Jan 18, 2022 Commission Meetings

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NO.

THOSE ARE THE REGULAR MEETING OF THE CITY OF TOMATO CITY COMMISSION, TUESDAY, JANUARY 18 POINT 21.

I'D LIKE TO WORK.

WELCOME EVERYBODY.

THE TIME IS FIVE 30.

WE HAVE A QUORUM AND NUMBER TWO PLEDGE OF ALLEGIANCE TO USE BLACK IN THE TEXAS FLAG.

AND, UH, PLEASE REMAIN STANDING FOR INVOCATION BY MR. DAVID, BOBBY LA I PLEDGE ALLEGIANCE TO THEE, TEXAS ONE STATE UNDER GOD ONE, AND INDIVISIBLE, LET US PRAY ETERNAL GOD, YOU ARE OUR ROCK.

YOU ARE THE FIRM FOUNDATION FOR EVERYTHING WE BUILD, YOU GIVE GIFTS TO YOUR PEOPLE FOR THE GOOD OF THE FLOCK YOU EQUIP AND TRAIN YOUR PEOPLE TO CARRY OUT THE GOOD WORKS.

YOU HAVE PREPARED FOR US IN ADVANCE.

AS WE MEET TODAY, WE ASK THAT YOU WOULD PROVIDE WISDOM, GUIDANCE, AND DIRECTION.

REMIND US THAT YOU ARE A LOVING ALLY, YOUR FORTRESS, YOUR A TOWER OF STRENGTH, AND YOU'RE A RESCUER.

EVERYTHING WE NEED IS FOUND IN YOU AND ANY EACH OTHER THROUGH JESUS CHRIST, OUR LORD.

AMEN.

OKAY.

THANK YOU, SIR.

[4. Announcements: Items of Community Interest.]

BEFORE ANNOUNCEMENT, THE ITEMS OR THE COMMUNITY INTEREST IN THE COMMISSION HAVE A AND THING TO DO THAT RIGHT NOW.

IT'S SOMETHING THAT, UH, WAS, I WAS ASKED TO SHARE AND I'LL SHARE WITH YOU ALL.

UM, UM, NEIGHBOR OF MINE SENT ME, UH, WHAT IS, UH, LIKE A PORTAL FOR, UH, COVID TESTING.

UH, APPARENTLY THE GOVERNMENT IS NOW FEDERAL GOVERNMENT WILL MAIL YOU FOR, UH, TESTING KITS, UH, GET ONLINE REGISTER ONLINE.

AND, UH, THE U S POST OFFICE WILL DELIVER THOSE FOUR, UH, TESTING KITS TO YOU AT YOUR ADDRESS.

I DID, UH, I, EVERY REGISTERED AND IT SAYS, UH, THERE'LL BE SHIPPING OUT SOMETIME LATER THIS MONTH.

SO IT'S JUST, UH, SOMETHING I'D LIKE TO SHARE WITH EVERYBODY, UH, IN THAT WAY.

UH, IF YOU, IF YOU NEED TO GET TESTS, UH, TESTING KITS, THAT'S THE WAY TO DO IT.

OKAY.

TAKE COMMISSURE.

ANYBODY ELSE? NO.

OKAY.

THEN

[5. Public Comments - (Speaker/Remarks limited to three minutes).]

UH, RUTH, DO WE HAVE ANYBODY FOR PUBLIC COMMENTS? YES, MAYOR.

WE HAVE A MR. TIMOTHY JARVIS.

SURE.

WELCOME STATE YOUR NAME AND YOUR ADDRESS.

MY NAME IS TIMOTHY JARVIS LIVE ONE-ON-ONE PALMER, THE LAGO CIRCLES, SAN BENITO.

I'M HERE TO TALK ABOUT ACCESS ON OUR ROADS, BUT FIRST I'D LIKE TO RECOGNIZE MR. DELAROSA, WHO HAS HELPED US IN OUR NEIGHBORHOOD ON THIS ISSUE AND OTHERS.

AND WE GREATLY APPRECIATE PAUL MULAGO CIRCLE IS AN HONOR CIRCLE.

AND IN THE MIDDLE OF THAT CIRCLE IS PUMP STATION NUMBER 29, WHICH WE'RE CONCERNED IS THERE ARE PEOPLE ARE PARKING ON THE SIDE OF THE ROAD AND AROUND THE PUMP STATION TO THE POINT WHERE SERVICE VEHICLES LIKE SCHOOL BUSES ARE TRASH PICKUP AND SERVE, UH, DELIVERY TRUCKS CAN NOT MAKE IT AROUND SOME DAYS.

SO WE LOSE SERVICES BECAUSE PEOPLE ARE PARKING THERE.

AND WHAT WE'RE REQUESTING IS THAT SOMETHING BE DONE.

SO THAT MAKES IT THE PARKING ON THE SIDE OF THE ROAD AND AROUND THE CIRCLE IS NOT ALLOWED SO THAT WE CAN ASSURE THE SCHOOL BUSES TO GET THROUGH OUR TRASH TRUCKS CAN MAKE IT THROUGH.

AND THE CITY VEHICLES IN OUR DELIVERY TRUCKS CAN MAKE IT THROUGH THE ROAD WAS DESIGNED DECADES AGO.

I'M SURE NONE OF YOU AND I'M NO, I DIDN'T HAVE ANY INPUT INTO THE DESIGN.

IT IS WHAT IT IS.

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AND WHAT WE SEE IS THE BEST WAY TO DEAL WITH IT IS TO SAY, OKAY, WE CANNOT PARK ON THE ROAD.

AND SO WE ASKED HER TO HELP ON THAT AND THAT'S IT.

ANY QUESTIONS? BE FREE TO TAKE THEM.

OKAY.

THANK YOU SO MUCH.

THANK YOU.

ANYBODY ELSE? YES.

MR. HONG GONZALEZ.

GOOD AFTERNOON.

GOOD AFTERNOON.

MAYOR CITY COMMISSION MEMBERS.

UH, MR. DE ROSA CITY MANAGER.

UH, MR. SALTY LEGAL COUNCIL.

UH, MY NAME IS MY NAME IS JUAN GONZALEZ.

I UNDERSTAND I ONLY HAVE THREE MINUTES, SO I'LL BE BRIEF FIRST AND FOREMOST.

I WANT TO TELL YOU THAT I WAS BORN AND RAISED IN SOME SUBDIVISION TO BE EXACT.

DURING THE PAST 40 YEARS, I'VE HAD THE GOOD FORTUNE OF WORKING WITH VARIOUS AGENCIES.

I WAS AN INVESTIGATOR WITH CHILD SERVICES, A RIGHTS ADVOCATE WITH THE TEXAS DEPARTMENT OF MENTAL HEALTH AT ADMINISTRATIVE, WITH THE TEXAS YOUTH COMMISSION AND A HUMAN RESOURCES DIRECTOR FOR THE CITY OF HARTINGTON AND CITY OF MACALLAN.

I'LL SERVE IN THE BIG BROTHERS PROGRAM, BOYS AND GIRLS CLUB AND AMERICAN ELITE IN SEVERAL CAPACITIES UPON RETIRING FOR THE SETUM ACCOUNT.

FIVE YEARS AGO, MY AIM WAS TO RETURN TO MY HOMETOWN OF SOMEBODY BEETLE AND VOLUNTEER MY SKILLS AND TALENTS.

ALSO CONTEMPLATED SELLING MY HOME IN MACALLAN AND RELOCATING HERE.

I CURRENTLY OWN A HOME IN SAN BENITO AT THIS MOMENT, TO MY POINT, UPON RETIRING FIVE YEARS AGO, I CONTACTED THE BOYS AND GIRLS CLUB IN PERSON.

THIS WAS PRE PANDEMIC TIMES AND HAVING EXPERIENCE IN FUNDRAISING AND STRATEGIC PLANNING.

I INDICATED A DESIRE TO SIGN UP AS A VOLUNTEER.

I ASKED HIM ONE OF THE BOARD MEMBERS COULD CALL ME TO DISCUSS HOW I COULD HELP TODAY.

I NEVER RECEIVED A PHONE CALL THREE YEARS AGO.

I CONTACTED SEVEN YEAR HIGH SCHOOL PRINCIPAL'S OFFICE AND ASKED IF I COULD SCHEDULE SOME TIME TO DISCUSS A PROGRAM I HAD DEVELOPED IN OTHER AREAS THAT WOULD BENEFIT BOTH THE STUDENTS AND THE CITY OF SAN BENITO.

I WAS GIVEN AN APPOINTMENT TO DRAW APPROXIMATELY HUNDRED MILES ROUND TRIP FROM MY HOME IN MACALLAN, UPON MY ARRIVAL.

THE PRINCIPAL HAD NO IDEA WHY I WAS THERE, BUT DID ALLOW ME FIVE MINUTES TO PRESENT MY IDEA.

NEEDLESS TO SAY IT WAS A TERRIBLY RUSHED PRESENTATION.

I WAS GIVING THE ASSISTANT PRINCIPALS A BUSINESS CARD, BUT DID NOT HEAR BACK FROM THE SCHOOL IN RESPECT TO MY INTERACTIONS WITH THE CITY.

I WAS TOLD FIVE YEARS AGO WHEN MY FATHER PASSED AWAY, THAT IT WAS MY RESPONSIBILITY TO PROVE THAT I HAD PURCHASED A CEMETERY LOT AT THE CITY CEMETERY.

WITHOUT THAT PROOF I WAS TOLD I COULD NOT BURY MY FATHER.

THANKFULLY I KEEP METICULOUS RECORDS AND WAS ABLE TO FIND THE RECEIPT VALIDATING MY PURCHASE.

AND MY FATHER WAS BURIED.

I'VE CALLED THE CODE ENFORCEMENT DEPARTMENT TWICE, GONE ONCE IN PERSON AND EMAILED THE DEPARTMENT ON A SEPARATE OCCASION ON VARIOUS INFRACTIONS OR QUESTIONS RELATED TO MY SAMUEL RESIDENCE, BUT HAVE NOT RECEIVED A RESPONSE.

I STILL HAVE THE EMAIL DATED 9 17 21 FROM ONE OF YOUR EMPLOYEES INDICATING THAT HE WAS GOING TO LOOK INTO THE MATTER THAT I WAS REPORTING AND GET BACK TO ME TO THIS DAY.

NO ONE HAS CONTACTED ME BACK ABOUT A YEAR AND A HALF AGO.

I CONTACT THE CITY BY, BY EMAIL ABOUT DONATING A MAGNIFIED UNIT DESIGNED TO HELP AMPLIFY READING MATERIALS FOR THE VISUALLY IMPAIRED.

I COULD HAVE VERY EASILY DONATED AN ACCOUNT.

I WANTED TO GO TO MY HOMETOWN.

IT WAS A NEAR, NEAR NEW CONDITION AND WAS WORTH CONSERVATIVELY, ABOUT $4,000.

I DID NOT RECEIVE A RESPONSE BACK.

SO ABOUT A MONTH LATER, I SENT ANOTHER EMAIL.

I RECEIVED A RESPONSE THAT TIME AND I WAS TOLD THAT I COULD DROP IT OFF ON A CERTAIN DATE.

I DROVE FROM MACALLAN AND DROPPED IT OFF, GIVEN THE VALUE OF THE UNIT AND THE FACT THAT I WAS DRIVING THE COUNTY, DROP IT OFF.

IT WOULD HAVE BEEN NICE FOR THE PERSON TO, IN CHARGE TO GREET ME AND THANK ME FOR THE, FOR THE DONATION TO THIS DATE.

I GET TO RECEIVE A SIMPLE, THANK YOU.

UM, I'D LIKE TO ADD THAT ABOUT TWO OR THREE YEARS AGO, I SPOKE TO SOMEONE HERE AT THE CITY ABOUT MIKE TAKING THE LEAD ON OUR NEIGHBORHOOD RENOVATION PROGRAM.

IF YOU'VE BEEN TO LA PALMA RECENTLY, YOU KNOW THAT IT'S, IT'S IN GREAT NEED OF RENOVATION.

I INFORMED THEM THAT I JUST NEEDED SOME TECHNICAL ASSISTANCE ON WHAT SERVICES THE CITY COULD AND COULD NOT HELP OUT WITH.

IN RESPECT TO THESE EFFORTS, I WAS TOLD THAT IT WAS A GOOD IDEA AND IT WILL BE PASSED ON TO THE HIGHER UPS TODAY.

NO ONE HAS CALLED BACK.

MR. MAYOR RESPECTED MEMBERS OF THE COMMISSION.

I HAVE PURPOSELY NOT MENTIONED ANY NAMES IN MY COMMENTS.

THE PURPOSE OF MY VISIT HERE TODAY IS NOT TO GET ANYONE IN TROUBLE OR CAUSE PROBLEMS WHERE WE COMPLAINED FOR THAT MATTER.

OKAY, SIR, I WILL DO MY BEST TO I'LL REACH OUT TO YOU.

I'M SORRY, SIR.

I'LL RULE.

I WILL TRY TO REACH OUT FOR YOU.

OKAY.

THANK YOU VERY MUCH FOR YOUR TIME.

I APPRECIATE IT.

WE HAVE TO KEEP ALL OF THE, UH, THE THREE MINUTES.

OKAY.

WE SHARE THE TERM.

THANK YOU.

YOU HAVE HIS INFORMATION.

OKAY.

ANYBODY ELSE WROTE

[6. Consideration and possible action to approve the Minutes of the October 12, 2021 Special City Commission Meeting.]

ANY QUESTIONS? OKAY.

IF NOT, DO I HAVE MOTION? MOTION BY COMMISSIONER VIA FRANCO SECOND BY COMMISSIONER.

NAVON ALL IN FAVOR.

OKAY.

AND WE'VE GOT THE MIRACLE TEAM OF STAINING.

UH, ANY NAYS MOTION PASSES.

[7. Presentation and discussion of Plan of Finance for Obligations to be designated as "City of San Benito, Texas General Obligations Refunding Bonds, Series 2022"; and other matters related thereto.]

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I DON'T REMEMBER SEVEN PRESENTATION AND DISCUSSION OF PLAN OF FINANCE OR FOR OBLIGATION TO BE DESIGNATED BY THE CITY OF SAN BENITO, TEXAS, A GENERAL OBLIGATION OF REFUNDING BONDS SERIES OF 2022 AND OTHER MATTERS RELATED THERE TOO.

AND, UH, MR. DON, DON OWENS, JAY WANTS ALL HIS, UH, PRESENT, ET CETERA.

GOOD EVENING, MAYOR AND COUNCIL MEMBERS, IF IT'S ALL RIGHT.

IF I MAY REMOVE MY MASK PRESENTATION, THANK YOU FOR THE RECORD.

MY NAME IS DON CONSOLIDATES WITH AND A HOSA WE SERVE AS FINANCIAL ADVISOR TO THE CITY OF SAN BENITO.

UH, WITH ME TODAY IS MATT LOU HAHN, WHO WAS THE VICE-PRESIDENT, UH, WITH US IN OUR SAN ANTONIO OFFICE.

AND, UH, THIS PRESENTATION IS CULMINATION OF, OF WORK THAT WE'VE DONE, UH, WITH THE HELP OF YOUR CITY MANAGER, DIRECTOR OF FINANCE.

UH, WE THANK THEM FOR, FOR THEIR INPUT AND, AND FOR THEIR ASSISTANCE WITH THIS.

UM, I KNOW WE'VE NOT HAD A CHANCE TO COME BEFORE THE CITY COMMISSION, UH, WITH, I THINK A COUPLE OF NEW MEMBERS.

I KNOW MAYOR YOU'VE BEEN, UH, YOU'VE PROBABLY SEEN THIS PRESENTATION A FEW TIMES AND I KNOW THE OTHER COMMISSIONERS HAVE AS WELL.

UH, SO FORGIVE ME FOR SOME OF THIS BEING A LITTLE BIT, UH, UH, REDUNDANT FOR, FOR SOME OF YOU, UH, I'D LIKE TO BEGIN ON PAGE ONE, A, JUST A BRIEF MARKET UPDATE.

UM, LET ME ADVANCE THIS.

OKAY.

OKAY, GREAT.

SO THE, THE MARKET UPDATE IS PROBABLY MOST OF YOU ARE AWARE.

WE HAVE SEEN INTEREST RATES, UH, GOING UP HERE ACTUALLY IN THE LAST THREE WEEKS.

UH, THIS BEING THE THIRD WEEK OF, OF THIS CALENDAR YEAR AND, AND TAX EXEMPT RATES HAVE MOVED UP QUITE A BIT.

IN FACT, THE FIRST WEEK IN, IN THE CALENDAR YEAR, UH, TAX EXEMPT RATES WENT UP ABOUT EIGHT BASIS POINTS THAT FIRST WEEK, UH, LAST WEEK THEY WENT UP ABOUT ANOTHER FOUR BASIS POINTS, UH, THIS WEEK, UH, THEY CONTINUE TO MOVE UP.

AND SO IF YOU LOOK AT THE BOTTOM RIGHT-HAND CORNER, UH, YOU'LL SEE A TABLE THERE AND YOU SEE MMD PERCENTAGE, UH, JANUARY 7TH.

SO MMD IS THE MUNICIPAL MARKET DATA.

IT'S AN INDEX THAT WE USE TO PRICE BONDS.

AND SO THAT IS FOR NATURAL AAA RATED ENTITIES.

SO THERE ARE A FEW GOVERNMENTAL ENTITIES THAT ARE AAA RATED AND THE MMD TRACKS THOSE, UH, AAA RATED GOVERNMENTAL ENTITIES AND WHERE THEIR BONDS TRADE.

AND AS YOU CAN SEE IN THE FIRST MATURITY OF 2023, IT'S A 0.3, UH, INTEREST RATES OF 30 BASIS POINTS IS WHAT WE WOULD CALL THAT ALL THE WAY OUT TO 30 YEARS AT, UH, 1.6, 3%.

SO YOU CAN SEE THERE, THE CHANGE OVER THE LAST WEEK HAS RANGED FROM A LOW OF ABOUT 13 OR 14 BASIS POINTS TO A HIGH OF ABOUT 16 BASIS POINTS.

THE CHANGE OVER THE MONTH, UH, IS AS HIGH AS ABOUT 17 BASIS POINTS.

AND OVER THE YEAR, EVEN THOUGH IT'S A SHORT YEAR, UH, WE'RE, WE'RE TALKING ABOUT, YOU KNOW, IN THE NEIGHBORHOOD OF 22, AS MUCH AS 57 BASIS POINTS, UM, WOULD THAT TELLS US IS EVERYONE IS SEEING WHAT WE'RE HEARING FROM THE FEDERAL RESERVE, WHICH IS INTEREST RATES ARE GOING TO BE GOING UP.

AND THE MARKET TYPICALLY MOVES AHEAD OF WHAT THE FEDERAL RESERVE DOES.

SO WE'RE ALREADY SEEING INTEREST RATES GOING UP.

THIS IS IMPORTANT FOR THE BACKDROP OF OUR DISCUSSION, BECAUSE WHAT WE'RE GOING TO BE TALKING ABOUT TODAY IS REFUNDING SOME OF THE OLD BONDS THAT THE CITY OF SAN BENITO ISSUED IN 2012, AND LOOKING TO REFINANCE THEM TO A LOWER INTEREST RATE.

SO SIMILAR TO WHAT YOU WOULD DO WITH YOUR HOME MORTGAGE, WE'RE GOING TO BE DOING THAT SAME TYPE OF, UH, POSSIBILITY HERE, UH, IN THIS PRESENTATION.

ANY QUESTIONS BEFORE MOVING ON TO THE NEXT PAGE, THIS IS THE AAA NMD INDEX THAT I REFERENCED IN THE PREVIOUS PAGE, BUT HERE IT GOES BACK TO THE YEAR 2000.

AND WHAT WE SEE HERE IS, UH, FROM THE YEAR 2000 TO NOW, BEGINNING OF 2022, THE BLUE BARS REPRESENT THE HIGH AND THE LOW FOR EACH MATURITY THAT WE'VE SEEN OVER THE LAST 21 YEARS IN A FEW.

SO, AS YOU CAN SEE, THE BAN IS, IS QUITE LENGTHY.

THE, UH, THE BLUE BOX REPRESENTS THE AVERAGE

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SO WE'RE VERY CLOSE.

IF YOU LOOK AT WHERE THE GREEN DIAMOND IS ON THOSE BARS, IT'S DOWN TOWARDS THE LOWER END OF THE BAR.

SO THAT MEANS THAT WE'RE VERY CLOSE TO THE ALL-TIME LOWS OF WHEREVER WE'VE BEEN IN TERMS OF INTEREST RATES.

SO TO REFINANCE THIS DEBT IS A GOOD INDICATOR THAT WE WANT TO BE ON THAT LOWER END.

AND IF YOU LOOK AT THE TABLE DOWN AT THE BOTTOM OF THAT PAGE, YOU'LL SEE THAT IF YOU LOOK AT YOUR 10, FOR EXAMPLE, UH, WE'RE AT 92% OF THE ALL TIME LOW FOR THAT 10TH MATURITY.

SO WHAT THAT TELLS YOU IS ONLY ABOUT 8% OF THE TIME IN THE LAST 21 YEARS HAVE INTEREST RATES BEEN LOWER THAN WHERE WE ARE TODAY.

SO IT GIVES YOU A VERY GOOD INDICATION THAT WE'RE, WE'RE AT A VERY LOW INTEREST RATE ENVIRONMENT TO BE ABLE TO TRY TO REFINANCE THIS DEBT.

THIS NEXT PAGE IS, UH, ONE THAT IS MAINLY RELEVANT TO WHAT WE SEE, UH, AND HEAR FROM THE FEDERAL RESERVE BANK.

AND THAT IS THAT TREASURY RATES ARE GOING TO BE GOING UP.

AND SO THE RELATIONSHIP BETWEEN THE 30 YEAR, AAA, M N D AND THE 30 YEAR TREASURY, AGAIN, GOING BACK SINCE THE YEAR 2000 IS BEEN VERY CLOSE TO BEING IN LINE WITH ONE ANOTHER.

AND AS YOU CAN SEE OUT TO WHERE WE ARE RIGHT NOW, BOTH OF THEM ARE SLIGHTLY TICKING UP, WHICH IS WHAT WE'VE SEEN HERE IN THE LAST FEW WEEKS.

SO WE'RE STARTING TO SEE IT MOVING UP, BUT AGAIN, RELATIVE TO WHERE WE'VE BEEN FOR THE LAST 21 YEARS, UH, WE'RE STILL IN A VERY GOOD POSITION IN TERMS OF WHERE WE WOULD BE LOOKING TO TRY TO REFINANCE THIS DEBT.

THIS NEXT PAGE COVERS WHO THE PARTICIPANTS WOULD BE.

IF THE CITY COMMISSION GAVE US THE AUTHORIZATION THIS EVENING TO PURSUE THIS TYPE OF REFINANCING.

SO THE CITY OF SAN BENITO WOULD BE THE ISSUER, A STRATEGY IN A HOSA AND COMPANY SERVES AS FINANCIAL ADVISER, NORTON ROSE FULBRIGHT IS BOND COUNSEL.

UH, WE DO NOT HAVE A PURCHASER YET FOR THE BONDS, UH, BANK OF NEW YORK MELLON TRUST IS THE PAYING AGENT.

THE CURRENT UNDERLYING CREDIT RATINGS FOR THE CITY OF SAN BENITO ARE A ONE BY MOODY'S, A BY S AND P AND AA BY FITCH.

UH, THESE ARE THE THREE MAJOR RATING AGENCIES.

UM, YOU PROBABLY ARE FAMILIAR WITH, WITH EACH ONE OF THOSE THREE.

WE DO HAVE A SPLIT RATING, AS YOU CAN SEE, UH, FITCH'S THE HIGHEST AT THE AA.

UH, MOODY'S IS THE SECOND HIGHEST AT THE AWAN AND THEN STANDARD.

AND POOR'S AT THE SINGLE A IS ACTUALLY THE LOWEST OF THE THREE, UH, BUT ALL VERY STRONG CREDIT RATINGS, UH, FROM ALL THREE RATING AGENCIES.

ANY QUESTIONS ON, ON ANY OF THAT, THEN MOVING ON TO PAGE FIVE.

UM, THIS IS AGAIN, PROBABLY A LITTLE BIT MORE FOR BACKGROUND PURPOSES, BUT TO BE ABLE TO SEE, UH, WHERE THE CITY HAS BEEN HISTORICALLY FROM YOUR, UH, MAINTENANCE AND OPERATIONS TAX RATE AND YOUR INS TAX RATE, WHICH IS INTEREST IN SINKING FUND.

THE INS TAX RATE IS SPECIFICALLY FOR THE REPAYMENT OF DEBT, UH, THAT DOESN'T NECESSARILY MEAN THAT YOU'RE PAYING ALL YOUR DEBT FROM THE INS TAX RATE, BUT PART OF IT IS PAID FROM THE INS.

PART OF IT IS PAID FROM WATER AND SEWER RATES, SOME FROM ECONOMIC DEVELOPMENT CORPORATION AND SALES TAX REVENUES, UH, BUT THE TOTAL TAX RATE.

SO YOU CAN SEE THE TAX RATE HAS REMAINED VERY LEVEL OVER THE LAST 10 YEARS AT ROUGHLY ABOUT JUST UNDER 73 CENTS IN TOTAL, AND, UH, THE INS TAX RATE ABOUT 7 CENTS AND THE MNO, WHICH IS YOUR GENERAL FUND AT ABOUT A 65, ALMOST 66 CENTS ON PAGE SIX.

NOW WE'RE GETTING INTO THE MORE SPECIFICS OF THE TRANSACTION, UH, WHAT WE WOULD BE LOOKING TO DO IF THE COMMISSION GAVE US AUTHORIZATION WOULD BE TO FINANCE, APPROXIMATELY 2 MILLION, $485,000.

UH, THE CITY HAS ALREADY, UH, BUDGETED AND SET THE TAX RATE FOR THE BONDS THAT YOU WOULD BE LOOKING TO REFINANCE.

SO YOU WOULD HAVE THAT MUCH, THAT YOU'VE ALREADY COLLECTED FROM YOUR TAX RATE.

SO INSTEAD OF BORROWING MORE MONEY, YOU WOULD JUST CONTRIBUTE THAT, THAT YOU'VE ALREADY BUDGETED.

AND THAT WOULD GO TOWARDS THE REPAYMENT OF THE BONDS.

AND THEN THE, UH, USES OF THE FUNDS WOULD BE TO PAY OFF 2 MILLION, $415,000 OF DEBT.

THAT'S OUTSTANDING FROM THE CERTIFICATES OF OBLIGATION THAT WERE ISSUED IN 2012,

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UH, AND WHAT WE'VE DONE ALONG WITH THE BOND COUNCIL IS REDUCE OUR FEES BECAUSE WE WANT TO MAKE SURE THAT YOU HAVE MORE SAVINGS THAN WHAT YOU'RE PAYING IN TERMS OF FEES TO COMPLETE THE TRANSACTION ON THIS FOLLOWING PAGE.

UM, WE'RE GOING TO GET INTO A LITTLE BIT MORE DETAILED NOW WITH RESPECT TO THE REFUNDING ANALYSIS, THE BONDS THAT WE WOULD BE REFUNDING AGAIN, THE SERIES 2012 CERTIFICATES OF OBLIGATION.

THEY HAVE THE MATURITIES THAT ARE STILL OUTSTANDING FROM 2023 TO 2032.

SO 10 MATURITIES THAT ARE LEFT TO BE PAID OFF.

YOU CAN SEE THE PAR AMOUNT OF EACH MATURITY AT ROUGHLY 210,000, ALL THE WAY UP TO 275,000 FOR A TOTAL OF 2 MILLION FOR 10.

AND THEN YOU CAN SEE THE EXISTING COUPONS, WHICH IS WHAT THE CITY'S PAYING A 3% FOR A COUPLE OF THOSE, AND THEN 4% FOR THE BALANCE.

WELL, WE WOULD BE LOOKING TO DO IS THE CALL DATE IS COMING UP FEBRUARY 1ST.

WE WOULD BE LOOKING TO PAY THESE OFF ON MARCH 1ST.

SO, SO LONG AS IT'S AFTER FEBRUARY 1ST, YOU'RE OKAY WITH REFINANCING THIS DEBT AND PAYING IT OFF.

WELL, WE WOULD BE DOING ON MARCH VERSUS PAYING OFF THESE BONDS AT THE HIGHER INTEREST RATE AND REFINANCING.

AND THE RIGHT SIDE OF THE PAGE IS GOING TO COVER NOW THE DETAIL THAT I WANT TO GET INTO.

SO ABOUT 2,485,000 OF BONDS THAT WOULD BE ISSUED.

THE VALUE OF THE SAVINGS IS ABOUT $85,472.

THE NET PRESENT VALUE.

IF YOU WERE TO FAST FORWARD, ALL OF THAT TO TODAY WOULD BE ABOUT $78,000.

THE PERCENT SAVINGS OF THE REFUNDED BONDS, THE NUMBER THAT WE STRIKE AS A FINANCIAL METRIC IS A MINIMUM SAVINGS OF 3%.

IF YOU CAN ACHIEVE AT LEAST 3% SAVINGS, THEN THOSE ARE BONDS THAT WE WOULD RECOMMEND FOR REFUNDING.

IF THESE WERE, UH, LONGER DATED BONDS, LET'S SAY THE CALL DATE WAS NOT FOR ANOTHER YEAR OR SO, THEN WE WOULD BE LOOKING TO ACHIEVE A HIGHER LEVEL OF SAVINGS, UH, PROBABLY CLOSER TO ABOUT 5%.

UH, BUT SINCE THESE ARE WHAT WE CALL CURRENT REFUNDING BONDS, UH, BEING ABLE TO ACHIEVE 3% OR HIGHER IS THE METRIC THAT WE USE AS THE BENCHMARK TO BE ABLE TO, UH, GO AHEAD AND RECOMMEND THAT YOU WOULD PROCEED WITH THIS TRANSACTION.

THE BONDS THAT ARE BEING REFUNDED, THE REFUNDED PAR IS 2.4 MILLION.

AND THE AVERAGE COUPON IS ROUGHLY 3%, ACTUALLY PROBABLY CLOSER TO ABOUT 4%, AS YOU CAN SEE IN 2025 TO 2032.

AND THE ESTIMATED INTEREST COSTS THAT WE WOULD HAVE FOR THE REPAYMENT OF THESE BONDS WOULD BE AT 1.8%.

WE'VE ACTUALLY HAD CONVERSATIONS AT THE END OF LAST WEEK AND TODAY, AND IT SEEMS LIKE THE BUYERS ARE ALREADY FACTORING IN HIGHER INTEREST RATES BETWEEN NOW AND THE END OF THE MONTH OF FEBRUARY WHEN WE WOULD BE LOOKING TO CLOSE.

AND SO THEY SAID, WE'RE PROBABLY GOING TO BE LOOKING AT CLOSER TO ABOUT 2% ON THE REFINANCING THAT WOULD BRING DOWN THAT SAVINGS TO WRITE IT ABOUT PERCENT.

AND, AND THAT'S KIND OF THE MINIMUM THRESHOLD.

WHAT WE'RE HOPING IS THAT RATES MAY NOT MOVE AS FAST AS THEY THINK THEY WILL.

UH, THE OTHER THING THAT WE WOULD BE, UH, SORRY ABOUT THAT.

THE OTHER THING THAT WE WOULD BE, UH, WANTING TO DO FROM OUR PART AND ON THE PART OF BOND COUNSEL IS LOOK TO BRING DOWN OUR FEES TO THE POINT THAT WE WOULD BE ABLE TO ACHIEVE THAT 3% SAVINGS.

THAT'S THE BENCHMARK THAT WE WANT TO MAKE SURE THAT, THAT WE ACHIEVE.

UH, AND, AND WE'VE HAD A GOOD STANDING RELATIONSHIP WITH THE CITY OF SAN BENITO, AND WE WANNA MAKE SURE THAT WE DO A TRANSACTION THAT MAKES GOOD FINANCIAL SENSE, NOT ONE THAT JUST IS GOING TO MAKE MONEY FOR, FOR EVERYONE.

WE WANT TO MAKE SURE THAT THE CITY ENDS UP IN A BETTER POSITION THAN ALL THE OTHER PARTICIPANTS, UH, THAT WOULD BE IN THE, IN THE TRANSACTION.

SO THAT'S A PIECE OF DETAILED INFORMATION I WANT TO MAKE SURE AND PASS ALONG TO YOU ON THE NEXT PAGE.

ANY QUESTIONS ON ANY OF THAT? I'M SORRY, BEFORE WE PROCEED, I KNOW THAT'S PROBABLY THE, UH, THE MAIN PAGE OF THE PRESENTATION THAT WE WANT TO MAKE SURE TO COVER

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THEN MOVING ALONG, THIS IS GOING TO BE AGAIN, PROBABLY MORE FOR INFORMATIONAL PURPOSES.

UM, BUT WHEN YOU STAND BACK AND YOU LOOK AT THE CITY OF SAN BENITO IS DEBT, YOU HAVE ABOUT $24 MILLION OF DEBT OUTSTANDING.

AND YOU PROBABLY WOULD ASK THE QUESTION OF, YOU KNOW, WHAT ARE THE DIFFERENT SOURCES OF FUNDS THAT ARE USED TO REPAY THE DEBT OF THE CITY? SO ON THIS PARTICULAR PAGE, IF YOU LOOK DOWN THE LEFT SIDE, THOSE ARE THE, UH, BOND ISSUES THAT ARE CURRENTLY OUTSTANDING BY THE CITY, AND YOU CAN SEE THEM BY SERIES AND YOU'LL SEE PERCENTAGES, THAT'S THE PERCENTAGE THAT'S ACTUALLY BEING PAID BY THAT SOURCE FOR THAT PARTICULAR BOND ISSUE.

AND YOU CAN SEE IN SOME OF THESE, UH, THEY'RE PAID BY MORE THAN ONE SOURCE.

SO THE VERY FIRST LINE ITEM, UH, THE GEO REFUNDING BONDS FROM 2012 ARE PARTIALLY PAID BY THE GEO, WHICH IS THE INS TAX RATE AT 29.31%.

AND THEN ON THE VERY FAR, RIGHT AT THE WATER AND SEWER ARE PAYING ABOUT 70.6, 9% FOR A TOTAL OF A HUNDRED PERCENT.

DOLLAR-WISE THAT BREAKS DOWN TO WHAT YOU SEE IN THE PRINCIPAL DOWN BELOW.

SO YOU CAN SEE ABOUT 30% OF THAT MILLION FOUR 50 IS THE 4 24, 9 95.

UH, THAT'S ASSOCIATED THAT PAID BY THE INTEREST IN SINKING FUND TAX RATE AND ABOUT 1,000,020 5,000 A DEBT THAT'S ASSOCIATED WITH THAT 2012 GENERAL OBLIGATION REFUNDING BOND IS, UH, IS BEING PAID BY WATER AND SEWER.

AND SO YOU CAN SEE THAT FOR EACH ONE OF THE BOND ISSUES THAT ARE OUTSTANDING AND THEY TOTAL UP TO A LITTLE OVER 24 MILLION, AND THAT WOULD BE AS, UH, UM, ACTUALLY TODAY'S DATE JANUARY 18TH.

SO WE WE'VE GOT THAT UP TO THE, UH, CURRENT DATE.

THE, UH, ONE THING THAT WAS JUST RECENTLY ADDED, UH, I BELIEVE A COUPLE OF YEARS AGO WAS THE CAMERON COUNTY EMERGENCY SERVICES DISTRICT.

AND YOU CAN SEE THAT KIND OF IN THE MIDDLE COLUMN OF, OF THOSE COLUMNS UP THERE.

AND, AND THERE'S SOME DEBT THAT WAS ISSUED IN 2020 THAT IS BEING, UH, PARTIALLY PAID BY THAT EMERGENCY SERVICES DISTRICT.

UH, BUT IN ORDER TO GET IT DONE, THE CITY, I BELIEVE ENTERED INTO AN AGREEMENT TO BE ABLE TO FUND THAT.

AND THE EMERGENCY SERVICES DISTRICT WILL MAKE A TRANSFER TO THE CITY EACH YEAR TO BE ABLE TO PAY A PORTION OF THAT DEBT.

UM, BUT THAT'S THE AMOUNT THAT'S ATTRIBUTABLE TO THEM.

IT JUST UNDER A MILLION DOLLARS, UH, ASSOCIATED WITH US 2020 BONDS ON PAGE NINE.

UH, WE HAVE THE, THE DEBT NOW YOU SAY, OKAY, SO THAT WAS THE DEBT THAT YOU JUST SHOWED US.

NOW TELL ME WHERE THIS DEBT IS PAID IN WHICH YEARS.

SO THAT'S WHAT THIS TABLE DOES.

SO YOU CAN SEE THAT CURRENTLY YOUR SALES TAX IS COMMITTED AS WELL AS YOUR CDBG FUNDS FOR THE NEXT, UH, FOUR YEARS, 2022 THROUGH 2025 TO MAKE CERTAIN PAYMENTS ON CERTAIN BONDS THAT I SHOWED YOU ON THE PREVIOUS PAGE, THE EMERGENCY SERVICES DISTRICT IN THE MIDDLE IS COMMITTED ALL THE WAY THROUGH 2045 AT $60,000 A YEAR.

YOUR ECONOMIC DEVELOPMENT CORPORATION IS COMMITTED THROUGH 2045 AS, AS YOUR WATER AND SEWER, UH, FOR ALL THOSE YEARS.

AND FOR ROUGHLY THOSE AMOUNTS THAT ARE SHOWN THERE.

AND THEN THE VERY LAST COLUMN IS THE AMOUNT THAT'S BEING PAID BY THE INTEREST IN SINKING FUND TAX RATE.

UH, AND SO YOU CAN SEE BY LOOKING AT THIS, UM, YOUR TWO PRIMARY SOURCES FOR REPAYMENT OF DEBT ARE YOUR LAST TWO COLUMNS, WHICH YOUR WATER AND SEWER AND YOUR INTEREST IN SINKING FUND TAX RATE.

AND AS YOU CAN SEE, BOTH OF THEM COME DOWN STARTING IN 2024.

SO IF YOU WERE LOOKING INTO THE FUTURE AND YOU WERE TO SAY, ALL RIGHT, UH, WE, WE WE'VE GOT IT PRETTY MUCH MAXED OUT FOR THE NEXT COUPLE OF YEARS, BUT IN 2024, IT LOOKS LIKE WE'RE GOING TO HAVE SOME CAPACITY.

SO IF THERE WERE SOME PROJECTS THAT YOU WANTED TO LOOK TO DO TO START PLANNING, YOU KNOW, IN 2023 OR LATE 2022, UH, TO BE ABLE TO LOOK AT ISSUING DEBT IN THE FUTURE, TO BE ABLE TO TAKE ADVANTAGE OF WHERE YOU HAVE THOSE DROP-DOWNS AND DEBT SERVICE, THAT WOULD BE CAPACITY THAT YOU WOULD HAVE AVAILABLE TO MAKE OTHER IMPROVEMENTS, YOU KNOW, HERE IN THE CITY.

SO THAT'S WHERE YOU KIND OF SEE A LITTLE BIT OF A BREAKING POINT IN TERMS OF EXISTING DEBT SERVICE.

DID YOU SAY IN 20 32 20, IS THAT WHERE, UH, BECAUSE I'M NOTICING THAT THE WATER IS SORE, THAT CONTINUES ALL THE WAY THROUGH 2045 AND THE NET

[00:30:01]

YES, SIR.

AND AS YOU RECALL, FROM AN EARLIER PAGE IN THE PRESENTATION, UH, RIGHT NOW YOU'RE AT ABOUT 7 CENTS ON THE INTEREST IN SINKING FUND TAX RATE.

UM, SO THAT, THAT'S WHERE THAT IS.

SO THIS FOLLOWING PAGE 10 NOW MAPS OUT.

WHEN YOU LOOK AT IT FROM A BUDGETING PERSPECTIVE ON JUST THE INTEREST IN SINKING FUND PORTION OF THE TAX RATE, YOU SEE IN COLUMN B IS YOUR PROJECTED VALUES FOR THE CITY.

UH, SO THE CERTIFIED VALUES THAT YOU HAVE FOR COLUMN B FOR 2022, AT 753 MILLION WAS AN INCREASE OVER THE PRIOR YEAR OF JUST UNDER 4% AT 3.71, THE DEBT SERVICE PAYMENT IN COLUMN D IN TOTAL IS 3 MILLION, 7 54.

AND, AND THEN THAT WOULD THEN BE BROKEN DOWN BY SELF-SUPPORTING DEBT, WHICH IS IN COLUMN G.

SO THAT'S BEING PAID AGAIN BY THOSE DIFFERENT SOURCES, WATER AND SEWER, EDC SALES TAX CDBG, AND THE EMERGENCY SERVICES DISTRICT TO WHERE YOUR NET THAT'S GOING TO BE PAID IN COLUMN.

I IS THE AMOUNT THAT IS RESPONSIBLE FOR BEING PAID FOR BY THE INS TAX RATE.

AND SO THAT WOULD CONTINUE DOWN FOR THOSE VARIOUS YEARS THAT YOU SEE THERE.

THE FOLLOWING PAGE IS NOW WHERE WE WOULD LOOK TO IMPLEMENT THE REFUNDING BONDS.

IF WE DID THIS, WE'D BE REMOVING THE OLD DEBT AT THE HIGHER INTEREST RATE, BRINGING ON THE NEW DEBT AT THE LOWER INTEREST RATE.

AND YOU'D BE LOOKING AT IN COLUMN E IS THE MAIN COLUMN THAT'S GOING TO CHANGE HERE.

AND THAT AMOUNT IS GOING TO BE DECREASED BY THE AMOUNT OF SAVINGS BY YEAR.

AND SO IT PROBABLY AVERAGES OUT TO JUST UNDER $10,000 A YEAR OF SAVINGS.

AGAIN, NOT A LARGE AMOUNT, WE'RE NOT TALKING ABOUT A LOT OF BONDS, TWO AND A HALF MILLION DOLLARS IS A LOT OF MONEY, BUT IN TERMS OF YOUR OVERALL DEBT, UH, IT'S VERY, VERY SMALL AMOUNT.

UH, WHEN YOU HAVE ABOUT 24 MILLION OUTSTANDING, THIS IS ABOUT 10% AND ALL WE'RE DOING IS REFINANCING IT.

SO YOU'RE NOT GOING TO BE PAYING, UH, PAYING IT DOWN.

YOU'RE JUST GOING TO BE PAYING IT DOWN AT A LOWER INTEREST RATE.

SO YOU'RE STILL GOING TO HAVE THAT ROUGHLY $24 MILLION OF DEBT OUTSTANDING, BUT NOW AT A LOWER INTEREST RATE, MOVING ON TO PAGE 12, THE TIMETABLE OF EVENTS THAT WE'VE PUT TOGETHER IS, UM, MEETING THIS EVENING WHERE THE CITY COMMISSION, UH, IF IT DEEMED SO CAN AUTHORIZE, UH, CITY STAFF, AS WELL AS BOND COUNCIL AND FINANCIAL ADVISORS TO PROCEED WITH THIS REFUNDING, UH, WE WOULD LOOK TO DISTRIBUTE A TERM SHEET TO POTENTIAL, UH, BANKS THAT WOULD BE LOOKING TO BUY THIS DEBT.

WE WOULD BE LOOKING TO TRY TO GET IT DONE WITHOUT HAVING TO GO TO THE RATING AGENCIES AND INCUR THOSE COSTS.

SO IT WOULD BE TRYING TO GET THIS DONE IN THE MOST COST-EFFECTIVE WAY POSSIBLE.

AND THEN, UH, HOPEFULLY BE ABLE TO, UH, HAVE A BID IN HAND, UM, IF NOT BY THE END OF THE WEEK, THEN NO LATER THAN THE 25TH.

AND IF, UH, THE CITY GIVES US THE GREEN LIGHT, WE WOULD GET A, UH, AUTHORIZATION FROM THE CITY MANAGER.

AND WE'D BE ABLE TO GIVE THE CALL NOTICE ON THE BONDS WE NEED ABOUT 35 DAYS.

SO ON JANUARY 25TH, THE NOTICE COULD BE GIVEN.

AND THEN WE WOULD LOOK TO, UH, CLOSE ON THE BONDS ON FEBRUARY 28TH AND ACTUALLY REDEEM THE OLD BONDS ON MARCH 1ST.

SO LITERALLY CLOSE ON ONE DAY, PAY THEM OFF THE NEXT DAY.

AND THEN YOU START PAYING ON THE LOWER INTEREST RATE, UH, STARTING ON MARCH 1ST, 2022.

SO IT'S A SMALL TRANSACTION, VERY COMPRESSED TIMETABLE.

UM, BUT ONE THAT, THAT WE THINK IS WORTH, WORTH YOUR CONSIDERATION.

AND, AND THEN, UH, BECAUSE WE ARE GOVERNED BY THE SEC, UH, WE NEED TO MAKE SURE AND COMMUNICATE THAT, UH, ALL THE NUMBERS THAT WE HAVE PROVIDED OUR ESTIMATES AND NONE OF THESE ARE LOCKED IN AT THIS POINT IN TIME.

UH, THESE ARE ESTIMATES THAT WE'VE PROVIDED FOR YOU TO BE ABLE TO MAKE A REASONABLE DECISION.

IF FOR SOME REASON WE DON'T HIT THE NUMBERS THAT MAKE SENSE FOR THE CITY.

WE WOULD COMMUNICATE THAT TO THE CITY MANAGER AND DIRECTOR OF FINANCE AND SAY, YOU KNOW, WE EITHER, YOU KNOW, POSTPONE THIS FOR ANOTHER TIME.

UM, I BELIEVE THE PARAMETERS AUTHORIZATION

[00:35:01]

SO IF WE SEE INTEREST RATES COME BACK DOWN, WE CAN EXECUTE AT A LATER POINT IN TIME.

UH, BUT FOR RIGHT NOW, SINCE WE HAVE SEEN INTEREST RATES MOVE UP, AS WE SHOWED IN THAT VERY FIRST PAGE OF THE PRESENTATION ABOUT, UH, ALMOST 20 BASIS POINTS HERE IN THE FIRST FEW WEEKS OF THE YEAR, UH, WE DON'T WANT TO LET THIS GET AWAY FROM US, UH, AND, AND MISS AN OPPORTUNITY HERE, EVEN THOUGH I SAID, IT'S NOT A, NOT A LARGE TRANSACTION, BUT WHEN THAT, YOU KNOW, IS WORTH CONSIDERATION SO LONG AS WE HIT THAT 3%, UH, BENCHMARK PER SAVINGS.

AND WITH THAT, WE'RE HAPPY TO ANSWER ANY QUESTIONS YOU MAY HAVE.

I HAD A QUESTION, UH, IN REFERENCE TO THE RATINGS THAT, UH, YOU TALKED ABOUT, UH, THERE WAS THREE DIFFERENT RATINGS.

UH, I MEAN, I, I WONDER, IS THERE SOMETHING THAT CAUSES, UH, THIS THREE DIFFERENT RATINGS AND IF, IF THERE IS, OR CAN WE DO SOMETHING ABOUT IT AND, WELL, UM, MY CONCERN IS, ARE THEY SIMILAR, UH, AND, UH, TO EACH OTHER? OKAY, SURE.

NO, THAT'S GOOD.

GOOD QUESTION.

COMMISSIONER.

THE, THE RATINGS ARE SIMILAR TO ONE ANOTHER, THE, UH, AA IS, UM, IF YOU THINK OF THE WAY THE RATING AGENCIES SET IT UP AS AA PLUS, UH, LET'S START WITH AAA AA PLUS AA AA MINUS, AND THEN WOULD BE AN, A PLUS SINGLE A PLUS MOODY SETS THEIRS UP AS AAA ALSO.

AND THEN THEY DO AA ONE AA, TWO AA, THREE, AND THEN THEY MOVE INTO THE SINGLE A CATEGORY, A ONE.

SO IT'S ALMOST LIKE AN EIGHT PLUS TWO WHERE FITZ WOULD BE AT AN A PLUS IF YOU WANTED TO KIND OF ALIGN THAT.

UM, THE AA BY S AND P IS THE LOWEST RATING OF THE THREE.

A LOT OF TIMES, WHAT WE SEE HAPPENING WITH THE THREE RATING AGENCIES IS THEY WILL HAVE THEIR OWN INTERNAL, UM, METRICS THAT THEY USE BECAUSE THEY COMPARE THE CITY OF SAN BENITO TO OTHER SINGLE, A RATED CITIES ALL AROUND THE UNITED STATES.

SO IN THE ONES THAT THEY RATE, THEY WOULD SAY, WELL, BECAUSE THE CITY OF SAN BENITO IS BELOW 30,000 IN POPULATION.

UM, WE HAD VERY FEW CITIES THAT WE WOULD RATE MUCH HIGHER THAN IN THE AGE CATEGORY, IF THEY ARE FEWER THAN A CERTAIN NUMBER OF PEOPLE.

AND SO SOME OF THEM HAVE POPULATION THRESHOLDS, SOME OF THEM HAVE, UH, FINANCIAL THRESHOLDS, SOME OF THEM HAVE DIFFERENT POLICY ISSUES.

UM, FOR UNFORTUNATELY WHAT WE HAVE SEEN IS, UH, THEY VIEWED THE RIO GRANDE VALLEY AND THE PROXIMITY TO MEXICO AND THE WEALTH PER CAPITA AS A FACTOR THAT HAS US TO BE RATED LOWER THAN OTHER CITIES THAT MAY NOT HAVE THAT KIND OF AN INFLUENCE IN THE LOCAL ECONOMY.

UH, SO ONE OF THE THINGS THAT WE DO, AND WE'VE DONE THIS WITH THE CITY MANAGER AND DIRECTOR OF FINANCE IN CALLS THAT WE'VE HAD WITH THE RATING AGENCIES IS SAY, YEAH, WE MAY NOT THE POPULATION, BUT OUR COST OF LIVING IS CONSIDERABLY LOWER.

SO WHEN YOU LOOK AT OUR WEALTH PER CAPITA OR OUR INCOME LEVELS, OUR MEDIAN INCOME LEVELS, UH, PER CAPITA, THEY ARE LOWER THAN OTHER CITIES AND OTHER PARTS OF THE UNITED STATES.

FOR EXAMPLE, IF YOU WERE GOING TO BE COMPARED TO ANOTHER CITY OF A SIMILAR SIZE IN CALIFORNIA.

YEAH.

THEY WOULD SAY, YEAH, BUT YOU KNOW, AVERAGE MEDIAN INCOME, THERE MIGHT BE $60,000 A YEAR, BUT THE COST OF LIVING IS CONSIDERABLY HIGHER.

SO THAT 60,000 MAY GO AS FAR AS A TWENTY-FIVE THOUSAND DOLLAR MEDIAN INCOME HERE.

BUT THE QUALITY OF LIFE HERE IS ACTUALLY BETTER BECAUSE YOUR DOLLARS GO FURTHER THAN DOLLARS.

IF YOU HAD TO LIVE IN CALIFORNIA WITH A HIGHER HOUSING COSTS, YOU KNOW, EVERYTHING THERE JUST SEEMS TO BE QUITE A BIT MORE EXPENSIVE.

SO WE, WE MAKE THOSE VARIOUS CASES TO THE RATING AGENCIES, BUT THEY, THEY TAKE A NATIONAL VIEW AND PERSPECTIVE AND NOT A REGIONAL ONE.

AND SO WE ARE SUBJECT TO, YOU KNOW, HOW THEY VIEW THE CITY IN RELATIONSHIP TO OTHER CITIES ACROSS THE COUNTRY.

AND THAT THAT'S PROBABLY BEEN THE MOST CHALLENGING FACTOR IF YOU WILL, THAT WE'VE HAD TO ADDRESS WITH THE RATING AGENCIES, FITCH GETS IT AND BELIEVE IT OR NOT,

[00:40:01]

THEN THE OTHER TWO COMBINED.

IN FACT, I THINK BERLIN, UH, AND MR. CITY MANAGER, WE JUST HAD THEM, I GUESS, WAS IT IN SEPTEMBER? THEY WENT THROUGH SURVEILLANCE ON THE CITY AND IT SEEMS LIKE ALMOST EVERY YEAR THEY'RE DOING SURVEILLANCE.

THEY'RE LOOKING AT THE FINANCIAL STATEMENTS.

THEY'RE LOOKING AT EVERYTHING FROM A FINANCIAL AND MANAGEMENT PERSPECTIVE.

THE OTHER RATING AGENCIES MIGHT LOOK ONCE EVERY TWO OR THREE YEARS.

AND IT'S LIKE, THESE GUYS ARE LOOKING THE HARDEST, THEY'RE TAKING THE MOST CRITICAL VIEW AND THEY HAVE THE BEST RATING FOR THE CITY.

AND IF YOU WERE TO SAY, YOU KNOW, WHICH ONE OF THE THREE, YOU KNOW, WOULD I SAY I'D PROBABLY LEAN TOWARDS, IT WOULD BE FITCH, NOT JUST BECAUSE THEY HAVE THE HIGHEST RATING, BUT BECAUSE THEY DO THE MOST DUE DILIGENCE ON THE CITY.

OKAY.

GREAT EXPLANATION.

YOU KNOW, I WAS ALREADY THINKING WHERE YOU WERE GOING WITH THIS, BECAUSE I FEEL LIKE WE'RE DOING AN EXCELLENT JOB, UH, HERE AT THE CITY, UH, WITH OUR FINANCES.

UH, YES, SIR.

AND SO I JUST WANTED A MORE OR LESS, UH, UH, I GUESS JUST TO SATISFY MY THINKING, UH, GOING ALONG THE LINES, BUT I MEAN, YOU KNOW, IT'S JUST SOMETHING THAT, WELL, THAT'S THE WAY IT IS.

SO, UM, WE DEFINITELY NEED TO DO SOMETHING, SO THANK YOU.

SURE.

ANY OTHER QUESTIONS? YES, SIR.

THANKS FOR THE PRESENTATION.

UM, WHEN I WAS LOOKING THROUGH IT ON THE DISCLAIMER, IS THE DISCLAIMER SOMETHING THAT YOU WRITE UP OR IS IT SOMETHING THAT NEEDS TO BE PRESENTED BECAUSE OF THE SEC RULES? IT NEEDS TO BE PRESENTED EXACTLY LIKE THAT.

IT'S, UH, THERE'S PROBABLY A LITTLE BIT OF WIGGLE ROOM.

UM, I WILL TELL YOU, WE PROBABLY HAVE ONE OF THE SHORTEST DISCLAIMERS OTHER FIRMS HAVE ABOUT TWO TO THREE PAGES OF DISCLAIMERS.

UM, YEAH, I THINK THE MAIN THING IS, IS THAT, YOU KNOW, WE HAVE TO ABIDE BY THE SCCS MUNICIPAL ADVISORY RULES AND THOSE RULES CAN BE PRETTY SIGNIFICANT IN ALL ENCOMPASSING AND WHAT THEY DON'T WANT US TO BE DOING IS, YOU KNOW, GUARANTEEING, YOU KNOW, THE SAVINGS OR, OR PROMISING OR MAKING ANY OF THOSE TYPES OF COMMITMENTS.

WE HAVE TO MAKE SURE THAT WE SAY ALL THESE AMOUNTS ARE ESTIMATED AND UNTIL THE DEAL IS DONE AND IT'S LOCKED IN AND WE CLOSED, DO WE HAVE ANYTHING THAT'S FINAL? UH, SO WE, WE HAVE TO MAKE SURE AND, AND, AND STATE, YOU KNOW, ALL OF THOSE TYPES OF THINGS, BUT, UM, UH, IS THERE, I DON'T KNOW IF THERE'S ANYTHING IN SPECIFIC THAT YOU WANT.

YEAH.

THERE WAS ONE SENTENCE THAT KIND OF THREW ME OFF.

IT SAYS, UM, WITH THIS COMMUNICATION STRALA IN A HOSA IS NOT ASSUMING THE ROLE OF YOUR INDEPENDENT REGISTERED MUNICIPAL ADVISOR.

SO UNDERSTAND THAT YOU'RE PRESENTING TO US, NSS IS NOT ATTEMPTING TO ESTABLISH A FIDUCIARY RUSSELL RELATIONSHIP TO ME IS LIKE THAT RIGHT THERE.

YOU'RE NOT TRYING TO, YOU KNOW HOW THAT SOUNDS SURE.

YOU'RE NOT TRYING TO ESTABLISH A FIDUCIARY RELATIONSHIP WITH US.

W WE ACTUALLY HAVE ONE CONTRACTUALLY, SO WE'RE, WE'RE NOT TRYING TO, WE ACTUALLY HAVE ONE, IN FACT.

SO, UM, WE, WE PROBABLY CAN CLEAR THAT UP, UM, A LITTLE BIT MORE.

I THINK THE THING THAT THE SEC IS DON'T TRY TO BE HERE AND INFLUENCE YOU TO DO SOMETHING, MAKE SURE THAT WE PRESENT THE INFORMATION AND IN AN UNBIASED FORM, AND WE CAN MAKE A RECOMMENDATION, UH, BUT WE SHOULD NOT BE TRYING TO INFLUENCE YOU TO DO SOMETHING.

AND, UH, AND THAT'S, I THINK THEY, THE THING THAT'S MOST CRITICAL THERE, AND WE PROBABLY NEED TO REVISIT THAT SO WE CAN MAKE THAT A LITTLE BIT MORE CLEAR, BUT YES, WE DO HAVE A CONTRACTUAL FIDUCIARY DUTY TO THE CITY.

THANK YOU FOR THAT.

AND THEN IS YOUR FIRM, UM, DO YOU HAVE YOUR FIRM NUMBER FOR, WITH THE SEC? WE DO.

I DON'T KNOW THAT OFF THE TOP OF MY HEAD, BUT I CAN GET THAT TO YOU.

WE ARE A LICENSED BROKER DEALER AND, UM, I THINK I HAVE FIVE OR SIX DIFFERENT LICENSES MYSELF.

UM, AND IN ADDITION TO THAT, UM, I'M ALSO A CPA.

UH, SO MY, MY LICENSES ARE PROBABLY MORE EXTENSIVE THAN I DON'T WANT TO SAY THAN ANYONE'S, BUT I THINK THERE'S ONLY A FEW PEOPLE IN TEXAS THAT HAVE THE LICENSES I HAVE AS WELL AS A CPA LICENSE.

AND THEN THE S THE YEARS OF EXPERIENCE IS THROTTLING.

THE HOSA HAS BEEN OPEN.

UM, WE ARE ACTUALLY, UH, CELEBRATING 30 YEARS, UH, NEXT MONTH.

UH, SO WE'RE VERY PROUD OF THAT.

I ACTUALLY START MY 30TH YEAR, AND THIS IS MY THIRD CAREER, UM, NEXT MONTH AS WELL.

AND, UH, SO VERY PROUD OF, UH, OF THE FIRM WE WERE, UM, WHEN I STARTED

[00:45:01]

UM, AND WE ARE 100% EMPLOYEE OWNED.

AND, UM, I WOULD SAY PROBABLY I THINK SOMEWHERE IN THE NEIGHBORHOOD OF ABOUT 75% OR MORE MINORITY OWNED, MAYBE 85%.

UM, AND I'M ACTUALLY THE SECOND LARGEST SHAREHOLDER IN THE FIRM AND, UH, VICE CHAIRMAN AS WELL, MAYBE A LITTLE BIT MORE THAN THEY'RE LOOKING FOR, BUT JUST SAY GOOD INFORMATION.

THANKS FOR THE BACKGROUND.

IF SURE.

NOW I'M TRYING TO FIGURE OUT THE SAVINGS HERE.

UM, ON PAGE SEVEN.

YEAH.

SO PAGE SEVEN HAS A NET PRESENT VALUE SAVINGS OF 78,268, BUT THEN THERE WAS A COST ISSUE AND SOME 75,000 NOW, CORRECT ME IF I'M WRONG.

DOES THAT MEAN THAT ONLY GETTING THE SAVINGS OF $3,000? GOOD QUESTION.

IT'S ACTUALLY THAT 78,000 IS ON A NET PRESENT VALUE BASIS.

SO THE, UH, FUTURE SAVINGS, BECAUSE IT'S GOING TO BE DERIVED OVER 10 YEARS IS THE 85,000 4 72 THAT YOU SEE ABOVE THAT, AND THAT IS NET.

SO IT'S AFTER THE PAYMENT OF THE COST OF ISSUANCE.

SO THAT, THAT NUMBER IS AFTER THE COST, THAT WOULD BE ENCOURAGED TO COMPLETE THE TRANSACTION.

THANK YOU FOR CLEARING THAT.

SURE.

YEAH, JUST THE UNPREDICTABILITY, I GUESS, OF THE INTEREST RATES STONE ONLY THING, YOU KNOW, IT SHOULD, WE HAVE FOUGHT REFINANCE MUCH SOONER, YOU KNOW, DURING THAT TWO OR THREE YEARS AGO OR TWO YEARS AGO, AND THE PANDEMIC STARTED.