[A.CALL TO ORDER-MAYOR]
[00:00:02]
ALL RIGHT, WE'RE GONNA GET STARTED. TODAY IS MONDAY, AUGUST 17TH, 2026.
THE TIME IS 6:00 AND THIS WILL START OUR PRE COUNCIL WORK SESSION.
AND I'LL CALL TO ORDER. MR. DAVID-GRAVES IS NOT HERE.
MISS TODD. HERE. MR. JOHNSON'S NOT HERE. MR. WASHINGTON HERE.
MR. RUTLEDGE. HERE. MR. DEFFIBAUGH. HERE. MR. LONG. HERE. WE HAVE A QUORUM AND THIS IS OUR WORK SESSION C-1 2026.
[C.WORK SESSION]
DISCUSSION REGARDING THE DEBT SERVICE INTEREST AND SINKING FUND TAX RATE IN RELATION TO SENATE BILL 1453.THANK YOU, MAYOR AND COUNCIL. KELLY WILSON, CFO FOR THE CITY OF PRINCETON.
WE WERE JUST HERE, WEREN'T WE? LAST WEEK? ALL RIGHT.
WE'RE GOING TO TALK ABOUT THE DEBT SIDE OF THE PROPERTY TAX RATE.
WE ARE PROPOSING TONIGHT TO TAKE THIS TAX RATE TO $0.20, A LITTLE OVER $0.20 COMPARED TO THE MINIMUM DEBT TAX RATE OF 173184. WHY I'M HAVING THIS WORKSHOP WITH YOU IS THERE ARE SEVERAL THINGS REGARDING SENATE BILL 1453, JUST TO BE OPEN AND TRANSPARENT ABOUT US, MAKING SURE THAT WE'RE IN COMPLIANCE WITH THIS REGULATION GENERALLY REQUIRES THE I&S RATE TO BE BASED ON THE MINIMUM AMOUNT, WHICH I MENTIONED IS THE $0.17, BUT THE GOVERNING BODY MAY ADOPT AN I&S RATE ABOVE THAT, STILL MEETING ITS CURRENT OBLIGATIONS FOR YOUR DEBT SERVICE.
SO AGAIN, BACK IN 2023, THE TAX RATE WAS AT 22 WAS AT 5345.
WE DROPPED IT TO 44. SO AGAIN A 9.4 CENT REDUCTION.
A LOT OF THAT AS WELL. THE TAX SIDE OF THE DEBT SERVICE WAS AT $0.22, IT DROPPED TO $0.17.
BUT AGAIN, WE CALCULATED THE MINIMUM DEBT SERVICE WITH OUR CURRENT DEBT OBLIGATION WAS 1731.
THAT WAS UTILIZING RESERVES TO KEEP THAT 1731 SIGNIFICANT AMOUNT OF RESERVES OF 1.1.53. SO WE'RE PROPOSING $0.20 ON THE DEBT SERVICE RATE.
SO AGAIN, THIS IS AN INCREASE OF A LITTLE OVER THREE PENNIES.
SO AGAIN BACK IN 2023 THE VOTER APPROVAL WE ISSUED OUR FIRST TRANCHE.
WE WERE ABLE TO STAY WITHIN THAT RATE. THAT WAS DROPPED FROM 17.
AND WE DO PLAN TO ISSUE THE SECOND TRANCHE NEXT YEAR.
BUT AGAIN, THIS TAX RATE IS TO MEET OUR CURRENT DEBT OBLIGATIONS.
NOT WORKSHOP WORKSHEET, WHICH IS IN YOUR PACKET AND IT SHOWS YOU ON LINE 49.
YOU CAN SEE ON LINE 49 OF THAT LONG FORM ITSELF.
THE MINIMUM WAS ON THE FIRST CALCULATION OF 17, BUT NOW WE'RE AT $0.20.
SO IF YOU GO TO THAT PAGE 49, LINE 49, YOU CAN SEE THE DIFFERENCE.
I WANT TO CLARIFY THAT 1.7 MILLION. IF WE GO TO THE $0.20, WE WILL ONLY HAVE TO PULL DOWN FROM THAT 348,786 TO MEET OUR CURRENT OBLIGATIONS. SO AGAIN, THIS IS JUST REITERATING THE DIRECTION. OUR RECOMMENDED DIRECTION BY COUNCIL, BY STAFF IS TO TAKE THIS TO THE 20 AND 20.5.
SO THAT'S WHY I WANTED TO HAVE THIS WORKSHOP TO EXPLAIN SENATE BILL 1453, WHAT IT ALLOWS COUNCIL TO DO AND BE TRANSPARENT WITH THE TRUTH AND TAXATION CALCULATIONS. I DON'T BELIEVE I HAVE ANYTHING ELSE TO PRESENT, BUT I'M HAPPY TO GO OVER ANY QUESTIONS YOU MIGHT HAVE. AND THIS IS THIS IS NOT A 20 CENT INCREASE.
THIS IS JUST THE THREE PENNIES FROM $0.17 TO THE 20, 20.05, CORRECT? THAT'S CORRECT. MAYOR. AND IF THERE'S. MISS TODD.
WHAT IMPACT IS IT GOING TO HAVE ON THE OVERALL FOR THE GENERAL FUND? I MEAN, IF WE'RE NOT RAISING TAXES, THESE THREE PENNIES ARE GOING TO COME FROM SOMEWHERE.
SO WHAT IMPACT IS THIS GOING TO HAVE ON THE OVERALL FOR THE BUDGET.
[00:05:06]
SO THIS GOES IN THE DEBT SERVICE RATE AND IT WILL COME FROM PROPERTY TAXES.SO INSTEAD OF THE VOTER APPROVAL RATE OF 44 THIS WOULD TAKE YOUR VOTER APPROVAL RATE TO $0.47.
AND SO FOR CLARIFICATION BOTH ITEMS ARE FOR A TAX INCREASE.
NOT LIKE WE'RE TAKING THE THREE PENNIES FROM SOMEWHERE ELSE IN THE BUDGET AND SLIDING THEM OVER. WE'D BE INCREASING. AGAIN YES, IT ALLOWS COUNCIL TO MAKE SURE THAT THEY'RE MEETING THEIR DEBT OBLIGATIONS BY ALLOWING YOU TO INCREASE IT BY THREE PENNIES.
MR. RUTLEDGE, TO BE CLEAR. SO IF WE IF WE DON'T MOVE FORWARD WITH THIS THEN THE THE OUTCOME IS THAT WE'LL HAVE TO PULL FROM RESERVES. IS THAT CORRECT? IF WE DON'T INCREASE IT TO THE $0.20, WE'LL HAVE TO PULL FROM RESERVES TO MEET OUR DEBT OBLIGATION.
THAT IS CORRECT. BY THE 1.7 MILLION, AS I MENTIONED.
RIGHT. AND SO THAT 1.7 IS OVER. I'M ASSUMING A FISCAL YEAR, RIGHT.
WE'D STILL HAVE TO PULL FROM OUR RESERVES. IT JUST MEANS THAT WE WOULD, IT WOULDN'T BE THE 1.7.
IT WOULD BE A DIFFERENT AMOUNT BECAUSE WE'RE ADDRESSING IT AT A LATER DATE, RIGHT? AS VALUES INCREASE, THOSE SORT OF THINGS THAT IMPACTS THAT.
BUT THIS IS NECESSARY TO JUST MEET WHAT WE CURRENTLY HAVE FOR FOR THAT.
SO WE DON'T HAVE TO APPROVE ONE OR THE OTHER.
WE CAN APPROVE NONE OR WE CAN IMPROVE BOTH. BUT THIS HERE IS SOMETHING THAT WE'RE GOING TO NEED OR WE'RE GOING TO HAVE TO PULL FROM OUR, OUR FUNDS AND WE'RE ALREADY GOING TO HAVE TO PULL FOR OUR FUNDS IF FOR OTHER REASONS AS WELL, FOR THE, THE FEES THAT WE HAVE, LIKE I SAID, THE ONE TIME FEES IS KIND OF WHAT'S HELPING US RIGHT NOW, BUT WE WON'T HAVE THOSE FOREVER. SO IT, WE DON'T WANT TO DO THIS NOW AND WE DON'T HAVE TO.
JUST KNOW THAT OUR, OUR, WE'RE GOING TO LOSE THAT OUT OF, OUT OF OUR RESERVES.
JUST REMEMBER THE PRESENTATION. JASON HUGHES, OUR FINANCIAL ADVISOR, GAVE AT THE BUDGET RETREAT.
HE SHOWED YOU THE HISTORICAL WHAT HAPPENED FROM 2023 TO DATE AND WHAT THIS COULD LOOK LIKE IN THE FUTURE, WITH YOUR DEBT SERVICE RATE BEING AS LOW AS IT IS AND FUTURE GROWTH OPPORTUNITIES.
WE JUST WE PROJECTED OUT AS BEST WE CAN, BUT IT'S A PROJECTION OF A 4% GROWTH.
WE REALLY STILL NEED MORE PENNIES ON THE THE DEBT SERVICE SIDE FOR FUTURE.
SO IT'S NOT LIKE WE'RE SAYING IF WE WENT FOR THE OTHER ITEM, IT WOULD ENCOMPASS EVERYTHING.
IT WOULDN'T TOUCH THE DEBT SERVICES AT ALL. IT WOULD HAVE TO BE THIS SEPARATE ITEM TO ADDRESS THAT.
IS THAT CORRECT? I'M JUST TRYING TO UNDERSTAND, SINCE THERE ARE TWO SEPARATE ITEMS ON HERE, BOTH OF THEM ARE INCREASES. I'M TRYING TO SEE IF HOW BOTH OF THEM PLAY AND IF ONE OVER THE OTHER WHAT THAT WOULD LOOK LIKE.
AND I WOULD SAY THIS JUST FOR MORE INFORMATION, I'M GOING TO WAIT UNTIL THE REGULAR MEETING, BUT I'M GOING TO BE ASKING COUNCIL TO WITHDRAW ALL OF THE LINE ITEMS FOR THE INCREASES FOR THE OTHER ITEMS. SO THIS WILL BE THE ONLY ITEM THAT WE SPEAK ABOUT SOMEDAY AND MOVE THIS TO THE MAY ELECTION, BECAUSE THERE'S SOME THERE'S SOME QUESTIONS THAT WE STILL HAVE. AND THERE'S SOME OTHER THINGS THAT I WISH WE'D DONE BEFORE WE PUT THIS OUT TO THE PUBLIC.
SO I THINK THAT INSTEAD OF JUST FILLING THIS NOVEMBER, BECAUSE RUSH, LET'S WAIT UNTIL THE MAY, LET'S GET ALL THE INFORMATION OUT THERE. LET'S PUT IT OUT THERE BEFORE WE COME UP HERE AND VOTE FOR IT.
SO THE PUBLIC CAN GIVE US THAT FEEDBACK BEFORE WE ACTUALLY BRING IT TO TO COUNCIL.
SO THIS IS THE ONLY ITEM WE'LL PROBABLY BE SPEAKING ABOUT TONIGHT.
WE'RE ALSO NOT VOTING ON THIS TONIGHT. THIS IS JUST TO DISCUSS.
[00:10:01]
THIS ITEM WILL BE BROUGHT BACK TO US. SO THIS IS JUST A WORK SESSION FOR THIS ITEM THAT I KNOW OF.ONCE YOU OPEN UP THE COUNCIL MEETING FOR THAT ACTION ITEM.
WHICH IS IT? IT'LL BE K.1. OKAY, I HAVE A STAR, BUT THAT'LL BE THE.
OH NO IT IS SKIPPED. SORRY, SORRY. I JUST SEEN ALL THE RED ON MY PAGE SO IT'S ALL GOOD.
OKAY, SO THIS WILL BE THE ONLY ITEM THAT WE THAT WE DISCUSS AND VOTE ON TONIGHT. IF COUNCIL CHOOSES TO, TO NOT TO WITHDRAW ALL THE OTHER ITEMS. IS THERE ANY OTHER QUESTIONS REGARDING JUST THIS IN GENERAL OR ANYTHING FOR OUR FINANCIAL ADVISOR? SO THE BUDGET MEETING, IT WASN'T STREAMED LIVE AND THERE WEREN'T MANY RESIDENTS WHO CAME AND ATTENDANCE. AND I KNOW SOME PEOPLE HAD TROUBLE EVEN GETTING THE VIDEO AFTERWARDS.
CAN YOU EXPLAIN WHAT HAPPENED FOR WHY WE'RE IN THIS POSITION AND HAVING TO BE ASKED TO RAISE THOSE TAXES? BECAUSE I FEEL LIKE THIS IS THE THIS IS THE PLATFORM WHERE THIS NEEDS TO BE SHARED WITH THE PEOPLE SO THEY CAN UNDERSTAND WHAT HAPPENED TO THE CITY'S FINANCES.
SURE, I DON'T HAVE THAT PRESENTATION, BUT WE CAN TALK THROUGH IT.
IN FACT, I'LL PASS THAT ON TO JASON HUGHES BECAUSE HE'S THE ONE THAT PRESENTED THAT AS WELL.
THERE WE GO. SENIOR MANAGING DIRECTOR AT HILLTOP SECURITIES.
GOOD TO BE WITH YOU AGAIN. SO IF YOU RECALL, AT THE PRESENTATION ON JULY 24TH, I CAME AND GAVE A PRESENTATION OVER KIND OF THE HISTORY OF GOING BACK TO THE BOND ELECTION. AND SO ON JULY 24TH, 2023, WHAT WAS PRESENTED TO COUNCIL AT THAT TIME WAS A BOND ELECTION FOR $109.1 MILLION. WHAT WAS ASSUMED AT THAT TIME WAS AN ISSUANCE OF $80 MILLION OF BONDS IN 2024, AND THEN THE BALANCE OF THAT 29.1 MILLION. WHAT WAS ASSUMED THEN TO BE 2027 GO BONDS.
AT THAT TIME, COUNCIL'S I&S TAX RATE WAS 22.09.
AND WHAT MY PARTNER SHOWED WITHIN THAT PRESENTATION IS THAT THE FULL 109.1 MILLION COULD BE SOLD WITHIN THE CONTEXT OF THE 22.0 SO THERE WAS NO I&S TAX RATE INCREASE AT THAT TIME.
AGAIN, THAT WAS THE PRESENTATION MADE ON JULY 24TH, 2023.
ONCE COUNCIL CALLED FOR THE BOND ELECTION AGAIN THAT'S 109.1 MILLION.
THEY ALSO LOWERED THE TAX RATE TO $0.1794. IN ADDITION TO DOING THAT, THERE WAS AN EXTRA $45 MILLION IN COS THAT WERE SOLD. THE FIRST TRANCHE WAS $20 MILLION OF 2024 COS.
AND THEN IN 2025, THE CITY ISSUED $25 MILLION TO FINISH THE LAW CENTER PROJECT.
WHAT I HAD RUN ON JULY AND PRESENTED ON JULY 24TH IS THAT THE REMAINING 54.05 MILLION FROM THAT BOND ELECTION CAN BE ISSUED WITHIN THE 20.5 CENT TAX RATE THAT MISS WILSON JUST WENT OVER.
BUT IT ALSO WOULD ALLOW THE CAPACITY TO MOVE FORWARD AND ISSUE THE REMAINING 54.05 MILLION.
WHAT IS ESTIMATED RIGHT NOW TO BE OCTOBER OF 2027.
SO WITH THAT, I'D BE HAPPY TO GO INTO MORE DETAIL OR ANSWER MORE QUESTIONS AS YOU LIKE.
MISS TODD. SO TO BE BLUNT AND TO THE POINT, WITHOUT RAISING TAXES, CITY COUNCIL CANNOT FOLLOW THROUGH ON THE PROMISE TO THE PEOPLE FOR ALL OF THE PARKS BONDS THAT WE HAVE DISCUSSED.
LIKE ALL THE PROJECTS THAT WE HAVE SHOWN TO THE PEOPLE, ALL THE THINGS THAT WE HAVE DISCUSSED, WE CANNOT FOLLOW THROUGH WITH OUR PROMISE TO THEM WITHOUT RAISING THE TAXES BECAUSE OF THE CHOICES THAT WERE MADE.
BASED ON OUR ASSUMPTIONS. YES. AND THIS AND THIS, NOT THE $0.10 DOESN'T MAKE THAT HAPPEN.
IT'S JUST $0.03 THAT MAKES THAT HAPPEN. SO I JUST WANT TO BE CLEAR ABOUT THE $0.10 WILL GO TOWARDS OUR, OUR OPERATIONS. SO THAT'S MORE OFFICERS AND MORE THINGS, MORE STAFF AND THINGS THAT WE NEED.
BUT THIS RIGHT NOW WE'RE TALKING ABOUT JUST THE DEBT SERVICES.
SO I KNOW IT'S A LITTLE CONFUSING BETWEEN THE TWO, BUT BUT YEAH, IF WE WANT TO GET THE PARKS BOND PROJECT NOT DELAYED A FEW YEARS, THEN THIS IS GOING TO BE WHAT IT IS. SO IF WE DON'T WANT TO PAY THE EXTRA $0.03, THEN SOME OF THE PROJECTS MIGHT GET DELAYED AT THIS TIME.
[00:15:16]
IS THERE ANY OTHER QUESTIONS FROM COUNCIL. MISS TODD.CAN I DIRECT A QUESTION TO COUNCIL? YEAH, IT'S A WORK SESSION.
SO YEAH. SO I WOULD LIKE TO KNOW FROM THOSE WHO ARE HERE TO MAKE THE VOTE FOR BOTH OF THOSE ITEMS. WHAT WAS THEIR UNDERSTANDING FROM WHAT WAS EXPLAINED TO THEM? WHEN THE PRESENTATION CAME IN SAYING YOU NEEDED THIS TAX RATE TO DO THIS BOND AND A DECISION TO PUT THAT ON THE BALLOT HAPPENED.
WHERE DID THE DECISION COME INTO PLAY TO LOWER THE TAXES AND WHY? SO WHAT I UNDERSTAND, AND I'M GONNA ANSWER THAT I DON'T WANT THE BACK AND FORTH BETWEEN COUNCIL, BECAUSE I'VE ALSO HAD THE SAME CONCERNS AND BEEN ASKED THE SAME QUESTIONS. THAT WAS FROM WHAT I'M GETTING JUST IS THERE'S RECOMMENDATIONS FROM STAFF.
THE MEMBER OF STAFF IS NO NO LONGER HERE WHO MADE THAT RECOMMENDATION.
AND THAT WAS PART OF THE REASON WHY THAT THEY'RE GONE AS WELL. THIS IS BEFORE WE WE GOT ELECTED.
THIS IS BACK THEN, BUT THIS WAS DISCOVERED BACK THEN THAT THE NUMBERS WERE JUST WRONG.
AND THIS KIND OF WAS SEEN COMING FOR, FOR A WHILE NOW.
SO THAT WAS I CAN'T GO INTO A LOT OF IT, BUT THAT'S BASICALLY WHAT HAPPENED.
IT WAS A RECOMMENDATION THAT WAS JUST IT WAS A BAD, BAD CHOICE.
THAT IS CORRECT, MAYOR IT WAS A BAD CHOICE. IT WAS LITERALLY THE LIKE, I JUST PULLED UP THE AGENDAS LITERALLY. YOU HAD THE MEETING IN JULY AND YOUR NEXT MEETING WAS TO LOWER THE TAXES.
IT WAS A TWO WEEK PERIOD BETWEEN THE TWO. YEAH.
AND THAT WAS I THINK THAT WAS A LESSON LEARNED FROM COUNCIL.
I THINK THAT IT WAS ABOUT TRUSTING STAFF AT THAT TIME.
AND I MEAN, IT'S IT'S NOTHING WE CAN DO ABOUT IT RIGHT NOW.
I THINK ANYBODY IN COUNCIL CAN ANSWER WHY IT JUST WAS ABOUT TRUSTING STAFF.
SO AND IT'S JUST, I'M NOT SURE HOW TO ANSWER THAT QUESTION, BUT IT'S A, IT'S A STICKY SITUATION THAT SHOULDN'T HAPPEN, BUT IT'S, IT'S WHAT HAPPENED. SO IT'S RIGHT NOW IT'S EITHER WE CORRECT IT OR WE WAIT UNTIL WE GET THE MONEY TO CORRECT IT.
I JUST DON'T WANT TO GET UP HERE AND PLAY THE BLAME GAME BECAUSE IT DOESN'T DOESN'T FIX IT.
THE RESIDENTS KNOW THAT. THEY KNOW WHAT HAPPENED AND KNOW THAT THIS WAS A CHOICE FROM COUNCIL.
AND WHEN WE FIND OUR STAFF IS NOT BEING TRUTHFUL, WE, WE TAKE THOSE, THOSE ACTIONS.
AND THAT'S JUST WHAT HAPPENED. BUT ANYTHING ELSE? I JUST WANT TO BE CLEAR, IT'S NOT A BLAME GAME.
IT'S CALLED ACCOUNTABILITY. DECISIONS WERE MADE.
WHAT HAPPENED AND DECISIONS THAT WERE MADE. BECAUSE WHAT WE'RE DOING IS WE ARE MAKING A DECISION THAT IMPACTS EVERY SINGLE ONE OF OUR RESIDENTS LIVES, THEIR INCOME, EVERYTHING, BECAUSE THEY'RE GOING TO HAVE TO PAY MORE TAXES.
THEY'RE GOING TO BE HAVING A LITTLE LESS HERE AND THERE.
AND SO JUST. IT'S JUST SOMETHING THAT NEEDS TO BE RECOGNIZED WHEN WE'RE MAKING THESE KINDS OF DECISIONS BECAUSE IT'S NOT JUST A LITTLE DECISION.
THESE ARE ALMOST 50,000 RESIDENTS THAT WE'RE IMPACTING.
IF WE'RE LOOKING AT THE THREE PENNIES FROM THE MEDIAN HOME VALUE, WE ARE LOOKING AT AN INCREASE OF $97 A YEAR FOR THAT INCREASE FOR THE THREE PENNIES. SO I JUST WANTED TO BE VERY TRANSPARENT ABOUT THAT AS WELL.
WHEN YOU RUN THOSE, THAT'S ON THE MEDIAN HOME VALUE.
ANY OTHER QUESTIONS FROM COUNCIL? ALL RIGHT. AT THIS TIME WE'LL MOVE ON.
THANK YOU SO MUCH. THANK YOU. THANK YOU SO MUCH. DISCUSSION.
AT THIS TIME, IS THERE ANY QUESTIONS REGARDING ANY AGENDA ITEM?
[00:20:01]
WE'RE GOING TO I MEAN, WE'RE GOING TO THE ITEMS COMING BACK UP AGAIN. SO IT'S ON YOU. AND THEN THERE'S NO ITEMS FOR EXECUTIVE.SO AT THIS TIME I'LL ENTERTAIN A MOTION TO ADJOURN. I'LL MAKE THE MOTION TO ADJOURN.
I'LL SECOND. MR. RUTLEDGE SECOND. ALL IN FAVOR SAY AYE.
AYE. ANY NAYS? TIME IS 6:20. WE'LL RESUME AT 6:30.
* This transcript was compiled from uncorrected Closed Captioning.