[00:00:05]
          THIS MEETING OF THE RICHARDSON CITY COUNCIL TO ORDER AT 6 P.M. JUST FOR THE RECORD, COUNCIL MEMBER, JUSTICE IS A WAY FOR THIS PARTICULAR MEETING, BUT THE REST OF OUR COUNCIL IS HERE. 
          AND WE'LL START OFF WITH ITEM A, WHICH IS PUBLIC COMMENTS ON AGENDA ITEMS AND VISITORS FORUM. 
          MR. MAGNER, THANK YOU, MAYOR, MAYOR AND COUNCIL. WE ARE NOT IN RECEIPT OF ANY CARDS IN ADVANCE OF THE 4 P.M. DEADLINE, AND AS OF THIS MOMENT, WE DO NOT HAVE ANYONE SIGNED UP TO SPEAK. IS THERE ANYONE IN THE AUDIENCE WISHING TO SPEAK? ALL RIGHT. SEEING NONE, WE'LL MOVE 
          [B. REVIEW AND DISCUSS THE FORMATION OF A HOUSING FINANCE CORPORATION (HFC) AND A PUBLIC FACILITIES CORPORATION (PFC)]
ON TO ITEM B, WHICH IS TO REVIEW AND DISCUSS THE FORMATION OF A HOUSING FINANCE CORPORATION AND A PUBLIC FACILITIES CORPORATION. MR. MAGNUM, THANK YOU. MAYOR. 
          EXCUSE ME. MAYOR AND COUNCIL. KENT FILE. OUR COO IS GOING TO HEAD TO THE PODIUM HERE. HE'S GOING TO LEAD KIND OF THE INTRODUCTORY SLIDES ON ON THIS TOPIC. LET ME JUST REMIND YOU THAT COMING OUT OF THE HOUSING NEEDS ASSESSMENT THAT WAS COMPLETED SEVERAL MONTHS AGO, THERE WERE FOUR KIND OF IMMEDIATE ACTION ITEMS. TONIGHT'S BRIEFING IS ONE OF THOSE TACTICS THAT YOU IDENTIFIED AS A PRIORITY FOR THE REMAINDER OF 2026. AND SO TONIGHT WE HAVE THE TEAM FROM FROM BOTH CHAPMAN AS WELL. EXCUSE ME, AS HILLTOP SECURITIES HERE. I'M GOING TO LET KEN KIND OF DO SOME INTRODUCTIONS, BUT I DO WANT TO LET YOU KNOW THAT AS WE GET INTO THE PRESENTATION ITSELF, OUR GUESTS TONIGHT, WHO WILL BE INTRODUCE HERE SHORTLY, ARE GOING TO REMAIN AT THEIR SEAT. I THINK AS WE HAVE GOOD DIALOG AND DISCUSSION AT ANY TIME, ANY ONE OF THEM COULD BE CALLED UPON TO PROVIDE SOME INFORMATION OR TO ANSWER OUR QUESTION. SO I THINK IT'LL JUST BE MORE FLUID THAT WAY. I WILL TELL YOU, YOU KNOW, A LOT OF TIMES I WILL ASK YOU TO KIND OF HOLD QUESTIONS UNTIL THE VERY END OF THE PRESENTATION. KENT AND I HAVE GONE THROUGH THIS TWICE NOW. THIS DOES BUILD ON ITSELF. AND SO AS WE GET DEEPER INTO THE PRESENTATION, IT MAY BE BETTER. AND IT KIND OF BUILDS ON ITSELF IN TERMS OF WHAT YOU NEED TO KNOW TO UNDERSTAND THE LATTER PARTS. 
          AND SO I THINK IF YOU HAVE QUESTIONS HERE IN THE BEGINNING, AS THEY GO OVER SOME OF THE KIND OF WHAT WE'RE CALLING THE MYTH BUSTING, OR EVEN SOME OF THE JUST BASICS IN TERMS OF THE WAY THAT THE PFC OR HFC COULD BE ESTABLISHED AND ITS PURPOSES, I THINK THAT WOULD BE APPROPRIATE FOR YOU TO KIND OF JUST GO AHEAD AND ASK THOSE QUESTIONS AS WE GO THROUGH AND PROBABLY BE A LITTLE BIT MORE PRUDENT. I ALSO WANT TO THANK OUR DIRECTOR OF FINANCE, TODD GASTHOF, AND OUR ASSISTANT DIRECTOR, AMY FERGUSON, FOR FOR BEING HERE, AMY, ACTUALLY IN IN HER FORMER POSITION WITH THE CITY OF ANNA, HAS QUITE A BIT OF EXPERIENCE WITH BOTH FCS AND NFCS AND HAS BEEN A GREAT VALUE ADD HERE AS WE PUT THIS PRESENTATION TOGETHER FOR YOU. 
          SO KENT, THANKS TO YOU FOR SPEARHEADING THIS EFFORT AND I'LL TURN IT OVER TO YOU. THANK YOU DON. MAYOR AND COUNCIL, JUST TO HELP SET THE STAGE HERE FOR THIS DISCUSSION THIS EVENING, I WANTED TO REMIND YOU ONE OF YOUR STRATEGIES IS TO PROTECT AND PROMOTE INNOVATIVE INTEGRITY AND VITALITY PROGRAMS TO SUPPORT NEIGHBORHOOD DESIRABILITY AND ENCOURAGE REINVESTMENT. ONE OF THE TACTICS TOWARDS THAT STRATEGY WAS TO RECEIVE AND DISCUSS NEXT STEPS OF THE HOUSING NEEDS ASSESSMENT. SO IF YOU RECALL, THERE WERE THREE NEEDS THAT CAME OUT OF THAT HOUSING STUDY NEED. NUMBER ONE WAS OLDER. LOW INCOME HOMEOWNERS NEED THE OPPORTUNITY TO SAFELY AGE IN PLACE, AND TOWARDS THAT, YOU'LL HAVE A FUTURE PRESENTATION ON THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM AND HOW THAT COULD BE USED TO HELP OLDER, LOW INCOME RESIDENTS FOR HOME REPAIRS AND SO FORTH. PROBABLY SOMETIME AFTER THE FIRST OF THE YEAR NEED. NUMBER TWO COMING OUT OF THE STUDY WAS MORE REASONABLY PRICED FOR SALE. 
          HOUSING UNITS ARE NEEDED TO ACCOMMODATE FAMILIES WITH CHILDREN, AND IN A COUPLE OF WEEKS, YOU'LL BE HEARING A PRESENTATION ABOUT MISSILE MISSING MIDDLE HOUSING THAT WILL GET AT NEED. NUMBER TWO, WHAT WE'RE HERE TO TALK ABOUT TONIGHT IS NEED. NUMBER THREE MORE WELL MAINTAINED RENTAL HOUSING UNITS ARE NEEDED THAT ARE AFFORDABLE FOR LOWER WAGE WORKERS. AND THERE ARE TWO ITEMS THAT CAME OUT OF THIS STUDY REGARDING NEED. NUMBER THREE. ONE WAS OPPORTUNITY ZONES. AND AGAIN, THERE'LL BE A PRESENTATION PROBABLY SHORTLY AFTER THE FIRST OF THE YEAR ON OPPORTUNITY ZONES. WHAT WE'RE HERE TO TALK ABOUT TONIGHT IS THE HOUSING FINANCE CORPORATIONS OR HFCS AND PUBLIC FACILITY CORPORATIONS OR FCS. 
          BOTH OF THOSE CORPORATIONS HAVE BEEN USED AS TOOLS AROUND THE STATE FOR THE NEW CONSTRUCTION AND THE REHABILITATION OF RENTAL HOUSING. AND I THINK YOU'RE ALL AWARE THAT PROBABLY OVER THE LAST 4 OR 5 YEARS, THERE HAVE BEEN A NUMBER OF CONCERNS AROUND USING THESE TOOLS. AND OVER THE LAST COUPLE OF LEGISLATIVE SESSIONS, THE CONCERNS HAVE STARTED TO BE ADDRESSED. SO IN THE 88TH LEGISLATURE IN 2023, REQUIREMENTS WERE TIGHTENED REGARDING FCS AND IN THE 89TH LEGISLATURE IN 2025, THE SAME THING FOR HFCS REQUIREMENTS WERE TIGHTENED. PROBABLY ONE OF THE BIG KIND OF CONCERNS THAT THAT WERE HAPPENING WITH HFCS AND FCS IS REFERRED TO AS KIND OF THE TRAVELING HFCS, FCS. AND WHAT WAS HAPPENING IS YOU COULD 
          [00:05:03]
HAVE, SAY, AN HFC DOWN IN CENTRAL TEXAS, AND THEY WOULD DO A PROJECT UP HERE WITH THE DEVELOPER IN A CITY IN NORTH TEXAS, BUT THEY WEREN'T REALLY THE CITY DIDN'T REALLY KNOW THAT THERE WERE TAX EXEMPTIONS BEING PROVIDED. IN A LOT OF CASES, THEY ARE PROVIDING 100% PROPERTY TAX EXEMPTIONS. AND THERE WERE SALES TAX EXEMPTIONS AS WELL. SO WHAT THE LEGISLATION DID IS REALLY RESTRICTED THESE HFCS AND FCS TO OPERATING WITHIN THEIR OWN JURISDICTIONAL BOUNDARIES WHERE THEY WERE CREATED. THEY CAN STILL DO PROJECTS OUTSIDE OF THOSE JURISDICTIONAL BOUNDARIES. BUT IF THEY DO THAT, THE CITY WHERE THAT PROJECT TAKES PLACE HAS TO APPROVE THAT PROJECT. SAME THING. IF THAT HAPPENS IN AN UNINCORPORATED COUNTY, THEN THE COUNTY WOULD HAVE TO APPROVE THAT PROJECT. IN ADDITION TO THE TRAVEL AND HFC ISSUE, REQUIREMENTS NOW ALSO REQUIRE OR REQUIREMENTS WERE PUT IN PLACE TO REQUIRE PUBLIC HEARINGS. THERE WERE TIGHTER AFFORDABILITY REQUIREMENTS AND REQUIREMENTS AROUND TENANT PROTECTIONS AND THE ACCEPTANCE OF HOUSING VOUCHERS ADDITIONALLY REQUIRED ANNUAL REPORTING. COMPLIANCE MONITORING AND AUDIT REQUIREMENTS WERE PUT IN PLACE WITH OVERSIGHT BY THE TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS. AND SO THESE ARE COMPLICATED TOOLS, WHICH WE'LL GET INTO THAT DISCUSSION TONIGHT. BUT THE PURPOSE OF TONIGHT'S MEETING IS REALLY TO GAIN A BASE LEVEL UNDERSTANDING OF HFCS AND FCS IN ADVANCE OF A FUTURE DISCUSSION WHERE WE CAN TALK MORE ABOUT KIND OF RICHARDSON'S SPECIFIC CONSIDERATIONS AND USE OF THOSE TOOLS. SO AS DON MENTIONED, I'M GOING TO TURN IT OVER AT THIS POINT TO HILLTOP SECURITIES. HILLTOP HAS BEEN IN NUMEROUS TRANSACTIONS AROUND THE STATE REGARDING HFCS AND FCS, AND TYPICALLY OPERATES AS THE FINANCIAL ADVISOR TO THOSE ORGANIZATIONS, CHAPMAN AND CUTLER, AS WELL AS THE LEGAL REPRESENTATION. A LOT OF TIMES THERE'S LLCS THAT ARE SET UP FOR THESE PROJECTS. CHAPMAN AND CUTLER HAS PROVIDED THE LEGAL LEGAL EXPERTISE. I WON'T READ THEM ALL. I'VE LISTED A FEW AREA HFCS THAT BOTH BOTH OF THEM HAVE SERVED, BUT THERE'S MANY MORE HERE IN DALLAS, FORT WORTH, AS WELL AS MANY MORE AROUND THE STATE. SO WITH THAT, I'M GOING TO TURN IT OVER TO MEGAN AND LET MEGAN INTRODUCE KIND OF THE TEAM FOR TONIGHT'S DISCUSSION. PERFECT. THANK YOU KENT. GOOD EVENING ALL. GOOD EVENING MAYOR COUNCIL STAFF AGAIN. MEGAN RAMOS WITH HILLTOP SECURITIES WANTED TO DO A QUICK INTRODUCTION OF WHO HILLTOP IS. YOU'RE PROBABLY FAMILIAR WITH HILLTOP THROUGH VARIOUS OTHER EXPOSURES WITH THE CITY OF RICHARDSON. SO WE'VE BEEN WE ACTUALLY JUST CELEBRATED OUR 80TH YEAR IN THE IN THE BUSINESS. SO WE SERVE MUNICIPALITIES ALL OVER THE STATE OF TEXAS. IN THE US, SPECIFICALLY, OUR TEAM HERE, THE HOUSING TEAM IS LED UP BY TIM NELSON, WHO'S JUST IS ABOUT 40 YEARS INTO THE BUSINESS. WE ALSO HAVE CLAIRE LASTRAPES, WHO'S OUR SENIOR VICE PRESIDENT, BRAXTON PARSONS, WHO'S SITTING RIGHT HERE TO THE LEFT OF ME. 
          AND THEN WE ALSO HAVE CHELSEA TRAN, OUR ASSOCIATE VICE PRESIDENT, AND MARGARET BUTLER, WHO'S OUR ANALYST. SO THIS IS OUR WHOLE TEAM. WE REPRESENT A LITTLE BIT OVER 40 DIFFERENT HFCS, PFCS ACROSS THE STATE OF TEXAS AND WON OUT IN IN FLORIDA. BUT PRIMARILY WE FOCUS WITHIN THE STATE OF TEXAS HERE. AND I WILL TURN IT OVER TO OUR FRIENDS AT CHAPMAN FOR A QUICK INTRODUCTION. GREAT. THANK YOU. MEGAN. I'M RYAN BOWEN FROM CHAPMAN AND CUTLER WITH ME, AS WELL AS RACHEL JENSEN. I'M THE HEAD OF THE HOUSING PRACTICE IN CHICAGO BASED THERE. BUT NEARLY ALL OF MY WORK IS WORKING WITH TEXAS HFC. SO AS MEGAN AND KENT MENTIONED, WE REPRESENT HFCS REALLY FROM ALL FOUR CORNERS OF THE OF THE STATE. PERSONALLY, I'VE BEEN DOING IT JUST UNDER 20 YEARS. OUR FIRM HAS BEEN WORKING WITH TEXAS HFCS REALLY SINCE THEY WERE FORMED BY STATUTE BACK IN THE LATE 70S, EARLY 80S. SO HAPPY TO BE WITH WITH YOU GUYS TONIGHT AND LOOK FORWARD TO A GOOD DISCUSSION. THANK YOU. RYAN. ALL RIGHT. WELL, AS KENT KINDLY PROVIDED A GREAT INTRODUCTION. SO WE WANTED TO GIVE A HIGH LEVEL OVERVIEW OF HOUSING FINANCE CORPORATION'S KNOWN AS HFCS PUBLIC FACILITY CORPORATIONS KNOWN AS FCS. AND WE WANTED TO START OFF WITH SOME CONCERNS THAT WE OFTEN HEAR WHEN WE'RE SPEAKING OF THESE THESE ENTITIES, AS KENT HIGHLIGHTED A COUPLE OF THEM ALREADY. WE THE TRAVELING HFC BUSINESS WAS ONE THAT YOU KNOW, PRETTY MUCH BROUGHT A LITTLE BIT OF A NEGATIVE LIGHT TO HFCS, PFCS. 
          BUT AS A STATUTE HAS BEEN AMENDED TO CURB THOSE CONCERNS, AS WELL AS ADD ADDITIONAL 
          [00:10:01]
RESTRICTIONS SUCH AS AUDIT REQUIREMENTS, REQUIREMENTS OF ACCEPTING VOUCHERS. THEY NOW ARE OVERSEEN BY THE TEXAS DEPARTMENT TDHCA. SO DEFINITELY MORE OVERSIGHT INTO THESE TRANSACTIONS, MORE TRANSPARENCY. ANOTHER COMMON CONCERN WE HEAR IS, YOU KNOW, THERE'S NO PUBLIC BENEFIT IN THESE PARTNERSHIPS. AS AS MENTIONED, YOU KNOW, STATUTES NOW REQUIRING CERTAIN PUBLIC BENEFIT STANDARDS. THEY HAVE AFFORDABILITY RESTRICTIONS THAT ARE REQUIRED. AND IT ALSO HELPS, YOU KNOW, PROVIDE NOT ONLY THE AFFORDABILITY, BUT ALSO REVENUES THAT ARE RECEIVED FROM THESE TRANSACTIONS. YOU'RE ABLE TO GET THOSE BACK IN THE FORM OF PUBLIC BENEFITS AND GENERATE THAT WITHIN YOUR CITY AND HIT YOUR HOUSING NEEDS OR EVEN OTHER COMMUNITY BENEFIT NEEDS. AND THE BOTTOM LINE THERE, HFC DEVELOPMENTS ARE PUBLIC HOUSING. ESSENTIALLY. 
          THESE ARE PUBLIC PRIVATE PARTNERSHIPS. THESE ARE RAN BY PRIVATE PARTNERS WITH. THEY HANDLE ALL THE PROPERTY MANAGEMENT LEASING OPERATIONS. THESE ARE NOT THE RESPONSIBILITIES OF THE HFC, PFC, LOCAL GOVERNMENTAL ENTITY. THIS IS BY DESIGN. AND WE CAN GET INTO A LITTLE BIT MORE DETAILS OF THAT HERE IN A BIT. A FEW OTHER ONES THAT WE ALSO COMMONLY HEAR IS THE NEGATIVE CONNOTATION BEHIND, YOU KNOW, LOW INCOME HOUSING. WHO ARE THOSE TENANTS? YOU KNOW, DO WE NEED IT? DO WE NOT? WHEN WE TALK ABOUT THESE TRANSACTIONS, 1ST MAY THINK WE'RE TALKING ABOUT ONE WHO MAKES VERY LITTLE INCOME TO NO INCOME. THESE ARE ACTUALLY YOUR WORKING CLASS PEOPLE THAT MAY NOT BE ABLE TO HAVE THE ABILITY TO PAY THOSE MARKET RENTS AND YOUR STANDARD COMMUNITIES. ANOTHER ONE THAT'S COMMON, AND PROBABLY THE MOST QUESTIONED, THAT WE'D GET IN THESE TYPES OF SETTINGS AND PRESENTATIONS IS ONE OF THESE PROJECTS COULD HURT YOUR CITY'S REVENUE TAX BASE? THAT WAS NOT CORRECT. THE HFC FCS, THEY ISSUE CONDUIT DEBT. SO THE THE DEBT IS BACKED BY THE REVENUES FROM THE PROJECT. SO THESE BONDS ARE NOT A LEGAL OR MORAL OBLIGATION OF THE CITY. THE HFC PFC IS A SEPARATE LEGAL ENTITY FROM THE CITY. SO AND AS WE GO THROUGH THIS DISCUSSION FURTHER, WE CAN TALK ABOUT ALL THE DIFFERENT KIND OF LEGAL PARAMETERS THAT ARE PUT AROUND THESE TRANSACTIONS AS WELL, JUST TO PROTECT THE CITY, HFC AND PFC. SO WE CAN LET'S GO AHEAD AND JUMP RIGHT INTO IT. 
          SO THOSE ARE KIND OF THE FEW KIND OF TOP QUESTIONS WE GET. YOU KNOW, NEXT KIND OF QUESTION IS WHY WOULD WE CREATE ONE? ESSENTIALLY, HFCS, PFCS ARE A TOOL IN THE TOOLBOX TO HELP YOU REACH YOUR HOUSING NEEDS WITHIN THE COMMUNITY. WITHIN THESE PARTNERSHIPS, NOT ONLY DO THEY BRING AFFORDABILITY TO YOUR COMMUNITY WITH DIFFERENT, YOU KNOW, THERE'S DIFFERENT AFFORDABILITY LEVELS YOU COULD TARGET. NOT ONLY DOES IT BRING THE AFFORDABILITY, BUT YOU ALSO RECEIVE REVENUE BACK TO THE HFC THAT YOU'RE THEN ABLE TO PUT BACK INTO YOUR COMMUNITY AS YOU SEE FIT WITH THESE PARTNERSHIPS. IT ALSO ALLOWS YOU A LITTLE BIT MORE SAY OR CONTROL, IF YOU WILL, WITHIN THE AT THESE PROPERTIES, SO MANY COMMUNITIES SEE THAT AS A AS A BENEFIT THAT IF THERE'S AN ISSUE OR PROBLEM, THEY'RE PROBABLY MORE WAY MORE LIKELY TO BE ABLE TO GET THAT FIXED RATHER THAN IT'S A MARKET RATE DEVELOPER. AND YOU HAVE, YOU KNOW, NOT VERY MUCH SAY, INTO THOSE. AND FROM THE DEVELOPERS PERSPECTIVE, WITH ANY PUBLIC PRIVATE PARTNERSHIP, OF COURSE, THERE IS A NEEDS TO BE A WIN WIN SITUATION. SO THE MOST VALUABLE ASPECT OF THESE PARTNERSHIPS IS THE AD VALOREM AND SALES TAX EXEMPTION THAT IS BROUGHT WITH THE HFC OR PFC PARTNERSHIP. AND THEN THAT ALSO ARE ABLE TO ACCESS LOW INCOME HOUSING TAX CREDITS WITH 4% OR 4% BONDS, AS WELL AS 9% CREDITS. MAYOR PRO TEM, SO YOU CONFUSED ME THERE. CAN YOU GO BACK ONE 
          [00:15:04]
SLIDE? SURE. YOU SAY THIS ISN'T LOW INCOME HOUSING YET UNDER THE DEVELOPER PERSPECTIVE, YOU HAVE IN THERE THAT THE PROJECT QUALIFY FOR LOW INCOME HOUSING TAX CREDITS. SO HELP ME UNDERSTAND HOW THAT'S NOT TALKING OUT OF BOTH SIDES OF YOUR MOUTH. AND I DON'T MEAN THAT DISRESPECTFULLY, BUT IT JUST THAT DOESN'T THAT DOESN'T SEEM TO ADD UP IN WHAT YOU WHAT YOU SAID IN EARLIER SLIDES THAT THIS REALLY IS THAT IT'S TARGETED AT WORKFORCE DEVELOPMENT, NOT LOW INCOME HOUSING. AND YET YOU HAVE ON THIS SLIDE THAT IT QUALIFY FOR LOW INCOME HOUSING TAX CREDITS. CAN YOU HELP ME UNDERSTAND THAT? SURE. SO I GUESS IT'S THE COMMON NOMENCLATURE, LOW INCOME HOUSING TAX CREDITS, ALSO KNOWN AS LITE TECH. THAT'S, I GUESS, THE NOMENCLATURE THAT'S BEEN USED FOR THESE TAX CREDITS. WHEN I SAY, I GUESS THIS ISN'T LOW INCOME, I MEAN IN TERMS OF THE PERCEPTION OF LOW INCOME IS EQUATES TO THOSE MAKING LESS THAN 30% OF AREA MEDIAN INCOME. MAKING ABOUT 60% OF AREA MEDIAN INCOME, PRIMARILY TO 80% OF INCOME. BUT THIS ALSO EXTENDS UP TO ONE 2140. SO I GUESS THE STATEMENT OF THIS ISN'T LOW INCOME, MEANING THE TENANT OR TENANTS RESIDENTS ARE NOT NECESSARILY THOSE OF OF EXTREME LOW INCOME, THOSE, YOU KNOW, IN UNDER POVERTY LEVELS. SO IF YOU LOOK AT HOUSING, HOW, HOW AFFORDABLE HOUSING IS FINANCED AND OPERATED, REALLY, YOU CAN KIND OF DRAW A LINE AT 1986, WHEN THE TAX CODE WAS REFORMED, PRIOR TO THAT AMENDED TAX CODE COMING INTO PLACE, YOU HAD BIG GOVERNMENTALLY OWNED, OPERATED, FUNDED. YOU KNOW, WHAT PEOPLE FREQUENTLY CALL HOUSING PROJECTS. I THINK THAT'S WHAT MEGAN WAS SAYING BY, YOU KNOW, IT'S NOT LOW INCOME PER SE IN THAT SENSE. YOU KNOW, WHAT THE 86 ACT DID? DID A LOT OF THINGS. BUT ONE THING IT DID WAS IT INTRODUCED THE LOW INCOME HOUSING TAX CREDIT, WHICH WAS INTENDED TO BRING PRIVATE CAPITAL AND PRIVATE OWNERSHIP INTO AFFORDABLE HOUSING. SO THAT IS A BIG COMPONENT OF HOW THESE DEALS GET DONE, IS YOU HAVE A PRIVATE INVESTOR WHO CONTRIBUTES CAPITAL. THEY MAKE THE EQUITY INVESTMENT IN THESE DEVELOPMENTS. IN EXCHANGE, THEY GET WHAT'S CALLED THE LOW INCOME HOUSING TAX CREDIT. AND THOSE UNITS ARE TYPICALLY RESTRICTED TO 60% AREA MEDIAN INCOME TENANTS AND LESS. SO IT IS WELL IT'S THE LOW INCOME. AND WE CAN DEBATE WHAT LOW MEANS. IT'S A DIFFERENT MODEL THAN WHAT WAS PRE 86 AND IS INTENDED TO PROMOTE PRIVATE INVESTMENT, PRIVATE OWNERSHIP AND HAVE PRIVATE INTERESTS, INVEST IN COMMUNITIES AND HELPING MAKE THINGS AFFORDABLE. SO I DON'T REALLY FEEL LIKE I GOT MY QUESTION ANSWERED. I'M SORRY, BECAUSE IN THE FIRST SLIDES YOU TALK, I MEAN, YOU SAID THAT THIS WAS REALLY DESIGNED FOR WORKFORCE OR THAT THAT THAT'S THE TARGET. AND YET YOU'RE BOTH NOW SAYING, WELL, YEAH, BUT IT, IT WOULD BE LOW, IT WOULD QUALIFY. AND SO THEREFORE THAT IT COULD IN FACT, BE LOW INCOME HOUSING. SO I'M JUST CONFUSED AS TO WHAT YOU'RE SAYING. I THINK I GET WHAT YOU'RE WHERE YOU'RE AT. SO I THINK THERE'S ANOTHER WAY TO LOOK AT IT TOO, IS THERE'S ALSO KIND OF DELINEATION BETWEEN THOSE LOW INCOME TAX CREDIT TRANSACTIONS THAT USE PRIVATE ACTIVITY BONDS AND CAN MOVE FORWARD WITH THAT. AND THOSE ALWAYS TARGET, YOU KNOW, 60% AMI AND LOWER. THERE'S ALSO THESE WORKFORCE TRANSACTIONS THAT DON'T DON'T INCLUDE HIGH TECH LOW INCOME TAX CREDITS OR BONDS. SO THOSE WOULD IN FACT BE TARGETING CLOSER TO THE, I THINK FOR STATUTE FOR HFCS AND SAYS YOU HAVE TO HAVE 10% AT 60% AMI, 40% AT 80% AMI, AND THEN T REMAINING 50% WOULD BE IN 3D MARKET. THERE'S A LITTLE BIT OF DELINEATION BETWEEN THE PFC AND THE HFC STATUTES, BUT THOSE TECHNICALLY WOULD NOT BE FOR LOW INCOME. TOTALLY. THEY WOULD BE YOU KNOW, HALF OF THAT WOULD BE A MARKET RATE PROPERTY. OKAY. MAYOR PRO TEM IF OR COUNCIL, THIS IS ACTUALLY JUMPING TO THE MY CONCLUDING REMARKS. THIS IS ACTUALLY ONE OF THE KIND OF QUESTIONS WE BELIEVE THAT WE NEED DIRECTION FROM THE COUNCIL ON MOVING FORWARD. IS IT THE THE THE 60% BELOW MI THAT WE'RE TARGETING, OR IS IT REALLY MORE THE WORKFORCE HOUSING THAT WE'RE TARGETING? BECAUSE THERE ARE TWO I MEAN, THERE ARE TWO VERY DIFFERENT. AND YOU'RE GOING TO SEE TWO EXAMPLES. ONE WITH THE LOW INCOME HOUSING TAX CREDIT, ONE WITHOUT. AND SO I JUST WANT TO SAY AT THIS POINT, YOU HAVE THE LATITUDE TO, TO, TO GIVE US THAT POLICY DIRECTION. YOU DON'T HAVE IF YOU IF YOU DECIDE TO DO THIS, YOU DON'T HAVE TO NECESSARILY DO BOTH TYPES OF PROJECTS. YOU CAN GIVE US THE DIRECTION TO DO ONE OR THE OTHER. SO IS IT REALLY OKAY? THAT'S WHAT I'M TRYING TO GET IN MY HEAD BECAUSE I'M JUST I'M YEAH, WORKFORCE HOUSING, I THINK. BRAXTON BRAXTON I MEAN, I DON'T WANT TO PUT WORDS IN YOUR MOUTH, BUT I JUST TO BUILD ON WHAT HE WAS SAYING, I THINK THE WORKFORCE HOUSING WOULD 
          [00:20:02]
FOCUS ON EVERYTHING ABOVE 60%, AM I RIGHT? AND, AND I GUESS IF YOU GOT INTO, YOU KNOW, THE LOW INCOME HOUSING TAX CREDIT, YOU WOULD GET WHERE YOU WOULD FOCUS MORE ON THE 60% AMI OR PRETTY CLOSE. YES. THAT'S THAT'S GENERALLY. YES. YOU COULD I LOOK AT IT AS TWO DIFFERENT TWO DIFFERENT MODELS, IF YOU WILL. YEAH. SO, SO YOU WOULD THE COUNCIL WOULD BE ABLE TO, IF YOU DECIDE TO MOVE FORWARD WITH A HFC, YOU WOULD SAY, YOU MAY SAY WE WOULD ENTERTAIN EITHER OPTION OR YOU MAY SAY, NO, WE ONLY WANT TO FOCUS ON THE. NINE THE NON LOW INCOME HOUSING TAX CREDIT PROJECTS INITIALLY, FOR INSTANCE. OKAY. YOU WOULD YOU WOULD HAVE THAT THAT DISCRETION AS AS THE HFC OR. YES. OKAY. THAT HELPS. I, I AGAIN, I'M NOT SAYING I HAVE AN OPINION ONE WAY OR ANOTHER, I'M JUST I WAS JUST TRYING TO BECAUSE IT FELT LIKE WE WERE GETTING TWO DIFFERENT KIND OF DISCUSSIONS THERE GOING. SO THANK YOU. SO YEAH, CONTINUING CONTINUING DOWN THE ROAD HERE. SO YEAH, AS WE MENTIONED, YOU KNOW, AFFORDABILITY IS THE BIG COMPONENT. SO THE OTHER COMPONENT IS THE REVENUES YOU RECEIVE FROM THESE PARTNERSHIPS OR DEVELOPMENTS. AND YOU KNOW, WHAT CAN YOU DO WITH THOSE? SO ESSENTIALLY, YOU KNOW, HFC, PFC AND YOU'LL SEE THAT THERE'S A FEW OF THOSE THAT BY STATUTE, ONLY HFC CAN DO. BUT GENERALLY WE SEE THESE FUNDS BEING USED WITHIN THE COMMUNITY TO DO, YOU KNOW, SINGLE FAMILY ASSISTANCE, YOU KNOW, RENTAL ASSISTANCE, DOWN PAYMENT ASSISTANCE, HOME REHABILITATION. WE SEE THESE FUNDS BEING PUT BACK INTO THE COMMUNITY THROUGH GRANTS TO, YOU KNOW, YOUR LOCAL HABITAT FOR HUMANITY, YOUR TO YOUR SCHOOL DISTRICTS. SO ESSENTIALLY ANYTHING CHARITABLE WITHIN YOUR COMMUNITY YOU'RE ABLE TO DO. AND THE GOVERNING BOARD, OF COURSE, SAYS, YOU KNOW, HAS THE, THE SAY SO AS TO HOW THESE FUNDS ARE BEING USED. SO THESE ARE JUST KIND OF A FEW EXAMPLES ON HOW YOU CAN USE THESE FUNDS THAT YOU'RE COULD BE RECEIVING FROM THESE TRANSACTIONS. I HAVE A QUESTION. YES. COUNCIL MEMBER DORIAN, THANK YOU. WHILE YOU'RE WHILE WE'RE ON THIS DISCUSSION, I JUST HAD A FEW THINGS. I MADE SOME NOTES EARLIER THIS WEEK ON UNDERSTANDING THE HFC. WOULD THIS ALSO INCLUDE ANYTHING LIKE BUILD TO RENT OR BUILD TO LEASE, INCLUDING ANY RESIDENTIAL OR WOULD INCLUDE RESIDENTIAL OWNERSHIP? OR WOULD THAT BE A COMBINATION OF. DO YOU WANT TO TAKE THAT QUESTION? I GUESS WE HAVE. I MEAN, WE WOULD HAVE OPTIONS TO DO THAT. CORRECT IT, WHETHER IT BE YES OR NO. IT'S A SINGLE FAMILY DEVELOPMENT THROUGH HFC OR IT'S VERY DIFFICULT TO REALLY KIND OF DO IN FINANCE, MAINLY BECAUSE THOSE WOULD BE EVENTUALLY BE SOLD TO A, TO A PRIVATE INDIVIDUAL. IT'S REALLY MORE KIND OF GEARED FOR WHAT'S ON THAT SLIDE IS KIND OF HELPING WITH THE FINANCING OF EXISTING HOMES FOR OR FOR NEW HOME BUILDS, BUT YOU WOULDN'T REALLY BE INVOLVED WITH THE HOME BUILDS AS MUCH. YOU'RE KIND OF HELPING WITH THE LOWER END MORTGAGE RATE FOR, FOR A FIRST TIME HOME BUYER IS REALLY WHAT THAT THAT'S KIND OF GETTING TOWARDS FOR YOUR OPTIONS FOR HELPING THAT. YEAH. SO IF WE, IF WE'RE LOOKING AT, FOR EXAMPLE, WORKFORCE HOUSING, WOULD THAT, I MEAN, WOULD THAT BE SOMETHING THAT AS A DEVELOPER, WE WOULD PUT THAT IN SOME KIND OF PERSPECTIVE FOR LIKE A STARTER HOME OR SUPPORTIVE TYPE OF HOUSING OPTIONS, LIKE TINY HOMES, SMALL NEIGHBORHOOD DEVELOPMENTS. I MEAN, WOULD THAT BE THE DIRECTION THAT THAT FUNDING COULD POTENTIALLY GO TOWARD? OR ARE WE TALKING ABOUT JUST CREATING A FULL DEVELOPMENT THAT IS COMPLETELY RENTABLE? RIGHT. I MEAN, I THINK THERE'S PROBABLY TWO TWO ASPECTS TO THAT, RIGHT? I THINK IN TERMS OF WHAT THE PRIMARY FUNCTIONS OF HFCS AND PFCS TEND TO BE, IT IS CAN'T REMEMBER, IT'S THE FORMER OR THE LATTER, BUT IT IS THE BUILDING OR REHABBING A DEVELOPMENT FOR PEOPLE TO LIVE IN RENT. I THINK WHAT THIS SLIDE IS GETTING AT IS AS PART OF THAT PARTNERSHIP, RIGHT IN TYPICALLY, I THINK THE CONTEXT OF A LOT OF WHAT WE'RE TALKING ABOUT THIS EVENING IS A PARTNERSHIP WITH HFC OR THE PFC TO EXEMPT THE PROPERTY FROM PROPERTY TAXES. MUCH OF THE BENEFIT OF THAT EXEMPTION COMES BACK TO THE HFC OR THE PFC, AND THEN IT'S UP TO THE HFC BOARD TO DETERMINE WHAT'S THE HIGHEST AND BEST USE OF THOSE FUNDS THAT IT HAS NOW GOTTEN ACCESS TO BY VIRTUE OF ITS PARTNERSHIP IN, IN A, A RENTAL DEVELOPMENT. OKAY. SO WE HAVE SOME FLEXIBILITY THERE. YEAH, YEAH. 
          AND I KNOW MEGAN AND BRAXTON HIT ON IT. I MEAN, FROM THE LEGAL STANDPOINT, I GET THE QUESTION A LOT. YOU KNOW, WE'VE WE'VE DONE, YOU KNOW, 1 OR 2 DEALS. WE ACTUALLY HAVE, YOU KNOW, A FAIR AMOUNT IN THE BANK ACCOUNT. WHAT CAN WE USE THAT FOR? AND, YOU KNOW, I THINK 
          [00:25:05]
MEGAN SAID IT REALLY WELL, I MEAN, IF IT'S A GOVERNMENTAL OR CHARITABLE PURPOSE, IT ALMOST CERTAINLY WILL QUALIFY AS A USE OF HFC FUNDS THAT'S PERMITTED. SO OKAY, SO IF YOU WANT TO, YOU KNOW, HELP FINANCE SOMETHING LIKE A BUILD TO RENT, YOU KNOW, THAT'S SOMETHING YOU COULD DO. 
          I MEAN, THERE'S QUITE, I MEAN, YOU KNOW, AS I'VE RESEARCHED THROUGH, THROUGH MOST OF THIS, I MEAN, THERE'S, IT LOOKS TO ME LIKE WE HAVE QUITE A FEW DIFFERENT TYPES OF OPTIONS, WHETHER WE BUILD, YOU KNOW, ANYTHING FROM FOURPLEXES TO QUADS TO DUPLEXES TO, YOU KNOW, BUILD TO, TO LEASE, BUILD TO RENT. I MEAN, I KNOW THAT WE HAVE, I JUST WANT TO MAKE SURE WE HAVE FLEXIBILITY IN THIS. AND MOST OF THESE FINANCINGS, I MEAN, YOU'RE, YOU'RE LIKE, I THINK MEGAN MENTIONED ONE OF THE EARLIER SLIDES. IT'S A PARTNERSHIP WITH THE PUBLIC DEVELOPER OR WITH A PRIVATE DEVELOPER. SO YOU'RE USUALLY THE GROUP THAT'S KIND OF BRINGING YOU THE PROJECT. YOU WOULDN'T REALLY BE THE GROUP THAT'S, YOU KNOW, ACTING AS ACTUAL GENERAL CONTRACTOR, SWINGING, SWINGING HAMMERS AND WALKING AROUND. SO IT'S, IT'S REALLY THE, THE MANAGEMENT AND THE CONSTRUCTION IS KIND OF TURNED OVER TO A DIFFERENT CORPORATION OR A DIFFERENT COMPANY TO A DEVELOPER. ONE THING THAT I CAN ADD IS WE'RE, I'M KIND OF JUST STARTING TO WORK ON A TRANSACTION WITH, WITH THE DALLAS PUBLIC FACILITY CORPORATION IN WHICH A DEVELOPER IS BRINGING IN A MULTIFAMILY PROJECT, BUT THEY'RE ALSO COMMITTED TO BUILDING, I THINK, 18 TO 20 TOWNHOMES THAT'LL BE SEPARATE FROM FROM THAT TRANSACTION. BUT THEY'RE COMMITTED TO, YOU KNOW, IF THE OR SORRY, THE PSC WILL PARTNER WITH US TO DO THIS. WE'RE COMMITTED TO BUILD THESE SINGLE FAMILY HOMES AND SELL THEM AT AN AFFORDABLE RATE. SO THAT'S THE TYPE OF FLEXIBILITY THAT YOU WOULD HAVE AS WELL. 
          YEAH. AND I, AND I GET IT. AND BY THE WAY, JUST SO YOU KNOW, I MEAN THAT THAT'S PART PART OF MY AREA OF EXPERTISE AS THE, AS A DESIGN BUILD DEVELOPER. SO I DO UNDERSTAND IT. I JUST WANT TO MAKE SURE AS WE'RE GOING THROUGH THIS PROCESS THAT WE'RE NOT LIMITING, LIMITING OURSELVES TO MOVE INTO ALL THESE DIRECTIONS POTENTIALLY. YOU KNOW, I KNOW WE COULD DETERMINE THAT LATER. I JUST WANT TO MAKE SURE THAT, YOU KNOW, I'M ASKING THE QUESTIONS NOW BEFORE WE MAKE A DECISION. THANK YOU. YES, SIR. OKAY. YEAH. GOING FORWARD TO THE NEXT SLIDE. 
          SO KEY CONSIDERATIONS WHEN CONSIDERING, YOU KNOW, WHEN HOW WE SHOULD CREATE THIS HFC, PFC AND THINGS TO KEEP IN MIND. SO HFC PFC IS MENTIONED. IT'S A VALUABLE TOOL. HOWEVER, THERE ARE VERY COMPLEX ENTITIES AND INVOLVED IN VERY COMPLEX TRANSACTIONS. SO DEFINITELY REQUIRES A FULL TEAM OF, OF ADVISERS FROM FINANCIAL ADVISORS, LEGAL COUNSEL, ACCOUNTANTS TO FULLY ENSURE THAT YOU'RE COVERING ALL THE BASES IN TERMS OF ALL THE DUE DILIGENCE, ESPECIALLY WITH THE MULTIFAMILY, YOU KNOW, PARTNERSHIPS WITH THE PRIVATE DEVELOPER. THESE ARE LONG TERM TRANSACTIONS. SO DEFINITELY DOES REQUIRE A LOT OF UPFRONT WORK TO ENSURE THAT THIS TRANSACTION IS RIGHT FOR THE HFC PFC TO ENTER IN, AS THESE ARE LONG TERM TRANSACTIONS. SO THAT'S NEXT SLIDE. ESSENTIALLY, THE STATUTE DIFFERENCES BETWEEN HFC, PFC. SO THEY DO OPERATE UNDER DIFFERENT STATUTE CODES, AND THEY DO HAVE A FEW DIFFERENT STATUTORY REQUIREMENTS, BUT MAINLY BOTH OF THEM ARE ABLE TO PARTICIPATE IN THE DIFFERENT HOUSING TRANSACTIONS AND MEET HOUSING NEEDS. THEY DO HAVE A LEVEL OF AFFORDABILITY REQUIREMENTS THAT IS REQUIRED UNDER STATUTE, BUT ESSENTIALLY THEY CAN OPERATE AS THE SAME, SAME FOR THE SAME PURPOSE. WE HAVE GOVERNMENTAL ENTITIES THAT EITHER HAVE JUST HFC, EITHER PFC OR BOTH, BUT IT REALLY JUST COMES DOWN TO THE BUSINESS NEED OF OF THE COMMUNITY HERE. SO WE HAVE THE AUTHORIZING STATUTE CODE, THE PURPOSE PER STATUTE, LEGAL STATUS, THE BOARD OF DIRECTORS. SO IT'S ALL PULLED FROM THEIR RESPECTIVE STATUTE CODES THERE. 
          AND THIS IS JUST A CONTINUATION OF THAT STATUTE CODE ON WHERE THESE STAND FOR THE EXEMPTION OF THE TAXATION, GOVERNMENT TRANSPARENCY, INCOME RESTRICTIONS. SO BOTH HFCS AND PFC ARE REQUIRED TO COMPLY WITH THE TEXAS OPEN MEETINGS ACT. THEY BOTH DO CARRY THAT TAX EXEMPT STATUS. AND AS MENTIONED, THEY DO HAVE THEIR RESPECTIVE INCOME RESTRICTIONS. SO, MEGAN, I WAS JUST GOING TO ADD HERE. I THINK THAT A KEY NOTE IS THAT THESE ARE COMPLETELY SEPARATE LEGAL ENTITIES THAT ARE FORMED, LIKE THEY'RE FORMED AS A HOUSING FINANCE CORPORATION OR A PUBLIC FACILITY CORPORATION SO DISTINCT FROM THE CITY. THEY DO OPERATE AS A GOVERNMENTAL ENTITY AND SERVING THOSE GOVERNMENTAL PURPOSE TO PROVIDE SAFE, DECENT AND AFFORDABLE HOUSING. IN THE CASE OF AN HFC. AND THEY, YOU KNOW, FUNCTION LIKE A GOVERNMENT AND THAT THEY, 
          [00:30:05]
YOU KNOW, STILL NEED TO COMPLY WITH TEXAS OPEN MEETINGS ACT AND PUBLIC INFORMATION ACT. SO THERE'S TRANSPARENCY. THAT WAS SOME OF THE CHANGES THAT OCCURRED OVER THE 2023 AND 2025 LEGISLATIVE SESSION. SO THERE'S, YOU KNOW, FULLER TRANSPARENCY INTO THE TRANSACTIONS. YEAH. 
          RACHEL, MEGAN, WHOEVER WOULD LIKE TO DO IT, IF YOU DON'T MIND. I APPRECIATE THE SUMMARY OF THE PRIOR, BUT I THINK THE INCOME RESTRICTIONS ARE SO CRITICAL TO THIS DISCUSSION. I DON'T WANT YOU TO GO THROUGH EVERY OTHER CATEGORY, BUT IF WE COULD SPEND A SECOND COVERING THE DIFFERENCE BETWEEN THE HFC AND PFC WITH RESPECT TO THE INCOME RESTRICTIONS, I THINK THAT WOULD BE HELPFUL. AND ONE NOTE, AND I'LL LET RACHEL AND MEGAN TAKE OVER, BUT I WOULD QUALIFY, PARTICULARLY WITH THE PFC, THAT THIS IS WHAT THEY ARE TODAY. THE NEXT LEGISLATIVE SESSION, AS WE ALL KNOW, IS ABOUT TO KICK OFF. I WOULD BE SHOCKED IF THERE WAS NOT SOME EFFORT TO LEVEL THE TWO IN TERMS OF INCOME RESTRICTIONS AND A NUMBER OF OTHER ITEMS. SO YEAH, I APPRECIATE THAT. THAT WILL BE THE FIRST POINT IN MY FINAL COMMENTS TONIGHT ACTUALLY. 
          BUT YEAH, SO SO MAYOR, I'M SORRY. NO, I WAS JUST GOING TO I WAS GOING TO CALL ON COUNCIL MEMBER CORCORAN IF HE HAD A QUESTION BEFORE WE GOT TO THE NEXT STAGE. YOU KNOW WHAT, WHY DON'T I JUST HOLD MY SPOT NUMBER ONE IN LINE FOR THE NEXT QUESTION? AFTER YOUR NUMBER ONE, AFTER THEY DO YOUR NUMBER ONE. ALL RIGHT. BUT YEAH, SO THAT'S SO THE INCOME RESTRICTIONS FOR THE HFC. I'LL POINT OUT THIS VERY FIRST SENTENCE BECAUSE THIS IS UNIQUE TO THE HFC. SO STATUTE REQUIRES AT LEAST 90% OF THE UNITS TO BE RESTRICTED TO PERSONS OF LOW AND MODERATE INCOME, AS DETERMINED BY THE HFC. WE GET THIS A LOT OF IS WHAT DOES THAT MEAN? YOU KNOW WHAT IS AS DETERMINED? WHAT IS TECHNICALLY AFFORDABLE OR AFFORDABLE LEVEL OF, OF MODERATE INCOME. AND TYPICALLY WE SEE THAT UPPER TIER BAND AT 120% OF AREA MEDIAN INCOME, OR 140% AREA MEDIAN INCOME. NOW OF THAT FOR BOND TRANSACTIONS, AT LEAST 50% OF THE TOTAL UNITS MUST BE RESTRICTED TO LESS THAN 80% OF AREA MEDIAN INCOME. I WILL CAVEAT THAT WITH THE THE LOW INCOME HOUSING TAX CREDITS, THEY DO HAVE LOWER AFFORDABILITY REQUIREMENTS. SO THAT IS SPECIFIC TO THE TECH AND FEDERAL TAX LAW. AND FOR NON BOND AND LIGHT TECH. SO ONE OF THE RECENT CHANGES WITH THE LAST LEGISLATION SESSION OF WITH THE PASSING OF HB 21 NOW REQUIRES EITHER 40% OF THE UNITS MUST BE RESTRICTED TO 80% OF AREA MEDIAN INCOME, 10% TO 60% OF AREA MEDIAN INCOME, OR 10% OF THE UNITS SHOULD BE RESTRICTED TO 50% OF AREA MEDIAN INCOME, WHILE 40% COULD BE AT 100% AREA MEDIAN INCOME. GOING BACK TO THAT, 90% OF UNITS MUST BE DEEMED AFFORDABLE. SO WHAT THAT MEANS, FOR EXAMPLE, WITH THAT BOTTOM LINE, SO 40% AT 8,010% AT 60, ANOTHER 40% WOULD BE DETERMINED AT EITHER 120 OR 140, WHATEVER. THE HFC IS DETERMINED TO BE THAT UPPER AFFORDABLE TIER 10% OF THE UNITS CAN BE UNRESTRICTED AND BE QUOTE UNQUOTE MARKET. WE DO SEE THAT THAT UPPER 120 TO 140 INCOME RESTRICTION IS ESSENTIALLY THOSE MARKET RENTS WOULD BE MARKET. IT'S A VERY RARE TO SEE MARKET RENTS, YOU KNOW, ABOVE THAT OR AT OR ABOVE THAT RENTAL RENT LIMIT FOR THOSE INCOMES OVER ON THE PFC. 
          THEY, AS RYAN MENTIONED, CURRENTLY DOES NOT HAVE THAT THOSE RESTRICTIONS TO HAVE 90% OF UNITS TO BE RESTRICTED. IF THE IF IT DOESN'T INVOLVE LOW INCOME HOUSING TAX CREDITS, BUT IT DOES REQUIRE THAT 10% UNITS MUST BE RESTRICTED TO NOT MORE THAN 60% OF INCOME, 40% AT 80%. 
          SO A LITTLE SIMILARITIES THERE JUST DON'T HAVE THAT THAT OVERALL ARCHING 90% TOTAL. 
          MEGAN, IF JUST CALLING ON SOME CALLING BACK TO SOME CONVERSATION, THE COUNCIL HAS PREVIOUSLY, JUST TO CONFIRM THIS IS THE MINIMUM, IF WE WANTED TO CREATE A HIGHER BAR AND, AND ESSENTIALLY CHANGE THE VALUE PROPOSITION IN THE SENSE OF, YOU KNOW, WE WERE GOING TO REQUIRE A HIGHER PERCENT AT OR MORE UNITS AT 60% THAN THE MINIMUM THE COUNCIL WOULD HAVE THAT LATITUDE OR THE HFC OR PFC BOARD. I GUESS ULTIMATELY WE'D HAVE THAT LATITUDE. ABSOLUTELY. 
          [00:35:04]
THAT IS CORRECT. SO THIS IS THE MINIMUM REQUIRED UNDER STATUTE FOR FOR THE AFFORDABILITY. 
          HOWEVER, WE HAVE MANY HFC PFC CLIENTS THAT HAVE EVEN MORE DEEPER AFFORDABILITY REQUIREMENTS. FOR EXAMPLE, ONE OF OUR CLIENTS REQUIRES THEIR WORKFORCE DEALS TO HAVE 50% OF THE UNITS RESTRICTED TO 60% OF AREA MEDIAN INCOME. SO YOU DO HAVE SOME AREA OF OF FLEXIBILITY, IF YOU WILL, IF YOU, YOU KNOW, IT'S AS YOU SEE APPROPRIATE FOR YOUR COMMUNITY CAN REQUIRE DEEPER AFFORDABILITY REQUIREMENTS FOR THESE PARTNERSHIPS. AND I THINK TO THE QUESTION THAT WAS ASKED EARLIER, THE, YOU KNOW, PARTICULARLY THE BOTTOM BOX ON THE LEFT THERE KIND OF SEGREGATES THE TWO DIFFERENT TYPES OF TRANSACTIONS WE TYPICALLY SEE. SO FOR THE BOND TRANSACTIONS, THOSE TYPICALLY WILL INCLUDE LOW INCOME HOUSING TAX CREDITS. SO WHILE WE CAN SAY 90% AT MODERATE 50 AND 80, FUNCTIONALLY, THE BOND TRANSACTIONS ARE ALMOST ALWAYS GOING TO BE 60%. AM I IN UNDER FOR ALL OR NEARLY ALL THE UNITS IN THE WORKFORCE ARE GOING TO BE THAT BOTTOM BULLET. THE NON BOND LIGHT TECH. SO THAT'S REALLY THE DISTINCTION THERE. AND I THINK THIS NEXT SLIDE WILL HELP CREATE THE PICTURE OF OF THE DIFFERENT INCOME BANDS. SO AS MENTIONED THERE HERE IS THE 2026 INCOME AND RENT LIMIT. 
          SO THESE ARE AS DETERMINED ANNUALLY BY HUD. THEY'RE UPDATED EVERY YEAR. BUT THIS TOP SECTION IS THE INCOME LIMITS FOR ONE, TWO, THREE AND FOUR PERSON HOUSEHOLD AT THE DIFFERENT AMI LEVELS. SO WE HAVE 60% AREA MEDIAN INCOME GOING ALL THE WAY UP TO 140% OF AREA MEDIAN INCOME. SO THOSE ARE THE INCOME AREAS OF WHAT WE'RE REFERRING TO WHEN WE TALK ABOUT, YOU KNOW, 60% AND UNDER OR THOSE, YOU KNOW, WHAT WE CALL WORKFORCE DEALS, THE 60, YOU KNOW, TO 80, AND THEN ALL THE WAY UP TO 140. AND DOWN BELOW, WE HAVE THE RENT LIMITS. 
          SO THESE ARE, AGAIN, THE LIMITS WE OFTEN PUT IN RESTRICTIONS, PARTICULARLY IN THE WORKFORCE DEALS TO HAVE DEEPER AFFORDABILITY. FOR EXAMPLE, IF MARKET RENTS WERE, YOU KNOW, ABOVE AT 70% OF AREA MEDIAN INCOME, WE WANT TO MAKE SURE THERE'S SOME DISCOUNT TO THOSE RENTS. AND IT'S NOT JUST HELD TO WHAT THESE RENT LIMITS ARE. WE DO TRY TO CREATE SOME DEEPER RENTAL RESTRICTIONS. AND THIS NEXT SLIDE IS REALLY JUST KIND OF A EXAMPLE WE THROW OUT, YOU KNOW, WE THROW AROUND, YOU KNOW, THESE 60%, 80% AMI. WE USE THAT TERM VERY, YOU KNOW, FREQUENTLY IN, IN OUR BUSINESS. BUT, YOU KNOW, WE WANT TO PRETTY MUCH SHOW WHO ARE THESE PEOPLE? WHO ARE THESE TENANTS THAT CAN BENEFIT FROM THESE INCOME RESTRICTED PROPERTIES. AND SO WE ENDED UP PULLING THE AVAILABLE INFORMATION FROM YOUR CITY'S WEBSITES AND PULLED VARIOUS POSITIONS USING.ND THIS IS A SIMPLE EXAMPLE, USING ONLY ONE PERSON PER HOUSEHOLD. 
          BUT WHAT POSITIONS AT YOUR MUNICIPALITY MUNICIPALITY WOULD FALL UNDER THESE INCOME RESTRICTIONS? SO AS YOU SEE, THERE'S NUMEROUS POSITIONS AT THAT 60% OF INCOME. SO AGAIN, THOSE ARE THOSE, THOSE DEALS THAT DO RECEIVE THE LOW INCOME HOUSING TAX CREDITS AND 4% BONDS. THE WORKFORCE IS THAT, YOU KNOW, BETWEEN 60 AND 70 TO 70 TO 80% OF AREA MEDIAN INCOME. 
          SO THESE ARE JUST KIND OF EXAMPLES OF WHO IN YOUR COMMUNITY CAN THESE TRANSACTIONS SERVE AND WHO'S BENEFITING. YOU KNOW, WE OFTEN SEE, YOU KNOW, FIRST YEAR TEACHERS POTENTIALLY WOULD QUALIFY FOR, YOU KNOW, BETWEEN 60 AND 80% INCOME BAND, YOU KNOW, FIRST YEAR POLICE OFFICERS, FIREFIGHTERS. SO A LOT OF, OF WHAT YOU WOULD THINK IS THE, YOU KNOW, YOUR WORKFORCE COMMUNITY WOULD BE ABLE TO BENEFIT FROM THESE TYPES OF TRANSACTIONS. SO THIS NEXT SLIDE IS, YOU KNOW, KIND OF CONTINUATION AS TO WHY, WHAT IS THE NEED FOR THE HFC OR PFC TO BE INVOLVED TO MAKE THIS AFFORDABILITY POSSIBLE WITH YOUR, YOU KNOW, NORMAL STANDARD DEALS AND PRIVATE DEALS? USUALLY YOU SEE SOURCES OF CONVENTIONAL FINANCINGS AND SELLER LOANS. POTENTIALLY, THERE COULD BE SOME LOCAL GRANTS THAT COULD BE INVOLVED, DEVELOPER FEE, DEFERRED DEVELOPER FEE. TYPICALLY WITH 
          [00:40:05]
THESE SOURCES, IT'S NOT ENOUGH TO CREATE THAT AFFORDABILITY AND TO MAKE A DEVELOPMENT PENCIL. SO THAT'S WHERE YOU SEE AN HFC PFC COME IN. AND IN THESE TRANSACTIONS, THERE'S ROLE OF BEING THE ISSUER OF TAX EXEMPT BONDS TO PROVIDE TAX EXEMPT FINANCING. WITH THOSE 4% PRIVATE ACTIVITY BONDS COMES THE TAX CREDITS. WHAT WE'VE BEEN REFERRING TO QUITE A BIT HERE SO FAR. SO THAT'S ESSENTIALLY, YOU KNOW, EQUITY THAT'S BEING ABLE TO BE PUT INTO THE DEAL BY A TAX CREDIT INVESTOR AND AS WELL AS THE TAX EXEMPTION. SO THE AD VALOREM EXEMPTION. AND THERE'S ALSO A AN EXEMPTION THAT CAN BE PUT ON FOR SALES TAX FOR THE HARD MATERIAL COST TO DEVELOPMENT. SO THE HFC PFC CAN BE IN THOSE IN THOSE ROLES TO PROVIDE THOSE BENEFITS, TO MAKE THE AFFORDABILITY AND PROJECT FEASIBLE. SO GOING IN A LITTLE BIT MORE DETAILS TO ONE OF THOSE ROLES HERE. SO THIS IS JUST SOME INFORMATION ABOUT WHAT IS A MULTIFAMILY HOUSING REVENUE BOND. SO THESE ARE PRIVATE ACTIVITY BONDS THAT ARE ISSUED TO SUPPORT AFFORDABLE HOUSING LOW INCOME HOUSING WITH THESE PRIVATE ACTIVITY BONDS, AS MENTIONED, ALSO BRINGS THE 4% LOW INCOME HOUSING TAX CREDITS. BUT KIND OF THE MAIN TAKEAWAYS FROM THIS SLIDE IS WE WANT TO EMPHASIZE THAT THESE ARE CONDUIT ISSUANCES. AGAIN, THESE ARE THEY'RE ISSUED BY THE HFC. HOWEVER THEY THE DEBT SERVICE IS PAID SOLELY FROM THE REVENUE OF THE PROJECT. THE HFC OR PFC ARE NOT RESPONSIBLE FOR THE REPAYMENT OF THE DEBT SERVICE. THIS IS SOLELY THE OBLIGATION OF THE BORROWER ENTITY, WHICH IS YOUR DEVELOPMENT PARTNER IS TAKES THE ALL THE RISK AND GUARANTEES THERE ON THAT DEBT. SO THEY DO NOT CONSTITUTE A LEGAL OR MORAL OBLIGATION OF THE CITY. AND THE CITY IS NOT PLEDGING ANY OF ITS REVENUES FOR THE PROJECT. AND AGAIN, NOT RESPONSIBLE FOR THE REPAYMENT OF THOSE BONDS. SO A BENEFITS OF BEING IN THIS ROLE IS ISSUER IS RECEIVING ISSUANCE FEES. RIGHT. SO WITH THE ISSUANCE OF THESE BONDS, ALLOWS THE ACCESS TO TAX EXEMPT FINANCING RATES FOR THAT TO THE HFC PFC SHOULD BE SHOULD BE REWARDED FOR, FOR PROVIDING THAT SERVICE. SO WE BUILD IN ISSUANCE FEES, OFTEN RANGING FROM 0.5% TO 0.75% OF THE TOTAL PAR AMOUNT ISSUED. SO THAT'S AN ISSUANCE FEE RECEIVED AT THE CLOSING OF THE BOND FINANCING ONGOINGLY. WE ALSO BUILD AN ANNUAL ISSUE ISSUER ADMIN FEES BECAUSE IT DOES, YOU KNOW, ONCE THE BONDS ARE ISSUED AND OUTSTANDING, THE HFC PFC DOES HAVE TO REMAIN ACTIVE AND OPERATING. SO WE DO BUILD IN THESE ANNUAL FEES TO HELP ACCOUNT FOR ANY COSTS THAT MAY BE ASSOCIATED WITH WITH THESE ISSUANCES. SO TYPICALLY THAT IS A 0.125% OR 0.15% OF THE TOTAL PAR AMOUNT. SO AND WE BUILD IN THAT 2 TO 3 YEARS OF THESE ANNUAL FEES ARE PAID UPFRONT AT CLOSING. AND THEN AFTER THAT, YOU KNOW, ONCE THE 2 TO 3 YEARS HAVE PASSED, YOU WOULD RECEIVE THAT ANNUALLY ONGOING AS LONG AS THE BONDS ARE OUTSTANDING. AND THIS IS JUST AN EXAMPLE THAT WE WANTED TO SHOW. WHAT DOES THIS MEAN IN DOLLARS, RIGHT? IF YOU HAVE A $25 MILLION BOND ISSUANCE, YOU WOULD RECEIVE, YOU KNOW, ASSUMING A 0.5% OF THE PAR AMOUNT, YOU RECEIVE 125,000 AT CLOSING. AND THEN THE UPFRONT ISSUER ADMIN FEES, ASSUMING IT'S TWO YEARS BE 62,500. SO AT CLOSING, YOU WOULD RECEIVE 187,500. AGAIN, THAT IS DEPENDENT ON THE PAR AMOUNT. SO IT COULD BE MORE BE LESS DEPENDING ON THAT PAR AMOUNT. SO THAT'S THE ROLE AS A BOND ISSUER AND YOUR OTHER KIND OF MAIN COMPONENTS OF OF THE HFC. PFC IS BEING IN THE ROLE OF A GENERAL PARTNER OR MANAGING MEMBER. ESSENTIALLY, YOU'RE IN THE OWNERSHIP STRUCTURE OF THE PROJECT TO ALLOW FOR THAT VERY VALUABLE AD VALOREM EXEMPTION AND AS WELL AS EXEMPTION ON THE SALES TAX SAVINGS. SO MAYBE CHECK IN WITH RACHEL OR RYAN. YOU WANT TO PROVIDE SOME COLOR 
          [00:45:07]
ON THIS SLIDE. CERTAINLY ON OUR ROLE HERE, MEGAN, BUT HAPPY TO JUMP IN. SO AS MEGAN NOTED, I MEAN, THE PARTNERSHIP STRUCTURE IS DISTINCT FROM THE ROLE AS ISSUER. AND YOU CAN CERTAINLY PARTICIPATE IN A TRANSACTION AS ISSUER WITHOUT THE PARTNERSHIP. I THINK WHAT WE'VE SEEN, AND I THINK RYAN CAN SPEAK TO THIS VERY WELL THAT, YOU KNOW, TEN, 15 YEARS AGO, THESE DEALS WOULD FUNCTION GENERALLY WITHOUT THE PROPERTY TAX EXEMPTION. AND NOW THAT'S JUST SIMPLY NOT THE CASE WITH THE RISING COST OF EVERYTHING. INTEREST RATES ARE HIGH. DEVELOPERS ARE LOOKING TO SHAVE COSTS OFF OF THE DEAL IN ANY DIRECTION. SO THE TAX EXEMPTION IS A VALUABLE COMPONENT OF THAT. SO THERE'S BEEN, YOU KNOW, NOT ONLY THE STATUTES THAT WE REFERENCED, BUT THEN CASE LAW IN TEXAS THAT LOOKS AT HOW THIS OWNERSHIP STRUCTURE CAN WORK WITH A, YOU KNOW, PRIVATE PUBLIC PARTNERSHIP. YOU STILL HAVE TO SHOW THAT THE HFC HAS WHAT'S REFERRED TO AS EQUITABLE TITLE OF THE PROJECT. SO THIS IS KIND OF CONSTRUCTED THROUGH A CERTAIN STRUCTURE THAT, YOU KNOW, TYPICALLY THE DIRT ON WHICH THE PROJECT IS GOING TO BE CONSTRUCTED OR EXISTS IS TITLED OVER TO USUALLY AN AFFILIATE. WE ALWAYS RECOMMEND AN AFFILIATE OF THE HFC AND NOT THE HFC ITSELF. AND WE'LL TALK A LITTLE MORE ABOUT PROTECTIONS. 
          BUT ESSENTIALLY YOU WANT TO SET UP LIMITED LIABILITY COMPANIES FOR EACH OF THESE ROLES SO THAT YOU'RE SORT OF SHIELDING THE HFC ASSETS AS YOU, YOU KNOW, ESPECIALLY AS YOU DO MORE PROJECTS OVER TIME. BUT THERE WOULD BE, YOU KNOW, THAT THAT CONVEYANCE OF LAND TO WE JUST, YOU KNOW, CALL THEM A GROUNDLESS OR TYPICALLY. AND THEN YOU ALSO HAVE A BORROWER ENTITY WHICH WOULD BE COMPOSED OF THE DEVELOPER PARTNER, THE EQUITY PARTNER. AND THEN USUALLY THE HFC HAS A GENERAL PARTNER IN THAT ROLE. AND SO THAT IS THE ENTITY THAT OWNS AND OPERATES THE PROPERTY. WE SET UP THE DOCUMENTS MOST TYPICALLY, WHAT MOST OF OUR HFC CLIENTS PREFER IS A PRETTY, YOU KNOW, PASSIVE ROLE. AS YOU KNOW, IT'S KIND OF GENERAL PARTNER IN NAME ONLY. BUT THROUGH THAT STRUCTURE AND THROUGH THAT DOCUMENTATION, THE GENERAL PARTNER WOULD HAVE A RIGHT TO MAKE CERTAIN MAJOR DECISIONS. AND THAT ALSO HELPS SHOW THE THE OVERALL EQUITABLE OWNERSHIP OF THE HFC. THERE'S ALSO CERTAIN OTHER THINGS THAT THE HFC GETS AT, YOU KNOW, RIGHT OF FIRST REFUSAL IF THE PROJECT IS EVER SOLD OR PURCHASE OPTION TO PURCHASE THE PROJECT. AND THAT ALL KIND OF TIES BACK TO THE LEGAL ANALYSIS THAT'S NECESSARY FOR THE PROPERTY TAX EXEMPTION. THERE'S A COUPLE OF OTHER KIND OF AFFILIATED ROLES THAT CAN BE ESTABLISHED. SO MEGAN MENTIONED THE SALES TAX EXEMPTION THAT'S AVAILABLE FOR ANY MATERIALS THAT WOULD BE USED IN THE CONSTRUCTION OR THE REHABILITATION OF THE PROPERTY. 
          SO WE CAN FORM A GENERAL CONTRACTOR ENTITY FOR THAT. AGAIN, IT'S NOT THE ENTITY THAT'S OUT SWINGING THE HAMMER. THERE WOULD BE KIND OF A MASTER SUBCONTRACT STRUCTURE PUT INTO PLACE. SO THE DEVELOPER WOULD THEN CHOOSE OR, YOU KNOW, KIND OF JOINTLY PICK WHO THE CONTRACTOR WOULD BE. AND I KNOW MEGAN AND BRAXTON ARE GOING TO COVER SOME OF THE FEES, BUT A COMMON FEE IN THESE TRANSACTIONS IS DEVELOPER FEE. AND HILLTOP WOULD NEGOTIATE TO GET A PERCENTAGE OF THAT RETURNED BACK TO THE HFC AS PART OF ITS ROLE. SO THERE COULD BE LIKE A CO-DEVELOPER ENTITY THAT'S RECEIVING THAT FEE. IF WE CAN TAKE A PAUSE, I'M GOING TO CALL ON COUNCIL MEMBER CORCORAN. JUST REAL QUICK, I JUST HAD TWO TWO QUESTIONS THAT I WANTED TO ASK JUST TO MAKE SURE I UNDERSTAND THE ARMY STRUCTURE. WHAT YOU'RE SAYING IS THAT, YOU KNOW, HYPOTHETICALLY,OU COULD DO ON ONE OF THESE. WHICH ONE WAS IT? YEAH. NO. YEAH. HYPOTHETICALLY, ON THE HFC, FOR EXAMPLE, YOU COULD DO YOU COULD REQUIRE SOMEONE TO COME IN AT 10%, AT 50, 40% AT 100. AND THEY COULD DO THE OTHER 50 AT LIKE 140. 
          AND THAT'S, THAT'S OKAY. THAT'S A LOT THAT WOULD BE ALLOWED. YEAH, THAT AGAIN, WOULD BE KIND OF THE MINIMUM. YEAH. I'M JUST TRYING TO MAKE SURE THAT'S AND THAT'S NOT A PRO OR AGAINST. 
          IT'S JUST YEAH, IT'S JUST A FACT. AND THEN LET ME SEE. AND THEN THE OTHER QUESTION I HAD WAS JUST ON THE BOARD STRUCTURE. YOU KNOW, WHEN THE CITY. I MEAN, IS IT PRETTY COMMON FOR CITY COUNCILS TO APPOINT THEMSELVES AS EITHER THE ENTIRE BOARD OR THE MAJORITY OF THE BOARD WHEN THEY SET THESE UP? OR HOW DOES HOW DO YOU ALL SEE THAT WORKING IT? IT'S A MIX. IT'S NOT UNCOMMON FOR. IN THIS CASE, IF IT WERE THE CITY. RICHARDSON HOUSING FINANCE CORPORATION FOR CITY COUNCIL OR A SUBSET OF CITY COUNCIL TO SERVE AS THE BOARD, MANY DO IT THAT WAY. 
          OTHERS APPOINT JUST CITIZENS THAT LIVE IN THE IN THE CITY TO SERVE ON THE BOARD. OTHERS, IT'S A MIX OF CITY COUNCIL IN THIS CASE AND CITIZENS. SO IT'S REALLY IT'S WHATEVER THE CITY 
          [00:50:01]
WANTS TO DO THERE. YOU CAN SET YOUR ORGANIZING DOCUMENTS UP TO REFLECT THAT. OKAY. YEAH. JUST AS A FOLLOW UP ON THAT LAST THREAD. WITH LIKE A LOT OF OUR OTHER BOARDS AND COMMISSIONS, THERE ARE SCENARIOS WHERE IT GETS APPROVED BY, LET'S SAY, CITY PLANNING COMMISSION, BUT THEN STILL COMES TO THE CITY COUNCIL FOR A FINAL APPROVAL IN THIS CASE. IS IT SET UP SIMILARLY, OR DOES THE HFC OR PFC HAVE THE FINAL DECISION? IF THE HFC OR PFC IS PARTICIPATING IN A TRANSACTION, IT WILL ULTIMATELY HAVE A FINAL APPROVAL, RIGHT AS TO WHETHER IT PARTICIPATES OR NOT. SO WHATEVER OTHER, WHETHER IT'S A ZONING BOARD OR WHATEVER THE OTHER CITY ENTITIES THAT IT MUST PASS THROUGH DOESN'T AFFECT, YOU KNOW, THE THE FINAL DISCRETION OF THE BOARD OF THE HFC OR PFC TO DETERMINE WHETHER OR NOT TO DO THAT DEAL. MY QUESTION WAS, ONCE THE HFC OR PFC DECIDES TO GO THROUGH WITH IT, ARE THEY THE FINAL SAY IN THAT CONVERSATION, OR IS THERE STILL POTENTIAL FOR COUNCIL TO HAVE LIKE AN ABILITY TO EITHER OVERRULE OR OVERRIDE THAT PARTICULAR DECISION IS WHAT I WAS ASKING. YEAH. SO CITY COUNCIL, AND ESPECIALLY WITH THE AMENDMENT TO THE PARTICULARLY THE HFC ACT, ULTIMATELY HAS THE FINAL SAY ON WHETHER THESE GET THAT RIGHT. SO WHETHER IT'S A TAX CREDIT DEAL, THERE'S A PROCESS BY WHICH A RESOLUTION NEEDS TO BE ADOPTED BY CITY COUNCIL. IF IT'S A WORKFORCE DEAL, THERE ARE NOW REQUIREMENTS FOR THE FOR THE CITY IN WHICH THE PROJECT IS LOCATED TO APPROVE OF IT. SO BOTTOM LINE IS, YES, NOTHING WOULD GET DONE UNLESS THE CITY COUNCIL, WHETHER IT'S THE HFC BOARD OR NOT, OR MEMBERS ARE. UNLESS CITY COUNCIL APPROVED OF IT. FAIR ENOUGH. THAT HELPS CLARIFY. THANK YOU. OKAY. RYAN, CAN YOU LET ME PIGGYBACK ON THAT? IS THAT JUST FOR ACTUAL DEALS OR IF THE HFC WAS HAD RECEIVED FUNDS AND THERE WERE OTHER EXPENDITURES THAT THEY WOULD WANT TO MAKE HOUSING PROGRAMS, FOR INSTANCE, IS. SO CAN YOU CLARIFY WHETHER THE MAYOR'S QUESTION APPLIES? JUST DISTINCTION? YEAH. SO I WAS SPEAKING WITH RESPECT TO THE MULTIFAMILY DEVELOPMENTS. RIGHT. 
          SO THE PARTICIPATION AND THE OWNERSHIP OF A MULTIFAMILY DEVELOPMENT OR THE FINANCING OF MULTIFAMILY DEVOPMENT, IF WE'RE TALKING ABOUT THE EXPENDITURE OF MONIES THAT THE HFC OR THE PFC HAS ACQUIRED, THAT FALLS WITHIN THE PURVIEW OF THE BOARD OF THAT ENTITY, AND THAT CAN MAKE THAT DISTINCTION. BUT AS YOU KNOW, WITH RESPECT TO MULTIFAMILY OWNERSHIP BY THE HFC OR PFC, THAT WOULD NEED CITY APPROVAL. I APPRECIATE THAT. SO SO THE DISTINCTION I WANTED TO MAKE THERE WAS, YOU KNOW, THESE ARE DOLLARS THAT ARE COMING BACK TO THE HFC THAT WERE WE WOULD FOREGO AS REVENUE TAX REVENUE. AND SO ULTIMATELY, THIS WOULD BE ONE OF THE ONLY SITUATIONS WHERE IF YOU APPOINTED A IF YOU APPOINTED HFC, A PFC BOARD THAT WAS NOT YOURSELF, THIS WOULD BE ONE OF THE ONLY SITUATIONS WHERE THEY WOULD HAVE THE ABILITY ESSENTIALLY TO BE, TO, TO MAKE THOSE DECISIONS AROUND EXPENDITURES. AND SO I THINK THAT'S ONE TO ME, THAT'S ONE OF THE PROS OF HAVING THE COUNCIL SERVE AS THAT BOARD IS THAT ULTIMATELY, I MEAN, WE'RE FORGOING THOSE TAX DOLLARS VIA THE ABATEMENT. IF WHAT COMES BACK TO THE HFC, ULTIMATELY, YOU KNOW, IN MY VIEW, YOU WOULD WANT TO HAVE THE CONTROL OVER HOW TO HOW TO MAKE THOSE EXPENDITURES. SO I ASK, SO WHILE WE'RE ON THIS, WHILE WE'RE ON THE TOPIC, IT'S GOOD TO GET SOME OF THESE NITPICKY QUESTIONS OUT OF THE WAY. I MEAN, WHEN IT COMES TO BOARDS, ARE THERE ANY RESTRICTIONS ON BOARD SIZE OR ANYTHING LIKE THAT? I MEAN, THERE'S A MINIMUM IN IN STATUTE, PARTICULARLY THE HFC, I THINK HAS A FIVE MEMBER, FIVE FIVE BOARD MEMBER MINIMUM. OKAY, I'D HAVE TO CHECK THE PFC, BUT I THINK IT'S THE SAME. YOU CAN HAVE AS MANY AS YOU WANT. OKAY. SO GREAT. THANK YOU. AND FOR HFC, THE BOARD DOES HAVE TO BE RESIDENTS OF THE A CITY WHICH IS. AS WE WERE PREPARING THIS AND ANSWERED A QUESTION, THERE IS A DISTINCTION RIGHT NOW WITH FCS THAT I KIND OF EXPECT WILL GET CLOSED UP. I'LL SAY THERE'S KIND OF A SWEET SPOT FOR BOARD SIZES, USUALLY BETWEEN FIVE TO TO NINE ISH. 
          ANYTHING MORE, YOU START HAVING QUORUM ISSUES. ANY MORE QUESTIONS? THESE ARE ALL GOOD QUESTIONS. ALL RIGHT. YES. I GUESS JUST TO TAKE US BACK TO THE KIND OF THE PARTNERSHIP STRUCTURE. YOU KNOW, SO SOME OF THE BENEFITS I THINK WE, YOU KNOW, TOUCHED ON OBVIOUSLY THROUGH THIS PARTNERSHIP STRUCTURE, YOU'RE HELPING CREATE THESE DEVELOPMENTS AND MEETING LOCAL HOUSING NEEDS. YOU KNOW, MEGAN AND BRAXTON ARE GOING TO COVER IN DETAIL SOME 
          [00:55:01]
OF THE FEES THAT ARE ASSOCIATED JUST WITH THE PARTNERSHIP SIDE OF THE TRANSACTION. WE TOUCHED ON THIS EARLIER, BUT WITH THE HFC PARTICIPATING IN THE OWNERSHIP STRUCTURE, THE HFC IS NOT RESPONSIBLE FOR DAY TO DAY MANAGEMENT OF THE PROPERTY. BUT IT DOES, THROUGH ITS ROLE, HAVE A SAY IN CERTAIN THINGS, LIKE YOU WOULD BE ABLE TO APPROVE OF THE IDENTITY OF THE PROPERTY MANAGEMENT COMPANY THAT WOULD BE IN PLACE. OR IF, YOU KNOW, FOR SOME REASON SOMETHING WAS GOING WRONG AND YOU WANTED TO, YOU KNOW, REQUIRE A CHANGE TO THAT PROPERTY MANAGEMENT COMPANY. AND THEN WE'VE ALSO TALKED ABOUT HOW YOU CAN CONTROL, YOU KNOW, DICTATE WHAT THE AFFORDABILITY LEVELS WOULD BE AS A REQUIREMENT OF, YOU KNOW, BEING ABLE TO PARTNER WITH HFC OR PFC. AND SO OVERALL, THIS IS, YOU KNOW, AS WE'VE SAID, JUST, YOU KNOW, THIS IS ANOTHER TOOL THAT THE CITY CAN USE TO PROMOTE ITS HOUSING POLICY AND KIND OF OVERALL ECONOMIC DEVELOPMENT GOALS, FOR EXAMPLE, BY SUPPORTING HOUSING THAT LOWER INCOME WORKERS CAN ACCESS LIMITATIONS OF, OF THE PARTNERSHIP STRUCTURE. OF COURSE, WE'VE BEEN TALKING ABOUT THE TAX EXEMPTION. SO IT CUTS BOTH WAYS. WE'LL TALK IN A LITTLE BIT ABOUT KIND OF THE RETURN OF PUBLIC BENEFIT. BUT THERE IS THE POTENTIAL FOR LOST TAX REVENUE ASSOCIATED WITH THE TAX EXEMPTION THROUGH THESE TRANSACTIONS. THERE'S, YOU KNOW, ADMINISTRATION THAT HAS TO OCCUR. JUST KIND OF MANAGING AND MAINTAINING AND KEEPING THE RECORDS OF THE LLC. AND, YOU KNOW, AS GENERAL PARTNER, THERE ARE CERTAIN THINGS THAT YOU MAY BE ASKED TO SIGN FROM TIME TO TIME. SO THERE'S JUST KIND OF DAY TO DAY ADMINISTRATIVE THINGS THAT, YOU KNOW, MAY REQUIRE SOME USE OF WHETHER IT'S CITY STAFF TIME, SOME HFCS DO HIRE THEIR OWN STAFF, BUT THEY ALSO WE CAN SET UP STRUCTURES SO THAT THE, YOU KNOW, HFC IS REIMBURSING THE CITY FOR THE COST OF STAFF TIME. THE HFC, AGAIN, IS NOT RESPONSIBLE FOR DAY TO DAY AND NOT RESPONSIBLE, FOR EXAMPLE, FOR THE, YOU KNOW, REPORTING TO THE STATE. BUT YOU DO WANT TO HAVE SOME LEVEL OF KIND OF REPORTING BACK TO YOU AND KIND OF UNDERSTANDING HOW THESE PROJECTS ARE OPERATING AND MAKING SURE THAT THEY'RE MEETING THE STATUTORY REQUIREMENTS. AND THIS LAST ONE, YOU KNOW, LIABILITY TO THE HFC ASSOCIATED WITH ITS INVOLVEMENT IN A RESIDENTIAL DEVELOPMENT FROM, YOU KNOW, CONSTRUCTION. THERE ARE A NUMBER OF THINGS THAT CAN OCCUR ALL THE WAY THROUGH, YOU KNOW, TO WHEN YOU HAVE RESIDENTS LIVING IN A PROPERTY, SOMETIMES THERE'S, YOU KNOW, A SLIP AND FALL ACCIDENT OR SOMETHING WITH THE ELEVATOR THAT CAN OCCUR. WE'RE VERY CAREFUL, YOU KNOW, IN OUR ROLE AS PARTNERSHIP COUNCIL, THAT'S KIND OF, YOU KNOW, THE BULK OF WHAT WE DO, REALLY LOOKING AT THESE DOCUMENTS AND MAKING SURE THAT THEY'RE STRUCTURED SO THAT THE DEVELOPER PARTNER IS RESPONSIBLE. AND THE HFC LIABILITIES ARE LIMITED TO WHAT WOULD REALLY BE LIKE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE HFC, WHICH IS HARD TO DO BECAUSE IT'S NOT RESPONSIBLE FOR DOING MUCH ON A DAY TO DAY BASIS. BUT WE PAY REALLY CLOSE ATTENTION TO KIND OF, YOU KNOW, LIMITING THOSE LIABILITIES. BUT WE DO RAISE THAT BECAUSE IT'S POSSIBLE, AS YOU KNOW, THE OWNER OF THE LAND, YOU KNOW, SOMEBODY WILL SEE THAT NAME ON THE, YOU KNOW, THE RECORDED DOCUMENTS AND SERVE PAPERS ON THE HFC ENTITY, WHICH CAN BE ALARMING. BUT WHEN THAT HAPPENS, YOU KNOW, FOR OUR CLIENTS, THEY CONTACT US, WE CONTACT THE DEVELOPER, WE MAKE SURE THEY'RE GETTING, YOU KNOW, THEIR INSURANCE INVOLVED, IF THAT'S APPROPRIATE AND HAVE IT DEALT WITH. I KNOW THE NEXT COUPLE OF SLIDES FOCUS ON THE FEES THAT ARE ASSOCIATED. SO I'LL PROBABLY PASS IT BACK OVER TO MEGAN AND BRAXTON. ABSOLUTELY. THANK YOU RACHEL. 
          SO YEAH, WE DID WANT TO PUT AN EXAMPLE AND WE DO HAVE TWO EXAMPLES. THIS FIRST ONE IS AN EXAMPLE OF A 4% LIGHT TECH DEAL. SO AGAIN TYPICALLY THESE ARE 100% OF THE UNITS RESTRICTED TO 60% OF AREA MEDIAN INCOME AND BELOW. AND WANTED TO GIVE AN EXAMPLE, WHAT ARE THE FEES THAT, YOU KNOW, COME FROM THESE TYPES OF TRANSACTIONS? I'LL START OFF BY SAYING THE, YOU KNOW, 4% LIGHT TECH DEAL. ESSENTIALLY, YOU KNOW, THE AFFORDABILITY COMES FROM, AGAIN, THE ACCESS TO THE TAX EXEMPT FINANCING, THE ACCESS TO THE, THE TAX CREDITS THAT TYPICALLY MAKES UP, YOU KNOW, ROUGHLY ABOUT 25, 30% OF THE OVERALL CAPITAL STACK COMES FROM THIS TAX CREDIT EQUITY. SO IT'S THOSE TWO SOURCES REALLY HELP THE AFFORDABILITY HAPPEN. HOWEVER, I BELIEVE, AS RACHEL MENTIONED A FEW MINUTES AGO, THESE TRANSACTIONS WITH, YOU KNOW, CURRENT MARKET CONDITIONS, INTEREST RATES, CONSTRUCTION COSTS COMPARED TO, YOU KNOW, TEN YEARS AGO WITH THESE TYPES OF TRANSACTIONS, WE DIDN'T SEE, YOU KNOW, THE INDUSTRY DIDN'T SEE A WHOLE LOT OF TAX EXEMPTIONS NEEDED TO MAKE THESE DEALS. PENCIL HOWEVER, WITH INCREASED COSTS HAVE MADE THESE DEALS A LITTLE BIT LESS FEASIBLE. SO THAT'S WHERE THE 
          [01:00:03]
TAX THE AD VALOREM TAX EXEMPTION COMES IN. SO THE PROPERTY TAXES ARE REMOVED FROM, YOU KNOW, THE OPERATING EXPENSES. AND THEN AGAIN, THE DEVELOPER CAN BENEFIT FROM THE SALES TAX EXEMPTIONS ON MATERIAL COSTS. SO WITH THESE 4% DEALS, WE TREAT THE TAX EXEMPTION AS KIND OF LIKE A FILL IN THE GAP, A WAY TO GET THE PROJECT MORE FEASIBLE AND STABLE AND BE ABLE TO MEET THE DEBT, YOU KNOW, THEIR DEBT COVERAGE, THEIR MINIMUM RATIOS AND MAKE THE DEAL WORK, YOU KNOW, OTHERWISE IT MAY HAVE NOT BE POSSIBLE. SO HILLTOPS PERSPECTIVE OR LET ME BACK UP A LITTLE BIT AND GIVE A LITTLE BIT MORE BACKGROUND ON THE VARIOUS FEES HERE AND WHAT OUR EXAMPLE IS. SO ESSENTIALLY, WE CAME UP WITH AN EXAMPLE TO HAVE A NICE ROUND ESTIMATED TAX BILL OF $1 MILLION. SO WE HAVE AN ASSESSED VALUE OF A PROPERTY, THE TAX RATES. AND WE LAND ON ESTIMATED TAXES. WITH THE NEW CONSTRUCTION, PARTICULARLY, WE USE ALL AVAILABLE INFORMATION TO US. SO WE LOOK AT THEIR THEIR PROFORMA. WE ESTIMATE WHAT THEIR STABILIZED NET OPERATING INCOME IS. AND THEN BACK IN A LOADED CAP RATE USING YOUR LOCAL TAX RATES AND A CAP RATE, AS POSTED BY THE CENTRAL APPRAISAL DISTRICT. SO ESSENTIALLY, OUR ROLE AS FINANCIAL ADVISORS IS WE TRY TO ESTIMATE WHAT IS THE VALUE OF THIS TAX EXEMPTION AND WHAT CAN WE GET IN RETURN. SO THIS IS OUR EXAMPLE HERE. WE ESTIMATE A TAX BILL AND WE PROJECT THAT OUT BY 15 YEARS WITH THESE TAX CREDIT DEALS. THEY ARE ON A WE'LL SAY A 15 YEAR HORIZON. THAT IS WHAT THEIR COMPLIANCE PERIOD IS. AND ESSENTIALLY AFTER THESE 15 YEARS OVER, MOST OF THESE DEALS GET RECAPITALIZED AND RESTRUCTURED AT THAT POINT GOING FORWARD. SO THESE DO WE ALWAYS LOOK AT THESE DEALS ON A 15 YEAR HORIZON PERIOD. SO WE ESTIMATE WHAT ARE THOSE? WHAT IS THE VALUE OF THAT TAX EXEMPTION. 
          AND AS YOU SEE HERE, THE TOTAL TAXES, WE LOOK AT THE ALL THE TAXING ENTITIES. SO THE CITY, COUNTY, ISD COLLEGE HOSPITAL, ALL OF THE VARIOUS TAXING ENTITIES. WE DID WANT TO KIND OF CLARIFY USING THIS, THIS EXAMPLE OF WHAT IS THE PORTION OF THE CITY TAXES HERE. SO WE DID KIND OF OUTLINE THAT BELOW. SO WITH THESE TAX CREDIT DEALS, AS I MENTIONED, THESE ARE KIND OF HELPS FILL THE GAP PER SE, BUT IT'S WE LOOK AT IT AS A, A 40% TARGET OF THE ABATED TAXES WE WANT BACK IN THE FORM OF DIFFERENT REVENUE STREAMS. ONE OF THE OPTIONS THAT THE DEVELOPER DEVELOPER ALSO HAS IS THEY CAN GO TO A, GET A 50% TAX EXEMPTION AS WELL. SO THERE'S, YOU KNOW, NUMEROUS REASONS WHY WE WANT TO HIT 40%. THAT IS ONE OF THEM IS WE DO WANT TO DRIVE INCENTIVE TO WORK WITH THE LOCAL HFC PARTNER AND PROVIDE THOSE FUNDS, YOU KNOW, DIRECTLY BACK TO YOU ALL AND YOU'RE MORE LIKELY TO, YOU KNOW, PUT THOSE BACK INTO YOUR COMMUNITY AS YOU SEE FIT. SO THE VARIOUS EXAMPLES OF FEES IS A DEVELOPER FEE IS WHAT WE HAD MENTIONED BEFORE, RACHEL AND HIGHLIGHTED. WE TYPICALLY SEE THIS AS A PERCENTAGE OF OVERALL DEVELOPER FEE SPLIT. TYPICALLY, WE SEE THE HFC PFC PARTNER GETTING 20 TO 30% OF THE OVERALL DEVELOPER FEE SPLIT. WE SEE A GENERAL CONTRACTOR FEE THAT'S TYPICALLY ABOUT ONE 1.5% OVERALL HARD COST. WE BUILD IN ALSO AN ANNUAL LEASE PAYMENTS. SO, YOU KNOW, A FEW YEARS AGO WHEN WE WERE DOING THESE DEALS, IT WAS VERY COMMON FOR THE HFC PFC PARTNER TO BE RECEIVING A PERCENTAGE OF CASH FLOW SPLITS AS WE AS THESE DEALS HAVE PROGRESSED AND WE SEE THAT, YOU KNOW, SOMETIMES UNDERWRITING ISN'T AS AS GREAT. YOU KNOW, ONCE WE HIT OPERATIONS COMPARED TO WHAT WE WERE ALL ESTIMATING AT CLOSING. SO SOMETIMES, YOU KNOW, IF THERE WAS A CASHFLOW SPLIT, THE AND THE PROPERTY WASN'T OPERATING AS PROJECTED, EVENTUALLY THAT CASH FLOW SPLIT, YOU KNOW, TURNED INTO A LOT LESS THAN WHAT WAS INITIALLY ANTICIPATED. SO WE STARTED BUILDING IN THESE KIND OF SET ANNUAL FEES THAT IT'S CASH FLOW DEPENDENT. SO IT'S IN THE WATERFALL. AND WE TRY TO PUT IT AS HIGH AS THE WATERFALL AS POSSIBLE AS THE EQUITY PARTNER ALLOWS US TO. AND THAT WAY IT'S, WE'RE SETTING A STAKE IN THE GROUND. SO IF THERE'S NOT CASH FLOW TO PAY IT, IT'S GOING TO CONTINUE ACCRUING. AND WE DO HAVE AN ANNUAL ESCALATOR BY 3%. 
          SO THAT AMOUNT WILL INCREASE BY 3% ANNUALLY. BUT WE WE TEND TO LIKE THIS CERTAINTY MORE THAN 
          [01:05:04]
IF WE WERE, YOU KNOW, GAMBLING WITH THE CASH FLOW SPLIT. SO THAT FEE, IF THERE WAS NO CASH FLOW TO PAY IT, IT WOULD ACCRUE ONCE THERE IS CASH FLOW TO PAY EITHER ONGOINGLY ANNUALLY THROUGH OPERATIONS OR AT THE TIME OF A SALE DOWN THE ROAD, THAT THOSE FEES WILL BE PAID. 
          THAT'S ALSO THE SAME AS SAME CONCEPT AS THE PARTNERSHIP MANAGEMENT FEE. AGAIN, WE TYPICALLY FOR ALL OF OUR CLIENTS, WE USUALLY GO WITH THE $10,000 INCREASING BY 3% ANNUALLY. THIS IS JUST TO ACCOUNT FOR ANY COSTS THAT THE HFC PFC MAY INCUR, SUCH AS ACCOUNTING, ADMINISTRATIVE, ANYTHING LIKE THAT, THAT THAT POPS UP THROUGH THE VARIOUS PARTNERSHIPS. AND LASTLY, HFC, PFC WOULD PARTICIPATE IN SALES PARTICIPATION. SO TYPICALLY WE BUILD THIS AS 1.5% OF THE GROSS SALE PROCEEDS WOULD COME BACK TO YOU ALL IN THE FORM OF A FEE. 
          SO THESE ARE ALL THE DIFFERENT KIND OF SOURCES OF REVENUE SOURCES AND A 4% BOND DEAL. 
          THESE ARE ALL BUT ULTIMATELY YOU CAN START TO TO BEING ABLE TO SELL THAT PROJECT ON. AND I THINK, AS NOTED, THIS IS A, THIS IS A BOND TRANSACTION. SO THE PREVIOUS SLIDE THAT SHOWED THE FEES THAT WERE BASED ON THE 25 MILLION, THE ISSUANCE FEE UP FRONT AND THE ONGOING ISSUE FEE, THOSE WILL BE INCLUDED IN THIS TRANSACTION AS WELL. WE SEPARATE THOSE FEES BECAUSE THEY'RE DIFFERENT ROLES. SO YOU WOULD HAVE, YOU KNOW, THE ONE SET OF FEES IS ACTING AS THE BOND ISSUER. AND THEN THESE THESE ARE THE FEES THAT YOU WOULD RECEIVE AS ACTING AS A GENERAL PARTNER. THAT'S WHAT WE'RE TRYING TO GET TO THAT 40% FROM, FROM JUST THESE GENERAL PARTNER FEES. OKAY. GOING TO OUR NEXT EXAMPLE. SO AS MENTIONED, THAT WAS A BOND DEAL, A 4% BOND DEAL, TYPICALLY STRUCTURED AT 100% UNITS OF 60% AREA MEDIAN INCOME. THIS IS AN EXAMPLE OF OF A WORKFORCE DEAL. SO NO BOND, NO 4% BONDS. 
          THERE'S NO TAX EXEMPT FINANCING ACCESSIBLE. THERE'S NO TAX CREDITS. SO SIMPLY, SIMPLY PUT, IT'S PRETTY MUCH THE AD VALOREM EXEMPTION. WHAT ARE WE GIVING UP AND WHAT ARE WE GETTING IN RETURN. SO HERE KIND OF SAME EXAMPLE. BUT HERE YOU'LL NOTICE THAT THERE IS AN ANNUAL RENT REDUCTION AMOUNTS. SO WITH HFC STATUTES THAT IT'S NOW REQUIRED THAT 50% OF THE ESTIMATED ABATED TAXES SHOULD BE GOING BACK IN THE FORM OF PUBLIC BENEFIT OF WITH RENTAL REDUCTIONS SO DIRECTLY TO THE TENANTS. THAT IS PART OF THE ONGOING AUDITS. THAT TD IS LOOKING AT THESE PROJECTS NOW GOING FORWARD AND AUDITING WHETHER OR NOT THEY ARE MEETING THAT REQUIREMENT, IF THEY IF DEVELOPERS UNDER THAT REQUIREMENT OF THE STATUTE CODE IS NOT ABLE TO MEET THAT 50% RENT REDUCTION, ANY DIFFERENCE WOULD HAVE TO BE PAID BACK TO THE VARIOUS TAXING ENTITIES FOR THAT SHORTFALL. SO, FOR EXAMPLE, WITH ONLY 30% OF THE ABATED TAXES WAS IN THE FORM OF RENT REDUCTION, THE ACTUAL 20 WOULD HAVE TO BE PAID ACCORDINGLY TO THE VARIOUS TAXING ENTITIES. SO JUST WANTED TO MAKE THAT NOTE ON HFC STATUTE CODE. GOING BACK TO KIND OF OUR EARLIER COMMENTS OF LEGISLATIVE SESSIONS COMING UP, WE ARE VERY MUCH EXPECTING THAT THERE'S GOING TO BE A PUSH TO AMEND THE PFC STATUTE CODE TO THEN FOLLOW THE HFC STATUTE CODE, JUST TO PUT EVERYBODY ON A ON AN EVEN PLAYING FIELD. SO AGAIN, TO TOO EARLY TO TELL, BUT WE EXPECT THAT'S GOING TO BE AN INITIATIVE IN THE NEXT SESSION FROM FROM VARIOUS LAWMAKERS. SO GOING BACK TO OUR EXAMPLE HERE. SO YOU'LL SEE THAT WE MARKED 50% OF THE ANNUAL RENT REDUCTION OR I'M SORRY, ABATED. TAXES WOULD BE IN THE FORM OF ANNUAL RENT REDUCTION. SO AGAIN, WE ESTIMATE OUT WE STILL USE A 15 YEAR TIME HORIZON. WE LIKE TO LOOK AT THESE DEALS ON THE SAME TIME HORIZON AS WE WOULD A BOND DEAL. AND WITH THIS EXAMPLE 
          [01:10:01]
IT'S COMMON TO SEE AN UPFRONT ORIGINATION FEE OR AN ACQUISITION FEE. YOU DON'T TYPICALLY SEE THAT IN A BOND DEAL. SO USUALLY THAT'S 50 BASIS POINTS 75 BASIS POINTS OF THE TOTAL VALUE OF THE PROPERTY. SO ORIGINATION FEE IS A COMMON FEE THAT WE BUILD INTO THESE TYPES OF TRANSACTIONS. AGAIN YOU SEE THE KIND OF TYPICAL THE SAME FEES THAT YOU SAW IN THE PAST EXAMPLE. GENERAL CONTRACTOR FEE ANNUAL LEASE PAYMENTS. FOR THIS EXAMPLE, WE USED A 10% OF THE ABATED TAXES IN THE FORM OF AN ANNUAL FEE. THE PARTNERSHIP MANAGEMENT FEE AND THE SALE PARTICIPATION AS THE 1.5% OF GROSS PROCEEDS. SO IN THIS CHART ON THE ON THE RIGHT, YOU KNOW, WE LOOK AT THE OVERALL PUBLIC BENEFIT. SO THE PUBLIC BENEFIT IS THE RENT REDUCTION. WE. AND THEN WE LOOK AT THE REVENUES TO THE HFC PFC OVERALL, YOU KNOW, THAT'S THE PUBLIC BENEFITS. THE SHADED AREA SHADED IN GRAY IS ESSENTIALLY THE INCENTIVE FOR THE DEVELOPER PARTNERS, THE EQUITY PARTNERS. SO THERE IS THAT INCENTIVE ALONG WITH THE, YOU KNOW, AUDITING, AUDITING REQUIREMENTS, COMPLIANCE REQUIREMENTS, YOU KNOW, DEVELOPERS DO INCUR ADDITIONAL COSTS FOR TAKING ON THESE INCOME RESTRICTED PROPERTIES. 
          SO THERE IS ALSO AN ADDITIONAL COST FOR THEM. SO AGAIN, GOING BACK TO THE POINT OF THE PUBLIC PRIVATE PARTNERSHIP, THERE IS, YOU KNOW, THAT INCENTIVE FOR, FOR BOTH PARTIES TO, TO BE ABLE TO ENTER INTO THIS PARTNERSHIP. ANY QUESTIONS ON ANY OF THOSE TWO SLIDES BEFORE WE MOVE ON? OKAY. ALL RIGHT. SO WE'RE MOVING ON TO, YOU KNOW, THAT WE'VE KIND OF COVERED THE VARIOUS NUANCES OF THE HFC PFC IF YOU ALL DECIDE TO CONTINUE MOVING FORWARD WITH ONE OR BOTH, BASICALLY, WE HAVE, YOU KNOW, SPECIFIC DOCUMENTS HERE, AND I MAY PASS IT OVER TO RACHEL TO COVER SOME OF THESE VARIOUS ITEMS HERE. ABSOLUTELY. SO SOME OF THE STANDARD DOCUMENTS YOU WOULD SEE AND, YOU KNOW, AS REQUIRED BY STATUTE, THE HFC WOULD NEED TO CREATE ARTICLES OF INCORPORATION TO BE FILED WITH THE STATE. SO AGAIN, SETTING IT UP AS A SEPARATE LEGAL ENTITY. AND THEN IT WOULD HAVE ITS OWN BYLAWS. AND BYLAWS COULD BE ONE PLACE, ALTHOUGH ALSO THROUGH KIND OF ITS APPLICATION AND GUIDELINES IS WHERE, YOU KNOW, THE BOARD COULD SET ANY POLICY DIRECTION THAT MIGHT BE EXPECTED IN TERMS OF AFFORDABILITY LEVELS OR OTHER CRITERIA. I THINK, AS WE'VE MENTIONED, YOU KNOW, THESE TRANSACTIONS ARE COMPLEX. 
          USUALLY THERE'S A NUMBER OF DIFFERENT PARTIES INVOLVED JUST ON THE HFC SIDE. I MEAN, THE OVERALL TRANSACTION, SOMETIMES WE HAVE WORKING GROUPS WITH, YOU KNOW, 60 PEOPLE WITH ALL THE DIFFERENT FINANCING PARTIES, BUT THE GENERAL ROLES THAT THE HFC OR PFC MIGHT EXPECT TO ENGAGE WOULD BE, YOU KNOW, A BOND COUNSEL TO REPRESENT YOU AS ISSUER OF THE BONDS, THE MUNICIPAL ADVISOR PARTNERSHIP COUNSEL TO HANDLE THE WORK ON THE PARTNERSHIP DOCUMENTS, A FINANCIAL ADVISOR LOOKING AT THE LENS OF, YOU KNOW, THE PARTNERSHIP AND THE FEES, AS MEGAN JUST DETAILED. AND TYPICALLY THERE'S A SPECIALIZED ACCOUNTING FIRM THAT WOULD ALSO HELP KEEP TRACK OF THE REVENUES. WE, YOU KNOW, THOUGHT IT WOULD BE WORTH MENTIONING THAT TYPICALLY AS THESE TRANSACTIONS CLOSE IS WHEN THE, YOU KNOW, FINANCIAL ADVISOR AND LEGAL COUNSEL FEES ARE PAID. SO OUR FIRM IN HILLTOP DON'T GENERALLY SEND THE HFC A BILL. THOSE FEES ARE PAID THROUGH THE TRANSACTION CLOSING COSTS BY THE DEVELOPER PARTNER. SO IT'S JUST ANOTHER WAY WE ALWAYS SAY, YOU KNOW, THE HFC REALLY SHOULD BE FUNCTIONING AS AN ACCOMMODATION PARTY WHEN IT'S PARTICIPATING IN THE PARTNERSHIP TRANSACTION. SO IT SHOULDN'T BE INCURRING OUT OF POCKET COSTS TO BE, YOU KNOW, IT'S COMING IN TO HELP THE DEAL WORK THROUGH THE TAX EXEMPTION AND HELPING WITH THE LOWER COST FINANCING THROUGH BOND ISSUANCE, BUT OTHERWISE SHOULDN'T BE INCURRING OUT OF POCKET COSTS. THE RULES OF THE DIFFERENT ADVISORS ARE DETAILED A LITTLE BIT MORE ON THE NEXT SLIDE. I THINK WE'RE HAPPY TO ANSWER ANY QUESTIONS ABOUT THOSE. I KNOW THIS HAS ALREADY BEEN A PRETTY LONG DISCUSSION, SO I THINK I CAN ALSO KEEP TAKING US THROUGH THE NEXT SLIDES. IF THERE AREN'T ANY PARTICULAR QUESTIONS. 
          THIS JUST KIND OF DETAILS THE STEPS THAT IT WOULD TAKE TO ACTUALLY SET ONE OF THESE UP. 
          SO, YOU KNOW, CHAPMAN, FOR EXAMPLE, COULD DRAFT THE NECESSARY DOCUMENTS, KIND OF IN COORDINATION WITH CITY STAFF AND MAKING SURE RESOLUTIONS CONFORM WITH CITY PROCESS. THE CITY COUNCIL WOULD REVIEW AND TAKE ACTION TO FORM EITHER THE HFC OR THE PFC. ONCE THAT'S 
          [01:15:08]
DONE, YOU FILE THE ARTICLES OF INCORPORATION WITH THE SECRETARY OF STATE. THEY TAKE HOWEVER MUCH TIME THEY WOULD TAKE TO PROCESS, AND AFTER THAT, YOU COULD CONVENE A MEETING OF THE BOARD OF DIRECTORS TO THEN, YOU KNOW, ADOPT BYLAWS AND APPOINT OFFICERS. AND FROM THERE, YOU KNOW, YOU CAN BE OFF TO THE RACES AND START DOING DEALS. OR YOU CAN SAY, YOU KNOW, HERE WE'RE ONLY INTERESTED IN DOING, YOU KNOW, ONE ONE A YEAR OR WHATEVER THE, YOU KNOW, THE CADENCE WOULD BE FOR THE HFC, THE BOARD OF DIRECTORS COULD MEET AROUND THAT. WE DO S FOR LIKE MORE OF OUR ACTIVE HFC CLIENTS MAYBE TEND TO MEET ONCE A MONTH AS A BOARD. OTHERS WHO AREN'T DOING TRANSACTIONS VERY REGULARLY MAY JUST MEET AS NEEDED TO ADDRESS ANY HFC OR PFC BUSINESS. AND THEN WE HAVE JUST KIND OF SOME WRAP UP THOUGHTS HERE. JUST, YOU KNOW, I THINK AS WE'VE TOUCHED ON MOST OF THIS, THESE ARE STATE AUTHORIZED TOOLS. THEY DO HAVE GUIDELINES AROUND THEM, BUT, YOU KNOW, REALLY ARE THERE TO HELP CITIES AND LOCALITIES ACCESS QUALITY, AFFORDABLE HOUSING PROGRAMS. THE PROPERTIES ARE PRIVATELY DEVELOPED AND, AND PROFESSIONALLY MANAGED, AND THEY HAVE LIMITED ONGOING OBLIGATIONS OF THE HFC OR PFC, THE MULTIFAMILY BONDS IS, YOU KNOW, MEGAN HAD DETAILED OUR CONDUIT FINANCING AND NOT SOMETHING THAT THE CITY IS RESPONSIBLE FOR REPAYING OUT OF REVENUE OF THE CITY. BUT HFC AND PFC PARTICIPATION CAN, YOU KNOW, CREATE EITHER LOW INCOME OR WORKFORCE HOUSING OR BOTH OPPORTUNITIES THROUGH THE VARIOUS LONG TERM AFFORDABILITY REQUIREMENTS. AND THAT IN RETURN, BRINGS REVENUE BACK TO THE HFC OR PFC TO SUPPORT OTHER HOUSING AND CITY INITIATIVES. AND, YOU KNOW, AS I THINK WE'VE COVERED, THESE REALLY ARE FLEXIBLE TOOLS THAT YOU CAN, YOU KNOW, WITHIN THE PARAMETERS OF THE MINIMUM STATUTORY REQUIREMENTS, THERE'S QUITE A BIT YOU CAN DO AND, YOU KNOW, CHANGE DEPENDING ON THE POLICY WISHES OF THE CITY. AND I THINK THE OTHER THING THAT WE, YOU KNOW, WANTED TO TOUCH ON, AND I THINK STAFF MAYBE WILL ELABORATE MORE ON THIS, AS YOU KNOW, APPROPRIATE FOR THE CITY OF RICHARDSON. BUT, YOU KNOW, FROM OUR PERSPECTIVES, HAVING DONE WORK WITH HFCS AND PFCS, WE THINK IT'S VERY REASONABLE THAT, YOU KNOW, AS A CITY, YOU MIGHT CHOOSE TO FORM ONE TO START LIKE THE HFC TO START, ESPECIALLY SINCE THE, YOU KNOW, THE LEGISLATIVE LANDSCAPE IS HOPEFULLY A LITTLE MORE SETTLED FOR HFCS AT THIS POINT, HAVING JUST GONE THROUGH 2025. BUT CERTAINLY, YOU KNOW, A PFC CAN BE CREATED AS, YOU KNOW, CITY AND KIND OF BUSINESS NEEDS WOULD DICTATE. AND THAT'S SOMETHING THAT CAN BE DONE RELATIVELY QUICKLY AS WELL. ALL RIGHT. THANK YOU GUYS SO MUCH. THANKS FOR TAKING US. YEAH. LET ME MAYOR, IF YOU WOULD. I, I DO HAVE SOME SOME CLOSING THOUGHTS THAT WITH RESPECT TO NEXT STEPS, YOU KNOW, THIS IS IN OUR, OUR, OUR MIND'S EYE AS THIS IS A ONE OF A TWO PART BRIEFING THAT WE WOULD COME BACK TO YOU A SECOND, BUT I WANT TO MAKE SURE JUST THAT YOU EXHAUST ALL OF YOUR QUESTIONS. THEY ARE THE EXPERTS. 
          OBVIOUSLY, THIS IS AN INCREDIBLY COMPLICATED AND INTRICATE KIND OF A TOOL COMPARED TO SOME OF THE OTHER ONES WE HAVE. SO IF THERE ARE ANY OTHER QUESTIONS, I THINK THIS IS, YOU KNOW, THIS TO HAVE EVERYBODY HERE IN THE ROOM AT THE SAME TIME. IT'S IT'S VERY BENEFICIAL. SO IF THERE ARE ANY OTHER QUESTIONS BEFORE WE MOVE ON. COUNCIL MEMBER DORAN, I JUST I JUST WANT TO BE CLEAR FOR TONIGHT. DO WE DO WE NEED TO GIVE THEM DIRECTION ON IF WE'RE GOING TO MOVE. I'M GOING TO I'M GOING TO SUMMARIZE HERE WHAT I WOULD LIKE THE SECOND PART OF THE SECOND BRIEFING TO FOCUS ON. AND THEN THAT'S WHEN WE WOULD I WOULD BE LOOKING FOR SOME DIRECTION WITH RESPECT TO THE NEXT STEPS THAT RACHEL JUST DESCRIBED. OKAY. ALL RIGHT. 
          THANK YOU. COUNCIL MEMBER CORCORAN. I DIDN'T I DIDN'T SEE THIS ON THE LIST OF ALLOWED USES FOR HFC OR PFC FUNDS, BUT I'M GOING TO ASK ANYWAY JUST TO SEE IF IT WAS SOMETHING THAT WAS AN OPTION. YOU KNOW, TYPICALLY WE GIVE WE CAN DO CHAPTER THREE, 80 AGREEMENTS OR OTHER SORT OF GRANTS TO DIFFERENT DEVELOPERS. HFC AND PFC FUNDS CANNOT BE USED FOR FOR THINGS LIKE THAT. IF IT DOESN'T INCLUDE AN AFFORDABLE HOUSING OR CHARITABLE COMPONENT, OR CAN THEY? YEAH, I'D BE HESITANT IF IT WASN'T FOR AFFORDABLE HOUSING. OKAY. YOU THE HFC STATUTE, THE KIND OF MAGIC LANGUAGE IS CHARITABLE OR PUBLIC WELFARE. OKAY, SO I KIND OF VIEW PUBLIC WELFARE TO BE VERY BROAD GOVERNMENTAL TYPE PURPOSES. IF IT'S TO A. 
          DEVELOPER FOR A NON AFFORDABLE DEAL. AND I'M NOT SAYING, YOU KNOW, OBVIOUSLY FACTS AND CIRCUMSTANCES, IF THERE WERE SOMETHING THAT WERE TANGIBLE, WE COULD CERTAINLY LOOK AT THAT. 
          [01:20:02]
BUT AT FIRST BLUSH, NO, DEFINITELY HAVE SOME QUESTIONS. YEAH. OF COURSE. YEAH. OKAY. 
          AND THEN FOR AUDITING OF BOTH OF THESE ENTITIES, I MEAN, YOU SAID TDHCA CONDUCTS AUDITS ON ON THEM. HOW OFTEN DO THEY DO THAT? SO THE AND I WILL ASK MY COLLEAGUES TO JUMP IN. SO ON THE, THE TDCJ AUDIT OF T WORKFORCE TRANSACTIONS IS A NEW THING THAT CAME IN, IN HB 21. 
          OKAY. IN THE LAST SECTION SESSION, THEY DO THAT EVERY YEAR. OKAY. FOR TAX CREDIT DEALS, THERE'S ONGOING COMPLIANCE THAT I THINK IS ESSENTIALLY AN ANNUAL. IT'S A DIFFERENT PROCESS, BUT THEY ARE CONDUCTING OVERSIGHT OF TAX CREDIT UNITS AS WELL. SO THEY HAVE AN ONGOING ROLE, WHETHER IT'S A WORKFORCE DEAL OR A TAX CREDIT DEAL, THE TAX CREDIT DEAL. YOU'VE GOT MULTIPLE LAYERS OF OVERSIGHT BECAUSE YOU'VE GOT A TAX CREDIT INVESTOR WHO'S A BIG INSTITUTION. YOU'LL HAVE A BOND PURCHASER, YOU'LL HAVE MULTIPLE LAYERS OF OVERSIGHT ON THE WORKFORCE. IT WAS A LITTLE LOOSER. REGULATORILY. SO BUT THEY UNDER THE NEW HB 21 REGIME, THERE'S AN ANNUAL DH TO MAKE SURE THAT THE PUBLIC BENEFIT IS BEING MET AND THE RESTRICTIONS ARE BEING MET. AND ARE THERE ANY OTHER SORT OF EXTERNAL AUDITS THAT ARE REQUIRED OUTSIDE OF THAT? NOT BY STATUTE. SO THE HFC DOESN'T NEED TO BE AUDITED BY STATUTE. SOME CHOOSE TO GET AUDITED FINANCIALS, OTHERS GET A COMPILATION, OTHERS DO OTHER THINGS. BUT THE THE THE PROJECTS YOU DO WILL TYPICALLY, THOSE OWNERS OF THE PROJECT THAT THE HFC OR THE PFC WOULD BE A PARTNER AND THEY GET AUDITED FINANCIALS TYPICALLY IN THE HFC IS ABLE TO REVIEW THOSE AND SEE THOSE. OKAY. AND SORRY NOT TO HARP ON THIS, THIS QUESTION ON THE BYLAWS THAT ARE TYPICALLY CREATED THAT YOU ALL SEE. I MEAN, DO THEY DO THEY EVER PUT IN REQUIREMENTS FOR ADDITIONAL LAYERS OF AUDIT AT ALL? OR IS THAT SOMETHING THEY TYPICALLY LEAVE OPEN ENDED? I DON'T KNOW THAT I'VE SEEN ADDITIONAL LAYERS OF AUDIT, BUT IT'S THE CORPORATION'S BYLAWS YOU CAN PUT IN. YOU WISH JUST YEAH, JUST WANT TO KNOW. 
          ABSOLUTELY. OR, OR SOMETHING, YOU KNOW, AND THAT'S THE TYPE OF THING WHERE, YOU KNOW, AGAIN, WE'VE COVERING A LOT OF GROUND HERE, BUT IF IT IS SOMETHING IN PARTICULAR FOR A PARTICULAR PROJECT THAT THE HFC OR THE PFC WANTS TO ADDRESS, AND CERTAINLY IN THE, YOU KNOW, VAST LIST OF FINANCING DOCUMENTS, YOU COULD PUT THOSE TYPES OF REQUIREMENTS IN FOR A PARTICULAR DEAL. AND I THINK FOR MOST HOUSES KIND OF IN GENERAL, LIKE RYAN STATED, THEY'RE NOT SUBJECT TO AN ACTUAL AUDIT. THEY TYPICALLY KIND OF OPT FOR THE COMPILATION. SURE. HOWEVER, TYPICALLY THAT AS I THINK MOST HFC WOULD BE REQUIRED TO BE INCLUDED IN THE CITY'S LIKE FINANCIAL REPORTS, LIKE YOUR ANNUAL CAFR, FOR EXAMPLE, YOU WOULD HAVE THE HFC FINANCIALS INCLUDED IN THAT, WHICH WILL BE COVERED THROUGH THE COMPILATION. OKAY, SO THAT'S GOOD TO KNOW. SO, COUNCILMAN CORCORAN, I THINK THE WAY THIS WOULD PROBABLY WORK IS THE HFC WOULD HAVE A FINANCIAL STATEMENT AUDIT, KIND OF WHAT YOU'RE FAMILIAR WITH, AND THAT WOULD BE INCLUDED, AS IT'S CALLED, EITHER A DISCRETELY PRESENTED OR A BLENDED COMPONENT UNIT. SO THAT WOULD BE INCLUDED IN OUR FINANCIAL STATEMENTS. AND SOME OF THAT DEPENDS ON HOW THE BOARD SET UP AND SO FORTH. OKAY. BUT THEY WOULD HAVE A WE WOULD PROBABLY HAVE THEM HAVE A SEPARATE AUDIT. IT WOULD BE INCLUDED IN OURS. SO IT'D BE KIND OF PART OF THE PROCESS YOU'RE FAMILIAR WITH FROM A FINANCIAL STATEMENT STANDPOINT. NO, THAT'S VERY HELPFUL. THAT'S THAT'S WHAT I WAS LOOKING FOR. THANK YOU. LAST QUESTION. YOU KNOW, WHEN IT COMES TO WHEN IT COMES TO THE BUDGET AND, YOU KNOW, WE TALK ABOUT GIVING UP TAX REVENUE WHEN WE DO SOME OF THESE DEALS THROUGH THESE CORPORATIONS. YOU KNOW, I ALSO THINK ABOUT THINGS THAT MAYBE LOOKING AT WHAT THE REVENUE COULD BE USED FOR. IS IT THE KIND OF THING WHERE WE COULD OFFSET THAT WITH, OH, SORRY, I SEE MY TIMES. THAT'S OKAY. GO AHEAD AND FINISH THE QUESTION. 
          YOU KNOW, I MEAN, WE GIVE WE GIVE CERTAIN GRANTS AND DONATIONS TO LOTS OF NONPROFITS AROUND RICHARDSON, BUT IT SEEMS LIKE THE REVENUE THAT GOES INTO THESE COULD BE USED TO DO SOMETHING SIMILAR, RIGHT? I MEAN, IS THAT SOMETHING THAT WE COULD ESSENTIALLY USE THE BUDGET FROM THIS TO OFFSET EXPENDITURES THAT ARE IN OUR NORMAL BUDGET? I DO THINK THERE IS SOME SOME EXPENDITURES THAT ARE CURRENTLY PAID OUT OF THE GENERAL FUND THAT WE COULD USE SOME OF THESE DOLLARS THAT WOULD COME BACK TO THE TO THE HFC, BUT THEY ARE GOING TO BE MORE LIMITED OVERALL THAN THAN GENERAL FUND DOLLARS. YEAH. FAIR ENOUGH. YOU KNOW, THE OTHER POINT THAT THAT I'LL MAKE THAT THAT IF YOU GUYS, IF ANYBODY HAS ANY, YOU KNOW, THE 40% GOAL IS A GOAL, RIGHT? AND SO, YOU KNOW, THERE THERE'S, AND, AND WHEN IT'S DELIVERED IS DIFFERENT, RIGHT? SO, AND IF SOMEBODY ON YOUR TEAM CAN KIND OF EXPLAIN, I MEAN, IN THE 15 YEARS, A LOT OF THIS IS ON THE BACK END. SO YOU'RE GIVING UP THE DOLLARS INITIALLY. AND 
          [01:25:03]
AGAIN, THIS ISN'T A NEGATIVE. THIS IS JUST BEING EYES OPEN, RIGHT? IN THE EARLY IN THE EARLY DAYS, IN THE EARLY YEARS OF THESE PROGRAMS, WE ARE GOING TO FOREGO THE DOLLARS IN THE GENERAL FUND, AND THEY'RE GOING TO BE A LITTLE BIT MORE HEAVILY BACK LOADED IN OVER THE COURSE OF THE 15 YEARS, IS MY UNDERSTANDING. COULD YOU COULD YOU SPEAK TO THAT MAYBE BECAUSE THAT THAT'S A FACTOR. COUNCILMAN CORCORAN, TO YOUR POINT, THAT'S A FACTOR THAT WE'RE GOING TO HAVE TO BE EYES OPEN TO IN THE EARLY STAGES OF ANY OF THESE DEALS. WE'RE GOING TO FOREGO GENERAL FUND DOLLARS. WE MAY RECUPERATE UP TO 40%, BUTS NOT GOING TO BE IMMEDIATELY, AND IT'S NOT GOING TO BE IMMEDIATELY, AND IT'S NOT GOING TO BE EQUALLY OVER THE COURSE OF THE 15 YEARS IS MY UNDERSTANDING. I WOULD AGREE WITH THAT STATEMENT. YES. LIKE, FOR EXAMPLE, DEVELOPER FEE THAT HAS TO BE PAID WITHIN THE FIRST THE FIRST 15 YEARS DURING THAT TAX CREDIT COMPLIANCE PERIOD. AND TYPICALLY, YOU KNOW, EQUITY INVESTORS WANT THAT, YOU KNOW, BY YEAR 1314 FOR SURE. BEFORE THAT, AGAIN, SOMETIMES THOSE ANNUAL FEES, LIKE THE ANNUAL LEASE PAYMENTS, WE LIKE TO PUT THAT AHEAD OF, OF DEFERRED DEVELOPER FEES. SO WE KNOW THAT'S GOING TO BE PAID ANNUALLY. SOMETIMES EQUITY INVESTORS DON'T ALLOW THAT BECAUSE THEN THAT JEOPARDIZES THE REPAYMENT OF DEFERRED DEVELOPER FEES. SO IT IS A COMMON KIND OF PUSH AND PULL. SO I'D AGREE THAT, YOU KNOW, THE ALL OF THESE FEES ARE RECEIVED AT VARIOUS POINTS OF TIME. AND, YOU KNOW, YOU CAN COUNT ON THE ISSUANCE FEE PAID AT CLOSING YOUR GENERAL CONTRACTOR FEE, GENERAL CONTRACTOR FEES, TYPICALLY HALF PAID AT CLOSING, HALF PAID AT CONSTRUCTION COMPLETION. SO THOSE ARE THE FUNDS THAT YOU WOULD RECEIVE UP FRONT. THE OTHER FEES ARE, YOU KNOW, ANNUALLY CASH FLOW DEPENDANCE AND COULD BE PAID AT VARIOUS TIMES. SO GENERALLY YOU HAVE A GOOD CHUNK COMING IN UP FRONT AND THEN IT KIND OF TAPERS DOWN THROUGH ANNUAL KIND OF FEES. AND THEN AT A SELLER REFINANCE, THERE COULD BE A LARGER KIND OF FEE AT THE END THERE. SO IT IS KIND OF ATREAMING KIND OF FLOW OF FUNDS THAT YOU KIND OF RECEIVE, WHICH IS WHY I WOULD, WHICH IS WHY THE QUESTION YOU STARTED WITH, I WOULD BE RELUCTANT TO SAY THAT WE CAN JUST SAY THAT WE'RE GOING TO JUST THAT WE'RE JUST GOING TO USE THIS BUCKET TO PAY SOMETHING THAT'S CURRENTLY IN THE GENERAL FUND. I MEAN, THESE AREN'T GOING TO BE THESE AREN'T GOING TO BE CONSISTENT DOLLARS YEAR IN, YEAR OUT. AND SO I WOULD BE THAT'S, THAT WAS PART OF MY RELUCTANCE AND WHY I WANTED TO THANK YOU FOR THAT. BY THE WAY. THANK YOU FOR EXPLAINING THAT BECAUSE, I MEAN, IT'S NOT JUST WE CAN TAKE, YOU KNOW, WE'RE GOING TO GET X NUMBER OF DOLLARS BACK IN THE HFC EQUALLY YEAR AFTER YEAR. AND WE CAN WE CAN FOREGO THE DOLLARS IN THE GENERAL FUND AND JUST PAY IT OUT OF THIS BUCKET. IT'S GOING TO FLUCTUATE AND IT'S GOING TO BE A LITTLE BIT LESS CONSISTENT THAN WE WOULD WE COULD ANTICIPATE AND EXPECT IN THE GENERAL FUND. MAYOR PRO TEM HUTCHENRIDER, THANK YOU. MAYOR, CAN YOU GO BACK TO THE HFC BECAUSE YOU SAID THAT'S THE ONE THAT'S KIND OF THE MOST DEFINED AT THIS POINT IN TIME FROM A LEGISLATIVE STANDPOINT, CORRECT. DID I HEAR YOU CORRECTLY? I APOLOGIZE, WHAT WAS THE QUESTION? THE HFC IS THE ONE THAT'S THE MOST DEFINED PFC IS THE ONE YOU THINK IS GOING TO HAVE SOME TWEAKS TO IT IN THIS NEXT IN THE NEXT LEGISLATIVE SESSION? IS THAT WHAT YOU SAID? RIGHT CORRECTLY. 
          THAT'S WHAT WE ANTICIPATED WITH THE LAST SESSION, DEFINITELY TARGETED THE HFC. WE CAN ANTICIPATE PROBABLY THE PFC WOULD BE COMING UP NEXT WITH SOME ADJUSTMENTS. SO COULD YOU GO TO THE HFC EXAMPLE FOR JUST A MOMENT? I, I JUST WANT TO MAKE SURE I FULLY UNDERSTAND THIS. KEEP GOING. THAT'S THE PFC, RIGHT? WHERE'D IT GO? OR ARE YOU WERE YOU LOOKING AT THE FINANCIAL EXAMPLE YOU GAVE FOR THE HFC? SO EITHER OF THESE DEALS CAN BE DONE IN THE HFC? PFC. I WANT TO LIMIT ONE OR THE OTHER TO JUST HFC OR PFC. SO WE'VE COMMONLY HEARD, YOU KNOW, THE WORKFORCE DEALS. THE WHICH WAS TYPICALLY 50% INCOME RESTRICTED. WE'VE HEARD THESE BEEN CALLED PFC DEALS, BUT THIS THIS CAN BE DONE WITH HFC AS WELL. CAN YOU GO BACK TO THE OTHER ONE THOUGH? THAT ONE WAS SPECIFICALLY. YEAH. OKAY. PERFECT. SO I JUST WANT TO MAKE SURE I UNDERSTAND. SO IN YOUR EXAMPLE HERE, APPROXIMATELY HOW MANY UNITS FOR 45 MILLION DID YOU ESTIMATE WOULD BE CREATED AS PART OF THIS EXAMPLE? WE DIDN'T USE UNIT COUNT. WE JUST SIMPLY WANTED TO COME UP WITH A EVEN ROUND NUMBER TAX BILL TO JUST HAVE AN EASIER KIND OF A, I GUESS, UNDERSTANDING OF THE VARIOUS FEES. BUT I GUESS GENERALLY WHAT WE SEE THESE THESE DEALS RANGING IN TERMS OF UNIT COUNT, I'D SEE ON AVERAGE AROUND ABOUT 200 TO 350 UNITS PER SE IN THESE VARIOUS TRANSACTIONS. OKAY. SO WE'LL SAY. SO IN FAIRNESS. 250 WOULD THAT BE A BASED ON WHAT YOU'RE AWARE OF, DON, AS FAR AS CURRENT COSTS? SO FOR 250 UNITS, 
          [01:30:04]
IF I'M UNDERSTANDING CORRECTLY, OVER 15 YEARS, IF WE DIDN'T HAVE THIS STRUCTURED IN A, IN A, IN AN HFC, WE WOULD ACCRUE $18.6 MILLION IN TAXES. IS THAT CORRECT? FOR FOR ALL TAX ENTITIES, FOR ALL TAXING ENTITIES, BUT FOR THE CITY IS THE CITY THE FOUR 4,600,000 FOR 4.6, RIGHT. THE CITY'S PORTION IS THE 4.6 OVER 15 YEARS. OKAY. SO. OUT OF THE SO, SO OUT OF THAT 15 YEARS OF REVENUE TO THE HFC PFC, THAT 7.4 WOULD WE WOULD THERE BE ANY TYPE OF A. I DON'T WANT TO USE THE WORD SPLIT, BUT WOULD WE WOULD WE OWE DOLLARS TO, FOR EXAMPLE, LIKE THE SCHOOL DISTRICT TO THE PARKLAND HOSPITAL DISTRICT, TRYING TO THINK WHO ELSE WE HAVE THE COUNTY. SO THAT THAT 7.4 THAT YOU SHOW DOWN THERE IS 15 YEARS OF REVENUE. WE DON'T. 
          THE CITY'S IN ESSENCE, FORGOING 4.6. BUT THAT 7.4 WHO ALL DO WE HAVE TO SHARE THAT WITH UNDER STATUTES? NO ONE. BUT THAT IS A POLI ISSUE. WE'VE SEEN, YOU KNOW, HFC, YOU KNOW, GIVE A ONE TIME PAYMENT TO SCHOOL DISTRICTS OR, YOU KNOW, THE HOSPITAL OR WHATEVER IT MAY BE. 
          SO THAT'S DEFINITELY A POLICY DECISION AS FAR AS HOW THOSE REVENUES GET SPLIT UP AND WHERE THEY GO. AND IF ANY OTHER TAXING ENTITIES RECEIVE ANY OF THOSE. BUT UNDER STATUTES THAT YOU'RE NOT REQUIRED OR, YOU KNOW, I GUESS REQUIRED TO SHARE OR GET THEIR AGREEMENT. SO I GUESS I'M JUST TRYING TO UNDERSTAND IF, IF IN ESSENCE, I DON'T, I MEAN, IF THE, IF WE'RE IF CITY TAX IS ABOUT 4.6 ON WHAT WOULD BE SCHOOL DISTRICT, WOULD YOU GUESS OUT OF THAT 18.5 APPROXIMATELY JUST A BALLPARK FIGURE. THE VAST MAJORITY. SO OF THE FOUR OF THE 139, I MEAN, AGAIN, IT'S PROBABLY. JUST DOUBLE. YEAH. SO I WOULD SAY THAT, YOU KNOW, PROBABLY 8 OR 8 TO $9 MILLION OUT OF THE 139 WOULD BE SCHOOL DISTRICT. SO DO THEY HAVE TO AGREE TO THIS, EXCUSE ME, TO THIS HFC STRUCTURE OR NOT IN THIS LEGALLY? NO. POLITICALLY, OF COURSE THAT'S YOU KNOW, THAT'S A DIFFERENT DISCUSSION. BUT I UNDERSTAND. YEAH, I'M JUST I'M I GUESS MY QUESTION. AND AGAIN, WE'RE CITY COUNCIL, WE'RE NOT SCHOOL BOARD, BUT I JUST WANT TO MAKE SURE THAT THAT WE, WE GO INTO THIS EYES WIDE OPEN. SO IN ESSENCE, AT LEAST EVERY MEETING I'VE EVER GONE TO WITH THE SCHOOL DISTRICT, THEY'RE, THEY'RE CONSISTENTLY TELLING US HOW THEY'RE, THEY'RE UNDERFUNDED. SO IF WE'RE, IF WE WENT IN AND DID THIS IN, IN ESSENCE, STRIPPED AWAY OVER A 15 YEAR PERIOD, 9 MILLION IN TAX DOLLARS FROM THEM, 4 MILLION FROM US. I MEAN, I UNDERSTAND THE BENEFIT. I'M JUST TRYING TO UNDERSTAND. AND HOW DO WE HOW DOES THAT WORK? NOT NECESSARILY IN THE POLITICAL CLIMATE. I'M JUST TRYING TO I'M JUST TRYING TO SAY REALISTICALLY, YOU KNOW, WALKING IN AND SAYING TO THE SCHOOL DISTRICT, WE'RE GOING TO WE'RE GOING TO CREATE 250 UNITS. MOST LIKELY. MY GUESS WOULD BE THERE'D BE SOME NUMBER OF STUDENTS. SO WE'RE WE'RE STRIPPING AWAY 9 MILLION IN FEES TO, I MEAN, I'M SORRY, IN TAXES TO THE SCHOOL DISTRICTS. AND WE'RE ADDING MORE BURDEN AT THE SAME TIME. AM I IS THAT A IS THAT POTENTIALLY. I THINK THE OTHER WAY TO LOOK IS TO I MEAN, THIS THIS IS, YOU KNOW, IF IT IS A NEW CONSTRUCTION ON RAW LAND, YOU'RE NOT REALLY RIPPING AWAY TAX BASE. IT'S TAX BASE THAT'S NOT REALIZED YET AND POTENTIALLY WOULDN'T BE REALIZED UNLESS THIS PROPERTY IS BUILT. IT MIGHT NOT BE BUILT AS A AS A MARKET RATE. AND I GUESS THE ADDED BURDEN OF STUDENTS WOULD DEPEND ON THE RESIDENTS. I MEAN, LIKE MEGAN KIND OF SHOWED IN ONE OF THE OTHER SLIDES IS A LOT OF THE RESIDENTS LIKELY TO, TO, TO LIVE IN THE, IN THESE PROPERTIES AS TENANTS PROBABLY ALREADY LIVE IN RICHARDSON. SO IT'S NOT ADDITIONAL STUDENTS THAT ARE COMING IN UNLESS THEY'RE MOVING IN FROM OTHER ENTITIES OR OTHER CITIES, OBVIOUSLY, BUT MOST OF THE TIME IT'S GOING TO BE RESIDENTS ALREADY LIVING HERE THAT ARE LIVING IN THESE PROPERTIES. YEAH, YEAH. BREXIT. LET ME LET ME. SO SO THAT'S A THAT'S A FAIR, THAT'S A VERY FAIR, I THINK PERSPECTIVE THAT I THINK THE THING IN A BUILT OUT CITY LIKE RICHARDSON, WHERE WE HAVE LESS THAN 4% OF THE LAND REMAINING, IS WE'VE GOT RIGHT NOW, WE HAVE FOUR DIFFERENT MULTIFAMILY PROJECTS THAT ARE UNDER DEVELOPMENT. SO I THINK WHEN WE TALK TO THE SCHOOL DISTRICT, THE SCHOOL DISTRICTS, NOT THINKING THAT THAT LAND IS GOING TO SIT THERE FOREVER. RIGHT? AND SO, I MEAN, WHAT YOU SAID IS ABSOLUTELY A FAIR PERSPECTIVE. I'M JUST SAYING WHAT WE'VE HEARD FROM THE SCHOOL DISTRICT. AND ACTUALLY, THIS IS POINT THREE OF MY FINAL CLOSING STATEMENT TODAY, WHICH 
          [01:35:05]
WAS NO, NO, IT'S BECAUSE IT'S A VERY FAIR POINT. I MEAN, WE NEED TO IF THE COUNCIL DIRECTS US TO MOVE FORWARD WITH THIS FURTHER, THEN WE NEED TO SIT DOWN AND HAVE A MUCH DEEPER AND WIDER CONVERSATION WITH BOTH. I THIS MAY NOT BE IMPACTFUL TO THEM, BECAUSE BOTH ISD'S ARE ALREADY SENDING DOLLARS BACK TO AUSTIN RIGHT UNDER ROBIN HOOD, BUT IT COULD IT COULD BE WHERE IT WOULD DEFINITELY IN BRAXTON'S ABSOLUTELY RIGHT, WHERE IT WOULD DEFINITELY BE IMPACTFUL TO THEM IS IF YOU ALLOWED THIS TO BE APPLIED TO EXISTING PROPERTIES. AND THAT'S, THAT'S PART OF THE THE NEXT AGAIN, THE NEXT BRIEFING AS WELL IS ARE WE TALKING ABOUT ONLY NEW DEVELOPMENT? ARE WE TALKING ABOUT REDEVELOPMENT BECAUSE REDEVELOPMENT WILL HAVE AN IMPACT FOR CERTAIN? I THINK THE THING THAT THE THING THAT WE'VE HEARD FROM FROM THE SCHOOL DISTRICTS AT A HIGH LEVEL WITH CONVERSATIONS SO FAR IS AGAIN, WITH LESS THAN 4% OF OUR LAND GREENFIELD, IT'S GOING TO DEVELOP THEIR THEIR ENTITLEMENTS OUT THERE RIGHT NOW THAT ARE BEING DEVELOPED WITHOUT ANY KIND OF I MEAN, APARTMENTS THAT ARE OUT THERE RIGHT NOW THAT ARE BEING DEVELOPED WITHOUT ANY KIND OF INCENTIVE. RIGHT. AND SO ULTIMATELY, THAT THOSE FEW HUNDRED ACRES WE HAVE LEFT ARE GOING TO BE CONSTRUCTED ON. 
          RIGHT? I MEAN, IT'S JUST IT'S JUST A MATTER OF TIME. AND SO I THINK IF YOU IF YOU IF YOU HAVE INTEREST IN THIS AND YOU WANT US TO TAKE IT TO THE NEXT LEVEL OF EXPLORATION, THEN WE NEED TO WE NEED TO WORK WITH BOTH PISD AND ISD TO DO A FINANCIAL ANALYSIS ON WHAT DOES THIS REALLY MEAN TO THEM GIVING THEIR CURRENT STATUS AS UNDER UNDER THE CURRENT TAX OR SCHOOL TAX SYSTEM AS AS ALREADY SENDING DOLLARS BACK TO AUSTIN AND THEN VIA THE I GUESS I'M OVER TIME JUST A LITTLE BIT. WE'LL COME RIGHT BACK IF YOU HAVE SOME MORE QUESTIONS. 
          COUNCIL MEMBER GRIFFIN. THANK YOU, MR. MAYOR. YOU KNOW, I'M TRYING TO UNDERSTAND. I MEAN, THIS IS VERY COMPLEX AND I'M PRETTY GOOD AT MATH. THAT'S WHAT I CAN TELL YOU. AND THE REASON I SAY THAT, BECAUSE I THINK THAT HOW MUCH I HAD IN MY POCKET, HOW MUCH IS GONE, HOW MUCH I HAVE, BECAUSE THAT'S THE BOTTOM LINE. I ALWAYS TRY TO SEE END OF THE DAY. SO I THOUGHT I UNDERSTOOD LOTS OF THINGS, BUT NOW I AFTER ALL THIS QUESTION, EVEN MY QUESTION GOT MESSED UP. NOW, OF COURSE, DON JUST MENTIONED THAT IF WE HAVE AN EXISTING BUILDING AND IF WE TRY TO REDEVELOP THAT, THE EQUATION IS GOING TO BE MORE COMPLEX. BUT BUT IF IT IS A RAW LAND, THERE IS NOTHING THERE, THEN IT'S GOING TO BE ANOTHER SITUATION. AND REGARDING THE SCHOOL DISTRICT, YOU KNOW, IF WE CAN HAVE MORE STUDENTS IN THE CLASSROOM, WE'LL GET MORE MONEY. SO SOMETIMES IT'S NOT REALLY A GOOD IDEA NOT TO HAVE MORE STUDENTS. SOMETIMES IF YOU CAN JUST BRING THE STUDENT WITH THE EQUATION THAT THEY HAVE TODAY IN THE STATE TODAY, THAT MEANS HAVING A STUDENT IS VERY IMPORTANT TO GETTING TO GET THE MORE MONEY. SO NOW WHAT I, YOU KNOW, I'M LOOKING FOR IS THAT IF WE HAVE A PROJECT THAT WE SAY, OKAY, WE APPROVE THIS DEVELOPMENT, SAY DEVELOPMENT X AND, AND CITY HAVE TO GIVE UP SOME TAX UPFRONT. AND THIS IS NOT SOMETHING WE'RE NOT GOING TO GIVE OUT SOME TAX FROM THE RESERVE. RIGHT. THERE WOULD BE NO UPFRONT CASH MONEY GIVEN FROM THE CITY. CORRECT. NO. NO UPFRONT COMMITMENT NEEDED FROM THE CITY. THE ESSENTIALLY WOULD BE AS THE DATE OF THE CLOSING OF OF THE FINANCING. SO THAT IS WHEN THAT TAX EXEMPT STATUS GOES INTO EFFECT. SO, YOU KNOW, SAY FOR EXAMPLE, IT'S JUNE OF, YOU KNOW, MIDDLE OF THE YEAR, YOU KNOW, TAXES PRIOR TO THAT WOULD STILL BE DUE. SO THERE'S NO UPFRONT, YOU KNOW, PAYMENT FROM THE CITY OR ANY OBLIGATION LIKE THAT. NOW, THE SECOND QUESTION I HAVE IS THAT THAT TAX EXEMPT IS GOING TO BE LIKE THE WHOLE THE LIFE OF THIS PROPERTY. IT'S SO LONG AS THE HFC PLAYS A ROLE IN THE OWNERSHIP. SO. THE STRUCTURE IN THE HFC PARTICIPATION IN THAT STRUCTURE IS WHAT GENERATES THE AD VALOREM EXEMPTION. SO I THINK FROM A AND I THINK MEGAN AND BRAXTON HIT ON THIS EARLIER, WE STRUCTURE THESE. SO IN THEORY THEY CAN GO 99 YEARS, 99. BUT FROM A PRACTICAL REALITY, SOMEWHERE IN THAT 15 TO 20 YEAR HORIZON, THERE'S GOING TO BE THE NEED FOR A CAPITAL EVENT. 
          SO THAT'S WHEN A ANOTHER DECISION POINT IS MADE AS TO, YOU KNOW, AND THAT'S COLLABORATIVE WITH THE DEVELOPER AND THE HFC AS TO WHAT MAKES SENSE LONG TERM FOR 
          [01:40:02]
THIS. IN SOME INSTANCES, WE'VE SEEN IT'S KIND OF GOING AWAY FROM A KIND OF TAX CREDIT TO A MORE WORKFORCE OR A MARKET RATE. IN OTHER INSTANCES, IT'S KIND OF PUTTING CAPITAL BACK INTO IT AND KEEPING IT AS A DEEPLY AFFORDABLE DEAL. IT JUST DEPENDS. SO IN SHORT, IT COULD BE 20 YEARS. AND AFTER THAT, REEVALUATE THE WHOLE SITUATION, HOW THAT'S GOING TO, YOU KNOW. 
          SET UP. AND IF IT IF IT DOES GO BACK TO A MARKET RATE AT THAT POINT, THAT IT DOES GO BACK ON THE TAX ROLLS IS REALLY THE TRIGGER THERE AS WELL. SO THAT 20 YEAR CAPITALIZATION, IF IT DOESN'T MAKE SENSE TO MOVE FORWARD WITH AN HFC STRUCTURE OR A PFC STRUCTURE, THAT PROPERTY WOULD, YOU WOULD EXIT THE PARTNERSHIP AND THAT PROPERTY WOULD GO BACK ON THE TAX ROLLS FOR, FOR ALL TAXING ENTITIES AT THAT POINT. OKAY. I DO HAVE A FEW OTHER QUESTIONS, BUT I'M GOING TO ORGANIZE MYSELF AND ASK THIS QUESTION. NO PROBLEM. GOOD IDEA. I WILL JUST ASK A COUPLE QUESTIONS. SO STAYING ON THIS EXAMPLE, GRANTED THERE ARE OTHER TAX ENTITIES THAT MAY NOT RECEIVE THEIR TAXES, BUT FROM A CITY PERSPECTIVE, IF WE WERE JUST FOCUSED ON THAT PIECE, IN THIS PARTICULAR EXAMPLE, WE RECEIVE OVER 15, OVER 15 YEARS, 7.4 MILLION VERSUS THE 4.6 MILLION WE WOULD HAVE RECEIVED OTHERWISE. GRANTED, IT GOES INTO THE RESTRICTIONS OF WHAT CAN BE USED IN THE HFC OR PFC. RIGHT? CORRECT. RIGHT. AND EVEN IN THE OTHER EXAMPLE, THE SECONDARY EXAMPLE, WHERE IT'S 15 YEARS, IT'S 4.6 MILLION VERSUS 4 MILLION, WHETHER IT ENDS UP BEING A LITTLE BIT MORE BACK LOADED OR IT HAS A LITTLE BIT OF FRONT LOADING AND THEN LATER BACK LOADING, BUT EITHER WAY, OVER 15 YEARS, YOU STILL HAVE A A NOMINAL DIFFERENCE, BUT SOMEWHAT CLOSE TO WHAT YOU WOULD HAVE RECEIVED. BUT INSTEAD OF IT GOING INTO YOUR REGULAR GENERAL FUND, IT GOES INTO THIS PFC OR HFC, CORRECT? CORRECT. OKAY. AND SO IN BOTH OF THOSE CASES, WE WOULD HAVE ESSENTIALLY A REVENUE NEUTRAL. 
          GRANTED, IT WOULD ADJUST IN TERMS OF WHERE IT WAS GOING, BUT OSTENSIBLY, IF WE USED THE ARGUMENT THAT THIS WOULDN'T HAVE HAPPENED WITHOUT THE INCENTIVE. AND OBVIOUSLY AS A COUNCIL, WE WOULD BE THE ONES CHOOSING WHETHER OR NOT WE WANTED TO DEPLOY THIS. I WANT COUNCIL TO ALSO CONSIDER THE FACT THAT I'M NOT MAKING AN ARGUMENT FOR OR AGAINST, BUT JUST LET'S THINK ABOUT THIS. WHEN WE HAVE DONE A TAX ABATEMENT OR WHEN WE HAVE DONE ANY OF SORT OF INCENTIVE, THOSE ARE DOLLARS THAT WE DON'T GET PAID BACK IN ANY FORM OTHER THAN FUTURE SALES TAX OR WHATEVER OTHER ANCILLARY BENEFIT THERE MIGHT BE. BUT IF WE GAVE AN ABATEMENT, LET'S SAY FOR FIVE YEARS OR TEN YEARS OR WHATEVER, UNLIKE THESE TWO INSTRUMENTS, WE WOULDN'T ACTUALLY BE ABLE TO GET THE DOLLARS BACK DIRECTLY THE WAY THIS IS. RIGHT? SO JUST, JUST TRYING TO MAKE SURE THAT WE'RE ALL KIND OF CLEAR EYED ON THAT. 
          AND WE WOULD BE THE ONES CHOOSING WHEN THIS TOOL GETS USED OR NOT, OR IF WE EVER USE THE TOOL. SO FROM MY PERSPECTIVE, DEPENDING ON WHERE THE COUNCIL SITS, IF WE WANT US TO HAVE AS MANY TOOLS AS POSSIBLE TO BE ABLE TO EITHER ALLOW OR NOT ALLOW A PARTICULAR TYPE OF DEVELOPMENT TO HAPPEN, THEN THIS WOULD BE SOMETHING THAT WE WOULD AT LEAST CONSIDER MOVING FORWARD WITH, WHETHER OR NOT WE EVER UTILIZE IT IN THE FUTURE. SO NO ONE'S GOING TO FORCE US TO BE ABLE TO, TO, TO GRANT ONE OF THESE, BECAUSE WE'LL BE ABLE TO SET UP THE STRUCTURE TO WHERE WE WOULD BE THE ONES MAKING THAT DECISION, JUST LIKE WE COULD MAKE A DECISION ON AN INCENTIVE OR A FULL TAX ABATEMENT FOR FIVE OR 10 OR 15 YEARS, OR WHATEVER THE LENGTH OF TIME THAT WE MAY WANT TO DO. THE OTHER THING THAT I THOUGHT WAS REALLY NOTABLE AND HELPFUL WAS ONE OF YOUR EARLIER SLIDES. IF YOU'RE ABLE TO GET TO IT, THAT'S GREAT. IT'S TOTALLY OKAY IF NOT, BUT IT WAS THE RENT AND INCOME LIMITS. SLIDE. SLIDE 12. IT'S REALLY IMPORTANT BECAUSE I KNOW THAT WORDS SOMETIMES MATTER, AND WORDS SOMETIMES GET US A LITTLE BIT TWISTED, AND THE WORDING OF LOW INCOME CAN REALLY KIND OF LIKE GET SOME OF US A LITTLE BIT ANTSY. AND I TOTALLY UNDERSTAND THAT. BUT IF YOU LOOK AT THE LEFTMOST COLUMN, WHICH PERHAPS WOULD BE CONSIDERED LOW INCOME, LESS THAN 60% OF AMI, AND THEN YOU LOOK AT THE CITY EMPLOYEES CURRENTLY THAT WOULD FIT INTO THAT CATEGORY. THE QUESTION JUST BECOMES, DO WE WANT TO CREATE HOUSING THAT WOULD ALLOW THESE PEOPLE TO BE ABLE TO AFFORD LIVING IN THIS CITY? AND THAT'S AT LESS THAN 60% FROM 60 TO 70 OR 70 TO 80, WHICH YOU CAN HAVE A MIX OF ALL THOSE THINGS. YOU CAN SEE THE JOB DESCRIPTIONS GET MORE AND MORE HEFTY. AND THE DESIRE, I WOULD THINK, FOR US TO HAVE LIVING OPTIONS FOR THESE PEOPLE WOULD 
          [01:45:09]
ALSO GROW PERHAPS A BIT STRONGER. SO I JUST WANT TO MAKE SURE THAT WE'RE VERY CLEAR EYED ON IT'S REAL EASY TO GET KIND OF ANTSY ABOUT THE WORDING ON SOME OF THIS STUFF, BUT AT THE END OF THE DAY, THE LESS THAN 60%, 60 TO 70 AND 70 TO 80 IS ARTICULATED RIGHT THERE. I THINK REALLY WELL, AND I APPRECIATE THAT YOU DID THIS BECAUSE IT'S IT'S HARD SOMETIMES TO THINK ABOUT EXACTLY WHO WE'RE TALKING ABOUT. AND THESE ARE THE EMPLOYEES OF OUR CITY THAT WE'RE TALKING ABOUT. MAYOR, IF I CAN ASK THE TEAM TO BUILD ON ONE POINT. SO THE TWO EXAMPLES AND I WAS I'LL BE HONEST, I HAD HEARTBURN COMING INTO THIS BRIEFING USING THE EXAMPLES, HOW IF SOMEONE ON THE TEAM COULD INDICATE FOR THE COUNCIL HOW OFTEN ARE WE OUR DEALS ACHIEVING THE 40%. WHAT PERCENTAGE OF OVERALL DEALS ARE ACHIEVING THE FULL 40% RETURN? SURE. SO FROM HILLTOP, FROM ALL THE DEALS THAT HILLTOP YOU KNOW, ADVISES ON, AGAIN, THAT 40% TARGETS ARE OUR TARGET THAT WE ALWAYS HIT. WE TRY TO ACTUALLY HIT THAT TARGET BEFORE EVEN FACTORING IN THE SALES PROCEEDS AMOUNTS. SO EVEN THE DOLLAR AMOUNT THAT WE'D SHOW, YOU KNOW, HITTING THAT 40% THAT INCLUDED THAT BACKHAND SALE PROCEEDS, WE TYPICALLY DON'T EVEN INCLUDE THAT WHEN WE'RE PUTTING TOGETHER OUR, OUR NEGOTIATIONS, OUR NUMBERS IN THE VERY UPFRONT FOR A FEW REASONS. YOU KNOW, YOU DON'T WE DON'T HAVE A MAGIC, YOU KNOW, BALL THAT WE CAN ASK TO SEE, YOU KNOW, WHEN ARE WE GOING TO SELL THIS PROPERTY AND AT WHAT CAP RATE, YOU KNOW, WHAT THAT VALUE IS. SO IT IS HARD TO ESTIMATE ESTIMATE THAT. BUT MAJORITY, I'D SAY OF OUR DEALS, YOU KNOW, ARE ALL OF OUR DEALS. WE AIM FOR THAT TARGET. HOW THEY ULTIMATELY SHAKE OUT, YOU KNOW YEARS DOWN THE ROAD. IT'S IT'S A LITTLE BIT MIXED BAG I'D SAY. BUT TYPICALLY WE SEE AT LEAST 30 BETWEEN THAT 30 TO 40% TARGET, EVEN WITHOUT THE BACK END SALE PROCEEDS. IF YOU LOOK, YOU KNOW, FIVE, TEN YEARS AGO WHERE WE HAD, YOU KNOW, FOR EXAMPLE, A CASH FLOW SPLITS WHERE I'D MENTIONED, YOU KNOW, MAYBE OPERATIONS DIDN'T GO AS, AS WELL THAT, THAT TARGET OR WHERE IT ULTIMATELY SHOULD SHAKE OUT. IT WAS WELL BELOW, YOU KNOW, 40%. SO AGAIN, WE TRY TO BUILD IN THESE, YOU KNOW, I'D SAY GUARANTEED WITH A LOWERCASE G FEES. SO THERE'S A, THERE'S A STAKE IN THE GROUND IN THAT THOSE FEES ACCUMULATE AND YOU DO GET PAID THOSE FEES AT SOME POINT. SO LET ME, LET ME TRANSLATE THAT. AND YOU CAN TELL ME WHETHER I'M SAYING THIS RIGHT OR NOT. OKAY. BECAUSE THIS IS A SERIOUS QUESTION WHEN IT COMES TO REVENUE COMING IN. 
          I MEAN, WE'RE SAYING IN THESE EXAMPLES THAT YOU'RE POTENTIALLY GOING TO HAVE, YOU'RE GOING TO GAIN MORE REVENUE, BUT THAT'S ASSUMING THE FULL 40% RETURN. HOW MANY ON ON WHAT PERCENT OF OVERALL DEALS ARE WE ACTUALLY ACHIEVING THE 40% RETURN? I THINK EARLIER IT WAS LIKE A THIRD. IF SOMEBODY SAID TO ME THE THE HOW MANY OF OUR PAST TRANSACTIONS HAVE. RIGHT, HOW MANY HOW MANY CURRENT TRANSACTIONS OR DEALS ARE ACTUALLY PERFORMING OUT AND ACHIEVING A 40% RETURN, WHICH BOTH OF THESE WHICH BOTH OF THESE EXAMPLES PROVIDED IN TERMS OF THE AMOUNT OF REVENUE THE HFC COULD SEE, BECAUSE THE MAYOR MADE A VERY GOOD POINT, WHICH IS. BOTH OF THESE EXAMPLES ARE DEMONSTRATING THAT WE'RE GOING TO HAVE MILLIONS OF DOLLARS MORE THAN WE WOULD FROM TAXES, BUT THAT ASSUMES THAT BOTH OF THESE DEALS ARE GOING TO ACHIEVE THE 40% RETURN. SO MY QUESTION IS, HOW MANY HOW OFTEN DOES THAT HAPPEN? THAT'S HARD TO SAY. I DON'T KNOW IF I HAVE THAT EXACT NUMBER WITH ME. AND WE'VE DONE, I MEAN, OVER THE PAST FIVE YEARS, I'D SAY PROBABLY WELL OVER, YOU KNOW, ABOUT 200 DIFFERENT TRANSACTIONS OVER THE PAST FEW YEARS. AND I DON'T THINK, YOU KNOW, BRAXTON, CORRECT ME IF I'M WRONG. I DON'T KNOW IF WE HAVE AN EXACT NUMBER ONGOINGLY IN TRACK. YOU KNOW, WHERE ARE THESE FALLING IN TERMS OF WHERE WE ENDED UP AT THE INITIAL CLOSING? I DON'T KNOW IF YOU HAVE ANY ADDITIONAL COLOR MAYBE TO ADD. I MEAN, LOOKING AT PROJECTIONS AT CLOSING, I CAN SAY THAT MOST LOOK LIKE THEY'RE GOING TO HIT THAT 40% GOAL. I MEAN, BUT AGAIN, TO LOOK BACK, YOU KNOW, FIVE YEARS FROM NOW OR TEN YEARS FROM NOW, THAT THAT'S SOMETHING THAT TYPICALLY WE'RE, WE'RE NOT DOING AS A FINANCIAL ADVISOR, WE'RE KIND OF LOOKING MORE AT UP UNTIL CLOSING AND RUNNING PROJECTIONS. YOU KNOW, THE ACCOUNTING FIRMS ARE TYPICALLY KIND OF LOOKING BACK AT THAT THOSE AMOUNTS. AND IF WE'RE HITTING THOSE GOALS, LIKE MEGAN DID, STATE, THOUGH, THAT 40% THAT WAS INCLUDED ON THAT SLIDE, THAT WAS NOT INCLUDED. THAT THAT INCLUDED THE, THE SALES PARTICIPATION. BUT TYPICALLY WE DO NOT INCLUDE THAT WHEN WE'RE KIND OF PULLING THOSE NUMBERS IN. SO FOR THE ACTUAL 40%, WITHOUT THE SALE, WITHOUT A SALES PROCEEDS, WE'RE AT CLOSING. I WOULD SAY 80% OF THE DEALS LOOK LIKE THEY'RE GOING TO HIT IT AT CLOSING. 
          IT'S JUST HARD TO SAY. ARE THEY HITTING RENTAL AGREEMENTS? ARE THEY CONVERTING FAST ENOUGH? ARE THEY CONVERTING ON TIME DEALS CLOSING TODAY? I WOULD SAY NO, THEY'RE NOT DEALS. YOU 
          [01:50:04]
KNOW, FIVE YEARS AGO THEY'RE STARTING TO CLOSE WHERE THEY OR CONVERT WHERE THEY NEED TO. 
          IT'S JUST PROJECTION. I GUESS THE MARKET HAS SHIFTED SO MUCH OVER THE LAST FEW YEARS, WITH RATES KIND OF COMING UP AND DOWN AND BEING VOLATILE. WE HAVE AN OVERSATURATION OF UNITS COMING IN RIGHT NOW. EVERYONE'S STARTING TO CONVERT THESE DEALS FROM THEIR CONVERSION PHASES TO THEIR PERMANENT LOANS. AND THAT'S REALLY WHERE THOSE FEES START KICKING IN, IS WHEN YOU HAVE THAT PERMANENT, PERMANENT KIND OF LOAN IN, BECAUSE THAT MEANS YOU'RE STABILIZED TO AT LEAST 90% OF THE OF THE PROPERTY IS, IS RENTED, YOU'RE ABLE TO START PAYING THOSE FEES. 
          WE'RE STARTING TO SEE THAT, YOU KNOW, PROBABLY OVER THE LAST TWO YEARS, THOSE HAVE STARTED TO SLOW DOWN TO, TO BECOMING WHERE THEY'RE SUPPOSED TO BE HAPPENING. SO WE'RE A LITTLE BEHIND ON CLOSINGS THAT CLOSED OR, YOU KNOW, ON TRANSACTIONS THAT CLOSED PROBABLY 2 TO 3 YEARS AGO, BUT THEY'RE STARTING TO KIND OF CATCH UP. SO THOSE FEES ARE, THEY ACCRUE. SO THEY THAT LEASE PAYMENT DOES ACCRUE, LIKE MEGAN SAID IN THE, IN THE PRESENTATION. SO ONCE THAT CASH FLOW STARTS COMING, YOU'LL START GETTING IN, YOU SCHEDULED 175,000. SINCE IT'S ACCRUED, YOU'RE GOING TO START GETTING WHATEVER CASH FLOW CAN PAY IN. SO SOMETIMES THAT COMES IN HIGHER ON AN ANNUAL BASIS UNTIL YOU'RE MADE WHOLE. SO OVER THE 15 YEARS THAT YOU SHOULD BE HITTING THOSE AMOUNTS. IT'S JUST THERE'S EBBS AND FLOWS THROUGH THOSE 15 YEARS. KIND OF LIKE WE STATED BEFORE. ALSO. AND AGAIN, WITH NEW CONSTRUCTION SPECIFICALLY, WE'RE, WE'RE, WE'RE COMING UP WITH OUR BEST ESTIMATES AND WE'RE DURING THIS PROCESS OF NEGOTIATIONS. AND THAT'S KIND OF A HOTLY CONTESTED DISCUSSION BETWEEN THE HILLTOP AND THE DEVELOPER PARTNER OF WHAT IS THE VALUE OF THESE, YOU KNOW, OF THE TAX EXEMPTION. SO WE'RE BOTH COMING TO THE TABLE WITH, YOU KNOW, THE INFORMATION THAT WE HAVE AT THE TIME. WHAT WE KNOW FOR CERTAIN IS WE'RE PROBABLY BOTH GOING TO BE WRONG, RIGHT? BECAUSE WE CAN'T, YOU KNOW, 100% PUT A NUMBER ON WHAT TAXES WOULD BE IN FIVE, 10%. SO AGAIN, THIS IS A, AN ESTIMATE ON WHAT WE BELIEVE IS THE MOST APPROPRIATE BASED OFF THE FACTS WE KNOW AT THE TIME. BUT AS BRAXTON STATED, AGAIN, IT KIND OF MOVES BETWEEN, YOU KNOW, THE MARKET CONDITIONS, WHAT'S BEING AND WHAT'S HAPPENING LOCALLY, WHAT ARE PROPERTY VALUES. SO AGAIN, IT'S, IT'S, IT'S MORE SO HELPFUL OF A NEGOTIATION STARTING POINT AS FAR AS WHERE WE ULTIMATELY END UP, I GUESS TO ADD ON TO WHAT WE TYPICALLY LOOK AT IS WE, WE ARE A CONSERVATIVE AS WE CAN BE ON THESE ESTIMATES BECAUSE WE UNDERSTAND YOU'RE TRYING TO PUT THESE INTO BUDGETS. I'LL SAY WHEN A DEVELOPER BRINGS THROUGH A DEAL. THEY WILL. THEY WILL SELL YOU THE MOUNTAIN AND TELL YOU IT'S GOING TO HIT X, Y, Z EVERY YEAR. AND THEN WE IMMEDIATELY HAVE TO SQUASH THAT JUST BECAUSE, YOU KNOW, REALISTICALLY, IT'S NEVER GOING TO BE AS GOOD AS YOU'RE TOLD. 
          SO WE TRY TO KIND OF BUILD THOSE PROJECTIONS AS CONSERVATIVE AS WE CAN. JUST JUST NOT. SO YOU DON'T OVERESTIMATE ANYTHING WITH THOSE FUNDS. COUNCILMEMBER. 
          THANK YOU, MR. MAYOR. NOW, IF WE SET THIS ONE OF THIS TODAY, WOULD THERE BE ANY COST FOR THE CITY JUST FOR SETTING UP? WE TYPICALLY I MEAN, WHEN WE'RE FORMING AN HFC AND WE FORMED A LOT THROUGHOUT THE YEARS, WE TYPICALLY DON'T CHARGE IT BECAUSE IT IS A PRETTY STRAIGHTFORWARD PROCESS. WE'VE GOT A SET OF FORM DOCUMENTS THAT WORKS VERY WELL, AND WE'RE HAPPY TO WORK WITH YOU ALL IF THAT'S WHAT YOU WANT TO DO AND YOU WANT TO WORK WITH US TO HELP GET THAT. SO I WOULD SAY JUST FROM IF YOU CHOOSE TO WORK WITH THIS TEAM, I DON'T THINK THERE WOULD BE ANY COST TO SETTING UP IS NOT COST. AND THEN AND AFTER THAT, I BELIEVE THAT WHEN THE REAL PROJECTS COME, IT WILL COME TO THE CITY COUNCIL FOR DISCUSSION. PUBLIC NOTICE ALL THOSE DUE PROCESS THAT WE HAVE. AND THEN IF SOMETHING GETS APPROVED, THEN THE PROJECT WILL SEE SOMETHING HAPPENING OTHER THAN THE THE BOARD OF HFC OR PFC, WHATEVER IT COMES. THEY ARE NOT GOING TO BE ABLE TO INITIATE ANY PROJECTS WITH THE. WITHOUT CITY COUNCIL APPROVAL. IS THAT CORRECT ASSUMPTION? YEAH. I MEAN, DO YOU WANT TO JUST TALK ABOUT THE DIFFERENT APPROVALS FOR THE DIFFERENT TYPES OF DEALS? BECAUSE IT VARIES FROM, YOU KNOW, ONE TO THE OTHER? YEAH. SO I MEAN, WHEN THERE'S, WHEN YOUR ISSUER, THERE'S A PUBLIC HEARING THAT NEEDS TO BE HELD. AND THEN THERE ALSO ASSOCIATED WITH BEING A BOND ISSUER ALLOWS YOU TO ACCESS THE 4% LOW INCOME HOUSING TAX CREDITS. AND SO WITH THAT, THERE'S TYPICALLY IT'S CALLED A RESOLUTION OF NO OBJECTION THAT NEEDS TO BE OBTAINED BY THE THE LOCAL GOVERNMENT. SO THOSE ARE A FEW TOUCH POINTS THAT THE CITY WOULD HAVE ALONG WITH THE BOND TRANSACTION. THIS THIS THIS BODY WOULD WOULD NEED TO PASS WHAT'S CALLED A RESOLUTION OF NO OBJECTION IN ORDER FOR THE DEVELOPER TO GET TAX CREDITS. IF THEY CAN'T GET TAX CREDITS OR BOND IN 4% DEAL JUST CAN'T MOVE FORWARD AS A BOND ISSUER, THERE WOULD NEED TO BE 
          [01:55:02]
A PUBLIC HEARING AND. THE EITHER THE MAYOR OR THE COUNCIL WOULD NEED TO APPROVE OF THE ISSUANCE. SO YOU'VE GOT THAT ADDED LAYER. ON THE BOND SIDE, THERE'S A NEW HEARING REQUIREMENT THAT CAME IN UNDER HB 21. SO ABOVE AND BEYOND THAT, IF THERE IS A ROLE IN THE OWNERSHIP. IN OTHER WORDS, IF IT'S INTENDED THAT THE PROJECT WILL COME OFF THE TAX ROLLS, THERE NEEDS TO BE A PUBLIC HEARING WHICH CAN CAN BE DONE AT THE SAME TIME AS A TEFRA CAN BE DONE AT THE SAME TIME AS A RESOLUTION, NO OBJECTION. SO ON THE BOND AND TAX CREDIT, THAT'S WHAT WE'VE GOT. AND WE'LL TALK ABOUT THAT. AND THEN I GUESS OUTSIDE THOSE PUBLIC APPROVALS TO THERE WOULD BE NO CITY PERMITTING APPROVALS. AND I'M NOT SURE ABOUT THE LAND HERE, BUT THERE COULD BE REZONING THAT COULD BE THAT MIGHT BE REQUIRED AS WELL. SO THERE'S THERE'S ADDITIONAL CITY STAFF APPROVALS AS WELL. I MEAN, YEAH, THERE ARE A FEW THINGS THAT OF COURSE, I MEAN, THIS IS WHAT I'M TRYING TO UNDERSTAND THAT SOMETIMES I THOUGHT THAT WHATEVER IS PRESENTED TO THE COUNCIL, THOSE ARE LIKE 100% TIME ACCURATE INFORMATION. BUT THERE IS LIKE AT LEAST ONE CASE THAT I HAVE SEEN IF ONE THING WAS PRESENTED AND AFTER THAT, YOU KNOW, I DON'T USE ANY, ANY SPECIAL WORD. I JUST SAID THAT THEY SAID, OKAY, FORGET IT. 
          WHATEVER WE SAY, WE SAY WE'RE GOING TO DO SOMETHING THAT FEDERAL GOVERNMENT IS GIVING US THIS AUTHORITY TO DO. SO YOU GUYS DON'T HAVE ANY SAY AFTER THAT. SO THIS IS THE THING I'M TRYING TO AVOID THAT, YOU KNOW, WE DO SOMETHING AFTER WE FORM SOMETHING. THEN AFTER THAT WE HEAR THAT, OKAY, NOW WE DON'T HAVE ANY THING TO SAY ABOUT IT BECAUSE NOW THIS, THIS BOARD IS GOING TO DO WHATEVER THEY WANT TO DO. YES OR NO, RIGHT? BECAUSE EITHER YOU CAN APPOINT YOURSELVES AS BOARD MEMBERS OR YOU ULTIMATELY CONTROL THAT. EVEN IF YOU WERE TO APPOINT SEVEN CITIZENS TO SERVE ON A SEVEN MEMBER BOARD, IF THE BOARD WAS NOT MEETING THE CITY'S INITIATIVES, YOU CAN REMOVE BOARD MEMBERS. THERE IS NO OBLIGATION TO HAVE BOARD MEMBERS FROM SCHOOL DISTRICT OR COUNTY. IT'S JUST ALL CITY APPOINTED, ALL CITY APPOINTED FOR FOR BOTH THE. OKAY, SO IT COULD JUST BE US AND THEN WE COULD BLAME OURSELVES IF WE DECIDED TO DO SOMETHING. BUT WE YOU COULD START OFF THAT WAY IF WE WANTED TO BE REALLY CAUTIOUS AND CONCERNED AND THEN A PILOT PROGRAM, WE COULD PROBABLY DO SOME OF THE MORE RESTRICTIVE WAY. SURE. AND MOVE FORWARD, OF COURSE. SLOWLY. THANK YOU. YEAH. MAYOR PRO TEM HUTCHENRIDER. OH, SO I HEARD WHAT MR. BONE SAID. SO IN ORDER TO THE MAYOR'S POINT TO PUT A TOOL IN THE TOOLBOX, IF THERE'S NO COST FROM THEM, DO WE SEE COST FROM THE CITY PERSPECTIVE? IS THERE A DOLLAR FIGURE THAT WE'VE KIND OF THOUGHT, THOUGHT THROUGH THAT WOULD IN ORDER TO, SAY, SET UP AN HFC? NOT NECESSARILY DO ANY DEALS, BUT JUST HAVE THAT TOOL IN THE TOOLBOX? DO WE KNOW WHAT I THINK THERE'S GOING TO BE SOME FINANCE STAFF TIME THAT WOULD BE ASSOCIATED WITH I MEAN, YOU KNOW, EVEN IF YOU'RE NOT DOING A DEAL, YOU'RE GOING TO HAVE TO HAVE AN AUDIT, RIGHT? I MEAN, YOU'RE GOING THERE'S GOING TO BE STAFF TIME AND THERE'S GOING TO BE RESOURCES THAT ARE DEDICATED TO IT LEGAL AS WELL. YEAH. OKAY. AND THEN WE'RE GOING TO WANT OUR CITY ATTORNEY TO, TO WORK WITH. SURE. YEAH. SO. WELL, BUT THERE MAY NOT BE ANY COST UNTIL THE TRANSACTION ON THEIR END. THERE'S GOING TO BE COSTS ASSOCIATED WITH OUR CITY ATTORNEY WORKING THROUGH THIS, YOU KNOW, PROBABLY. YEAH, I HAVE NO, I DON'T KNOW HOW MANY HOURS WOULD YOU SAY GO INTO CREATING ONE OF THESE? IT REALLY DEPENDS ON HOW MUCH INPUT AND HOW MUCH CITY OF RICHARDSON TOUCH YOU WANT TO PUT ON WHAT WE CAN PRODUCE, RIGHT? SO WE CAN PRODUCE A SET OF ARTICLES THAT MEETS ALL THE STATUTORY REQUIREMENTS. AND TYPICALLY MY APPROACH ON ARTICLES IS JUST MEET THE STATUTORY REQUIREMENTS BECAUSE THAT'S ALL YOU HAVE TO DO. NO NEED TO OVERCOMPLICATE IT AND BIND YOURSELVES TO THINGS THAT, YOU KNOW, MAYBE DOWN THE ROAD YOU DON'T WANT TO. THE BYLAWS IS WHERE YOU CAN GET A LITTLE MORE CREATIVE AND. YOU KNOW, PUT WHETHER IT'S AUDIT OR SET UP COMMITTEES OR WHATEVER YOU WANT TO DO. BUT BOTTOM LINE IS, YOU KNOW, WE CAN DO IN, I WOULD SAY, CALL IT 7 OR 8 HOURS WORTH OF WORK, THE PAPERWORK AND THE FILINGS THAT NEED THAT WE'VE DONE A NUMBER OF TIMES. SO LIKE I SAID, WE'RE NOT STARTING FROM SCRATCH ON THIS. SO IT REALLY JUST DEPENDS HOW MUCH BACK AND FORTH THERE IS WITH THE CITY AND WHAT YOU WANT TO SEE IN THERE. AND. AND THEN DON, DO YOU HAVE A FEEL? I MEAN, DO WE GET ASKED ON A REGULAR BASIS FROM DEVELOPERS IF WE'RE AN HFC OR A PFC OR. YEAH. AND IF SO, DO THEY HAVE, YOU KNOW, IS IT MORE IN THE GREENFIELD OR MORE 
          [02:00:01]
IN THE REDEVELOPMENT? DO YOU CAN YOU KIND OF GIVE US A FEEL FOR THAT? YEAH, WE'VE HAD SEVERAL INQUIRIES. I THINK I'VE SHARED A COUPLE WITH YOU FOR FOR YOUR CONSIDERATION. I DO THINK IF WE CREATE ONE. AND THAT'S AGAIN, GETTING INTO SOME OF MY FINAL THOUGHTS. I THINK IF WE CREATE ONE, WE NEED TO YOU NEED TO ANSWER SEVERAL IMPORTANT QUESTIONS, BECAUSE I DO THINK THAT WE'RE GOING TO HAVE A LINE AT THE DOOR. AND IT'S, IT'S A, IT'S A VERY POPULAR TOOL RIGHT NOW FOR, FOR MULTIFAMILY DEVELOPERS. I MEAN, THERE ARE SEVERAL THAT ARE DOING AN AWFUL LOT OF DEALS IN USING THIS TOOL. AND SO I THINK THAT, YOU KNOW, KNOWING WHERE YOUR GOALPOSTS ARE SO THAT WE CAN ENTERTAIN, YOU KNOW, DEALS THAT WOULD HAVE SOME CHANCE OF PROCEEDING IF WE BROUGHT IT TO YOU FOR YOUR CONSIDERATION VERSUS KNOWING WHAT TO SAY NO TO RIGHT OUT OF THE, YOU KNOW, RIGHT OUT OF THE GATES WOULD BE VERY IMPORTANT. OKAY. THANK YOU. 
          AND I DO WANT TO BACK UP BECAUSE AGAIN, WE KIND OF GOT HALFWAY THERE ON THE CITY APPROVAL. THE WORKFORCE TRANSACTIONS HAVE ALWAYS BEEN A LITTLE BIT OF A BLACK BOX, AS I KIND OF EXPLAINED, THERE WERE GUARDRAILS THAT WERE PUT ON THOSE, INCLUDING THE TDA REPORTING, INCLUDING CURBING OUT OF JURISDICTION, BUT THOSE SPECIFICALLY THERE'S NO STATE LAW REQUIREMENT THAT CITY COUNCIL APPROVE THOSE, AND THEY DON'T USE THE TYPES OF FINANCING THAT REQUIRE A A CITY TO APPROVE. SO THAT WOULD BE THE ONE INSTANCE ON THE WORKFORCE WHERE, YOU KNOW, CITY COUNCIL AS A BODY DOESN'T HAVE A UP OR DOWN VOTE. OBVIOUSLY, YOU CAN ARTIFICIALLY CREATE THAT BY INSTITUTING THE COUNCIL AS THE BOARD. BUT I JUST WANT TO MAKE THAT CLARIFICATION. YEP. WE'RE NOT MAKING A DECISION TONIGHT. THIS WAS MOSTLY INFORMATIONAL, BUT I KNOW OUR CITY MANAGER HAD A FEW CLOSING COMMENTS. I THINK YOU MENTIONED THAT WE'VE ALREADY HEARD .13 AND ONE OR THE OTHER ONES, BUT GO AHEAD. SO SO IF IF IF THIS IS AGREEABLE TO YOU, HERE'S WHAT I PROPOSE FOR THE FOLLOW UP BRIEFING. AS KEN SAID, THIS WAS INTENDED TO PROVIDE A BASELINE UNDERSTANDING OF FCS AND HFCS. ANSWER YOUR SPECIFIC QUESTIONS, BUT THEN COME BACK WITH SOME RICHARDSON UNIQUE, I THINK, CONSIDERATIONS. YOU KNOW, ONE THING IT'S BEEN MENTIONED SEVERAL TIMES. WE'RE 20 DAYS, 21 DAYS AWAY FROM BILLS BEING FILED. AND FOR THE 90TH LEGISLATIVE SESSION, YOU KNOW, YOU KNOW, ESSENTIALLY 85 DAYS FROM THE START OF THE SESSION. AND SO WHATEVER WE DO, WE'RE GOING TO GET INTO THE EARLY DAYS OF THE SESSION AND SEE IF THERE'S ANY ACTION ON EITHER FCS OR HFCS. AND SO I THINK WE'D WANT TO KIND OF TAKE THAT INTO CONSIDERATION. I THINK THIS THIS NEXT BRIEFING, WE NEED TO HAVE A CLEAR UNDERSTANDING. AND I'VE JUST TERMED THIS THE COUNCIL ROI GOAL FOR THESE. IF YOUR ROI GOAL FOR AFFORDABILITY AND FOR AND FOR THE KINDS OF DISTRIBUTION AND PERCENTAGES AROUND AM, I ARE THE MINIMUM THAT THE STATE REQUIRES, THEN THAT'S VERY UNDERSTANDABLE. IF YOU HAVE HIGHER GOALS FOR THAT AND YOU WANT TO RAISE THE BAR, THEN WE NEED TO UNDERSTAND THAT. AND BECAUSE THIS IS REALLY JUST TWO SIDES OF A LEDGER, RIGHT? IF YOU'RE GOING TO IF YOU'RE GOING TO REQUIRE MORE RENT DISCOUNT, THEN THAT'S THE OTHER SIDE OF THE LEDGER IS GOING TO HAVE TO BE MADE WHOLE SOMEHOW. AND, YOU KNOW, I THINK WHAT WE DON'T WANT TO DO IS WE DON'T WANT TO SET UP A HFC WITH UNREALISTIC, UNREALISTIC COUNCIL GOALS AROUND YOUR WHAT YOU'RE EXPECTING FOR AN ROI ON THIS EXEMPTION BECAUSE IT WILL NEVER GET DONE. I DO THINK IT'S WORTHY. BEFORE WE COME BACK TO YOU, FOR US TO SIT DOWN WITH THE ISDS, I THINK IT'S REALLY IMPORTANT FOR US TO BE ABLE TO SAY BOTH ON EXISTING AND NEW DEVELOPMENT, WHAT THAT ACTUALLY MEANS FOR THE SCHOOL DISTRICTS IN TERMS OF IN TERMS OF THEIR BUDGET. YOU KNOW, IF THIS IS COMPLICATED, THE ONLY THING THAT MIGHT BE MORE COMPLICATED IS SCHOOL FINANCING. AND I THINK WE NEED TO LET THE TWO CFOS OF THE ISDS WEIGH IN MORE CONCRETELY ON WHAT THIS MEANS TO THEM. I DON'T THINK ANYBODY REALLY HAS A GOOD IDEA. WE'RE GOING TO NEED WE'RE GOING TO NEED TO UNDERSTAND WHETHER WHEN WE GO OUT AGAIN, WHETHER WE'RE TALKING ABOUT JUST WORKFORCE HOUSING OR LOW INCOME HOUSING, NEW VERSUS EXISTING. I THINK SOMETHING THAT I'VE SEEN IN THE PROJECTS THAT WE'VE SURVEYED SO FAR IS ONE OF THE STRATEGIES TO REDUCE THE COST OF CONSTRUCTION IS TO USE BUILDING MATERIALS THAT I THINK ARE NOT GOING TO BE CUSTOMARY FOR RICHARDSON, PARTICULARLY IN MULTIFAMILY DEVELOPMENTS. AND SO I THINK WE NEED TO HAVE A CONVERSATION AROUND, ARE YOU OKAY WITH A DEAL THAT WOULD USE, FOR INSTANCE, 100% SIDING ON A MULTIFAMILY PROJECT OR GARDEN STYLE APARTMENTS, AGAIN, ON A MULTIFAMILY PROJECT TO MAKE THE TO MAKE THE DEAL WORK OUT. AND THEN FINALLY, YOU KNOW, I WOULD, I WOULD LIKE TO, I WOULD LIKE TO, TO HAVE OUR STAFF OR WORKING WITH THE CONSULTANT TEAM, DO MORE RESEARCH AROUND EXISTING DEALS, PARTICULARLY MAYBE THOSE THAT HAVE BEEN AROUND FOR FIVE YEARS OR SO TO DETERMINE HOW CLOSE TO THAT 40% GOAL ARE, ARE SOME OF THESE 
          [02:05:06]
DEALS THAT HAVE BEEN AROUND FOR A WHILE COMING? BECAUSE AGAIN, IF THAT'S THE GOAL AND THAT'S WHAT YOU'RE EXPECTING IN TERMS OF REVENUE, RETUR TO THE HFC, AND THAT'S NOT HAPPENING FREQUENTLY. I THINK YOU WOULD WANT TO KNOW THAT BEFORE YOU WOULD DECIDE NOT NOT BEFORE YOU DECIDE WHETHER YOU WANT TO ESTABLISH AN HFC NECESSARILY, BUT GOING INTO POTENTIAL DEAL MAKING, I THINK THAT THAT'S SOMETHING THAT YOU'RE GOING TO WANT TO THAT YOU'RE GOING TO WANT TO KNOW. AND SO THOSE ARE THE KINDS OF NEXT STEPS. IF IF THOSE ARE AGREEABLE, THAT'S GREAT. I THINK WE WOULD PROBABLY PROPOSE TO COME BACK TO YOU SOMETIME AROUND JANUARY TIME FRAME TO ALLOW US TO COMPLETE THOSE STEPS. IF NOT, I'M MORE THAN HAPPY TO CHANGE MY PLAN. SOUND LIKE A PLAN TO YOU GUYS? YOU GUYS COMFORTABLE WITH THAT? SOUNDS GOOD. THANK YOU. ALL RIGHT. THANK YOU FOR BEING HERE TONIGHT. THANK YOU GUYS SO MUCH. THAT WAS INFORMATIVE. THANKS FOR HAVING US. BRAIN BENDING ALL THAT OTHER STUFF. ANY QUESTIONS IN THE INTERIM? YOU KNOW, FEEL FREE TO REACH OUT. AND I THINK I CAN SPEAK FOR HILLTOP ON THAT 
          [C. REVIEW AND DISCUSS THE INVESTMENT POLICY]
TOO. THANK YOU. THANKS FOR HAVING US. ALL RIGHT. WE'LL MOVE ON TO ITEM C, WHICH IS TO REVIEW AND DISCUSS THE INVESTMENT POLICY. MR. MAGNER, THANK YOU. MAYOR TODD AND AMY ARE GOING TO STICK AROUND FOR THIS ONE. THIS IS A A REGULAR BRIEFING THAT WE BRING BACK YOUR INVESTMENT POLICY TO YOU FOR CONSIDERATION. TODD AND HIS TEAM HAVE DONE A THOROUGH REVIEW AND HAS SOME RECOMMENDATIONS TONIGHT ABOUT HOW WE PROCEED. TODD. THANK YOU, DON. THANK YOU, MAYOR, COUNCIL MEMBERS, APPRECIATE YOUR TIME THIS EVENING. AS DON MENTIONED, WE'RE GOING TO GO OVER THE INVESTMENT POLICY. THIS IS PART OF OUR ANNUAL PROCESS. IT'S REQUIRED BY OUR POLICY TO BE REVIEWED ANNUALLY. AND I'M GOING TO GO OVER SOME OF THE KEY ELEMENTS OF THE POLICY. WHAT IS THE RENEWAL PROCESS? WHAT ARE SOME OF THE MAJOR GUIDELINES THAT WE HAVE OUTLINED WITHIN OUR POLICY, AS WELL AS WHAT NEXT STEPS ARE IN FRONT OF THE COUNCIL GOING OVER THE INVESTMENT POLICY? SO IT IS GOVERNED BY THE TEXAS PUBLIC FUNDS INVESTMENT ACT, OR PFI. A THAT SETS REALLY THE STATE STANDARD FOR INVESTMENTS FOR GOVERNMENTS TO FOLLOW. AND IT REQUIRES US TO HAVE A FORMAL POLICY, REVIEW IT ANNUALLY, AS I MENTIONED, AND THEN RATIFY THE POLICY OR MAKE ANY CHANGES AS NECESSARY. I'LL GIVE YOU A SNEAK PREVIEW, BECAUSE THAT WE'RE NOT GOING TO BE RECOMMENDING ANY CHANGES. AND I'LL GET INTO WHY THAT'S THE CASE AS I MOVE THROUGH THE PRESENTATION. OUR INVESTMENT COMMITTEE IS COMPRISED OF KEMP FILER, OUR COO, MYSELF, AMY FERGUSON, OUR ASSISTANT DIRECTOR OF FINANCE, HERMAN CHAVEZ, OUR COMPTROLLER, AND THEN OUR NEWLY PROMOTED ACCOUNTING MANAGER, JULIET TOSTO, FROM OUR ACCOUNTING DIVISION. THAT'S REQUIRED BY THE INVESTMENT POLICY. THE INVESTMENT COMMITTEE IS RESPONSIBLE FOR TRACKING DAILY LIQUIDITY. SO WE'RE ENSURING THAT WE HAVE THE FUNDS AVAILABLE TO PAY OUR OBLIGATIONS ON A DAILY BASIS. WE ALSO ARE AUTHORIZING TRAINING PARTNERS FOR OUR ONGOING TRAINING REQUIREMENTS REQUIRED UNDER THE POLICY AND FIRE, AS WELL AS THE AUTHORIZED BROKERS AND DEALERS THAT WE UTILIZE TO ENGAGE IN THE TRANSACTIONS AND THEN AGAIN, ADVISE ANY NEEDED POLICY CHANGES. THE CITY USES INVESTMENT ADVISOR, HILLTOP SECURITIES ASSET MANAGEMENT, OR HILLTOP. FAMILIAR NAME FROM EARLIER THIS EVENING, A PART OF THE SAME COMPANY, BUT A DIFFERENT GROUP THAN WHAT WAS IN THE PREVIOUS PRESENTATION. 
          SO WE'VE WE'VE WORKED WITH HILLTOP FOR MANY, MANY YEARS. THEY HELP PROVIDE A POOL OF INSTITUTIONAL BROKERS BEFORE ENGAGING WITH HILLTOP. THIS ANY INVESTMENT DECISIONS OR ANY INVESTMENT TRANSACTIONS WOULD HAVE REQUIRED A STAFF MEMBER TO PICK UP THE PHONE AND, AND REACH OUT TO MULTIPLE DEALERS. BEING ABLE TO WORK WITH PROFESSIONAL INVESTMENT ADVISOR ALLOWS US TO HAVE AN EXPANDED POOL OF BROKERS, DEALERS AND REALLY MAKE THAT PROCESS MUCH SMOOTHER AND QUICKER TO ENSURE WE'RE GETTING A GOOD INVESTMENT VALUE. THEY ALSO HELP PROVIDE BIWEEKLY INVESTMENT CALLS THAT OUR STAFF SITS IN ON THAT HELPS MONITORING THE ECONOMY AND PROVIDE INVESTMENT RECOMMENDATIONS. WE ALSO SEPARATE FROM THOSE, MEET WITH THEM ANNUALLY TO SPECIFICALLY GO OVER OUR STRATEGY AND UNDERSTAND, ARE WE STILL ALIGNING OUR PORTFOLIO AND WHAT MAKES SENSE, WHERE WE THINK THINGS ARE HEADED? FROM THE ECONOMY STANDPOINT, IT'S IMPORTANT TO DRAW A DISTINCTION BETWEEN WHAT HILLTOP PROVIDES AND WHAT THE CITY STAFF DOES. HILLTOP DOES PROVIDE ADVICE AND GUIDANCE, BUT THEY DO NOT MAKE THE INVESTMENT DECISIONS. THAT MEANS THAT IS MAINTAINED BY THE CITY'S INVESTMENT COMMITTEE. 
          AGAIN, GOING BACK TO THE INVESTMENT COMMITTEE, WE'RE REVIEWING THE POLICY TO ENSURE IT REMAINS ALIGNED WITH THE CITY'S GOALS AND ALLOWS US TO INVEST DURING ALL ECONOMIC CYCLES. WE MONITOR ANY POTENTIAL CHANGES IN ACCOUNTING STANDARDS OR FEDERAL OR STATE LEGISLATION, AND HOW THAT WOULD IMPACT WHAT THE POLICY OUTLINES FOR US. AND THEN WE REVIEW RECOMMENDATIONS FROM HILLTOP, THE INVESTMENT ADVISOR. WE ALSO HAVE AN ORGANIZATION, THE GTOT, 
          [02:10:05]
THE GOVERNMENT TREASURERS ORGANIZATION OF TEXAS, THAT HAS AN AWARD. IT'S A CERTIFICATE OF DISTINCTION FOR INVESTMENT POLICIES, AND I'M HPY TO ANNOUNCE THAT WE'VE RECEIVED THIS AWARD 14 TIMES IN A ROW. WE'VE IT'S IT'S AWARDED EVERY TWO YEARS. SO WE'VE RECEIVED IT SINCE 1999, LAST RECEIVED IT LAST SUMMER. SO WE'LL BE GOING FOR AWARD NUMBER 15 NEXT NEXT YEAR IN 2027. BUT IT REALLY SETS THE STANDARD TO SHOW THAT OUR POLICY IS IN ALIGNMENT WITH BEST PRACTICES AND WITH THE FIRE. OUR INVESTMENT POLICY OUTLINES THREE SPECIFIC OBJECTIVES FOR INVESTMENTS. AND THESE ARE LISTED IN ORDER OF IMPORTANCE. NUMBER ONE IS SAFETY. SO OF PARAMOUNT IS THAT WE'RE NOT LOSING PRINCIPAL. WE ARE ENSURING WE'RE UTILIZING THE HIGHEST QUALITY INCOME PRODUCING SECURITIES. AND SO THAT IS THAT IS ITEM NUMBER ONE. 
          NUMBER TWO IS LIQUIDITY. IT'S IMPORTANT THAT WE STRUCTURE OUR INVESTMENTS TO MATCH OUR CASH FLOW NEEDS. SO BE THAT OPERATIONAL COSTS OR THAT BE FOR BOND RELATED PROJECTS. IT'S IMPORTANT WE HAVE THEM MATURING. AND SO WE HAVE THE FUNDS AVAILABLE WHEN WE NEED THEM. I WILL SAY THAT IN ADDITION TO MORE LONGER TERM INVESTMENTS, WE ALSO DO MAINTAIN A SUFFICIENT AMOUNT OF OUR PORTFOLIO AND LOCAL GOVERNMENT INVESTMENT POOLS OR MONEY MARKET MUTUAL FUNDS THAT WE HAVE SAME DAY LIQUIDITY, WHICH IN A SENSE MEANS IF WE NEED IF WE NEED TO TRANSFER $1 MILLION TODAY, WE CAN PULL THAT OUT TODAY. IT'S IN OUR ACCOUNT TODAY. SO WE DO MAKE SURE WE HAVE A SUFFICIENT AMOUNT IN THE EVENT THERE'S EBBS AND FLOWS, AND WE NEED TO HAVE ACCESS TO LARGE AMOUNTS OF FUNDS QUICKLY. AND THEN THE FINAL THIRD ITEM IN LIST OF IMPORTANCE IS YIELD. SO WE DO TARGET THE BENCHMARK OF THE THE 13 WEEK, 91 DAY T BILL. SO THAT IS OUR BENCHMARK. WE TRY TO MEASURE AGAINST TO SEE IF WE'RE BEATING THAT. AND THEN BUT AGAIN THAT'S THIRD ON THE LIST. SO ALTHOUGH THAT'S A GOAL, FIRST AND FOREMOST IS THE SAFETY OF THE FUNDS. THEN THE LIQUIDITY. WE HAVE THE FUNDS AVAILABLE WHEN WE NEED IT. AND THEN THE THIRD GOAL IS TO TRY AND BEAT THAT BENCHMARK, THE INVESTMENT POLICY COVERS SEVERAL DIFFERENT INVESTMENTS THAT ARE ALLOWABLE. SO WE UTILIZE U.S. TREASURIES OR FEDERAL AGENCY OBLIGATIONS. IT'S IMPORTANT TO NOTE THIS DOES NOT INCLUDE MORTGAGE MORTGAGE BACKED SECURITIES. WE AS JUST MENTIONED ON THE PRIOR SLIDE, WE HAVE WE HAVE THREE DIFFERENT LOCAL GOVERNMENT INVESTMENT POOLS THAT WE UTILIZE. AND THEN A MONEY MARKET MUTUAL FUNDS. THOSE ARE ALL RATED TRIPLE-A AND MAINTAIN A $1 SHARE CONSTANT ASSET VALUE. 
          WHAT THAT LAST COMMENT MEANS IS ESSENTIALLY A DOLLAR TODAY IS A DOLLAR TOMORROW. AS THE MARKET FLUCTUATES, WE STILL HAVE THE VALUE OF THE DOLLAR IN THERE. IT'S NOT GOING TO GO UP AND DOWN, AS YOU WOULD SEE WITH LIKE A BOND MUTUAL FUND, WHERE IF THE MARKET TANKS OR GOES UP, THAT SIGNIFICANTLY CHANGES WHAT THE VALUE OF THAT DOLLAR IS. AND THEN CERTIFICATES OF DEPOSIT, AS WELL AS HIGHLY RATED BONDS RATED A OR BETTER FROM OTHER STATE AND LOCAL GOVERNMENTS ARE ALLOWABLE INVESTMENTS. THERE ARE SEVERAL TYPES OF INVESTMENTS NOT ALLOWED BY OUR POLICY. THAT INCLUDES BOND MUTUAL FUNDS, WHICH AGAIN, THAT THAT'S DISTINGUISHED FROM LOCAL GOVERNMENT INVESTMENT POOL IN THAT THE SHARE PLACE SHARE PRICE DOES FLUCTUATE AS THE MARKET CHANGES. MORTGAGE BACKED SECURITIES ARE NOT ALLOWABLE INVESTMENTS. THEY CAN BE USED FOR COLLATERAL, BUT WE ARE NOT ALLOWED TO USE DIRECT INVESTMENT IN MORTGAGE BACKED SECURITIES, COMMERCIAL PAPER AS WELL AS BANKER'S ACCEPTANCES, WHICH ARE ESSENTIALLY A SHORT TERM PROMISE TO PAY. DIVERSIFICATION IS OUTLINED IN OUR POLICY, AND THIS HAS MULTIPLE PRONGS TO IT. ONE IS, AS MENTIONED, STAGGERING THE MATURITIES TO MEET OUR CASH FLOW NEEDS. SO I LIKE TO THINK OF THIS AS A LADDERING APPROACH, THAT WE DON'T WANT ALL OF OUR INVESTMENTS MATURING THE SAME MONTH. WE HAVE DIFFERENT WE HAVE OPERATIONAL NEEDS THROUGHOUT THE YEAR. HOWEVER, AS YOU KNOW, ONE OF OUR MAIN REVENUE SOURCES, PROPERTY TAX COMES DUE ALL AT ONE POINT IN TIME. AND SO IT'S IMPORTANT FOR US TO HAVE INVESTMENTS THAT ARE MATURING EVERY SINGLE MONTH TO HAVE THAT CONSTANT ACCESS TO FRESH CASH AS AS NEEDED. ALSO, THERE'S A DIVERSIFICATION FROM THE STANDPOINT OF WE DON'T WANT ALL OUR MONEY IN ONE BUCKET. SO WE DO HAVE SOME SPECIFIC THRESHOLDS WITHIN THE POLICY THAT OUTLINE THAT. AND I'VE GOT SEVERAL OF THEM LISTED THERE. CERTIFICATES OF DEPOSIT ARE LIMITED AT 50% OF THE PORTFOLIO FOR THE LOCAL GOVERNMENT INVESTMENT POOLS OR MONEY MARKET MUTUAL FUNDS, NO MORE THAN 25% OF OUR PORTFOLIO VALUE AT ANY POINT IN TIME CAN BE IN ONE OF THOSE POOLS OR THE MONEY MARKET MUTUAL FUND THAT WE ARE A PART OF, AND THEN ALSO A LIMIT TO 25% OF THE PORTFOLIO FOR STATE AND LOCAL GOVERNMENT BONDS. COLLATERALIZATION IS 
          [02:15:01]
VERY IMPORTANT. SO ANY MONEY THAT WE HAVE WE'LL START WITH IN THE BANK IS EITHER FDIC INSURED OR MUST BE COLLATERALIZED. AND SO THAT IS ESSENTIALLY WHERE THE SECURITIES OWNED BY THE BANK ARE PROVIDED TO A THIRD PARTY AND PLEDGED TO THE CITY IN CASE THAT BANK FAILS. AND SO WE HAVE A $5 MILLION IRREVOCABLE LETTER OF CREDIT CURRENTLY. SO ALTHOUGH I WOULD ANTICIPATE IT BE AN ISSUE IF IF OUR DEPOSITORY BANK WERE TO FAIL, WE COULD CALL ON THAT, AND THAT WOULD ENSURE $5 MILLION OF WHATEVER WE WOULD HAVE HAD UP TO THAT $5 MILLION IN THE BANK AT THE TIME IT FAILED. WE WOULD GET ACCESS TO. BECAUSE OF THAT, WE ALWAYS MAKE SURE OUR BALANCE IN THE BANK IS BELOW THAT $5 MILLION THRESHOLD. SO THERE'S NEVER A RISK TO THE CITY OF LOSING ANY FUNDS IN OUR DEPOSITORY BECAUSE OF THE WAY WE HANDLE THAT. AND THAT'S WHY DAILY REVIEWING OUR INVESTMENTS AND OUR BALANCES IS SO IMPORTANT. I DID MENTION MORTGAGE BACKED SECURITIES CAN BE USED AS COLLATERAL FOR THE DEPOSITORY BANK. IF IT'S 110% OR MORE OF THE DEPOSIT BALANCE. SO ESSENTIALLY, IF WE DIDN'T HAVE THAT LETTER OF CREDIT, THE BANK COULD SAY, OKAY, I'M I'M DEDICATING A CERTAIN AMOUNT OF MONEY THAT'S SPOKEN FOR TO THE CITY OF RICHARDSON. IF WE WERE TO FAIL AND THAT OVER A HUNDRED, AT LEAST 110% IS TO ENSURE, AS THE PRICE FLUCTUATES, THAT WE'RE COVERED. BUT AGAIN, WE'VE GOT THE LETTER OF CREDIT. SO WE'RE COVERED. FROM THAT STANDPOINT. SAFEKEEPING IS VERY IMPORTANT AS IT RELATES TO OUR INVESTMENTS. SO THINK OF IT AS THERE'S A THIRD PARTY CUSTODIAL BANK THAT HOLDS THE CITY'S INVESTMENTS. FOR US THAT IS FROST. SO THAT'S SEPARATE FROM OUR DEPOSITORY. AND WE HAVE A SEPARATE AGREEMENT WITH THEM, SEPARATE FROM OUR DEPOSITORY SERVICES. WHAT'S IMPORTANT HERE IS THAT THE INVESTMENTS ARE HELD IN THE CITY'S NAME OR ON BEHALF OF THE CITY. ALL OF OURS ARE IN THE CITY'S NAME AND FOR THE INVESTMENT TRANSACTIONS THEMSELVES, THEY UTILIZE WE UTILIZE THE DELIVERY VERSUS PAYMENT METHOD. SO THE SAFEKEEPING BANK IS GOING TO BE AN INTERMEDIARY IN THAT TRANSACTION TO ENSURE, BEFORE THE FUNDS LEAVE OUR ACCOUNT, WE'RE RECEIVING THE SECURITY. THAT'S THE VALUE OF WHAT WE'RE PURCHASING. AS MENTIONED, WE UTILIZE HILLTOPS TO HAVE ACCESS TO A LARGE GROUP OF BROKER DEALERS. WE HAVE 28 BROKER DEALERS ON THE LIST. CURRENTLY. TEN OF THOSE ARE PRIMARY DEALERS WITH DIRECT RELATIONSHIP WITH THE FED, BANK OF NEW YORK. AND OF THOSE 28 DEALERS THIS LAST FISCAL YEAR JUST COMPLETED, WE HELD SECURITIES FROM 11 OF THOSE DEALERS. AND SO WHEN THEY'RE REACHING OUT FOR QUOTES, WE'RE GETTING AT LEAST THREE QUOTES. 
          AND THEN WE WE CHOOSE THE ONE AS THE CITY STAFF THAT PROVIDES THE BEST BENEFIT TO THE CITY. 
          AND THEN I ALREADY MENTIONED WE ARE PART OF MULTIPLE POOLS AND A MONEY MARKET MUTUAL FUND. 
          THERE'S MANDATORY TRAINING REQUIREMENTS OUTLINED WITHIN OUR POLICY. SO WHEN THERE'S AN INVESTMENT OFFICER THAT IS COMING ON AND NEW TO THEIR RESPONSIBILITIES WITHIN THAT FIRST YEAR, THEY ARE REQUIRED TO UNDERGO TEN HOURS OF INVESTMENT SPECIFIC TRAINING. 
          THAT GOES OVER ALL THE SPECIFICS OF THE FIRE AND WHAT'S ALLOWABLE AND NOT ALLOWABLE, AS WELL AS OUR SPECIFIC POLICY. AND THEN EVERY TWO YEARS THEREAFTER, THE INVESTMENT OFFICERS ARE REQUIRED TO UNDERGO ONGOING TRAINING OF AT LEAST EIGHT HOURS. AND THEN FROM A TRANSPARENCY STANDPOINT, JUST FOR FOR YOU ALL AND FOR THOSE WATCHING, OUR INVESTMENT POLICY IS OUT ON OUR WEBSITE AND AVAILABLE. I, WE ALSO HAVE OUR QUARTERLY INVESTMENT REPORTS GOING BACK THE LAST SIX AND A HALF YEARS, ALL AVAILABLE ON OUR WEBSITE. SO THOSE ARE AVAILABLE FOR THE PUBLIC TO VIEW. IN TERMS OF NEXT STEPS, WOULD WE BE LOOKING FOR GUIDANCE FROM THE COUNCIL ON INVESTMENT COMMITTEE HAS REVIEWED THE CURRENT POLICY. WE'VE ALSO HAD OUR FINANCIAL ADVISOR REVIEW IT AND SEE IF. 
          AND WE DO THAT EVERY EVERY YEAR TO SAY, ARE THERE ANY MAJOR CHANGES THAT WE NEED TO MAKE? AND THERE'S NO RECOMMENDED CHANGES FROM EITHER A FINANCIAL ADVISOR OR THE INVESTMENT COMMITTEE. THERE HAVEN'T BEEN ANY LEGAL CHANGES THAT WOULD REQUIRE ANYTHING CHANGE. WE FEEL LIKE THE POLICY WORKS WELL AND WOULD CONTINUE TO DO SO. SO WITH THAT SAID, FOR YOUR CONSIDERATION NEXT WEEK THERE'LL BE TWO RESOLUTIONS. ONE IS MORE OF A HOUSEKEEPING RESOLUTION, AND IT RELATES TO THERE'S A REQUIREMENT TO BE A PART OF TECH'S POOL THAT WE HAVE AN ACTUAL RESOLUTION FROM THE CITY COUNCIL DESIGNATING ALL OF THE AUTHORIZED REPRESENTATIVES, SO THAT RESOLUTION WOULD BE ADDING ON, AMY TO TO BE AN AUTHORIZED REPRESENTATIVE. AND THEN ALSO, AS MENTIONED, OUR NEWLY PROMOTED ACCOUNTING MANAGER, JULIET, WHO'S BEEN WITH THE CITY FOR SEVERAL YEARS BUT JUST IN A NEW CAPACITY, WE'RE VERY EXCITED ABOUT TO HAVE THEM ADDED ON TO THE AS AUTHORIZED REPRESENTATIVES. AND THEN THE OTHER RESOLUTION WOULD BE ACTUALLY ADOPTING THE INVESTMENT POLICY IN ITS 
          [02:20:04]
CURRENT FORM. AND WITH THAT, I ENTERTAIN ANY QUESTIONS YOU MAY HAVE. COUNCILMEMBER GRIFFIN. 
          THANK YOU, MR. MAYOR. I JUST THANK YOU FOR YOUR DETAILED PRESENTATION. JUST ONE QUICK QUESTION IS, IS THAT I THINK YOU ALREADY TOUCHED THAT A LITTLE BIT. I JUST WANT TO ASK YOU AGAIN, HAS THERE BEEN ANY FUNDAMENTAL CHANGE OR PRACTICE SINCE LAST YEAR'S PRESENTATION TO THIS YEAR'S? WE HAVE NOT HAD ANY FUNDAMENTAL CHANGE. I THINK THE ONLY THING I WOULD SAY IS WE'VE BEEN MORE INTENTIONAL, AND WE HAD WE ADDED ON A MEETING WITH OUR FINANCIAL ADVISOR TO TO REVIEW AND SAY, OKAY, ARE WE STILL IN ALIGNMENT AS WE SEE CHANGES WITH WHAT'S HAPPENING WITH THE FED RATE? ARE WE STILL POSITIONED WELL? AND I'M HAPPY TO SAY NO, AT THIS TIME, THERE'S ASIDE FROM HAVING AN ADDITIONAL CONTACT WHEN WE SEE MOVEMENT IN THE FEDERAL FUNDS RATE, THERE HAVEN'T BEEN ANY MAJOR CHANGES TO HOW WE APPROACH THE PORTFOLIO. THANK YOU. ANY OTHER QUESTIONS? ALL RIGHT. GREAT JOB. GO FORTH. THANK YOU. WE'LL MOVE 
          [D. REPORT ON ITEMS OF COMMUNITY INTEREST ]
ON TO ITEM D, WHICH IS REPORT ON ITEMS OF COMMUNITY INTEREST. MAYOR PRO TEM HUTCHENRIDER. 
          MAYOR, JUST A COUPLE OF THINGS LAST WEEK THAT WERE JUST ABSOLUTELY AMAZING. ONE I'LL NEVER FORGET FOR THE REST OF MY LIFE, I'M SURE, WHICH WAS THE DART SILVER LINE ARCHES LIGHTING CEREMONY. IT WAS AN ABSOLUTELY AMAZING EVENING. I DON'T KNOW HOW TO. IT'S THE ONLY TIME I'VE EVER BEEN ABLE TO PARTICIPATE IN. IN PUSHING A BUTTON TO LIGHT UP THE. TO LIGHT UP A ARCHWAY, SO I KNOW THAT'LL BE SOMETHING THAT'S ONCE IN A LIFETIME, I THINK. SO JUST REALLY, REALLY, REALLY ENJOYED THAT. AND THEN SECOND, SEVERAL OF US HAD THE OPPORTUNITY TO GO OUT AND PARTICIPATE IN THE RICHARDSON HIGH SCHOOL HOMECOMING PARADE. 
          AND SO WE DID THAT ON FRIDAY AFTERNOON. AND THAT WAS THAT WAS A NEAT EVENT. GREAT TURNOUT FROM THE COMMUNITY ALL ALONG THE ROADWAY AND FROM STUDENTS AND FROM EVERYONE. SO CONGRATULATIONS TO RICHARDSON HIGH SCHOOL FOR THEIR HOMECOMING PARADE. I THOUGHT IT WAS GREAT. THANK YOU VERY MUCH. ABSOLUTELY. COUNCIL MEMBER DORIAN. THANK YOU, MAYOR, I THE COUNCIL AND MAYOR, WE ALL. AND ANYWAY, CITY STAFF, CITY MANAGER. WE ALL HAD A SUPER BUSY WEEK. AND THERE'S FOUR THINGS I'D LIKE TO BRING ATTENTION TO TONIGHT. ONE, I WANT TO MAKE EVERYONE AWARE AND ANYONE WATCHING OR LISTENING, MY COLLEAGUE AND FRIEND OF MINE AND ATTORNEY ANDREW HAWKINS, HIS HIS WIFE PASSED AWAY ON NOVEMBER THE 8TH JUST UNEXPECTEDLY. HER NAME IS NICOLE HAWKINS. SHE GOES BY NIKKI. THEY LIVED IN CANYON CREEK FOR OVER 25 YEARS. ANDREW'S BEEN A PART OF THE CHAMBER OVER THE YEARS, AND HIS WIFE, NIKKI, WAS VERY INVOLVED WITH THE COMMUNITY NEIGHBORHOOD ASSOCIATION. JJ PIERCE, THE MIGHTY MUSTANG BAND. THEY HAVE TWO CHILDREN, TEGAN, 21, AT TEXAS STATE RATE 18, A SENIOR AT JJ PIERCE. THE SERVICES ARE GOING TO BE HELD AT THE WOMAN'S CLUB ON NOVEMBER THE 7TH, AND IT'S NOT NECESSARILY SERVICES. SHE MADE VERY STRICT INSTRUCTIONS THAT SHE WANTED A PARTY AND SHE WANTED EVERYONE TO HAVE FUN AND CELEBRATE. SO IT'S GOING TO BE KIND OF A WILD TIME. THERE'S GOING TO BE ABOUT 300 PEOPLE THERE. SO ANYONE THAT WAS PART OF THAT OR KNEW THEM, THEY WOULD LOVE FOR YOU TO ATTEND THE WOMAN'S CLUB ON NOVEMBER 7TH. SECOND THING IS ONE OF THE THINGS THAT I PARTICIPATE IN NORTH TEXAS IS TRYING TO BRIDGE ORGANIZATIONS WITH DIFFERENT CITIES HERE IN RICHARDSON. I DID HAVE THE OPPORTUNITY. I'LL CHOOSE THIS PARTICULAR ONE, PUTTING IN CONTACT THE DIALOG INSTITUTE, BURRELL, WHICH I APPRECIATE VERY MUCH, INTRODUCING HER WITH THE MEETING WITH THE CITY MANAGER'S OFFICE IN MCKINNEY AND KIND OF PAIRING THEIR COMMUNITIES TO TRY TO BRIDGE COMMUNITIES AND CREATE DIVERSITY AND BRING AWARENESS TO THOSE. SO I REALLY APPRECIATE BURRELL HANDLING THOSE THINGS AND, AND PUSHING THAT AGENDA FORWARD. THE NEXT THING IS THE RICHARDSON CIVIC ARTS SOCIETY FALL AWARDS AT COLLIN COUNTY OR THE COLLIN COLLIN COLLEGE PLANO CAMPUS. WE GAVE OUT AWARDS ON THURSDAY. I WAS JOINED BY COUNCILMAN. DANIEL BURNETT AND ALSO OUR MAYOR, AMIR AMAR, AND OF COURSE, THE PRESIDENT OF THE RCAS, KEVIN BLAIR. SO THEY WERE VERY, VERY APPRECIATIVE. AND THE TALENT THERE IS INCREDIBLE. THE LAST IS ON HUFFINES ARTS FESTIVAL THIS WEEKEND, WHICH WAS INCREDIBLE. ALSO, THE WEATHER WAS PERFECT. I HAPPENED TO GO BY AND SPEAK TO SEVERAL OF THE VENDORS, BUT ONE IN PARTICULAR, JIM AND SUSAN HUCKABEE. THEY LIVED IN RICHARDSON. THEY DON'T LIVE IN RICHARDSON NOW, BUT THEY MOVED. 
          [02:25:04]
THEY LIVE IN SANGER. BUT THEY LIVED HERE BACK IN THE 50S. AND ONE OF THE THINGS I LEARNED THAT RICHARDSON. RICHARDSON HIGH SCHOOL USED TO JUST BE ONE HIGH SCHOOL BACK THEN, ALL GRADES. EVERYONE WENT TO ONE HIGH SCHOOL. SO THEY GAVE ME SOME REALLY GOOD STORIES ABOUT GOING TO SCHOOL HERE, LEARNING HOW TO BUILD POTTERY IN THEIR CLASSES. AND ANYWAY, THEY MOVED OUT TO SANGER AND THEY'RE RETIRED AND THEY'RE NOW BUILDING POTTERY. THE NAME OF THEIR COMPANY IS CALLED SMALLHOUSE POTTERY. SO HAD A REALLY NICE CONVERSATION WITH A VERY NICE COUPLE, AND THEY JUST THOROUGHLY ENJOYED BEING AT THE EVENT THIS WEEKEND. THANK YOU, COUNCILMEMBER BURDETTE. THANK YOU MAYOR. ONE EVENT THAT REALLY ENJOYED LAST WEEK WAS THE CHAMBER'S NETWORKING EVENT ON THURSDAY AFTERNOON BEFORE THE THE ARTS LIGHTING. BUT I JUST WANT TO SAY CONGRATULATIONS TO ASHER. NET ON. THEY'RE CELEBRATING 40 YEARS. AND FOR MANY YEARS THEY POSTED THAT SPECIFIC EVENT. SO HAD A GREAT TIME THERE. GOOD FOOD AND GOOD FELLOWSHIP. AND THEN EARLY SATURDAY MORNING ACTUALLY WORKED A SHIFT TO HELP SET UP FOR THE RICHARDSON'S POLICE ACADEMY ALUMNI ASSOCIATION RECYCLING EVENT, WHICH IS A GREAT EVENT THAT GIVES CITIZENS A GREAT, RESPONSIBLE WAY TO RECYCLE ELECTRONICS AND SHRED DOCUMENTS IN LARGE QUANTITIES. IF YOU HAVE THAT, AND ALSO RAISES FUNDS FOR THE POLICE ACADEMY ALUMNI ASSOCIATION. SO I DIDN'T HEAR THE THE TOTAL ON HOW MUCH WAS MADE. BUT BUT THERE WAS ALREADY A LINE AT 945 FOR A 10:00 START. THERE WAS ALREADY A LINE IN THE PARKING LOT OF PEOPLE TO DROP OFF. SO WELL DONE WITH THAT. AND THEN CONGRATULATIONS TO THE ICEMAN CENTER PRESENTS. THE NEON NOSTALGIC SHOW ON SATURDAY EVENING WAS VERY WELL ATTENDED AND AN ABSOLUTE BLAST. 80S COVER BAND MET FOLKS IN THE AUDIENCE FROM AROUND THE METROPLEX FROM CANADA. THE BAND WAS CANADIAN, SO THEY HAD SOME CANADIANS THERE THAT I DON'T KNOW IF THEY CAME SPECIFICALLY FOR THE SHOW, BUT WE WELCOMED THEM TO RICHARDSON. BUT YEAH, GREAT, GREAT ATTENDANCE, GREAT FUN, HIGH ENERGY SHOW AND HAD A BLAST. SO CONGRATULATIONS TO THE ICEMAN COUNCIL MEMBER, CORCORAN. THANK YOU, MR. MAYOR. 
          IT REALLY WAS AN EXTREMELY BUSY WEEK. SO JUST GOING REAL QUICKLY, YOU KNOW, DOWN THE LIST YOU, COUNCILMEMBER DORIAN, COUNCILMEMBER BURDETTE AND MYSELF ALL ATTENDED THE CORPORATE CHALLENGE CLOSING CEREMONY, WHICH WAS JUST REALLY WELL DONE. FIRST TIME I'VE EVER GOTTEN TO GO TO ONE IN MY TIME ON COUNCIL AND ABSOLUTELY LOVED IT. ABSOLUTELY LOVED IT. THE WHOLE CORPORATE CHALLENGE EXPERIENCE WAS ACTUALLY REALLY PHENOMENAL. I GOT TO PARTICIPATE A LOT MORE THIS YEAR BECAUSE MY COMPANY PARTICIPATED IN IT. AND MAN, JUST SO WELL DONE. THE PARKS COMMISSION ALSO HAD A MEETING ON TUESDAY NIGHT, A RELATIVELY SHORT MEETING. WE JUST DISCUSSED PLANS FOR NEXT YEAR, DISCUSSED. THERE'S A LOT OF DISCUSSION ON WHAT, YOU KNOW, CITY COUNCIL, WHAT VALUE THEY GOT OUT OF THE PARKS LETTER THAT IS ALWAYS SUBMITTED. SO JUST SOMETHING FOR EVERYONE TO THINK ABOUT AS WE GO INTO NEXT YEAR, WHAT LENGTH YOU WANT TO SEE IT KIND OF THE LEVEL OF DETAIL THAT WORKS FOR YOU ALL. 
          THEY'LL BE TAKING DEFINITELY BE TAKING THAT INTO CONSIDERATION AS YOU ALL GO INTO THE NEXT BUDGET. AND THEN YOU ALSO JUST HEARD FROM ATHLETIC AND REC UPDATES. I HAD THE CHANCE TO ATTEND THE UTD PIZZA WITH POLITICIANS. MAYOR OMAR, I THINK WE MISSED EACH OTHER, BUT I HEARD THAT YOU WENT THERE. REALLY, REALLY COOL EVENT THAT WAS PUT ON BY UTD STUDENT GOVERNMENT I BELIEVE, AND A REALLY GOOD CHANCE TO CONNECT WITH THOSE STUDENTS AND HEAR THEIR THOUGHTS AND WHAT THEY YOU KNOW, REALLY, I MEAN, THEY ASKED US A LOT OF QUESTIONS, BUT A LOT OF THEM ACTUALLY HAVE AMBITIONS TO DO WHAT WE'RE DOING HERE. AND SO, YOU KNOW, I JUST HAD TO DISSUADE THEM A LITTLE BIT, MAYBE GOING TO SOMETHING MORE LUCRATIVE. BUT IT WAS A FUN EVENT. AND THEN FINALLY CAN'T LEAVE THIS MEETING WITHOUT CONGRATULATING OUR MAYOR PRO TEM FOR JUST A WONDERFUL CALL FOR COMPASSION GALA. REALLY WELL DONE AS ALWAYS. EVERY SINGLE YEAR. HAD A GREAT TIME. AND YOU JUST YOU JUST DO SUCH A GREAT JOB EVERY TIME YOU GO UP THERE AND SPEAK. AND YOU'RE A REAL INSPIRATION TO THE COMMUNITY WHEN YOU'RE THERE. SO FANTASTIC JOB. THANK YOU SIR. COUNCILMEMBER RUFFINI. THANK YOU, MR. MAYOR. I'LL BE REPEATING LOTS OF THINGS. SO WE HAVE PLENTY OF TIME TONIGHT. AND I DON'T HAVE FIVE MINUTES HERE NOW. ANYWAY, LAST WEEK WE ATTENDED. WE ATTENDED A FEW EVENTS, YOU KNOW, OF COURSE, THAT ARCH LIGHTNING THEN CAN DID WONDERFUL JOB LAST SATURDAY. YOU KNOW THEY HAD THE GREAT DINNER. THE CHOCOLATE WAS REALLY GOOD. BUT OUT OF THOSE, YOU KNOW, THE ONE THING MOST REALLY YOU KNOW THAT I FEEL SPECIAL. THAT WAS THE RICHARDSON HIGH SCHOOL HOMECOMING PARADE. AND YOU KNOW, WHAT TOUCHED ME MOST WAS THE THE KINDNESS AND THE WARMTH. 
          [02:30:02]
EVERYONE ALONG THE PARADE ROUTE, SO MANY KIDS, STUDENTS AND PARENTS WAVED, SMILED, OFFERED CANDY AND COLORFUL BEAD NECKLACE. I GOT THOSE AND AND ALSO TOOK A MOMENT TO SAY THANK YOU FOR YOUR SERVICE. I HEARD THAT NOT ONE, TWO, THREE, PROBABLY OVER TEN OR I DID NOT. 
          I LOST COUNT AND THOSE SIMPLE GESTURE OF APPRECIATION WERE TRULY HUMBLING AND MEANT A LOT TO ME. SO MOMENTS LIKE THESE REMIND ME WHY SERVING OUR COMMUNITY IS SUCH A PRIVILEGE. 
          I'M GRATEFUL TO BE PART OF THIS WONDERFUL RICHARDSON FAMILY. ALL RIGHT. I SCRATCHED OFF THE ONES THAT HAVE BEEN MENTIONED, NOT BECAUSE THEY WEREN'T IMPORTANT, BUT BECAUSE THEY HAVE BEEN STATED AND THEY WERE WONDERFUL EVENTS. I DID GET AN OPPORTUNITY TO JOIN ABOUT A DOZEN MAYORS FOR THE NORTH TEXAS FOOD BANK ANNUAL REVIEW OF WHAT THEY'VE DONE IN OUR COMMUNITY. I'LL POST ABOUT IT SOMETIME, MAYBE LATER THIS WEEK, BUT JUST SOME REALLY EYE OPENING NUMBERS FOR ALL OF US TO BE CONSCIOUS OF AS IT RELATES TO AFFORDABILITY AND FOOD INSECURITY AND WHAT THEY'RE DOING TO KIND OF BRIDGE THE GAP THERE. BUT JUST AMAZING WORK BEING DONE BY THE NORTH TEXAS FOOD BANK. SO MUCH OF WHAT THEY DO, OF COURSE, IS IN PARTNERSHIP WITH OUR VERY OWN NETWORK OF COMMUNITY MINISTRIES. SPEAKING OF THE AIRONET 40 YEARS, THERE WAS ANOTHER COMPANY WITH A BIRTHDAY THIS LAST WEEK, TEXAS REPUBLIC BANK. 
          THIS NUMBER SEEMS SO LARGE THAT IT ALMOST SEEMS MADE UP. BUT 135 YEARS OF SERVICE TO THE COMMUNITY, WHICH IS JUST BREATHTAKING. COMMISSIONER SOMERMAN HAS BEEN WORKING ON A BIT OF A DREAM PROJECT AND THE ESPERANZA COMMUNITY, AND ALTHOUGH NOT DIRECTLY IN RICHARDSON, DEFINITELY IMPACTING OUR ISD STUDENTS AND ULTIMATELY OUR OVERALL COMMUNITY. AND IT WAS REALLY INSPIRING TO SEE MORE THAN 300 PEOPLE SHOW UP TO CELEBRATE THE FORMAL OPENING AND SEEING THAT VISION COME ALL THE WAY THROUGH FRUITION. HATS OFF TO HIM. THE CREATIVITY THAT HE USED TO USE, ITEMS THAT WERE SITTING IN WAREHOUSES AND ESSENTIALLY MAKE AN ENTIRE COMMUNITY CENTER WITH IT, YOU KNO CHAIRS. HE HAD A STORY FOR JUST ABOUT EVERYTHING THAT WAS THAT WE WERE EITHER SITTING ON OR LOOKING AT ALL THINGS THAT WERE SITTING IN WAREHOUSES, NOT BEING USED, AND ENDED UP GETTING EXERCISED AND USED FOR REALLY AMAZING, GOOD OVERALL FOR THE COMMUNITY. IF YOU DON'T KNOW SPANISH VERY WELL, ESPERANZA MEANS HOPE AND THE TRANSFORMATION OF THAT AREA AND THAT STREET MAYHEM BEING TRANSFERRED INTO ESPERANZA IS IS REALLY A TELLING PART OF THE OVERALL STORY OF WHAT'S GONE ON OVER THERE. AND THEN THE LAST THING I'LL SPEAK ABOUT IS I HAD THE OPPORTUNITY OVER THE LAST SEVERAL MONTHS TO BE ABLE TO CHAIR THE SUSAN G. KOMEN DALLAS RACE FOR THE CURE. IT IS REALLY COOL THAT WE HAVE THIS BEING HOSTED IN RICHARDSON, ESSENTIALLY ON UTD'S CAMPUS, ALTHOUGH WE DO TAKE PART IN SOME OF THE STREET CLOSURES AND THAT SORT OF THING. A MASSIVE AMOUNT OF THIS IS DONE ON CAMPUS AND IN PARTNERSHIP WITH UTD, AND I BELIEVE THEY'LL DO IT THERE AGAIN NEXT YEAR. THERE WERE MORE THAN 6000 PEOPLE THAT CAME FROM ALL OVER THE PLACE. THERE WERE PEOPLE FROM OTHER CITIES HERE IN THE REGION, BUT OTHER CITIES THROUGHOUT TEXAS THAT I WAS RUNNING INTO THAT WERE JUST EXCITED TO BE IN RICHARDSON AND ON THAT CAMPUS. WE ENDED UP RAISING FOR THIS PARTICULAR RACE. AND FOR ME TO BE ABLE TO KIND OF FINISH MY ROLE THERE, WE WERE ABLE TO RAISE $1.2 MILLION TOWARDS RESEARCH AND CARE AND CLOSING THE GAP FOR PEOPLE WHO ARE FIGHTING BREAST CANCER, AND SO JUST COULDN'T BE MORE PROUD OF THE COMMUNITY ABOUT THE EFFORT AND THE FACT THAT WE GOT AN OPPORTUNITY TO HOST THAT. THANK YOU. ALL RIGHT. WITH THAT, THERE IS NO FURTHER
* This transcript was compiled from uncorrected Closed Captioning.