[Call to Order, Invocation and Pledge of Allegiance] [00:00:04] >>> GOOD EVENING OR AFTERNOON. IT IS 6:00 P.M. IT IS TUESDAY, JULY 28 AND WE HAVE FULL COUNSEL PRESENT. I CALL COUNSEL TO ORDER. PASTOR REYNOLDS WILL LEAD THE START. PASTOR. >> LET US PRAY. GOD OF GRACE GOD OF GLORY, HOW WE THANK YOU FOR THIS DAY. WE ARE AMAZED BY YOUR GRACE AND WE MARVEL AT YOUR MERCY. YOUR LOVE HAS LIFTED US TO BE PART OF ANOTHER DAY AND WE THANK YOU SO VERY MUCH. NOW WE ASK YOUR BLESSINGS UPON THE MAYOR, ALL THE COUNCIL PERSONS AND THE ENTIRE CITY. WE PRAY THAT YOU WILL CONTINUE LOVING US AND LEADING US AND LIFTING THE POLICE CHIEF, THE FIRE CHIEF, ALL OF THE LAW ENFORCEMENT AND FIRST RESPONDERS PLEASE COVER THEM AND THE FAMILIES IN THIS COMMUNITY. WE PRAY THAT THIS NIGHT THAT YOUR PRESENCE WILL BE FELT, YOUR WILL BE DONE AND YOUR SON JESUS WILL BE GLORIFIED IN ALL THAT IS DONE. WE THANK YOU IN JESUS NAME, AMEN >> I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA. AND TO THE REPUBLIC FOR WHICH IT STANDS, ONE NATION UNDER GOD INDIVISIBLE WITH LIBERTY AND JUSTICE FOR ALL. >> AFTER WATCHING TV LAST NIGHT I FELT COMPELLED TO MAKE AN OBVIOUS STATEMENT, WE BEGIN THE BUDGET PROCESS TODAY AND NEXT FRIDAY WE WILL HAVE A WORKSHOP WITH STEFAN COUNSEL WORKING TOGETHER. WE'RE DOING THIS DURING CHALLENGING TIMES. WE HAVE COME THROUGH COVID-19 SOCIAL UNREST THROUGH THE NATION. WE ARE LESS TO LIVE IN MIDLOTHIAN AND WE HAVE -- WE ARE FORTUNATE TO BE HERE. PART OF THE REASON WE ARE FORTUNATE IS THE POLICE DEPARTMENT. I WANT TO MAKE IT CLEAR THAT THIS COUNCIL IS IN FULL SUPPORT OF THE POLICE DEPARTMENT. WHEN IT COMES TO FUNDING WE WILL FULLY FUND THE POLICE DEPARTMENT WITHIN THE RESOURCES WE HAVE AND WHAT WE HAVE TO MANAGE THE BUDGET. SO CHRIS THANK YOU FOR YOUR STAFF AND THANK YOU FOR YOUR FINE OFFICERS. WITH THAT BEING SAID, THE [2020-240 ] REGULAR SESSION 2020 -- 240 RECEIVED A QUARTERLY INVESTMENT REPORT FROM PATTERSON AND ASSOCIATES. >> GOOD AFTERNOON. GOOD AFTERNOON IT IS GOOD TO BE BACK. ACTUALLY IT IS GOOD TO BE OUT OF THE HOUSE. I HAVEN'T BEEN OUT OF THE HOUSE SINCE THE END OF MARCH EXCEPT TO GO OUT OF THE OFFICE. I WISH I HAD,. >> I WISH I HAD BETTER NEWS FOR YOU BUT OF COURSE, JUST LIKE EVERYTHING ELSE, THE MARKETS ARE BEING AFFECTED BY COVID-19 AND THE SHUTDOWN. AND I WAS CALLING THIS REOPEN, RECLOSER REPEAT BECAUSE WE HAVE SEEN THIS BEFORE AND WE WILL SEE IT AGAIN AND WE WILL CONTINUE TO SEE IT I AM SURE. EVERY TIME WE TRIED TO OPEN THE ECONOMY WHICH WE HAVE TO DO, THEN THE COVID-19 COMES BACK AND THE RISK COMES BACK. SO WHEN WE HAVE A RISK ON RISK ON SITUATION AND THE RISK IS EVERY TIME WE DO THIS, EVERY TIME WE GO THROUGH THIS CYCLE. EVERY TIME WE GO THROUGH THIS CYCLE, WE END UP WITH A LONGER AND GREATER POSSIBILITY OF LONGEVITY OF THE TIME IT WILL TAKE TO GET BACK TO NORMALIZATION. THE WE WILL NOT SEE A B. IT WON'T BE A RECOVERY WHERE WE [00:05:03] COME BACK QUICKLY. IT WILL BE A U OR A -- OR SOME PEOPLE WILL SAY IT WILL BE A SQUARE ROOT. SO WE WILL GET BACK AND HIT A PLATEAU AND HOPEFULLY WE WILL GET NEAR TO THE PALAZZO. BUT EVERY SURGE, EVERY TIME WE OPEN UP WE OPEN UP MORE AND IT DOES LEAD TO GROWTH AND THERE HAS BEEN SOME GROWTH THAT CAME OUT. TODAY HE CAME OUT, THEY HAVE NEW INFORMATION ON MANUFACTURING HERE IN TEXAS. COMING BACK STRONGLY. AND YOU HAVE CONSUMERS WHO EVERY TIME THEY GET A REOPENING THEY TEND TO SPEND. THAT IS WHAT AMERICANS DO BEST. WE SPENT. UNFORTUNATELY THEY ARE NOT USING THE MONEY TO SAVE AND THAT IS UNFORTUNATE BECAUSE WE HAVE SEEN OVER THE LAST COUPLE OF MONTHS WHAT HAPPENS WHEN YOU DON'T HAVE RESERVES. YOU GOING INTO BUDGET SESSIONS I'M SURE YOU HAVE THAT IN THE BACK OF YOUR MIND ALSO. >> SO THAT CONSUMERS ARE SPENDING RETAIL CAME UP STRONG AND WENT BACK DOWN AGAIN WHEN PEOPLE PULLED BACK. THEY WANT TO BE OUT AND SPENDING. THAT WILL BE GREAT FOR THE ECONOMY BECAUSE THE CONSUMER IS TWO THIRDS OF OUR GDP. IT IS VERY IMPORTANT FOR THEM TO HAVE A WAY TO SPEND MONEY AND TO MAKE MONEY. THE HARDEST PART RIGHT NOW IS THE PAYROLLS. YOU CAN SEE, ON THE GRAPH, THE PAYROLL NUMBER ON THE TOP WHERE IT WAS DOWN BUT IT IS COMING BACK AND EVERY TIME WE COME BACK AND WE COME BACK WITH -- WE HAVE GOOD NEWS HAPPENING THERE. THE PAYROLLS ARE SHOWING WE HAVE TO KEEP ADDING TO THEM. WE HAVE TO GET PEOPLE MOVING AGAIN AND THE CARES ACT DID HELP THE CARE THAT CAME OUT IN MARCH, MARCH 27, WITH $2 TRILLION. AND $349 BILLION WAS FOR PPE AND THE PAYROLL PROGRAM SPIRIT THAT HAS HELPED. NOW THE CARES ACT TWO IS BEING FOUGHT THROUGH CONGRESS RIGHT NOW. THERE IS A BIG RANGE THERE BECAUSE, ONE OF THE -- $1 TRILLION IS ONE OF THEM AND REDUCING THE WEEKLY, THE WEEKLY PPE AND THE DEMOCRATS ARE COMING UP WITH EIGHT THREE-POINT FIVE JULIAN DOLLAR PACKAGE. IT IS HARD TO TALK ABOUT NUMBERS LIKE THAT WITHOUT THINKING ABOUT WHAT'S GOING ON AND HOW IT WILL AFFECT YOU AND THE MARKETS ON A LONG-TERM BASIS. THE STIMULUS TO POINT TO, WILL BE A MAJOR SHIFT. IF IT GOES OUT THE WAY CONGRESS WANTS IT TO, IT WILL BE CLOSER TO $1,200 FOR AMERICANS FOR ANY FAMILY UNDER A CERTAIN AMOUNT. THAT IS TO A POINT WHERE IT MAKES MORE SENSE TO STAY AT HOME TO GET IT. THEN IT DOES TO GO OUT AND FIND A JOB. NOW THEY ARE GOING TO SEARCH FOR JOBS EVEN OPPOSED TO HOW MANY BUSINESS CAN REOPEN. AFTER 2007-2009 A LOT OF PEOPLE CRITICIZE THE FEDS AND THE STATE FOR NOT HAVING POLICIES TO MOVE ON THEM. AT THIS TIME THEY HAVE DONE THE OTHER WAY. THEY WORK ON IT AND SAID WE HAVE TO GET STIMULUS OUT QUICKLY AND OBVIOUSLY THAT IS WHAT THE CARES PACKAGE WAS ABOUT. THERE ARE A FEW THINGS THAT CAME OUT OF THAT. FIRST OF ALL THE SCALE OF BORROWING AND THE DEBT THAT IS BEING RAINY -- ROLLING OUT. WE WERE JUST IN 2018 STARTING TO GET OUT SOME OF THE STIMULUS AND SOME THINGS THAT WERE PUT IN PLACE AND 2009 AND 2010. WE WERE JUST COMING OUT OF IT IN 2018. IT WILL BE DECADES BEFORE WE CAN GET OUT OF IT. [00:10:01] THE IMS HAS ESTIMATED, THAT THE LARGEST COUNTRIES WILL BORROW 17% OF THEIR GDP BECAUSE OF THE STIMULUS GOING OUT. THAT IS A HUGE NUMBER WHICH CLAMPS DOWN ON THE ECONOMY. NOW THE EU INTERESTINGLY ENOUGH FINALLY CAME OUT AND DECIDED THEY WILL GO WITH A $2.6 TRILLION BOND ISSUE THAT IS BEING OFFERED FOR THE FIRST TIME BY THE EU. SO THE EUROPEAN UNION WAS REALLY ON A PRECIPICE ON WHETHER THEY WOULD DISINTEGRATE OVER THIS SITUATION A LARGE PART WILL BE GIVEN AND GRANTS WITH -- IT IS A 0% LOAN TO THE SOUTHERN COUNTRIES. AS OPPOSED TO THE NORTHERN COUNTRIES BUT THEY JUST SIGNED IT THE OTHER DAY. THAT WILL JUST ADD ON TO THE DEBT THAT IS BUILDING UP. >> ANOTHER THING IS THAT THE RESERVES OF THE TREASURY AND THE FEDS, WE HAVE BEEN LITERALLY PRINTING MONEY AND SUPPORTING THE STIMULUS PROGRAMS THAT HAVE GONE OUT. SO YOU HAVE THESE HUGE, NOT JUST IN THE UNITED STATES, WE HAVE AN ADDITIONAL $4 TRILLION IN THE TOP LARGEST COUNTRIES AND THIS HAS BEEN ADDED TO THE RESERVES. ANOTHER THING THAT COMES OUT OF THIS STIMULUS IS, THE STATE HAS BECOME THE CAPITAL ALLOCATOR OF CHOICE. I WILL MENTION A FEW IN A SECOND ABOUT WHAT THE CENTRAL BANKS THE FED IS MY FIRST RESPONDER, NO DISRESPECT TO FIRE, POLICE OR HOSPITAL WORKERS BUT THEY HAVE BEEN ON TOP OF THIS PROGRAM FROM THE BEGINNING. THEY HAVE BEEN DOING, THEY HAVE BEEN FIGHTING BANKRUPTCIES, THEY HAVE BEEN TAKING MAJOR STEPS AND SOMETIMES THESE JUST DON'T GET INTO THE PRESS. I'D LIKE TO MENTION SOME NOW. FIRST WAS THE PRIMARY MARKET CONTROL. AN FACILITATOR. WHAT THAT WAS DOING WAS, THEY WERE TRYING NOT TO SUPPORT AND GIVE DIRECTLY TO THE CORPORATIONS WHICH IS HOW THE MESSAGE COMES ACROSS. BUT THEY WERE PLACING THEMSELVES AS A BACKSTOP TO THE CORPORATIONS AND SMALL BUSINESSES. THAT WAS THE FIRST ONE, THAT WAS THE PRIMARY MARKET FACILITATORS. THEN THEY CAME OUT WITH A SECONDARY MARKET FACILITY AND WHAT THEY HAVE DONE THERE IS THEY HAVE, SUPPORTED THE COMMERCIAL PAPER MARKET, THE MUNICIPAL MARKET, AND WHAT THEY WERE DOING WAS PROVIDING LIQUIDITY BECAUSE LIQUIDITY IS WHAT MAKES THE MARKET WORKS. IT IS WHAT MAKES THE ECONOMIES WORK AND THEY HAD TO DO THAT. WHEN WE LOOK AT YOUR PORTFOLIO YOU WILL SEE ONE OF THE RESULTS OF IT IMMEDIATELY. BACK IN APRIL WHEN THE COMMERCIAL PAPER MARKET FROZE. IT ABSOLUTELY FROZE BECAUSE THERE WASN'T ENOUGH LIQUIDITY TO SUPPORT THE EMPIRICS OF THE FED STEPPED IN AND PROVIDED THIS AS A MARKETPLACE, OPENED IT BACK UP AND YOU CAN SEE THE EXTENT OF THIS IN THE FACT THAT THE RATES WERE RUNNING 7.5 BEFORE. DURING THE SQUEEZE THEY WENT TO 287. ON VERY SHORT-TERM PAPERS. THERE'S NOTHING WORKING HERE THEY SAID THEN THEY DIDN'T AGAIN IN THE GOVERNMENTAL BOND MARKET. THEY HAVE BEEN DOING A LOT TO SUPPORT WHAT IS GOING ON. THEY CANNOT AFFECT THE JOB SITUATION VERY WELL EXCEPT TO USE THE PPE BUT THEY HAVE BEEN CONTINUING TO SUPPORT THE MARKET SPIRIT SOME OF THE MONETARY AND FISCAL BASKING GOING ON YOU CAN SEE IT HERE. THE PPE IS THE CONSUMPTION AS YOU CAN SEE. A LOT OF THE CHARTS EVEN THOUGH THEY HAVE BEEN GOING DOWN THEY HAVE BEEN HOLDING STEADY. THEY HAVE GOTTEN TO A POINT WHERE WE CAN COME BACK OUT OF IT. BUT IT WILL BE IN A SLOW MANNER. [00:15:08] I WAS CURIOUS TO SEE WHAT WAS HAPPENING IN DALLAS AND TEXAS IN PARTICULAR. I MENTIONED TODAY, I MENTIONED WHAT WAS GOING ON IS STRONG AND THAT SUPPORTS THE OTHER BED THAT CAME OUT EARLIER THIS WEEK THAT SAID NATIONALLY THEY HAVE A MANUFACTURING INDEX THAT COMES OUT AND INDICATORS THAT THEY USED TO JUDGE THE STRENGTH OF THE ECONOMY. THAT'S A REALLY POSITIVE SIGN. WE HAVE TO LOOK, NOT BE OVERLY OPTIMISTIC BUT THERE IS SOME GROWTH AND IT IS STRONG. CONSIDERING WHERE WE CAME FROM. YOU CAN SEE WHERE WE CAME FROM. THE EMPLOYMENT GROWTH IN THE UPPER RIGHT-HAND CORNER. YOU CAN SEE HOW FAR IT WENT DOWN AND IT HAS COME BACK UP AND OVER THE LINE. YOU CAN SEE TEXAS THERE AND DALLAS, FORT WORTH, RUNNING VERY STRONG. THE GROWTH BY SECTOR ON THE BOTTOM RIGHT, COMING DOWN, NOT A BEE BUT COMING INTO A YOU POSITION SO IT WILL COME UP AND THERE WILL BE GROWTH. YOU CAN SEE ON THE LOWER LEFT-HAND SIDE THAT IS THE TEXAS BUSINESS CYCLE. YOU CAN SEE A DRAMATIC DROP BUT NOW WE ARE BACK UP INTO POSITIVE TERRITORY. TEXAS BUSINESS WAS ANOTHER INTERESTING THING. IT CAME IN WITH THE ENERGY CRISIS, AND WE HAVE SEEN THIS AT THE GAS STATIONS I NOTICED COMING IN, IT WAS A DOLLAR 99 CENTS AND I WISH I FILLED MY TANK EARLIER THAT THE ENERGY PRICES COMING UP IS HELPFUL. ANOTHER THINK THE FED AND THE TREASURY HAVE ALLOWED THE DOLLAR TO GET WEAKER. THAT IS NOT SOMETHING THAT PEOPLE USUALLY WANT TO SEE. THEY DON'T THINK THAT IS GOOD BUT IT REALLY DOES HELP US. IT WILL HELP US IN INTERNATIONAL TRADE BECAUSE EVEN THOUGH IF YOU AND I WERE GOING TO TUSCANY FOR THE SUMMER, MAYBE NEXT YEAR, IF WE WERE GOING TO TUSCANY WE WOULD WANT A STRONG DOLLAR BECAUSE THE DOLLAR WOULD GO FURTHER WHILE WE ARE TRAVELING. BUT ON A TRADE BASIS WE WANT THE DOLLAR A LITTLE WEAKER. WE WANT IT TO BE A LITTLE WEAKER SO THE TRADE WILL BE IMPROVED. IT HAS ALREADY SHOWN ITSELF TO BE A MAJOR IMPROVEMENT FOR TEXAS TO EXPORT SO MUCH AND FOR THE UNITED STATES IN GENERAL. ONCE THIS IS DONE THIS IS AN AWFUL LOOKING CHART. THIS IS THE TREASURY. AND YOU CAN SEE WHERE WE WERE IN DECEMBER. WE DIDN'T THINK THAT WAS GLORIOUS ON THE THREE MONTH PERIOD BUT THEN OF COURSE, THE FEDS IN MARCH AND APRIL CUT 150 BASIS POINTS AND WE ARE SITTING AT OVERNIGHT RATES FROM 0 TO 0 POINTS 35. THERE IS SO MUCH DEMAND FOR OUR SECURITIES, THAT IS KEEPING DOWN THE FIRST PART OF THE CURVE WHERE IT IS STRAIGHT. I LOOK THIS AFTERNOON BEFORE I LEFT AUSTIN, I LOOKED AT THE JULY NUMBERS THAT THEY ARE WORSE THAN THIS. YOU ARE DOWN ANOTHER TEN BASIS POINTS OR .1% ON THE THREE MONTHS OR SIX MONTHS. YEAR. FLOOR DOWN FURTHER 20 BASIS POINTS ON THE LONG IN. WHAT'S HAPPENING THERE IS, WE HAVE HORRIBLE RATES, BUT WE DON'T HAVE NEGATIVE RATES. WE HAD THE HIGHEST CREDIT QUALITY OF THE WORLD. SO IF YOU ARE AN INTERNATIONAL INVESTOR IF YOU ARE ANOTHER COUNTRY, IF YOU ARE SOVEREIGN YOU ARE COMING INTO OUR MARKET AND YOU ARE BUYING A SET AMOUNT OF SECURITIES. AND THAT IS WHEN YOU HAVE THAT KIND OF DEMAND. YOU GET HIGHER PRICES. AND IN MY WORLD HIGHER PRICES IS LOWER RATES. SO THAT IS WHAT IS HAPPENING THERE. THE LONGER WE GO AND YOU WILL SEE IT IN THE NUMBERS, THE LONGER WE GO, THE MORE WE WILL BE HOLDING RIGHT HERE AT THE LOWEST RATES. THERE IS NO INFLECTION OUT THERE. SO, THIS IS PROBABLY WHAT WE WILL BE LOOKING AT FOR A NUMBER OF QUARTERS GOING FORWARD. [00:20:10] IF YOU LOOK AT THE GENERAL FUND INVESTMENT FOR THE CITY YOU CAN SEE EXACTLY, YOU CAN SEE THIS -- WHEN WE HIT THE RIGHT BUTTON. LOOK AT THE AVERAGE YIELD OF. THIS IS THE AVERAGE YIELD FOR THE PORTFOLIO. YOU CAN SEE IT HERE WHERE IT THIS TIME LAST YEAR WE WERE LOOKING AT 235 ON A SIX MONTH AND NOW WE ARE DOWN TO A .17. THAT HAS BROUGHT THE WHOLE PORTFOLIO DOWN. WHAT WE HAVE TRIED TO DO AND YOU CAN SEE IT HERE, IN DECEMBER THERE WAS INDICATIONS OF MARKET WAS SLOWING DOWN THE ECONOMY WAS SLOWING DOWN. IT WASN'T BECAUSE OF COVID-19 IT WAS BECAUSE WE GO INTO THE CYCLE NORMALLY WHEN WE COME OFF OF THE HOLIDAY HIVE BUT THAT WAS THE TIME WHEN WE TOOK A LOT OF THE FUNDS THAT WERE COMING IN FOR THE TAXES AND EXTENDED THE PORTFOLIO. LOCKING INTO AS MUCH AS WE COULD. BY THE END OF MARCH, WE DID NOT HAVE ANY MORE OPPORTUNITIES. THEY WERE ALREADY TRYING NOT BECAUSE MARCH IS WHEN THE FED CUT THE RATES DRAMATICALLY. SO OVER THE PAST QUARTER FROM MARCH UNTIL JUNE, WE HAVE GONE FROM A 152.9. SO DOWN 60 BASIS POINTS. BUT LOOK AT THE BENCHMARK YIELD THE MARKET HAS DRAWN IT DOWN FROM 1.1 DOWN TO 17 BASIS POINTS. YOU CAN SEE THE EFFECT OF EXTENDING THE PORTFOLIO WHERE WE CAN AND THIS IS THE PERIOD WHERE YOU NEED LIQUIDITY BECAUSE YOU DON'T HAVE NO CASH COMING IN. BUT BY LOCKING INTO THE NONCASH PORTION WHAT'S HAPPENING HERE IS WHAT'S HURTING THE FOLIO AND EVERYONE IS THE CASH PORTION OF THE PORTFOLIO. FOR MARCH, AND JUNE, I THINK TO ME THAT LOOKS VERY GOOD BECAUSE THE POOLS HAVE GIVEN US SOME ABILITY TO KEEP THE RATES UP IN THE PORTFOLIO. BUT ALSO BECAUSE THERE IS VERY LITTLE OUT THERE IN THE SHORT PERIOD OF TIME IN THE YIELD CURVE TO PUT THE MONEY TO WORK. SO YOU CAN SEE WHAT WE HAVE STARTED TO USE MORE OF IS THE COMMERCIAL PAPER AND RIGHT NOW THE CITY IS MOVING SOME OF THE MONEY OVER INTO TAXABLE PRIME WHICH ALSO USES COMMERCIAL PAPER. THAT IS THE ONLY THING WHERE YOU GET ANY PICKUP RIGHT NOW. SO WE HAVE ADDED A LITTLE THROUGH THE TREASURY PORTION OF THE PORTFOLIO. IT IS VERY DIFFICULT TO BUY BECAUSE THE AGENCIES ARE UNDER SUCH DEMAND RIGHT NOW BUT THE BIG DIFFERENCES GETTING THE MONEY OUT OF THE BANKS AND YOU CAN SEE THE RATES DOWN HERE ON THE BOTTOM. HOW THEY HAVE MOVED FROM MARCH THROUGH JUNE AND THE MOST DRAMATIC OF THEM WOULD BE THE THREE BOTTOM ONES WHERE THEY ARE GOING FROM .72.08. LOSING A HALF OF A PERCENT RIGHT HERE. LOSING IT ANYWHERE YOU HAVE LIQUID MONEY. THAT IS A HARD FIGHT TO FIGHT. THE MATURITY ALLOCATION TELLS THE STORY OF WHERE WE HAD A LADDER THAT WOULD BE RELATIVELY NORMAL GOING OUT IN MARCH THINKING WE COULD KEEP GOING OUT AFTER MARCH AND ALL OF THE HAPPENINGS IN BETWEEN. BY THE END OF JUNE, YOU HAVE SO MUCH MONEY SITTING LIQUID BECAUSE THERE IS NO OPPORTUNITY OUT THERE AND THAT IS WHY WE ARE ASKED TO EXTEND THE COMMERCIAL PAPER SLIGHTLY AND THE POLICY GO OUT TO SIX MONTHS. YOU CAN SEE WHAT WE ARE TRYING TO DO HERE, WE ARE TRYING TO GRAB SOME OF THE VALUE THAT IS OUT HERE IN THE 1-TWO-YEAR AREA WHERE THE CURB COMES UP A LITTLE. YOU CAN SEE IT MOVING MORE LIKE THIS AND BECOMING MORE AND SOME OF THE SHORTER PAPER RUNS OFF. OF COURSE THE POLICY HAS DIVERSIFICATION LIMITS. THERE IS NO REQUIREMENT IN THE POLICY FOR LIQUID MONEY BECAUSE IT WILL PROTECT YOUR LIQUIDITY. BUT YOU CAN SEE THE USE OF THE POOLS AT THIS POINT, A LOT HARDIER. -- HIGHER. THE CDS THERE'S NO VALUE THERE. THE BANKS CANNOT SUSTAIN WITH THE RATES THEY HAD BECAUSE THEY DON'T HAVE ANY SPREAD. THEY NEED TO SEE A YIELD CURB [00:25:01] AND THEY NEED LOAN ACTIVITY. SO YOUR CDS WILL GO DOWN THERE. WHAT WE ARE LOOKING AT MORE IS MUNICIPAL THAT. OR BETTER MUNICIPAL DEBT FOR THE STATES, COUNTIES AND CITIES JUST LIKE YOU'RE DEAD AND TRYING TO ADD SOME VALUE THERE. ALTHOUGH IN THE GENERAL THAT IS A DIFFICULT THING TO DO BECAUSE THEY USUALLY COME OUT WITH SMALL PORTIONS FOR YOUR PORTFOLIO. WE ARE LOOKING FOR THEM NOW AND SOME OF THE OTHER PORTFOLIOS. LIKE THIS ONE. HERE, FROM MARCH TO JUNE ABOUT HALF A MILLION DOLLARS. THE MARKET VALUE ALSO APPEARED REMEMBER AS THE RATES GO DOWN, THE VALUES OF ANYTHING ON THE PORTFOLIO ARE GOING UP SO THAT IS WHY YOU GET INTO THE POSITIVE MARKET VALUE AREA. UNFORTUNATELY THIS IS GOING MORE LIQUID, GOING FROM 31 DAYS TO 23 DAYS AND UP AND DOWN FROM THE END OF LAST YEAR. BUT YOU CAN STILL SEE THE EFFECT HEAR FROM 1.5-4. AN ENDING YIELD AS THE CASH PORTION GOES INTO THE 02010 AREA. UNFORTUNATELY, YOU CAN ALSO SEE THE EARNING SPIRIT WHERE THE AVERAGE FOR LAST YEAR WAS ABOUT $37,000. WE HAVE SLOWLY GONE DOWN AND DROPPED FROM 31,000 IN THIS CURRENT -- IN THIS QUARTER THAT ENDED IN JUNE. >> A LITTLE BIT OF A DIVERSIFICATION ON THIS NOT TOO MUCH. MOSTLY IN THE COMMERCIAL PAPER AND THE CDS AND FOR THE SAME REASONS WE SAW OTHERWISE. THAT 2.08, TAKE A GOOD LOOK AT IT BECAUSE IT WILL MATURE AND THEN WE WON'T BE ABLE TO REPLACE IT BUT IT WAS A GOOD LUCK IN ON THE CD FOR THAT PARTICULAR PORTFOLIO. HERE IS MC D.C. IT IS RELATIVELY THE SAME STORY. THIS HAS JUMPED UP $1 MILLION. IN BOTH BOOK AND MARKET VALUE BUT THIS ONE UNFORTUNATELY, WE CAN'T DO ANYTHING UNTIL WE KNOW THE EXPENDITURE PLANS. WE DON'T HAVE DISCUSSION ON YOUR PORTFOLIO SO WE HAVE TO WORK WITH STAFF TO MAKE SURE THEY HAVE MONEY AVAILABLE WHEN THEY NEEDED. UNFORTUNATELY HERE, WE HAVE GONE FROM SIX DAYS TO ONE DAY AND YOU CAN SEE EXACTLY WHAT HAS HAPPENED. WE WENT FROM 1% DOWN TO .21 AND GETTING CLOSE TO THE BENCHMARK YIELD. AND THE EARNINGS CUT BY THREE QUARTERS. >>> MCDC ASSETS HANGING IN THE BANK. AND THAT'S AN AWFUL RATE OF .16. DOWN FROM .15 ALTHOUGH IT IS HANGING IN THERE. BUT YOU CAN SEE THE AGENCIES THAT WE HAVE LOST AS WE MOVE TOWARDS A LIQUIDITY POTION. AND BROUGHT IT DOWN TO .2%. THE MDA'S A LITTLE DIFFERENT THEY HAVE JUMPED FROM 31,000, 31 MILLION TO 40 MILLION AND IN OVERALL VALUE. AND THAT HAS SHOWN BECAUSE YOU CAN SEE EVEN THOUGH IT HAS GONE FROM 116 DAYS TO 47 DAYS, JUST THE MOVEMENT THE ENDING YIELD ON THE CASH PORTION AS REALLY BEEFED UP THE EARNINGS SO THE EARNINGS FOR THE QUARTERS ARE $121,000 LAST QUARTER AND THIS QUARTER FOR 97,000. IT'S NOT A PRETTY PITCHER, ALTHOUGH IT IS A LOT BETTER THAT IT COULD BE. WE DO SCRAMBLE TO FIND SOME VALUE OUT IN THE MARKETS IF AT ALL POSSIBLE. HERE, THE BIG PROBLEM WITH THAT IS A LARGE PORTION OF THE PORTFOLIO, A LARGE PORTION SITTING IN THERE AND EARNING 0. WHAT WE HAVE TRIED TO DO IS, A LITTLE EARLIER IN THE YEAR IS ADDED TREASURIES TO IT AND A LOT OF AGENCIES TO IT. SOME SITTING IN THE TREASURIES. THAT DOES HELP THEY ARE STILL AT 155 AND 175. BUT GETTING THE MINING -- MONEY OUT AND GETTING IT TO WORK EVEN AT A LOW RATE WOULD HELP THE PORTFOLIO CONSIDERABLY. >> SO THE BENCHMARK IF YOU LOOK [00:30:02] OVER EVERYTHING FROM MARCH, AT THE END OF MARCH AND TO THE END OF DECEMBER, THE TOTAL EARNINGS FOR ALL OF THE PORTFOLIOS, AND IF YOU CUT IT IN HALF, AND MORE IN JUNE, THAT IS WHAT HAPPENS WHEN YOU HAVE SECURITIES AND YIELD SPIRIT LIKE I SAID, THIS IS PROBABLY WHAT WE WILL SEE FOR THE NEXT COUPLE OF QUARTERS, HOPEFULLY EKING OUT A LITTLE MORE BUT, NOT A LOT THERE TO GET. >> AND, I DID PUT THE FISCAL YEAR TO DATE SO YOU COULD SEE SOMETHING WITH THE MILLION DOLLARS IN IT. THIS IS THE EARNINGS FOR ALL OF THE COMBINE. $1 MILLION BY SEVEN. I WILL BE GLAD TO ANSWER ANY QUESTIONS. >> I HAVE SEVERAL QUESTIONS. WILL YOU BE HERE FOR THE 3RD QUARTER REVIEW QUICKSAND YES. >> I DON'T KNOW I'M JUST ASKING. >> YES I, FOUR TIMES. YEAR. >> A COUPLE OF QUESTIONS. >> HOPEFULLY BETTER NEWS. >> I HOPE SO TOO. A COUPLE OF QUESTIONS. NUMBER ONE, I KEEP AN EYE ON THE UNEMPLOYMENT DATA. THIS IS TELLING ME THAT WE ARE POSSIBLY GOING TO EXPECT SOME WHITE-COLLAR LAYOFFS TO COME IN SEPTEMBER THROUGH OCTOBER, I'M ASSUMING, IT WON'T BE ATROCIOUS BUT IT COULD BE 10-15% RANGE. DOES THAT CALLED YOU ANY CONCERN OR PAUSED? AND JUST. WHAT I KNOW THEY'RE BUILDING DOWN ON SPECIFICALLY IS THAT A LOT OF THE CORPORATIONS THAT HELD OFF THIS LONG AND CAP THERE WHITE-COLLAR WORKERS AND KEPT THEM AT HOME, THAT IS WHY EARNINGS SEASON RIGHT NOW IS SO IMPORTANT TO WATCH. AND AS THEY EAT AWAY AT THEIR RESERVES THAN THEY WILL HAVE TO LAY PEOPLE OFF. THAT IS UNFORTUNATELY GOING TO HAPPEN. I DON'T THINK IT WILL BE MORE THAN 12%. >> GOING BACK TO SOME OF YOUR COMMENTS. I MYSELF I AM IN THE MANUFACTURING BUSINESS. WE MANUFACTURE WOODEN PALLETS WHICH HOLD PRODUCTS THAT ARE MANUFACTURED. SO I HAVE A WIDE SCOPE ACROSS ALL FACETS OF THE INDUSTRY. WHAT'S INTERESTING IN WHAT WE ARE EXPERIENCING IS THE PRODUCTS WE MANUFACTURE THAT HOLD IN HOUSE SHIPMENTS, PERHAPS MACHINE PRODUCTS, THOSE SALES HAVE BEEN CUT DOWN TO 25%. THE INTERESTING FLIPSIDE IS, ANYTHING WE MANUFACTURE THAT HOLDS PRODUCTS LIKE HOME DEPOT AND LOWE'S, THEY HAVE GONE UP ONE 100% GROWTH FOR THIS SHORT PERIOD OF TIME. ALL WE CAN ASCERTAIN THAT TO BE IS WITH THE STIMULUS PAYMENTS THAT FAMILIES GOT THEM WHO DIDN'T NEED THEM AS BADLY. IT IS AMAZING THE VOLUME WE ARE DOING. >> MY COMPANY OWNS STOCK BECAUSE HOME DEPOT, LOWES, ANY OF THE HOME IMPROVEMENT COMPANIES, AND THE COMMODITIES THAT SUPPORT THEM, THE LUMBER AND COPPER AND ALUMINUM THOSE ARE STRONGER AT HOLDING UP AT PRE-COVID-19 LEVELS. I DON'T THINK IT IS SO MUCH THE PPE. I THINK PEOPLE ARE HOME AND MAYBE IT IS THE TO DO LISTS THAT MEN HAVE TO DO NOW. BUT INSTEAD OF GOING OUT AND WITH THE UNCERTAINTY YOU WON'T BUY A NEW HOUSE, BUT YOU CAN IMPROVE YOUR OWN HOUSE. SO THAT MAKES A LOT OF SENSE TO ME. THAT THE HOME IMPROVEMENTS PLUS THE COMMODITIES USED FOR THE HOME IMPROVEMENTS WOULD BE STRONGER. THERE'S ANOTHER INTERESTING ONE, I DON'T THINK I MENTIONED IT. IT WAS PERMITS AND THE HOUSING STARTS ARE UP. SO IT IS A DICHOTOMY BECAUSE PEOPLE ARE, IMPROVING THEIR OWN HOMES WHETHER TO SELL THEM OR NOT OR JUST BECAUSE THESE ARE THINGS THAT THEY HAVE PUT OFF FOR A WHILE. BUT ALSO BECAUSE THE RATES ARE SO LOW. YOU SO THAT'S RIGHT YOU SAW THAT WE ARE HIS HORRIBLY LOW WITH AND THERE'S A LOT OF REFINANCING GOING ON. THAT IS MONEY COMING IN FOR PEOPLE TO USED TO IMPROVE THEIR [00:35:05] HOMES. PLUS THEY ARE REFINANCING AND THEY ARE BUYING AT A LOWER LEVEL. SO WHENEVER YOU CAN GET A NEW HOUSE, PEOPLE WANT TO MAKE CHANGES. IT MAKES PERFECT SENSE. >> INSURANCE STATEMENT ABOUT THIS IS THAT LOCAL OR NATIONAL. >> I DON'T SEE THE TEXAS PERMITS. I HAVE SAW IN ONE REPORTED WAS THREE WEEKS AGO THAT HOUSING WAS STRONG ON EXISTING HOUSE SALES. I JUST DROVE THROUGH DOWNTOWN AUSTIN AND I WAS AMAZED. IT IS CRAZY DOWN THERE ANYWAY BUT I WAS AMAZED THAT THERE WERE 12 BUILDING FRAMES DOWNTOWN. SO, THAT TELLS ME, LENDING RATES ARE LOW. THEY WILL STAY LOW. PEOPLE WILL USE THAT. WILL STAY COMPANIES WILL USE THAT. THE MONEY THEY DO HAVE FOR REFINANCING. >> MY 3RD AND FINAL QUESTION AND WE WILL TALK ABOUT WHAT WE WERE DISCUSSING. WE NOTICED THE SAME PHENOMENON BACK IN 20 SO DARK WITH HOMEOWNERS FIXING UP THEIR HOMES BECAUSE OF THE FINANCIAL CRISIS KEEPING THEM HOME. BUT IT IS THREE TIMES THE VOLUME NOW. SO, I DIDN'T HEAR YOU MENTION ANYTHING ABOUT -- AND I HAD MY CONCERNS ABOUT ONCE THE PRINTING PRESS STOPPED, WHICH IS WHAT WE FEEL LIKE IT'S KEEPING THE MONEY ROLLING INTO THESE PERSONAL GOODS THAT ARE BEING TAUGHT TO FIX UP THE HOMES BECAUSE THEY ARE BORED AT HOME. WHAT IS THE REALITY, I HEARD YOU MENTION YOUR STATEMENTS FOR A NUMBER OF QUARTERS THERE WILL BE LOW INFLATION. IT IS NOT PREMISED UPON THE FACT THE PRINTING PRESS. ON THE CASH AND -- >> I THINK THEY HAVE TO KEEP GOING BECAUSE, IF YOU LOOK BACK. THE FISCAL AND MONETARY SLIDE I WAS SHOWING AND TALKED ABOUT, THAT SINCE ZERO EIGHT AND ZERO NINE IT IS THE CENTRAL BANKS AND THE POLICIES THEY ARE SOLIDLY BEHIND THIS ON THE GLOBE. EVERY BANK IS EASING AT THIS POINT. THEY ARE BRINGING THE RATES DOWN AS MUCH AS THEY CAN. WHEN THEY BREAK IT DOWN PEOPLE ARE STILL NOT SPENDING AS MUCH. THERE IS NO GENERATION OF INFLATION. THAT WILL KEEP THIS VERY LOW. >> THAT IS THE POINT THAT CONFUSES ME. I GAVE YOU PRINT MONEY BUT NO INFLATION. WHAT TOOLS DO THEY HAVE? >> THEY HAVE TO KEEP PRINTING, THAT IS THE TROUBLE. >> IS THAT THE MONEY SUPPLY? >> NO WE ARE NOT ON THE GOLD STANDARD. >> THEY JUST KEEP RAINING. IT IS BUILDING UP THESE RESERVES AND WHICH ARE AT THE CENTRAL BANKS WILL HAVE TO BE BROUGHT DOWN AGAIN BUT THEY WON'T DO THAT UNLESS THEY CAN STOP DOING THE STIMULUS. BUT YES THEY ARE FLOATING DEBT MONEY AND PRINTING THE MONEY BUT IT IS GOING OUT IN THIS TREMULOUS PROGRAMS BECAUSE TALKING TO STAFF AND THERE'S A LOT OF PROBLEMS GETTING THE MONEY TO THE END-USER AND SECONDLY WHAT THEY ARE DOING WITH A LOT OF THE MONEY IS THE BACK STOP I WAS TALKING ABOUT. THE SECONDARY AND PRIMARY FACILITIES THE LIQUIDITY FACILITIES. WHAT THE FED IS DOING NOW WHICH IS SCARY, IS THE FED IS BUYING, WHEN THEY WENT BACK IN ZERO EIGHT AND TEN, THEY WERE BUYING GOVERNMENTAL DEBT AND TREASURIES THEN THEY MOVED OVER TO AGENCIES. TO MAKE SURE WE SUPPORTED THE MORTGAGE SIDE OF THE EQUATION. BUT NOW THEY ARE BUYING CORPORATE. THEY ARE BUYING ETF AND JUNK LOADS. THEY ARE BUYING ANYTHING AND EVERYTHING. THAT PUTS ALL OF THE SECURITIES ON THE BALANCE SHEET. YOU HAVE TO GET THEM OFF AT SOME POINT. BUT THEY CANNOT DO IT UNTIL THE ECONOMY STARTS BACK AGAIN. >> WHY IT HAS TO BE REOPENED. >> WHEN I'M HAVING TROUBLE UNDERSTANDING, YOU WOULD AGREE BY THE TIME WE ARE DONE PRINTING IF WE CAN STOP IT WILL BE $32 TRILLION. PROBABLY. SO WE ARE TALKING 150% GDP. SO HOW DO WE DIG OUR WAY OUT OF THIS WHEN -- SOMEHOW THIS HAS TO [00:40:10] BE FIXED. >> THE ONLY WAY IT GETS FIXED IS THROUGH GROWTH. THE ONLY WAY IS TO GET THE ECONOMY MOVING SO THE FUNDS ARE COMING BACK AND BALANCING OUT, THE FUNDS ARE DOWN HERE AND THE RESERVES ARE UP HERE. IN ORDER TO ALLOW THOSE TO GO BACK OUT OR TO MATURE YOU HAVE TO GET THE ECONOMY MOVING AGAIN. >> YOU SAID 10-15 YEAR? >> IN ORDER TO DO THAT THE BEST GUESS IS TWO DECADES. THE MAJOR WORK FROM DOWNTOWN AREAS, AND THE PROPERTY VALUES. ARE WE GOING TO GO BACK TO NORMAL? >> I THINK IT GOES BACK TO NORMAL. BUT IT GOES BACK TO NORMAL SLOWLY. ONE OF THE PROBLEMS IS THE FACT THAT YOU HAVE TO GET THE BUSINESS IS OPEN. YOU HAVE TO GET THE BUSINESS IS SAFELY SO THEY WILL STAY OPEN. AND BUILD UP PEOPLE'S CONFIDENCE IN GOING DOWNTOWN. I WAS AMAZED COMING DOWN THE STREET HERE. IT IS BOOMING IN MIDLOTHIAN. AND YOU SEE IT AND I HEAR IT. I HEAR IT FROM DIFFERENT PEOPLE AND MY CLIENTS. THEY ARE STEADY AND THE SALES TAXES GOING UP. THEY TELL ME THE DOWNTOWN CORE AREAS ARE MAKING THE SALES AND I AM HEARING IT NOT IN A FEW PLACES BUT IN CORPUS, HOUSTON AND UP IN DALLAS AND FORT WORTH, IT IS SLOW, IT IS NOT DRAMATIC. NOT ENOUGH TO WRITE HOME ABOUT BUT PEOPLE LIKE ME. >> WE COULD DO THIS FOR A LONG TIME. >> THERE SO. >> THANK YOU FOR THE PRESENTATION. HOW DOES THE DECREASE IN INTEREST AFFECT US AS FAR AS THE BUDGET? >> WE ARE CONTINUING TO LOOK AT IT THROUGH THE PROCESS WE HAVE TAKEN IT DOWN SOME ALREADY. AS YOU WILL SEE IN THIS PRESENTATION, WE HAVE TAKEN A FEW THINGS DOWN WITH UNCERTAINTY. BUT WE ARE TRYING AND WHETHER WE TAKE ENOUGH OUT THAT IS A QUESTION WE HAVE TO LOOK AT. MAYBE WE HAVE TO ADJUST BEFORE WE FINALIZE IN SEPTEMBER. >> ONE THING THAT AFFECTS THAT IS THE BOND YOU HAVE IN PLACE. BUT THAT YOU HAVE IN PLACE. I KNOW THE CITY HAS REFINANCED SOME OF IT BUT IF WE KEEP GOING DOWN, ESPECIALLY ON THE LONGER END OF THE CURVE THAT WE WILL HAVE MORE OPPORTUNITIES TO REFINANCE THE DEBT AND PULL THAT MONEY IN AGAIN AND HAVE A LONGER PERIOD WITH A LOWER INTEREST RATE WHICH IS THE GOOD SIDE. THERE'S ALWAYS THINK IN AND A YANG. >> OKAY. THANK YOU VERY MUCH. >> THE 2041, HOW LONG DO YOU THINK THIS WILL BE DO YOU WANT TO DO THE CITIZENS ARE RIGHT WE [Citizens to be heard] HAVE ONCE I GRIP YOU DON'T MIND. ONE SPEAKER FOR CITIZENS TO BE HEARD. THEY WANT TO ADDRESS THE COUNCIL. YOU HAVE 3 MINUTES TO STATE YOUR NAME, I WILL GIVE YOU A ONE MINUTE WARNING. >> MY NAME IS WAYNE HOWARD. I AM A CITIZEN HERE ON AND OFF I'VE BEEN HERE IN MIDLOTHIAN FOR SIX YEARS. I JUST HAVE A QUESTION. I WAS GOING THROUGH MY PHONE AND I SEE MIDLOTHIAN HAVING AN [00:45:04] EXPANSION FOR DOWNTOWN. MY QUESTION IS, WHAT ARE THE PEOPLE, THE RESIDENTS THAT LIVE IN THE AREA, THAT HAVE HOMES THERE, AND DON'T HAVE THE MONEY TO MOVE SOMEWHERE ELSE, WHAT WILL HAPPEN TO THE FAMILIES AND RESIDENTS IN THAT PERIMETER? >> WE, DID WE RESPOND TO THE QUESTION? COLLIDE WOULD YOU LIKE TO RESPOND TO MR. HOWARD'S COMMENT. >> BUT AS FAR AS RESIDENTIAL WE ARE NOT LOOKING TO BUY ANY. WE CAN SIT DOWN AND WE CAN GO THROUGH THE PLAN AND I CAN TELL YOU WHERE WE ARE CONCENTRATING ON. WE HAVE A COMMERCIAL AREA. I CAN GIVE YOU MY CARD. >> AND THE REASON IT FRIGHTENED ME IS BECAUSE I HAVE BEEN HERE SIX YEARS. I HAVE SEEN, HOW LITTLE AT A TIME, LIKE WHERE THE POST OFFICE IS, THE NEW POST OFFICE, ALL OF THAT AREA HAS BEEN BOUGHT OUT EXCEPT MR. GONZALES. THAT USED TO BE HISPANIC NEIGHBORHOODS. DOWNTOWN IS MOVING CLOSER AND NOW THAT IS GONE EXCEPT MR. GONZALES HOUSE. I JUST DO NOT WANT IT TO COME OVER TO THE BLACK NEIGHBORHOODS BECAUSE, WE HAVE NO HISTORICAL VALUE HERE IT SEEMS LIKE. IT SEEMS LIKE YOU HAVE 3-4 NAMES ON THE SCHOOL SPIRIT SO OUR FEELING IS WHAT WILL HAPPEN TO US? A LOT OF PEOPLE IN THE COMMUNITY IT WOULD BE HARD FOR ME AND MY FAMILY TO GO INTO ANOTHER 30 YEAR MORTGAGE SOMEWHERE. MY QUESTION IS WHAT WILL HAPPEN TO THE RESIDENTS AND HOW DO YOU GET EXPOSED TO THIS. WHAT'S GOING ON PRESIDES COMING TO COUNCIL MEETINGS. I'M SURE A LOT OF PEOPLE DON'T EVEN KNOW ABOUT THE EXPANSION. >> WE CANNOT DIRECTLY COMMENT BECAUSE. >> ALSO, MYSELF AND THE COUNCIL MEMBERS WERE AVAILABLE TO HAVE DISCUSSION ANYTIME YOU WANT. BUT STAFF IS YOUR BEST SOURCE TO ANSWER THE QUESTIONS. >> THANK YOU I APPRECIATE IT. >> IS THERE -- 2020 -- 241, THE PRESENTATION OF PROPOSALS OPERATING BUDGETS FOR THE CITY [2020-241 ] OF MIDLOTHIAN GENERAL FUND AND UTILITY FUND. >> THANK YOU IT IS THAT TIME OF THE YEAR WE GET TO START THE PROCESS AND AS YOU HEARD FROM LINDA, THIS IS VERY INTERESTING THERE ONE THAT MOST OF US PROBABLY HAVE NOT SEEN IN THE PAST. WE ARE DEALING WITH A LOT OF UNCERTAINTY. SO WE ARE TRYING TO MANAGE THAT AS BEST WE CAN AND BEING CONSERVATIVE THAT IS WHAT YOU WILL SEE AND HEAR THROUGH A LOT OF THIS TONIGHT. AND AS WE CAN INTO THE WORKSHOP SPIRIT HOW WE ARE TRYING TO BE CONSERVATIVE IN OUR NUMBERS AND WE ARE NOT ADDING A LOT OF NEW INITIATIVES AND PERSONNEL THIS YEAR. WITH THAT, SOME OF THE GOALS THAT WE HAVE IS TO MAINTAIN THE SERVICE LEVEL SPIRIT WE ARE IN A HIGH-GROWTH ENVIRONMENT. THAT'S WHAT'S INTERESTING THAT'S GOING ON. OUR GROWTH CONTINUES. WE ARE SEEING A LOT OF BUILDING ACTIVITY COMMERCIAL AND MORE. WE WILL MAINTAIN THAT WITH THE EXISTING STAFF. WE WANT TO PROTECT NOT ONLY THE BOND WRITING BUT TO PROVIDE STABILIZATION SHOULD THIS [00:50:04] ECONOMY TAKE A DOWNTURN SHOULD WE DO THAT AND THAT IS A GOOD POSSIBILITY IN THE NEXT SIX MONTHS TO A YEAR. WE ARE ENSURING THAT OUR ASSUMPTIONS ARE CONSERVATIVE SO WE CAN REMAIN STRONG IN OUR FINANCES. WITH THAT, AS OPPOSED TO THE LAST TWO YEARS WE ARE NOT RECOMMENDING MOST OF WHAT THE DEPARTMENTS HAVE REQUESTED AS FAR AS A NEW INITIATIVE AND PERSONNEL AND PROGRAM. PRIMARILY THIS IS CAUSED BY A VIRUS AND THUS THE ENSUING ECONOMY. WHAT WE WOULD LIKE TO DO IS LOOK AT POSSIBLE MIDYEAR ADJUSTMENTS SHOULD WE GET INTO THE FIRST OF MARCH AND THINGS ARE GOING GOOD. WE MAY LOOK TO COME BACK WITH MIDYEAR ADJUSTMENTS. WE WILL ASK THE COUNCIL TO CONSIDER THOSE IF THE OUTLOOK IS MORE POSITIVE. IT COULD BE THE OPPOSITE LIKE THIS YEAR. WHEN THE COVID-19 HIT, WE COULD SAY WE ARE GOING TO HALT CERTAIN THINGS WHETHER IT IS HIRING FREEZES, POSTPONING PROJECTS OR THE MIDYEAR NUMBERS AND SEE WHERE WE NEED TO GO TO MAKE ADJUSTMENTS. WITH THAT, BASED ON OUR NUMBERS RIGHT NOW AND I WILL SHOW YOU THEM IN A MINUTE, AND FOUR OF THE REASONS WE ARE LOOKING AT OTHER ISSUES. WE HAVE A NEW ALIGNMENT WE WILL LOOK AT AND OLD FORT WORTH ROAD. JUST DRIVE IT SHOULD BE SELF-EXPLANATORY. SO WE DO HAVE AN ELEMENTARY SCHOOL THAT WILL BE BUILT AT THE CORNER. THEY HAVE TENTATIVELY SLATED THEY WANT TO OPEN AUGUST 2022. TWO YEARS FROM NOW. SO THIS WOULD BE A MAJOR EXTENSION OR CORRIDOR AROUND THE AREA. WE WANT TO TALK ABOUT THAT AND SEE IF WE CAN GET THE DESIGNS UNDERWAY IF THAT IS SOMETHING COUNCIL WANTS TO DO. ROGUE REHABILITATION TO MAINTAIN INFRASTRUCTURE, JUST LIKE THE CURRENT BUDGET YEAR WE ARE PUTTING EMPHASIS ON ROAD PROJECTS AND DOING REHAB SPIRIT OF SEEING THOSE AROUND TOWN. I THINK WE HAD EASTGATE DONE THIS WEEK. CONTINUING THAT PROGRAM TO KEEP THE ROADS IN GOOD SHAPE. CONTINUING TO INVEST IN THE STAFF. ONE THING WE DON'T WANT TO DO, WE ARE HOLDING STAFFING LEVELS CONSTANT THAT WE WANT TO MAINTAIN AND WE HAVE OPEN POSITIONS WE NEED TO RECRUIT SO WE HAVE LOOKED AT THE MARKET WHAT OTHER CITIES ARE DOING AND WHAT OUR COMPETITION IS DOING. WE WANT TO KEEP PACE WITH THEM IN THIS MARKET. ESPECIALLY IN POSITIONS THAT ARE MORE DIFFICULT TO ATTRACT. THE PROPOSED BUDGET AS IT STANDS RIGHT NOW MAINTAINS THE CURRENT TAX RATE. THAT IS BASED ON DISCUSSIONS WE HAVE HAD IN THE PAST. THIS IS TO MAINTAIN -- TRACK ONE OF THE ONLY NEW POSITIONS WE HAD, I THINK THE ONLY NEW POSITION WE HAD WAS A SCHOOL RESOURCE OFFICER. >> >> THE GOOD NEWS, PROPERTY TAX CONTINUED TO GROW. BASICALLY, A LITTLE DIFFERENT THIS YEAR. WE DON'T HAVE THE FINAL CERTIFIED VALUES BECAUSE OF THE COVID-19 AND THE DELAYS THAT WERE PUT IN. WHAT WE HAVE TO WORK WITH RIGHT NOW IS A CERTIFIED ESTIMATE. A BE A LITTLE DIFFERENT THAN WHAT YOU HAVE SEEN IN THE PAST. A CERTIFIED ESTIMATE NOT OF VALUE. WE PROBABLY WON'T HAVE THAT UNTIL THE SECOND WEEK OF AUGUST. BUT RIGHT NOW THE INCREASE, AS YOU RECALL LAST YEAR IT WAS DIFFERENT. ONE BIG CAVEAT, I WANT TO DRAW ATTENTION TO THIS, THE GOOGLE VALUES HAVE BEEN INCLUDED FOR THE FIRST TIME. THEY WERE PARTIAL VALUES BASED ON WHAT WAS ON THE GROUND JANUARY 1. THE MAIN THING IS THIS ASTRID. YOU CAN GO DOWN TO THE BOTTOM OF THE SLIDE. THE TAX ABATEMENTS HAVE NOT BEGUN. THOSE VALUES THAT ARE REPORTED THIS YEAR, WHEN THE ABATEMENT KICKS IN AND WE LOSE 80% OF THAT VALUE. THAT NUMBER, I THINK THIS IS APPROXIMATELY $260 MILLION. DO THE MATH. THEY ARE ADDING NEW STUFF OR PROJECTS. THIS IS SOMETHING WE ARE KEEPING A CLOSE EYE ON. WE HAVE IT THIS YEAR BUT WHAT DOES THAT DO NEXT YEAR. THAT IS A NEW THING THIS YEAR. SO THE ESTIMATES RIGHT NOW, A [00:55:01] LITTLE OVER $4.7 BILLION. THE TAXABLE VALUE. KEEP IN MIND WITH THE SENIOR TAX FREEZE, WE REPORT THIS FREEZE NUMBER LITTLE OVER 4.4 MILLION. SO THE DELTA IS WHAT ON THE DUTCH ART IS WHAT IS ON THE FREEZE AMOUNT. >> SO JUST LOOKING AT THE HISTORICAL PERSPECTIVE. YOU CAN SEE, OVER TIME, AGAIN WE REPORTED THE 14.34. THAT IS FOLLOWING SUCCESSFUL YEARS. THE 22% WAS WHEN WE DID THE INFLUX IN 2018 BUDGET. BUT YOU CAN SEE WE HAVE BEEN HEALTHY FOR LONG TIME. CAP TO GO BACK TO 11-12 WHEN WE WERE IN THE MIDDLE COMING OUT OF A RECESSION. >> MORE GOOD NEWS. RIGHT NOW SALES TAX REVENUE IS VERY STRONG. HOWEVER, YOU JUST HEARD IT. WE ARE CONCERNED ABOUT THE FUTURE. WE HAVE BEEN LOOKING AT OTHER CITIES AND IT IS ALL OVER THE PLACE. SOME EXPERIENCING 30% DROPS IN SALES TAX AND YOU LOOK AT SOME OF OUR NUMBERS IN THE MONTHS WHERE WE HAVE HAD 15-24% INCREASES. SO WITH THAT SAID, WHAT WE ARE DOING TO BE ON THE CONSERVATIVE SIDE IS BUDGETING AND LEAVING IT FLAT COMPARED TO WHAT WE BUDGETED LAST YEAR. THERE'S ALSO, BECAUSE OF THE UNCERTAINTY, ANOTHER CAVEAT. WE HAVE HAD SOME LARGE PAYMENTS THAT WE HAVE SEEN IN THE LAST COUPLE OF MONTHS. WE HAVE TRIED TO DO MORE RESEARCH. WE BELIEVE THE MAJORITY OF THAT WILL BE A ONE-TIME DEAL WITH CONSTRUCTION PURCHASES. WE WILL DISCOUNT THAT ALSO. SO WHILE THE NUMBERS ARE STRONG THIS YEAR END GOING UP WE MAY NOT SEE THOSE EXACT NUMBERS MOVING FORWARD. SO AGAIN, WE WILL BE ON THE CONSERVATIVE SIDE WITH THOSE PROJECTIONS GOING INTO THE BUDGET. SAME THING WITH BUILDING ACTIVITY. IT REMAINS VERY STRONG. WE ARE SEEING A LOT OF PERMITS FOR SINGLE-FAMILY RESIDENCE. HOWEVER IF YOU RECALL, WE UPPED THE BUDGET LAST YEAR IN ANTICIPATION OF LARGE COMMERCIAL ACTIVITY. SO, EVEN THOUGH WE HAVE A STRONG BUILDING ENVIRONMENT, WHEN YOU TAKE OUT THE NUMBERS YOU SEE A DECREASE IN THE BUDGET. WHEN YOU DON'T PLAN FOR THAT LARGE BUILDING PERMIT COMING IN. SO IT SEEMS KIND OF ODD, WHEN STRONG BUILDING REVENUE BUT THE BUDGET IS GOING DOWN AND THAT IS THE REASON WHY. >> SO JUST LOOKING AT THE HISTORY. WE HAVE HAD STRONG GENERAL FUND REVENUE HISTORY. DOUBLE DIGITS IN THE LAST COUPLE OF YEARS. THIS YEAR OBVIOUSLY VERY MUTED, A LOT OF THAT IS ON THE PROPERTY TAX SIDE. BUT YOU HAVE OTHER NUMBERS COMING DOWN TO OFFSET THE PROPERTY TAX NUMBERS. SO RIGHT NOW WE ARE AT 2.7% INCREASE IN GENERAL FUND REVENUE ON THIS PROPOSAL. WE HAVE IT BROKEN DOWN BY CATEGORY AND YOU CAN SEE THE WILD FLUCTUATIONS EXPLOIT 4% IN TAXES. SO AGAIN MOST OF THE PROPERTY TAX AND SALES TAX REMAINING FLAP THEN YOU GET TO THE PERMITS AND YOU SEE THIS LARGE DROP BEAR AGAIN REMEMBER WE BOOSTED THIS UP LAST YEAR'S PRETTY HIGH IN ANTICIPATION TO THE GOOGLE ACTIVITY. SO WHEN YOU PULL THAT OUT YOU SEE THIS 40% DECREASE. YOU TRY TO GET BACK TO A MORE NORMALIZED REVENUE FIGURE FROM OUR OTHER PERMANENT ACTIVITY. AND THIS IS FLAT BUT THE CHARGES FOR SERVICE THAT IS COMING DOWN, THE FINES AND FEES COMING DOWN AND WHEN YOU TALK ABOUT, AND IF YOU THINK ABOUT THIS IT IS EVEN BECAUSE GOOGLE'S VALUE IS HERE. SO YOU GET A LARGE SPIKE BUT IT CAN COME BACK OUT NEXT YEAR. YOU CAN SEE IT REFLECTED IN THE INCOME FIGURE. AS FAR AS THE EXPENDITURES. WE ARE LOOKING AT A PRETTY FLAT EXPENDITURE BUDGET AND THE 1.3%. YOU CAN SEE WE HAVE DOUBLE-DIGIT INCREASES FOR MOST OF THE LAST 4-5 YEARS BUT WE ARE HOLDING THE LINE AS BEST WE CAN AND PULLING BACK A LOT. WE ARE FOCUSING ON EXPENDITURES AND FOCUSING ON ONE-TIME THINGS LIKE STREET REHAB THAT CAN EASILY BE THROTTLED BACK IF [01:00:02] THINGS REALLY GO SOUTH IN THE ECONOMY. >> AGAIN, BREAKING THIS DOWN BY DIFFERENT CATEGORIES. YOU SEE PERSONNEL A 3.8%. CONTRACTS GOING DOWN. SUPPLIES GOING DOWN. THE DEBT WHICH IS OUR CAPITAL LEASE. WE DON'T HAVE LONG-TERM DEBT AND THE NUMBER SPIRIT YOU'RE LOOKING AT THE CAPITAL LEASES FOR COMPUTER EQUIPMENT AND COPY EQUIPMENT AND THINGS LIKE THAT. THE CAPITAL LINES, THIS IS WHERE, THIS IS WHERE THE STREET REHAB MONEY IS BACK SO WE HAVE A LARGE AMOUNT LAST YEAR I WOULD SAY IT WAS ROUGHLY 26 OR 3.7 MILLION. WE ARE ABOUT 2.6 THIS YEAR. SO WE HAVE PULLED THAT BACK. THEN YOU HAVE YOUR OTHER CATEGORIES WHICH ARE FUEL AND ELECTRICITY AND THOSE KIND OF THINGS. AND THEN TRANSFERS. WE HAD THIS TRANSFER IN-AND-OUT SO THAT NUMBER, BECAUSE OF THE VALUE, A BIG TRANSFER OUT AND A LARGE WORK TRANSFER COMING BACK IN FOR THE AMOUNT OVER THE CAP. THE AGREEMENT. >> TRYING TO GET INTO SPECIFIC PROGRAMS THIS LIST WILL BE SHORTER THAN USUAL. THIS IS WHERE WE USUALLY.OUT THE STUFF AND YOU WILL SEE THE LIST IS A LOT SHORTER. SO AGAIN, ROAD REHAB $2.6 MILLION. WE HAVE THOSE STREETS IDENTIFIED AND WE WILL TALK ABOUT THOSE AS WE GO THROUGH THE BUDGET WORKSHOP. WE ARE ALSO REPLACED A DUMP TRUCK. THERE WAS A PROGRAM GOING THROUGH THE STATE FOR GRANT. THE COUNCIL PROVE THAT WE WENT FOR THAT SO THIS IS WHAT WE ARE LOOKING FOR, THE MATCHING FUNDS SO WE DON'T HAVE TO BUY THE FULL AMOUNT JUST A PARTIAL. >> I MENTIONED THE STAFF WAS PROPOSING EIGHT 3% INCREASE. IF YOU REMEMBER THIS IS NOT IN ALIGNMENT WITH THE STEP PLANS. SO WE ARE LOOKING TO INSTEAD OF BUMPING EVERYONE UP A STEP IS TO MOVE THE ENTIRE PLANT. SO THIS KEEPS THEM ON THEIR STEPS, BUT YOU CAN MOVE THE WHOLE PLANT, IT INCREASES OUR STARTING SALARIES FOR FIRST RESPONDERS. SO WE WILL BE A LITTLE MORE COMPETITIVE IN THE MARKET WITH THOSE SALARIES. THE OTHER THING WE WANT TO DO IS MAINTAIN BENEFITS. OUR OTHER BENEFITS OTHER THAN STAYING COMPETITIVE WITH THE CITIES WE ARE COMPETING AGAINST. PUBLIC SAFETY. WE ARE MAKING ENHANCEMENTS. WE WHEN WE PUT THIS IN THE BUDGET LAST YEAR WE WENT OUT FOR A SPECIALIST IN WE TALKED ABOUT COUNCIL AND WE WANT TO UPGRADE THIS SO WE ARE ASKING FOR THAT IN THIS YEAR'S BUDGET. THE INVESTIGATION THE LEASE PROGRAM. THE FIRE DEPARTMENT, WE PUT IN A NEW ALERT SYSTEM WE WANT TO PUT IT IN NUMBERS TWO AND THREE AND ALSO DOING REPLACEMENTS PROGRAMS. THEN IN THE DISPATCHING, WE WANT TO INSTITUTE THE EMERGENCY MEDICAL DISPATCH. IN ORDER TO DO THAT WITH A SOFT WHERE PROGRAM THAT WOULD ENABLE THEM TO INITIATE AND ADMINISTER EMERGENCY MEDICAL DISPATCH. IN OUR PARKS PROGRAM, OF COURSE WE ARE -- WE ARE GETTING AREAS WHERE WE ARE LOOKING TO ENHANCE THE ROUGH CUT AND THE FINE CUT, REPLACING SHADE STRUCTURES AND RESURFACING THE TENNIS COURTS AND LOOKING TO ADD SAND AT THE VOLLEYBALL COURT. IT, CONTINUE WITH OUR SWITCH REPLACEMENT PROGRAM AND DOING AN EXPANSION FOR THE POLICE DEPARTMENT. THEN AS WE LOOK AT THE UTILITY FUND. IT REMAINS VERY HEALTHY WITH THE GROWTH. YOU CAN SEE THE PROJECTED REVENUES ARE OVER 15%. AGAIN AS WE CONTINUE TO GROW ADDING BIG USERS WE ARE SEEING THE REVENUE GROWTH. WE ALSO SEEM REVENUE PICKUP FROM OTHERS. AS THEY PULL MORE WATER THROUGH THE CONTRACT SALE SPIRIT WATER, THIS IS JUST, THE WATER ADD 6% INCREASE OVER WHAT WE ARE PROPOSING THIS YEAR. THE SALES JUST UNDER 5% INCREASE IN THE SEWER RELATED REVENUE [01:05:08] OVER LAST YEAR. >> OUR EXPENDITURES, SO WE SEE THIS DECREASE THE REASON FOR THAT, IF YOU REMEMBER WE CASH FUNDED THE CURRENT WATER TREATMENT PLANT. SO THAT MONEY IS COMING OFF. THOUGH THAT IS WHY YOU ARE SEEING THE BIG DECREASE IN THAT EXPENDITURE BUDGET BECAUSE WE WERE ABLE TO CASH BOND THE CURRENT EXPANSION. SO SOME OF THE PRIORITIES, THE FIRST TO OUR NORMAL CAPITAL DISTRIBUTION COLLECTION SERVICES. YOU SEE THESE PROJECTS ALL OVER TOWN ESPECIALLY AS WE REPLACE OLD WATER LINES AND SEWER LINES. WE WANT TO CONTINUE THAT AND IDENTIFY OLD INFRASTRUCTURE THAT NEEDS TO BE REPLACED. AN ASSESSMENT REPAIR, WE KNOW WE HAVE INFILTRATION ISSUES AROUND TOWN. WE SEE IT WHEN WE HAVE BIG RAINS. WE WANT TO IDENTIFY THOSE, CONTINUE TO IDENTIFY THOSE AND COMPARE THOSE AND THAT WILL CUT DOWN ON TREATMENT COSTS AND CUT DOWN EXPANSIONS OF THE WASTEWATER PLANT. WE DON'T WANT TO JUST KEEP TREATING WASTEWATER. SLUDGE DEWATERING. THIS IS WHERE YOU TAKE THE SLUDGE OFF OF THE BOTTOM AND YOU DRY IT. THEN YOU HAUL IT OFF. WE HAVE TO DO A RISK AND RESILIENT ASSESSMENT. ALSO, WE ARE LOOKING TO DESIGN OUR NEXT EXPANSION UP TO 22 MILLION GALLONS. SO WE WANT TO CASH BOND THAT INSTEAD OF WHAT MAY BE A DEAD ISSUE. I DON'T THINK WE WILL BE ABLE TO CASH BOND THE EXPANSION BUT WE WILL DEAL WITH THAT ONCE THE DESIGN IS DONE. AND THE TRASH PUMP. THESE ARE REQUESTS OVER 50,000. SO JUST TO RECAP THAT. OUR PROPOSAL HAS TO MAINTAIN THE RATE OF 68 AND HAVE. MAINTAINING THE FUND BALANCES AND OUR EXISTING STAFF LEVELS AND TAKING A VERY CONSERVATIVE APPROACH DUE TO THE UNCERTAINTY OF THE ECONOMY. PLAN FOR THE MIDYEAR ADJUSTMENTS. THAT IS ONCE WE TAKE A LOOK AT THE OUTLOOK AT THAT TIME. AND THE EMPHASIS ON THE ROAD IMPROVEMENT. >>> WITH THAT, TONIGHT IS OUR PRESENTATION. WE HAVE A WORKSHOP THIS FRIDAY. IT IS PLANNED FOR ALL DAY 8:30 A.M. UNTIL 5:00 P.M. WE HAVE ANOTHER ONE NEXT TUESDAY AT 6:00 P.M. THEN THE FOLLOWING FRIDAY WE WANT TO HAVE THE SECOND ALL-DAY WORKSHOP. IN THE PAST SEVERAL YEARS THAT HAS BEEN ENOUGH. WE HAVE BEEN ABLE TO DO IT FROM THERE BUT WE DO HAVE OTHER WORKSHOPS IF NEEDED SCHEDULED FOR THE 14TH AND 15TH OF AUGUST. THEN WE HAVE THE REQUIRED PUBLICATIONS ET CETERA. THAT HAS CHANGED WITH SENATE BILL TWO. SO, THEY DON'T REQUIRES MANY PUBLIC HEARINGS BELIEVE IT OR NOT. WHICH SEEMS ODD. SO WE ACTUALLY HAVE LESS PUBLIC HEARINGS ON THE BUDGET THAN WE DID UNDER THE OLD METHODOLOGY. BUT THAT IS JUST A SNAPSHOT OF WHAT THE NEXT FEW WEEKS AND MONTHS WILL LOOK LIKE IN ORDER TO GET TO A FINAL VOTE ON THE BUDGET IN SEPTEMBER. WITH THAT I WOULD APPRECIATE COUNSEL AND LOOK FORWARD TO A FUN BUDGET PROCESS. >> ANY QUESTIONS OR COMMENTS WERE CRISPIER. >> THANK YOU VERY MUCH CRISPIER FOR THE PRESENTATION. [2020-243] >> GO TO PUBLIC HEARING SPIRIT OPEN ITEM 22 ANY -- 243 CONDUCT A PUBLIC HEARING AND CONSIDER AND ACT UPON AN ORDINANCE AMENDING THE DEVELOPMENT AND USE REGULATIONS OR PLANNED DEVELOPMENT DISTRICT NUMBER 113 TO PROVIDE FOR ADOPTION OF A SIGNED PLANT COMMONLY KNOWN AS 1201 EAST HIGHWAY 287. TO ALLOW FOR ADDITIONAL SIGNAGE AND RESTATE THE PLAN DEVELOPMENT REGULATIONS. >> THANK YOU. THE SUBJECT PROPERTY, CONSISTS OF RIGHT NOW A PROFESSIONAL OFFICE BUILDING AND HOSPITAL AND, THERE ARE CERTAIN AREAS FOR FUTURE DEVELOPMENT. THE PROPOSAL IS TO ADOPT A SIGNED PLAN. THIS IS CONSISTENT WITH OTHER HOSPITALS IN THE DFW AREA AND IT IS GEARED TOWARDS, ALLOWING FOR [01:10:09] A MORE DIRECTIONAL AWARENESS, TO BETTER INFORM PATIENTS WHEN THEY ARE COMING IN WHERE CERTAIN AREAS ARE IN THE HOSPITAL DUE TO IT BEING A LARGE CAMPUS. THE SIGNAGE IS DESIGNED AROUND EMERGENCY PURPOSES. THEY DO HAVE OTHER SIGNS CONSISTENT WITH EACH OTHER. WE HAVE SEEN, I AM SEEING OTHER DEVELOPMENTS WHERE THERE IS A THEME GOING ON. THE PROPOSED LINES ARE CONSISTENT WITH ONE ANOTHER. THEY DO CONSIST OF STONE AND BRICK AND OTHER MATERIAL. ON TWO SIDES. AND WITH THE EDGES ON THE OUTER SIDES. THEY HAVE VERY DIRECTIONAL SIGNS AS I STATED MADE UP OF THESE PANEL SIGNS. THEY ARE UNDERGROUND AS WELL AS THE SMALL SIZE. THIS GIVES ADDITIONAL DIRECTION. THEY DO RECOMMEND APPROVAL OF THE SIGNED PLANT THIS IS WITH THE SPIRIT WHEN WE CREATED THE ZONING ORDINANCE. THE PURPOSE IS IT ISN'T NECESSARILY TO GET PEOPLE TO COME TO THE FACILITIES BUT TO DIRECT PEOPLE ONCE THEY ARE AT THE FACILITY SPIRIT I CAN ANSWER ANY QUESTIONS AT THIS TIME. I MAKE A MOTION TO CLOSE THE PUBLIC HEARING. >> I SECOND PERIOD. >> MOTION TO CLOSE THE PUBLIC HEARING. >> THE ITEM PASS A 6-0. COUNSEL. >> DISCUSSION OF QUESTIONS? >> I WILL MAKE A MOTION TO APPROVE. >> OUR SECOND. >> THAT WAS QUICK. >> MOTION TO APPROVE AS PRESENTED AND A SECOND PERIOD THE ITEM PASSES 6-0. OPEN ITEM 2020 -- 244. [2020-244] CONDUCT A PUBLIC HEARING AND CONSIDER AND ACT UPON AN ORDINANCE AMENDING THE CITY OF MIDLOTHIAN'S ZONING ORDINANCE AND MAP BY ASSUMPTION THE INITIAL ZONING CLASSIFICATION AS ARCHITECTURAL FOR PROPERTY THAT IS APPROXIMATELY 18 FOR 45 ACRES OUT OF WILLIAM MORGAN SURVEY. >> THIS IS IN THE CITY LIMITS BEAR WHEN A PIECE OF PROPERTY IS ANNEXED IN THE CITY, IT COMES IN WITH A TEMPORARY DESIGNATION UNTIL A PERMANENT DESIGNATION IS ADOPTED BY CITY COUNCIL. IN ADDITION TO THIS, THEY THE -- THE CITY IS REQUESTING TO REZONE THE PROPERTY TO AGRICULTURAL DISTRICT. THE PROPERTY IS APPROXIMATELY 1S RECOMMEND APPROVAL AND I CAN ANSWER ANY QUESTIONS AT THIS TIME. >> I MAKE A MOTION TO CLOSE THE PUBLIC HEARING. >> A MOTION TO CLOSE THE PUBLIC HEARING, A SECOND? PLEASE VOTE. >> CLOSE 6-0. QUESTIONS OR COMMENTS? MOTION TO APPROVE. >> A SECOND PERIOD THE ITEM PASSES 6-0. [2020-245] >> OPEN ITEM 2020245. CONDUCT A PUBLIC HEARING AND CONSIDER AND ACT UPON AN ORDINANCE AMENDING THE CITY OF MIDLOTHIAN'S ZONING ORDINANCE AND A MAP ESTABLISHING THE INITIAL ZONING CLASSIFICATION AS SINGLE-FAMILY ONE DISTRICT FOR PROPERTY THAT IS APPROXIMATELY 2.338 ACRES OUT OF THE SURVEY. >> JUST LIKE 2020 THIS CAME INTO THE CITY THROUGH VOLUNTARY ANNEXATION. WE ARE REQUESTING THAT THE ZONING BE CHANGED FROM A TEMPORARY DISTRICT TO A SINGLE-FAMILY ONE DISTRICT. THE MINIMUM LOT SIZE FOR THIS PROPERTY IS APPROXIMATELY TWO-POINT 38 ACRES IN SIZE. IN ORDER TO AVOID THIS BEING CONSIDERED A LEGAL FORMING LOT BECAUSE IT DOES NOT MEET OUR AGRICULTURAL REQUIREMENTS. THAT IS THE REASON STAFF IS RECOMMENDING SINGLE-FAMILY ONE DISTRICT. THERE ARE VARIOUS PROPERTIES SURROUNDING THIS THAT HAVE SIMILAR ZONING. AND, STAFF DOES RECOMMEND APPROVAL OF THE REQUEST THEY CAME BACK AND FAVORED 0 CAME BACK IN OPPOSITION. I CAN ANSWER ANY QUESTIONS AT THIS TIME. [01:15:07] MOTION TO CLOSE THE PUBLIC HEARING. >> MOTION TO CLOSE PUBLIC HEARING. >> IT PASSES 6-0. COMMENTS OR QUESTIONS? >> I SECOND PERIOD MOVED TO APPROVE AND A SECOND PERIOD. >> PLEASE VOTE. [2020-246] >> THE ITEM PASSES 6-0. >> OPEN ITEM 2020 -- 246. CONDUCT A PUBLIC HEARING AND CONSIDER AND ACT UPON AN ORDINANCE AMENDING THE CITY OF MIDLOTHIAN'S ZONING ORDINANCE AND MAP BY ASSUMPTION THE INITIALS ON THE CLASSIFICATION SAME PROPERTY. >> THIS PROPERTY IS LOCATED DIRECTLY ACROSS THE STREET FROM OUR LAST CASE THAT WE HEARD. THEY ARE REQUESTING TO CHANGE ZONING FROM TEMPORARY TO SINGLE-FAMILY ONE DISTRICT. THE SIZE OF THE LOT IS APPROXIMATELY 2.502 ACRES IN SIZE. FOR THE SAME REASON WE ARE PROPOSING A CHANGE IT DOESN'T MEET THE MINIMUM LOT SIZE FOR THE AGRICULTURAL DISTRICT. THERE ARE SIMILAR PROPERTIES IN THE AREA THAT ARE ZONED SIMILARLY TO SINGLE-FAMILY ONE DISTRICT BUT THERE'S ALSO PROPERTY ZONED FOR AGRICULTURAL DISTRICTS. WE DID RECOMMEND APPROVAL OF THIS WAY BEFORE THE COMMISSION. STAFF DID RECEIVE ONE LETTER IN OPPOSITION TO THE PROPOSED REQUEST. THE LETTER IN OPPOSITION, THEY DID HAVE CONCERN ABOUT POSSIBLE DRAINAGE ON THE SITE. DUE TO THE MAJORITY OF THE PROPERTY BEING LOCATED IN THE FLOOD PLANE THAT IS PART OF THE DEVELOPMENT PROCESS. AND THEY WILL BE REQUIRED TO GO THROUGH THE CIVIL ENGINEERING PROCESS THAT WILL HELP DICTATE WHERE THE WATER FLOWS. DUE TO THIS STAFF DOES RECOMMEND APPROVAL I CAN ANSWER ANY ANY QUESTIONS AT THIS TIME. >> I JUST WANT TO CONFIRM, THIS DOESN'T QUITE LIVE UP TO PICK IT DOESN'T BUT UP TO IT, HOWEVER THE PROPERTY WE DID RECEIVING OPPOSITION WAS BUT IT DIDN'T TRIGGER ANY MAJORITY VOTE. >> A MOTION TO CLOSE PUBLIC HEARING. >> MOTION TO CLOSE PUBLIC HEARING IN A SECOND PERIOD PLEASE VOTE. THE HEARING IS CLOSED, 6-0. I MAKE A MOTION TO APPROVE. MOTION APPROVED AND A SECOND PERIOD. >>> ITEM PASSES 6-0. >> THANK YOU. >>> CONSIDER -- ITEM 2020 -- 247. [2020-247] CONSIDER AND ACT UPON AWARDING A TWO-YEAR CONTRACT WITH THREE, ONE-YEAR EXTENSIONS OPTIONS TO NEMA 3 ELECTRIC COMPANY. ADAM. >> I AM THE PUBLIC WORKS DIRECTOR. TONIGHT WE WANT TO CONSIDER AND ACT UPON AWARDING A TWO-YEAR CONTRACT WITH NEMA 3 ELECTRIC AND HARGROVE ELECTRIC COMPANY. NEMA 3 HAS BEEN SERVING FOR FIVE YEARS AND THEY DO A GREAT JOB. HARGROVE, IS A LOW BIDDER. WE DID REFERENCE CHECKS AND WE FEEL COMFORTABLE WITH MOVING FORWARD WITH HIM UPON YOUR APPROVAL. THERE WAS SOME COMPETITIVE PRICING. OUR BIDS, WE RECEIVED FOR BIDS. THIS IS A COMMON IT IS A BUDGETED ITEM. THE CONTRACT WILL BE TWO YEARS WITH THREE, ONE-YEAR EXTENSIONS IF NEEDED. ANY QUESTIONS. >> I MAKE A MOTION TO APPROVE. >> THE MOTION TO APPROVE AS PRESENTED. >> THE ITEM PASSES 6-0. >> THANK YOU. CONSIDER ITEM 2020 -- 248. [2020-248] CONSIDER AND ACT UPON A RESOLUTION OF THE CITY OF MIDLOTHIAN HOFFMAN ---TEXAS AUTHORIZING TEXAS COALITION FOR PORTABLE POWER TO PROCURE ELECTRICITY FOR THE. ON AND AFTER JANUARY 1-, 2,023. >> GOOD EVENING. WE HAD AN AGREEMENT WITH TCAP, TEXAS COALITION FOR PORTABLE POWER FOR A NUMBER OF YEARS. THEY STARTED IN THE EARLY 2,000'S AND THEY -- THERE IS A COOPERATIVE GROUP OF CITIES. WE GO OUT AND WE, COMBINED OUR LOAD AND GO OUT AND DO OUR MULTI- YEAR ELECTRICAL CONTRACTS. [01:20:01] THIS GROUP HAS COME TOGETHER AND LOOKED AT AN ALTERNATE METHOD FOR PROCURING THE ENERGY. THAT IS A LITTLE DIFFERENT THAN DOING THE FIXED RATE CONTRACT FOR A NUMBER OF YEARS. THIS ONE IS CALLED A STRATEGIC HEDGING PROGRAM. EXCUSE ME. ALLERGIES ARE BAD. >> STRATEGIC HEDGING PROGRAM WHERE THEY WILL GO IN PERIODICALLY AND LOOK FOR THE BEST RATE. OUR CURRENT CONTRACT EXPIRES ON DECEMBER 2022, SO WE HAVE TO START LOOKING AT THAT AHEAD OF TIME SO WE HAVE TIME FOR US TO GET RATES ESTABLISH THAT WE CAN USE FOR BUDGETING. SO TCAP HAS COME UP WITH A NEW PROGRAM AND THIS SHOULD ELIMINATE TIMING THE MARKET TO GET THE BEST PRICE WHERE WE HAVE HAD TO DO IN THE PAST. IT'S LIKE THROWING A DART AT A WALL AND HOPE WE HIT IT. SOME YEARS WE HAVE DONE WELL AND SOME YEARS NOT AS WELL. BUT ALWAYS BETTER THAN IF WE HAD GONE OUT ON OUR OWN. I DIDN'T WANT TO INTRODUCE, I HAVE A SUMMARY HERE. SHE HAS AN ACTUAL PRESENTATION SHE WANTS TO GO THROUGH. WE DO NEED TO IGNORE -- WE ARE NOT ASKING FOR MEMBERS ARE PRIVATIZATION FORMS TO BE FILLED OUT. WE ARE ASKING FOR TONIGHT, WHETHER OR NOT, THEY WILL ALLOW THIS AS ANOTHER OPTION TO LOOK FOR ELECTRIC RATES AND IN ADDITION TO LOOKING FOR A FIXED PRICE. IT GIVES US MORE OPTIONS. BUT IF MARGARET CAN GO THROUGH THAT. IF YOU CAN ANSWER ANY QUESTIONS YOU MIGHT HAVE. >> MAYOR AND CITY COUNCIL. THANK YOU FOR TAKING THE TIME TO LISTEN TO THE PRESENTATION. I WILL QUICKLY GO THROUGH THIS. I WILL QUICKLY, FOR THOSE OF YOU WHO ARE NOT AS FAMILIAR WITH TCAP, WE HAVE 160 MEMBERS IN THE DEREGULATED AREAS OF TEXAS. MOST MEMBERS ARE IN THE NORTH TEXAS AREA. ACTUALLY, IT STARTED AS THE CITY'S AGGREGATION POWER PROJECT BACK IN 2002. IT WAS FORMED WITH 82 CITIES, MAINLY IN NORTH TEXAS. THERE WAS A SOUTH TEXAS GROUP AS WELL THAT WAS MOSTLY THE VALLEY. BACK IN 2011 WE USE THE SAME CONSULTANTS AND GENERAL COUNSEL AND SAME WAY OF DOING THINGS, THE TWO GROUPS MERGED IN 2011 AND WE BECAME TCAP. WE DO HAVE 815 MEMBER BOARD MADE UP OF CITY OFFICIALS AND ELECTED OFFICIALS AND THOSE ARE THE CITIES REPRESENTED ON THE BOARD RIGHT NOW. WE DO HAVE THE MAYOR OF MCALLEN ANNA COUNCILMEMBER FROM THE CITY OF BISHOP. WE HAVE FINANCE DIRECTORS, CITY MANAGERS AND CITY ATTORNEYS THAT MAKE UP THE BOARD. WE DO HAVE ELECTIONS EVERY YEAR. HALF OF THE BOARD IS UP EVERY YEAR FOR A TWO-YEAR TERM. SO IF ANYONE IS FROM MIDLOTHIAN WE HAVE ELECTIONS AGAIN IN NOVEMBER. SO WHY TCAP, WE ARE NONPROFIT AND NOT TRYING TO MAKE MONEY OFF OF THE CITY. WE WANT TO GET THE LOWEST RATES PROPERTIES TO SAVE YOU MONEY. WHAT WE FOUND OUT, WAS WHEN YOU GO TO THE MARKET, THE ENERGY PROVIDERS WANT TO KNOW WHAT YOUR LOAD IS. THE MORE FAVORABLE YOUR LOAD THE MORE FAVORABLE YOUR PRICES. SO WHAT YOU CAN SEE IN THE REDLINE IS THIS VOTE. AS YOU CAN SEE THE PRICE, IT PEAKS LATE IN THE DAY AROUND 4:00 P.M. WHEN PEOPLE COME HOME AND TURN THEIR AIR CONDITIONING ON AND THAT IS WHEN YOU HEAR ABOUT POTENTIAL BLACKOUTS AT THE END OF THE DAY. THE TCAP IS THE BLUE LINE. WE ARE DIFFERENT. CITIES SHUT THE BUILDINGS DOWN AT 5:00 P.M. AND RETURN ON PUMP STATIONS OVERNIGHT. THE NICE THING ABOUT THIS LOAD IS THE PRICES TEND TO FOLLOW THE RED LINE. SO WHEN WE GO OUT TO THE MARKET AND WE SHOWED THEM THIS LOAD, THE MARKET KNOWS THEY CAN BUY ENERGY IN THE OFF-PEAK HOURS TO KEEP PROFITS LOWER. -- TO KEEP THE USE LOWER. >> I KNOW YOU ARE THINKING, WHY ARE WE HERE. LET ME TELL YOU WHY WE ARE HERE. [01:25:01] WE HAVE A NEW PROCUREMENT OPTION. IT IS TO HELP SAVE MORE MONEY THAN YOU HAVE SAVE RIGHT NOW. I WILL GO THROUGH IT QUICKLY AND TELL YOU WHY WE ARE COMING AND WHY THIS OPTION EXISTS AND WHY DIDN'T EXIST BEFORE. REALLY QUICK, DEPARTMENT OF ENERGY HAS MADE THESE PREDICTIONS. YOU CAN SEE, WE HAVE A POSITIVE SUPPLY AND IF YOU KEEP UP WITH ANY OF THE OIL, WEST TEXAS, A LOT OF THAT HAS STOPPED PUMPING BECAUSE THE PRICES IS BELOW $50. BARREL OUT THERE. SO WE HAVE SO MUCH OIL IN TEXAS AND IN THE UNITED STATES AND NATURAL GAS WE DON'T KNOW WHAT TO DO WITH IT. WE HAVE BECOME THE LEADING EXPORTERS AND OIL AND NATURAL GAS. BECAUSE WE HAVE SO MUCH OF IT IS KEEPING THE PRICES LOW. BECAUSE THE PRICES ARE LOW, WE ARE PREDICTING ABUNDANT SUPPLIES AND THE ENERGY MARKETS WILL REMAIN STABLE. JUST WEARILY QUICKLY THERE WAS SOME VOLATILITY OVER THE LAST TWO YEARS IF YOU HEARD ABOUT PRICE SPIKES LAST SUMMER. THE REASON WAS THREE PLANTS WENT OFF-LINE. THEY SAID THEY WERE GOING TO GO BLIND BUT EVERYONE THOUGHT THEY HAD MORE TIME. THEY WENT OFF-LINE WITHIN THREE MONTHS AND THERE WAS NO ENERGY GENERATION BEHIND THAT TO FILL THE GAP. SO THAT IS WHAT WE SAW LAST SUMMER. BUT IT IS GETTING BACK TO NORMAL AND ERCOT IS DOING WELL. THIS IS THE CRUX OF IT. THIS ONE SLIDE. WHAT HAPPENS IS, THE ENERGY MARKETS, THE GENERATORS, THEY REACT TO THE MARKET. SO YOU CAN SEE, IF WE WERE GOING OUT FOR A PRICE FOR NEXT YEAR, 2021 IT WOULD BE HIGH BECAUSE THEY ARE REACTING TO WHAT IS GOING ON RIGHT NOW. RIGHT NOW COVID-19 IS GOING ON SO WE DON'T KNOW WHAT WE WE WILL DO. WE WILL MAKE IT HIGH, AND MAKE SURE WE RECOUP ALL OF OUR COSTS. THEN YOU SEE AS IT GOES OUT TWO YEARS IT GETS LOWER. IT IS THE TWO-YEAR GAP OR THE TWO-YEAR DIP AND WE HAVE SEEN THIS GOING BACK TO 16. IF YOU CHANGE THE NUMBERS AT THE BOTTOM AND IT SAYS 2016-2017 THE CURB IS STILL THERE. THEN YOU SEE PRICES GOING HIGHER. THE MARKET DOES NOT KNOW WHAT WILL HAPPEN SO THEY ADD PRICE PREMIUMS. THEY WANT TO COVER THEIR COSTS WHEN THEY BUY ELECTRICITY IN THE OUT YEARS. SO WHAT HAPPENS IS, WHEN YOU GET A FIVE-YEAR FIXED CONTRACT OR YOU WANT TO GO OUT 7-8 YEARS, YOU ARE ACTUALLY TAKING ALL OF THE PRICES AND YOU ARE AVERAGING THEM INTO ONE PRICE FOR THE TERM OF THE CONTRACT. THAT IS HOW THE PRICE GETS FIXED. SO YOU CAN SEE, LET'S SEE WE WERE DOING A FIVE-YEAR CONTRACT. YOU WOULD TAKE THE PRICE AND YOU WOULD ADD THEM ALTOGETHER TO AVERAGE IT. THAT WOULD BE YOUR PRICE. YOU CAN SEE YOU HAVE HIGHER PRICES AND THE OUT YEARS BECAUSE THEY ADDED THE RISK PREMIUM SPIRIT THAT IS BECAUSE THEY DO NOT KNOW WHAT THE MARKET WILL DO. SO WHAT WE ARE RECOMMENDING AND WHAT WE ARE BRINGING TO THE MEMBERS IS WE BY ONE-YEAR CONTRACTS, TWO YEARS IN ADVANCE WE ALWAYS DO THAT IN THIS DIPSTICK WHAT THAT DOES, IT GETS THE PRICE PREMIUMS OUT OF YOUR CONTRACT. YOU ARE NOT PAYING FOR THEM AND IT KEEPS PRICES LOW. IT ALSO ALLOWS US TO STAY IN THE MARKET AND BE FLEXIBLE. ONE OF THE THINGS THAT HAPPENED, WAS ENERGY PRICES FELL. THE BOTTOM FELL OUT. IT FELL OUT OF ELECTRICITY PRICES. WE WERE IN A FIXED CONTRACT AND COULD NOT TAKE ADVANTAGE OF IT. BUYING WHEN YOU'RE AT A TIME WE CAN TAKE ADVANTAGE OF ANY CHANGES IN THE MARKET. THE FLIPSIDE IS IF FOR SOME REASON, A CITY SAYS THIS IS NOT WORKING FOR US ANYMORE OR WE SEE PRICES ARE NOT GOING ANYWHERE BUT UP HERE THIS PATTERN DISAPPEARS, WE WILL COME BACK TO YOU. WE WILL NOT ALLOW PRICES TO GET SO OUT OF BLIND THAT YOU ARE PAYING HIGHER PRICES THAN YOU SHOULD. THERE IS FLEXIBILITY BUILT INTO THIS. THE OTHER THING IT DOES IS IT IS LIKE THROWING A DART TO FIND THE LOWEST PRICE. PRICES CHANGE DAILY. THERE IS NODICTION. IT COULD BE UP ONE DAY AND LOWERED THE NEXT DAY. YOU THINK THIS IS AS LOW AS IT WILL GET ANY GOALS LOWER. THE BLUE LINES REPRESENT, THE [01:30:03] VARIETY OF PRICES OVER A YEAR. YOU CAN SEE IN 2011, THE PRICES WERE ALL OVER THE PLACE. BUT IF YOU LOOK AT THE AVERAGE, YOU CAN SEE IT IS A STRAIGHT LINE. THIS WILL TAKE ADVANTAGE OF THE STRAIGHT LINE THERE. THE AVERAGE PRICE. WHAT WE WILL DO, WE WILL GO TO THE MARKET EVERY MONTH. WE WILL BUY ONE 12TH OF THE LOAD. AT THE END OF THE YEAR WE WILL AVERAGE THE PRICES TOGETHER, COME BACK TO THE CITIES IN MARCH AND TELL YOU THE PRICE FOR THE FOLLOWING CALENDAR YEAR. YOU WILL ALWAYS KNOW YOUR PRICE BEFORE YOU START BUDGET SEASON. WE ARE ALSO GOING TO GO OUT TO FOR SUPPLIERS. THAT WILL HELP KEEP THE PRICES LOW AS THEY BID AGAINST EACH OTHER AND TRUST ME, PEOPLE WANT OUR BUSINESS BECAUSE WE ARE SO LARGE AND WE ARE CITIES AND BECAUSE WE DO HAVE SUCH A FAVORABLE PROFILE. SO REALLY QUICKLY, THIS IS THE TIMELINE. WHAT WE NEED TO KNOW, BY SEPTEMBER WE NEED TO KNOW HOW MANY MEMBERS ARE IN AND WANT TO DO THIS SO WE CAN GET EVERYTHING TOGETHER. WE WILL START PURCHASING ELECTRICITY FOR THE 2023 YEAR IN JANUARY. AGAIN, WE HAVE TO BUY TWO YEARS OUT TO DO THAT. SO, WE WILL DO THAT THROUGH 2021. SO WE WILL HAVE THE 2023 CONTRACTOR IN 22 WE WILL BUY FOR THE 22 -- 2024. IF FOR SOME REASON THE CITY DOESN'T FEEL COMFORTABLE AND THEY DON'T THINK IT IS WHAT THEY SHOULD THERE ARE OPPORTUNITIES IN JUNE AND DECEMBER FOR YOU TO COME BACK AND SAY WE WANT A FIXED CONTRACT. WE CAN DO THAT. SO YOU ARE REALLY ONLY IN THIS CONTRACT ABOUT A YEAR END A HALF TO TWO YEARS. SO IT GIVES THE CITY MORE FLEXIBILITY. WE WENT BACK LIKE I SAID, THE CHART WAS THERE. IT HAS BEEN THERE. THE YIELD CURVE HAS BEEN THERE SINCE 2016. SINCE WE HAVE PRICES FOR THIS WE WENT BACK AND BUILT THE SYSTEM BACK TO 2016 AND LEARNED WHAT WOULD THE SAVINGS HAVE BEEN IF WE DID THIS SINCE 2016. THIS IS WHAT WE FOUND. THE GREENLINE IS YOUR CURRENT RATE WHICH IS THE .6 CENTS. THE RED LINES ARE WHAT THE RATES WOULD HAVE BEEN HAD WE DONE STRATEGIC HEDGING. THOSE AVERAGE ABOUT 13 UP TO $23,000 IN ADDITIONAL SAVINGS FOR THE CITY OF MIDLOTHIAN OVER THE SAME YEARS. AGAIN, IT IS TAKING ADVANTAGE OF TRYING TO FIGURE OUT WHEN THE BEST TIME IN THE MARKET IS. IT IS A LOT MORE FLEXIBLE. WE WILL GET TO TAKE ADVANTAGE OF THE PRICES DROP. IT AVOIDS CARRYING CHARGES FOR RISK PREMIUMS THAT ARE BUILT INTO LONG-TERM CONTRACTS. SO PAIRED THAT IS MY PRESENTATION. I'M SURE THERE ARE QUESTIONS. I HAVE QUESTIONS. >> I'M NOT SURE HOW TO ASK THIS SO BEAR WITH ME. ARE WE COMMITTED TO BUY THROUGH YOU? BECAUSE AUNT SAID YOU ARE ANOTHER OPTION. I WASN'T SURE HOW YOU MEANT THE WORD OPTION. YOU ARE COMMITTED TO TRY -- TCAP THROUGH 2022. CANCEL IF WE APPROVE THIS WE ARE COMMITTED THROUGH 2023? SAID NO THROUGH 2028. BECAUSE WE WILL DO ANOTHER FIVE YEARS, ONE YEAR AT A TIME. OKAY. BUT YOU SAID THAT IT WOULD BE ANOTHER OPTION. >> WHAT I MEANT, I MAY HAVE MISUNDERSTOOD. ANOTHER OPTION FOR US ON HOW TO PROCURE THE LOAD AS A GROUP. SO WE ARE STILL A GROUP. BECAUSE IT WOULDN'T BE WHERE YOU THROW THE DART AT THE WALL AND GET ONE PRICE. IT WOULD BE EVERY MONTH WE HAVE THIS. >> AND WE HAVE DIFFERENT POINTS THAT WE COMMIT. WE CAN ALWAYS LOOK -- LOCK IN A FIXED RATE. >> YES. YOU WOULDN'T HAVE TO RECOMMIT. YOU CAN JUST SAY YOU WANT TO FIX CONTRACT RIGHT NOW. >> OTHERWISE IT PROCEEDS. >> AND THAT IS WITH THE EXHIBIT. I PREPARED THIS AND KEPT POSTPONING IT BECAUSE I WANTED [01:35:10] TO BRING THIS BACK UP. BUT AT THAT POINT WE WOULD EXECUTE SOMETHING AT A FIXED PRICE IF IT LOOKED LIKE THIS CURB WAS NOT WORKING. BUT HAVE THERE ARE 39 WE ARE AMONGST THE EARLIER GROUP SIGNING. SOME IS IN THIS AREA JUST TO LET YOU KNOW. WE ARE NOT BY OURSELVES. HOW LONG HAVE YOU BEEN WITH THEM >> 2002 YOU ARE A FOUNDING MEMBER OF THE ORGANIZATION. >> I WILL MAKE THE MOTION TO APPROVE. >> THE ITEM PASSES 6-0. >> ITEM 2020 -- 249. CONSIDER AND ACT UPON THE RECOMMENDATION FROM MIDLOTHIAN [2020-249] ECONOMIC DEVELOPMENT TO APPROVE A PURCHASE AND SALE AGREEMENT, PROMISING NOTE AND LOAN AGREEMENT WITH TCGNA. >> GOOD EVENING MAYOR AND COUNCIL. I AM EXCITED TO BE HERE TONIGHT WITH ANOTHER PROJECT AT THE BUSINESS PARK. THE FIRST MAP WILL SHOW ALL OF THE ACTIVITY WE HAVE AT THE PARK INCLUDING THE TWO PARCELS, THERE IS ACTUALLY THREE PARCELS THAT WILL BE PURCHASED AS PART OF THIS DECISION TONIGHT. AND SO, JUST TO BE CLEAR, THIS AGREEMENT COVERS THIS LOT. LOT ONE BLOCK H AND THE COUNTY ASSOCIATED PORTION INSIDE OF THE COUNTY OUTSIDE OF THE ETJ. AS MENTIONED, THIS WOULD BE TO TCGNA, THE SAME ENTITY THAT PURCHASED THE LOT THREE A, BLOCK A. THIS IS THE SAME ENTITY THAT IS CONSTRUCTING THE FACILITY FOR HOLDINGS. SO THIS IS A GROUP THAT WE HAVE WORKED WITH A LOT. THIS IS OUT AT THE PARK. THEY SEE THIS AS AN OPPORTUNITY TO GROW AND EXPAND SO THEIR PROPOSAL IS TO PURCHASE THE PROPERTY AND THEY WILL BUILD SPACE, SO THEY DO NOT HAVE A USER YET, THEY WILL BUILD THAT SPACE NOT KNOWING WHO THEY ARE AND CONTINUE TO KEEP ADDING MORE FACILITIES. THEY WILL PURCHASE THE PROPERTY FOR $3.5 MILLION. AND AS MENTIONED ONE OF THE KEY THINGS WITH THIS CONTRACT THEY WILL BE REQUIRED TO DELIVER A BUILDING PERMIT FOR 150,000 SQUARE FEET IN ORDER TO CLOSE ON THE PROPERTY. ADDITIONALLY, IN CONNECTION WITH THIS WE HAVE OFFERED A LOAN AGREEMENT AND A PROMISSORY NOTE FOR HALF OF A MILLION DOLLARS. THAT NOTE WOULD BE CALLABLE APRIL 30, 2022 WHICH ALIGNS WITH THE COMPLETION OF THEIR FACILITY. AS MENTIONED THIS ITEM WAS REVIEWED BY THE ECONOMIC DEVELOPMENT BOARD OF DIRECTORS. IT WAS APPROVED BY 6-0. ANY QUESTIONS YOU HAVE ON THE PURCHASE AND SALE AGREEMENT. THE PROMISSORY NOTE OR THE BONE AGREEMENT? >> WE HAVE TO TALK TO HIM ABOUT THE JOB. HIS WORK HAS BEEN GREATLY APPRECIATED. A MOTION TO APPROVE. AND A SECOND PERIOD. [2020-250] >> THE ITEM PASSES 6-0. >> ITEM 2020 -- 250 CONCERT OF AN ACTIVE RECOMMENDATION FROM MIDLOTHIAN ECONOMIC DEVELOPMENT TO APPROVE AN ECONOMIC DEVELOPMENT PERFORMANCE AGREEMENT WITH TCGNA AND TO PROVIDE A POSSIBLE INCENTIVE UP TO $500,000. [01:40:07] >> A COUPLE OF THINGS HAPPEN. THIS IS BOTH TOOL WHEREBY, TCGNA WOULD RECEIVE BASICALLY A HALF-MILLION DOLLAR GRANT OR DECREASE IN THE SALES PRICE. SO, ACCORDING TO THE AGREEMENT, IF THEY DELIVER A BUILDING THAT IS AT LEAST 150,000 SQUARE FEET BY APRIL 30, 2022, AND MAKE A $3 MILLION CAPITAL INVESTMENT ASSOCIATED WITH THE CONSTRUCTION OF THE FACILITY, THEY WILL HAVE THE ABILITY TO HAVE THE LOAN FORGIVEN. AND ONE OF THE THINGS THIS AGREEMENT DOES, IT ALLOWS FOR THE REMAINING INFRASTRUCTURE IMPROVEMENTS THAT NEED TO BE CONSTRUCTED THAT THEY WOULD BE RESPONSIBLE TO HAVE THOSE IMPROVEMENTS CONSTRUCTED. SO THAT IS THE REMAINING IMPROVEMENTS THAT WE WANTED TO WAIT UNTIL WE KNEW WE WOULD HAVE A COMPANY OUT THERE AND WE ALSO ARE GOING TO ADD A SECOND POINT OF ACTION THAT WILL BE USED FOR EMERGENCY PURPOSES ONLY. AS MENTIONED, THIS ITEM WAS ALSO REGLUED BY MIDLOTHIAN'S BOARD OF DIRECTORS AND THEY APPROVED IT ANY QUESTIONS YOU GUYS MAY HAVE. I HAVE A MOTION FROM COUNSEL. I WILL SECOND THAT. MOTION TO APPROVE AND SECOND PERIOD PLEASE VOTE. ITEM PASSES 60. >> ITEM 20202-251 CONSIDER AND ACT UPON MINUTES FROM THE CITY [2020-251] COUNCIL MEETINGS OF JULY 7 AND JULY 14, 2020. >> A MOTION. A MOTION AND A SECOND LEESVILLE. >> IT PASSES 60. >> ITEM 2020 -- 250 TO CONSIDER [2020-252] AND ACT UPON APPOINTMENTS TO FILL VACANT POSITIONS ON THE MIDLOTHIAN COMMUNITY DEVELOPMENT CORPORATION BOARD AND THE PARK BOARD AS SUBMITTED BY THE NOMINATION SUBCOMMITTEE. THE NOMINATION COMMITTEE INTERVIEWED 15 PEOPLE AND MAY I ADD THAT THE GROUP OF PEOPLE WE INTERVIEWED WERE EXCELLENT. THAT IS PROBABLY ONE OF THE BEST GROUPS WE HAVE SEEN AS FAR AS, PEOPLE VOLUNTEERING FOR THESE POSITIONS SO THE DECISION WAS DIFFICULT. YOU HAVE FOR PEOPLE TO FILL TWO SLOTS ON THE BOARD AND TO PEOPLE FOR THE OTHER AND THIS IS ANOTHER GROUP IS THERE ANY COMMENTS OR DISCUSSION FROM COLUMN -- I COUNSEL. >> I THINK ABOUT YOU DURING THE INTERVIEWS. THE PEOPLE COMING IN. IT IS SO GRATIFYING, WE ARE BREAKING QUALITY PEOPLE TO BECOME PART OF THE COMMUNITY. THEY ARE DECIDING THINGS. I REALLY APPRECIATE THAT. I REALLY APPRECIATE MAKING THESE DECISIONS AND I MOVED TO APPROVE. MOTION TO APPROVE. DO WE HAVE A SECOND PERIOD. >> I HAVE IT RIGHT HERE. >> PLEASE ON THE PARKS BOARD. WE ARE NOMINATING LEVI MCDONALD AND CHANDRA FILLMORE. ON THE OTHER BOARD WE ARE NOMINATING JEFFREY CAMPBELL AND ALAN GORMAN. >>> OKAY. THE MOTION AND THE SECOND PLEASE VOTE. NOMINEES ARE APPROVED 6-0. I WOULD LIKE TO ADD, THESE WERE TO FILL VACANCIES ON THE COMMITTEES. WE WILL AT THE END OF THE YEAR COME BACK AND DO THE NORMAL INTERVIEWS, SO PEOPLE SHOULD LOOK TO OCTOBER TO APPLY FOR THE COMMITTEES. IN GROUP WE HAVE HERE, WE WILL PUT THEM BACK IN AUTOMATICALLY PICK THEY WILL BE CONSIDERED BUT ANYONE ELSE WHO WISHES TO PLACE THEIR NAME AND NOMINATION CAN DO SO TOWARDS THE END OF THE YEAR. >> AT 7:44 P.M. WE WILL CONVENE [Executive Session] TO A NEW EXECUTIVE SESSION. THAT IS TO CONSIDER A CLOSED SESSION. BUT ANY AND ALL ACTIONS WILL BE TAKEN IN THE REGULAR SESSION. IT IS UNDER SECTION 551.071 LEGAL CONSULTATION WITH CITY ATTORNEY ON ANY AGENDA ITEMS LISTED HEREIN. REAL ESTATE DELIBERATION REGARDING REAL PROPERTY TO LIBERATE THE PURCHASE, EXCHANGE LEASE OR VALUE OF REAL PROPERTY BY HIM ED IN MIDLOTHIAN AND IN OPEN SESSION WILL HAVE A [01:45:09] DETRIMENTAL EFFECT ON THE POSITION OF NEGOTIATIONS WITH THIRD PARTIES. ECONOMIC DEVELOPMENT DELIBERATION REGARDING COMMERCIAL OR FINANCIAL INFORMATION RECEIVED FROM A BUSINESS PROSPECT TO DELIBERATE THE OFFER. WE WILL CONVENE -- >> I'M SORRY. ZERO SEVENTY-TWO AND 087. SO AT THAT POINT WE WILL STAND CONVENE. >>> IT IS 9:06 A.M. WE ARE OUT OF EXECUTIVE SESSION BACK TO REGULAR COUNSELOR SESSION. I HAVE MOVED THAT WE ADJOURN ALL IN FAVOR SAY AYE. WE ARE ADJOURNED AT 9:06 P.M. * This transcript was compiled from uncorrected Closed Captioning.