On the record is brought to you by Steve and Adele Dufilho.

San Antonio is a fast growing, fast moving city with something new happening every day.

That's why each week we go on the record with Randy Beemer and the newsmakers who are driving this change.

Then we gather at the reporters roundtable to talk about the latest news stories with the journalist behind those stories.

Join us now as we go on the record with Randy Beemer.

And thank you for joining us for on the record, I'm Randy Beemer, and this week we are starting with everything there is to know about what's going on down at City Hall, or at least in the city manager's office.

And that is a lot.

City Manager Eric Walsh joins us.

Thank you very much for coming in.

Thanks for having me.

Budget.

First of all, that's in the news.

A lot of headlines.

What I mean, the headline proposed tax increase.

And that has had some pushback from city council.

Tell people because there were some actual mis reporting, I think, about the exact number of percentages and how it would affect people.

What are you proposing?

So and the council had we had a couple of conversations with the council in May and June.

I mean, the bottom line is that our revenues are not growing as fast as our expenses.

So part of what I talked to the council about in May and June was really kind of four buckets, right?

One, reducing our expenses to adjusting existing revenue, permits, fees that we have that we haven't adjusted in some time.

Three there's a there's a use of there's there's prior year value, taxable value that we haven't taken advantage of.

And the state gives cities and counties kind of a three year window to to utilize that.

And then the fourth bucket was talking about a up to a 3.5% increase in the tax rate.

And that's as much.

As you can do.

Or they can do without having to go to the to.

An election.

That's right, that's right.

And state law changed in 2019.

And what the state said was that that is to sustain operations, municipal operations.

Now, it wasn't lost upon me as we were talking as I was talking to the council about this.

It's been 33 years since we've done that.

Tax.

Rate, the tax rate increase.

And so that's a significant issue.

I certainly understand that.

The council gave me good feedback.

Where we're at right now is, is we are developing the proposed budget.

And I'll propose that to council on August 13th.

So you've floated things, but the official is coming out August 13th, but you're still looking at 3.5% tax increase.

Well, I mean, we actually won't get the taxable values from the appraisal district, actually, not just the city.

Any tax entity in the county won't get the certified taxable rolls until next week.

And so that's a that's a big part of the Tetris games.

We're feeling that that we're playing right now.

And so we'll see what those values look like.

We were projecting based on preliminary assessments from the appraisal district, that we were going to see about a 2.1% decrease in taxable value.

So because the property values have just dropped so much resale.

Appeals, appeals are up, exemptions are up.

And those are all appropriate within state law.

And everybody's got given right.

The market is a little bit soft the housing market.

And so in a city in one of the fastest growing cities in this fastest large city in the in the country, with new improvements and new construction, we're still seeing a decrease in taxable value.

And even with all that construction and the companies moving in and that kind of development, it's still.

Down there.

It's still negative.

It was in the early assessment.

So we'll we'll hear from the appraisal district in that certified role next week.

And that's an important part to finalizing what I do in terms of the proposed budget to council.

Is that the main reason for the proposed tax rate increase?

Well, no, I mean, I raised the issue because our expenses are are more than our revenue.

And and, you know, as city as a city grows and we have demands for either library services or fire fire units or EMS units or police officers, we've got to be able to meet those demands and those service requirements.

And and we can't do that unless we have the resources.

And a lot of that is going to rest upon not just revenue, but there will likely be significant cuts in our expenses that I'll propose in, in August.

And, and, you know, we spend $4 billion a year.

So it's reasonable to us to assume that even in a, in a, in a great year for the city, we're always looking at where we can press down those expenses.

I mean, there's, there's there's efficiencies we can do.

We do comprehensive budget reviews.

We do line and reviews.

I mean, we are squeezing as much as possible.

And that's going to be a big part of what I'm going to lay out in.

August when you do that.

And historically when when a city manager would do this and you lay out 3.5% city council box, can they cut that to whatever?

And then you have to reconfigure everything by September.

You have to have a budget by the end of September.

Anything I propose in August the council can amend for the adopted.

But in this case, with $158 million projected budget shortfall, is that going to be a special headache, a special headache for you this year?

You think it looks like the council is not maybe going to go with that three and.

A half.

There are no special headaches at City Hall, but I think it's going to be a challenge.

You know, my job is to kind of make sure that council sees kind of the what we're doing both for fiscal year 27, how that impacts fiscal year 28 and potentially fiscal year 29.

Because again, we've got to get our expenses lined up with our revenue or vice versa, our revenue lined up with our expenses.

And you do that.

You do that in three ways.

You reduce expenses, you increase revenue, you do a combination of it.

And so we'll go through those work sessions with the council in late August and early September.

And there will likely be there's always changes that the council makes to the adopted budget.

But but as we sit here today, I'm confident that what I'll deliver to the council on August 13th will be a balanced budget for fiscal year 27 and fiscal year 28.

And if we have any funds available, then we'll hold on to that for fiscal year 29.

Do you have conversations with individual council members?

I know you talk about work sessions.

Do you count votes in terms of, well, this isn't going to fly this would, this might and do you know, and how much conversation is there maybe away from the dais.

So you're not supposed to count votes.

But I do have regular meetings with council members.

And so I've gotten a fair amount of feedback in those work sessions.

I've also gotten feedback a little bit for some of the council members in my regular meetings with them.

And it was it was about it, at least in the public conversations.

It was about half and half.

And I mean, this is a significant it's not lost upon me.

That's a significant issue because we haven't talked about it in 33 years.

But at some point we're going to have to we're going to have to do that.

And there's been some more public feedback.

Push back against some things, like the mayor talking more recently about maybe killing ready to work program that the former mayor Nuremberg had had pushed for, and also botanical garden funding and things like that.

Are you taking those into account now?

Will your budget in August maybe not include?

Some of what I take into account are the count, the mayor and the council discussions that we had in May and June, the group conversations.

That's what I take into account.

That's those those are the things that I look to, to be the the rails on the side of the road that I use.

I don't I don't take individual statements like that.

I mean, it's important, but those are things that if the council has ideas or the mayor has ideas, then then that's a conversation with the with the entire group in August and September.

Part of the property tax rate increase, I understand would go because to police in benefits because they just you just negotiated that as well as that.

Is that how I how it works?

No.

Well two different things.

One of the things I talked to the council about in May and June was that just the increase in public safety, whether that's fire hoses, tires for the police cars or, or wages and benefits for, for police and fire, that's probably going to grow about $70 million from this fiscal year to next fiscal year.

You know, we're dealing with fuel just like everybody else.

We're dealing with increases in prices.

If we were to raise the tax to 3.5%, that only generates about another $24.5 million.

So that increment what I told the council, that increment would all go to pay for what we have in terms of public safety.

Again, that kind of rests in terms of the.

Tax rate increase is 24 million.

It would all go to police public safety.

Yeah.

And now in terms of the police contract, you know, we had our own financial parameters of where we wanted to land in terms of kind of our markers.

And we've kind of as we do our our projections and our forecast of budgets.

And so we landed in a good spot with the Police Officers Association.

We're going to need to probably make some adjustments to the police budget in terms of revenue and expenses to to be able to encapsulate that.

But but any talk about a tax rate increase because of the contract, I think we can do that within our existing budget.

And what about that police contract?

There's some big changes in there.

You want to make the work life balance better.

There was a pause in the talks.

I know you started in January.

Kind of surprising to me that it's this early, that you got a tentative agreement.

So.

Well, I. Mean, just a different time.

It's different time.

We've worked, we've worked hard with them and they worked hard as well.

We were focused on making sure that our officers are almost 3000 officers were competitively paid in terms of total compensation as it relates to other major Texas cities.

And we did a survey at the beginning of the process.

We knew where we wanted to land.

Other other cities have collective bargaining agreements.

We know what those schedule adjustments are, and.

It's hard to retain officers here if they're going to go somewhere else.

Well, we don't have we don't have as much of a challenge as, say, a Dallas does.

Dallas leaks a lot of officers to Arlington or Irving.

But we want to make sure that that when they if we're going to go through the expense of recruiting and training, that we that we retain them for the life of their career.

And, you know, the average tenure of a police officer is about 28 years, and that's good for us.

The contract provides a lot of certainty in terms of what our expenses are for the next three years.

So as we're dealing with kind of our revenue and expenses, and it provides a fair amount of certainty to the officers that that they know what they're what their wages are.

And again, it's 3000 of our employees and they're they're one of our core services.

What's the tentative agreement, the timeline on that.

The city council agree at separate agree to that separately from the budget, or is that.

It will likely be separate from the budget?

The the the association has to go through a process where they they have hearings with the officers to walk them through.

There's a vote that they'll take in in, I think probably mid-August, mid to late August.

But you don't anticipate any problems either way with the city or the union?

Well, I think for granted, I think the union is going to do their best to kind of walk the changes through with the officers.

I think it's a fair agreement that once they vote and approve it, then it comes to council for consideration.

A couple of other things I'd like to get to that Tacoma or the Toyota expansion down there and the Tacoma plant or the Tacoma coming back to San Antonio from Mexico.

That's going to double their investment in San Antonio.

But it's also going to what is it, more than 100 million in tax breaks.

How does that affect the budget.

Well, so let's put it in context.

I mean, the Toyota and you know, we are we are very fortunate.

We'll have the largest footprint.

Toyota will have the largest footprint in North America in San Antonio.

And they're investing $3.6 billion into that doubling of the size of the plant.

They're going to hire an additional 2000 employees.

Just just the wages paid to those 2000 employees when they're up and running is is 160, $165 million a year.

And so, you know, the incentives that that we as well as the county worked on to, to to provide that incentive more than makes up the, the, the impact once that plant is up and running and they're planning on starting construction by the end of the calendar year, what's that plan is up and running in a couple of years.

That'll have us over a $7 billion impact to our regional economy.

And so you know what it does to sales tax in our city, what it does to property tax, what it does in terms of economic vitality will more than make up.

That, because there was there was a number in one of the reports about over ten years, all of the tax breaks, city, county and state would wind up 150,000 per new job created.

Is that.

I don't know about that.

Okay, that was another.

That's why I ask you.

Okay, but but just on its face, in the first year of operation, they're going to they're going to they're going to institute through pay with those 2000 employees, $160 million into our economy in just one year.

And each of those employees are going to have to have housing and.

All that.

Yeah, absolutely.

How about the airport expansion?

Moving ahead with that, there was a bond issue.

Was it yesterday?

Yesterday, yesterday.

Great news.

I mean we had we went to the market yesterday and issued a little over $866 million in revenue bonds for the construction of the new terminal.

We had $3.9 billion worth of orders on our $866 million worth of bonds.

And so what that puts us in a position of is the ability to negotiate really great interest rates with those with those trading houses.

So we did very well.

The project out at the airport is on budget, on schedule.

It's going to open up in June 2020.

Eight, the first.

So the first phase is June 28th.

Is that the new terminal?

Yes.

Yeah.

And everything with southwest is good.

Now we're all good.

Okay.

We're all good.

And people might wonder also about the Spurs, you know, because that was big news a while, you know, because are you still negotiating them with them right now.

You said that's going to be maybe in a few months.

Yeah.

How is what kind of negotiations can you do after that term non-binding term sheet.

Well, so first of all, what we're doing right now is a fair amount of prep work to make sure that we are best positioned to negotiate those agreements with the Spurs.

We're doing a review of our what is the cost and revenue associated with that entertainment district, for example, right now, if there's an event at the Alamodome or the convention center and they require police officers, that event pays for those officers.

So we want to make sure that we apportion those costs and then also look at what the revenue opportunities are to the city for the for the entire district.

We need that in our back pocket before we get much further with the Spurs.

And so October, we have a number of briefings coming to council in October on where we're at with that district cost revenue analysis.

We're going to be updating the council on our feasibility on the convention center expansion.

We're going to be talking to the council on October about what are the infrastructure needs in that area.

We're working very closely with tech.

Start on that, because a fair amount of that relies upon their participation for highway exits and entrances and intersectional work.

Well, a bunch of that be what is it, 200 million part of the bond issue for next year?

Well, we I mean, part of the last week, last year conversation with the council was $220 million.

That I think we're going to come back to the council with is going to be a number of very south of that, because we've taken major elements out of it, based on the council conversation last year and what that does to the bond that that conversation will happen with the with the council this fall.

Those are all October is going to be a very heavy month in terms of reporting to the Council on all these things.

The council is going to want to have a public session on what are the what are the priorities in terms of negotiating with the Spurs, and then we're going to get after it with them.

And there's a whole slew of agreements, a development agreement with their with their developer, the Spurs developer, an agreement for the arena, the use of the arena, the construction of the arena.

So we've got we've got a fair amount of work.

To do.

And considering all that growth and some of the other contracts and expansion.

Toyota, do you have a projected okay, in five years, we're going to have this much more taxable value.

And so we won't have as much budget because the budget projections are at this point, tough for forever.

That's that's part of the reason why we're doing that revenue analysis to figure out what what are the revenue opportunities for the city, because, I mean, we potentially will see increases in sales tax from that district right off the top of my head, the taxable value that's going to happen there on site, that was part of that term sheet we approved or that the council approved that we negotiated last year.

That said, we're going to take that that taxable value to the city, and then we will make that as part of our contribution.

In addition to the state allocated funds that we have access to into the arena.

And that lasts for, what, ten years?

Some of them will last 30.

Yeah.

30 years.

Yeah 30 years.

Absolutely.

All right.

Well, thank you very much I appreciate it.

Eric Walsh, city manager not busy at all during the summer.

Thanks for coming in.

Thanks.

On reporter's roundtable this week.

So many stories to get to.

Everything from the hiring of a somewhat controversial superintendent here to razor wire boys being sold as scrap down in Mexico.

And here to tell us all about that and more.

Maybe a little politics.

Is Michael Carlos, a writer for the San Antonio current social media star as well.

About news.

Thank you for coming in.

It's great to be back.

Randy San Antonio Independent School District just hired a superintendent and maybe a sign of the times, but it was, I guess, a 5 to 2 vote.

And he has a little controversial past.

Tell us about that.

Right.

So Superintendent Jaime Aquino over at Cisd, he was going to retire believe in January.

However, for whatever reason, his retirement came early.

The AI, SD Board of Trustees voted to give Adrian Bustos the role as superintendent.

Now, that wasn't without controversy, though.

As you mentioned, Mr.

Bustos was actually caught in a pretty extensive cheating scandal during his time at El Paso ISD.

A number of years ago.

A number of years ago, I believe it was 2017.

So obviously, you know, some trustees I don't want to I'm going to paraphrase what they said, but one of them said, you know, would we allow our students to cheat and then become valedictorian as a metaphor for appointing Bustos?

Here's another interesting thing that hasn't been reported is that Adrian Bustos actually doesn't have a superintendent certification from the T.A., so he's at this point.

So he's been appointed.

The board filed a waiver with the TSA, and now the T will either approve or deny that waiver.

He's in the process of getting it.

So I don't think there will be an issue.

But just another fact about SAS.

And now there was also a board member, I understand that said who voted for him.

It was Editor Garza who said not everybody has a perfect past.

It's hard to get someone without any some sort of blemish on their record.

Well, that's true, but at the same time, sized is in dire straits.

It's facing a multi-million dollar budget deficit, and it's at a very real risk of being taken over by the Texas Education Administration agent, the T.A.

or the T, because of a, you know, for consecutive years of basically failing the star at a nine different campuses in the district.

So this is pretty serious, and I can understand why some people are saying, is this the guy that we want to lead this district at this moment?

More recently, I guess he's had a more successful time.

And he was recently.

He was the yeah, he was there as the chief improvement officer.

Chief.

Yeah.

Kind of turbo round.

Yeah.

Yeah.

He wasn't superintendent, but he was a high ranking member.

And he seems very optimistic.

At that board meeting he said, you know, you're going to be reading the headlines next year about what a great turnaround we're doing here at San Antonio ISD.

So fingers crossed.

And yeah, hopefully especially with the dropping enrollments.

And we've seen a number of superintendents here retire resign in the past year.

And it's a challenging time for all of those.

Yeah absolutely.

All right moving on.

You have so many stories of razor wire on the boys, some that were swept away, sold for scrap in Mexico.

Right.

So we had a lot of rain last week, I'm sure, as everyone knows.

And so what happened is that these border boys, which were owned by the federal government, not by the state government, they were stationed in Eagle Pass.

And due to the rain, they washed into the Rio Grande River and kind of went missing.

Some ended up as far as Laredo.

They floated all the way down to Laredo.

But what's interesting is that a local newspaper down there actually went over to Mexico and discovered that some Mexican nationals were burning the boys and then selling the aluminum inside of them, because, remember, they have razor wire.

They're selling them for scrap.

And, you know, cornered that papers reporting they're going for $2,300 per boy.

Wow.

So, you know, I saw a comment on that story and someone said capitalism always finds a way.

So yeah, you know.

And now there was also a little bit of accountability, the state government making it clear, no, it wasn't us, because at first nobody really knew who they were because they were both down there.

Right.

So yeah, it's not the state's boys, or at least that's Governor Abbott's official statement is that our boys remained intact.

This is the federal government's broad.

Has there been any response from the federal government yet about these boots?

Well, I know a couple of bridges were closed down over the weekend because the boys were trapped on these major trade checkpoints.

So to my understanding, those have been removed.

Trade is resumed and the boys are being collected by, I believe, the federal government, said a related contractor who I guess is in charge of Bowie operations.

And no word yet about replacing the boys, or there was going to be more boys installed, as I understand in the future.

Right.

So these boys were not already in the river.

They were kind of stationed, getting ready to be installed, and then they washed into the river.

So I imagine the federal government will will replace those boys.

But I guess it's a story we're just going to have to keep following.

And there was an interesting story you had about a certain pack, a political action committee that was formed, and so far it has raised $0.

Right.

They the US Senate race is definitely keeping me on my toes, Randy.

But yeah, there's this Republican affiliated pack.

The no.

Talarico PAC was launched a few months ago.

And they you know, they seemed really ambitious and had some big goals.

However, in the latest campaign finance cycle, they reported raising $0.

And that's kind of concerning because that comes right after it was reported that Ken PACs or James Talarico out fundraised Ken Paxton by 3 to 1 margin, which is, you know, in Texas for Democrats.

That's that was some pretty good numbers.

And this we don't know exactly who this PAC was backed by.

Could it be that that PAC they're waiting until later in the campaign to when it really counts to spend that money to raise that money?

You can say that, but I mean, we're three months from Election Day.

I mean, the last cycle was really when you started seeing some big numbers.

You know, Christian Carranza raised a ton of money.

A local Democrat running down here, Johnny Garcia.

Right.

These are just the reports that I looked at closely.

But but, you know, the last the last cycle, that last quarter that we just had, that was the time to raise money.

So I find it hard that this specific PAC will be able to recover in the next three months.

And is that an indication, a related story you did about Republicans debating or not feeling that they have to debate for statewide office or not?

But Ken Paxton has said recently that he will, though there's no specifics.

Is that race that close that you think he actually would?

Oh, that race is close.

I mean, he's down in fundraising.

He's had a you know, I think it's safe to say a rough month of not great headlines.

Right.

Just yesterday, you know, he was basically avoided reporters questions based off of the alleged voter fraud that the Tribune reported on and then the real estate portfolio.

So, I mean, it's been a rough, rough month for Paxton.

So but is it in his interest to debate?

You know, sometimes people debate and it helps.

Other times it doesn't.

And he's not known as the maybe best speaker.

I mean he has more to lose.

Well, you can make that argument.

I mean, a lot of it just comes down to prep.

But he has not actually debated an opponent and I think 2 or 3 election cycles.

So this would be historic if, you know, Paxton said he's going to do it.

It would be historic if it does happen.

And it's not the trend, because you also wrote about other Republicans not debating in this cycle, right?

So Beau French, a pretty controversial candidate running for railroad commission.

He's basically just skipped out on two debates.

And Greg Abbott also did not respond to Jena in a hostess invitation, the Democrat running for governor to debate her.

So this is this is a long you've been a news a long, longer than I've been alive.

Yes.

Thank you for reminding me.

But, you know, the tradition of political debates, I mean, goes back to Nixon, Kennedy.

And it's just unfortunate that in the last four years, mostly candidates on the GOP side have not been participating in that tradition.

Well, maybe that'll change.

And they'll come in here.

Hopefully before I pass away, apparently.

Thank you.

Michael Carlos, reporter writer for the San Antonio Current and also social media star, because here's what you need to know San Antonio did I get the.

Yeah yeah that's right.

There you go tagline.

All right Brandon.

Thanks, Michael.

And thank you for joining us for this edition of On the Record.

You can see this show again as well as download the podcast at klrn.org I'm Randy Beemer, and we'll see you next time.

On the record is brought to you by Steve and Adele Dufilho.