THROUGH EVERY SERVICE AND EVERY PROGRAM IN THE CITY, USING MANAGING FOR RESULTS OUR PERFORMANCE MEASUREMENTS, USING CORE SERVICE ANALYSIS, USING A WHOLE VARIETY OF TOOLS TO SEE WHERE CAN WE GARNER THE REST OF THE SAVINGS WE'RE GOING TO NEED TO CLOSE THIS GAP. I ACTUALLY HAD A CHANCE TO SEE A SERIES OF QUESTIONS THAT COUNCILMEMBER SLUSHER HAD FRAMED FOR HIS OWN BENEFIT OF HOW HE WOULD APPROACH CUTS AND SERVICES. AND MANY OF THESE QUESTIONS. AND I THINK THEY HAVE BEEN PASSED OUT TO YOU, ARE SIMILAR TO THE TYPE OF QUESTIONS WE WOULD BE ASKING OURSELVES AS WE MOVE THROUGH EACH OF THE DECISIONS, WHO'S IMPACTED, WHAT ARE THE DEMOGRAPHICS OF WHO'S IMPACTED, IS AN ALTERNATIVE SERVICE OR OPTION, ARE THERE UNINTENDED CONSEQUENCES, LOSSES OF OTHER JOBS, THOSE KINDS OF THINGS. AND I DON'T KNOW IF COUNCILMEMBER SLUSHER WOULD LIKE TO USE THIS OPPORTUNITY TO GO THROUGH THAT LIST.

SLUSHER: THANK YOU, CITY MANAGER. I THINK I MIGHT PASS THESE OUT TO EVERYBODY. AND I SAID IN THE MEMO I'M REAL OPEN TO FEEDBACK. I HOPE I GET SOME. THESE ARE SOME OF THE CRITERIA I'M GOING TO BE USING TO EVALUATE INDIVIDUAL PROGRAMS AND INDIVIDUAL LINE ITEMS. AND NOT ALL THESE APPLY, WOULD APPLY TO EVERY ITEM. AND SOME AREN'T TOTALLY QUANTIFIABLE, BUT IS THIS CORE SERVICE, HOW MANY PEOPLE DOES THIS SERVICE BENEFIT AND NUMBERS AND PERCENTAGES THIS SERVICE ADDRESS A NEED FOR WHICH DEMAND AS INCREASED BY THE ECONOMIC SITUATION, FOR INSTANCE, THE SOCIAL SERVICES THAT WE WERE TALKING ABOUT EARLIER, CAN WE FIND PARTNERS THAT CAN HELP FUND THIS? FOR EXAMPLE, NOW THE CITY IS GOING TO GET THE QUARTER-CENT FROM CAPITAL METRO THAT WILL HELP US FUND TRANSPORTATION PROJECTS AND THAT'S SUPPOSED TO BE ADDED TO WHAT WE'RE SPENDING ALREADY. WHAT IS THE IMPACT OF THIS SERVICE OR PROJECT ON OTHER PARTS OF OUR ECONOMY AND OTHER CITY REVENUE SOURCES? HOW MANY PEOPLE DOES THIS SERVICE OR PROJECT EMPLOY? BECAUSE OBVIOUSLY IF PEOPLE LOSE THEIR JOBS, THAT INCREASES THE DEMAND FOR OTHER SERVICES. HOW MANY JOBS DOES THE JOB OR SERVICE CREATE? COULD THIS BE A REVENUE-PRODUCING PROJECT FOR THE CITY? SO I'M SURE THERE'S PLENTY MORE, BUT THOSE ARE IDEAS THAT I'M GOING TO BE USING IN EVALUATING.

MAYOR GARCIA: DID YOU SAY THE CAPITAL METRO HAS ALREADY DECIDED ON A QUARTER-CENT?

SLUSHER: WE VOTED IN FAVOR OF THAT AT THE APRIL BOARD MEETING, YES.

MAYOR GARCIA: AND THAT'S IN THE BUDGET ALREADY?

FUTRELL: I BELIEVE THAT IS IN THE BUDGET, BUT YOU WILL NEED TO CORRECT ME. VICKY MAY BE ABLE TO TELL YOU THIS OR NOT. AND WE ARE BRINGING FORWARD A LIST OF PROJECTS FOR YOU. LISA, DO YOU KNOW WHEN? IS IT JUNE 27th? SO PROBABLY YOUR VERY NEXT COUNCIL MEETING WE'LL BE BRINGING FORWARD A PROPOSAL TO YOU ON AN ALLOCATION OF THAT?

SLUSHER: THE THING TO BE CAREFUL ABOUT THERE IS THOSE ARE THE CRITERIA UNDER WHICH THAT CAME FORWARD ORIGINALLY AND CONTINUES TODAY IS THAT THOSE HAVE TO BE ADDED, SO WE CAN'T USE THAT. AND NOW WE GO TO OUR TRANSPORTATION DEPARTMENT BUDGET AND MOVE MONEY SOMEWHERE ELSE AND IT WAS INTENDED TO BE LIKE THAT BECAUSE THESE ARE THE TAX FUNDS FOR TRANSPORTATION. AND THE IDEA WAS WHEN THE RAIL ACTION DIDN'T PASS THAT THE QUARTER-CENT WOULD GO BACK TO THE JURISDICTIONS TO USE ON TRANSPORTATION PROJECTS BEYOND — MORE TO BE DONE ABOUT TRANSPORTATION THAN WAS ALREADY BEING DONE.

MAYOR GARCIA: IS THERE ANYTHING IN THE BUDGET RIGHT NOW THAT WOULD FALL IN THAT CATEGORY? BECAUSE THE QUESTION THAT IS ASKED US IS CAN WE FIND PARTNERS THAT CAN HELP FUND THIS? SO IF THIS IS FOR PROJECTS THAT ARE IN ADDITION TO — COUNCILMEMBER SLUSHER, IS THAT RIGHT?

SLUSHER: CORRECT. ADDED TO.

MAYOR GARCIA: DO WE HAVE ANY PROJECTS THAT WOULD QUALIFY FOR THIS KIND OF FUNDING?

I DON'T BELIEVE WE DO IN THE BUDGET.

FUTRELL: THERE ARE OBVIOUSLY LOTS OF PROJECTS THAT WE'RE INTERESTED IN USING THE MONEY FOR, BUT NOT IN THE BUDGET. RIGHT, VICKY?

THAT IS CORRECT.

SLUSHER: FOR INSTANCE, IF WE WERE TO PUT SOME OF THOSE FUNDS TO SEND THE PEDESTRIAN BRIDGE OVER — BEYOND CESAR CHAVEZ, THAT WOULD BE SOMETHING THAT WE WEREN'T GOING TO BE ABLE TO DO OTHERWISE.

MAYOR GARCIA: SEE IF THAT FUNDING WOULD HAVE ANY IMPACT ON THE BUDGET THAT'S ALREADY BEEN FORMULATED.

I DON'T BELIEVE SO, BECAUSE OF THE ADDITIVE CRITERIA, I DON'T THINK WE'VE BUILT INTO THIS BASE BUDGET ANY NEW THINGS THAT WE HADN'T ALREADY PLANNED ON. AND SO I DON'T THINK THERE'S ANYTHING THAT THAT MONEY COULD REPLACE.

MAYOR GARCIA: BUT ONE THING FOR SURE IS THESE ARE ADDED PROJECTS AND THAT WE WOULD LOOK AT THE THINGS THAT WE REALLY NEED TO ADD A LOT OF VALUE. NOT NECESSARILY LEVERAGING, BUT CONNECTING SO THAT THIS MONEY THAT'S FOR THE TRADITIONAL PROJECT REALLY ADDS A LOT OF VALUE TO A LOT OF OTHER THINGS. AND I'M SURE THAT'S ONE OF THE THINGS THAT MS. GORDON AND YOU ARE LOOKING AT.

FUTRELL: YOU ALSO HAD ANOTHER CRITERIA. YOU ASKED US TO OVERLAY ON THE QUARTER-CENT. AND I BELIEVE IT WAS 15% OF THE MONEY AT A MINIMUM SHOULD GO FOR BIKE AND PEDESTRIAN ORIENTED PROJECTS. SO WE HAVE ALSO INCLUDED THAT IN THE RECOMMENDATIONS THAT WE'RE FORMULATING.

MAYOR GARCIA: OKAY. COUNCIL, ON THIS APPENDIX B, WE HAVE SOME PRETTY HEAVY ITEMS. I THINK THE ONE IN THE EMERGENCY MEDICAL SERVICES, DEL VALLE STATION STAFFING, PROVIDES 10 NEW PARAMEDICS FOR DEL VALLE STATION OPENING IN NOVEMBER OF 2002. 12 MONTHS OF FUNDING, CAPITAL OUT LAY AND 10 PARAMEDICS ARE INCLUDED IN THE STAFF POSITION AND FOR E.M.S. BY APRIL 2003. 1,$413,000. WHAT EXTENT DOES THE COUNCIL WANT TO SAY WE'RE GOING TO DELAY THIS EXPENDITURE AND MOVE IT INTO FISCAL YEAR 2004 OR ANYTHING ELSE?

> THE DEL VALLE STATION, WHICH IS BOTH FIRE AND E.M.S., SO IT ACTUALLY DOUBLES THAT AMOUNT, IT WILL BE AM 2.3 MILLION IF WE DELAY IT ON BOTH THE FIRE AND THE E.M.S. SIDE, IS THE STATION THAT THE PUBLIC SAFETY STAFF HAS SAID CAN BE DELAYED FOR A YEAR. SO THIS WOULD BE PROBABLY ONE OF THE ONES WE WOULD BE RECOMMENDING.

MAYOR GARCIA: AND THEN THERE'S ANOTHER STATION. THERE'S THE FIRE SOUTHEAST, E.M.S. STATION. DO WE WANT TO DIRECT THE CITY MANAGER TO POSTPONE BRINGING THESE FACILITIES AND SERVICES ONLINE FOR 12 MONTHS?

FUTRELL: JUST SO YOU KNOW, YOU ARE NOT ABLE TO POSTPONE ALL OF THESE STATIONS. YOU HAVE SERVICE —

MAYOR GARCIA: YEAH. ASSUMING THAT WE ARE DISCHARGING OUR RESPONSIBILITIES TO PROVIDE SERVICES UNDER THE ANNEXATION AGREEMENTS. AND I GUESS WE NEED TO KNOW WHAT KIND OF FLEXIBILITY WE HAVE IN THAT RESPECT.

FUTRELL: AND DEL VALLE IS ONE OF THOSE THAT WE WERE AHEAD OF THE CURCH ON THAT ONE. WE COULD PUT IT OFF FOR A YEAR WITHOUT ANY SERVICE PLAN IMPACT AND WITHOUT A RESPONSE IMPACT. WE'RE GOING TO BE ABLE TO BEAT THE CURRENT RESPONSE TIME THERE. FOR NEXT YEAR.

MAYOR GARCIA: WE COULD DO THIS IN ANY ONE OF TWO WAYS. NUMBER 1 IS WE CAN STAY THAT WE'RE GOING TO PICK THIS ITEM AND THIS ITEM AND THIS ITEM. OR WE CAN SAY TO THE CITY MANAGER, YOU KNOW, LOOK AT SERVICE STREAMS, LOOK AT OBLIGATIONS THAT THE CITY HAS UNDER ANNEXATION AGREEMENTS, LOOK AT ALL THE THINGS THAT HAVE TO BE LOOKED AT, AND THEN BRING BACK TO US THOSE THINGS THAT ARE NOT JUST TOTALLY, TOTALLY, YOU KNOW, NECESSARY TO BE DONE. THE FIVE-YEAR PLAN FOR 2.0 FOR STAFF WILLING IS $1.6 MILLION. OBVIOUSLY VERY SENSITIVE ISSUE. YOU KNOW, ALL THOSE OTHER THINGS IN THE POLICE DEPARTMENT ON PAGE 50 THERE'S SOME PRETTY HEAVY ITEMS, PRETTY LARGE ITEMS THAT — THE COST OF OFFICERS ADDED IN '02, $2.2 MILLION.

FUTRELL: THOSE ARE OFFICERS ALREADY HERE. SO ONCE AGAIN, THAT'S A COST THAT HAS A STEP IN LONGEVITY. AND SO THERE ARE — ALL OF THESE HAVE DIFFERENT REQUIREMENTS AND COMPLICATIONS, BUT SOME OF THEM ARE CLEARLY OPEN AND FREE POLICY DECISIONS. THE FIVE-YEAR PLAN, THE 2.0, IT'S A POLICY DECISION THAT WAS MADE LAST YEAR TO GO TO 2.0. YOU ALSO HAVE SOME FLEXIBILITY THERE IN TRYING TO EXPEDITE IT, DELAY IT OR KEEP IT THE FIVE-YEAR PATH. YOU ALSO HAVE MUCH THAT SAME FLEXIBILITY UNDER FIRE, UNDER TASKFORCE STAFFING.

MAYOR GARCIA: MY VIEW ON THIS ONE IS THESE ARE BIG TICKET ITEMS, CITY MANAGER, AND BECAUSE WE'RE $29 MILLION AWAY FROM THE STRUCTURALLY BALANCED BUDGET, THAT WE NEED TO LOOK AT ALL OF THEM AND SEE — USING COUNCILMEMBER SLUSHER'S MATRIX AND THE OTHER ITEMS THAT WE HAVE DISCUSSED HERE, LOOK AT WAYS OF ADDRESSING THE SHORTFALL FROM THESE ITEMS TO THE EXTENT POSSIBLE. AND WE DON'T KNOW FOR A FACT WHAT OBLIGATIONS — I DON'T THINK THE COUNCIL KNOWS WHAT OBLIGATIONS WE HAVE TO DO ALL THESE OTHER THINGS. APPROVED ANNEXATION, ADD SIX NEW OFFICERS FOR N ONCREEK, I THINK ONION CREEK WAS GOING TO BE ANNEXED UNTIL THE FOLLOWING YEAR. I DIDN'T KNOW FOR SURE HOW ALL THESE THINGS WORKED. THESE ARE THE BIG TICKET ITEMS. AND TO GET TO WHERE WE CAN BALANCE THE BUDGET, WE MAY HAVE TO TAKE A CRITICAL LOOK AT ALL OF THESE ITEMS. COUNCILMEMBERS?

SLUSHER: MAYOR, I TOTALLY AGREE WITH THAT. I THINK THE BEST APPROACH IS TO LET THE CITY MANAGER GO THROUGH AND PICK OUT THE ONES THAT SHE THINKS ARE THE BEST CANDIDATES TO DELAY AND NOT SPEND MONEY ON THIS YEAR BECAUSE I THINK IF WE WENT THROUGH IT TODAY AND JUST PICKED OUT, THEN WE MIGHT SEND A MESSAGE WE'RE SAYING NOT TO LOOK AT ANY OF THE OTHER ONES. AND I THINK WE PROBABLY SHOULDN'T MAKE THAT DECISION ON THE FLY.

MAYOR GARCIA: ONE OF THE THINGS THAT I'M TRYING TO SEE HOW THE COUNCILMEMBERS MAY GET INVOLVED. I DON'T KNOW WHETHER THE COMMITTEE WOULD BE A GOOD PLACE AS A SOUNDING BOARD AS YOU MOVE THROUGH THE PROCESS BECAUSE THAT'S NOT A — IT'S A QUORUM OF THE COUNCIL BURKS IT ISN'T THE FULL COUNCIL. SO LET'S TALK ABOUT, ONE OF YOU, HOW WE CAN DO THIS AND DO IT IN AN ON ORDERLY MANNER?

I HAD ONE OTHER THING I WOULD LIKE TO PUT ON THE TABLE BEFORE WE GO TO PROCESS, IF I COULD. WOULD IT BE ALL RIGHT?

MAYOR GARCIA: SURE.

MAYOR, IT'S SOMETHING YOU MENTIONED LAST WEEK THAT I THINK COULD FIT ON THIS PAGE OF OTHER HIGHLIGHTS THAT I'D LIKE TO CONSIDER. I THINK THAT WE HAVE A SIGNIFICANT RISK AT THIS POINT IN TIME IN OUR MANAGEMENT STRUCTURE, PARTICULARLY WHEN WE'RE LOOKING AT THE ELIMINATION OF AT LEAST 150 POSITIONS AND PROBABLY ANOTHER 50 OR SO MORE WITH THE ADMINISTRATIVE SERVICES REDUCTION. SO WE'VE GOT 200 OR SO POSITIONS THAT WE'LL BE ELIMINATING. AND OUR CITY MANAGER DOES NOT HAVE THE TOOLS OF AN INTERNAL AUDIT FUNCTION. AND I WOULD REALLY THINK THAT THIS IS A RISK THAT WE NEED TO ADDRESS SOMEHOW IN THE BUDGET SO THAT SHE GETS A SMALL TEAM OF INTERNAL AUDITORS THAT LOOK AT THOSE THINGS THAT ARE OF PARTICULAR SIGNIFICANCE TO THE INTERNAL CONTROL FEATURES OF THE CITY AS WELL AS SOME OTHER ISSUES THAT COME UP FROM TIME TO TIME. IT'S VERY INFREQUENT THAT THE — THAT OUR AUDIT PROGRAM BY THE AUDIT OFFICE COINCIDES WITH THE NEEDS OF THE CITY MANAGER FROM TIME TO TIME. I THINK ALSO THIS WOULD NOT BE A COST SAVINGS, PER SE, THAT WE COULD DOCUMENT RIGHT NOW, BUT YOU KNOW IT'S A COST AVOIDANCE. BECAUSE DURING THE YEAR WHEN WE HAVE THINGS COME UP, WE END UP PULLING PEOPLE FROM OTHER POSITIONS TO HELP US IF WE HAVE AN ISSUE THAT WE NEED TO LOOK AT OR WE WOULD HIRE ACCOUNT TEMPS TO BRING IN, AND THAT'S A COST THAT WE INCUR OR VERY FREQUENTLY WE WILL SIMPLY HIRE OUR EXTERNAL AUDITORS TO DO ADDITIONAL WORK. SO I DO THINK THERE IS SOME COST AVOIDANCE HERE AND I THINK IT WOULD BE CERTAINLY — IT WOULD IMPROVE THE ANALYSIS OF RISK AND BETTER INTERNAL CONTROL. SO I WOULD LIKE TO AT LEAST PROPOSE THAT YOU CONSIDER ALLOCATING A FEW POSITIONS FOR AN AUDIT TEAM FOR THE CITY MANAGER FROM THE CURRENT AUDIT STAFF TO HER OFFICE OR SOMEHOW COMING UP WITH FUNDING FOR A SMALL TEAM. AND I THINK THAT'S ELABORATING ON SOMETHING THAT YOU BROUGHT UP LAST WEEK, MAYOR.

MAYOR GARCIA: YEAH. AND FROM A STRUCTURE POINT OF VIEW, AS WE OPERATE TODAY WE HAVE TWO OUTSIDE AUDITORS GROUPS. THE FIRM THAT WE HIRED TO DO THE AUDIT AND THEN THE CITY AUDITOR. AND THE CITY MANAGER HAS ZERO. AND IN AN ORGANIZATION WITH THE BUDGET OF TWO BILLION DOLLARS AND 10,000 EMPLOYEES, THAT DOESN'T MAKE SENSE. SO I AGREE WITH YOU. THAT'S WHAT I WAS TALKING ABOUT LAST WEEK. WE HAVE TO BE ABLE TO FACILITATE THE CITY MANAGER A WAY TO MOVE QUICKLY TO LOOK AT ISSUES THAT CONCERN THE ADMINISTRATION. SO WE'LL LOOK AT THAT AS WE MOVE THROUGH THE PROCESS. ANY OTHER QUESTIONS ON THIS ONE? THIS ONE HAS NO NUMBER THAT WE CAN PUT ON THE — ON THAT BOARD, SO WE'RE GOING TO GO TO TAB 17. THE EMPLOYEE BENEFIT REVIEW.

WE HAVE BOTH REPRESENTATIVES FROM THE HUMAN RESOURCES DEPARTMENT COMING UP AS WELL AS A REPRESENTATIVE FROM OUR OUTSTANDING ACCOUNTING FIRM. THERE WAS JUST A GREAT DEAL OF INTEREST LAST WEEK IN UNDERSTANDING A LITTLE BIT ABOUT — I PUT IT INTO TWO QUESTIONS. HOW DOES OUR PROCESS STACK UP FOR DESIGNING AND COSTING OUT OUR BENEFIT PACKAGE AND THEN HOW DOES OUR ACTUAL BENEFIT PACKAGE COMPARE WITH OTHER GOVERNMENTAL ENTITIES AND PRIVATE ENTITIES? SO ONE QUESTION DEALT WITH THE PROCESS END AND THE OTHER QUESTION DEALT WITH THE PRODUCT. IS IT OVERLY RICH, IS IT UNDER WHAT'S OFFERED IN THE AREA. SO THIS IS DESIGNED TO GIVE YOU A LITTLE BIT OF UNDERSTANDING OF BOTH PROCESS AND PRODUCT COMPARATIVELY. AND I THINK IT'S A GOOD OVERVIEW FOR THE COUNCIL TO HAVE. SO THANK YOU ALL.

MAYOR GARCIA: IF YOU COULD INTRODUCE YOURSELVES, THAT WOULD BE HELPFUL.

I'M TOMMY TUCKER WITH THE HUMAN RESOURCES DEPARTMENT. I HAVE DEBRA DOLGZ, A FINANCIAL ANALYST. DEE HERNANDEZ, WHO IS THE CITY'S BENEFITS MANAGER. AND MICHAEL ROD BY RI GEZ FROM TOWEL AND PERRIN WHO IS THE LEAD CONSULTANT FOR OUR BENEFITS AND ACT TAYLOR ADVICE. SO AS THE CITY MANAGER SAID, WE WILL HAVE TWO PARTS TO THIS PRESENTATION. I WOULD LIKE TO BRIEFLY DESCRIBE THE PROCESS IN WHICH WE RECOMMEND CHANGES TO THE BENEFITS PLAN AND THEN WE WOULD TURN IT OVER TO MICHAEL, WHO WILL COVER THE ROLE OF THE OUTSIDE CONSULTANT, ALONG WITH A COMPARISON OF OUR OURSELVES AGAINST OTHER EMPLOYERS. SO TO BEGIN WITH —

MAYOR GARCIA: THE FIRST PAGE IS PAGE 83 IN THE BOOK, SO TURN TO YOUR TAB ON THAT. YOU CAN REFER TO YOUR NOTEBOOK.

PAGE 83. WHAT ARE WE TRYING TO ACCOMPLISH WITH THE BENEFITS PROGRAM? WELL, WE'RE COMPETING WITH OTHER EMPLOYERS FOR OUR EMPLOYEES. AND SO WE HAVE TO HAVE A PACKAGE WHICH WE CAN ATTRACT AND RETAIN EMPLOYEES. OF COURSE, WE WANT A COST-EFFECTIVE PROGRAM THAT MEETS THE GREATEST NEEDS OF THE EMPLOYEES AND THE GREATEST NUMBER NUMBER OF EMPLOYEES. WE CONCENTRATE ON FOUR COVERAGES. IN PARTICULAR, MEDICAL BENEFITS, DENTAL BENEFITS, BASIC LIFE BENEFITS AND DISABILITY BENEFITS. AND FINALLY, THE BENEFITS PACKAGE HELPS US ASSIST EMPLOYEES TO BE PHYSICALLY AND MENTALLY FIT SO THAT WE HAVE A PRODUCTIVE WORKFORCE. ON THE NEXT PAGE — ON THE NEXT PAGE WE COVER THE SOURCE DOCUMENTS THAT DESCRIBE OUR PROCESS. THOSE ARE SUMMARIZED IN THE FOUR BULLETS AT THE BOTTOM OF THE PAGE. TO BEGIN, WE'RE IN THE FIRST BULLET RIGHT NOW FOR THIS YEAR'S PROPOSAL, AND THAT IS WE WORK WITH TOWERS AND PERRIN TO ANALYZE OUR PLANNED PERFORMANCE. WE LOOBLG AT WHAT OTHER EMPLOYERS ARE DOING AND WE LOOK AT WHAT IS HAPPENING IN THE HEALTH CARE INDUSTRY. FOLLOWING THAT ANALYSIS, WE MAKE RECOMMENDATIONS TO THE CITY MANAGER FOR BENEFITS, PROGRAM CHANGES, AND THE CITY MANAGER EVALUATES THOSE RECOMMENDATIONS IN LIGHT OF THE OTHER NEEDS OF THE CITY AND INCORPORATES THOSE INTO THE PROPOSED BUDGET AND THE CITY COUNCIL ADOPTS THE PROPOSED BUDGET. AND SO NOW I WOULD LIKE TO PASS IT OVER TO TOWER AND PERRIN, WHO WILL DESCRIBE THEIR ROLE.

THANKS, I'M MICHAEL RODRIGUEZ. WE'VE BEEN THE BENEFITS CONSULTING FIRM FOR THE CITY OF AUSTIN FOR THE LAST FIVE YEARS. AS PART OF OUR ROLE, ON AN ANNUAL BASIS WE ATTEMPT TO DO SOME OF THE ITEMS IN FRONT OF YOU, THAT IS ANALYZE THE PLAN'S HISTORICAL EXPERIENCE, MONITOR THE ONGOING EXPERIENCE OF THE PROGRAM, PROVIDE ACTUARIAL PROJECTIONS BASED ON THAT EXPERIENCE AND FINALLY, DO A FAIR DEGREE OF BENCHMARKING, BENCHMARKING OUR PLAN AGAINST OTHER PLANS. DOES YOUR PLAN COST AS MUCH AS OTHER PLANS DO? SHOULD IT COST MORE OR LESS? IS IT BEING MANAGED EFFECTIVELY. THOSE TYPES OF THINGS ARE PART OF OUR ONGOING PROCESS, OUR ONGOING ANALYSIS OF THE CITY OF AUSTIN PROGRAM. TO START OFF WITH I WOULD LIKE TO REVIEW WHAT WE'VE DONE FOR THIS PARTICULAR MOOGHT, MEETING, AND WE'VE TAKEN SOME SURVEY INFORMATION FOR OTHER AUSTIN AREA EMPLOYERS AS WELL AS OTHER MUNICIPALITIES. YOU CAN SEE LISTED IN FRONT OF YOU SOME OF THE SURVEY PARTICIPANTS. WE TRIED TO GET A GOOD CROSS-SECTION, KEEPING IN MIND THAT YOU'RE REALLY COMPETING WITH THESE TYPES OF ENTITIES FOR YOUR EMPLOYEES. AS TOMMY MENTIONED, A BIG PART OF THE BENEFIT PROGRAM IS TO PROVIDE A COMPETITIVE PACKAGE TO RECRUIT AND RETAIN YOUR EMPLOYEES. AND WE THINK THAT BY TAKING A SAMPLING OF OTHER AUSTIN AREA EMPLOYERS, BOTH GOVERNMENTALS AND IN THE PRIVATE SECTOR, THAT — AS WELL AS OTHER CITIES THROUGHOUT THE STATE, THEN WE'RE ABLE TO DEVELOP A GOOD BENCHMARK WITH WHICH TO COMPARE YOUR PROGRAM AGAIN. LET'S TAKE A QUICK LOOK AT SOME OF THOSE COMPARISONS. THE NEXT PAGE SHOWS AT THE TOP HALF YOUR MEDICAL BENEFITS COMPARED AGAINST THOSE THREE CATEGORIES THAT I MENTIONED ON A PREVIOUS PAGE. AS YOU CAN SEE, THE CITY MEDICAL PLAN APPEARS TO BE RIGHT IN LINE WITH OTHER AUSTIN AREA GOVERNMENTAL EMPLOYERS AND OTHER AUSTIN AREA CORPORATE EMPLOYERS. ACTUALLY, THE CITY PLAN IS NOT QUITE AS RICH AS THOSE TWO. THE LAST COLUMN SHOWS THE OTHER MUNICIPALITIES WITHIN THE STATE OF TEXAS THAT WE ANALYZE. THE CITY OF AUSTIN PROGRAM LOOKS A LITTLE BIT MORE RICH THAN THOSE PROGRAMS OFFERED BY OTHER CITIES. THE SECOND HALF SHOWS THE CORE BENEFITS THAT ARE OFFERED AS WELL. NOW, THESE ARE JUST SOME OF THE HIGHLIGHTS. OBVIOUSLY THERE ARE OTHER BENEFITS THAT ARE OFFERED, IT DOESN'T COVER EVERYTHING, BUT WE WANTED TO SHOW YOU AT A HIGH LEVEL WHETHER OR NOT BENEFITS WERE OFFERED — FOUR BENEFITS WERE OFFERED. IN GENERAL FROM A HIGH LEVEL THE BENEFITS THAT THE CITY PLAN OFFERS ARE FAIRLY COMPETITIVE HERE, BUT I BELIEVE THAT WHEN COMPARED AGAINST ESPECIALLY THE AUSTIN AREA GOVERNMENTAL EMPLOYERS AND THE AUSTIN AREA CORPORATE EMPLOYERS, THE BENEFIT THE CITY OFFERS ARE ACTUALLY A LITTLE BIT LESS. FOR EXAMPLE, THE CITY OFFERS A DENTAL ASSISTANCE PROGRAM, WHICH IS BASED ON A FIXED FEE SCHEDULE OF INFORMATION WHEREBY A MEMBER CAN GO TO A DENTIST AND THEY WOULD GET A FIXED AMOUNT REPAID, WHICH WOULDN'T NECESSARILY MATCH UP TO THE ACTUAL CHARGE THAT HAD BEEN FILED WITH THE CLAIM. THE EMPLOYEE IS THEN ON THE HOOK FOR THE REST OF THE DOLLARS. MOST OTHER CORPORATE EMPLOYERS AND OTHER AUSTIN AREA GOVERNMENTAL PLANS WORK A LOT MORE LIKE YOUR MEDICAL PLANS. THEY REIMBURSE AN ACTUAL PERCENTAGE OF THE CHARGE FOR PAYMENT. LIFE INSURANCE IS ANOTHER GOOD EXAMPLE. THE CITY OFFERS A FLAT AMOUNT. MOST EMPLOYERS HAVE SINCE GONE TO ACTUALLY A BENEFIT WHICH IS BASED ON SALARY, WHICH FOR MOST EMPLOYEES THAT SALARY, THAT ONE-TIME SALARY BENEFIT IS GOING TO BE MORE THAN A FLAT DOLLAR LIFE INSURANCE AMOUNT THAT YOU GUYS OFFER. SO YOU'RE VERY COMPETITIVE, BEING THAT YOU OFFER ALL THESE BENEFITS. YOU'RE VERY COMPETITIVE IN THAT THE BENEFIT LEVEL, PARTICULARLY WITH THE MEDICAL PLAN, SEEMS TO MATCH UP PRETTY WELL, BUT THERE ARE SOME AREAS THAT THE CITY OF AUSTIN PROGRAM IS CLEARLY NOT AS RICH AS SOME OF THE OTHER PROGRAMS IN THE AUSTIN AREA. ON THE NEXT PAGE WE TAKE A LOOK AT SOME OF THE COSTS. THESE ARE BASED ON 2002 MONTHLY PLAN PREMIUMS. IT'S KIND OF DIFFICULT TO COMPARE THESE BECAUSE OBVIOUSLY THE COST OF THE BENEFITS FOR A MEDICAL PROGRAM DEPEND ON THE BENEFITS OFFERED. AND AS WE LOOKED AT EARLIER, THE BENEFITS OFFERED ARE NOT EXACTLY THE SAME AMONGST ALL THE ENTITIES. IF YOU TAKE A LOOK AT THE COSTS, YOU CAN SEE THAT IN GENERAL THE CITY OF AUSTIN PROGRAM IS ONCE AGAIN VERY COMPETITIVE WITH THE OTHER PROGRAM. ON THE TOP HALF OF THE CHART WE SHOW THE FULL PREMIUM AMOUNT. THAT'S THE ACTUAL DOLLAR AMOUNT THAT'S NECESSARY TO PROVIDE THE BENEFITS THAT WE LISTED ON THE EARLIER PAGE. THE BOTTOM HALF OF THE CHART WE SHOW THE EMPLOYEE COST SHARING. THAT'S HOW MUCH MONEY THE EMPLOYEES VZ TO PAY TO BECOME PARTICIPANTS IN THE PLAN. YOU CAN SEE FROM THAT THAT THE CITY OF AUSTIN IS FAIRLY GENEROUS. THE EMPLOYEES DO NOT HAVE TO CONTRIBUTE TO THE PLAN FOR BECOME MEMBERS AND GET THEIR MEDICAL CLAIMS PAID FOR. DEPENDENTS, HOWEVER, MUST PAY 50% FOR THEIR COVERAGE. WE FEEL LIKE THAT'S VERY COMPETITIVE WITH WHAT OTHER AUSTIN AREA GOVERNMENTAL EMPLOYERS ARE DOING. AS YOU CAN SEE BY THE FOOTNOTE, THE AUSTIN INDEPENDENT SCHOOL DISTRICT CHARGES A FAIRLY SIGNIFICANT AMOUNT TO THE EMPLOYEES, BUT WITH THAT EXCEPTION, THE OTHER AUSTIN AREA GOVERNMENTAL EMPLOYERS THAT WE SURVEYED, PARTICULARLY IN — PARTICULARLY THE STATE OF TEXAS, THE UNIVERSITY OF TEXAS SYSTEM AND TRAVIS COUNTY, ALL THOSE ENTITIES DO NOT REQUIRE CONTRIBUTIONS FOR EMPLOYEES TO BE IN PART OF THEIR PLAN. FINALLY, OUR CONCLUSIONS, WE THINK THAT THE PROCESS THAT'S FOLLOWED BY THE CITY OF AUSTIN IS SIMILAR TO THAT FOLLOWED BY OTHER CITIES, CERTAINLY OTHER COMPARABLE TOWNS. IF YOU COMPARE THE PRIVATE SECTOR VERSUS THE PUBLIC SECTOR, THE PUBLIC SECTOR HAS MEETINGS LIKE THIS WHERE OFTEN TIMES BENEFIT DECISIONS ARE MADE AS OPPOSED TO THE CORPORATE EMPLOYERS WHERE BENEFIT DECISIONS ARE TYPICALLY MADE BY A FEW KEY INDIVIDUALS. THE CITY PLAN ALSO OFFERS A VERY APPROPRIATE LEVEL OF BENEFITS GIVEN WHAT OTHER EMPLOYERS IN AUSTIN ARE DOING. AND FINALLY, IN AGGREGATE, THE COSTS THAT THE CITY OF AUSTIN ARE PAYING AND THE COSTS THAT THE EMPLOYEES HAVE TO CONTRIBUTE TO BE IN THOSE PLANS ARE ALSO RIGHT IN LINE WITH THE BENCHMARKS THAT WE HAVE COMPILED.

MAYOR GARCIA: WHAT IS THE TERM MORE RIGOROUS THAN USED BY MANY OTHER TEXAS COMPANIES?

WHAT WE FOUND IN OUR EXPERIENCE IS AT MANY CORPORATE EMPLOYERS, IF YOU GET TO THE RIGHT KEY PERSON YOU CAN MAKE A BENEFIT DECISION. IN THE PUBLIC SECTOR ENVIRONMENT, THAT'S AN IMPOSSIBILITY. THINGS ALWAYS HAVE TO GO UP THROUGH THE CHAIN OF COMMAND AND EVENTUALLY TO YOU AS APPROVAL — FOR APPROVAL. AS OPPOSED TO I'VE SEEN CASES WHERE IN THE CORPORATE SECTOR A PARTICULAR INDIVIDUAL MAY WANT A BENEFIT DONE THAT WAY AND THAT INDIVIDUAL'S GOT THE POWER TO DO IT AND THAT BENEFIT GETS SIMPLY DONE WITHOUT GOING THROUGH THE NORMAL CHAIN OF COMMAND. THAT SIMPLY DOESN'T HAPPEN IN THE PUBLIC SECTOR ENVIRONMENT.

MAYOR GARCIA: IS THAT WHAT MORE RIGOROUS MEANS?

THAT'S WHAT THAT MEANS.

MAYOR GARCIA: QUESTIONS FOR OUR CONSULTANTS? SO WE'RE SPENDING THE RIGHT AMOUNT OF MONEY AND WE HAVE NOT THE RIGHT BENEFITS AND MAYBE NOT AS GOOD AS SOME, BUT ON THE AVERAGE OKAY?

YOU ARE CERTAINLY PROVIDING A GOOD LEVEL OF BENEFITS TO YOUR EMPLOYEES. I THINK IF YOU ASKED YOUR EMPLOYEES, THEY MIGHT SAY YOU SHOULD PROVIDE MORE BENEFITS TO THEM, BUT COMPARED TO OTHER AUSTIN AREA EMPLOYERS, YOU ARE RIGHT IN LINE AS FAR AS THE BENEFITS YOU'RE PROVIDING. AS FAR AS THE COSTS ARE CONCERNED, YOU'RE PROBABLY A LITTLE BIT LESS THAN THE AVERAGE COST. I THINK THAT WOULD SAY THAT YOU'RE ACTUALLY RUNNING YOUR PLAN A LITTLE BIT MORE EFFECTIVELY THAN SOME OTHERS.

MAYOR GARCIA: HOW DATED IS YOUR INFORMATION? HAS THERE BEEN ANY CHANGE FOLLOWING THE ECONOMIC DOWNTURN?

THE INFORMATION THAT WE HAVE FOR PLAN DESIGNS AND COSTS FOR THE 2002 PLAN YEAR, WHICH FOR MOST CORPORATE EMPLOYERS AS WELL AS PUBLIC SECTOR EMPLOYERS WOULD BE THE YEAR THAT BEGINS JANUARY FIRST OF 2002. I THINK IN GENERAL WE SEE A DEFINITE INDUSTRY TREND OF SHIFTING COSTS TO EMPLOYEES TO HELP EMPLOYERS STAY VINYL, IF YOU WILL.

MAYOR GARCIA: NOW, AS TO THE BENEFITS THEMSELVES, ARE THOSE DECISIONS MADE BY THE STAFF OR BY THE COUNCIL, BY THE MANAGEMENT? HOW IS THAT DONE? AN EXAMPLE IS I GOT A LETTER AT MY HOME SAYING, YOU NO LONGER HAVE PRIVATE ROOMS IN HOSPITALS. YOU NOW HAVE SEMI PRIVATE. HOW ARE THESE DECISIONS MADE?

THE RECOMMENDATIONS ARE MADE BY STAFF AND APPROVED BY THE CITY MANAGER.

FUTRELL: THE LETTER THAT YOU GOT — AND I DON'T KNOW, JOE, IF YOU WANT TO COME UP AND TRY AND SUMMARIZE OR, TOMMY, IF YOU'VE GOT IT, BUT MOST OF THOSE WERE CLARIFICATIONS, WITH ONE EXCEPTION. WHERE WE HAD PEOPLE INTERPRETING THE BENEFITS DIFFERENTLY. SO THE LETTER WAS DESIGNED TO BE VERY CLEAR ABOUT WHAT WAS INTENDED, BUT THERE WAS ONE EXCEPTION, AND THAT HAD TO DO WITH MORBID OWE BESSTY. A — OBESITY. A GASTRIC BYPASS.

IT WAS SOMETHING THAT WAS ALREADY IN PLACE, BUT THE WORDING IN OUR DOCUMENTS COULD BE MISCONSTRUED. AND IN ORDER TO HELP THE EMPLOYER AND OUR THIRD-PARTY ADMINISTRATOR, WE WANTED TO PROVIDE THE INFORMATION. BUT THOSE BENEFITS HAVE BEEN IN PLACE AND IMPLEMENTED THAT WAY HISTORICALLY. BUT WE JUST WANTED THE WORDING TO BE CLEAR IN RELATIONSHIP TO THE SEMI PRIVATE/PRIVATE ROOM, IT'S ALWAYS BEEN THAT WAY. THE ONLY MAJOR CHANGE WAS THE GASTRIC BYPASS.

FUTRELL: AND EXPLAIN WHY WE DID THAT ADMINISTRATIVELY BECAUSE THAT WAS ONE OF MY QUESTIONS ALSO.

IN THE PLAN DOCUMENT IT DOES ALLOW FOR THE CITY MANAGER TO MAKE CHANGES TO THE PLAN AS NEEDED. AND THE TREND THAT WE WERE SEEING WAS THIS ONE SPECIFIC PROCEDURE — WITH THIS ONE SPECIFIC PROCEDURE IS HISTORICALLY WE MAY HAVE SEEN MAYBE TWO GASTRIC BY BYPASSES IN 20 YEARS.

FUTRELL: BASICALLY STOMACH CLIPS, RIGHT?

AND IN THE LAST SIX MONTHS WE HAVE SEEN SEVEN. AND SO IT'S BECOMING SORT OF THE EASY WAY OUT FOR SOME FOLKS. WE HAD ONE PERSON PUT ON WEIGHT IN ORDER TO MEET THE CRITERIA TO HAVE THIS PROCEDURE DONE, WHICH IS NOT WHAT THE INTENT OF THE MEDICAL LANGUAGE IS, THAT IT'S HERE TO PROVIDE COVERAGE FOR AESTHETICALLY NECESSARY SITUATIONS, BUT THIS ONE WAS — THE TREND THAT WE WERE SEEING WAS THE MAJOR CONCERN. AND IT COSTS ABOUT $50,000 EVERY TIME ONE OF THESE PROCEDURES IS DONE. SO THE ONLY MID-YEAR COURSE CORRECTION ON THE PLAN, AS I UNDERSTOOD THE ADMINISTRATIVE CRITERIA, WAS WHEN WE HAD A PROBLEM THAT WAS GOING TO CAUSE US CLAIMS PROBLEMS, SOME UNANTICIPATED TREND THAT WAS GOING TO CAUSE OUR PACKAGE TO NOT WORK. AND IN THIS CASE WE SAW THIS AS ONE OF THOSE POTENTIALS.

MAYOR GARCIA: WHAT DO WE DO WHEN WE SEE TRENDS LIKE THAT AGAIN?

ON THIS — ON THE SELF-FUNDED PLAN, THIS IS THE — THE PROCEDURE THAT WE PUT IN PLACE BY HAVING THE CHANGE AT MIDYEAR WAS SIMPLY BECAUSE OF THE EXPERIENCE THAT WE SAW. AND WHAT WE DID WAS MAKE THE RECOMMENDATION IN CONJUNCTION WITH TOWERS TO THE CITY MANAGER ASKING FOR THE CHANGE MIDYEAR AND IT BECOMES EFFECTIVE MAY 1.

MAYOR GARCIA: AND TELL ME AGAIN WHAT THE CHANGE IS.

IT'S THAT WE'VE ELIMINATED THE COVERAGE FOR GASTRIC BYPASSES.

FUTRELL: THAT'S FOR VERY, VERY OVERWEIGHT PEOPLE WOULD HAVE THEIR STOMACH CLIPPED OFF TO AVOID BASICALLY SO THEY DON'T EAT, AND LOSE WEIGHT. ALMOST LIKE A DESIGNER — WHICH WASN'T THE WAY IT WAS DESIGNED. IT WAS DESIGNED TO HELP PEOPLE WHO ARE SO OVERWEIGHT IT IS UNHEALTHY AND THEY ARE IN DANGER AS OPPOSED TO A WAY TO LOSE WEIGHT EASILY. AND THAT WAS WHAT WE WERE BEGINNING TO SEE, IS THAT PHYSICIANS ARE MORE AND MORE WILLING TO DO IT NOW, NOT AS A LIFE-SAVING MECHANISM, BUT AS A WEIGHT LOSS MECHANISM. I SEE THE SCRUNCHED UP EXPRESSIONS. I KNOW THIS IS A STRANGE CONCEPT.

MAYOR GARCIA: ONE OTHER QUESTION. WE HAD A CITY PLAN THAT WE, I GUESS, MANAGE THROUGH A THIRD-PARTY ADMINISTRATOR? IS THE HISTORICAL COST THAT WE'RE INCURRING THROUGH THAT LOWER, HIGHER OR ABOUT RIGHT AS COMPARED TO OTHER SYSTEMS THAT DON'T HAVE SELF-FUNDING LIKE WE DO HERE?

FIRST OF ALL, I THINK THAT A LOT OF THE EMPLOYERS THAT WE DEAL WITH AS A FIRM ARE SELF-FUNDED, MAINLY ONCE YOU GET ABOVE 5,000 OR SO EMPLOYEES, IT REALLY BEHOOVES YOU TO BE A SELF-FUNDED CLIENT. I THINK THAT CERTAINLY — YOUR CLAIMS BECOME MORE PREDICTABLE AND THEREFORE YOU DON'T NEED TO ADD A LOT OF EXTRA MARGINS OR PROFIT FOR AN INSURANCE COMPANY TO COME IN AND TAKE OVER YOUR RISK. ALL THAT BEING SAID, I THINK THAT YOUR CLAIMS EXPERIENCE HISTORICALLY HAS BEEN AS GOOD OR BETTER THAN MANY OF OUR OTHER CORPORATE CLIENTS. I THINK THAT IF YOU WERE TO COMPARE YOUR CLAIMS TO SOME OF THE AREA HMO'S, WHO WE'VE READ ABOUT IN THE PAPERS, I THINK YOUR CLAIM EXPERIENCE WOULD LOOK MUCH BETTER THAN THEIR EXPERIENCE. I THINK THERE'S A LOT OF FACTORS TO THAT, NOT THE LEAST OF WHICH IS AN HMO COMING TO THE CITY OF AUSTIN AND TRYING TO BUY BUSINESS TO ESTABLISH A PRESENCE HERE AND THEN TRYING TO MAKE UP FOR THOSE LOSSES IN FUTURE YEARS BY HIGH RATE INCREASES. BUT REGARDLESS, I THINK THAT YOUR ACTUAL CLAIMS EXPERIENCE IS GOING TO — LOOKS VERY GOOD COMPARED TO ANY BENCHMARKS THAT WE HAVE SWLTS ANY OF THE OTHER EMPLOYERS IN THE AUSTIN AREA.

MAYOR GARCIA: QUESTIONS FOR OUR EMPLOYEE BENEFITS PERSONNEL? THANK YOU VERY MUCH. COUNCILMEMBER THOMAS?

THOMAS: JUST ONE. WE'RE TALKING ABOUT OUR EXISTING PERSONNEL. CAN YOU ON THE SAME FORMAT TELL — GIVE ME EXAMPLES OF THE RETIREES.

NOT TODAY.

THOMAS: CAN YOU GIVE IT TO ME FOR THE RETIREES?

YES.

FUTRELL: THERE'S BEEN A GOOD DEAL OF CONCERN AND I THINK COUNCILMEMBER THOMAS' QUESTION LEADS TO THAT ON THE RETIREMENT BENEFITS. THERE'S AN INCREASING PRESSURE I THINK FOR COMPANIES TO ONLY WANT TO BID ON AND COVER US FOR ACTIVE EMPLOYEES. AND WE HAVE ALWAYS LEVERAGED OUR SYSTEM TOGETHER AS A WHOLE TO TRY TO DO THE BEST WE COULD ON THE RETIREE BENEFITS. SO WE'LL TRY TO GET YOU ADDITIONAL INFORMATION ON THAT AS SOON AS POSSIBLE. BECAUSE OF THE INTEREST YOU'VE SHOWN IN THIS ITEM, YEARS AGO WE USED TO DO A SPECIAL PRESENTATION ON BENEFITS AS PART OF THE BUDGET ADOPTION PROCESS. AND WE HAVE STOPPED THAT OVER THE LAST FEW YEARS. I THINK WHAT WE WILL DO IS I WILL INCORPORATE THAT THIS YEAR. KNOWING WHAT WE'RE FACING AND THAT IT HAS A TRADE-OFF DECISION AND SOME OTHER DECISIONS WE MIGHT WANT TO MAKE, WE'LL DO A FOCUS PRESENTATION ON BENEFITS AND COSTS AND PACKAGES AND PART OF OUR BUDGET HEARINGS AND PRESENTATION.

MAYOR GARCIA: OKAY. THANK YOU VERY MUCH. THE LAST ITEM ON THE AGENDA IS THE BUDGET SCHEDULE. AND THAT'S ON PAGE 91. JUNE AND JULY THE CITY MANAGER ONE ON ONE WITH COUNCILMEMBERS. JULY 31st, CITY MANAGER PROPOSED BUDGET DELIVERED TO THE COUNCIL. AUGUST, DEPARTMENTAL PRESENTATION OF PUBLIC HEARINGS ON THE PROPOSED BUDGET. AND THEN SEPTEMBER 9th, 10th AND 11th, IT'S SCHEDULED FOR FIRST, SECOND AND THIRD READINGS WE'LL APPROVE THE BUDGET. NOW, LET ME GO BACK TO TAB 8 OF MAINTAINING THE CURRENT RATE OF 00.17 AND ADD 0.138 FOR DEBT SERVICE. AND IF WE CAN EXPLAIN IT THIS WAY: TO AVOID THE ROLLBACK PROFESSIONS OF THE LAW — PROVISIONS OF THE LAW, I THINK THE CITY TAX RATE CAN INCREASE BY 1.3 CENTS.

FUTRELL: I ROUNDED IT, BUT I BELIEVE THAT IT IS 1.3 —

1.38 WILL GET US TO THE ROLLBACK RATE.

MAYOR GARCIA: AND THAT GENERATES APPROXIMATELY $7 MILLION.

YES, SIR.

MAYOR GARCIA: SO HERE'S THE OPTION THAT WE HAVE. WE'RE ABOUT $29 MILLION STILL SHORT, CORRECT, RUDY?

YES, SIR.

MAYOR GARCIA: OKAY. SO WE CAN SAY TO THE CITY MANAGER, YOU KNOW, PROCEED WITH, ASSUMING THAT WE CAN ADD THAT 1.38 AND THEN YOU SCRUB $28 MILLION FROM WHAT'S LEFT ARE THE INSTRUCTIONS THAT WE GAVE, OR WE CAN SAY SCRUB THE WHOLE 29 MILLION, BUT I THINK THE CITY MANAGER NEEDS TO HAVE SOME DIRECTION FROM US AS TO WHICH WAY, YOU KNOW, WE WANT TO PROCEED.

FUTRELL: WE HAVE A LOT OF INFORMATION IN YOUR Q AND A ON TAXES, TAX RATES, RAW TAX BILLS, BUT THIS IS ONE OF PROBABLY THE LAST STRUCTURE AL BUDGET QUESTIONS AND I KNOW IT'S A DIFFICULT DISCUSSION.

MAYOR GARCIA: WE COULD SAY THAT THIS ITEM COULD TAKE THIS FORM. AFTER YOU SCRUB AS MUCH AS YOU CAN, AND IF YOU'RE STILL SHORT, WE WOULD CONSIDER GOING TO THE 7 MILLION. AND NOT MAKE ANY MORE DECISION STATEMENTS ON THAT. BUT I THINK WHAT I HEAR FROM THE CITY MANAGER IS IF WE'RE GOING TO SCRUB 29 MILLION, WE'RE GOING TO CUT MORE THAN JUST THE FAT. AND THAT DOES CONTAIN A — DOESN'T PAINT A REAL PRETTY PICTURE FOR THE CITY. WE DON'T HAVE A REAL PRETTY PICTURE TO PAINT FOR THE CITY ANYWAY, BUT THAT WOULD MAKE IT EVEN TOUGHER FOR THE SERVICES TO THE COMMUNITY. SO IS THERE ANY — DOES ANYBODY HAVE ANY IDEA HOW YOU WANT TO PROCEED ON THAT? COUNCILMEMBER SLUSHER?

SLUSHER: THAT'S THE ACTUAL RATE. WHAT ABOUT COMPARED TO THE EFFECTIVE RATE? HOW MUCH IS THE — 1.3, HOW MUCH IS THAT OVER THE EFFECTIVE RATE?

FUTRELL: RUDY, YOU HAVE THOSE NUMBERS, SO LET'S LAY THEM OUT. WHAT'S IN YOUR FIVE-YEAR FORECAST, WHAT'S IN YOUR GAP NUMBER IS STAYING AT THE CURRENT RATE OR NOMINAL. SO IF YOU WERE TO DROP BACK TO EFFECTIVE RATE, WE WOULD HAVE TO RAISE THE GAP. THE GAP WOULD BE BIGGER. BUT RUDY WILL GIVE YOU THE THREE NUMBERS. AND THE THREE KEY NUMBERS ARE EFFECTIVE, NOMINAL AND ROLL BACK.

COUNCIL, THE ESTIMATED EFFECTIVE RATE IS 43.7. THE CURRENT — THE NOMINAL RATE RIGHT NOW THAT WE'VE GOT IN THE FORECAST OF 4597 IS 2.27 ABOVE THE EFFECTIVE RATE.

MAYOR GARCIA: 2.7 —

ABOVE THE EFFECTIVE RATE.

MAYOR GARCIA: MILLION?

I'M SORRY, CENTS. 2 .7 CENTS. THAT INCLUDES ONE POINT FOR THE VOTER APPROVED BONDS AND THE ONE CENT FOR THE TAX ANTICIPATION NOTE. GOING UP TO THE ROLLBACK RATE, THE ROLLBACK RATE IS 47.35. THAT COMPARED TO THE EFFECTIVE RATE IS A DIFFERENCE OF 3.65 CENTS.

SLUSHER: WHICH IS HOW MANY MILLION?

THE 3.65 WOULD GENERATE —

IT'S ABOUT FIVE MILLION A CENT?

IT'S ABOUT FIVE MILLION A CENT.

PROBABLY ABOUT 17 MILLION. 17, $18 MILLION.

SLUSHER: WELL, MAYOR, I CERTAINLY THINK WE CERTAINLY CAN'T RULE OUT A TAX INCREASE. I THINK IT'S APPROPRIATE TO LOOK EVERYWHERE ELSE FIRST, BUT IT CERTAINLY WOULDN'T BE REALISTIC TO TELL FOLKS WE'RE — YEAH, TO SHUT THE DOOR ON THAT.

MAYOR GARCIA: I'LL SECOND THAT MOTION. THAT WOULD BE TO GO TO THE ROLLBACK RATE. DISCUSSION? WE WERE SAYING IF WE HAD THE — COUNCILMEMBER ALVAREZ?

ALVAREZ: IF I THOUGHT THAT THE 1.38 PROPOSED INCREASE YOU INCLUDES — INCLUDED THE ONE-CENT VOTER BONDS AND THEN .38 FOR THE 10. AND HERE I THINK YOU'RE TELLING ME THAT THAT'S ALREADY FACTORED IN BEFORE WE EVEN ADD THE ADDITIONAL 1.38.

CORRECT. BY MAINTAINING THE NOMINAL RATE THAT WE HAVE INCLUDED THE TWO CENTS FOR THE DEBT SERVICE. MOVING UP TO —

ALVAREZ: ONE CENT FOR DEBT SERVICE AND ONE CENT FOR THE 10.

CORRECT. STARTING WITH YOUR EFFECTIVE RATE AS YOUR BASE AND THEN ADDING THE ON TWO CENTS FOR THAT BASICALLY GETS US TO THE NOMINAL RATE. IT'S A SLIGHT, SLIGHT DIFFERENCE.

ALVAREZ: SO THE 1.38 CENTS INCREASE WOULD BE ABOVE THE 10.

YES, SIR.

FUTRELL: I ALSO URGE YOU, AND MAYBE YOU MIGHT NOT WANT TO DO IT HERE, BUT WHEN YOU HAVE TIME, IN YOUR BACKUP THERE'S SOME VERY, VERY GOOD GRAPHS THAT WALK THROUGH THE DIFFERENT COMPONENTS OF THE OVERLAPPING DEBT BOTH BY RATE AND BY RAW TAX BILLS. SO IT DOES REALLY PAINT AN INTERESTING PICTURE OF WHAT THE CITY HAS DONE OVER THE LAST 10 YEARS BY GOING BACK TO THE EFFECTIVE RATE EACH YEAR IN A BOOM YEAR.

MAYOR GARCIA: ONE OF THE THINGS, RUDY, THAT WAS REQUESTED, AND I THINK IT'S IN THIS BACKUP, BUT I CAN'T FIND IT, THE TOTAL EXPENDITURE BUDGET FOR THIS YEAR WAS HOW MUCH?

APPROVED BUDGET WAS 466. I BELIEVE THE QUESTION YOU'RE REFERRING TO WAS ASKING THIS COMPARED TO THE CURRENT YEAR ESTIMATES. AND LET ME FIND THAT VERY QUICKLY FOR YOU. ON THE QUESTION AND — THE Q AND A PACKET, IT BEGINS ON PAGE 202.

FUTRELL: AND RUDY, YOU MIGHT WANT TO TALK ABOUT THE PERCENT DIFFERENCE BETWEEN THESE TWO NUMBERS AND WHY THAT PERCENT DIFFERENCE IS AS LARGE AS IT IS.

RIGHT. THE SIGNIFICANT POINT THERE IS COMPARING THE CURRENT YEAR ESTIMATE TO THE FORECAST IS GOING TO SHOW A MUCH BIGGER NUMBER AS COMPARING THE — AS IF WE WOULD HAVE COMPARED THE APPROVED BUDGET. THE BIG DIFFERENCE IS — AS YOU WELL KNOW — WE'VE IMPLEMENTED SEVERAL COST REDUCTION ITEMS OR ACTIONS, BEGINNING WITH THE HIRING FREEZE. THAT'S VERY SIGNIFICANT. OTHER CAPITAL DEFERRALS AND SEVERAL OTHER ACTIONS THAT WE'VE TAKEN TO REDUCE COSTS. THE EFFECT OF THOSE ACTIONS ARE INCORPORATED INTO THE CURRENT YEAR ESTIMATE THAT WE ARE COMPARING AGAIN. THE FORECAST, AS WE TALKED ABOUT BEFORE, ASSUMES THAT WE GO BACK STATUS QUO, THAT ALL THE POSITIONS WOULD BE FILLED, THAT WE'LL BE ABLE TO BUY THE CAPITAL WE NEED. SO THAT'S WHY YOU SEE BASICALLY A 68.7-MILLION-DOLLAR INCREASE.

MAYOR GARCIA: THAT'S FROM AN ESTIMATE, NOT FROM APPROVED BUDGET BURKS FROM ESTIMATE. — BUT FROM AN ESTIMATE.

THAT'S CORRECT.

MAYOR GARCIA: AND THAT IS APPROXIMATELY A 15% INCREASE IN EXPENDITURES TR LAST YEAR TO THIS YEAR.

THAT'S CORRECT.

MAYOR GARCIA: AND OUR POPULATION DID NOT INCREASE ANYWHERE CLOSE TO THAT, RIGHT?

YOU'RE CORRECT.

MAYOR GARCIA: SO I THINK WE HAVE TO ANSWER THE QUESTION WHY IS IT THAT THE CITY NEEDS AN ADDITIONAL 15% OVER THE ESTIMATE THAT WE HAD FOR LAST YEAR. ACTUALLY, WHAT WE NEED TO DO IS WE NEED TO TAKE THE 517 FOR THIS YEAR AND SUBTRACT FROM THAT THE ITEMS THAT WE ALREADY DID HERE. BUT WE'RE STILL GOING TO HAVE A SIZEABLE INCREASE. WHAT PEOPLE ARE ASKING ME IS WHY DO YOU HAVE TO SPEND THAT MUCH MORE. AND I THINK THAT'S THE QUESTION THAT WE NEED TO HAVE ANSWERED.

AND BASICALLY — OBVIOUSLY I'LL LET THE CITY MANAGER RESPOND, BUT AS WE DEVELOP THE FIVE-YEAR FORECAST, THE BASIS WAS THAT WE WOULD RETURN TO THE EXPECTED GOALS AND PERFORMANCE LEVELS AND SERVICE LEVELS THAT THE COMMUNITY IS USED TO. WE ARE OBVIOUSLY IN A CRISIS SITUATION ANDE F F F F F F TO, YOU KNOW — IN A SENSE ARTIFICIALLY KEEP COSTS DOWN.

MAYOR GARCIA: HERE'S THE POINT THAT I'M GETTING TO. WE'RE GOING UP $67 MILLION, MINUS WHAT WE'VE SHAVED OFF HERE. THE PEOPLE — THE PEOPLE EVERYWHERE YOU GO ASK THE QUESTION ABOUT PUBLIC SAFETY. THEY WANT TO SPEND THE MONEY ON PUBLIC SAFETY. SO I THINK A BIG CHUNK OF THAT $68 MILLION IS IN PUBLIC SAFETY. THAT'S WHERE WE'RE SPENDING THE MONEY IS PUBLIC SAFETY, MEET AND CONFER AND ALL THE OTHER THINGS THAT WE'RE DOING. SO PEOPLE NEED TO UNDERSTAND THAT THIS BUDGET IS NOT GOING UP BECAUSE WE'RE INFLATING IT WITH A LOT OF PEOPLE. WE'RE ACTUALLY SPENDING IT — BASICALLY TO PROTECT THE CITY. AND EVERY TIME YOU PICK UP THE NEWSPAPER, SOMEBODY FROM THE FEDERAL GOVERNMENT IS POSITIVE WARNING US THAT WE'RE GOING TO GET ATTACKED MORE. SO I THINK THAT THAT'S SOMETHING THAT THE PEOPLE NEED TO HAVE EXPLAINED TO THEM BY US THAT A BIG CHUNK OF THE MONEY WE'RE SPENDING FROM LAST YEAR TO THIS YEAR —

SLIGHTLY OVER ONE-THIRD IS STRICTLY PUBLIC SAFETY. 34% OF THAT 68 MILLION IS ONLY FOR PUBLIC SAFETY.

FUTRELL: AND I THINK WE SHOWED YOU SOME OF THE GRAPHS IN THE FIVE-YEAR FORECAST THAT SHOW THAT THE INCREASES IN OUR INVESTMENT IN PUBLIC SAFETY I THINK BY NEXT YEAR TAKE UP 98, 99 PERCENT OF ALL SALES AND PROPERTY TAX.

MAYOR GARCIA: AND IF YOU LOOK AT THE 34% OF THE 69 MILLION, IS GETS CLOSE TO THE SCRUBBED DOWN FIGURE. IN OTHER WORDS, WHEN WE SCRUB DOWN — WHEN WE ELIMINATED ALL THE THINGS THAT WE ELIMINATED, WE GET DOWN TO A FIGURE THAT'S CLOSE TO THE 34%. SO IF WE LEAVE IT LIKE IT IS, THAT EXTRA 29 MILLION FOR THE — 29 MILLION IS MOSTLY PUBLIC SAFETY, CORRECT?

FUTRELL: YOU CERTAINLY COULD BECAUSE THE SAVINGS THAT WE'VE INCURRED ALL THIS YEAR, WE'VE HELD PUBLIC SAFETY HARMLESS ON MOST OF THE SAVINGS.

MAYOR GARCIA: SO I THINK FOLKS NEED TO UNDERSTAND THAT THAT'S WHY THE COUNCIL IS STRUGGLING BECAUSE I'VE GOT A GUY THAT SEND ME — HE HAS A PH.D. I DON'T KNOW WHERE HE GOT IT FROM, BUT ANYWAY, HE SENT ME THE SAME E-MAIL ABOUT 40 TIMES, THE SAME, SAME, SAME. HE WENT TO SLEEP ON THE SEND BUTTON. AND HE SAID CUT A THOUSAND JOBS, LIKE EVERYBODY ELSE. WELL, YOU CAN'T CUT A THOUSAND JOBS AND INCLUDE — I GUESS HE MEANT ACROSS THE BOARD. THAT MEANT FIRE, POLICE, E.M.S., EVERYBODY WAS GOING TO GET A SHARE OF THAT CUT. AND I THINK THAT PEOPLE NEED TO UNDERSTAND THAT WE CAN'T DO THAT IN THIS CITY, NOT WITH THE SITUATION THAT WE HAVE. ANYWAY, FURTHER COMMENTS? CITY MANAGER, IS IT 3:00 O'CLOCK? ACTUALLY, IT'S TWO MINUTES AFTER. WE PROBABLY WILL DO SOME MORE WORK IN THE ONE TO ONES THAT YOU WILL BE DOING WITH THE COUNCIL AND WE'LL GET BACK ON THE LATTER PART OF JUNE AND JULY. ANY MORE BUSINESS, COUNCILMEMBERS?

THOMAS: ONE THING, COUNCILMEMBER ELECT BETTY DUNKERLEY WAS TALKING ABOUT THE AUD R. AUDITING SITUATION. I'M NOT AGAINST THAT, BUT WOULD IT AFFECT OUR AUDITING DEPARTMENT IF WE PULL, BECAUSE IT'S MY UNDERSTANDING THAT THEY'RE ALREADY HURTING FOR PERSONNEL AND THE AUDITING DEPARTMENT SHE WAS TALKING ABOUT HELPING THE CITY MANAGER'S OFFICE.

I THINK THAT'S PROBABLY A QUESTION YOU'RE GOING TO NEED TO ASK STEVE, BUT I'M ASSUMING IF YOU ARE PULLING POSITIONS FROM STEVE SHAW, YOU WILL BE REDIVIDING THE DUTIES OR TASKS THAT YOU WOULD FOR THAT LEVEL OF STAFFING. I WILL SAY THAT THERE'S PROBABLY BEEN NO DEPARTMENT HELP AS HARMLESS, EXCEPT FOR PUBLIC SAFETY, IN ALL OF OUR PUBLIC SAVINGS GOALS AND CUTS A AS AUDIT HAS BEEN.

MAYOR GARCIA: LET ME ANSWER IT THIS WAY, COUNCILMEMBER. AUDITORS IN DEVELOPING THE SCOPE OF WORK THAT THEY'RE GOING TO DO, THEY ALWAYS WANT TO KNOW HOW MUCH YOU HAVE IN THE WAY OF INTERNAL AUDIT FUNCTION GOING, BECAUSE IF YOU HAVE A GOOD INTERNAL AUDIT FUNCTION GOING, THE SCOPE OF YOUR WORK DOESN'T HAVE TO BE AS EXTENSIVE. THEY CAN MOVE UP AND AUDIT AT A HIGHER LEVEL, KNOWING THAT THE CITY MANAGER HAS INTERNAL AUDIT FUNCTIONS GOING. SO I THINK IT CAN BE DONE.

THOMAS: COULDN'T WE ALSO UTILIZE — DO WE HAVE ANY OUTSIDE AUDITORS THAT WE ALREADY ARE USING THAT —

MAYOR GARCIA: EMG. AS WE STAND RIGHT NOW, WE HAVE TWO FUNDAMENTALLY OUTSIDE AUDITORS. OUR CITY AUDITORS THAT REPORTS TO THE COUNCIL. AND THE PKMG.

THOMAS: OKAY. THANK YOU.

MAYOR GARCIA: FURTHER QUESTIONS, COMMENTS. THANK YOU VERY MUCH, COUNCILMEMBERS. WE'LL SEE YOU TOMORROW. I'M ENTERTAIN A MOTION TO ADJOURN. MOTION BY COUNCILMEMBER GRIFFITH, SECONDED BY THE MAYOR PRO TEM. ALL IN FAVOR, SIGNIFY BY SAYING AYE. OPPOSED NO. MOTION CARRIES ON A VOTE OF SIX TO ZERO, WITH COUNCILMEMBER WYNN TEMPORARILY OFF THE DIAS.

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