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[Call to Order, Invocation, and Pledge of Allegiance.]

[00:00:06]

>> GOOD EVENING. IT IS 6 P.M.

FEBRUARY 22ND, 2022. CITY COUNCIL WAS CALLED TO ORDER. WE HAVE COUNCIL MEMBER KAUFMAN WILL LEAD US IN YOU ARE INVOCATION AND PLEDGES.

>> PLAY WITH ME, IF YOU BO. IF YOU WOULD.

FATHER, WE COME BEFORE YOU THIS EVENING RECOGNIZING YOUR GOODNESS. WE THANK YOU FOR WHO YOU ARE AND OUR ABILITY TO SERVE THIS GREAT COMMUNITY IN YOUR NAME, LORD, WE THANK YOU FOR THAT GREAT OPPORTUNITY.

LORD, WE HELP PRAY FOR YOU TO S DO IT WELL.

WE PRAY FOR THOSE SICK AND STRUGGLING, THAT YOU BE WITH THEM AND INTERVENE. AS I LOOK OUT AND SEE REPRESENTATIVES OF OUR CHAMBER OF COMMERCE, I WANT TO LIFT UP THE ECONOMICS OF OUR COMMUNITY. THANK YOU FOR OUR BUSINESSES, THAT YOU CONTINUE TO BLESS THEM, LARGE AND SMALL, A PLACE TO REFLECT YOUR GLORY IN THIS COMMUNITY.

GOD, WE GIVE THIS MEETING TO YOU, LORD, HELP US TO LEAD -- HELP TO LEAD US AND TO GUIDE US WITH YOUR WISDOM.

IN JESUS' NAME WE PRAY, AMEN. >> REGULAR AGENDA ITEMS,

[2022-075 ]

2022-075, RECEIVE A QUARTERLY INVESTMENT REPORT FROM

PATTERSON& ASSOCIATES. >> NOW YOU WANT ME TO MOVE AWAY, OKAY. I GUESS I DON'T HAVE TO SAY THAT AGAIN, RIGHT? SO YOU CAN SEE WHAT'S HAPPENING OUT THERE, AND IT IS ALL BECAUSE OF SOME OF THE FACTORS THAT WE HAVE TALKED ABOUT MANY TIMES. THE FACT THAT INFLATION RIGHT NOW IS THE BIGGEST THING. THAT'S WHAT'S -- WELL, THERE ARE TWO THINGS TODAY. INFLATION BECAUSE, THERE'S A QUESTION OF IS THIS INFLATION COVID DRIVEN OR IS IT CYCLICAL? AND ALONG, FOR A LONG TIME WE THOUGHT IT WAS STRICTLY COVID DRIVEN, THE SUPPLY CHAIN. NOW IT IS LOOKING MORE AND MORE AS IF IT IS CYCLICAL. IT IS CERTAINLY NOT TRANSITORY.

IT IS GOING TO TAKE A LONG TIME TO WORK OUT OF IT.

WE HAVE ?OAN KNOWN THAT FOR A LG TIME.

THE FED STARTED IN DECEMBER TALKING ABOUT THE FACT THAT THEY ARE GOING TO RAISE RATES. THEY STARTED FIRST WITH TAKING AWAY THE TAPER -- OR TAPERING, TAKING AWAY THE ACCOMMODATION WHICH WAS THE 120 BILLION THAT THEY WERE PUTTING INTO THE ECONOMY EVERY MONTH. AND THEY STARTED IN JANUARY TO BACK OUT OF THAT ACCOMMODATION WHICH MEANS THEY ARE NOT GOING TO PUT SO MUCH LIQUIDITY INTO THE SYSTEM.

IT ACTUALLY, AT THIS POINT, LOOKS LIKE THAT LIQUIDITY WHICH WAS TO BE THE CURE HAS ACTUALLY TURNED INTO THE DISEASE.

AND SO -- WE HAVE GOT TOO MUCH LIQUIDITY IN THE SYSTEM, THE FED SAID I WILL START IN JANUARY, PULL THE ACCOMMODATION AWAY AND SHOULD HAVE THAT DONE NEXT MONTH IN MARCH.

THE MARKET EXPECTS SIX -- FIVE TO SIX RATE INCREASES THIS YEAR.

NOW, WHEN WE TALK ABOUT RATE INCREASES, WE ARE ONLY TALKING ABOUT ON THE FAR LEFT-HAND SIDE. THAT'S THE ONLY RATE THAT THEY CAN CONTROL. AND YOU CAN SEE THAT THEY ARE STILL KEEPING IT DOWN AT ZERO AS THEY WILL KEEP IT THERE THROUGH

[00:05:01]

MARCH. BUT THE MARKET HAS ALREADY BUILT IN ABOUT FOUR RATE HIKES, AND THE RATE HIKES COME AT QUARTER POINT. SO IN MARCH, WE CAN EXPECT THAT THE LIQUID MONEY, THE OVERNIGHT MONEY, WILL GO TO ABOUT .25.

IT HAS BEEN SITTING AT .1 TO .8 -- .08 NOW FOR ALMOST TWO YEARS. AND SO THIS IS A MAJOR, MAJOR CHANGE. IT ALSO SHOWS NOW THERE'S A LOT OF OPPORTUNITY OUT THERE, SINCE THE MARKET BUILDS IT IN FIRST, WE CAN GO OUT AND GRAB AT THE 38, 72, AND AS I SAY THIS MORNING, IT WAS A LITTLE BIT HIGHER.

BUT THAT IS ONE OF THE FACTORS. THE OTHER FACTOR THAT COULD TAKE THIS DOWN AGAIN IS MR. PUTIN. THAT'S UKRAINE.

WHEN THERE IS ANY KIND OF WAR, ANY KIND OF HOSTILITY OR ANY KIND OF DANGER, PEOPLE RUN TO SAFETY.

AND THEY RUN INTO THE UNITED STATES MARKETS BECAUSE THAT'S WHERE THEY KNOW THE CREDIT IS GOOD.

THAT'S WHERE THEY KNOW THAT THE DEBT IS SAFE.

AND SO THAT WE MIGHT SEE IT GO BACK DOWN AGAIN.

BUT WE ARE IN THE PROCESS NOW WORKING WITH STAFF OF STARTING TO USE THESE RATES WHICH HAVE JUST COME COMPOUNDING UP AND GET THAT MONEY WORKING. SO INFLATION IS GOING TO CONTINUE TO BE, AND YOU CAN SEE IT ON THE LOWER RIGHT-HAND SIDE, INFLATION HAS JUST SOARED. AND THEY HAVE TO GET THAT DOWN .THE MOST EFFECTIVE WAY TO DO THAT IS RAISE RATES WHICH SLOWS DOWN THE ECONOMY, SLOWS DOWN THE BORROWING AND SO FORTH.

THE BALANCE THAT THE FED HAS TO FIND IS THEY DON'T WANT TO GO TOO FAST AND TOO FURIOUS. DON'T WANT TO GET THOSE RATES SO HIGH THAT IS IT STOPS THE ECONOMIC SITUATION.

AND SO YOU DON'T WANT TO HURT THE ECONOMY AT THE SAME TIME.

BUT ECONOMY, YOU CAN SEE IT UP ON THE TOP THERE, THE GROSS DOMESTIC PRODUCT, IT IS BROKEN INTO CONSUMPTION AND NET EXPORTS AND SO FORTH. YOU CAN SEE THAT IT IS NICE AND SOLID. IT IS GROWING WELL.

WE HAVE A GOOD SOLID BASE ON THE ECONOMY AND NOW THE FED IS LOOKING TO BALANCE THOSE TWO THINGS.

PLUS, A THIRD FACTOR, AND THAT IS JOBS.

BECAUSE WE HAVE AN UNUSUAL SITUATION NOW WHERE WE HAVE ACTUALLY GOT MORE JOBS THAN WE HAVE PEOPLE WHO HAVE A JOB.

AND SO THAT'S SLOWING EVERYTHING DOWN.

THROW THAT ?OO T INTO THE MASK N DATES AND NOW WE HAVE A POT THAT IS BOILING HERE. IT IS PRIMARILY THE INFLATION THAT IS CAUSING THE PROBLEM HERE BECAUSE WE HAVE THROWN SO MUCH MONEY INTO THE ECONOMY AND WE HAVE TO GET IT BACK OUT AGAIN.

SO THAT'S THE BALANCE THAT THE FED IS LOOKING FOR.

THE MARKET KIND OF GETS AHEAD OF IT ITSELF AND THEY HAD CALLED ORIGINALLY FOR SIX RATE INCREASES THIS YEAR.

I DON'T KNOW, I HAVE BEEN THROUGH A LOT OF THOSE RATE INCREASES, I DON'T THINK THEY ARE GOING TO DO IT QUITE AS QUICKLY AS THE MARKET WOULD LIKE OR IS CONCERNED ABOUT.

AND THAT'S BECAUSE THEY ARE VERY DELIBERATE.

THEY WANT TO MAKE SURE THAT THEY DON'T SHOCK THE SYSTEM TOO MUCH.

PLUS, WE HAVE GOT THE PROBLEM WITH THE UKRAINE AND THAT'S GOING TO COMPOUND THIS SITUATION IMMENSELY.

THERE'S SOME ADDITIONAL FACTORS HERE AND THE ONE ON THE TOP, THE FEDERAL BALANCE SHEET, IS PROBABLY ONE OF THE BIGGEST ONES. SINCE WE HAVE THROWN SO MUCH MONEY INTO THE ECONOMY AND WE HAVE DONE THAT TO A CERTAIN EXTENT BY ISSUING DEBT PLUS ALL OF THE OTHER DEBT THAT'S BEEN CREATED DURING THE LAST TWO YEARS PERIOD, YOU CAN SEE THAT WE NOW HAVE A NATIONAL DEBT THAT'S TOPPED $30 TRILLION.

AND THAT'S 125% OF THE GROSS DOMESTIC PRODUCT OF THE UNITED STATES. THAT'S NOT IN ITSELF A BAD PROBLEM, IF YOU CONTINUE TO HAVE THE ECONOMY GROW.

SO IF THE ECONOMY CAN SUSTAIN THAT KIND OF DEBT, THERE'S NOT A PROBLEM. IF YOU SLOW IT DOWN TOO MUCH, THEN IT IS A BIG PROBLEM. WE HAVE THE FED, THE DEBT, SERVICING THE DEBT, MAKING SURE PEOPLE GET OUT OF THEIR DEBT SITUATION, THAT'S GOING TO FALL BACK INTO THE JOB OPENINGS AND THE TURNOVER WHICH WE CALL THE JOLTS AND YOU CAN SEE THAT THE JOLTS, THE OPENINGS AND THE TURNOVER IN JOBS IS AMAZING.

IT IS HARD TO NOT RUN INTO SOMEBODY WHO HAS A SITUATION WHERE THEY HAVE JOBS AND THEY CAN'T FILL THEM.

THE ECONOMY, THOUGH, AS I SAY, IS REALLY VERY, VERY STRONG.

AND MANUFACTURING STRONG, EXISTING HOUSES AND HOUSE

[00:10:02]

GROWTH, HOW CONSTRUCTION IS DOWN SLIGHTLY ABOUT IT WAS UP 20% LAST YEAR. SO COMING OFF THAT 20% HIGH IS NOT GOING TO BE A BIG PROBLEM. THE OTHER PROBLEM -- OR THE OTHER AREA IS THE PERMITS FOR CONSTRUCTION AND I KNOW YOU ARE GROWING LIKE MAD HERE IN MIDLOTHIAN, SO THE PERMITS ARE UP. THE ACTUAL HOUSES ARE DOWN.

THAT MAKES SENSE TO ME BECAUSE OF THE SITUATION OF THE SUPPLY CHAIN. THEY CAN'T GET THE ALUMINUM, THE BUM BETTER. THAT'S ONLY GOING TO BE EXACERBATED BY THE UKRAINE. AND PUTIN.

BECAUSE THAT'S WHERE A LOT OF COMMODITIES COME FROM.

SOME OF THE ALUMINUM AND THEN WE HAVE TO SUPPORT THEM ON THE GAS.

SO THE GEO-POLITICAL PROBLEMS ARE WHAT I HAVE NAMED DOWN HERE RUSSIA'S ROULETTE AND WHAT KIND OF GAME HE IS GOING TO PLAY THERE IS GOING TO BE A SERIOUS PROBLEM, TO MAKE SURE THAT WE UNDERSTAND WHAT KIND OF IMPACT THAT HAS.

RIGHT NOW, I MEAN, IT HAS BEEN A LONG TIME SINCE I HAVE BEEN ABLE TO COME TO YOU AND SAY, YES, DEFINITELY, THE RATES ARE GOING UP AND, YES, THEY DEFINITELY ARE.

THEY ARE GOING TO LEAP UP BUT WE ALSO HAVE A SAYING IN THE MARKET THAT WHEN THE RATES GO DOWN IN A NORMAL CASE, THEY GO DOWN BY THE ESCALATOR. WHEN THEY GO UP, THEY GO UP BY THE STAIRS. IT WILL BE A SLOW, OVER THE NEXT NINE TO TEN MONTHS, YOU WILL SEE THE RATES GOING UP CONSTANTLY.

WHAT THAT'S DONE TO YOU IS, IN THIS, THIS IS THE 1231 REPORT, SO IF YOU REMEMBER WHAT THAT GRAPH LOOKED LIKE, THERE WASN'T MUCH OF A CHANGE. ALTHOUGH WE HAVE BEEN KIND OF WAITING AS YOUR TAXES COME IN, AND THEN WAITING FOR THE POINT WHERE WE CAN ACTUALLY MAKE A MOVE AND GO OUT INTO A LONGER SECURITY, WHICH NOW, IF YOU CONSIDER THE POOLS ARE STILL ABOUT 8 BASIS POINTS, AND THE THREE-MONTH IS -- WELL, THIS MORNING IT WAS AT A 39. SO 30 BASIS POINTS, THIRD OF A POINT PICKING UP OVER THAT PERIOD.

YOU STARTED THE QUARTER AND THE BIG INCREASE, OF COURSE, IS TAXES COMING IN AT 129 MILLION AND ENDING IT AT 135 MILLION.

THE RATES STILL LOOK AWFUL HERE BECAUSE THE QUARTERLY NET YIELD ON THE PORTFOLIO WAS 16 BASIS POINTS.

SO FOR THE BEGINNING OF THE YEAR, THE EARNINGS FOR THE QUARTER, VERY SLOW. COMING IN AT $50,000 AND THAT'S BECAUSE OF THE .14, .15 YIELD YOU SEE ON THE PORTFOLIO.

I EXPECT FULLY IN MARCH TO BE ABLE TO SAY WE'RE DOUBLING THAT BECAUSE IT SHOULD BE NO PROBLEM TO GET UP NO 30 AND 40 BASIS POINTS. YOU WILL NOTICE THAT WHEN THE WEIGHTED AVERAGE MATURITY OF THE PORTFOLIO WENT FROM 128 DAYS TO 99 DAYS. THAT'S MERELY THE EFFECT OF ALL THE CASH COMING IN. THAT'S WEIGHTING THE -- PULLING IT SHORTER. BUT THAT WILL CERTAINLY CHANGE AND ALREADY HAS STARTED TO CHANGE THIS QUARTER.

THIS IS WHAT IT LOOKS LIKE GRAPHICALLY.

YOU CAN SEE THAT MOST OF THE MONEY IS STILL, AT THIS POINT, SITTING IN THE POOLS BECAUSE THE POOLS WERE BETTER THAN ANYTHING YOU COULD GET OUT TO THE ONE-YEAR AREA.

BECAUSE IF YOU REMEMBER WHAT THAT GRAPH LOOKED LIKE ON THE YIELD CURVE, IT WAS VERY FLAT THERE.

IT MAKES SENSE TO KEEP IT IN A LIQUID SITUATION.

THAT DOES NOT MAKE SENSE NOW AND WHAT WE HOPE TO BE ABLE TO SEE IS THAT YOU WILL SEE HERE WHERE THERE WAS NO VALUE, AND THIS IS ACTUALLY MONEY THAT'S GETTING SHORTER, THAT WAS 9 TO 12 MONTHS, THIS IS WHERE IT WILL START TO LOOK MORE LIKE A REGULAR LADDERED PORTFOLIO BECAUSE THERE'S OPPORTUNITY NOW THAT WE HAVEN'T HAD FOR QUITE A WHILE.

COMCOMPARATIVELY WHEN YOU LOOK T THE ASSET ALLOCATION OF THE TWO, IT DOESN'T LOOK ALL THAT DIFFERENT.

WE REALLY A LOT ON THE AGENCIES AND MUNICIPAL MARKET AND A LITTLE BIT ON COMMERCIAL PAPER. YOUR POLICY IS VERY SHORT ON COMMERCIAL PAPER AND IT IS VERY DIFFICULT TO GET SHORT COMMERCIAL PAPER. SO IT HAD FALLEN DOWN TO JUST UNDER 3% OF THE PORTFOLIO. MONEY IN THE BANK IS OFTEN SITTING THERE JUST AS YOU ARE COMPENSATING BALANCE AND AS YOU ARE LIQUIDITY NEEDS COME UP? CDS, WE USE A LITTLE BIT.

BUT, REALLY, WHERE I EXPECT TO SEE THAT GROW A LOT IS IN THE AGENCY AREA AND POTENTIALLY PUTTING SOME MORE TREASURIES, T BILLS, AND T NOTES BACK ON THE PORTFOLIO WHICH WE HAVEN'T SEEN

[00:15:05]

FOR A LONG TIME. THE POLICY HAS DIVERSIFICATION LIMITS BUILT INTO IT. THAT IS THE LIGHTER BLUE LINE.

AS WE HAVE, BECAUSE MOST OF THE MONEY WAS SITTING THERE VERY, VERY LIQUID, WE HAVEN'T COME ANYWHERE CLOSE TO THE DEVERSE IF DEVEDEDIVERSIFICATION LIMITS. I STARTED BACK FROM DECEMBER 20TH, 2020 AND UP TO DECEMBER '21, YOU CAN SEE THAT IS NOT MUCH HAS HAPPENED DURING THAT YEAR.

I THINK THE WAY TO LOOK AT IT, THE EASIEST WAY IS TO LOOK AT THE AVERAGE YIELD AND THE ENDING YIELD AND THE BENCHMARK YIELD.

SO WE STARTED AT 11 BASIS POINTS.

DIPPED DOWN DURING THE YEAR AND NOW STARTED TO COME BACK UP IN DECEMBER. AND THAT'S THE BEGINNING OF THE MOVE COMING BACK UP AGAIN. OF COURSE, THE EARNINGS AT THESE TERRIBLE LOW, LOW RATES, VERY DIFFICULT EVEN WHEN YOU HAVE $15 MILLION SITTING THERE. BUT WE ARE STARTING TO MOVE IT OUT AGAIN. YOU WILL SEE THE WAM GO A LITTLE BIT FARTHER. YOU NOTICE THAT BACK HERE, WHERE IT WAS REALLY DIFFICULT TO GET MONEY ANYWHERE BUT IN THE POOLS, IT WAS VERY, VERY SHORT. 6 AND 26 DAYS.

MDEC LOOKS LIKE THIS, A LOT OF MONEY SITTING IN THE POOL FOR THE SAME EXACT REASONS. AND SO THE OVERALL MATURITY, MOST OF IT SITTING HERE IN THE OVERNIGHT, WHICH WOULD BE THE POOLS, AND TO A CERTAIN EXTENT THE BANK, AND THEN A LITTLE BIT WHERE IT IS POSSIBLE TO GRAB SOME ADDITIONAL YIELD BUT IT IS -- DURING THAT TIME IT WAS ONLY IN THE ONE AND TWO-YEAR AREA WHERE YOU COULD GET ANY YIELD AT ALL.

THAT'S MCDC LOOKING BACK, NOT AS BIG A JUMP THERE FROM 7.2 MILLION TO 8.2 MILLION. MUCH LONGER NOW WITH 27 DAYS.

BUT STILL VERY, VERY STEADY ON WHAT'S AVAILABLE OUT IN THE MARKET, SO IT IS STILL AT ABOUT .08% OR 8 BASIS POINTS.

IT IS GOING TO CHANGE. NEXT QUARTER IT IS GOING TO CHANGE, OKAY? MCDC, THIS IS WHAT IT LOOKS LIKE AGAIN THE POOL. WE USE MUNI, CITY, STATE, COUNTY, HOSPITALS, MUNICIPAL BONDS.

AND THEY HAVE BEEN ASTOUNDINGLY GOOD OVER THE LAST YEAR AND THAT'S BECAUSE EVERY CITY AND COUNTY AND SCHOOL DISTRICT HAS BEEN ISSUING DEBT WITH THE RATES BEING SO LOW.

AND THERE WAS A LOT MORE OUT THERE WITH VERY HIGH CREDIT QUALITIES, SO THAT'S WHY YOU SEE SOUTH BEACH OF THE MUNIS ON DIFFERENT PORTFOLIOS. HERE'S MDA, JUMPED FROM 35 MILLION UP TO 43 MILLION DURING THE YEAR AND HERE, NOW, THIS ONE STAYS A LITTLE BIT LONGER AND YOU CAN SEE WE ARE STAYING UP AROUND 200 DAYS AS A WEIGHTED AVERAGE ON THIS ONE.

SO AS A RESULT, BECAUSE WE CAN GO OUT A LITTLE BIT FARTHER THEN YOU HAVE A LOT DIFFERENT RESULT DOWN HERE BECAUSE WE CAN GO OUT FARTHER AND DON'T NEED THE LIQUIDITY THAT THE OTHER PORTFOLIOS NEED, THEN WE HAVE BEEN ABLE TO KEEP IT UP BETWEEN 30 AND 50 BASIS POINTS, OR ABOUT .37% AND AS A RESULT, THEN, THE EARNINGS A LITTLE BIT BETTER FOR MDA THROUGHOUT THE YEAR.

MDA, THERE'S THE DIFFERENCE. IF YOU LOOK AT THIS, IT STILL HAS A LOT OF MONEY THAT IS TOTALLY LIQUID BUT THEIR CASH FLOW ALLOWS US TO GO OUT HERE INTO THE ONE TO TWO AND TWO-YEAR AREA, TWO TO THREE-YEAR AREA AND SO THAT ALLOWED US TO USE A LOT MORE OF THE AGENCY'S, FEDERAL AGENCIES AND SOME OF THE MUNIS ALSO. THAT MAKES A GREAT DEAL OF DIFFERENCE. THE CITY PORTFOLIO HAS TO PAY ONGOING ROLLING EXPENSES ALL THE TIME.

OBVIOUSLY, THEY HAVE A GREATER NEED FOR LIQUIDITY.

BUT NO THAT WE H NOW THAT WE HAG IN THAT AREA WHERE WE CAN GRAB IT AND INVEST IT, IT WILL LOOK A LOT DIFFERENT THE NEXT TIME AROUND. BENCHMARK OVERALL, I JUST TOOK THE QUARTERLY EARNINGS HERE. TO GIVE YOU AN IDEA OF WHAT IS ACTUALLY HAPPENING. THESE ARE THE EARNINGS.

SO YOU CAN SEE WHEN WE WERE BACK IN 19 -- PHY FISCAL YEAR 1920, T BEFORE COVID HIT, THE RATES WERE UP AROUND 1.5, WHICH IS ABOUT SIX RATE HIKES WOULD TAKE US AGAIN.

[00:20:03]

SLOWLY JUST ALL THE WAY DOWN THROUGH THE COVID TIME INTO DOWN AROUND 50,000. TOTAL EARNINGS FOR ALL THE PORTFOLIO 69,000, VERSUS 216 WHEN THE RATES GO BACK UP AGAIN.

WE EXPECT TO SEE A LOT OF CHANGE HERE AND AS YOU SEE, THESE, THE SIX-MONTH BILL, ESPECIALLY GOING FROM WHAT WAS AT THE END OF DECEMBER, A .09, AND NOW IS GOING TO BE ON A SIX-MONTH, ABOUT HALF A PERCENT. THAT'S A MAJOR CHANGE THAT'S COMING AS LONG AS THE UKRAINE -- IF WE CAN GET A HANDLE ON UKRAINE. THAT'S THE BIG QUESTION RIGHT NOW. SO ANY QUESTIONS THAT I CAN ANSWER? I AM TRYING.

IT'S GOING TO BE A LOT EASIER NOW, THAT'S FOR YOU SHOOR.

>> NO QUESTIONS, THANK YOU VERY MUCH.

WE APPRECIATE IT. >> ITEM 2022-076,

[2022-076]

PRESENTATION OF CITY'S FINANCIAL AUDIT FOR FISCAL YEAR 2020-2021 FROM REPRESENTATIVES OF PATILLO, BROWN, & HILL, LLP.

>> THANK YOU. WHAT WE ARE PASSING OUT RIGHT NOW ARE TWO DOCUMENTS THAT YOU WILL SEE.

THE BIG HUNDRED PAGE DOCUMENT, LOOKS LIKE THIS, IS A COPY OF THE CITY'S ANNUAL FINANCIAL STATEMENTS.

IT ALSO INCLUDES TWO AUDITOR'S REPORTS THAT I WILL GO OVER.

AND THEN YOU ALSO HAVE A SMALLER DOCUMENT THAT LOOKS LIKE THIS.

THIS DOCUMENT CONTAINS ALL OF THE MATTERS THAT ARE REQUIRED TO BE COMMUNICATED TO A GOVERNING BODY AT THE END OF AN AUDIT.

I GUESS I WILL START OFF BY INTRODUCING MYSELF.

MY NAME IS TODD PRUITT, I'M A PARTNER WITH PATILLO, BROWN, AND HILL. I WOULD LIKE TO THANK THE COUNCIL FOR ALLOWING US TO PERFORMING THE AUDIT.

A SPECIAL THANKS TO THE CITY EMPLOYEES THAT HELPED US DURING THE COURSE OF THE AUDIT. THEY DID AN EXCELLENT JOB PROVIDING US THE DOCUMENTS WE NEEDED TO HAVE IN ORDER TO DO OUR AUDIT, AND IN DRAFTING, PREPARING THIS HUNDRED PAGE DOCUMENT, YOU CAN IMAGINE THERE IS A LOT OF TIME AND EFFORT THAT GOES INTO DRAFTING THIS. THEY REALLY DID AN EXCELLENT JOB THIS YEAR IN GETTING READY FOR THE AUDIT.

I WOULD LIKE TO GO OVER THE RESULTS OF THE AUDIT WHICH ARE CONTAINED IN TWO SEPARATE REPORTS IN YOUR AUDITED FINANCIAL STATEMENTS. IF YOU LOOK AT THE ANNUAL COMPREHENSIVE FINANCIAL REPORT, THE FIRST SECTION IS CALLED THE INTRODUCTORY SECTION AND IT IS ABOUT TEN PAGES.

YOU WILL NOTICE THAT IT IS NUMBERED WITH ROMAN NUMERALS.

IF YOU SKIP PAST THAT SECTION, YOU WILL FIND THE FINANCIAL SECTION. THE FIRST PAGE OF THE FINANCIAL SECTION, YOU WILL SEE OUR INDEPENDENT AUDITOR'S REPORT OF THE FINANCIAL STATEMENTS. WHAT THIS REPORT BASICALLY SAYS IS THAT THE PREPARATION OF THESE FINANCIAL STATEMENTS IS THE RESPONSIBILITY OF THE CITY. WE CAN ASSIST WITH THE PREPARATION AND WE DO. BUT ULTIMATELY THE PREPARATION OF THE FINANCIAL STATEMENTS IS THE CITY'S RESPONSIBILITY.

IT IS OUR RESPONSIBILITY, AS YOUR AUDITOR, TO HE CAN PRESS AN OPINION ON THE FINANCIAL STATEMENTS.

YOU WILL FIND OUR OPINION AT THE TOP OF PAGE 2.

I'M HAPPY TO REPORT THAT WE HAVE ISSUED WHAT IS CALLED AN UNMODIFIED OPINION. YOU WILL HEAR IT REFERRED TO AS A CLEAN OPINION. THE HIGHEST FORM OF OPINION THAT WE CAN ISSUE WHAT. IT REALLY MEANS TO YOU AS A USER OF THESE FINANCIAL STATEMENTS IS THAT THEY HAVE BEEN AUDITED BY OUR FIRM AND IN OUR OPINION THEY ARE FREE OF ANY MATERIAL MISSTATEMENTS OR LARGE ERRORS. THEY ARE ALSO PRESENTED FAIRLY IN ACCORDANCE WITH GENERALLY-ACCEPTED ACCOUNTING PRINCIPLES. YOU WILL ALSO NOTICE AT THE BOTTOM OF PAGE 2, THAT OUR AUDIT WAS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS. THOSE STANDARDS REQUIRE YOUR AUDITORS TO DO A NUMBER OF THINGS THAT GO BEYOND JUST GENERALLY ACCEPTED AUDITING STANDARDS.

ONE OF WHICH IS TO REPORT ON YOUR INTERNAL CONTROLS OVER THE

[00:25:04]

FINANCIAL REPORTING PROCESS AND COMPLIANCE WITH LAWS AND REGULATIONS AND CONTRACTS AND GRANTS.

YOU WILL FIND THAT REPORT ON THE VERY LAST PAGE OF THE BOUND DOCUMENT WHICH IS PAGE 103. AND THIS REPORT, YOU WILL SEE SEGREGATED INTO TWO SECTIONS. THE FIRST PAGE DEALS WITH INTERNAL CONTROLS OVER FINANCIAL REPORTING.

THE SECOND SECTION ON PAGE 104 DEALS WITH COMPLIANCE.

WE WILL TALK ABOUT EACH ONE OF THOSE A LITTLE BIT.

INTERNAL CONTROLS OVER FINANCIAL REPORTING, WHAT WE ARE TALKING ABOUT HERE IS BEFORE WE CAN PERFORM OUR AUDIT, WE HAVE TO FIRST GAIN AN UNDERSTANDING OF ALL YOUR INTERNAL CONTROLS OVER THE FINANCIAL REPORTING PROCESS. ALL THAT REALLY MEANS, IS ALL THE POLICIES AND PROCEDURES THAT YOU HAVE IN PLACE IN ORDER TO PREPARE THESE FINANCIAL STATEMENTS.

IF, DURING THAT PROCESS, WE IDENTIFY ANY DEFICIENCIES, EITHER IN THE DESIGN OF THOSE CONTROLS OR THEIR OPERATION, THAT WE THINK ARE SIGNIFICANT, WE ARE REQUIRED TO INCLUDE THEM IN THIS REPORT AND I'M HAPPY TO REPORT THERE WERE NO SIGNIFICANT DEFICIENCIES IN INTERNAL CONTROLS THAT WERE IDENTIFIED DURING THE COURSE OF THE AUDIT. THE SECOND PAGE OF THIS REPORT DEALS WITH COMPLIANCE. HERE WE ARE TALKING ABOUT COMPLIANCE WITH LAWS, REGULATIONS, CONTRACTS AND GRANTS. WE ARE TALKING ABOUT THINGS THAT, IF WE FIND NONCOMPLIANCE, WE THINK IT COULD HAVE AN IMPACT ON YOUR FINANCIAL STATEMENTS. USUALLY THOSE ARE -- THOSE TYPE OF THINGS WOULD BE ITEMS THAT WE CREATE A LIABILITY FOR A CITY, FOR EXAMPLE, IF YOU HAVE A LARGE FEDERAL GRANT AND WE DISCOVERED SOME NONCOMPLIANCE, YOU MIGHT HAVE TO PAY THAT MONEY BACK TO THE GRANTING AGENCY, THAT WOULD BE SOMETHING THAT WOULD BE INCLUDED IN THIS REPORT AND YOU CAN SEE THERE AT THE TOP PARAGRAPH ON PAGE 104, THAT THERE WERE NO INSTANCES OF NONCOMPLIANCE THAT WERE IDENTIFIED DURING THE COURSE OF THE AUDIT. SO FROM A RESULTS OF THE AUDIT STANDPOINT, YOU HAVE GOT REALLY THE BEST THAT YOU CAN HOPE FOR.

YOU HAVE A CLEAN OPINION ON YOUR FINANCIAL STATEMENTS.

WE HAD NO SIGNIFICANT DEFICIENCIES IN YOUR INTERNAL CONTROLS OVER THE FINANCIAL REPORTING PROCESS.

AND YOU HAD NO INSTANCES OF NONCOMPLIANCE THAT WOULD BE MATERIAL TO YOUR FINANCIAL STATEMENTS.

SO I CONGRATULATE THE CITY ON THE CLEAN RESULTS OF THE AUDIT AND I WOULD BE HAPPY TO ANSWER ANY QUESTIONS YOU MIGHT HAVE ABOUT THE AUDIT OR THE FINANCIAL STATEMENTS THEMSELVES.

GOOD NEWS, WE LIKE THESE KIND, TOO.

THEY DO AN EXCELLENT JOB, ESPECIALLY FOR A CITY THIS SIZE.

A LOT OF OUR CLIENTS, WE PROBABLY ROUGHLY HALF OF OUR CLIENTS, WE HAVE DRAFT THIS ENTIRE REPORT, THEY WOULD REVIEW IT AND YOUR STAFF ESSENTIALLY DRAFTS THE ENTIRE REPORT AND WE REVIEW IT. THEY DO AN EXCELLENT JOB.

>> I WANT TO CONGRATULATE THE STAFF, TOO.

>> I WAS GOING TO SAY, THANK YOU CITY STAFF.

THEY ARE THE ONES THAT BRING THIS ACCIDENT REPORT YEAR OVER YEAR. OUR FINANCIAL STANDING IN THE CITY IS EXCELLENT, ESPECIALLY IN TIMES LIKE THIS WE NEED THAT.

ANY COMMENTS? >> THANK YOU.

>> THANK YOU. AGENDA ITEM 2022-077, RECEIVE

[2022-077 ]

RACIAL O PROFILING AND JUVENILE CURFEW ANNUAL REPORTS.

CHIEF? >> GOOD EVENING MAYOR, COUNCIL.

IT IS AT WHAT TIME AGAIN, THIS TIME OF YEAR WE BRING AN ANALYSIS OF WHAT WE DID LAST YEAR IN TERMS OF TRAFFIC CONTACTS. RACIAL PROFILING IS A STATUTE THAT WAS CREATED BACK IN THE '90S BY OUR LEGISLATORS TO GIVE CITIES INSIGHT INTO THE CONTACT, NUMBER OF CONTACTS AND HOPEFULLY PREVENT RACIAL PROFILING BY THE OFFICERS.

SINCE I ARRIVED IN MIDLOTHIAN BACK IN 2007, WE HAVE GROWN SUBSTANTIALLY IN THE TYPE OF CONTACTS WE HAVE MADE.

WELL, I SAY THAT. WE HAVE CONSISTENTLY00 VEHICLESR

[00:30:04]

MOST OF MY TENURE. AND SO THERE'S A COMBINATION OF REASONS WHY THAT H HAS NOT RISEN BECAUSE OF THE INCREASE IN OFFICERS, THE INCREASE IN ACTIVITY, INCREASE IN OTHER AVENUES THAT WE INVEST IN ON A DAILY BASIS.

BUT IT HAS REMAINED FAIRLY CONSISTENT AND AS OUR COMMUNITY GROWS IN DIVERSITY, YOU WILL SEE OVER THE PAST THREE YEARS, WE HAVE CONTINUED TO GROW IN NUMBERS.

IN 2021, WE MADE 11,402 MOTOR VEHICLE CONTACTS.

IN 2020, WE MADE 11,536 CONTACTS.

IN 2019, WE MADE 10,144 CONTACTS.

SO YOU CAN SEE THERE'S NOT A TREMENDOUS AMOUNT OF DIFFERENCE BETWEEN '21 AND '20. WE JUMPED UT QUITE A BIT FROM '20 TO '19. THE RATIOS CHANGED A LITTLE BIT FROM 21 TO 20, AND IN 20, WE MOVE INTO CITATIONS AT THIS POINT BECAUSE THE ENFORCEMENT ACTION BECOMES IMPORTANT FOR THE STATE'S PERSPECTIVE ON WHAT WE DO AFTER WE HAVE MADE CONTACT.

SO WE BREAK THAT DOWN RACIALLY. SO IN LAST 2021, WE ISSUED 4,403 CITATIONS. THAT BREAKS DOWN, WE ISSUED 2,379 CITATIONS TO CAUCASIANS. 1,082 CITATIONS TO MEXICAN AMERICAN OR HISPANIC. 858 CITATIONS TO AFRICAN AMERICANS OR SOMEONE WITH BLACK ETHNICITY.

79 CITATIONS TO ASIAN OR PACIFIC ISLANDER.

AND 5 TO FOLKS THAT FALL INTO THE ALASKA, NATIVE AMERICAN, INDIAN. THOSE RATIOS BREAK OUT 54% OF OUR CITATIONS WERE TO CAUCASIANS.

24.5% WERE ISSUED TO MEXICAN AMERICANS.

19.5% WERE ISSUED TO AFRICAN AMERICANS.

2020, YOU L LOOK BACK AT THAT, % OF OUR CITATIONS ISSUED TO CAUCASIANS. 2% TO MEXICAN AMERICANS.

AND 17% TO AFRICAN AMERICANS. THERE IS NOT A SIGNIFICANT DIFFERENCE IN THAT. THE TELLING ISSUES, WE ALSO VALUE OR LOOK AT THE SEARCHES AND ARRESTS MADE FROM THOSE CONTACTS. AND THEN WE ALSO KEEP UP WITH THE NUMBER OF COMPLAINTS BASED ON RACIAL PROFILING OR THAT THE OFFICERS, NOT ONLY THAT, BUT RUDE, THOSE KIND OF THINGS.

WE DID NOT HAVE ANY COMPLAINTS LAST YEAR THAT ALLEGED RACIAL PROFILING. AND SO WE MADE THAT THROUGH 2021 AND IT DOES NOT APPEAR THAT THERE'S ANY TRUE SPIKE OR ANY SIGNIFICANT DIFFERENCE IN THE PERCENTAGES.

EVEN WHEN WE GET DOWN TO SEARCHES AND/OR ARRESTS.

DR. DELL CARMIN WHO DOES OUR COLLEGIATE-BASED ANALYSIS IS STILL WORKING ON THAT REPORT. IT IS ABOUT A 75-PAGE DOCUMENT.

WHEN WE HAVE THAT, WE WILL GET THAT TO YOU.

YOU WILL ENJOY READING THAT AS MUCH AS WE DO.

WE WILL ALSO POST THAT ON OUR WEBSITE ARE NOT WE WILL ALSO POST IT ON THE TICO WEBSITE WHEN IT COMES IN.

BUT THIS DATA HAS ALREADY BEEN POSTED ON THE TICO WEBSITE, WHICH IS OUR LICENSING AGENCY IN COMPLIANCE WITH STATE LAW.

AND IF YOU HAVE ANY QUESTIONS ABOUT THAT REPORT, AS SOON AS WE GET THE LARGER REPORT, WE WILL SHOOT IT TO YOU.

ONE OF THE DIFFICULTIES IN GENERATING THESE REPORTS IS WE RELY ON PRIMARILY THE ELECTRONIC CITATION WRITERS THAT WE USE.

THEN WE HAVE TO COMPARE THAT TO THE ARREST DOCUMENTS WE HAVE IN OUR RECORD MANAGEMENT SYSTEM. WHEN THERE IS CONFLICT, WHICH THERE ALMOST ALWAYS IS, WE HAVE TO DIVE INTO THE DATA AND MAKE SURE WE CAN FIND WHERE THAT CONFLICT IS.

THIS YEAR, THERE WERE FIVE FL FLOATING ARREST CITATIONS WE COULDN'T IDENTIFY. BRAZIS, WHICH IS OUR PROVIDER, FOUND THOSE AND THERE WAS A GLITCH IN THE SYSTEM AND THEY WERE MISLABELED. SO THEY WERE EASILY FIXED BUT BY THE TIME WE SENT THE DATA BACK TO DR. DELL CARMIN, WE PROBABLY

[00:35:01]

LOST OUR PLACE IN LINE. WE ARE WAITING ON HIS REVIEW.

ANY QUESTIONS? IT IS A LOT OF NUMBERS.

THE CONSISTENT THING IS WE HAVE BEEN VERY FORTUNATE TO -- I THINK IT GOES BACK TO THE HIRING PROCESS AND OUR EXPECTATION FOR OUR OFFICERS TO AVOID THAT TYPE OF ACTIVITY OR PUT THEMSELVES IN A POSITION TO BE SUSPECTED FOCUSING ON ETHNICITY RATHER

THAN CRIMINAL VIOLATIONS. >> DOES THAT OCCUR ON THE

BYPASS? >> I CAN GET THAT FOR YOU, MAYOR. THERE IS A PORTION OF THE REPORT THAT TELLS YOU ON WHAT ROADWAYS, BUT IT DOES NOT BREAK IT DOWN TO BYPASS VERSUS 875, 663, 13. I CAN GETTING -- WE CAN PROBABLY DO THAT BUT IT WOULD BE DIVING BACK INTO THAT.

BUT THERE IS A BREAKDOWN BETWEEN QUOTE/UNQUOTE HIGHWAY AND CITY STREETS. THAT'S WITHIN THE REPORT.

I'M JUST NOT EXACTLY SURE WHERE THAT IS AT.

>> GENTLEMEN? GOOD JOB, WE DO -- WE ALL COMMEND THE POLICE DEPARTMENT. SO THANK YOU, CHIEF.

>> YOU'RE WELCOME. AND I HAVE THE NEXT PRESENTATION, WHICH IS THE CURFEW VIOLATIONS, WE PRESENT THAT EVERY YEAR ALONG WITH THIS PRESENTATION.

IT HAS CHANGED QUITE A BIT FROM OUR PREVIOUS YEARS.

SO THIS YEAR WE ACTUALLY MADE CONTACT WITH ABOUT 20 JUVENILES, WHICH IS -- THAT DOESN'T SOUND LIKE A LOT.

BUT WHEN YOU THINK ABOUT LAST YEAR, WE ONLY -- ACTUALLY CONTACTED 7 JUVENILES BUT THEY WERE AT THREE DIFFERENT EVENTS, JUST THREE EVENTS. SO IN THIS YEAR'S, WE HAD SEVERAL DIFFERENT EVENTS RANGING FROM LARGE FIGHT IN A NEIGHBORHOOD FIELD. I KNOW THAT DOESN'T SURPRISE ANYONE WHO HAS LIVED IN MIDLOTHIAN FOR DECADES.

THAT KIDS WOULD BE IN A FIELD. ALTHOUGH THEY ARE EVAPORATING.

SO THREE JUVENILES FOUND ILLEGALLY PARKED.

WE CAN'T IMAGINE THAT, AND THEY WERE IN POSSESSION OF MARIJUANA.

AND THREE JUVENILES WERE LOCATED PULLING ON THE HANDLES OF DOORS WITHIN NEIGHBORHOODS. NOW, I WILL GIVE YOU ONE GUESS WHAT THEY ARE LOOKING FOR. THAT'S TYPICALLY HOW WE LOSE ITEMS OUT OF OUR CARS, BURGLARY OF VEHICLES.

BUT IN MIDLOTHIAN WE DON'T HAVE A LOT OF SMASH AND GRABS, A LOT OF PEOPLE BREAKING WINDOWS. WE ARE REALLY GOOD ABOUT LEAVING THINGS IN OUR CAR AND UNLOCKED. ABOUT HALF OF THOSE HAVE GUNS IN THEM AND THAT'S NOT WHAT THIS REPORT IS ABOUT BUT JUST, IF ANYONE IS LISTENING, CHECK YOUR CAR, GET YOUR GUN, GET YOUR WALLET, GET YOUR PC AND YOUR MEDS.

BECAUSE WE LOSE THOSE ON A REGULAR BASIS.

TWO JUVENILES IN KIMBELL PARK, ONE JUVENILE FOUND SNEAKING OUT OF A HOUSE. IMAGINE THAT.

AND SO ONE OF THE TRENDS WE ARE SEEING REALLY CITY WIDE IS A LOT OF DAMAGE TO OUR PARKS. AND WE HAVE SEEN QUITE A BIT OF CRIMINAL MISCHIEF AND WE THINK AND WE KNOW THAT A LOT OF THESE PARTICULAR JUVENILES ARE JUVENILES WE DEAL WITH ON A REGULAR BASIS. EITHER COMMIT THEFT, CAUGHT COMMITTING CRIMINAL MISCHIEF. WE ARE SEEING NOW A TREND WITH CRIMINAL BEHAVIOR OUT OF OUR JUVENILES, WHICH IS A SIGNIFICANT CHANGE FROM YEARS PAST.

SO PART OF THE EVALUATION OF THIS ANALYSIS IS WHETHER OR NOT WE KEEP THE CURFEW ORDINANCE. WE SUGGEST THAT WE DO.

BUT WE WANT TO COMBINE THAT ORDINANCE OR AT LEAST MIRROR THAT ORDINANCE CLOSELY WITH THE TIMES THAT WE CLOSE OUR PARKS.

ONE OF THE CITATIONS THAT WERE ISSUED THIS YEAR WAS TO A 21-YEAR-OLD, WHICH DOES NOT MEET THE CURFEW VIOLATION, BUT HE WAS IN THE PARK WITH A JUVENILE. AND SO WE WANT TO MAKE SURE THAT WE MAKE CONTACT WITH SOMEONE AFTER 11 P.M. OR 11:30 IN OUR PARKS, THAT THE OFFICERS HAVE MORE TOOLS TO DEAL WITH THOSE INDIVIDUALS. TYPICALLY THAT'S WHEN OUR DAMAGE IS OCCUR AND WE REALLY WANT TO SHUT THOSE DOWN AND MAKE SURE THAT WE ARE NOT SEEING DAMAGE ON THE SUNRISE.

AS WE GROW, THIS EXPECTATION, ONE OF THE SIDE BENEFITS, IF YOU WILL, OR DETRIMENTS TO GROWTH, YOU JUST SEE A LITTLE BIT MORE CRIME AS WE GET BIGGER BASED ON THE NUMBER OF PEOPLE.

IT IS NOT HUGE JUMPS B AND OUR STAFF IS COMMITTED TO BEING

[00:40:08]

EVERYWHERE THEY CAN BE AND INTERVENING TO THE EXTENT THAT WE WILL PREVENT CRIME AND CHANGE BEHAVIOR.

I DON'T THINK THERE IS ANYTHING WE HAVE TO DO.

THAT'S A SUNDOWN CLAUSE, THIS MAY BE THE THIRD YEAR, WE

PRESENT IT EVERY YEAR. >> JUST WHRR WHETHER OR NOT IT S TO BE RENEWED. WE WILL BRING IT BACK.

>> ANY QUESTIONS, COUNCIL? >> CHIEF, THANK YOU VERY MUCH.

>> YOU'RE WELCOME. THANK YOU.

>> TOCITIZENS TO BE HEARD. I BELIEVE WE HAVE NO ONE SIGNED

[CONSENT AGENDA ]

UP. CONSENT AGENDA.

ALL MATTERS LISTED UNDER CONSENT AGENDA ARE CONSIDERED TO BE ROUTINE BY THE CITY COUNCIL AND WILL BE ENACTED BY ONE MOTION WITHOUT SEPARATE DISCUSSION. IF DISCUSSION IS DESIRED, THAT ITEM WILL BE REMOVED FROM THE CONSENT AGENDA AND WILL BE CONSIDERED SEPARATELY.

DO WE HAVE A MOTION. >> MOVE TO APPROVE.

>> SECOND. >> MOTION APPROVED, SECONDED.

PLEASE VOTE. ITEM PASSES 6-0.

[2022-086 ]

PUBLIC HEARING. I OPEN 2022- CONDUCT A PUBLIC HEARING TO CONSIDER AND ACT UPON AN ORDINANCE DESIGNATING A CERTAIN AREA AS A REINVESTMENT ZONE FOR COMMERCIAL-INDUSTRIAL TAX ABATEMENT IN THE CITY OF MIDLOTHIAN, TEXAS TO BE KNOWN AS THE MIDLOTHIAN COMMERCIAL-INDUSTRIAL TAX ABATEMENT REINVESTMENT ZONE NUMBER 17; APPROXIMATELY +393 ACRES LOCATED AT CHAPARRAL STEEL MIDLOTHIAN L.P.'S EXISTING FACILITY, AND SURROUNDING AREAS, AT 300 WARD ROAD, MIDLOTHIAN, TX 76065, INCLUDING PARCELS 29 086 APPROXIMATELY 1872 ACRES.

NO. APPROXIMATELY, APPROXIMATELY 1..

30, APPROXIMATELY 57.5 ACRES. 31, 189 ACRES.

WYATT ROAD, MIDLOTHIAN TEXAS, 76065, AS PART OF PARCEL FURTHER DESCRIBED IN THE ELLIS COUNTY PUBLIC RECORDS.; ESTABLISHING THE BOUNDARIES THEREOF; AND PROVIDING FOR AN EFFECTIVE DATE. 22.

>> GOOD EVENING, MAYOR AND COUNCIL.

I WILL SHARE A PICTURE THAT WILL HELP US TO UNDERSTAND THAT DESCRIPTION HERE SHORTLY. FIRST ITEM WE ARE COMING FORWARD WITH TONIGHT IS FOR A REINVESTMENT ZONE.

THIS IMMEDIATE ITEM IS ONLY FOR THE REINVESTMENT ZONE.

THIS IS NOT THE APPROVAL OF THE AGREEMENT.

SO REAL QUICKLY, REINVESTMENT ZONE IS REQUIRED FOR ENTERING INTO A TAX ABATEMENT AGREEMENT WITHIN THE CITY'S TAX ABATEMENT POLICY THERE ARE DIFFERENT ITEMS THAT WE GO THROUGH TO IDENTIFY THE REINVESTMENT ZONES AND HOW AND WHY WE WOULD USE THEM. ULTIMATELY, THEY ARE CREATED IN CONNECTION WITH AN APPLICATION THAT'S SUBMITTED.

WE HAVE RECEIVED AN APPLICATION FROM CHAPERELL STEEL MIDLOTHIAN LP, ON JANUARY 1ST OF THIS YEAR. WHAT IS PROPOSED IS THE CREATION OF THE MIDLOTHIAN COMMERCIAL INDUSTRIAL TAX ABATEMENT REINVESTMENT ZONE NO. 17. AND YOU CAN SEE IT INCLUDES EVERYTHING IN THE IMAGE TO THE RIGHT.

>> [INAUDIBLE]. >> SO WHAT WE HAVE SHOWN HERE IN THE GRAY IS ALL THE PROPERTY THAT IS OWNED BY CHAPARRAL STEEL MIDLOTHIAN LP. EVERYTHING THAT IS SHOWN IN THE MAP IS IN THE GRAY. AS YOU GO IN CLOSER, THERE'S A DASHED LINE THAT IDENTIFIES THE REINVESTMENT ZONE.

THIS REINVESTMENT ZONE DOES NOT INCLUDE ALL OF THEIR PROPERTY.

THIS ZONE DOES NOT INCLUDE THE AREA WHERE THE SOLAR FARM IS CURRENTLY UNDER CONSTRUCTION. SO THE ZONE WOULD ONLY BE INCLUDED IN THAT AREA WITH THE DASHED LINE.

REQUIRED IN CONNECTION WITH THE APPROVAL OF A REINVESTMENT ZONE IS A PUBLIC HEARING, WHICH WE HAVE POSTED FOR.

AND THEN THE PROPOSED ACTION WOULD BE THE APPROVAL OF THE

[00:45:05]

ITEM. ANY QUESTIONS THAT COUNCIL HAS

ON THE REINVESTMENT ZONE? >> THAT DEPENDS, ARE YOU GOING TO KEEP GOING? I WILL WAIT.

>> I'M DONE. >> SO IF WE APPROVE A REINVESTMENT ZONE, THAT IS KNOTS NOTDOING ANYTHING.

WE HAVE TO ATTACH SOMETHING TO THIS.

>> CORRECT. THE APPROVAL OF REINVESTMENT ZONE CREATES A DEFINED AREA THAT STAYS IN PLAY FOR A PERIOD OF FIVE YEARS. AND THEN FUTURE AGREEMENTS THAT ARE APPROVED WITHIN A REINVESTMENT ZONE, THEY ALL WOULD HAVE SIMILAR TERMS WITHIN THEM.

BUT THE APPROVAL OF THIS ITEM WOULD SOLELY BE THE APPROVAL OF

THE ZONE. >> COUNCIL? I WOULD LIKE TO MAKE COUNCIL MEMBER COFFMAN HAS RECUSED

HIMSELF FOR 87, AND 88. >> CLOSE THE PUBLIC HEARING.

>> MOTION TO CLOSE PUBLIC HEARING.

>> SECONDED. PLEASE VOTE.

ITEM IS CLOSED. DISCUSSION, COUNCIL?

TO TAKE A MOTION. >> MOVE TO APPROVE.

>> MOTION TO APPROVE. SECONDED.

PLEASE VOTE. ITEM PASSES 5-0.

[2022-087 ]

WE ARE NOW IN REGULAR AGENDA. ITEM 2022-087, CONSIDER AND ACT UPON A RESOLUTION AUTHORIZING THE EXECUTION OF THE CITY OF MIDLOTHIAN TAX ABATEMENT AGREEMENT WITH CHAPARRAL STEEL MIDLOTHIAN, LP.

KYLE? >> WITH A REINVESTMENT ZONE IN PLACE, THE CITY COUNCIL HAS THE ABILITY TO ENTER INTO A TAX ABATEMENT AGREEMENT. SORRY.

AND SO ONE OF THE PIECES -- I'M AT A WEIRD ANGLE.

I WANTED TO GO THROUGH AND DO A REAL QUICK REFRESHER OF REMINDER TO EVERYBODY WHAT A TAX ABATEMENT IS.

SO TAX ABATEMENTS ARE TOOLS THAT CAN BE USED IN THE RETENTION AND CREATION OF MUNI J NEW JOBS INTE COMMUNITY AND CAPITAL INVESTMENT. THESE ARE TOOLS LIMITED TO A PERIOD OF TEN YEARS. YOU CAN'T DO A TAX ABATEMENT AGREEMENT FOR THE VALUE OVER TEN YEARS AND THEN THE OTHER KEY THING IS THAT TAX ABATEMENTS ONLY DEAL WITH THE NEW VALUE FOR THE AREA. SO THE AREA -- OR THE PROPERTY, REAL AND PERSONAL PROPERTY THAT CURRENTLY EXISTS, THAT STAYS WITHIN THE ROLE AND THE TAX ROLE.

THERE IS NO TAX ABATEMENT ON THE EXISTING PROPERTY.

SO WE ARE ONLY LOOKING AT NEW INVESTMENTS THAT COME AS PART OF A PROJECT. AND THEN ONLY CITIES AND COUNTIES HAVE THE ABILITY TO DO TAX ABATEMENTS.

SCHOOL DISTRICTS DO NOT. SO I WANTED TO RUN THROUGH A COUPLE REAL QUICK EXAMPLE TO ILLUSTRATE THIS POINT.

SO IF WE HAVE A FACILITY THAT HAS $100 MILLION OF TAXABLE VALUE IN REAL AND PERSONAL PROPERTY, WE ALL ASSUME THAT OVER TIME THESE PROPERTIES WILL INCREASE IN VALUE OVER TIME LIKE THEY WOULD OUR HOMES. THAT'S NOT THE CASE.

WITH COMMERCIAL PROPERTY, MAJORITY OF THE TAXABLE VALUE IS MADE UP OF PERSONAL PROPERTY THAT DECREASES OR LOWERS OVER TIME. SO THE GRAPH THAT WE WOULD TRADITIONALLY SEE IS SOMETHING THAT WE HAVE SHOWN HERE.

SO WHAT WE DO IN A TAX ABATEMENT IS WHEN WE ENTER THESE AGREEMENTS, WE LOCK IN WHAT IS KNOWN AS A BASE VALUE.

RATHER THAN THE TAX VALUE GOING DOWN, WE HAVE LOCKED IN THAT BASE VALUE IN THIS EXAMPLE OF $100 MILLION.

THEN AS A COMPANY COMES IN TO RE-INVEST INTO THE FACILITY, WE HAVE ILLUSTRATED THAT THEY DO THIS NEW PROJECT AND HAVE $200 MILLION OF TAXABLE VALUE. OVER TIME, THAT VALUE WILL DECREASE, OVER TIME, AS MACHINERY AND EQUIPMENT AGES AND THEY USE IT LONGER. SO IN OUR AGREEMENTS ONE OF THE THINGS WE DO, WE CREATE A MINIMUM VALUE THAT COMPANIES ARE REQUIRED TO MEET AND MAINTAIN. THIS IS CRUCIAL FOR US BECAUSE THIS IS HOW WE ENSURE THAT WE, AS THE COMMUNITY, CAN GO TO TAXPAYERS, RESIDENTS, VOTERS AND HELP THEM TO UNDERSTAND THAT WE TRULY HAVE A GUARANTY THAT WE KNOW THAT A COMPANY MUST PERFORM TO A SPECIFIC VALUE AND THAT WE KNOW WE ARE GETTING WHAT WE THINK AS WE ARE GOING INTO SOME OF THESE AGREEMENTS.

AND THEN THE LAST POINT, AS ILLUSTRATED EARLIER, EVERYTHING WITHIN THE BASE VALUE, OR WHAT WE HAVE SHOWN IN ORANGE, THE

[00:50:01]

COMPANY WILL CONTINUE TO PAY 100% OF THE TAX VALUE FOR BOTH THE REAL AND PERSONAL PROPERTY. IT IS JUST THE NEW VALUE OR THAT AREA THAT'S IN PURPLE THAT THERE'S A TAX ABATEMENT FOR.

SO AS THE CITY, WE CONTINUE TO RECEIVE 100 PERCENT OF THAT EXISTING BASE VALUE AND THE ABATEMENT IS ONLY APPLICABLE TO THE NEW VALUE. SO WHEN WE LOOK SPECIFICALLY AT MIDLOTHIAN'S TAX ABATEMENT POLICY, THERE ARE ONE ADDITION THAT WE ADDED, THAT IS THAT EACH OF THE COMPANIES THAT WE ENTER INTO THESE AGREEMENTS, THEY HAVE TO PAY A WAGE THAT HE CAN SEEDSE COUNTY AVERAGE WAGE. THIS FIGURE IS IMPORTANT.

IT IS USED MULTIPLE DIFFERENT AREAS IN ECONOMIC DEVELOPMENT.

THIS IS ALSO A SURE WAGE THAT WE KNOW.

IT IS REPORTED AT THE COUNTY LEVEL.

UNFORTUNATELY, WE DO NOT HAVE WAGES REPORTED AT THE CITY LEVEL. WE HAVE INCOME BUT THAT'S DIFFERENT FROM WAGES. THE OTHER THING IS THAT EACH OF THESE AGREEMENTS HAVE TO ACHIEVE ONE OF THESE FOUR ITEMS THAT WE HAVE INCLUDED. CONTRIBUTE TO THE REDEVELOPMENT OF BLIGHTED PROPERTY. INCREASE THE QUALITY OF DEVELOPMENT AND SERVE AS A CATALYST FOR FUTURE DEVELOPMENT, OR CREATE EMPLOYMENT CENTERS. THE LAST ONE WITH THE IMPACTED DOWNTOWN IS NOT APPLICABLE. SO FOR THE PROJECT THAT WE BRING FORWARD TODAY IS THE CHAPARRELL STEEL MIDLOTHIAN.

THIS IS A FACILITY IN OUR COMMUNITY SINCE THE '70S.

THE MIDLOTHIAN STEEL MILL TRULY HAS BEEN THE ANCHOR OF THE REGIONAL ECONOMY FOR US. THIS IS A FACILITY THAT HAS TREMENDOUS AMOUNT OF EMPLOYMENT. THERE ARE OVER A THOUSAND EMPLOYEES OUT THERE AND THEY ARE EARNING, THE AVERAGE WAGE SPREAD OUT OVER THE FACILITY IS OVER $100,000.

THIS IS A FACILITY THAT IS VERY IMPORTANT TO US IN PART BECAUSE, AS THEY SELL STEEL OUTSIDE OF OUR REGION, IT BRINGS NEW MONEY INTO OUR REGION AND SO AS THOSE EMPLOYEES ARE PAID, THEY ARE PAID WITH NEW WAGES THAT ARE NEW TO OUR LOCAL ECONOMY.

AS THEY GO OUT TO RESTAURANTS AND MEDICAL PROVIDERS AND OTHERS IN THE REGION, THEY HELP TO BRING IN NEW DOLLARS TO OUR COMMUNITY. SO A COUPLE OF THINGS IN ESTABLISHING THIS AGREEMENT THAT WE WILL GO THROUGH.

SO AS WE GO THROUGH THE AGREEMENTS, THERE'S A COUPLE OF KEY ITEMS THAT I WISH TO HIGHLIGHT TO EVERYBODY.

THOSE ARE THE IMPROVEMENTS, THE TERM, THE PERFORMANCE AND THE ABATEMENT. EACH OF THESE ITEMS ARE NEGOTIATED BY THE TWO ENTITIES. SO THE CITY AND CHAPARRAL STEEL MIDLOTHIAN. WE WILL GO THROUGH EACH OF THEM HERE TODAY. I APOLOGIZE, I GOT AHEAD.

SO THE FIRST ONE, ASSOCIATED WITH THE TAX ABATEMENT AGREEMENT, THERE ARE TWO KEY PROJECTS THAT ARE OUTLINED WITHIN THIS FACILITY. OR WITHIN THIS PROJECT.

SO THE FIRST ONE IS A NEW PROCESSING OR FINISHING FACILITY THAT WILL BE CONSTRUCTED NORTH OF HIGHWAY 67.

THE OTHER IS A MILL MODERNIZATION, GOING IN AND RE-INVESTING IN THIS FACILITY. AS MENTIONED, THIS IS A FACILITY FROM THE '70S. WITHOUT SIGNIFICANT REINVESTMENT, THE FACILITY WILL CONTINUE TO DECLINE.

SO THIS IS OUR WAY TO PARTNER AND CREATE A -- TO SUSTAIN THE ECONOMIC ENGINE THAT WE HAVE HERE IN OUR COMMUNITY.

AND THEN, YOU KNOW, THERE'S 300 MILLION-DOLLAR CAPITAL EXPENDITURES ASSOCIATED. HOWEVER, OUR FOCUS IS NOT ON THE CAPITAL EXPENDITURE BUT ON THE TAX VALUES, BECAUSE THAT'S WHAT WE GO THROUGH AND WHAT WE RECEIVE.

SO ULTIMATELY THESE PROJECTS WILL BE COMPLETED OVER TERM.

I APOLOGIZE, THE SECOND CALLOUT THAT I HAVE SHOULD BE SHIFTED OVER ONE LINE. THE FINISHING FACILITY THEY HAVE COMPLETED BEFORE DECEMBER 31ST, 2023.

SO IF THAT BECOMES THE FIRST BENCHMARK, SO THAT BENCHMARK IS NOT MET, THEY WOULD TERMINATE THAT AGREEMENT AND IN THE AGREEMENT THEY WOULD HAVE TWO OPPORTUNITIES, BASICALLY, NOT TO MEET THEIR AGREEMENT BEFORE IT WOULD ULTIMATELY TERMINATE.

THE SECOND ONE WOULD BE BY DECEMBER 31ST, 2026, THEY WOULD HAVE TO COMPLETE THE MILL MODERNIZATION AND THAT IS ACKNOWLEDGED AND REFERENCED IN THE TAXABLE VALUE THAT WE RECEIVE FROM THE FACILITY. SO THE KEY ONE REALLY IS THIS MINIMUM ANNUAL PERFORMANCE CRITERIA THAT THE AGREEMENT

[00:55:02]

OUTLINES. THAT IS ASSURANCE FOR US AS A COMMUNITY THAT WE KNOW WHAT WE ARE GETTING AS PART OF THIS PARTNERSHIP THAT WE MAKE WITH INDUSTRY.

SO EACH YEAR THE COMPANY WILL BE REQUIRED TO REPORT NUMBER OF FULL-TIME JOBS, 900 AT THE FACILITY THAT ARE THEIR EMPLOYEES. THEY HAVE TO REPORT TOTAL ANNUAL PAYROLL AS OUTLINED FOR EACH YEAR.

AND THEN THE LAST ITEM IS THE TAXABLE VALUE.

SO OBVIOUSLY THE FIRST YEAR, THEY DON'T HAVE THAT TAXABLE VALUE IN PLACE. EVERY OTHER SUBSEQUENT YEAR, THEY WILL BE REQUIRED TO REPORT TAXABLE VALUE.

IF THEY COMPLETE EACH OF THESE ITEMS, THEN WHAT IS PROPOSED IS A 45% TAX ABATE MANMENT ON REALD PERSONAL PROPERTY.

THIS IS OVER THE $135 MILLION OF BASE VALUE WE HAVE EXISTING.

SO WHEN YOU LOOK AT TEN-YEAR BENEFITS, THE COMPANY WOULD RECEIVE, BASICALLY, A $2.9 MILLION DISCOUNT ON THEIR TAX FROM THE CITY. HOWEVER, WITH THIS PROJECT THERE WOULD BE ADDITIONAL NEW TAX VALUE THAT WOULD BE CREATED AND SO, INCLUDING THE BASE AND THE NEW VALUE, THE CITY WOULD RECEIVE ABOUT $12.7 MILLION IN NEW TAXABLE VALUE.

AND THEN YOU CAN SEE THERE ARE OTHER TAX ENTITIES THAT ARE INCLUDED. THAT IS THE FIGURE THAT WE HAVE FOR THE LOCAL NUMBER. SO AS WE HAVE GONE THROUGH AND LOOKED AT THIS PROJECT, STAFF HAS EVALUATED THIS PROJECT BASED ON OUR TAX ABATEMENT POLICY AND LOOKING AT THE ECONOMIC IMPACT OF THIS PROJECT THAT IT MAKES TO OUR COMMUNITY.

MIDLOTHIAN ECONOMIC DEVELOPMENT BOARD ALSO REVIEWED THIS PROJECT IN CONNECTION WITH THEIR ECONOMIC DEVELOPMENT PERFORMANCE AGREEMENT THAT WE WILL TALK ABOUT LATER.

MIDLOTHIAN ECONOMIC DEVELOPMENT BOARD MADE A RECOMMENDATION TO CITY COUNCIL FOR APPROVAL OF 7-0, UNANIMOUS VOTE.

AND WITH THAT, ARE THERE ANY QUESTIONS ON THE TAX ABATEMENT

AGREEMENT? >> COUNCIL?

QUESTIONS? >> MOTION TO APPROVE.

>> WE HAVE A MOTION. >> SECOND.

>> SECOND. >> SECOND, THANK YOU.

>> PLEASE VOTE. ITEM PASSES 5-0.

THANK YOU, KYLE. >> I HAVE THE THIRD ONE.

[2022-088]

ONLY THREE SLIDES. >> ITEM 2022-087 -- CONSIDER AND ACT UPON THE RECOMMENDATION FOR MIDLOTHIAN ECONOMIC DEVELOPMENT TO APPROVE AN ECONOMIC DEVELOPMENT PERFORMANCE AGREEMENT WITH CHAPARRAL STEEL MIDLOTHIAN L.P.

TO PROVIDE A POSSIBLE INCENTIVE OF UP TO $2,450,000 FOR A PROJECT RELATED TO THE CREATION OR RETENTION OF PRIMARY JOBS. KYLE?

>>> [INAUDIBLE]. >> THAT WAS ITEM 88.

>> I'M SORRY, 2022-087. I READ THE WRITE THING.

I'M GETTING GLASSES BEFORE MY NEXT COUNCIL SESSION.

I APOLOGIZE. THANK YOU VERY MUCH.

ITEM 2022-088. WHAT I READ.

>> YOU BET. THIS INCENTIVE COMES AS WE LOOK AT PROJECTS, WE LOOK AT A SERIES OF DIFFERENT TOOLS THAT WE HAVE AVAILABLE FOR US TO USE. AND SO THIS IS A PROPOSED INCENTIVE THAT IS IN ADDITION TO THE TAX ABATEMENT AGREEMENT.

WHAT WE ALLOT OR WHAT WE DO HERE IS WE HAVE THE ABILITY OF USING SALES TAX DOLLARS THAT ARE CREATED TO HELP GENERATE AND GROW OUR LOCAL PRIMARY JOBS. SO, AGAIN, COMPANIES THAT EXPORT A PRODUCT OR SERVICE BRING NEW MONEY INTO OUR COMMUNITY AND SO THROUGH THE ECONOMIC DEVELOPMENT PERFORMANCE AGREEMENT THAT WE WILL HAVE PRESENTED HERE, IS ANOTHER WAY TO CONTRIBUTE TO OUR LOCAL ECONOMIC ACTIVITY. THE ACTION THAT IS PROPOSED IS FOR CITY COUNCIL'S APPROVAL OF THE PROGRAM AND EXPENDITURES.

COUPLE OF ITEMS THAT I WANTED TO HIGHLIGHT AS FAR AS THE TWO AGREEMENTS, SO THE TAX ABATEMENT COVERS A LONGER PERIOD THAN THE ECONOMIC DEVELOPMENT PERFORMANCE AGREEMENT.

THE -- WE TRY TO FOLLOW THE SAME BENCHMARKS.

YOU SEE THE FINISHING FACILITY IS THE FIRST REQUIREMENT THAT

[01:00:04]

HAS TO BE COMPLETED. THAT WOULD RELEASE AN OPERATIONS GRANT THAT WOULD BE PAID OFF IN 2024.

$1.3 MILLION. THE SECOND ONE, THROUGH THE CONSTRUCTION OF THIS FACILITY, DIFFERENT SALES AND USE TAXES ARE COLLECTED. SO AS THEY PURCHASE EQUIPMENT, MACHINERY AND EQUIPMENT AND OTHER EXPENDITURES FOR THE EXPANSION, WE WILL TAKE AND CAPTURE A PORTION OF THOSE AND USE THE CITY'S LOCAL 2% SALES TAX COLLECTION AS OUR MEASURE AND WE WILL CREATE THE SECOND GRANT THAT WILL BE PAID BY MIDLOTHIAN ECONOMIC DEVELOPMENT. THAT GRANT BEING A SALES TAX GRANT OF $1.15 MILLION. THAT GRANT WILL BE RECEIVED AS LONG AS THE COMPANY MAINTAINS COMPLIANCE TO THE MINIMUM ANNUAL PERFORMANCE CRITERIA, SO THE SAME INFORMATION THAT THEY PROVIDED UP HERE, JUST THE FIRST YEARS UP THROUGH THE 2027 YEAR.

AND AS LONG AS THEY MEET THAT, THEN THEY HAVE THE ABILITY OF RECEIVING THE SALES TAX GRANT. SO THE PROPOSED ACTION, THIS ITEM ALSO WENT BEFORE THE MIDLOTHIAN ECONOMIC DEVELOPMENT BOARD, THE BOARD APPROVED THAT ITEM 7-0 TO BRING FORWARD FOR APPROVAL OF COUNCIL FOR THE PROGRAM A AND EXPEND DURATION.

EXPENDITURES.ARE THERE ANY QUES. >> I'M KIND OF DUMB.

CAN YOU GO OVER THE SALES TAX GRANT.

>> YES. IT IS A GRANT THAT -- WE ARE CALLING IT A SALES TAX GRANT. TRULY WHAT IS HAPPENING IS WE ARE USING WHAT THE COMPANY GENERATES IN NEW SALES TAX THAT ARE ASSOCIATED WITH THE CONSTRUCTION OF THE FINISHING FACILITY AND THE MILL MODERNIZATION APPROXIMATE, WE ARE USING THAT AS OUR MEASURE AND ULTIMATELY MIDLOTHIAN ECONOMIC DEVELOPMENT WILL PROVIDE A REIMBURSEMENT OF UP TO THE 1.15 MILLION DOLLARS THAT WOULD BE CREATED.

SO IT -- BASICALLY, AS THEY INVEST INTO THAT FACILITY, WE TAKE A LOOK AT ALL OF THEIR COSTS THAT MAY BE SUBJECT TO A SALES OR USE TAX. AND THEN OF THAT PORTION, WE

WOULD REIMBURSE THAT GRANT BACK. >> SO YOU ARE USING THEIR PROVIDED SALES TAX DOCUMENTS AS A MEASURE OF METRIC AS TO WHETHER OR NOT THEY HAVE MET THEIR OBLIGATION, THEN YOU WILL RELEASE OR YOUR BOARD WILL RELEASE THE ADDITIONAL 1.15 MILLION IN FUNDS OUT OF YOUR BUDGET, NOT OUR BUDGETS.

>> CORRECT. SO WE HAVE STRUCTURED THIS ONE SIMILAR TO OTHER SALES TAX REIMBURSEMENTS THAT THE CITY HAS USED. TO WHERE THEY WILL BASICALLY BE REQUIRED TO COLLECT ALL OF THE SALES THROUGH THEM, RIGHT, SO AS YOU THINK OF WHOLESALE ACTIVITY, SOMEBODY ALONG THAT CHAIN PAYS A SALES OR USE TAX AND ULTIMATELY GRIDAU WILL BE THAT ONE THAT WILL CORRECT, BASICALLY, THAT MONEY AND THEN AS THEY WILL PAY IT, SO IT HAS BEEN PAID. AND THEN WE WILL BE ABLE TO GO BACK THROUGH, CONFIRM THAT IT WAS PAID, AND THEN PROVIDE THAT -- IT EQUATES TO 50% REIMBURSEMENT.

THOSE FUNDS WILL BE PAID OUT OF MIDLOTHIAN ECONOMIC DEVELOPMENT

FUNDS. >> IN THE EVENT THAT THEY DO NOT SHARE THAT INFORMATION, WE DON'T PAY THEM?

>> CORRECT. IF THEY CANNOT DOCUMENT THAT THEY HAVE PAID THOSE FUNDS, WE WILL NOT PAY IT.

>> DUMB QUESTION, THE FUNDS PAID HAS TO EXCEED THE MONIES THAT IS

GOING TO BE GIVEN BACK, CORRECT? >> CORRECT.

IT IS A 50% REIMBURSEMENT. SO THEY NOT ONLY WOULD PAY -- YEAH, THEY WILL PAY -- THEY ARE ONLY GETTING HALF OF THAT LOCAL

COLLECTION. >> SO YOU ARE GIVING HALF, NOT 1.3. 1.3 IS A GUESS?

>> NO, SO THEY WILL PAY MORE -- THEY WILL PAY DOUBLE THE 1.3.

>> THAT'S AN ESTIMATE. >> YES.

>> THEY GET 1.3. THAT MAY OR MAY NOT BE HALF.

>> AND IT IS POSSIBLE THAT THEY MAY HAVE MORE EXPENSES.

IN THE AGREEMENT, WE HAVE SETTLED ON THE MAXIMUM THAT THEY CAN RECEIVE FOR THAT GRANT IS THE 1.15.

>> CORRECT ME IF I AM WRONG, KYLE.

BASICALLY THEY BUILD THE NEW FACILITIES, THEY GET THE 1.3.

BUT IF THEY WANT THE 1.15 IN SALES TAX GRANT, THEY HAVE TO

[01:05:04]

MEET THE OTHER METRICS, WHICH IS THE SECOND PORTION.

AND IT IS NOT GUARANTEED 1.15. IT IS UP TO 1.15?

>> CORRECT. >> THANK YOU.

>> PLUS THE JOBS, THE PAYROLL AND TAXABLE VALUE.

>> TO ME, I THINK THE KEY IS MONEY IS COMING OUT OF THE ECONOMIC DEVELOPMENT FUND AND NOT THE CITY.

>> CORRECT. >> [INAUDIBLE].

>> AND THE BOARD WAS UNANIMOUS. ANY QUESTIONS? I WILL TAKE A MOTION IF THERE IS NO MORE QUESTIONS.

>> MOTION TO APPROVE. >> SECOND.

>> MOTION TO APPROVE, SECONDED. PLEASE VOTE.

ITEM PASSES 5-0. KYLE, THANK YOU VERY MUCH.

YOU GET YOUR HAT TRICK. OKAY, ITEM 2022-089 2022-089, CONSIDER AND ACT UPON

[2022-089 ]

AN AGREEMENT FOR PROFESSIONAL SERVICES WITH ENPROTEC/HIBBS & TODD, INC. FOR THE DESIGN OF NEW FILTER UNDERDRAINS AND MEDIA AT THE TAYMAN WATER TREATMENT PLANT IN AN AMOUNT NOT TO EXCEED

$80,000. >> MAYOR, COUNCILMEN.

MIKE IS A LITTLE UNDER THE WEATHER, SO YOU ARE GETTING ME.

WHAT BRINGS US TODAY FOR CONSIDERATION IS JUST A PROFESSIONAL FEES FOR ENGINEERING OF THE 8 FILTERS THAT WE HAVE AT THE TAYMAN PLANT.

THEY ARE EXCEEDING THEIR LIFE EXPECTANCY AND THEY ARE DUE, F. FIRST OF FOUR WERE DONE IN ROUGHLY MID '80S. THE LAST FOUR THAT WERE DONE WERE LATE '90S. SO WE ARE ASKING TO GET STARTED MOVING FORWARD WITH JUST THE ENGINEERING PART.

ANY QUESTIONS? >> IS THIS IN THE BUDGET?

>> NO, IT IS NOT. WE WANT TO TAKE IT, IF WE CAN,

FROM UTILITY FUND DEPARTMENT 38. >> OKAY.

>> WHAT'S THE LIFE EXPECTANCIES OF THE NEW ONES?

>> THE NEW ONES, I WON'T BE AROUND.

YEAH. WE WILL DESIGN THEM WHERE THEY ARE ALL THE SAME. RIGHT NOW WE HAVE ONE THAT HAS THREE FILTER MEDIA. YOU CALLED THEM BLOBS, OLD SCHOOL, UNDER DRAINS. THEY ARE THE SAME SO WHEN WE PAIRS ARE NEEDED, WE DON'T HAVE TO --

>> 20, 30 YEARS. >> [INAUDIBLE].

>> THAT'S THE NEW ONES, YEAH. >> CHRIS, MY QUESTION IS JUST FOR YOU. DOES THE -- DOES THIS BID THROUGH THROUGH THE CITY'S PROCUREMENT POLICIES TO ASSURE

ITS COMPETITIVENESS? >> YOU DO NOT HAVE TO BID PROFESSIONAL SERVICE. WE DID NOT BID BECAUSE IT IS AN

ENGINEERING CONTRACT. >> HOW DO WE KNOW IT IS ANY

GOOD? >> JUST THAT THEY HAVE DONE WORK FOR US BEFORE AND SO WE HAVE HAD EXPERIENCE WITH THIS ENGINEERING FIRM IN PREVIOUS JOBS THAT THEY HAVE DONE.

>> I JUST MEAN IN THE COST SECTOR.

NOT PERFORMANCE, BUT, YEAH. I GET IT --

>> SAYING THE COST OF THE DE DESIGN?

>> CORRECT. >> WE DON'T HAVE A COMPETITIVE -- NOR DRN I GUESS , I GUESS WEHAVE TO REMEMBER, IO GO OUT, WE WOULD NOT DO THIS ON A COMPETITIVE PRICE STANDPOINT.

YOU WOULD GO GET THE QUALIFICATION, SELECT ON QUALIFICATION AND THEN START NEGOTIATING THE PRICE.

SO, AGAIN, YOU WOULDN'T BE ABLE TO JUST STRICTLY COMPETE ON

PRICE FOR ENGINEERING. >> WHEN YOU GET THE FILTERS IN,

WE WILL COMPETE PRICES. >> ACTUAL CONSTRUCTION, YES, YOU COULD. AND THEY WILL HANDLE ALL THAT IF

WE GET TO THAT POINT. >> MY QUESTION WOULD BOIL DOWN, HOW DO WE KNOW THAT $80,000 IS AN APPROPRIATE COST FOR THE DESIGN OF THE UNDER FILTER SYSTEM?

>> I THINK WHAT WE ARE LOOKING AT IS HISTORY OF WORKING WITH

[01:10:04]

ENGINEERS ON DESIGNING PRODUCT AND FEEL LIKE THAT THAT IS A REASONABLE RATE FOR THE SERVICES THEY ARE PROVIDING.

>> IF THERE'S NO OTHER QUESTIONS, I WILL TAKE A MOTION.

>> MOVE TO APPROVE. >> SECOND.

>> MOTION APPROVED, SECONDED. PLEASE VOTE.

ITEM PASSES 6-0. THANK YOU VERY MUCH.

[2022-090]

ITEM 2022-090, CONSIDER AND ACT UPON A RESOLUTION SCHEDULING A PUBLIC HEARING DATE TO CONSIDER AN UPDATE TO LAND USE ASSUMPTIONS, CAPITAL IMPROVEMENTS PLAN AND IMPACT FEES PURSUANT TO CHAPTER 395 OF THE TEXAS LOCAL

GOVERNMENT CODE. >> MAYOR, COUNCIL, THANK YOU VERY MUCH. THIS IS JUST A RESOLUTION SCHEDULING THE PUBLIC HEARING. I BELIEVE THAT PUBLIC HEARING RIGHT NOW IS SCHEDULED APRIL 12TH, 2022.

OVER THE PAST, I WOULD SAY, WELL, WE PROBABLY STARTED THE PROJECT ABOUT 8 MONTHS AGO. OVER THE PAST SEVERAL MONTHS WE HAVE BEEN GOING TO THE CAPITAL IMPROVEMENT ADVISORY COMMITTEE, IT IS THE PLANNING & ZONING COMMISSION.

AND THEY HAVE GONE OVER THE LAND USE ASSUMPTIONS, CAPITAL IMPROVEMENT PLAN AND IMPACT FEES.

THESE WILL BE BROUGHT BEFORE THE COUNCIL ON OCTOBER 12TH FOR THE UPDATE. STATE LAW REQUIRES US EVERY FIVE YEARS TO PROVIDE AN UPDATE TO THE IMPACT FEES AND THAT'S WHEN WE WILL BE BRINGING THE UPDATE TO THE COUNCIL.

I SUSPECT PRIORITY THIS, WE WILL BE HAVING A WORKSHOP KIND OF EXPLAINING WHERE WE ARE AT WITH LAND USE ASSUMPTION, CAPITAL IMPROVEMENT PLAN AND IMPACT FEES AT THAT POINT.

RIGHT NOW, THIS IS JUST SCHEDULING A PUBLIC HEARING ON THE 12TH OF APRIL. I WILL ANSWER ANY QUESTIONS.

>> SIMPLE QUESTION. ALL THREE OF THOSE THINGS SPELLED OUT ARE THERE ARE PURSUANT TO STATE LAW OR JUST

THE RATE SCHEDULE? >> ALL THREE.

THE LAND USE ASSUMPTION -- THEY KIND OF JUST -- THEY FOLLOW EACH OTHER AND YOU CAN'T REALLY DO ONE WITHOUT THE OTHER.

SO LAND USE ASSUMPTIONS. THEN FROM THERE YOU CAN DEVELOP THE CAPITAL IMPROVEMENT PLAN. FROM THAT, YOU PUT THAT TOGETHER AND DEVELOP THE IMPACT FEE. IT A LITTLE MORE DIFFICULT THAN

THAT. >> OKAY, ACT ON A RESOLUTION.

>> DO WE NEED A DATE? >> THE DATE WILL BE APRIL 12TH.

SO WE NEED A MOTION TO APPROVE THE RESOLUTION.

IS THERE A MOTION? >> I WILL MAKE THE MOTION TO

APPROVE. >> SECOND.

>> MOTION TO APPROVE RESOLUTION, SECONDED.

PLEASE VOTE. ITEM PASSES 6-0.

THANK YOU, CLYDE. ITEM 2022-091,

[2022-091 ]

CONSIDER AND ACT UPON AUTHORIZING THE CITY MANAGER TO A) EXECUTE A FIRST AMENDMENT EXTENDING THE TERM WITHIN THE SOUTHEAST 3-YEAR ANNEXATION DEVELOPMENT AGREEMENTS TO EXPIRE ON OCTOBER 31, 2063 FOR DONNA -- FOR THE LISTED PEOPLE, IF YOU DON'T MIND. AND, B, AND B, AMEND AND RESTATE A DEVELOPMENT AGREEMENT IN ITS ENTIRETY WITHIN THE SOUTHEAST 3-YEAR ANNEXATION FOR PATRICIA AND GEORGE LUEDTKE, EXTENDING THE TERM TO OCTOBER 31, 2063 AND SETTING AN EXPIRATION DATE TO JANUARY 1, 2024 FOR THE ABILITY TO SELL FIREWORKS ON THEIR PROPERTY.

AND TRENT, WE HAVE ONE SPEAKER. SO WHEN YOU FINISH, WE WILL HAVE

THE SPEAKER COME UP. >> I WILL MAKE IT QUICK.

BACK IN 2017, NARN IN ACCORDANCH STATE LAW, SECTION 212.172, WHEN THE CITY OF MIDLOTHIAN WENT AHEAD AND DID THE THREE-YEAR ANNEXATION, THOSE PROPERTIES HAD SPECIAL AGREEMENT, WITH THOSE DEVELOPMENT AGREEMENTS, EXPIRATION DAYS WAS ISSUED.

AT THAT TIME, THEY WERE ISSUED FOR 2023 AND ONE OF THEM TO BE 2024. SUBSEQUENT CITY COUNCIL MEETINGS, CITY COUNCIL DID DIRECT STAFF TO BRING FORTH AMENDMENTS TO THESE DEVELOPMENT AGREEMENTS TO BRING FORTH THE MAX ALLOTMENT A STATE LAW ALLOWS US TO DO, THAT WOULD BE 2063.

TWO REQUESTS IN FRONT OF YOU. THE FIRST REQUEST IS AMENDING

[01:15:04]

THE MAJORITY OF THE AGREEMENTS EXCEPT FOR ONE.

THE SECOND REQUEST IS TO CHANGE THE EXPIRATION DATE OF THE DEVELOPMENT AGREEMENT, HOWEVER, LIMIT THE TIME THAT THEY CAN SELL THE FIREWORKS TO THE ORIGINAL EXPIRATION DATE.

I CAN ANSWER ANY QUESTIONS AT THIS TIME.

>> DID WE WORK WITH -- I ASSUME IT IS PATRICIA AND GEORGE THAT OWN THE FIREWORKS STAND. IS THAT RIGHT?

>> CORRECT. THAT'S WHO CURRENTLY, ACCORDING TO E CAT, WHO OWNS THE PROPERTY WITH THE FIREWORKS STAND.

>> DID WE CONTACT THEM AND ASK THEM ABOUT THAT?

>> NOT AT THIS POINT, WE HAVE NOT CONTACTED THEM.

THIS IS GIVING THE CITY MANAGER THE AUTHORIZATION TO MOVE FORWARD WITH AGREEMENTS TO START WORKING WITH THOSE PROPERTY

OWNERS AN OFFER THEM. >> WE JUST TOOK THE DIRECTION OF CITY COUNCIL TO DRAFT THE AGREEMENTS.

WE WOULD STILL, IF THESE GETS APPROVED TONIGHT, WE STILL NEED TO GO BACK TO ALL THE PROPERTY OWNERS AND GET THEM TO SIGN.

BUT WE WERE INSTRUCTED NOT TO CHANGE THE EXPIRATION DATE OF

THE FIREWORKS FACILITY. >> SOMEWHAT OFF SUBJECT BUT MAYBE NOT, IN REGARDS TO THE FIREWORKS FACILITY, AND -- EXCUSE ME. SORRY ABOUT THAT.

IN REGARDS TO THE FIREWORKS FACILITY AND THE USE, POSSESSION OF FIREWORKS WITHIN THE CITY AS A WHOLE, BEFORE THESE PROPERTIES AS A WHOLE WERE ANNEXED INTO THE CITY, THEY WERE ALLOWED TO USE

FIREWORKS. >> THESE ARE STILL OUT.

>> I UNDERSTAND THAT. SO I GUESS MY QUESTION IS, IF WE ARE GOING TO APPROVE THIS, WHAT IS THE SIGNIFICANCE OF THE

FIREWORKS STAND? >> SO CURRENTLY AS PART OF THE ORIGINAL DEVELOPMENT AGREEMENT LIMITED FIREWORKS WITHIN THESE DEVELOPMENT AGREEMENTS, LIMITED OF HOW THE AGREEMENT WAS WRITTEN ORIGINALLY, ONLY THE SALE OF FIREWORKS WITHIN THIS AREA.

SO THAT'S WHERE WE ARE AT RIGHT NOW.

AND THAT'S WHERE WE GENERALLY HAVE BEEN DIRECTED TO CONTINUE TO MOVE FORWARD IN THE SAME DIRECTION OF THE FIREWORKS STAND AND LIMITATION OF SHOOTING OFF FIREWORKS.

SO THAT'S STILL WITHIN THIS AGREEMENT.

HOW IT HAS BEEN REWRITTEN, NOTHING HAS BEEN CHANGED.

>> I THINK THE -- WE DID NOT HAVE TO ALLOW THEM TO CONTINUE BUT THAT WAS THE DECISION OF COUNCIL AT THE TIME, WAS TO ALLOW THEM TO PUT A CLAUSE ON IT.

SO I THINK THAT'S PROBABLY THE DIFFERENCES.

WE DIDN'T HAVE TO ALLOW THEM ORIGINALLY.

SO THAT MIGHT BE -- I HOPE THAT ANSWER YOUR QUESTION ABOUT WHY THAT WAS HELD OUT A LITTLE BIT DIFFERENT.

. >> WE HAVE A SPEAKER.

MISS PONDER, NAME, AND YOU HAVE THREE MINUTES.

>> NAME IS LEWIS POONDER, I HAVE SPENT THE LAST NINE HOURS OUTSIDE THE CONVENTION STUMPING FOR VOTES.

I'M SORRY I CAME UP HERE LOOKING HAGGERRED.

I THANK THE COUNCIL FOR PUSHING FORWARD FOR GETTING THE WORKSHOP DOWN. I WAS OUT OF TOWN OR I WOULD HAVE BEEN WITH YOU GUYS. I WANT TO THANK THE CITY MANAGER AND CITY ATTORNEY FOR PUTTING THIS TOGETHER AND GETTING SOMETHING, IT WASN'T EXACTLY WHAT I WAS ASKING FOR, I FIND IT TO BE A FANTASTIC COMPROMISE. AND I THANK YOU AGAIN.

THAT'S ALL I HAVE. THANK YOU.

>> THANK YOU. COUNCIL?

QUESTIONS, COMMENTS. >> MOTION TO APPROVE.

>> SECOND. >> MOTION TO APPROVE, SECONDED.

I TAKE IT THERE IS NO MORE DISCUSSION, PLEASE VOTE.

[2022-092 ]

ITEM PASSES, 6-0. ITEM 2022-092, CONSIDER AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND ENTER INTO AN AGREEMENT WITH STEELE AND FREEMAN FOR SERVICES AS THE CONSTRUCTION MANAGER-AT-RISK AND ASSOCIATED GENERAL CONDITIONS FOR CONSTRUCTION FOR THE CITY OF MIDLOTHIAN CITY HALL & LIBRARY AND PUBLIC SAFETY BUILDING & COURTS.

>> MAYOR, COUNCIL, THANK YOU VERY MUCH.

IF YOU RECALL BACK MAY OF LAST YEAR, I KIND OF BROUGHT A SCHEDULE OF HOW WE WOULD PROCEED FOR THESE CONSTRUCTION PROJECTS.

AND WE DID SAY FEBRUARY WE WOULD BE BRINGING CONSTRUCTION MANAGER AT RISK TO YOU. THAT WAS A PROCUREMENT METHODS

[01:20:03]

THAT WAS CHOSEN BY THE COUNCIL. WE DID PUT OUT, SUBMIT A RFP DECEMBER, DECEMBER 16, FOR CONSTRUCTION MANAGING AT RSK FOK FOR TWO PROJECTS. WE GOT NINE RESPONDENTS.

WE HAVE NARROWED IT DOWN TO FOUR PEOPLE TO INTERVIEW.

MYSELF, CHRIS, DICK, CARL SMITH, CHERYL ALLISON, ADAM.

REPRESENTATIVES ARE OWNERS REP AND ARCHITECTS WERE ON THE INTERVIEW COMMITTEE. AT THAT POINT, WE INTERVIEWED FOUR DIFFERENT FERMS. FROM THAT INTERVIEW, STEELE AND FREEMAN STOOD OUT. THE APPLES AND APPLES CON SPAREN FOR FEES, THEY STOOD OUT. THEY WERE LOWER BY A COUPLE HUNDRED THOUSAND DOLLARS. WE HAVE STEELE AND FREEMAN ON FIRE STATION ONE, COMPLETED 18 MONTHS AGO.

WE HAD VERY GOOD RESULTS FROM THEM BEING THE CONSTRUCTION MANAGER AT THAT POINT. SO WITH THAT, I WILL STAND FOR ANY QUESTIONS BUT IT IS -- WE WILL RECOMMEND STEELE AND FREEMAN AS OUR CONSTRUCTION MANAGER AT RISK.

>> HOW DID WE DO ON FIRE STATION ONE?

>> WE DID GOOD. THEY WERE PROBLEMS, DESIGN.

THERE IS SOME ISSUES WITH SOME OF THE -- I WANT TO SAY CONDENSATION WITH SOME OF THE HVAC STUFF.

BUT I DON'T KNOW THAT THAT WAS A CONSTRUCTION MANAGER ISSUE.

FROM ALL I HAVE SEEN, IT IS NOT. IT IS A DESIGN ISSUE.

THERE ARE THINGS THAT WE ARE STILL WORKING THROUGH, TRYING TO RECTIFY THAT. IT IS A UNIQUE SYSTEM WITH A UNIQUE BUILDING. BUT FROM A CONSTRUCTION MANAGER STANDPOINT, I THINK EVERYBODY THAT WORKED WITH THAT WAS VERY

PLEASED. >> SIR, ARE THEY DONE WITH THAT PROJECT, EVEN THOUGH WE ARE DEALING AS A CITY WITH ISSUES.

>> WE GO THROUGH THE YEAR WARRANTY.

AFTER THAT. YES, THEY ARE DONE.

BUT I THINK THEY ARE STILL WORKING WITH US WITH THE MMP AND HVAC CONSULTANT, STILL TRYING TO FIND THE SOLUTION TO THAT ONE

PROBLEM. >> I SEE THE FIRE CHIEF GETTING

CLOSER. >> OKAY, I FELT HIM ON MY BACK.

>> FUNNY YOU MENTION THE CONDENSATION, I REMEMBER THAT FROM BEFORE IT WAS OPEN, THAT IT WAS DRIPPING WHEN YOU AND I

TOURED THE BUILDING. >> SO COUNCIL, MAYOR.

I CAN'T SAY ENOUGH ABOUT OUR RELATIONSHIP THAT WE HAD DURING THE CONSTRUCTION PROCESS WITH STEELE AND FREEMAN.

POST CONSTRUCTION, THEY HAVE A DEDICATED STAFF THAT COMES AND ADDRESSES ANY ISSUES THAT MAY ARISE.

AS WE ALL KNOW, NO BUILDING IS PERFECT.

WHEN WE FIND A FLAW IN CRAFTSMANSHIP, THEY HAVE BEEN QUICK TO REPAIR THAT. WE HAVE BEEN DEALING WITH A CONDENSATION ISSUE IN THE HVAC SYSTEM.

WE GOT MOST OF THAT TAKEN CARE OF TOWARD THE END OF THE SUMMER, SO WE DIDN'T HAVE A GOOD RUN AT A LOT OF HIGH TEMPERATURES BUT WE IDENTIFIED THAT, IN A CONSTRUCTION PROCESS, THAT THE WRAPPING AROUND THE DUCT WORK WHERE WE WERE EXPERIENCING MOST OF OUR CONDENSATION WAS NOT AS THICK AS IT WAS BEING CALLED OUT FOR IN THE ARCHITECTURAL DESIGN. THAT WAS CAUGHT.

IT WAS ALL STRIPPED OUT, REPLACED.

WE DIDN'T HAVE ANY CONDENSATION ISSUES THERE AT THAT POINT.

SO WE WILL SEE WHAT NEXT SUMMER. THEY STOOD BEHIND THEIR WORK.

WE HAVE GONE PAST A YEAR, BUT THEY ARE STILL COMING AND ADDRESSING ISSUES AS WE HAVE THEM COME UP.

SO I CAN'T SAY ENOUGH PERSONALLY ABOUT MY EXPERIENCE IN THAT PROCESS WITH THEM. THEY ARE ALWAYS WILLING TO LOOK FOR BETTER VALUE. THEY ARE ALWAYS WILLING TO LISTEN TO WHAT WE, AS THE END USER, ARE ASKING FOR AND NEEDING. AND I JUST -- WE NEVER HAD AN ISSUE. SO THAT'S MY TWO CENTS WORTH.

BUILDING IS NOT PERFECT BUT I DON'T THINK YOU CAN BUILD A PERFECT BUILDING. WE IDENTIFIED THE FLAWS.

THEY HAVE BEEN VERY GOOD TO FIX THEM.

>> CHIEF. >> THANK YOU.

>> THE FIRE STATION HAS BEEN RECOGNIZED.

>> IT HAS. >> WOULD YOU CARE TO TELL US ABOUT THAT, PLEASE. IT IS NOT ON THE AGENDA, BUT OUR FIRE STATION HAS BEEN RECOGNIZED.

>> YOU CAN GO ON FACEBOOK AND FIND IT.

IT WAS A BRONZE AWARD. >> WE CAN GO BACK TO COMMUNITY

INTEREST. >> THANK YOU.

>> THEY WORKED WELL WITH OUR ARCHITECT.

THTHERE WERE VERY GOOD DISCUSSIONS.

THE ARCHITECT AND CMAR DON'T ALWAYS AGREE.

THEY WORKED WELL WITH THE ARCHITECTURAL STAFF TO FIND THE

BEST VALUE FOR US. >> I KNOW YOU GUYS LOOK FOR EVERY OPPORTUNITY TO SHOOT JABS ACROSS FROM PD TO FIRE.

[01:25:03]

YOU ARE READY TO UNLEASH THEM ON ANOTHER PROJECT?

>> HERE'S THE DEAL, I HAVE ALREADY PUT MY PLUG IN FOR THE SUPERINTENDENT AT THE PD. MY OFFICE IS GOING TO BE JUST A LITTLE BIT BIGGER THAN THE POLICE CHIEF'S, I'M JUST SAYING.

>> ASSUMING THERE'S NO MORE DISCUSSION, I WILL TAKE A

MOTION. >> MOTION.

>> SECOND. >> MOTION TO APPROVED, SECONDED.

PLEASE VOTE. PASSES 6-0.

I BELIEVE THAT CONCLUDES OUR BUSINESS FOR TODAY.

DO WE HAVE A MOTION TO ADJOURN? >> YES.

>> SECOND. >> ALL IN FAVOR OF ADJOURNING, PLEASE VOTE. SAY AYE, ANY OPPOSED.

NO, WE ARE ADJOURNED AT

* This transcript was compiled from uncorrected Closed Captioning.