Calling this meeting to order. City of Laredo Special Council meeting 11 Houston Street, Laredo, Texas, March 25th, 2026, 12:05 p.m. All stand for the pledge of allegiance. I pledge algiance to the flag of the United States of America and to the republic for which it stands. One nation under God, indivisible, liberty and justice for all. >> Texas pledge. >> Honor the Texas flag. >> Ice to the Texas one state one and indivisible. Moment of silence. >> Moment of silence, please. Thank you. May be seated, >> Mr. Secretary. Roll call, please. >> Yes, Mayor. >> Honorable mayor, Dr. Victor D. Travinho, >> present. Honorable me mayor Portamp and council member district 1 Gilbert Gonzalez >> honorable council member district 2 Ricardo Richard Jr. >> Honorable council member district three Melissa Cigaroa >> honorable council member district 4 Ricardo Rick GarcA >> honorable council member district 5 Ruben Gutierrez Jr. present. >> Honorable council member district 6, Dr. Tyler King here. >> Honorable council member district 7, Vanessa Perez. Honorable Council Member District 8, Alisa Cigaroa. Mayor, you have a quorum. >> All right. Thank you, Mr. Secretary. Acknowledge, please, that council member and mayor prompt Gonzalez are here and council member Ricardo Rael are here as well. Council >> and Council Eliso. Thank you. >> Yes, mayor. Thank you. >> We don't have any citizens comments up to now. >> No, mayor. >> All right. >> No citizen comments. >> All right. We'll proceed with communications and we'll proceed. All right. >> Good afternoon, everyone. >> Some announcement before we begin, bridge week festivals, health department festivals. I also want to inform the public that we have several meetings with our federal partners at border patrol and there were productive conversation with regards to concerns city had with installations of of some of these border structures. I wanted the public to know that the protection of life and safety for the city are paramount. more conversation will take place but some of the important messages that were taken away from the the meetings or that they are hearing our concerns and we will provide they will provide the technical data needed so we can review it with our subject matter experts. There are also some concessions on allowing us to give valuable input on the sign which the city plans to do so at these meetings as these meetings progress. Again, I want to inform the public that the city of Loredo is having these meetings because we have chosen to negotiate and because our position as the number one port of entry in the United States is important. I know city manager will have several other proposed proposals supported by the advice of legal counsel and going into our discussion today. I want to thank you all for being here and take part of this important capital improvement workshop. These discussions are not just about projects on paper. They're about the future of our city and aligning prosperity to improve the quality of life to our residents. As we review priorities and allocate resources, I want to reemphasize a fundamental principle. Our first responsibility is to the core functions of government. That means that ensuring public safety remains strong supporting our police, fire, and emergency services so that the continues to be recognized as the safest city in Texas. It also means maintaining and improving our infrastructure, our streets, drainage systems, and utilities, specifically water infrastructure. I want water boil notices to be a thing of the past so that our community can grow safely and sustainably. So at this is shown by the fact that in nearly a decade Laredo for the first time did not have a boil water notice in 2025 up to now. That is due to good work of our management and utility department. A focus in hiring good people, replace our old pipes and maintain our system by testing our waters. And it means investing in public health, ensuring every resident, especially in underserved area, has access to the services they need to live healthy lives. Capital improvement are crucial, but they must be guided by discipline and purpose. Before we expand into new initiatives, we must ensure that the basics are not just met, but strengthened. Reliable roads, effective drainage, safe neighborhoods, and resilient utilities are not optional. They are essential. I also want to emphasize transparency and collaboration in this process. Having our finance team present ensures that we can answer question clearly and make decisions grounded in fiscal responsibility. I do want to thank him for joining me yesterday to do a presentation to the Chamber of Commerce on our CIP process. These are your tax dollars and we are the we owe the community thoughtful accountable stewardship. And as we move forward today, let's stay focused on what matters most, protecting our residents, strengthening our infrastructure, and making decisions that re reflect both prudence and vision. With that being said, I will hand over the floor to Mr. Neb. Go ahead, Mr. Neb. >> Good afternoon, Mayor, City Council. Thank you for your time. U today is our our first pre-budget workshop. Uh we we've tried to have these uh starting last year to help prepare as to where we're headed with the budget. So I I get the opportunity here uh to kind of set the foundation for this year's budget uh conversation. Um and this is not strictly about the budget itself right now. This is actually a laying out the foundation. It's understanding the environment we're operating in, the constraints we are facing, and the direction we'll need to take moving forward. So we're going to focus on three things today. Financial reality, strategic alignment, and and long-term sustainability. So the the goal today is to establish the financial context, walk through the major cost drivers, and begin framing both operational and capital priorities. The workshop is about defining what is possible before we begin making the decisions. You're going to receive a lot of information today on various pieces of the developing budget. Uh we're we're happy to answer any preliminary questions as we walk through this, but our goal today is to provide you information to bring you up to date with all the conversations that have been happening departmentally within our structure for that to prepare the fiscal year 202627 city of Laredo budget. And so you're going to you're going to hear a lot of information and and I want you to know that uh it's kind of patterned a little bit toward uh some of the difficulties we have with balancing our priorities with the the amount of revenue that we have. Um but I will I will guarantee you that come September, we will have a balanced budget and we will be moving forward with a lot of great things for our community. It happens every year, but we have to have this structural conversation because there are foundational influences. And so, we always want to have our eye on on the long term, but we're all always operating at the short term. So, that'll be the purpose of today. And we we've got a lot of information to put to you. Uh we'll be covering some general budget area information. We're going to cover the health insurance impacts of what we're going to see. We're going to go through the CIP and then I am actually hoping for an opportunity to go into close session uh because we have received the uh the final draft report for the police and fire study and prior to me uh providing it to our departments and and walking through that conversation. I really want you as the elected body to have the first blush at at least seeing the document before before we start having the conversations with all of our people at the highest level. This is the challenge we're facing. Costs continue to rise. Insurance, retirement, personnel, and infrastructure. And our current revenue is not keeping pace with these. Nothing is cheaper than it today than it was yesterday. This is not a temporary issue. This is a structural issue and we have to build toward that. Because of that, how we respond matters. I have talked a lot about the need to improve our rate structures and to add more cost recovery measures into our processes, but know that we cannot rely on revenue increases alone and we cannot reduce our services in a way that fails our community. Our approach is to has to be to address the structure of how we operate and to balance the short-term needs with the long-term commitments. That will be the lens of this entire budget process. At this point, I want to pause and explain a handout to you. Uh, it is the core service review. And the mayor mayor in his opening remarks talked a little bit about core services and and making sure that our priority stays focused on this. What this handout does for you is that it shows how our current budget is structured. The vast majority of our spending is already dedicated to core services, public safety, infrastructure, and the systems required to support them. Over 88% of our services relate to core service. This further explains our approach to the efficiency study findings for the growing community and is in line with many of our comparable cities. Discretionary spending represents a much smaller portion of the budget. The reason this matters is because it reframes the conversation. This is not something we can simply solve by reducing discretionary programs. Again, it is because long-term sustainability has to guide our decisions. And so, I I just want to make sure that I shared with you exactly how our breakdown is. There you can see our core services. You can see the core support services that actually support the core services and then the discretionary. And we actually have a few of our departments that are are jointly within core services and some discretionary as well too. And I use the health department as a good example of that because I would argue that 65% of what the health department does affects our core services model. There's about 35 that is more discretionary as to that operation. As we look at the capital and long-term investments, we have to be strategic. That includes leveraging partnerships, looking at alternative financing strategies, and coordinating with regional and governmental partners. Many of the projects we're discussing now require multi-jurisdictional coordination, and we need to ensure we're aligning our investments to the long-term value, and we do this on a regular basis. My point is that, and I hope that everybody hears this, is that we are expanding our philosophy even further within this budget cycle. We can't do it alone. We can't keep carrying the burden ourselves. We have to find these stronger partnerships and we have to find other ways of of doing this. The environment that we are operating in currently, we are operating in a growing and increasingly complex environment. We have population growth. We have the trade activity. We are a border community. Infrastructure expansion. Rising service expectations are all increasing the demands on the city. At the same time, our flexibility within core funding services remains limited. And that tension is what's driving much of what we begin discussing today as we build this budget. When we look at our cost structure, the primary drivers are personnel, health insurance, retirement, and internal service costs. Over 70% of our operational expenses are related to the employees that complete our provided services. We are a service related industry. We are we're we're built for that. This is how we complete all of our work. These are not discretionary expenses. These are structural expenses. And I want to make sure that everybody understands that or tries to change my mind with that as well too because we have to account for that cost because that is how we get our services completed. This means that they will and this means that those costs will continue to grow unless we address them through some structural solutions and that's what we'll be talking about all the way through this budget cycle for this structure. Salary is only one part of the total compensation. The benefits particularly health insurance and retirement are significant and growing drivers. One of the most important core services, our public safety compensation, represents a large portion of our overall core service cost. The mayor alludes to this in his opening remarks again that public safety is a very important structure for us. And uh I have an out uh the second hand handout that I have out there actually shows you the full compensation picture. These are the cost factors that we actually utilize as when we how how we manage our people. It's not just about salaries. It's about the insuranceances. It's about the retirement. It's about incentives in order to provide for different things within that. It is about uh uniform costs. It is about all of these different impacts have a total compensation salary compensation structure. I want to make sure everybody understands that because it's not as simple as just raising salaries. It is about looking at it as a total compensation model within that structure. So I wanted to provide you with that because as we go into these conversations I want to make sure that you understand that uh because we are going into u upcoming public safety negotiations and there are a few things that should be made clear. The city remains committed to recruitment, retention and competitive compensation. At the same time, the reality is that these investments represent a significant and growing financial commitment and our long-term success will require alignment between the structure and the re resources particularly in salaries, health insurance and retirement. It is important that these agreements be modernized and come into alignment with the best practices from the industry. This year provides us the opportunity to do just that. We are looking at a long-term um C uh collective bargaining agreement trying to take out the uncertainties of how we intend to support our people and how we in intend to support these important services. Uh I hope to discuss this in more detail today in a close session at the end of this if we still have a little bit of time because I do want to share with you the police and fire study uh final draft document as we get ready to share this with our with our partners within the department as when we're as we continue to start the negotiations. Our focus moving forward today is to evaluate how our services are delivered. Identify the opportunities for efficiencies and align our resources with core service expectations. The goal is long-term sustainability, not shortterm fixes. And I think that's the one of the things that I want to lay across as we move into this budget. I don't want to just show you one slide. This is why I'm explaining this in a lot greater detail. These are all the influences that are behind when we share this is our goals of of balancing out our budget. We are intending to look at all of this as we move forward. We are also looking at how to align our costs with users and beneficiaries. That includes evaluating the funding models used by peer cities, expanding cost recovery where appropriate, and leveraging major systems such as our bridge for sustainable revenue. The goal is to protect our core services by better aligning our costs and our revenues. The the last handout I have for you is what's titled the revenue alignment and cost recovery handout. It al outlines many of the creative and best practice ideas on how services can be funded. Uh this was requested at a recent city council meeting and will be expanded as we continue to discuss balancing the budget and providing highquality services. But I wanted to provide that to you because it was a request from from a city council meeting. These are these are the ways that other communities actually tackle very similar problems to what we have. Um and and they they find a way in order to get there. You're going to hear today about our health insurance and our internal our internal ability to to uh support our employees and their families. And I will say that last year council had already taken steps to improve the sustainability of our health plan last uh and those adjustments will need to continue. We established a three-year implementation for making some adjustments to I I believe our PO uh and trying to seek uh movement onto our our high deductible plan uh in order to help uh offset some of these rising costs that we're seeing in the industry. um the market trends are driving our costs. We do have our our loss ratios and the the claims are higher uh for if we have a couple high claims then that actually causes our our market to adjust as well too. But I believe that we are being faced by market trends as well and you'll hear a lot about that more from those experts that we have here for that. But as we discuss this portion of the presentation, I want to leave this with knowing having you know that we are considering all options, all opportunities. We want to keep our employees and our families covered, but we're trying to balance that commitment with the resources necessary to cover it. And I think that's going to be the uh that's kind of the artwork along with the science as far as making this all kind of pull together. I I want to I want to go from our our internal health services but I want to go to the external our our our health department uh and uh the service that we provide on the medical side for that. So let me shift over from our internal health operations over to our external health services for a moment and this is all part of our efficiency discussions and an opportunity to improve those services provided through a more definitive partnership. Both cities and counties have the authority to provide health services. The city of Laredo has stepped into that role and provides all these important services today. However, when you look at how the state law is structured, counties are positioned to support these services at a broader regional scale with access to funding and delivery mechanisms that are designed for long-term sustainability. That distinction becomes important as we look at how these services are funded and delivered moving forward. Our uh expansion in our health services in that area comes at the expense of our other core services. And this is something this is a reality that we need to recognize. We we don't have enough revenue in order to cover all the services that we're providing. But we have to continue providing highquality services. And that this is the point of where I'm kind of going with that. With the loss of federal funding and the structure of our current system, it is becoming more difficult for the city to continue expanding in this role alone. There may be opportunities for broader coordination at the county level to support these services more effectively. As we look at this long term, this is ultimately a structural and policy discussion that will require coordination with Web County. With the county currently in the process of selecting its next judge, there's a natural opportunity to begin the DA dialogue around how these services are delivered and funded at a regional level. Our focus is to ensure that regardless of leadership, we are aligned in how we support the long-term health of our community. And this has been a mission, I believe, of this council all along. And I believe that we should be uh seeking those partnerships in in the most appropriate way. Finally, um, we'll be going into a CIP conversation. And so, as we transition into the capital part of our conversation today, what you will see reflects current and ongoing needs. This is not a complete list of projects. We're still in developing them out. One of the key goals of coming out of this workshop is to ensure that all potential projects are identified and brought forward. If they're not on the list, we cannot prepare for them. If they're not on the list, we cannot put all the all the pieces together in order to move these things forward. And so each one of these projects will be evaluated through a structured process and ultimately financial capacity will be determined on what can be delivered. I believe the outline structured process meets some of the concerns that the city council has identified in recent agenda requests as far as project managements and and all of that. So, I want I want to make sure that you you understand that for some of the items that have been on the agenda, this is how we're trying to meet those expectations within within this. So, you should see that in there. And I I think the broader point that I believe that the city council is trying to also make so that the public can understand that not everything can be funded. We will have to prioritize our expectations. We have to we have to eat the elephant bite by bite. As we move through the CIP process, we'll be focusing on infrastructure reliability, system performance, efficient use of our facilities, and opportunities to improve coordination and governance. These investments need to support both service delivery and long-term sustainability. It has to mean make a difference to our community in the long term. And so that's where we're going to be looking at this. Finally, as we move forward, this is really what it comes down to. We're operating in an environment where costs are rising, revenue is limited, and most of our resources are already committed to core services. That means the challenge we're facing is structural, not temporary, and it will require tradeoffs. Not all of these priorities can move forward at the same time. This will require alignment on how we approach the approach this budget. Our focus is to protect core services, align our structure with our financial reality, and make the decisions that are sustainable, not just for this year, but for the long term. Ultimately, the decisions we make through this process will shape the city's long-term sustainability. Mayor and city council, that's the setting of the table. That is at least preparing the uh our our our approach into this year's budget. What I'm going to do is I'm going to ask Mr. Sparza come up and talk about some of the general information within the budget. What we're seeing six months into this budget as we move into it because first thing we try to do is establish what our revenues are going to look like. Then we try to balance out our re our expenses within those revenue structures and if we have any gaps then we're going to try to figure out how to close those gaps and everything. So I want to make sure that he covers that as well at first. I would love to go into the health insurance conversation second, the CIP third, and then we'll go uh hopefully if we have opportunity with time and everything, we'll go into the close session so I can share with you the study and some insight on that and then we'll uh we should be able to wrap up >> your presentation so far. >> This is my Mayor, may may I ask a couple of questions? Um, one thing that came up specifically is um of course our public health system. Yes. and about getting Web County involved with it, which we should have been done a long time ago, but we've been discussing it for a couple of years now. >> Have negotiations started with Web County Commissioners, the current judge. Now, >> the the conversation we've had, we have talked with the judge about collaboration and cooperation, not specifically about which items they needed to go with, >> but about collaborating with the city and possibly funding some type something from the health department because at the end of the day, >> we we we've spoken with them about the cooperation and collaboration. I I I would say that I I don't know if we've had the specific conversation about the health side as well too other than we've talked a lot about the health department side, but there are other opportunities that we have out there. I would expect that we've had the conversation when we establish the detox center because that was uh partially collaborative because they're providing the the location and we're providing the operations and and we'll we'll talk about that within our efficiencies as well. >> But they are open to helping our health funding when it comes to funding it >> with our current judge. I have had good conversations about collaboration and cooperation. >> Okay. >> I I believe that as we are now seeking our our next judge, I believe the opportunity is very natural to say what what where where do we believe that the count the web county will be with this uh new leadership that we will be seeing. >> Right. Thank you. And and second question um concerning to me that I just heard you say couple times tradeoffs will be required. Um tradeoffs speaking about obviously we're not going to get into detail about it yet but trade-offs I want to be sure core services are absolutely taken care of. That's going to be a necessity every single day. What are we talking about trade-offs? >> Yes sir. Thank you. And and so when I when I talk about trade-offs um the the challenge is is that and and this is what you're faced with today already when we're talking about even the bridge rates, >> right? And we understand limited funding. We understand that, but I just want to kind of get into the detail, a little detail about what the trade-offs are going to be. >> Yeah. Well, and I I will say that um I I probably won't be able to answer you completely with very specifics on this because what I believe is going to happen is and this the int the whole intent is to lay everything out on the table and walk through each piece of this thing. So, as we as we look at our revenue structures and and we're going to have to prioritize out, right? I mean, at some point in time, we're going to cover our highest priorities to our lowest priorities, and then we're going to run out of cash essentially, and we're going to have to stop there. What I what I see with what I when I when I describe tradeoffs is that and especially when it comes to our employees, there are three primary categories that are important to everybody, every employee, and every family of that employee. The salary itself because that gives them the cash to live. the insurance to protect their family through any kind of emergency or any of that nature and then of course the retirement at the end when I can't can no longer work where do I go what I will say is that within our our our structures we have all these other expenses and based upon exactly what we're going to do because what you will see in the and I will say this publicly for the police and fire study what we are seeing is that we see a compression of a lot of our positions Not just about the retention. We we see that our our our starting wages will need to be adjusted. We see within our structure a a compression of where we overlap different responsibilities too closely. There should be a separation between that as well too which means that we move the we move the scale exactly what you did with the uh the seagull study with the regular employees. This is very similar on the police and fire side as well too. And I don't want to just make this about police and fire because this is all about the the managing of the employees all al all together within that structure. So the trade-offs are is that it is nice to have certain things covered within these agreements or within our regular thing, but if we're not covering these first three core services salaries insurance and retirement first and foremost, it's it's nice with the other little stuff, but it has no significant difference in the lives of our employees. And that's when I talk about trade-offs is that if we're going to if we're going to increase the salaries up to this level here, there may have to be that tradeoff on the other side to balance out that pendulum. Um, and insurance is probably a really good example because you're going to see some of the what what that impact is looking like. We have the ability to either absorb the cost all by the city or do the uh the the 7030 split that we do with the employees right now where the city covers 70% but that means the employees going to have to cover the port proportional share as well too. Um we have a lot of different models for that. Those are the trade-offs that we have to do and everything everything that we decide we're going to try to cover within our revenue source that takes off that takes a dollar out of that pot. Right. >> Ju just to just just my train of thought is when people apply to work for the city of that's a those three things are very important not only for retention but for people to want to come into this city specifically for insurance and retirement. people aren't don't want to work till they're 70 72 years old now which is right >> social security a there now but uh that's primarily why people work for municipality the state or even the government the federal government because those three core functions are taken care of and that's one thing I definitely want to have you keep you know our employee need to stay h they need to stay happy >> and and this is part of the reason why I wanted to have this in the conversation public so thank you for the questions as well too because it is about transparency and it's about Let's protect the most important pieces first, right? >> All the other stuff in my mind, it's nice to have or it's nice to do and everything else, but does that help our people serve this community? And >> right, and that's what's important, keeping our employees happy, but because they serve our community and therefore they it's a reflection on not only the city, but what type of service they're they're committing or giving our our our community. Yeah. >> Yeah. And and I and I that's why I mentioned the word as well too modernization of our of our agreements because collective agreements actually they they just kind of build off of each other as they go. There's usually not an opportunity to really reset. But we I in my mind I think that this council wants to fix the structure within what we operate in and this is the opportunity to have those conversations and they're not always the easiest conversation to have, right? Uh but I really appreciate your uh your tenuous n or your tenacity that kind of comes with this because this is where we're going to make the difference for future uh future opportunities for the community. But thank you. >> Thank you. Appreciate it. >> Yes. Go ahead. >> Thank you. Um Mr. Just to clarify, when you're talking about compression within the salary um levels of police and fire, I guess to explain a little bit about that, you're talking about salary levels that are too close to one another to be able to differentiate very well the ranks and the responsibilities of of these people. Yes. >> Yes, ma'am. Uh the the idea of compression. So, uh, if you look at, um, and and I'll I'll just use the police department as a good example because that's one of the areas that we have the compression. So, you have a have a police officer that just comes on board and they're the starting out, but then you have we have different levels or different categories of employees as you go up all the way up to the chief. So, you have the the regular employee out on the street. Then you have the uh the sergeants, you have the lieutenants, you have the captains, you have the district chiefs, you have the assistant chiefs, and then you have the chief. I they may not be in that exact order because I think police and fire actually serve they have them lined out differently. The compression is is that there should be at least based upon um salary market uh analysis. There should be an 8 to 10% differential between each one of those classifications as you move up because there's responsibilities that go up. You know, it's u uh the buck stops here kind of mentality for the police chief. The buck stops here. He's responsible for all of that. So his responsibilities are a lot higher than the individual that's going out to do a speeding ticket or anything of that nature. And so it's about it's based upon responsibilities. What's happening is that there's too much overlap between some of these different classifications of positions. And we saw the same thing on the on the on the city side when we went through the seagull study is that the compression is that we have overlapping where we have uh there is a difference between our employees that I I won't digress from that but there is a difference because of uh we do we utilize a minimum and a maximum salary range for all of our regular employees and so it is based upon the midpoint of that market. Police and fire are actually work off of a percentile basis. We we establish them based upon the industry in a percentile basis and then that's how it reflects. So we are we are looking at establishing steps within there so that we can at least help create that uh remove that compression within that system. And so the compression is that when you have somebody with lower responsibility at a higher rate of pay than somebody that has higher responsibility, the question is is that is that appropriate or valid? And so that's where we're trying to ex spread out that compression. It happens over time. And I I would argue that this is where we go back to protecting those three core values at first and then we talk about all the other stuff as afterwards is that uh when you when you put all that stuff within that that whole mix, it offsets the value of that and that created the compression. And so now we're going to have to now we're going to try to separate that compression. And then that's where I think both those conversations kind of blend together where the trade-offs and all of that and coming into exactly how to how to stop that compression. >> Thank you. >> And I'll just u reiterate on some of the things that you just touched upon right now. What um what I think would be uh beneficial not only to us uh or for me personally uh can and all of this is like nobody can get more excited about budget talks except me, right? that type of thing as as as enlightening as it is. Um we are working with two things uh struct you said structural right and I think from that structural comes process re-engineering uh figuring out what we do right and and reshape it so that we can work for us more on more efficient basis that comes from the efficiency studies that we're doing but what I'd like to do is if if we can towards the end of our discussions by when we get closer to uh you know uh balancing the budget is if if we can structure a uh an outline that says this is the way we were doing things before and this is the way we're going to do them now. And I think that helps because we can take score there. We can figure out, okay, we did this correctly. Uh we did uh we we were going to adjust this one or it just completely didn't work or whatever it is. But it's a game plan that I'm I'm excited about because I think uh what you're saying right now with given the times and the way this country is moving uh there's a lot of instability going on and and and the public needs to know that's why we're taking these kind of steps. We need to make sure that everybody is is aligned with our thinking because there's because of that instability. And so we have to take care of our people. We have to take care of of our citizenry and and we have to take care of every tax sent that we can. we can possibly protect. So in aligning that mentality, I think it it'll be beneficial for everybody to see what we're doing now and what we've discovered from since over the the last two or three years since and what we're going to do different and that way we can all uh kind kind of get guided along and we can jump on board with it too. >> Yeah. No, I and I agree with you. I I think that's going to be very important through this thing and I and it and I do believe you guys took such strong strides last year through our budget when we established some of the resolutions we did that that will help us build this budget out and so it is perpetuating that on out and and just continuing that model finishing the job. I guess maybe that I I've been using finish the job quite a bit here recently and so we got to do we got to finish what we started and I I think that's what we're starting to see within this uh you know and not to not to go back too far. I mean the bond referendum was the start of some of those conversations the efficiency studies and everything else. Um I I just appreciate so much that you guys are not afraid to have the conversation. Now, what we're going to do is all based upon as we walk through the conversation. I can tell you and I will reiterate it as well too is that there will be a balanced budget. The city manager is required to give you a balanced budget sometime here in July and August. It will be balanced. It will do a lot of wonderful things for our community. It will not do everything that we want it to do, but I appreciate the assistance with with all of that. Uh, and then what I really hope for is that because and those of you that were on the council for a lot longer time as well too know when we when when I deliver a budget to you and it gets rebuilt in in like three meetings, it's very difficult to to establish uh that standard. And I think what this what these meetings do for us is establish that standard because I want to build a budget you're proud of. I want to build a budget that actually matches what you want to share with the public as well, too. And so thank you. >> Mayor go ahead. >> I would I just would like to add to um just some of the the comments that council member GarcA made as well. And I just I'd love to thank everybody for preparing all of the packets. But I do I do I since we're trying to improve our models and shift our mentality. Um I would really appreciate if we can get all these packets in advance time. We just this we cannot or normalize receiving packets the day of our meeting when we have items that say discussion with possible action. It's just really unacceptable and unprofessional. So I appreciate I would appreciate if we could >> receive these earlier >> and the council council member and I we we spoke last night in a text about this trying to get this information out. Uh, I'll take full responsibility of that with this one just because of all the different meetings that I was in. I was finishing I was wrapping this one up at 11:39 this morning. So, for for the noon. So, I don't like operating under those conditions as well too. My my mouse batteries died while I was working on your conversation. Correct. We're not >> We're disc today is about conversation. I what I really want to do is make sure that you are caught up with all of the conversation that we're having. Uh there will be we will have I think two more pre >> discussion. There's no action going to be taken tonight. In other words, >> there's no action that has to be taken today. >> Just just clarify. Thank you. >> All right. >> All right. Um mayor, I'm going to call Mr. Sparza up and then we'll we'll get started on the actually the meat and potatoes of today. So, thank you for your time. >> All right. Thank you. Meat and potatoes. Good afternoon, honorable mayor and council. Jesus Paris the third with the budget department. >> Thank you, sir. >> And I have a presentation on the budget update as it relates to revenues. Uh we did have in our last uh council meeting or last workshop the preliminary uh four months uh actuals and the period budget to period actuals and their variances. So we have some updates on that. But before we get to those uh slides, I do want to touch back on the budget calendar. We have some highlighted dates that are important here. the first one in May 13. That's a tenative date that we have for the workshop number two. We do have a proposed change for June. Uh we had June 10 in our last meeting. We are proposing June the 1st. And then we have our submission uh of the budget that has to be submitted to council 90 days prior July 22nd. and we have the final submission, the final budget workshop on July 29th. Uh if uh I I encourage council to let us know if there are any issues with the dates highlighted. Uh that's where we going to be talking the budget. >> Yeah, go ahead. >> The June 1st date, that's the day of the city council meeting, the first and the third week of the month. That's one that's my first concern. Well, my only concern actually. Did you want to have that meeting prior to the council meeting or during the council meeting? >> It would be >> because that's not going to work. If we're going to do it during the council meeting, we can't finish agendas now, >> much less for the budget discussion. >> Is is there a date that you might do you want us to >> be the following week or or even further that week or further along that week because the first that's our meeting of the month >> um mayor? >> Yeah. >> For June, do we usually do one or two meetings uh for June? >> Sure. So maybe even further down that week if you are okay with Thursday, Wednesday, Thursday. >> Yeah, I I certainly suggest the fourth >> June 4th. >> Is that >> Are you all okay with June 4th? I mean, >> there's there's nine of us, so of course scheduling is always going to be an issue, but I will say that my wife and I have our 10 year wedding anniversary, and we will be out of town uh the rest of that week. But uh but I mean we can't we can't uh schedule I understand >> that's not the final meeting correct from what I'm receiving here >> that is the >> that is the uh budget work number three >> number three we have >> and then we have the uh the submission u the final bud budget work is on the 29th >> June the 4th >> let's see if you can >> we'll update June the 4th Yeah, June 4th this year we see if it's possible >> June 4th. >> June 4th. >> What's the for that June one? What is the topic? Um which which which part of the budget >> that third one? We're probably going to be focusing on the expenditure cycle. >> Okay. And that's that's that's the uh yeah the expenditure cycle. >> Can you elaborate on that? We have we'll have in there the cost of living the CIP final projects uh as we finalize and prepare the the actual submission of the budget. >> CIP final projects. >> Yes. The capital improvements plan projects because today we're going to have the >> we have one in July. Don't we have one in July? >> The July 29th is the final budget workshop >> out of the library last year >> specifically. I'm just asking reason we changed it from June. >> We're trying to figure out the date. So I'm trying to wonder why we changed it from June 10th. >> There was some concern on the date that 10 out of council would be available. >> Okay. Well, look, we have a we have a meeting May 13th. We can discuss some CIP issues there prior to the June 4th meeting. Correct? we have any issues. I guess before you >> I would just ask that we not have the final CIP um you know vote on that June um >> well July 22nd we have the submission of the budget and CIP to council. So that's the final submission to us and then we can discuss it then with the CIP >> also. If we're changing it may or may >> Yes. Yes. Go ahead. >> If we're changing it because not everybody's present on the 10th and >> well the final we have the we have the fourth then July 22nd and then we have July 29th that's the final budget workshop. So that day correct me if I'm wrong we can still make changes on the 29th of July. Is that correct? >> Yes. you to technically make changes at that point. What's going to happen? This is on the today's meeting. We are going to get a little bit into the actual projects. Uh we met with the departments last uh Friday was our last meeting with the departments as we meet with them and uh our our uh uh engineering will will touch on that. Uh so we've got all the projects that they submitted. So, as we work within this next week, week and a half to two weeks, we're trying to finalize the list of projects that we're going to come forward with their grading and priorities so that council can look at that. Hopefully, by the budget work number two, which is on May 13, you'll have the list in there to start finalizing that list. So as we move into the workshop number three, we have aligned the projects on the CIP and we're also align finalizing all the expenditures on the budget side. >> So Mr. Spa before before the June 4th meeting, we're going to have discussions on CIP and everything in the budget in between before and after the fact. So if we have concerns or questions or something we want to put in priority, we're going to have meetings prior to we're only in March. >> Correct. >> Right. So we're going to have other chances to do that before the sanction. >> Okay. For the record, did we have Councilman Gonzalez noted? >> Yes. >> All right. Okay. Go ahead. >> Thank you. Um, so could I suggest uh Mr. Neb, we've got three weeks in June, the the June 1st week, the June 8th week, June 15th week, which would give then you about a month or a little bit over for the July 22nd, the following budget CIP meeting. Could you please poll us and find out when the majority of us can meet because it it's a we have three weeks there. I think we can find something that'll work. It would it would be helpful if everyone could be present. Understanding that maybe that doesn't happen. >> Yeah. And and I and I think some of the pre- stuff Yeah. the the the budget workshops themselves are good. I think going off of what council member Dr. King was mentioning as well too though when it comes to the adoption of the budget and everything, everybody should be here. We we need it to happen in that manner as well too. But I I am happy to I'm well happy to work on these these dates and times and uh and find that because we want you all here. >> Yeah, exactly. >> We really do. I think that's been the strength of what we've been doing in the last couple years is that >> you just call us for June and then make sure the less of that obviously the better because then you have someone say, "Oh, I wasn't here for that one." And you know everything. >> Yeah, absolutely. >> Thank you. Thank you very much. >> Thank you. >> So, as we move into this slide, uh like the last council meeting that we have, uh property taxes is our number one revenue for our general fund. We have one more month. Here on the table on the top left, we have the budget uh period budget period actual and our variance budget to actual variance. left side we have October to February which is which are the months that we're covering in this year to this year uh this fiscal year. So as we look at the October for example we have 5.9 is our budget we we got we received 6.6 in our actuals. So we have a positive uh budget actual variance of 656,000. As you move into November, we have another positive variance of 941. >> A budget was 10.5. The uh actual received was 11.5. Uh December, we have a negative budget to actual variance of 4.5. As we move into January, we have 28.1 budget 27.7 actuals. And in February, we have 4.9 budget and 6.5 positive budget to actual variances. So as as we going through the months the the variances between the budget actual change sometimes are positive sometimes that might be negative but our total for this first October through February our budget was n 91 million or actually was 89.3 so we have a budget to actual negative variance of 1.6 6 mill the chart on the right just a graph uh representation of our chart of that. So we can as we look at the current status that we have for property taxes we collect we've collected so far in this five months 91.05% of budget the current collections are 1.8 8 below budget and in comparison to the January report that we brought forward we were negative uh 3.2 on the budget to actual variance. So we're doing we're making up some of those property uh revenues that come in and we are projecting that we will get to a and in the next chart uh um if nobody has any question I'll move into the next chart. This this information was uh uh we we did send this one out to council. Uh it was about 8 or 9:00 at night. We were trying to finish. We've made a couple of more changes this morning. Uh but it was sent out to council for for review and and beforehand. Um so this one was something that we added from the last uh month and uh council members had asked us to add a year to date because we're looking at the first five years. Now this is a projection. So this is this uh table represents actual from 22 to 26. The 26 the difference is we have five months of actuals and what's highlighted in green is our projections for year end. So if we look at the bottom number there for the total projected we're projecting 96.5. is uh compared to last year's 91.5. We have approximately $5 million more in property taxes that we're projected to receive. And we're estimating we're collecting about 98.32 of budget. As we look into general uh general fund sales tax which is our second uh largest revenue source for general fund. Same concept as property taxes. We have budget actual and this is a period budget and period actual and we have a variance. >> We look at October to February. The difference here in sales tax is you notice that the budget to actual variance for all the months are negative. So we have a total of 1.2 million budget to actual variance on our sales tax and on the right we have the table we have for example October was 4.4 we collected 4.2 November the budget was 4.6 we collected 4.5 same thing for December January 4.9 budget we collected 4.4 and then February we have 6.2 collected 5.9. >> So we've collected so far 40.67 of our budget. This is currently we are 5.11 below our budget. The January number variance that we had was 977 negative. So that has increased to a negative 1.3 million. >> Actually may uh question current collection 5.11% below budget. Um, explain that to me please. >> So the the if I take the 1.2 and divide it by the 24.6 that is a difference of 5%. >> No, I understand. I understand that. What what I'm asking is where where's the devian? Where's the difference? Why are we receiving less than what was projected or was budgeted? >> Yeah. >> Is it because people aren't paying their taxes? Is it what? >> Well, let me I guess let me jump into the next slide that is going to kind of help answer some of those questions because remember this is the difference between budget to variance and now we have the difference between actual and actual >> but is there a difference in sales that's why we're not collecting that many question this is all related to the sales uh where the sales tax is applicable so there's there's less sales >> okay therefore of course go ahead >> yeah I think he's asking is it related to decrease increase bridge crossings from No Laredo. Is it just because of the economy and the way it is with inflation and you know >> I think it's a compilation of all all of that. Uh Councilman Dr. King uh it's the economy might have to do with the tariffs is is less as uh less uh traffic on the bridge and I I will touch on bridge a little bit. So it's it's it's all related. I think it's all encompassing what's happening in the economy. But do we have a breakdown like you're saying it right now if it's if it's the economy if it's the the toll crossing are do you have a breakdown like that or is it it's very difficult to actually tie it down to one specific thing I mean it's not we we don't have a report that gives us well so much was because of tariffs so much was because less uh customers from Mexico are coming in and shopping in the US US the the reports that we get are >> and and I understand that but is u what What make what what brings to me is like how are we how are we going to identify or how are we going to you know fix the problem if we don't know where the problem is. It it's >> everything. How do we are going to incentivize whatever or where where are we going to put that money or how are we gonna you know >> work on that work on that if we don't know if it's because we are not getting people crossing the bridge because we're not having you know the taxes are too low or we don't have enough you know whatever the case is we want to know but exactly so we can start you know attacking that situation. If I may, let me let me explain a little bit how we receive these sales tax numbers because the sales tax is paid into the state of Texas >> and then they allocate it within their they all of the businesses are required to use their their industry code in order to determine where that's at. So we we will never know how much Walmart sold unless they tell us what Walmart sold in in Larredo. But we can say that uh based upon grocery shopping we can find that data and so we can see fluctuations in there. That's a lot larger study for that economic development level than that. But the state all that money goes into the state then the state uh categorizes it and then they ship us our check. And so we can go back to the state and request for very broad areas as to where the money came from or where where what was paid for for the sales tax. It'll give you kind of a general feeling that groceries were down for whatever reason. So then we then you can kind of know that our people were not buying as many eggs or milk or whatever it is. >> Um I don't know if that changes what we how we tackle within that. But they will not give you specifics because they believe it's a confidential matter between the business and the state about the submittal of the sales tax. Now, what also throws us into a whack for the sales tax is that if somebody does not submit their paperwork in the month or the time frame that they're required to, it shows up at at a at a later month. And that skews off of our off of what our estimates are as well, too. So, >> well, at the end of the day, I think it's the economy we live in right now. At the end of the day, it's a culmination of everything. The tariffs, bridge crossings going to be down, people not shopping for clothes as much as they used to. Um, a lot of it's online also, which we don't get those sales taxes for. So, we need to realize that. >> Yeah. I think we I think we go through a larger analysis for that. I just don't know if we're going to get you exactly what you're thinking because it won't let us get get down to those levels because I've always asked if I can get down to that level. I now know that I'm going to go market whatever the business is that we're weak on, right, and bring them in. And so it becomes a more of a more of a a balancing nature of that. So those numbers we do know that the the numbers are based upon I mean there is a lot of it that is based upon our our our people itself that are shopping as well too and that's why we watch those market trends uh during the holiday season because we actually believe we're having more people come over from Mexico and everything and shopping during those holiday seasons because we want to see those fluctuations as well too because that changes how the CBV markets that changes how we all all do our structure but the challenge I think that's a long-winded answer for you, but I think that's why we can't get down to the very specifics as to what we want to do. I know that one time we had a conversation about trying to find out how much sales tax is being generated by district level and that's that's even more difficult for that. Yeah, because we we it's not tracked that way by >> just put it out there. Shop Laredo, shop local that anywhere within our city limits is wonderful. >> Exactly. >> All right. Okay. Go ahead. This this next slide is is similar to the property um tax but we did something a little bit different on this one. On the side we have a line graph. So in this line graph you can actually see that January and February and keep in mind that we we receive our sales tax about two months later. So this could be the activity for the November December and then as we move into April and June we have some activity during the summer as well. So this is a trend. Uh the the uh presentation that I sent last night, I updated this one to show this line. I think it shows a represent a better representation of the trend on it. I did adjust the difference. The earlier one had a a average uh projection. This one is more based on trend. There was about a $300,000 difference from it. But same thing here. Our uh table on the left uh 21 to 26. You can see that our sales tax have moved from 48 44 uh in fiscal year 21 to uh 48.6 51. Last year's was 54 million. And we're projecting what's in green is represented on the green U line on the table on the right. And we're represing that we're going to receive 54.7 uh out of the 5405 comparison. last last year. So this is an increase of 614,000 more than last year's actual. So although we're projecting budget to actual uh uh negative number, we are compared to actuals, we are about 614, we're projecting to be above actual numbers. Then our third largest revenue line item, bridge transfer from general fund. This is directly correlated to our 50% of the total which is our total uh crossings. Uh we have our period budget and period actual and our variance column. Uh not going to go into each one but you also notice on the variance that we had a positive variance on October but moving November to February uh we have had negative variances as they compared to budget itself. uh the or on the chart on the right side as the budget to action comparison same numbers uh we've collected so far 38.7 of our budget of the uh transfer from uh bridge uh we are currently around 7% below budget January's uh report was at 929 negative so this is uh this is also increasing in that negative number to from 11 9 129,000 to 1 uh 1.3 million. The next chart has the same analysis based on the U as before we have the 21 to 26 actuals and as we look at the projections in green we're doing an average collection uh projection uh for bridge uh so that would that projection would take us to about 40.2 2 40.3 million compared to the 41.5 that we actually received last year. So we are looking at a small decrease in actual from last year to our projection this year in the tune of about $1.3 million. And this is this line item is budgeted at 43.3 million coming in from bridge. And this is kind of looking at the fine month. This is looking at the fine month. Uh we're looking at revenues compared to expenditures. Uh we have them by categories. We have taxes. And the take away from this is a period budget uh and period actual. 117.3 million is a budget for taxes. This includes property taxes, sales tax, and all the taxes that we have in the general fund. uh compared to the 165 uh.9 million that we have 117 is our largest generate revenue generating the general fund. Uh taxes overall are 2.7 below budget. Uh total number that we have as we look at all the different categories of revenues that the general fund has, we're at a negative 5.3 period budgetto period actual variance. On the good side, when we look at the expenditures, we have it broken down by personnel materials contractual transfers. We have period budget, period actually and period variance as well. You can see as as was mentioned 90 million.5 is a personnel cost, our largest cost out of the 122.6 million that we have. Uh the expenditures, we have a 87.1 actual periods for the five periods. So we do have a positive variance of 3.4. When we look at the bottom uh corner uh section totals for all our expenditures, we're at 6.3 positive. So when we look at the fivemon period, we have a million dollars in in the black positive numbers that we have at this point. So we're doing we're doing good. We're controlling the expenditures although some of the short part some of the variances that we have in the revenues are present. But I think the one of the takeaways here as we prepare in looking at our expenses and as we go look at our uh monies that we have available for expenses it it is clear to me that our bridge transfer the way it is for next year are limited because I don't have that growth going at this point. So we're looking at maybe the uh bridge transfer as it if it stays the same. It's probably going to be the same amount of last year based on this preliminary six month or fivemon period as well as our se sales tax. I would want to be conservative and not overstate those revenues at this point. As we progress I'll keep you updated on that. If I see any trends that we can push those two revenues up more we will do so. Uh I have if you don't have any questions here I have one more slide that I want to share with you because as I was working on those top three revenues property taxes number one uh wanted to share this with you because I as I'm doing our as we are doing our analysis the the bar chart on the left shows the M tax rate the maintenance and operation this is what runs general fund uh public safety parks uh public works uh We have the on the from the left going the 22 to 26 we have the tax rate 46 cents uh 44 41 39 to 37 these are the decreases in cents that we've have rounded to do the two decimals we we've lost two cents in fiscal year 23 24 3 cents 25 two cents and two cents last year in the current budget. This totals 9 cents that we've lost within this last years. And to put it in perspective and get an idea, the approximate revenues that we've lost with this 9 cents is approximately $25 million. It it it's it it is a significant amount that is tied into the cap that we have. So, and that's why it gets challenge more challenging every year because that growth is not keeping up with our expenditure growth. So, I I I wanted to share this one because it it kind of brings the light into the three line item the three revenue tops and this one it is it's very we need to keep reviewing this as we go as well. But the right side chart just shows both the combination of the uh interest in CP fund which is what we use to pay for debt service and then the MO and you can see also the the reduction in there. So any any questions on this slide and uh that concludes my update as to the revenues as I mentioned as as we now have the the revenues uh revenues were due from the department uh on the 23rd. So I am we are reviewing the revenues uh some of the revenues that the departments are pushing forward are actually less than what their original budget was. So one of the struggles that we have is even though I'm projecting with prelim very preliminary numbers that we have on property taxes I am projecting a there's going to be an increase uh in the two two and a half to three and a half million dollars but that's going to be offsetting some of the other revenue line items that departments are coming in with lower numbers and that's in the next couple of weeks I'm touching base with the departments and and actually pushing them or challenging them is know we're asking you to look at any potential new revenue revenue sources or the existing revenue sources because we cannot regress on any of those revenue sources. >> Can you hear me? >> Yeah, go ahead. >> Um, and I apologize that I didn't catch you at the previous slide with the property tax discussion, but this the state of Texas is considering reducing that cap to either no net revenue or a lower I think it's 1.2% or something like that rate or 1.5. Um, and It's it's going to make all of your numbers worse in the sense that the city will be limited on the revenues it can collect. And I know um I know the public is always very concerned of course about tax rate. Um I think these discussions help uh highlight the challenges that we have because service the providing services isn't doesn't reduce right that the money that we need to invest in providing even the same level of service increases because we do have inflation and if it if the state of Texas mandates that cities cannot grow their tax base more than 1.5% that won't even keep up with the cost of inflation at this rate. So, I um you know, I think there should be and I don't mean to call it a a not a doomsday scenario, but there's some some discussion in the future because I would assume this would be for the next following tax year. What happens if the state does come in with a much lower reduced rate? I >> contingency >> like a contingency plan or some type of discussion. I know no one wants to advocate for higher taxes, but if we could think of it maybe as a maintenance level so that our city services aren't dramatically reduced in response to what the state could propose or let people know so they can advocate for themselves. If the state does come in with this, then you need to be contacting, you know, legislators to talk about what the reduction in services mean. But in order for that to happen, they should be able to rely on the city to provide that information. >> Yes, definitely. C, >> thank you so much. Great job. Thank >> I think at this time we're going to bring the CIP presentation forward. >> Mr. Ether CIP or health. Yeah, whichever way you want to go. If you're if you're you're up and ready to go, council members, you want the CIP first before the health and benefits. >> Yes. Go ahead and do that. Good afternoon, Mayor. >> Afternoon, city council. For the record, everyone should have a package of this chair. We do. All right. Thank you. So, I'll start off with with the CA the CAP uh capital B plan establishes the framework uh used by the city of Lorettto to evaluate, prioritize, and deliver capital investments. The framework supports long-term uh infrastructure planning while aligning projects with available financial capacity and community priorities. The CIP serves as the city city's primary planning tool for major infrastructure, facility, and capital investments. So the capital improvement plan is a five-year strategic planning tool that helps us uh identify, evaluate and finance of our major capital project. Uh it's formally adopted by the the mayor and this city council. It's reviewed annually to state responsible to the community needs. Uh it's led by city management with active participation from engineering department, finance, budget and in collaboration with other uh city departments. This helps us uh have a clear assessment of of our of our local needs. It aligns with the community interest and long-term goals. Uh it promotes financial stability and enhances collaboration in city uh governance. Uh our CIP helps us you know move forward with uh acquisition uh construction renovation and major improvements of physical assets that provide long-term value and service to the community. So our our CIP uh planning so starting on on FY26 FY27 the city will maintain a 10-year capital improvement program planning horizon uh the CVIP will be updated annually as as previous years and adopted as part of our city budget process. So in years one through five uh financial aid program projects aligned with the adopted annual budget and then uh years six through 10 are our long-term projects guided for future investments uh in infrastructure. Uh our CF uh process calendar is is broken down into seven uh stages. First stage is CIP implementation, internal engagement and then project identification which is uh where we're at right now between the March uh the month of March and April and then we'll follow up with the staff review uh in in the latter part of April May to June and project evaluation uh July of budget workshop and then finally September will be adopt of the CIP book uh our CIP road So our first step is uh project identification. Uh they're based on operational needs and service demands. Uh city council direction uh strategic planning initiatives assess uh management data. Uh step two which is our our staff review uh it's about uh the physibility of the project uh preliminary costs uh identify potential funding source and operational impacts and then also the project readiness to be um let out for for construction and then our final step is the project evaluation evaluated on our criteria regulatory safety community impact alignment with strategic planning maintenance and operations uh economic development of funding availability and project readiness and timelines. Uh the caps are prioritizing to f five levels. So what we do is staff performs technical evaluation and priority ranking of capital projects while the mayor and the city council retain final authority to modify projects priorities based on policy direction uh community needs and uh financial uh capacity. So our first category is mandate uh anything legally required or essential for public health and safety. Uh obligated is commitments due to external secure funding or existing agreements. And then category three is high priority urgent for safety, infrastructure, reliability or economic stability. And then category four is maintenance of resourcing infrastructure. And then finally we have desiraables improves quality of life but not immediately essential. And then we we also break it down by by categories. We have uh eight categories which is uh mobility, infrastructure, public health and safety, utility infrastructure, culture and recreational, uh port Laredo, information technology, facilities improvements, neighborhood improvements. Then our project delivery framework. Uh the heart of first phase is the concept and evaluation. We define the scope establish preliminary cost estimates notification of potential funding sources and analyze any operate operational impacts. Our second phase is design and funding confirmation. So we do our engineering design permitting refine the cost estimate and then confirmation of project it's funded. And then finally we have the construction phase which is the procurement contracting and project implementation. And here we have some of the active projects that we have of the FY uh 26. And then working with with management and direction from council, we have some uh preliminary proposed projects for the uh FY27 which is a convention center, the port police substation, the tiny homes phase 2, the sports complex phase two, district recreational center, civics and performing arts center, secondary water initiative. Um, Pasalanka water storage, Walter Bridge expansion, the Columbia Bridge expansion, uh, citywide building improvements, Los President Avenue extension, right extension and great separation. These are very preliminary uh projects that we the list that we have as Mr. Espa mentioned last week. We finished our meetings with all the departments. So, in the coming weeks, we'll be compiling all all those requests from the departments and we'll have a more a more defined list from the request from the departments. >> Mayor May, >> um, thank you, Mr. Los Santos. um and and sorry to interrupt just a little bit, but I I want to thank you for the priority labels and the categories that you're putting forth because oftentimes when we have needs in the district and we're trying to um communicate those needs to the appropriate departments, it's difficult to know how to identify them, how to categorize them, how to uh translate the priority that we feel that exists in our district to some type of engineering language. that then we could find the the attention that it needs for evaluation. Um, when you're talking about these list of proposed projects and it's under review, so it's going to go through um and and get those label, you're going to look at them and then look at those labels and and see, you know, if it is mandated to desirable and then what category it fits under >> and and provide some type of valuation. Yes. >> And then will that come back to individual council members? That does does that come back through in in a council meeting? >> Comes back through a workshop, right? >> I would put it back through the entire council. I I I think yeah, once we once we have them identified again, you know, at the end of the day, we're going to prioritize and we're going to do what we can get done. But I think the whole nature of this thing is to make sure that it is developed properly in order to move it forward. So I would think that we would bring them all back to the the entire council. have no problem with letting the individual council members know on their district level items as well too. Uh but we really want to want to keep that because it's going to be council action that determines exactly the priority list. >> Well, and I do think it's helpful though to at that level when you're looking for funding sources because some of these will naturally fall into um our ability to contribute district priority funds. even if it's a a city um prioritized project, if it makes sense to tap into some of the funds for help in identifying those funding sources, then that conversation can start a little bit earlier, I would think. >> Thank you. >> Okay. Sure. And before we move on, I want to acknowledge council member for district 7 here for the record. >> Yes, mayor. That was that was the last slide of my presentation. Thank you very much. Mayor, can I just ask real quick and I'm I was listening to you back there. >> Um on this one through five timeline that we have, you know, we so sometime within the next two or three months, we are going to identify the projects that are um doable within one to five years and then and then put short-term and long-term goals to them. Right. >> Yes, sir. Uh obviously some of them uh require critical path schedule to to get them going ASAP. Uh and uh but the next time I guess coordinating between both we can have the the uh the funding mechanisms that are going to go behind them and and and how that's going to work out. >> Yeah. Yeah. And Mayor Pro Tim and council. Yeah. And so so the the whole idea about having the structure built the way it is is so that one we don't lose projects because a lot of a lot of great projects find their way into conversations but never make it onto the list and so then they never are able to move. The other thing that we have seen and we've had this conversation in in past meetings as well too is that we have projects that stall on the list and that generally it's because funding hasn't been set up to get them done as well either. And so the whole idea is that this three-year process as well too and the categories and everything is to make sure that there is a a life cycle of each one of these projects and then we then we get down to where we're at. We're we're anticipating approximately we we believe that we're going to be good with a $50 million bond issue again this this upcoming year. We're we're looking at PPFCOs and we're looking at the uh the tax notes as well too. But we we do believe that there will be about 50 million that we're going to be all to able to allocate. >> And well, I wanted to to break it down into that uh whether we can we can do it or not. What what projects are going to require some federal funds uh what requires uh uh grant monies uh things of that sort so that we can we can figure out why there so we can say okay this is why it's taking five years before it gets going. Certainly. >> And until we get the the full amount, we can't move on it. >> And yes, sir. And I and I think that goes back to council member Sigurero's comment as well, too, is that we're going to we're going to find gaps within the funding models, and that's where the grants come in very well for that. That's where district priority funds, we'll be actually able to help complement that as well, too, is that based upon what that gap is as far as what we have room for within the project and does it fit these categories and then moving it forward. The the hard part on the grants is sometimes we don't know where those grants are going to be until the season of and that's going to be the challenge I would just caution everybody on is that we'll we'll keep it in play as long as we can. But if if those funds don't close the gap, then we have a harder decision to make as to whether or not to to hold the project or move it forward with other cash. >> Sure. Go ahead. 50 million you're referring to there for capital improvement that's just from cos plus ppfos plus >> the uh >> last year it was about 80 >> yeah and Mr. Sparza is probably probably kicking me right now because he's trying to hold that number in check as well too. But we actually I believe that we did 50 40 to 50 million. We've been able to hold that very sustainable in the cos >> and so we believe that's there. Uh last year we were able to do ppfos and the tax notes and brought it up to about 80 million. I am hopeful for that but based upon my my earlier don't know exactly how we're going to balance out the budget. Those are those trade-offs that we're going to have to look at as as far as we go. So you can I in my mind I think we can we can almost be guaranteed that we're going to do at least the 40 to 50 million. It's whether or not we can actually do the other other pieces on top of that. >> I believe that's where we're at. So >> I have a question. >> Sure. Go ahead, >> Mr. Neb. Does that include um for the bridge expansions? Is that going to come out of that same one or are we going to bond out separately? >> No. And Mayor Prom and Council member No. So the bridge the bridges are out of a different revenue source and so that what I when I talk about the cos on the other side that is just a general obligation cos uh but both bridge expenses will be out of the bridge revenue side and we will be bonding for those uh either a 20 or a 30-year window. We're we're we're waiting to see. Our our financial advisor is working within those numbers trying to once we know the model of what we're seeking and how we're going to get there, then he's going to establish the financial plan accordingly as to how we can afford it. >> Mayor, >> yes. >> Can I ask? >> Go ahead. >> So, I think the strategy for the expansions should be focus on world trade. That's my that's my I think that's what we need first. World trade expansion. Can we cover that alone with just borrowing bonds from the bridge fund for for that one project? >> I I think we would have to look at that because our reserves in the bridge fund have are are are going down slowly uh based upon the expenditures that we currently have. I rather than to put a definite out there. I would rather >> you can answer that. >> I would I yeah I'd rather we can get the answer for that one. Now, the challenge we have is that because the presidential permits are five-year windows, >> right? >> We are focused on the the the construction of the World Trade Bridge, but we're supposed to go under construction of the Colombia a year later. Uh, and so that's that's going to be the challenge with focusing only on one bridge or the other because I we're and right now the expenditures that we have with all the consultants and the design and everything, we're actually using our cash right now that that the bridge has in order to cover those expenses. >> Mayor, >> so but when you're saying that we have five years to initiate the construction, right? >> It's it's the presidential permit requirement, right? And we were just approved like half a year ago for Colombia. >> We we were approved. Yeah. And then the year we one year we had the World Trade Bridge and then the next year before the end of that year we had the Colombia. So they we were able to get the Colombia permitted in December I think or November December of that that same year. World Trade was in the summer. So, right now we're kind of um like a year into the World Trade Permit, which I think that one is is nearing capacity. Um I don't think we need to start the Colombia one necessarily a year later. We have two years, possibly three. And I do agree that we need to project that out, but I think that if we have the B bonding capacity under that account, then we should include definitely include that and get that project started sooner than later. >> Yeah. And and our focus is on the world trade. I want to make sure that everybody understands our focus is there, but we do also we're also doing all that preliminary work. It's just behind because of the nature of when they're supposed to come to term, right? >> Yeah. >> All right. So, that is that all you got in you? That's it. >> Okay. >> Uh what else we have? Mr. Neim, if we could Yeah, let's let's move into the health insurance side. >> All right. council just just FYI this is one of the internal funds that we have the city has fleet has the uh risk has a health and benefits and the other funds we are moving forward with the budget process we don't have at this point any major issues or any thing that we want to bring to council's attention health benefits because it's one of the ones that we we are going to need some direction or at least we want to brief council as to how we're doing with that. So, >> one for myself and one for the mayor when he comes back. Thank you. >> Hello. Good afternoon. >> Good afternoon, honorable mayor and council. My name is Karen Thurkett. I am with the human resources department and with me today um to go over the presentation regarding our health and benefits insurance trends and our rate proposals is uh Natalie Hasket. She's part of our Gallagher consultant um group along with Brian Lopez uh who is our the financial analyst for Gallagher and then we also have our brokers which is Dina Certa and Blas Martinez. Um and in this presentation, um we're going to pro, uh go over certain key points. Um one of them going over what our current health plan financial trends are looking at. We're going to discuss our stop-loss cost trends. Uh review our medical and prescription claim performance and also present uh proposed plan design changes, proposed employee contribution adjustments. Um and then also some information regarding um advantages and challenges if you were to decide to go out for RFP uh proposals for our medical insurance. And with that, I'll go ahead and hand it over to Natalie so she can continue. >> Thank you, Carol. Good afternoon, Mayor Council Natalie Hask with Gallagher. So, as Carol mentioned, you know, we have a variety of topics to cover today, but we wanted to kind of start out by providing a financial overview um from fiscal year 23 um onto our proposal for fiscal year um 2627. Um I wanted to kind of draw your attention, you know, kind of line by line here, just kind of looking at starting with our opening balance, right? You can see that um it's just been steadily declining um over the fiscal years um with the starting about $9.2 million to now we're sitting at about a projected $ 1.9 million deficit. Um as far as the revenues um as although the revenues are growing modestly from about 44 million to 59.7 um reflecting an assumed 15% increase on rates. Uh while this is positive uh the growth the growth is relatively controlled. Um so if we go down to the total um available funds again even with the increased revenues um that total available fund begins to flatten and slightly decline um just due to um you know the reduced reduced starting balances that we're starting from for each fiscal year. U when we move to the expenditures um again starting with a $44.4 $4 million expenditure line in fiscal year 2324 and moving to a proposed or potential um of a 579 million. Um this is largely >> Yes, sir. I've got a question for you. So last year um our previous employee of ours that was standing there where you were told us to raise rates because we had to do it so much and it was going to balance our medical rate or where we're at financially and financial wise. You're telling us the same thing they told us last year. Raise it again and raise it again and raise it again and we're going to be okay. They've told us this for the last several years and we've put our employees to pay more and more towards their medical and to where at a point where their raises weren't even covering what their medical charges are now or their increases weren't they weren't seeing any any difference in their checks because it was going towards medical insurance. When does this end? It's every single year. We're in the same thing over and over again from Blue Cross and Blue Shield. And I understand, but we're a big group. Why don't we get better rates than what we're receiving? And when does it stop? And I would like to hear for our employees sake. When is this going to stop? Every year it's a 10, 20, 15% increase. It gets to a point where I I'll just leave it at that. Where does it stop? No, I I understand your passion in that and I I I too share that passion for all of my clients. Um I think you know we are faced with a challenge and I know last year I think the message was we need to do x y and z to become uh to a flat budget. Well we didn't correct me if I'm wrong Carol we did not actually take all of those steps that were recommended. We took a phased um approach for the rate p uh from a rate perspective um and flattened some of the um percentages that the city versus the employees. But we didn't actually make any plan design changes, nor did we increase the rates like we had recommended to try to um flatten that curve. >> But we did increase the rates for employees. Our employees paid the difference. And not to mention, they brought civilian employees to par with our CBA employees, which we didn't even discuss how on earth this lady come up with these numbers or whatever. She did it on her own. Granted, she's not here with us now, but fact of the matter is what happened then when they're telling me one thing last year and you're sitting here in the same place she as is or was and is telling me the same thing. Well, let's do this now. It's going to fix it. But you're here less than six months into the budget and you're telling me we need to do it again. >> I'm sorry, but it doesn't make any sense to me. Like I I want a long-term plan. Tell us what it's going to do and our employees can opt in or opt out, but to be doing this year in year in year out, 10 20% increases is absolutely ridiculous. There has to be a stop to this. We simply can't afford it anymore. Our employees can't afford this anymore. It's it's become something that the families need to choose between groceries and getting medical insurance. And then retirees, they're in an even worse position than our employees are because they're on a fixed budget. Our employees typically can work overtime, work different things, work different jobs, but our retirees can't. And I'm assuming you're going to be asking for the same thing for retirees, >> that is in the proposal. Yes. >> Yeah. >> Um, mayor. >> Yes. if we can um present if I do remember last year six months ago really or have you know um that there was a discussion you guys I don't know this would be nice if we could see the proposal from last year to because I do remember that you did recommend um more substantial uh even more substantial um insurance increases for the premiums and we um similar to council Gutierz concerns now. We had the same ones then and I think we didn't go as far as you were proposing and my understanding is this is a nationwide crisis um where healthcare is just getting out of control and it's been out of control um and until we have whether it's a public option um Medicare for all public option I mean as far as insurance companies are in the business of making profit insurance companies, they want to raise your premium and they want to give you less. And that's why we get 50% denials in a lot of cases. Sometimes insurance companies just have automatic denials or they have AI bots automatically denying claims because at the end of the day, we have a for-profit health care system that I wish um was different than it is. Um so my understanding is this is a nationwide crisis and um just getting more and more out of control. >> Um, so I'm guessing that's what you're going to say, but I guess to council Guuti's point is um, yeah, I mean, we didn't you're only like in one slide of your presentation, I understand, but I I do think that is from what I've seen and from the medical side, it's the ultimate issue um that we're dealing with and it's really tough. >> If I can. >> Yeah, go ahead. We um well last year we were talking about almost doubling the increase double the increase of what they actually got which was if they were paying $40 they were going to pay 80 every two weeks and that's where we kind of said that was way too much of an increase. And then you highlighted the fact that you had made proposals over the years that we didn't implement and we recognized the fact that those proposals were not communicated to us as a council as something to adopt. And so you're talking years of delayed implementation and recommendations and then asking us to hit our employees all at once with a huge increase. and that's where we all kind of agreed that it was not going to be acceptable. Um, you're going to ask us to do the same thing again and we're going to more than likely not want to do that. So we had also asked for creative ideas from the city to implement programs on how we can cut costs and increase better health for employees, things that they can do. Um to stop using certain facilities that were overcharging the account. Um, we had also implemented the HB HSA policy um because the recommendation was that we would see some cost savings there. Do you have all of these um can you give us a report on the effectiveness of all of these things that we've implemented? >> Um, council woman I may um we can definitely provide that data over to you. We have increased our um trainings and ourformational to our employees advising them where to what are is considered in network within our plan. Um we meet on a monthly basis with our local broker to go over our trends and we've also invited the two um unions to sit in those meetings so that they're also aware and understand the message that we have so that they can also um disseminate that information back over to to >> No, I I appreciate that and I I I know you all have done that and I think that's great. But do we have data on the effectiveness? Have we seen a reduction? Do we have the numbers to look at to see if any of these efforts have actually worked or if we're trending in the right direction? Because it's a $1.9 million deficit that are go are all of our employees are going to have to come up with and that's a lot of money for them. So, uh I'd like to see if any of these strategies have worked and maybe look at what options we have instead of just increasing premiums again because that's not saying that we're going to be able to I don't speak for the rest of council, but it's going to be hard for us to support doing that, especially especially with everything going on right now. >> And I know it's kind of >> I'm sorry. I know it's a little early right now because in the sense that we've been doing the education for several years to continue to promote our what our plan incorporates. Um I know that these talks now incorporating the unions. Um the data that we have is the data from last budget year. So we won't see more hardcore numbers until most likely until the next the next year where we'll have the true information from how our insurance has there been a decrease in regards to those areas where we're seeing that high cost. >> We could see a sixmonth report. >> We can definitely work on that. Yes. just are you I know you're going to probably talk about this but HMO versus PO obviously the HMO plans I'm guessing the premiums are quite a bit less than the PO monthly premium and >> I would imagine that the city in general prefers or would like to encourage more to to opt into the HMO plan as it's um you end up having that gatekeeper from the from a from a primary care perspective obviously me as a primary care physician I I never deni if a patient wants to go see a specialist, I would never tell them if they really want to see the specialist, I would never personally um deny that patient that. that I know there are some primary care physicians that take that gatekeeper role in my opinion a little too seriously and sometime deny patients um that specialist access which yes primary care physicians should educate patients about when they really need to see a specialist but you know just denying them for something if they just really really want to get something checked if they they know their body better than anybody else they know something's wrong they want to get it checked like So, I don't know if that's the reason why patients are or employees are choosing not to do the HMO because there's that's a culture in our community with primary care physicians. Um, I hope that's not the case. But I do feel if we could educate employees and even out outreach with the primary care uh physicians that um the HMO plans could be a decent option because from my understanding nearly all of the specialists in Laredo are in network. That's the other thing about HMO plans is you have to go to an in network primary care or specialist. But in Laredo almost every specialist is in network of blue cross. That is correct. >> So there's no issue with that from an access. The only reason an employee may not like an HMO plan I think is getting that referral from their PCP in a timely manner >> or at all. Right. So I can understand that but um that is something I feel that could save a lot of money um just for the discussion. >> Yeah. >> Yeah. >> Well yeah and thank you council member Pettis. I know also uh and King uh I know this is a nationwide uh crisis but I'm sure other uh many municipalities were planning uh for for planning yearly for this and I know uh the consultant was here last year and stated that she had been consulting our our HR director uh precoid or or more than five years ago and the city never acted. Uh I guess now that we have more stability and consistency and just making these adjustments is not going to be easy. >> Great. So um you know you had mentioned yes the health the cost of healthcare is rising. Um there are a few reasons why we're seeing some increases specifically to the city of Laredo. um you know our high-cost claimments actually increased um due to you know their diagnostic state where they are in their treatment um that was actually about 34.5% of our spend for 2425 or your large claimants and we'll go into a little bit more about them in just a little bit. Another issue that is specifically hurting Texas are our freestanding ER utilization. Um, Texas is one of, I think, four or five states that allow freestanding ERS. Um, and because of some of the f federal legislation, these freestanding ERS are often now charging more when they're winning from the independent dispute resolution process than it was actually build. And so, you can see we had an increase of just those providers, those freestanding ERS not affiliated with a hospital network, um, was $4.6 6 million of your spend last year. The year prior it was only 1.2. And this is a trend we're seeing around Texas. >> Fair. >> Yes. I have a question about about this in particular. Um I thought those claims were denied automatically. >> Not because of >> So we cover them. >> You cover them. And the kicker is because they're an emergency room, you have to cover them. they have to be paid and considered in network because of emergency back when the ACA was implemented. Now, back in 2022, I think I have my ears right, um the no surprise act came out where our members could not be balanced build. And so, where that law was you was essentially developed to protect the members, what has happened is these freestanding ERS that are allowed in about five states in te and Texas, the great state of Texas being one. Sure. Um they are taking advantage of that. you'll notice they're popping up everywhere and they're backed by um uh private equity firms because they're money generators. So, what's happening is where we used to see and and the HR team was probably going to see this as they continue to meet with Blue Cross. Where we used to have a key cost driver of just syphil and and flu and and and things like that. Those weren't considered emergent in nature. Now, you will see a spike in respiratory that is considered emergent. So, where these freestanding ERS are now coding all of their claims as emergent as part of the no surprises act, they have to be paid and you can't charge them a different co-pay >> and there's no way to get around it. >> And there's no way and there's no way to get around it and they are not charging the member. We have found they are not charging the member. So, where you have you can put a $1,400 co-pay on your ER. So, members are not going to see it because it's free healthare now. I'm gonna I'm gonna go there because it's free and they see me any time of the day. >> All right. I might want to comment a little bit on that. We see that in our practice. >> We have patient that we see with the same diagnosis as a freestanding emergency room like or rhinitis or cold. >> In our practice is not considered an emergency. In theirs, it is. And it's the same diagnosis. So I know the insurance companies have the ability to give a pre pre uh existing u oration pre-authorization you call it. >> I think that that would be beneficial with the insurance company or your group to determine what is an emergency or not. If somebody comes in with a heat rash or something simple like that, come on. That's not an emergency. And it's not an emergency in our clinic. How can it be an emergency in their clinic? So that I think has to be done on your side of the of the insurance companies. >> Yep. So I will comment on that. That that that would be my method right too. However, part of the ACA act was prudent lay person. So if I think I'm having a heart attack but it ends up being indigestion, I will win that. >> Well, if I think I'm having a stroke and all I have is a little sore in my nose, >> right? >> I mean, >> and and that's what's happening. >> There has to be some prudency. There has to be some delineation >> and the patient can't make that determination. >> So if the patient comes in, I have a stroke and all they have is a little fever blister, they can be told it's a fever blister won't be covered. >> So I mean I think you have some discrepancy as an insurance company to to look more into that. >> Good afternoon. Tina Sa with Loudell Insurance. Just one very quick comment. Our current legislature is not in session right now, but you have the ability to reach out to our elected representatives, not just those that are representatives in Laredo, but across the state. These decisions are made at the state and national level and then they're trickling down to you at the council level having to make a decision about the claims that the employees are incurring. And I just don't know if there is enough push back to our elected representatives or if the push back balances what they're getting from the huge hospital corporations, the huge pharmaceuticals. I mean, I realize you can't fly them in their jets to Las Vegas and uh do whatever fun things they they want to do, but maybe I say as a citizen of Laredo and as somebody in the industry, if you folks will help push back, that might begin to move the needle a little bit because a lot of what's impacting the city is the huge increase in the actual cost of claims, whether it's charging more for a piece of paper or the wonderful examples you two doctors just gave of I'm going to use the word abuse because I'm not smart enough to think of a softer term but it doesn't seem fair to me that if I go to your your office with a sinus infection I don't know what you're reimbured but probably 60 bucks max but if I go to the free standing ER and they write it up as possible, I don't know, bronchitis or life-threatening condition that they get thousands of dollars. I mean, there's a huge injustice, but I'm on my little soap box, but that's one of the things that I I tell many of you when I see you individually, >> we need you to push back. >> Ma, wouldn't that be considered fraud as far as the if they're saying that because at the end of the day, a doctor's responsibility and you gentlemen correct me if I'm incorrect, but they're sworn to take care of the patient and I'm assuming when they're going to charge the insurance company, whoever they hire to do their billing, I mean, they just can't be lying on forms like that. That that's that's it's fraud. There's no other way to put it. Councilman Gutierrez, that's a word I would use also, but I guess we've created a system of laws that have all these loopholes that people find a way through. There are these wonderful, I know the doctors are aware of them, seminars that people can go to at fantastic resorts where they teach them how to upcode. They teach them all of the tools of the trade. You all are self-funded. The beauty of being self-funded is that you're paying for the claims that your employees actually incurred. We have many clients that are actually uh fully insured, meaning that the insurance companies pay for everything and they are facing this has been the worst year for renewals ever. We had one group where I almost cried because we had to tell them their rates were going up 40%. They said, "How how are we supposed to provide insurance for our employees when the rates are going up 40%." And they're they're going up 40%. Not just because their group is particularly uh a particularly high utilizer, but because the pool that they're in is getting further and further diluted. And this is a good time of year if you have a swim swimming pool to think of what a pool looks like, especially if you have an oak tree anywhere nearby. You wake up in the morning and it's green because all that junk flies in there. As the costs go up, fewer and fewer healthy people are participating and more and more unhealthy people are staying in the plan. The city, you get to set your rates. If you want to tell yourselves that the rates are two bucks, you can tell yourself that the rates are two bucks. But at the end of every Monday, am I right? That that's when that's when the bill is due to the insurance company, you have to pay whatever your employees incurred and Blue Cross paid on your behalf or whichever insurance company you're using incurs on your behalf the previous week. So, you can I the example I've been using is is going to the gas station. If you drive a Suburban, which thank God I don't drive one anymore, but if you drive a Suburban and you've decided you're going to pay $50 for a of a tank of gas, you walk into Stripes and say, "I'm paying $50 for a tank of gas." Are you going to get it? >> You're not going to get a full tank of gas. And if you already filled the full tank of gas and you're only going to pay $50, you might go away for a ride, but it's not going to be in in your own car. It's going to be in the back of a police car. So, it's we're just in this really horrible crisis moment that all these different little things have filtered down back to the swimming pool that my neighbor's oak tree. It's all in my swimming pool. It's all in your swimming pool. But I'm going to give credit where credit is due because Gallagher and uh the the HR department have put together a fantastic uh presentation for you. They're really going to walk it through. I hear you. The frustration level is really high. It's high across the country. Each one of you have a very valid position. It's you you're spot on. But it doesn't change the fact that your highcost claimants their claims are up 34 and a half% and what was a high-cost claimment 10 years ago my doctors well sorry Dr. Keane but Dr. Trevino will definitely remember that what was a high-cost claimment 10 years ago pales into what it is today. We are seeing people with claims of $2 million. Whereas, what was it 15 years ago? 10, >> we had a limit of a million dollars. >> We had a case here at the city where we had to request a special exception to cover somebody's treatment that exhausted at one the person exhausted at $1.2 million. And now that's in an a calendar year. and resets the following. So, it's just a bad situation. >> Mayor, may I? >> But again, they've put together a phenomenal presentation. I would encourage you that let's look at it all and then come back and we'll we'll do everything we can to fight for you and find a way to address this. But at some point, some council, whether it's you or a future council, is going to have to address the can that keeps getting kicked down the road. Um, and that being said, the city of Laredo gets gold stars because your premiums that you get to set are as close to the insurance companies recommended and the consultants recommended as anybody in South Texas. So you are the A student in this scenario, but it's still a very difficult situation. >> We would like to take a closer look at that and I think I would have some inside information that would help. I mean because we'll work at that, >> right? >> I mean a lot of doctors can't go against that. So all they have to do is change the shingle and put freestanding ER and that's it. That solves everything. But that's not the right thing to do. So we can we can work on on possible solutions. >> Mayor man. >> Yes. Go ahead. >> I I um and and thank you so much for giving credit to the city of Laredo. I I do think we take seriously our responsibility to maintaining health coverage for all our employees. And so we do weigh these decisions very carefully. But I do want to build on on what the mayor has suggested and form a motion, a directive so that city management can begin to develop a position paper and some advocacy so that we can be ready for this next legislative session so that we can be at the forefront because if we are feeling these effects and we know that in this current climate they're only getting worse. We heard that this Republican uh nationally the Republican legislature didn't um allow for the ACA health sub subsidies to continue. That puts pressure just like Miss Seda was saying that healthy people leave the system so that it's only unhealthy people or more unhealthy people who are left and it just creates this pressure on rates. So if we should take that that uh policy advocacy seriously at our state legislature and look to identify the problems that are specific to Texas, specific to us and advocate that they change. We have a great working relationship with our two house representatives and of course our senator uh the dean senator Safarini who is a wonderful partner in these serious issues and with the expertise that we have with the mayor and and Dr. especially we if we can become that advocate at the state level. So that that is my motion. >> Second. >> Any second? >> Second. >> Second. All in favor? >> I oppose. Motion pass. >> Thank you. >> Thank you. >> So going back to the last two reasons for the key cost drivers for the city of Laredo. Um growth in cancer prevalence. We can all think COVID um a little bit. We're still seeing those downstream effects of COVID where you know members stayed out of the doctor and we just haven't we're just now starting to get comfortable returning right and so where we used to catch cancers maybe stage one maybe two now we're you know catching much later in stage three and four and so the the treatment is much more costly aggressive and you know we're seeing that um and then again rising cardiovascular and metabolic health costs um I think the team is kind of working on communications and how can we, you know, how can we um try to prevent some of this? It's really prevention on the front end. Um, so touching on stop-loss, as a reminder, stop-loss, the city has stop-loss kind of reinsurance to protect you from some of those large claimments um that we were just discussing. Um, as a reminder, your threshold, what we call threshold, is $300,000. So any one member um if they accumulate more than $300,000 in medical and pharmacy spend in the year, the city stops paying those and the reinsurer reinsurer in this case Bluec Cross does pick up the remainder of those claims. However, the more they cover obviously the higher our renewals are um from fiscal year. Um so we can see just taking a historical look back um the green is fiscal year 20 to 21. you had seven high-cost claimments, your reimbursement was $3.3 million that year, your highest year. Um, and then so on and so forth. We can see that fiscal year 2425, we had 11 high-cost claimments, but their total of reimbursement was 1.4. But remember, we still have 11 claimments and more behind them that are getting close to that 300. So, because just because we didn't get a reimbursement doesn't mean that we still had a large population that had, you know, to $250,000 worth of claims. And so, um, as a renewal increase, we're projecting that the increase is about 13 and a half%. And that's a fixed cost that the city pays. Um, I know we spent quite a quite a um time on the freestanding ER, but wanted to give you a little bit more clarity into where those dollars are coming from and what subsets of your population are the highest utilizers. Now, I will say you are not an anomaly as far as my city clients where fire and police are much higher because what is happening is these freestanding ERs are coming to um different events and they're bringing Chick-fil-A and they'll give you a blanket and come on in and let me be your PCP. So, they uh same with our district clients, our teachers. They're promoting that because they can get in front of a large population of your employees. Um so you can see we already kind of talked about in fiscal year 23 um 24 1.2 and then um you know right now 2425 we jumped four 44.6 six million. Yes, there were more visits, but not that many to attribute to those dollar costs, right? And so, um, we kind of touched on the difference between a PCP or an urgent care visit versus some of these freestanding. And remember, if they don't get the amount they want, they are disputing that and sometimes getting more than the build charges. So, it's a it's it's a problem. >> Yeah. The problem with those PCPs, they don't make rounds at the hospital, >> right? Exactly. Exactly. They're not your PC >> and you have to make an appointment. >> Exactly. They're just your outpatient PCP. >> Go ahead. >> Um I I I kind of feel like we're spending a lot of time talking. Uh I understand the concerns. However, they do provide a service that people are using, right? And that issue here is not that they're bad or whatever. It's that they provide a service. However, it's costing us a lot of money for them to go to that provider, right? So whatever practices they have or whatever like I don't think that's really for us to judge here today but I think we need a uh plan to come up with a plan other than legislative you know initiatives which those take time which we can do but is there something we can do to restrict I understand we've asked the question but there has to be a way for us to maybe offer offer two different insurance plans and this one doesn't cover it but this one does. If there's anything that we can do, I'd like to hear solutions for how to tackle this problem just because you know I don't their business and I don't like to you know >> it's I think we should just address it. >> Yes, absolutely. >> I hear you. Mayor man, >> I I do have a question on the the freestanding ERS. You you said that the costs are usually $13,000 per visit compared to about 383 for the same condition at a different facility. How much of that cost is borne by the person who goes in? Is it fully accepted by the insurance that the insurance bears the entire cost of that? The city is very Yes. Correct. Because they're supposed to be collecting a co-pay or co- insurance if they have the high deductible versus the PP or HMO, but we have found that they are not. So, it's a further incentive for the members to go. >> That's a that's a really big thing is because I believe the co-pay for an ER co-pay is supposed to what do we what is our 200? >> 300 300 >> 300 >> 300. So in theory, in theory, when an employee goes to one of these freestanding ERs, they should be spend putting out $300 co-pay. >> Correct. >> But they're not charging them. >> Correct. >> My understanding is that's not allowed. Like my understanding is that you do like if someone comes into your family practice and they're your friend or distant relative and you can't just ah we're not going to charge them a co. Right. Correct. >> So why would you be able to do that? Why would the ERS be able to not charge that $300 copay? That's obviously >> a barrier. I mean, the the co-pay for primary care >> is what? Zero, >> I think it's zero. >> It's actually zero for Okay. So, it's $0 for a primary care co-pay under our plan. $300 co-ay for ER, >> which in theory would be the barrier to make people think twice about going to the ER >> for something that is just a little cold. >> But there's freestanding ERs not charging the copay. >> Correct. >> Is that legal? >> Um >> to not charge the copay. Is that legal? >> I have two schools of thought on that. But again, they have found a loophole. And not to beat them up, I hear you. They they provide the citizens a a service because it's an emergency. You you you have to see a patient even if they can't pay. That's >> But are they billing the copay? Are they sending them a bill for the copay? >> They are not. >> Well, is there a way for us? >> Or if they are, they're not collecting on it. >> So they do a bill and paper and they throw it in the trash. >> Could be. I've seen it twice. I've seen it both ways. >> Yes. Go ahead. Can't we take some control over our plan and implement some kind of something where it's like if you're using our plan to do this then we will charge the $300 to reimburse our plan. >> Funny you asked that. Um I was just at the city of San Antonio and they asked the same thing. Um I have a compliance team looking into that and so I can I'll be happy to pass that um response on. Um, I just think the o the overall message is it's all emergency and you cannot be denied and they have to be covered. And so if that's where we're faced with can we do this, can we do that? Yes, I understand the out out of the box thinking and and I want to find a solution. We're just held harmless by some of those legislative laws. >> Mayor from May. >> Yes. Okay. >> Well, let me kind of I guess there's a reason I think people do this and it's because it's a lot easier and convenient. It's hard to get appointments with your doctor sometimes and um you get your medicine quickly. You take care of I mean your kid wakes up with a you know a fever or they're coughing a lot. Their their ear is hurting. It's a Saturday. It's a Sunday. Your doctor's not working. So you go in there and you get your kid treated. That's why a lot of people do it. I don't think there's any ill intent behind this. I think it's more of a matter of convenience or something. So, if there's a way that we can, you know, outshine or or or tackle this offering with some other offering, especially on the weekends, right, and in the evenings. >> Um, sometimes your kid is just like acting funny and you want to take them and get them checked because you never know these days, right? >> And that's I think what a lot of families or probably our employees go through. And so, they may don't realize that this is and they are used to, oh, just go in there, it doesn't cost you anything. So we as a as an organization have to change the culture in the way that people and we talked about this last time we talked about rates. So again what have we done to change and shift and what strides have we taken and is there any evidence to show that the number of usage the the usage has just decreased because then that means we haven't done anything. We just keep identifying a problem and we don't and we're not coming to to with solutions for that problem and that's not going to help us today or tomorrow or five years from now. >> One of the things the city provides for the employees is a monthly training session and that's one of the ways that they earn their wellness points and we do talk about the emergency room usage at every single training. Even if the training is about life insurance, we find a way to talk about appropriate use of your uh emergency rooms, your primary care physician. We have the reports and the data that shows how many people go in, for example, for their annual exams, etc. And those are all points that the city uses to develop those wellness points that then result in rewards. So, it's a constant I think it's one of those messages that you have to say over and over again. But I was a nervous mom and I know what it's like to wake up with a crooy kid in the middle of the night and rush to the emergency room only to find that the night air somehow stopped the cough. But I didn't know that when I was a young mom. I ran into the emergency room. So, it's about access. Council member Pettis, you're absolutely right. It's about having access to providers whether it's primary care, whether it's being comfortable with tele medicine. It it's that panicky feeling that especially as parents, we feel that. And so we have a lot of empathy for that. We try to consistently give that that message over and over again to the audiences that attend those sessions. the the way the plan has to pay is mandated by the the >> federal or state >> by the federal government. The federal government says an emergency has to be covered the same in network as it is out of network. So whether you go to Laredo Medical Center, and I'm sorry, I don't mean to pick on them, but I every time I walk by that emergency room, it's teeming with people. You So you go there and they're in network and you're going to wait 3 hours before your kid gets seen or you go into the urgent care or the the freestanding ER where your child is seen within minutes. The cost is the same to the patient or to the parent. >> The cost is different to the city. It it and we're we're a little hamstrung. I appreciate trying to find something creative, but the government has said this is how you have to do it. You have to cover them exactly the same. And one of the things that she just mentioned a second ago was about from a lay person's perspective. That means yours and mine at 3:00 in the morning with that crooppy child, what we think is an emergency, not what Dr. Trevinoho with his many years of practice knows is an emergency. And it was designed to protect the patient, but there's always a a cost involved. But I know that everybody is committed to trying to find creative solutions, but this is still a touch point and and it's going to stay that way for a while until we until we find those solutions. >> Mayor, I have a question. >> When you're having these seminars with the employees, is it like somebody talking to them through a screen virtual >> oneonone? Is management participating in any of these? Is this PIO participating or or marketing talking to the employees Mr. them like cuz I understand what you're trying to do educate but I mean let's face it seminars and these types of discussions we got a lot of things on our minds right so um I think we need a little bit more of a >> we can do >> of a campaign yes we need a campaign >> and it's not to tell employees you know we don't want you to you know use services that are available to you in the case of an emergency, but we also want to be mindful because if not, we're going to end up having to raise rates. And I think that's the point, right? I don't mind paying peace for peace of mind if it's my child or whatever, but the problem is that um if it could wait a day and it could cost a lot less. Um I just don't know how to communicate that message if like you said, all things being equal, they get an instant visit versus having to wait. So maybe the city needs to have uh s um evening clinics and weekend clinics available. If it costs us a million dollars to implement that, we still end up saving 3 million. Well, we we we have our I know that there's an item on the agenda for the upcoming council meeting regarding the afterhour services. Um but that is an option that you know employees are advised that they can use the afterhour services that is going to be free for them. um along with the in network providers. So, >> well, mayor if I may. >> Yes. Go ahead. >> You're talking about one clinic, right? That's the afterare or you're talking about a whole program. >> It's it's only one clinic that's >> Well, that's the problem is that you have >> having multiple. >> Well, we need to have I mean, if there's 20 freestanding ERs and then it's and they're by their by their homes, maybe we need to have a few other satellite locations for so our our employees can go in there and especially for preventive stuff. And we also have our in network ERS like the ones from doctors and that have locations in North Central and South Florida that are considered in network providers. But we can we can build up a better campaign to promote those um areas so that employees know where to >> Well, that's the only way because we're having the same conversation we had last year. We're going to have the same conversation next year and it's just going to be the same thing all over again. And if we're talking about changing legislation, that stuff takes a lot of time in years. It doesn't happen overnight. So that's not a quick fix. The quicker fix is something else. >> And one more thing, do you have tele medicine? >> Yes, we do. We have it in all our plans and in our PO and HMO plan. Mistake is absolutely free to use the uh MD life. Obviously, there is a a charge for the ones under the high deductible plan, but it's a very minimal amount. um and it's available 24/7 along with our nurse hotline that's also available 247 and we do those services. We have seen a bit of an increase on the on the MD life um which is a good thing because again we're educating our employees that these are services that are available for you and they're included within your benefit um plan >> English and in English and Spanish. >> Okay, perfect. If I may, um, I noticed from the fiscal year 24 to 25, the visits only went up 200 and something, but the actual payout went up by three million. So, it went from $1,700 an ER visit for the freestanding ERS to $5,000 a visit. What's the reason for that almost triple increase per visit? >> Yes. So this you're not the first one to ask this question. Um what has happened is that was the flip when these and I and I'm sorry to the freestanding ERS. Um that was that is when they started making the visits what we call um NSA eligible meaning they are urgent care claims in nature. So they flipped those diagnosis sees to then go and get more money through the independent uh dispute resolution. That's why >> wow >> it just kind of started happening in the last >> So this is a in the last year that's changed. I mean, so we're going from 1,700 a visit to $5,000 a visit um for free. Um and then but on here on the paper it says approximately $13,000 u >> what's per visit. So that's that math. >> I mean it's higher than what I'm quickly averaging here. Where's that number coming from? >> Oh, okay. So, uh, Brian is mentioning that that could just be, uh, the number that we pulled for those that are going to that independent, uh, resolution where they're getting more than the $5,000. So, on average, they're they're achieving often times >> costing us the five and they get the rest from from where >> that's it. >> Oh, >> and you're charged a fee on top of that. >> Okay. >> Mayor, if I may, >> go ahead. >> Are we allowed to offer incentives for not using C providers like let's say I don't know you did not use something like that you get a day off this year I mean we have wellness stuff is that is that optional is that even >> like a report card sort of >> I guess I mean it's like okay I get three wellness days if I do this and then if I don't go to a freestanding ER for a non-emergency I get an additional day off or something >> I I would think just from my opinion it would be we'd have to be careful of PHI and HIPPA, >> right? >> Um but administratively it would probably be a city. >> I don't know. I'm just trying to think of some way because >> No, I I mean again the service is there for people that need it and I'm sure they've helped save a lot of sick patients. But we're trying to figure out how to afford this plan. So that's why we're asking these questions. >> Right. >> Okay. So, this slide just illustrates some of the medical trends um that we're talking about here. And we're going to have subsequent slides that kind of back into some of these numbers. Um but essentially between fiscal year 2324 and 2425, we saw a $7.6 million increase. Um if we do nothing, we're looking at a projected $36.4 million. Um so another three and a $3.7 million increase. Um, now we have some plans and some proposals to show you later on in the presentation that will drive that number down. And I'll let Brian touch more on the financial uh perspective, but just kind of wanted um to set the stage here. Um, I won't go through this in detail just because it is um PHI, but I wanted to give you a kind of a look uh when we're talking about our large claimments. Uh these are the top 10 um from February 25 to January 26. So not quite the full fiscal year, right? Um this is where they're sitting in their claim status. So we have some very high claims. Um obviously claimment um nine up the stop-loss reinsurance has already kicked in, but many of them likely will continue with disease states that will take us into the next year. cancers, um you know, things that are that are very high in in cost. Um some of these are likely NICU babies. Hopefully, they are improving and and we won't see them again next year. But you can kind of count on at least, you know, 20 30% of them remaining on your on your claims. >> Um I'm going to let Brian um touch on these slides. >> Hi. Um again, I'm Brian Lopez with Gallagher. I focus more on the financial and actuarial side of our consulting. So obviously our projections have a lot to do with that. Um, this here particularly is just looking at the medical and pharmacy side of things. So, I know we had some fund balance discussions earlier, but that was inclusive of a lot of the other benefits that we offer. Think dental, vision, life insurance, and all that. So, this is specifically focusing on the medical and pharmacy piece of it. Um, so these are Gallagher's projections just to kind of give you information of how we're getting to the numbers that we're projecting for year-over-year. Um that first column there to the left is what we have set budget for for just medical and pharmacy. So you can see that at the bottom if you care to look at it in a per employee per month basis, it's there on an annualized basis as well. But the interpretation there on the annual total gross cost is that with everything combined, what the city contributes, what the employees contribute, the total gross budget for medical and pharmacy is right around $39 million. So that's what that first column is. To the right of that is what we would call a reforcast. So obviously we've set budget for this current fiscal year and for the current plan year as well. But now we have a few months of data that we can help to inform us of where do we expect to end this current year relative to our budget. So that's what that middle column is is a reforcast to where we expect to end as far as September 30th of 2026. The top section looks at our variable costs. So what we're projecting for medical pharmacy obviously for the plan design and migration savings for the current plan year be zero because we're already in this plan year. We don't anticipate any changes before the plan year ends. Below that, the sections for per employee per month fixed cost. So what we pay Blue Cross to administer our plan, what we pay for our reinsurance on an individual and an aggregate basis. APR is an additional program that we pay for for Blue Cross Blue Shield to help us to handle some of those out of network claims and we pay them a small fee for that. Um what I'll point out is the administrative fee is a large negative number because that also includes what the plan recoups in pharmacy rebates. So, as it stands currently, you guys are getting back more in pharmacy rebates than what we're actually paying in administrative costs, which is why it's that large negative number for the reforcast for this year. >> Uh, that would be the administrative fee line item. >> These are on a per employee per month basis. So, we try and put our projections to account for changes in enrollment. Obviously, as more people get on the plan, that's more potential cost and claims as well. So when we run our projections, these numbers obviously at the end we'll add them all up to a total annualized number, but these right here are on a per employee per month basis. >> Yes. >> So you're saying we get $100 per employee into our plan like as savings surplus. >> Yes, it's a credit to your account that you receive from pharmacy manufacturers for certain specialty medications. Part of that is the actual amount is closer to about 150 that we get back, but we have to pay Blue Cross to administer the plan and that runs about $40 to $50 per employee per month. So combining those together, it is a credit to the plan that we are getting back uh to represent. >> Is there a way to do it where you don't have to pay Blue Cross? >> Uh no, currently Blue Cross is our administrator. We're under contract for >> even for this even for this rebate. >> Yes. So we are in under contract with them for another year. We're on the second of three years and then after the third year we could go out for uh proposals to to see how the market is. Um we do have the ability to extend the contract for uh two one more year terms with Blue Cross, but we are obligated to them for the next three years. >> What I'm asking is and you're speaking specifically about administering the prescription rebate program or you're speaking about administering Blue Cross for the entire policy for >> the whole for the whole. >> No, no. I'm talking about is there a way to split this off from what they do for us and say have someone else handle getting I mean why would we need to pay them $4 $40 per patient per month just to collect a rebate? Like why is >> No, no, no. Excuse me. No, it's you you pay Blue Cross a monthly administrative fee to to pay for the cost of administering your plan. That's paying the claims, that's having the computer systems in place, that's having the prior authorization structures in place, that's paying for the representatives that provide the service directly to uh both Gallagher, of course, us, and the HR department. It's for all of the the cost of doing business. >> So, it's $40 per person per month to do that. >> Yes. But because right now they just said that the prescription rebate was more like 150 minus that. So is that how it's being paid from there? >> So the prescription rebate is in order for medications to make it onto Blue Cross uh their preferred list of medications. >> They have to the pharmaceutical companies give the insurance companies an incentive. We want to be on like a coupon if you would would. >> So that coupon aggregates into a rebate that Blue Cross gives direct as a pass through to the city. So would the city be able to go out and negotiate for example with Fizer for a rebate equivalent to what Blue Cross gets? No. because Blue Cross's uh PBM uh pharmacy benefit manager works across the country right? >> And so based on all those millions and millions of people, that's how they get the rebate. But Blue Cross, >> they currently do a pass through and the admin fee is actually like $56. So they give this credit to the city that helps offset that cost and then at the end of the year they settle up and if the city's owed more and some years we've gotten >> we we keep the credit. In other words, sometimes they over give us on not overgives but they give us a credit upfront and if we do if our plan is working very well, they don't ask us to reimburse them back. They they gave it as a credit that they initially upfront gave over to us. And that's all part of the fact that Bluec Cross is a member-owned company. It's a mutual company. So each one of you that are covered by Blue Cross Blue Shield as a policy holder actually are an owner. So it's kind of like another big mutual company that many of us are familiar with is USAA where you get that check back every once in a while or credit on your >> credit union. >> Yeah, exactly. >> Great. Great example. If I may blast Martinez for the record, Blue Cross Blue Shield through their uh PBM, their pharmacy benefit manager, they do offer these uh pharmacy rebates. There's other companies and other PBMs that don't do that. In other words, they keep the rebates or whatever, but with a partnership or with a contract that you all have with Blue Cross Blue Shield, those rebate dollars come back to you, the members. So, that's something to keep in mind. >> Thank you. >> Yes. Go ahead. And this I understand what I'm about to go through may not be for this year because we're obviously talking about costs and everything. A couple years ago I asked you guys about adding you know GLP1s for obesity. Um the costs were for WGO for example one of the main two for people without diabetes but who have obesity. The cost was like 1,300 a month at that time. Just a few just a few weeks ago, months ago, it was announced that in January of 2027, that's going to be cut in half, which is still way too expensive, $675 a month. I do have a lot of patients who see their friends and family that maybe work for the county or work at TAMU and they cover these medications. Um and with the decrease the 50% decrease um are you you know you work Gallagher you work with other um cities and entities are you seeing more integration or more at least buyin options for these medications um I'm not necessarily asking for this year I'm just asking the outlook for something that could be done where it doesn't cost the city as much um the patient can have some skin in the game but um also have some coverage We um we aren't necessarily seeing them add the coverage to the formulary because of not just WGO but uh you know Zbound and some others that are are more costly. What we are seeing um is some programs where you're implementing in the cities, counties, districts where they would give essentially a bucket of money to the member to help them buy them direct from the manufacturer because as you heard there's some reform there. uh in the transparency of pharmacy. I know a lot of that's not going to come to fruition until 2030 and then we'll have a a changeover. So, you know, don't know if that's going to happen, but I do know now there is some direct access from a member to a manufacturer. Um and they do get the first three months at a very reasonable cost and then it does increase. But in order to help the member get those medications because there are proven studies that they are helping, right? They're reducing coorbidities with with but keeping it off the plan. are going to give you3 $400 whatever that is in a HA fund and they can use those dollars to help us pay for >> because that's my other argument in the long term our employees that are with us 20 to 30 years >> these medications are reducing cardiovascular disease heart disease kidney disease diabetes which saves the city the self-funded in the long run now getting proof that the savings you know it's hard because it's relatively newer medications but I mean Dr. Dr. Trevino and I probably see this in our practices where we see patients biomarkers and everything going down. We see that it's improving their quality of life and making them more productive, >> you know, citizens in society. So that's I and I just feel like that will translate to more productive workforce, less sick workforce, less, you know, less costly employee for the long run. But just something I would like y'all to keep us in mind um for the long run. you know, maybe not this year, but next year if you see it as a financial viability, um would like to consider it in the future. >> Definitely a conversation we'll keep going. >> Go ahead. Um, I think what jumps out and and I see that the next page will will describe it a little bit better, but what jumps out is that in this budget year we're projected to be over $6 million almost $7 million in the red for pharmaceutical costs. Is it is it or is it >> for medical and pharmacy together? >> So for both? >> Yes. >> So we're already running in the red. >> That's correct. >> And and you're going to tell us how to not be in the red. >> Got some ideas. Thank you. >> You may not like it. >> Yeah. >> So, so quickly on on this slide that we are here, if you want to just look at the annual gross cost for both the reforcast and the projection, like you mentioned, you can see that gross cost for our reforcast. We're projecting it to be about $45 million relative to the $39 million. That's where you where you get to the $6 million. That's on the next page as well. And then the column to the right is our projection for the next fiscal plan year. So obviously we trend claims forward with what we know medical and pharmacy inflation to be year-over-year. Um this is mostly what we would consider a status quo projection. So if we don't make any changes to plan designs, employee contributions or any additional programs, what it would look like. The only change that is modeled in this scenario is the minimum change that we have to make to our high deductible health plan to keep it compliant as an HSA eligible plan. Um so that's the only change that's been made here, but the rest is a status quo scenario. And in that case, the annual gross cost rises to $51.8 8 billion, which if we jump to the next page, that's this is all of those numbers put in context of our budget. So, like you mentioned, with those gross costs considered, our projection is that we would end the current plan year in a deficit of about $6 million. Trending that forward to the next year, if we make absolutely no changes, we would expect that to rise to a deficit of $12.85 million. to the right there, just to kind of give some context. If we made no changes to any of the plan designs or any of the other options that we're offering employees, the contribution increase both to the city and the employee to make up the entirety of that difference would be roughly 32.5%. Obviously, that can change with changes in enrollment and things like that. So, it would probably float somewhere between 30 and 35%. But that's the extent of the change to contributions that we would need to make to fully rightsize the budget on contributions alone. Mayor, >> go ahead. >> And um could you tell us how that compares? I mean, you say you were just in San Antonio um in other communities is are they seeing the same type of hole in the middle of their budget year and these same type of projections for the next? A lot of our public entities in particular who are more revenue constrained than other people might be on on the private side of things have certainly seen really large numbers as far as what they're having to fund deficits and changes that they're having to make. Um 2025 in particular was a really really difficult year from a claims perspective. We saw medical trend go from honestly it was usually around 6 to 8% it's risen to 10 just in like 12 to 24 months. Um, so 2025 was a really unprecedented year as far as cost. So we are seeing a lot of different municipalities face these levels of deficits and and changes that they would have to make to address it. and and mayor man, >> what >> um so was there um when the ACA subsidies were not extended, was that was that possibility calculated into some of these projections or was this more of a surprise sort of increase in cost because once people stop purchasing insurance again that pool shrinks and everybody else has to support those additional costs and so their premiums our premiums end up rising. >> Yeah. So our projections are based on your claims data specifically over the last 24 months is what we typically look at for our projections. So in that case with those subsidies running out with Medicare reimbursement not keeping up with medical inflation. All of that happening to our plan and what we're seeing on the claims is captured in the data that we have here. Um I would say 2025 was a bit more of a surprise than we thought. We were still obviously projecting normal increases that we would expect. But yes, those all of those aspects are included in our projections >> which just goes to say that the national environment impacts at the very local level. You can't separate the two. >> Yes, absolutely. >> Thank you. >> Any other questions on our projection or or relativity to the budget? Okay. Um, so as we start modeling and walking through some of our plan design changes andor contribution changes, just a quick slide to remind you how our plans look today. As a reminder, you have an HMO plan, a high deductible health plan, the PO, and then the GR GFR plan. >> Retire the under 65 retirey plan is the GFR one. Thank you. So, this is a proposed plan design change um with an if we make all of these savings or changes, this would give us an estimated savings of about $4.5 million. Everything in red would be a change and as you me as you can see it would be an increase to what is uh compro uh versus current. Um on the high ded there is no change to the HMO plan. um on the high deductible health plan that only changes increasing that deductible um to 3,400 which is an IRS minimum um requirement for next year. Uh so we have to do that no matter what. Um really where we see the changes is in the PO and the retiree plan. You can see the deductibles increased um from a th000 to 2,000. There was some increase in the co- insurance level and then some of the co-pays specifically around pharmacy. Mayor F, >> go ahead. >> Um, I don't see how upping the co-ay for the emergency room is going to help with the freestanding emergency room issue. >> So that's why I mean we have to come up with recommendations that are going to help our long-term goals. Doing stuff like that is just going to put us put everybody back into that other category. Like you we can't tackle one problem by encouraging it with a solution for another problem. I don't think upping the co-ay is the way to go because of that reason I just said and the fact that if it really is an emergency that I mean I can give you an example. I had to take my son to the emergency room. They discharged him and then I had to take him back the next day and they charged me the co-pay twice even though he really shouldn't have been discharged the day before. So stuff like that happens and it's not fair to the people that are trying to get care. you're hitting them with a $500 co-pay just for seeking out help, then they're not going to seek out help there. They're going to go to a freestanding room where they pay nothing. And then we're going to talk about how much our freestanding ER costs have increased. So, if you're going to bring us solutions, they have to be solutions that help with the long-term goal and don't like shoot ourselves in the foot on one side to try to fix something else. >> Understand and hear you. We can certainly draw back that facility er charge that really isn't driving a lot of the cost. It excuse me a lot of the savings. It's really within your deductible increases, your co- insurance increase and then the pharmacy co-pays. That's really where the bulk of the savings are coming from, unless I'm misspeaking. >> The co- insurance you said it has to go up to 30%. >> No, no, no, no. The only thing that we're required to do is to make the change on the deductible for the high deductible health plan, moving it from 3,300 to 3,400. >> Oh, but I mean going back to the 30% I mean if a freestanding ER is not charging them the the co-ay >> then again percentage that we that would be the percentage that we would get. >> No, the we so the co- insurance would be for anything any services that are not copay driven. So, if you go to um >> surgery, >> a knee surgery or a cat scan, you're going to be charged your deductible amount and then once you've reached that deductible, then your co- insurance kicks in. >> Yeah. Yeah. Yeah. No, I get it. 8020. Here you're talking 7030, >> right? But, uh the co- insurance doesn't impact the freestanding ERS. Well, not if the person's not paying out of pocket, >> right? But, um, so typically they would not they would just pay their co-pay. >> Um, and then yes, and then they're they're 30%. But it's really driven for some of those other services like a surgery, an outpatient stay, those things that are going to make the largest. >> But what about preventive? Let's say you elect to go have, for example, a colonoscopy. >> That's 100% covers. There's no charge. >> But you're okay. So that that doesn't always preventives are staying exactly the same. >> We're not um they're not proposing changes to the preventive care visit nor the um >> the hospital does not cover 100% for for those types of um procedures. >> Correct. Typically you're an outpatient facility when you get a colonoscopy. >> Yeah. So that's why you do pay the 30 >> find a followup. >> Yeah. If they find a pup and there is a procedure after the colonoscopy. Yes. You could be charged your deductible and co- insurance, but the the screening itself, the anesthesia to put you under, the physician charges are all covered at 100% for a routine colonoscopy. >> And ma'am, >> yeah, >> just to be clear, she she did mention colonoscopy, I think, as an example. Colonoscopy happens to be a cancer prevention um screen that according to the Affordable Care Act since 2009 or 10 has been fully covered as no out-ofpocket costs for anything such as mammogram papsmear colonoscopy. However, I've seen if they do if you do a colonoscopy at the hospital in an outpatient way, then the the patient does end up getting charged. Most of our colonoscopies in this community though were done at a endo endo suite uh outpatient setting in that case. I think most of the time they're not getting charged a facility fee. But >> I actually don't think that was council member Pettis's question. She was she just used colonoscopy as an example. She probably >> correct me if >> any any preventive care. Oh, okay. I thought you meant like a outpatient another type of like a surgery like a knee surgery or something like that that would be treated differently. >> So something that's a little more less invasive um a mammogram. Mammograms are covered at 100%. You go for the mammogram then if they find something and they say oh you know what you need to come back and do an ultrasound or a follow-up mammogram. Well that followup mamogram or that sonogram diagnostic >> is now now diagnostic and it's now subject to the deductible and co insurance. Um colonoscopies get very confusing because of the removal of polyps. Most people don't want to have a colonoscopy and then be told oh you had two polyps and so now you got to come back next week and go through it all over again and we're going to remove the polyps. So, it gets a little confusing there because sometimes sometimes it's preventive. It starts out preventive and then it ends up being diagnostic and so then the cost is different. But I believe that there's there was legislation to address that and make colonoscopies always covered at 100%. So that there's >> mayor >> less disincentive. My point was and why I was going down that route of questioning is because we're talking about saving long-term on this health plan, right? And we're talking about how preventive care and early detection can help in the long run, right? And how once you get to a point where you're already diagnosed with something later stages, especially the costs increase, right? And so we're not just talking about this from a financial standpoint, but we're also talking about this in terms of like better care for our employees. But my point is is that if you are a lot of people number one don't like to go to the doctor. Number two, if they feel fine, then they have a hard time believing that there might be some kind of something with them that needs more followup or whatever. If they're going to have to pay more out of pocket for preventive type things or surgical things, then that's just going to lead them to deferring. Oh, I don't need to go do this procedure right now. I'll go in six months. I'll go in a year. And by the time they go, they didn't realize that they had something that grew in that time that had they gone six months earlier, it would have been right. So what I'm saying is that when it comes to out-ofpocket expenses for things where the employees trying to take an initiative to help themselves in terms of bettering their health or get diagnosed earlier, it's really hard to ask them to pay more because that's just going to incentivize them to wait. >> Allow me to clarify. Preventive services are available at no cost to the employee. their spouse and their dependent. There is no out-ofpocket cost for true preventive services. That's a federal mandate as a result of >> of ACA ACA. It's been it's been in place for for a number of years. And if there are instances where somebody is being charged by their provider for preventive services, that's where we are in partnership with your human resources department. Bring that claim to us. Allow us to explore and research on your behalf. doctor's offices, providers make mistakes all the time. But it's amazing how when you call and you say, "Hey, um, Mrs. King had a mammogram and she's getting a charge. It should be covered at 100%." I'm just picking on your poor wife. >> And my wife's going to be mad cuz she's not 40 yet. >> Okay. Okay. Then we'll we'll we'll use me. um they the charges get corrected, but it's super duper important that the community speak out because if there is a provider that is consistently doing it, we need to identify who that person is. And when that happens, we we have been known to call Blue Cross, turn them over into uh the Blue Cross uh police as Blast and I call them, and they will be investigated to make sure that they are not over billing. So, we're here to advocate for that. So, just to be super clear, your preventive services are covered at 100%. And anytime they're not, we need people to speak up so we can try to address it. >> I I have I have seen that when a colonoscopy is done at the hospital in the outpatient setting where they get charged a facility fee. And I've actually told both hospitals that from my understanding of the law, they shouldn't be doing that. >> That's right. >> So, you know, >> we'll turn it over to them. >> Yeah. send it over to us >> because if they do a screening colonoscopy in the outpatient setting, the patient is not admitted. It's just routine because there's some patients with a specific insurance where there's no GI physicians in Laredo to do colonoscopies. So there's a general surgeon at LMC and a colarctal surgeon at doctor's hospital willing to do sorry this is not city employees but the point is >> but it's back to >> if a city employee does it at a one of the hospitals they shouldn't get charged anything even if it's even if it's they can't charge a hospital fee for a screening colonoscopy. >> That's correct. And so remember that >> there isn't a person that's reviewing these claims. Everything's done by computer. And so whatever that CPT code is that gets put on that claim, the computer's going to spit it out. We can challenge that CPT code, but only when we know about it. So anytime you hear something, please turn it over to us. We'll chase it down. We'll find out. And if we begin to see any kind of a pattern and and it does happen, we'll we'll turn it over to to uh Blue Cross and we'll make sure that to communicate with the city and >> yeah, if the GI physician even in the even in the endo suite if they code it as a diagnostic colonoscopy instead of a screening that's also patient >> the doctor insurance >> or Yeah. So that's another >> what about if the colonoscope turns out to be a positive finding like a polip or cancer >> that and that's where it gets a little murky Dr. is that because you're already there, because they're doing what they do, once they've taken out the polip, then it becomes deductible and co- insurance. But I'm under the understanding that there's Leslie >> Natalie, I'm sorry, Natalie, am I wrong? Um, did is there recent legislative change on the colonoscopies that they always have to be covered at 100% or did I dream that Oh, well it's a dream. Um, but again, back to things that we can do to advocate legislatively. I know it's long term, but it's that's a super important thing. >> Can I? >> Yes. >> And how do how do employees contact you to report these? Is there an email that they should >> Yes, they where our contact information is on the employee uh website where all of the the benefits information is. We collaborate. We speak daily with human resources. So, we're we're very much a team. We go to all of your employee events that we're invited to and we hand out our um information, our cards. We we are extremely accessible. >> Okay. Thank you. >> Any other questions on this slide? Um so um so just kind of breaking down that $4.5 million. This this slide just shows um the high deductible health plan that IRS required change would result in about $300,000 worth of savings. The changes to the PO plan the 3.4 and then the changes to the retirey plan generating about 800. So that's how we came up with that $4.5 million savings on the prior page. >> Go ahead. This there was a question that I had about HMO versus PO. Someone asked, you know, if the city had it its way, it would the city would prefer more it would be more savings for the city if more patients were in the HMO. >> That's yes, >> potentially. >> That is a that's like a that's a >> pretty factual statement. >> Always the case. I'm just >> Mayor, if I may, go ahead. >> How come you all are not talking about the HSA plan anymore? What happened to that? The HSA plan is um sorry I'm sorry >> the HSA plan is what goes together with the high deductible plan. Oh >> there is a slide that we are proposing some >> it's not a separate plan. It is >> it's not a separate plan. It is a benefit. It's an incentive that we provide to our employees that participate in the high deductible. >> But it's the high deductible plan. >> Correct. >> As an employee if I worked here in the city I have three choices. HMO, PO or the high deductible health plan which is a PO. >> We also have the flexible spending account which is the F FSA FSA FSA going to say FSA FSA. But those are again on an ad need if the employee wants to start that contribution. But that one is more of a use it or lose it. So if you don't budget yourself accordingly, you may lose some of your money that you contribute to your So next um we're going to move into some of the contribution strategies or scenarios we should we should say. Um this assumes no major shifts in enrollment um for the next year. So we're not assuming that you know HMO members flip over to PO vice versa. We're just assuming status quo as far as enrollment. Um, so these are these are just the contributions and these do not include the plan design changes. Correct. >> Yeah, they they don't include the plan design changes. And just to kind of give some context of what we're we're looking at here, you know, when we spoke on that first slide about a potential $12.8 million deficit if no changes are made for next year. That's what that first line looks like is roughly what would the increase to a contribution both for employees and what the city is contributing. what would that need to look like if we made no other changes to get to 12.8 billion. So that's where that 32.5% comes from is that's roughly what the contribution again assuming no major shifts in our migration patterns or anything like that. Um but 32 and a.5% would be what it would be to have to get to that 12.8. Below that are several scenarios ranging from 24 to 28% and what the additional contribution to that budget would be under each of those scenarios. And beneath those numbers as well is how much of that dollar amount is coming from employees and their contributions going up and how much of that would be from the city additionally adding contributions to it. So the interpretation would be if we're in 122.8 million of a deficit under the 24% scenario if we increase both employer employee contributions by 24%. We could reduce that deficit by $9.5 million. And then you could see the other values there for some different scenarios as well. Go ahead. >> And I apologies because I'm sure you mentioned it. Could you define E and ER? >> Yes. E is employee. ER is employer. So ER being the city, E being what the employees contribute. >> Good question. >> And then this is similar to the page that we looked at previously about where that leaves us relative to budget. What this shows is what if we stacked those different scenarios on top of each other. So what if we decided to make those proposed plan design changes? Obviously we can still continue to model that. We're still very early on in the process and we made contribution changes to employees and the employer contribution at the same time. Where does that leave us in some of these different scenarios? So to the left is that status quo number that $ 122.8 million that we expect the deficit to be if we don't do anything. And then to the right where we wind up combining those options from a budget perspective. So for a 24% increase and the plan design changes, we would be in a slight budget surplus of $1.3 million. Currently, I know as far as the entire budget goes for all of them, we're in a slight deficit. So that would help to kind of bring back some of that fund balance that we have as well. And $1.3 million relative to our $40 million budget is not a not as significant amount. Obviously, we're not trying to make changes so much that we have a large surplus. We want to keep it as minimal as possible for the employees as well. But just to give you an idea of where this lands uh from a budget perspective. >> So mayor may go ahead >> I um so you you just on on the contribution scenario you said a 32.5% increase to both employee employer contributions would result in that >> $ 122.8 million savings correct for for that. But then on the next page for the projection it says a 24% total contribution change. So is it 32 or >> the 24% scenario would include also making the plan design changes as well. So both of those things combined whereas to address the $12.8 million if we made no plan design changes it would need to be that 32.5% to be able to get there. So in this case, the 24% getting us to a surplus includes making all of those changes to the plan designs and the savings we expected. >> And and you're saying the 1.3 million would or 1 point almost 1.4 million would contribute because we're going to be in a $6 million deficit this year. And we don't, >> correct me if I'm wrong, I don't think we have that in our reserves anymore because we were at, you know, the bottom of the barrel last year. So where does that extra if we're at almost two million I think in our reserves was left. So where does that extra four million come into play? Do do we need to make these changes ahead of the next budget cycle and can we >> That's a good question. >> Policies that we have now, >> right? That's a good question. >> That's a good That's a good budget question >> because there's $4 million we're not accounting for. Um, for the record, uh, for the estimate, we're projecting a deficit of around $2 million. So, all of these changes are to trying to balance for the proposed budget for for next fiscal year. So that's why this is a really important topic that we want to have to council so that they can also see what we are also seeing and how we're going to do for all of the other funds because again this 24% also affects the city. In the other slide we have it's going to cost around six around seven million to the city and usually around 60 to 70% comes to general fund and that's that will be also something that we need to balance in the expenses for next year for general fund. So that's why these conversations for bringing it so that you can give us a decision of what are we going to do and if we don't do the 24% then we will also need to look at other ways to fund health and benefits. So those are what we have. >> So and apologies, mayor. Um so you're you're saying uh that if we if we if we deny the 24% or even with the 24% the budget for the benefits will not solely rest on what we collect from the employees and and our designated contribution. We will have to look for other funding sources. >> If if the 24 again is with the plan changes or the design change, if we made changes according to the decisions that you all decide then that will remove that 4.5 million in savings that will that we are projecting to have. So that will change also the percentage we are showing here 1.3 1.4 4 million that that will be the reserve that we could potentially have for next year. Again, that's a number that we're saying we could have if the things go higher, that will also be so the policy changes that exist already. No, the policy changes that you are are suggesting and then an additional 24% total contribution change from from where >> the the excuse with the budget department again uh as we've been working with Gallagher and HR the in order to not to have to make up the the 13 million that we're projecting next year which is the six and the other seven on the following year we want to break it apart into having addressed part in the benefits and the other part as the increase of the 24% and that is in the total rate contribution rate. So with that total contribution rate we have the employees contribution and we have the city's contribution. So that 24% that we have right now kind of gets us to the the break even point the minimum that we need to bring so that we can have I think it's a 1.3 million uh projected fund balance in there. So, >> okay. So, and and my apologies because the 12.8 million is a combination of the $6 million hole, correct? We will find ourselves this year and then the projected almost 7 million, >> correct? >> For next year. Okay, my apologies. >> Thank you. >> Go ahead. >> I go back to my previous comment. It's frustrating because we have a lot of people on this team. We have a lot of consultants and experts helping us and giving us advice, but we are not really all we're really talking about is money like more money more money more money that we need to come up with and things like this. Um if if you all are close to this plan and close to the employees then it would be um something that we asked for before and also something that I would like to see is you know what are the statistics like who are the higher users what you know how how many of these um employees are late late diagnosis you know was there something that you know and I understand there's hippo laws and everything so we're not really privy to that information But you all have this data. It would be nice to get some strategic uh solutions, some some ideas coming to us to say this is what we could do to address the legislative concern. This is how we can get around this problem. Like let's not just talk about what problems we have. We also need to come up with ideas that don't just involve more money and more money and more money. I mean there are things that can be done. There's reasons why employees are deferring going to a doctor. Again, like things that we're doing that are shooting us in the foot for another goal that we have. Um there's so many people on this team that I'm pretty sure there are underlying um strategies that we haven't explored because, you know, it's easy for us to just throw money at a problem, but that's not going to solve the problem and it's going to cost everybody and it's going to make the problem worse because people are going to have trouble affording co-pays. They're going to have trouble affording deductibles. They're going to have trouble that, you know, they're going to wait till the very last you know, when they're actually feeling sick and that's when they're going to take action and by then it's going to be harder for for them to get their health back. And um and so these are these are discussions that we don't have when we talk about health. And that's the things that I'm looking for is look, we've identified that if we were to, for example, add an additional day, then you know, we could potentially save or by adding the HSA plan, we saved money on this. I still haven't seen any stats on adding the HSA plan, which was a recommendation. Um, we we we don't have um solutions that are creative. We're just talking about increasing 12%, increasing 30%. And our employees are going to end up suffering because we're not going to be able to pay them an increase in their salaries to keep up with the coverage of the increase in their health insurance, which I'm sure all organizations are dealing with right now. And I'm pretty sure this is you hear this all all across the board, but we do have about 2600 employees. And if there's anything that we can do to help make this a healthier plan, um either getting more people on board with some strategy or or pushing some initiative, those are the conversations I'd like to have when we talk about our health insurance plan. Um in tandem with we need more money. So, um, moving on to the next portion of our agenda here is just a brief touch on prescription drug trends. Um, as you can see, just like medical, that growth has not slowed down. It's actually oftent times higher than the medical trend. Um, just because of the new drugs to market, some of them are cure drugs, which are fantastic, but they're oftentimes coming with a million2 million dollar price tag. So, is extending um the life of our membership, which is great um and is helping them feel feel better and healthy. But but um you know, it's just something we can't lose sight of. So again, just an infographic to to show you um you know, where we were where we are in 2425 uh $10.6 million where we estimate ending 2526 11.6 Um and if we uh look at our projections that Brian had prepared uh just with the pure trend um you know it's a 13% increase and what is driving our prescription costs for the city. This is based on the city of Laredo's utilization. um in 2425 we can see that you know we have our our top drugs um around those GLP1s right um you know the makeup of them has changed um so we still have uh one two three four four GLP1 agents um were our top spin categories in 24 and 25 we do have um you know some others that uh treat different um disease states but you can see by by far not only uh script count but paid amounts. Those GOP ones did drive a significant um part of our prescriptions in 2425. >> One thing I will say and I see a change from Ozmpic to Mandaro. Um but um Ozmpic's price is going down significantly in January of 2027. >> It's still not cheap. you know, it's going down to 600 >> and something a month for insuranceances instead of what was it 1300 before or,00 um so at least it is going in the right right direction. Um, as far as the the Trump RX, the Trump RX stuff, is that only for Medicare patients that that's affecting because I know he's identified the president has identified um GLP1s is something he's trying to reduce the cost of >> because when you can get OIMPIC for $50 or $25 a month in Europe um and we're paying that much here. I mean, yeah, it's not really fair that the American people would be funding the research and design, you know, uh, you know, on our backs basically and everyone else get the rest of the world gets the medication for $25 a month. So, is there anything changing other than what I've just mentioned about decreased costs for Ozimpic? What about um what about Mjaro? Is that look for 2027 looking to go down in price at all? Um so from Mjaro what we're seeing is MARO you can see from 20 to 24 24 to 25 to 25 to 26 it's flipped Mjaro is now your top right >> uh drug it is taking the place of ozic because I think of that additional indicator for weight loss even though >> but we don't but Meljaro is the city of Larredo is not covering Mjaro for um for weight loss it's only covering it for true diabetic patients >> correct >> however we've seen the um written prescription count increase because of that just additional weight loss effect it has for the diabetic population. So we've seen Mjaro um become number one and Ozimpic back down to number two >> because OYIC has more side effects. Correct. >> So patients prefer Mjaro over that >> and more weight loss with Mjaro. So it's a 5% more weight loss. So people prefer that too. >> Um >> that's why I'm asking like yes going down in price in 2027, >> right? What will be the price of Mandaro in 2027? >> That I do not know yet unless you but but I do um we can we can definitely look into that. >> But as far as your question about Trump RX or whatever we want to call it. Um part of that is available to all consumers. They can get uh direct for manufacturer pricing for the first three months. So like $199 for the first three months, but then after that in the fine print it jumps back up to regular price. So This isn't really helpful right now if you think about it. >> And that would be outside of the insurance of course. >> Just u one quick question on that though. Um I know that the I'm looking at the numbers between 24 and 25 and now 24 and 26. 25 and 26. Uh, does this mean that Majaro, let's say we had I'd like to see more or less if if any of the numbers decreased on the if people saw an off-ramp to some of these products. In other words, u if if if the number that you're saying there was a price increase, but that the number of patients didn't decrease the claimments. >> Yeah. So in Majaro you have >> I know that that that's just telling me that they had an incredible price increase >> if if if it just went up because of the cost >> not necessarily because we have more claimments in there. >> So you did increase about 100 you went from 192 claimments um taking Monro to 282. >> You're telling me that the price pretty much stayed the same from one year to the other. >> So yeah basically went from 251 to 201 went from 192 to 282. >> Yeah. >> And and we're seeing that pretty consistently across the board. Um one thing I did want to point out on 24 25 uh 25 26 now your top four are um you know around diabetic right um but one we're going to have to look out for is Skyrizzy um because Humira has lost come off of there's bioimilars now that are less expensive. We're promoting that. So the manufacturers are now, you know, speaking to our physicians um and promoting, you see the the commercials, right? So Skyrizzy is is quickly going to take the place of uh humra as we used to see it. And of course those have indicators to treat several things outside of plaqueis or whatever whatever rheumatitis, excuse me, with what it was originally anticipated for. >> And for the Skyrizzy, that's five five patients, five employees at $421,000. Correct. >> With other generics that are >> pretty much >> equal to the Sky. >> Correct. >> With the GOP ones, there's no really equivalent generics, >> right? Unless you're compounding, you know, off the off the plan, >> which we should not be compounding, by the way. >> Yes. >> Um, you know, that's a li liability. And I do want to bring that up, mayor, if you don't mind. It's my understanding that our wellness program has contracted with a local compounding pharmacy and we are using them in our wellness program and that is literally opening ourselves up to a lawsuit and I hope that we stop that as soon as possible. Uh, I'd like to that to come up to council because I think that's ridiculous that we are promoting or contracting with contracted non-FDA approved compounded medications in our city is going to be getting in a lawsuit for. So, I hope we um stop doing that. Mayor, I think that's something, you know, we should bring back. Um because we're I don't know if you know this mayor, we are and correct me if I'm wrong, it's my understanding that we are promoting or we have contract with a like a med spa where we contract out or promote compounded GL1 medications and I think that's not okay. Can someone confirm that's happening or not? >> I'm sorry. Council members, can you just repeat the last portion going over some numbers >> that we've contracted with a medical spa to promote compounded non-FDA approved medications? >> Um I believe there is a contract and um we can go ahead and disseminate the information over to the public health department since the wellness program is under the >> because there's more hospitalizations and side effects from those medications. So I think it's opening up to lawsuits but >> would like to bring that back as a separate item. >> Point of information blast Martinez for the record to Councilman Garca's point and Drs. Correct me if I'm wrong, but we had a a seminar conference with a few of the pharmacists and they were saying that now when somebody is diagnosed with diabetes, the first place of attack is the GLP1s. Before it was, hey, let's try humanalog. Now it's straight GLP1s because of the great effects, but that also comes with the higher cost. You know, the GLP1 versus just getting insulin or, you know, something that's been around forever. All right. Um, so the next two slides are really just um, infographics again showing the discrepancies, the disparities. If we do nothing, you know, our revenues are subtly increasing, but our total expenditures are far outpacing taking us into fiscal year 30 to 31. And again, the same thing um just based on our projected ending fund balance. Right now, we're at a deficit of a million.9. You know, if we do nothing to plan design rate contributions, we essentially could be in facing a $50 million deficit by fiscal year 30. >> And I just wanted to clarify on this on this slide. This is only if we were to project a 10% increase into the revenues. We're doing a 10% increase to our contributions and our and our contractual services would increase at a 12% year after year. This is how we would look at the closing balance. And so on year five, you're looking close to a negative 49.6 million defense. So again, just showing um I I know we're talking we're very sensitive to, you know, the amounts that were potentially proposing to increase employees. Um but I just wanted to remind everyone that the city is contributing nearly twice um what the employees are. So this is what the proposed revenue uh with the 24% increase would look like. >> Go ahead. Um, Mr. N, does does the $36.5 million is that part of this budget calculation for the next year or something to this amount? I mean, maybe it's not exactly this, but the fact that is there is there a plan that we could actually entertain this type of increased contribution? um and mayor and city council and and of course from the first part of the conversation is that uh we are we will be building our projections based upon the proposal based but once the council has the conversation then we're going to adjust that proposal. So we we haven't set the budget yet. We're we're still working on the revenue numbers and now we're now we're trying to pattern. We're we've been cautioning about the what we expect is going to happen on the expense side, right? And so the the this proposal is being presented as one possible option in order to take care of this issue. And so uh we can look at the percentages that the city covers as well as the employee covers. We can look at all those different variables that are going to be a part of this thing. We've not put it down on paper and said this is the one that has to be packaged within there. We we will I guess preliminarily we would build our budget based upon the best information which is this information but then once you have your conversation as you have been having we will adjust accordingly within that to to to redistribute how that budget would actually function. quick way to say that and I I would just add that within this report as well too over half of that percentage that they're seeking is industry caused. 9 to 13% of it is actually caused by the industry. It's very difficult for us to make any adjustments to our plan uh to say let's let's try to make make the behaviors be differently. The other half is exactly what they're talking about with the the the type of drug that's being used to cover things, the emergency visits and all of that. That is so half of this is is it wouldn't matter I guess where we would go. I mean that's the lack sad part about that n 13 to 15% of that that cost is what the industry is putting on top of us as well too. And so I appreciate all the other conversation though. >> Mayor F. Go ahead. How many employees do we have in total that are in the medical plan? All the medical plans here for the city right now? >> I believe it's around 3,300. That includes our retire as well and family members. >> Are you counting the family members as extra memberships? >> Yeah, with family members you're looking at about maybe like 6,000 a little bit. Oh, so the 3,300 is like how >> just employees and the retirees >> with total member population about 6,000 >> and employees that are still employed with us now. >> Six 6,388. >> That's everybody included, right? But employees only that are still working now. >> Employees only. >> We employ over 283 >> about 2893. >> 2,893. >> Okay. Thank you. Go ahead. >> Thank you. And so this graph uh just is a reminder of how you are contributing based on plan. So for the high deductible health plan, the city contributes 100% of that premium. Um HMO 85% and the PO is a 80% contribution. You can see um on the left hand side um where that has um decreased and or increased mostly decreased um since the failure 2425. So now we get into the employee contribution scenarios with actual um dollar amounts. Um so we'll go through each individually. The first one is the PBO plan. Um this is a scenario with both contribution and those plan design changes. That is what's needed. Um, and here are the rates that would support that. As a reminder, we're we are applying that previously approved $13.3 um from last year. Again, these are bi-weekly rates. Um, so on a sliding scale on the right hand side, you can see, you know, you have your current rates. We have that $13 applied from last year and then what it would look like if the rate increased 24%, 26 or 28. And again, this is just for the PO plan. And so each subsequent slide um has the increases as well to the HMO and then for the um high deductible health plan and I'll pause there because I know that's three slides if I can. >> Yes, go ahead. >> Those those rates are just outrageous. Like that is just way too high. That's way too high even at 24%. I mean, that's a big increase for for our employees. And bi-weekly, like you're talking $200 a month minimum, whichever plan they're on or less um per month for for for everybody to be able to have the same coverage they have now. and also additional increases in their co-pays, increases in their out of pocket. Um, it's it's too much. >> Mayor May, >> go ahead. >> Is and I apologize if if we haven't gotten to yet, but do you have is it possible to um to force everybody into one I guess two plans, right? The HMO and high deductible and drop the PO. Does that are we able to do that and does that create a savings benefit? >> Yes, you guys uh our cell phone and health plan you have full discretion over what you do plan design. It is an option for us too uh to remove the PO plan. There would potentially be savings there like we talked about previously with the HMO of it's going to be a better performing plan financially than our PO. It's not a scenario we have modeled in this proposal currently, but it's definitely something we can look into if that's something that the council is interested in. >> Mayor, if I may, >> I think getting rid of the PO plan is not a good idea. >> I don't think we should be removing offerings. I think we need to figure something out again without throwing asking our employees to throw more money at the problem. We're trying to correct a problem that was generated over years of deferred increases. and we're asking at once to put us back where we should have been. And um it's unfair to the employee um and their families. So again, um and it's I don't think that this is going to get us towards um healthier work a healthier workforce. It's going to cause a lot of people to not be able to afford coverage and not even be able to go to the doctor. Well, I just a quick question >> for the PO. Um, what percentage or number do we have that are employee only, >> employee plus spouse, employee plus child, employee plus? Because I think last time I asked this question, I was surprised with how few of our employees use the PO employee plus family because it's so expensive, right? Um, so do you do we have those numbers of like >> I don't think we have breakdown. or they might have it. But >> that we need to know >> we need to know what percentage of our employees we're affecting with the decisions. You know if 5% of people are an employee plus family. Okay. Like but it's a >> lot. >> Yeah. Last time I was it was it was lower than I it was lower than it was at like 10% last time that used the whole the family option. So I could it was super low. I remember being surprised how few people are in the employee plus family plan and then just this is you need to know >> mayor if I may what the confusion was last year was that um employees were separate and then family plan was separate and then there was like a a disconnect that that the rate did not include the employee and there was that. >> So what we did on >> they changed it here. >> What we did on this one to add a little simplicity is we incorporated what is for example if I have go to the PO one. If I have employee and family, the 53923 already includes the projected employee only uh rate within that bi-weekly amount. >> So just to kind of simplify that, we added it already >> into that confusion because I know there was always that confusion. I was >> u mayor >> ladies question gentlemen um so we're talking about changing the planet doing different things over and over how we can fund this balance in different ways are there ways that we can because the conversation started initially because of private businesses right these these er that are popping up everywhere the freestanding ERS is there a way to implement a $1,000 a $500 fee to go see those particular And not that I'm speaking ill of them, but at the end of the day, that's what's causing us to be in this deficit. And if we were to fix that, then that would fix the entire problem that we're seeing right now. We wouldn't see these increases of 24, 26, 28%. Is there something we can do to that to something to that effect? And obviously, you're saying we control it, but we go through Blue Cross Blue Shield. So, is there something that you can do in unison with us to be sure those are limited? and if I should go with my children or whatever it may be, I'm gonna need to come up with $500, $1,000, whatever it may be, because a $13,000 doctor visit is absolutely ridiculous. And that we're paying it is insane to me. But we see two entities in the city that are utilizing them over and over again. So, if we can take it to them specifically and address them both and say, "This is what's going to cost you when you go to a private ER." And granted, we all want convenience. Absolutely. My kids are sick. I want to see it, you know, taken care of right away, but at a $13,000 charge is is ridiculous. >> So, we are, to answer your question, we are uh we have some compliance concerns with doing that. However, you're not the first municipality is asking, can I as an administrator actually charge my employee x number of dollars off the medical plan? We forget about the medical plan if we find out that they have gone to that facility. So, we're researching that to make sure it's compliant. Um, some of our municipalities are taking the stance of I don't care if it's compliance or not. I I will deal with that. >> Um, because it is a huge cost driver that that for a lack of better terms, we have no control over right now. >> Well, it's a huge concern because it's affecting all of your 2,800 employees that are actually on the plan. >> And at the end of the day, they're all paying it for this these certain groups that are using them over and over. >> Absolutely. >> That's not that's not fair to everybody else. >> So, we are investigating that internally with our compliance team. And then we're >> I'm glad this is the first meeting of the budget talks, right? We're just getting this this conversation going and I'm sorry it's gone to length but we have a lot of questions a lot of concerns of what's coming up you know so I'm glad we started and great great conversation >> we'll keep we'll keep the >> but if you can please keep us updated with this >> absolutely >> go ahead >> um I I appreciate that that you're investigating that and I think you know part of being the advocates that we need to be at the state level is to try to drive the conversation up at that level so we can get some changes so we don't have have to be putting this burden on our employees. But even if we were to be able to stem the tide or stop this uh what costly usage of prescending ERS that are not in network, right? That's the ones that are not in network. Um we've seen a $4.6 million usage of of those and the budget deficit that we have to the hole that we have to fill is 12.8 million. So you're still looking at about $8 million. So some changes will need to be made, right? I we it is so uncomfortable and unfortunate to have to look at putting this burden on our employees. It's also a city-wide burden because we they will not march alone in this. But at the same time, this is a reflection of what we've been talking about the national um the national market and how we choose as a country not to have universal healthcare. how we choose to have this private market foundation and the an unexpected but rising costs of health care in this country and there is no way at this level to rein that in. So the reality is we have $8 million that we have to fill because we can't run a deficit. We're we're not allowed to as a municipality. And so these uncomfortable u alternatives that we have to come up with to have this cost sharing with our employees. I mean either we ask them to shoulder more of the burden or we look at our own city budget where we're going to cut services because management just said that core services are primarily what drives our budget. then perhaps we need to cut them back in order to fund the $8 million because the last thing we want is for this whole plan to fall apart and we can't provide any healthcare to our employees. That is really where it's unacceptable, >> right? >> Um and I understand the the that we can't like restrict and all that. We've gone we've gone over that. But is there a way that we can implement a some kind of policy where if the city has a a employee wellness office open until 5:00 p.m. from 8 to 5 and you choose to go somewhere else during that time frame for a non-emergency? Um, is there a way to handle that within the plan as far as like if it's if employee wellness is open then then and you have like a a cough or you need to get your ears ear your checked for possible infection or something like that um that they have to come in to the provided um facilities and then if there's an emergency then from there they can you know get go to to the hospital or something like that. Like is there way that we can set requirements on the plan as far as offerings where you do have access to to care. It's just that during these times that these facilities are open, you have to come into to the employee wellness office or something like that. >> So, we would definitely that it's something that could be done. It would be administratively on the city and not Blue Cross Blue Shield. I want to make they won't help in that in that uh position, but we also want to make sure from a compliance perspective that it's okay. So, I can add that to my list. >> So, how do where do we get a list of these compliance issues? That way, our legal team can also help figure out like some we can we really need to get some solutions that are a little bit maybe outside the box to deal with these issues that these hurdles that we have in front of us. Um, respecting everybody's like ability for choice and things like that. >> There there does need to be some analysis beyond what we have here. Like what departments are using these services at what time? If they're going at 1:00 in the morning, 2:00 in the morning, 3 in the morning. Some of these our employees are 24/7. They don't work 8 to 5. They get out at 2 in the morning. They get out at midnight. If they're sick and they need to go to a doctor and they just got out of their shift, they don't have anywhere else to go. And so there's some of these issues that they deal with. Um, so I I again I want to see some >> Yeah, we can certainly look into that and to see what specifics we can get from Blue Cross as far as I don't know if we can get a time that they sought the provider, but we can work through some of that. >> Yeah, not times, but days >> and um we can definitely have I know that they've provided reports on like the high utilizing utilizers by department. We do have statistics on that. So we can we can gladly provide that number. And again, blas Martinez for the record. Uh right now, if I work for the city of Laredo, I have access and so does my family to go to the uh to the city hall annex, you know, for your simple stuff, right? Colds, flu, that kind of stuff. They did have, and I don't know if they've already re uh renegotiated, but they did have access to where you could go to an urgent care clinic after uh after hours up until 9:00. Now, one of the problems that everybody experiences is in Laredo, Texas. If you get sick after 9:00, unfortunately, the only place you can go is to the emergency room. Now, we do have the MD live, which is 24/7 English and Spanish 365, but again, that's your minor stuff, colds, flu, fevers, you know, that kind of stuff. So the the process is in place. It's the utilization. And again, if I work at I get off at three in the morning and I have a cold or flu, I can pick up the phone and I can do a telephone call. I can do online chatter. I can do FaceTime with a doctor, right? He can prescribe a medicine. But if I'm having chest pains or I sprain my ankle or break my ankle at 3 in the morning, guess what? I'm going to go to the emergency room. >> If I go to the in network emergency rooms, that might cost, I don't know, three, six, $8,000 for that injury. If I go to some of these standalone, well, if maybe more, right? If I go to the standalone, and to your uh point earlier, Councilman Gutierrez, even if we put uh and and as Councilman Council person Pettis said, if we put a $10,000 ER copay, they're going to wave it anyway, right? So, I'm going to go forever. >> But when they go to in network facilities, it's better for the city and the claim is processed. Mayor coming. >> A question and concern that's coming up just in my head right now talking about this. Should we implement this in the next few months, the employee and family um on a yearly basis paying over $14,000 for medical insurance, just over $14,000. And I'm thinking, should our employees start leaving our plan, start going with Obamacare or whatever else is offered out there, and we start losing people in our plan, are our rates going to go even higher because we don't have as many employees in the plan? If every contract that's out there uh has that clause that if you have more uh than a 10% change in your population that they can go back and re restructure, rerate your plan, right? So if it was more than three 400 employees then it is possible they can come back and say hey we need to repric or reate your >> Y so so he um so >> so that would be from just the administrative fee that Blue Cross Blue Shield charges or if you're in a fully insured model but as a self-funded we you know as you know we set our rates however if we do have a mass exodus of employees Brian do you have any statistics on what that would increase the plan? Yeah, I mean it it really depends on the situation. It is something that we model when we have these kind of scenarios is where do we project enrollment to be because of exactly what you're talking about. It does potentially remove quote unquote good risk from the plan and put you in a position for that. So we can definitely look into different enrollment scenarios and kind of give you a range of what we anticipate might happen. And unfortunately, you know, migration and enrollment is one of the much more difficult things for us to project because we don't really know what employees are going to do when they're actually presented with this option and what choices they're going to make. >> Sure. And I'm just thinking because of last year's increase, this year's possible increase, you're you're talking about an increase of over three $4,000, you know, in the course of two years, employers can start looking at other other possibilities, other types of other means of insurance, right? And that's just worrisome because I know you all work with us because at the group level the amount of people that we have in the plan and it's just a concern now. >> Yeah. And it it would be twofold there as well because you know in theory you would be removing some of that good risk and contribution but also some of the claims would likely drop off but it's it's a further analysis that we can definitely look into because I can totally understand the concern. >> Thank you. >> I'd like to make a comment on on that u council member because it's a great point there. Individual insurance is now very difficult to obtain. >> Subsidies are gone. >> The subsidies are gone. So, we had a gentleman in our office the other day that was comparing the city's retiree plan to buying something on the open market. Really, there's only a couple of providers that make that available in the under 65 rate. And what was his rate last? >> Anywhere from $850 to $1,200 a month for him. and it was an HMO only plan, not the PO that you all offer your retirees. So he had major stickers >> on an individual basis. There is no PO available individually. You cannot leave the city of Laredo and go on the marketplace and buy a PO because those that product no longer exists. It's like a rotary phone. You can't get it. They and if you did, it didn't work. It's so y'all what you all have even these rates that feel really high compared to the market. They are so generous. Um they are accessible. They're tight. I get it. Especially in a in a world where everything is more expensive and it's just another thing going up in cost. But relative to what is available on the outside or even at other employers in town, it's very and I believe we have a slide on that, don't we? >> We have some benchmarking. >> We have some ben Yeah, just to give you a a sense of what are what are other large employers in town charging. The city is is doing such a great job and doing so well by their employees. And it's tough, but I'm thrilled that we're having this conversation now in March because I was just thinking how we've had years when we have this conversation in in in June and July at 10:45 and y'all don't want to hear a single thing from us much less uh >> increases. Yeah. >> Yeah. So, so this is a beginning of a conversation and I have I have a report that when you all are done I'll share I think we can put it up on the overhead of some information that we shared this uh earlier this year about how many people are going in for their preventive care things like that. So we've got a lot of data that we can we can ground you all in information. >> Point of information also was that the city of Laredo provides 50% of the cost for dependent. No other employer that we know of does that. So if I work at the city and I want to put my family on the plan, the city's going to pick up 50% of that cost. Your other employees don't other Thank you. First of all, y'all please like have a seat in a moment because like uh you know your legs are locked and where you're going to pass. So you need to you know stretch or you know sit down. Okay. Worried someone's going to fall. No. U >> somebody better. But um um compliance versus legal you know you mentioned we'll check with compliance and >> but some cities are doing it anyway even if compliance says no. So I'm >> right >> tell me difference in complant and legal. So any questions that you have, one of our services is you have access to our compliance, our risoto attorneys. And so we tend to run everything by them to make sure that you're not running a foul with different um you know, state federal, you know, it may give us guidance. Sometimes when we're walking the line or thinking a little outside the box, they're going to recommend that you take it to your own internal counsel as well. But what I do is share that narrative and that response so that your attorneys can can review what our attorneys are saying about the auction and and see if it is really a risk that Laredo is able willing to take on or not or maybe some of the pitfalls. So >> you're saying like it's a gray area like >> because we're not your attorney, we're just providing a service of reviewing your question and your plans. We would defer anything that you would be using to make a decision to your internal um attorneys. >> Uh I think our inter attorneys do need to come to the table with on this stuff and and help figure out um ways to to deal with these restrictions. But um for HR um there are policies like maybe we can implement like have pre-employment physicals or like revisit the return to work program where employees can be out 260 days. >> Yes. >> Uh so stuff like that. That's what I'm talking about when I say let's come up with other things that we can do besides just increasing the rate. >> Yes. and and that is one we are in the process of moving into reviewing that return to policy that we have in place. Excuse me. Just keep in mind the return to work policy. It's not only just for personal, it also covers the workers comp and workers comp is separate from what we're discussing here on the on the personal insurance component. >> No, I understand. >> Yeah, we can Yeah, we can get into those factors as well. There's probably something we're not seeing right now and I don't think any of us are that entrenched in the nuances of of all that. All I know is that um when you're asking us to raise rates um that's when it becomes a concern. So unless we've explored every option to try to save money, if we raise the rate now within two three years the rates should decrease or we'd be at a healthier place or something. But every year it just becomes crisis mode. Like we're 10 million short, we're 12 million short, we're nine million short. And like Councilman Gutier mentioned, we made an increase. We didn't go with the full recommendation, but again, we are we are trying to correct a lot years of not following recommendations and um it's getting it's going to get to a point where employees cannot afford to provide health insurance for their families and that's going to be a problem for us as an employer. on this slide. I can go >> on this slide. Uh this this is in regards to our high deductible plan. So our high deductible plan offers the health savings account which is the HSA. Currently right now we provide our employees a $750 incentive HSA credit to their card. What we're proposing for next year is to have like a semi a tier where uh if if the employee is on an employee only plan um they would get $500 but if they have more than one whether it's spouse child or the family plan they would get $700 um in as part of their contribution incentive that the city would provide or to employ. with this, it would we would still stay within our bud our budget. And we also projected the projected increases if more individuals were to move into this plan for next year. >> Um, mayor, what I feel like we're not making the um HMO plan like as attractive as it could be. Um, you know, it's not I mean, you know, it's you're going it's for an employee only anyway. It's very similar in price to the PO plan. >> Yeah. >> Is there not a way to, you know, similar? We do the high deductible plan at $0. like you know I'm not saying the HMO should be zero but is there if you really you know want to make that offering is there I mean why would you increase the HMO plan you know >> well this would be to increase all the plans because again what we're proposing again it's just a proposal is design plus contribution in order to bring that the deficit that that we've illustrated to you today. >> Okay. >> Um on this slide, um this is talking about again since we're proposing all plans, this would also include our retirement fund with the same percentages, the 24, 26, and 28%. And what the contributions would look like um for those retirees um whether they are on the regular under 65. These are all under 65 or over 65. We have a different plan and that's not being affected whatsoever. Um and then those employees that we currently have that retired under our retirement incentive program, what it would look like for those uh employees that retired in our retirement incentive program. We're already in year two. We have three more years um to go on that plan itself. >> Mayor Mayor P. >> Yes. Go ahead. How many uh individuals are in the under 65 retiree plan? More or less. I'm sorry. >> About 285. Right under 300. >> I'm sorry. Mayor, what is a GFR1? >> It's how we classify, but it it is >> the retirement plan for under 65. >> Are you paying that monthly right now? >> Right now. the civilians only. Police and fire. >> Yeah. So, for a civilian employee retiring, they currently pay $56730 per month. Police and fire are covered >> for I'm sorry for GFR1. >> For GFR1, >> you're showing here retiring family $1566 through >> that is the retiry amount and then the family contribution together which is the 1566. >> Okay. Now, if it's a police or firefighter, they only pay the difference from the family component because the city um covers the retired police and firefighter 100%. >> Right. Right. Okay. >> Thank you. >> Um on this slide, we're demonstrating is um how in the last 10 years we have not made any um changes to our deductibles. So if you look from back in uh fiscal year 2018 all the way to now, our deductibles have maintained the same amount. Um the same thing with our excuse me, our co-pays for our prescriptions. We've maintained the same co-pay amount for the last nine years and we haven't made any changes with what we're proposing with the plan design is we're proposing to make changes to the deductible and also the prescription um co-ay amount. The prescription copia amount that we are projecting or proposing is a $5 increase. >> Yes, go ahead. >> There's not a way to set different deductibles for different categories of of facilities. Can we say if you go to a hospital, your deductible is zero, but if you go to a freestanding ER, your deductible is 500? >> No. >> No. >> No. um because of because of the way ACA um defines emergency, you have to pay the same benefit. >> Yeah. But at some point you go okay, you go in there and I think Dr. Tavvin mentioned something like this. You go in there and you say I have an emergency, >> but you don't have an emergency. >> Correct? >> You're saying you have an emergency and as initial assessment determines that you do not have an emergency. So now you've gone to an emergency facility for a non-emergency. There isn't a way for us to handle that in a in our plan. >> Okay. So yes. So you do actually currently do that. Correct. Um so if you go to emergency room it's a >> separate $300. $300 co-ay for emergency room. But if you get admitted, then it now falls under the deductible, >> right? >> Deductible um >> the deductible is if you get admitted then the $300 gets waved if you are admitted >> for going to the emergency room. So if you go to the emergency room, you get treated and you you're discharged, there's a $300 co-ay for in network >> ER. But if you get admitted, they wave the co-ay because now you're looking at the deductible down. >> Okay. Well, I'm not 100% sure that that's what's being implemented because I remember well regardless, but the freestanding ERS, >> we still are still talking about how they walk in and they pay nothing. So, >> so what I'm saying is the deductible for like if you're going to go into the emergency room for a non-emergency, we would much rather you go into an actual emergency room >> than to go into a facility that's going to charge more. Right? So, for this facility, our plan is going to charge you a $500 fee >> and this plan and and and we are not going to charge anything for utilizing actual, you know, certain types of facilities. And I understand you're still like going to check on these things and all that, but >> is there a definitive no that we can't do that? >> There's not a definitive no. >> All right. >> I can but I if if I may restate maybe your question, it could go a different way. So, um I thought you were going down the path is can we have one copay for if it's an emergency and a separate copay if it's a non-emergency? >> No, I'm talking facility to get Right? I think I have an emergency. >> I have a choice now. I go to this one. >> Um, I don't pay anything >> and I get checked and they tell me either yes or no >> or I go to this one and they tell me yes or no. >> Either way, we they still have access to care. However, forgetting that assessment and the risk that it was not is going to end up costing >> correct >> us and them, >> right? >> But but remember these freestanding ers where where you're saying, could we charge more if they go to these facilities? Remember, they are not charging the member of the copay. >> No, no, we we charge like the >> Oh, administratively from the city. Yes. That we were going to check into. Yes. >> There's not a definitive No. >> So, mayor may that's that's a that's a great question that my you know, council is is asking is like if let's say you go to a standalone I'm not going to say names, right? they stand alone by itself. Is there a way that you can find out how and implement a charge same as the as as emergency room, let's say maybe an upper, you know, higher charge. >> Yeah. >> As $500. I I think we're already we're covering we're going in circles in the same question, right? But I think that question it's going to be the the question that's you know I guess the golden goose for for this result right so I think that's everybody goes and it's not the emergency room it's not the the care I think it's the efficiency when you go to a to to one of those uh stand by themselves >> you go in there and yeah I've been guilty I've done it before I'm not going to lie when you're scared and you know what's what's happening to her body or or whatever you go in there and you check in by I know. 5 minutes later, you're in. >> You're already hooked up to machines. D boom boom boom. 10 minutes later, 20 minutes later, sir, there's nothing wrong with you. You just got some little bit of whatever >> and you're out. So, that's we're we're actually paying for efficiency or or to speed up the the process, right? That's what we're looking for. That's what I think of most of our our employees and myself and most of us is always we are as the human factor. We want to know what's wrong with us and we want to know what's wrong with us now and especially if it's your child. >> Sure. >> So I think that's where everybody's falling into that. Hey, that's where we want to find out. And I think that's the the golden ticket. We find out if that's that's possible even though I will never put a price of how much I would pay for an emergency room and for the efficiency and and and being to be honest. If you told me it's $1,000, I'll I'll find a way to get those $1,000 just to go to to to for to see my my kid to get checked out. We do it. They do it for when they bail out people. There's a bond. They they ask for a 10% bond, whatever the price it is, a 10%. They go out and look for whatever to get the person out of out of jail. We they can do the same thing. I think they can do the same thing at at over here. you need $500 to get admitted, but if the efficiency you're going to get out and they're going to check you out as as soon as possible, I think that's that's what we're looking for. So, that's the golden ticket. I think you should come back as as soon better uh sooner than later to get that, you know, that information that we need. So, that was just my my my comment. >> Mayor, if I may. >> Sure. And I think it also applies to we have a situation I believe that we have like specialist doctors that are being sought for primary care purposes and so I don't know who's you know jurisdiction it is to determine that because they're doctors right but I don't know if there's a way where let's say you have a specialist who treats you for something and then you have a cold and now you go to that doctor to get treated for your cold when you should have a primary care doctor separate from your specialist. So, is there a way to work that? Yeah, I think those are things that we need our legal team to also work with you all to say yes, you can or no, you can't based on these restrictions or rules. Again, we just need to figure out a way to better manage. People are free to see whoever they want. Doctors should have full authority over their patients and everything. We we should not be getting involved in that. However, at some point, somebody's paying for the bill. And right now, it's our employees that are paying for it. >> Okay. >> Okay. So, we did provide some comparison summaries. Um we can go through these if you like really what they are they're they're just scenarios in regards to like if we have like a low user um an employee who uses the plan very minimally right so did you want us to go through each of these scenarios with three scenarios one as a low user moderate user and a higher >> okay so as a as a low user let's say you have an employee who uses a plant just for annual checks perhaps maybe one or two prescriptions. Then the ideal plan for an individual that uses the plan very moderately or very low would be the high deductible for this employee will avoid the high um price costs that come with the PO plan itself right because the preventive cares are still covered at 100% under the high deductible plan right prescriptions some prescriptions are covered at 0% after the or maybe at 0% or would be at 0% after the deductible um for being a um low utilizer. On scenario two is the predictable union, an individual that has a very young family, right? So they visit the pediatrician for like ear infections, wellness checks. Occasionally they go to urgent care, then the HMO plan would be more ideal for that type of scenario where the co-pays and the deductibles are kept at a low cost, right? Um because again, your primary care covered at 0% or 0% and your specialists are at 40 a $40 co-pay. Your urgent cares are $40 co-pay. Um, and so this would be, but then again, you're only looking at within the state of Texas, which is what the HO plan offers. And then scenario three is your your high utilizer, somebody who really needs the services. um people with chronic conditions that uh or have maybe cancers or anything like that that they need to manage then again the PO plan would be the more ideal plan for them to utilize. Um with this plan it does have the outpatient surgery that pays 30% after the deductible. It has the flexibility that has um the out of network. So I want to see a specialist in Denver that's going to help me get through my my condition. The plan's going to be able to cover those costs. Um, so just just some scenarios that we should have out there for you. >> If I might just add to Miss Carol's presentation on the low user on the uh C on the high deductible health plan. Right now the city is currently contributing $750 so that if somebody does need to buy a prescription or get something done, the city has already funded that plus they can fund as well. And the city has done that for several years. So, we do have currently several of your members that have five, six, $7,000 already accumulated in that high deductible fund >> and it's pre-tax money that they put into their HSA. And the scenario number two to address council member Fettison's concern about uh people using specialists for primary care services under scenario number two. The HMO the cost for the primary care is free. It's zero. But if they in order to see a specialist they need a referral. So, they can't just easily go to a cardiologist, for example, for that cold because they would need a referral to see the cardiologist. And if they did, it's going to cost them $40. Whereas, if they saw their uh family practitioner, that's going to be covered at a zero copay. So, that that scenario is already built in on the HMO. to um clarify if they already are a patient of a cardiologist then do you still have to seek the referral every single time you go? >> Yes. >> Yes. If the cardiologist does not serve as a primary care physician, if he's not he or she is not um enrolled with Blue Cross as a primary care physician, then they cannot be selected as a primary care physician. you'd have to select another one and then when you need to see the cardiologist get that referral. >> What uh Miss Tina's talking about is if I elect the HMO plan, I have to give the insurance company the name of my PCP. >> Oh yeah. >> And then you can change it right once a month. But uh you can't put a specialist if he's not. >> Isn't pretty much every PCP in Laredo is with Blue Cross? I mean is there really >> I want to say at the last count out of the 450 more or less I want to say about 400 420 were Blue Cross Blue Shield providers pretty much. >> So there are some that >> 90% or more >> and 99% of your claims are in network. So >> literally your position >> everybody is staying in network. The out of network it's not really an issue. The only downside, correct me if I'm wrong, the only downside to an HML plan for from the patient perspective is needing a referral. >> That's one. And also, it's a Texas based or Texas only >> and being in network. Sorry. >> It's a Texas only plan. If your son or daughter's going to NYU for college or Denver, they're not going to have coverage over there unless it's an emergency, right? You don't want to consider a PO or the high deductible. >> So, if you're and if you're on vacation or traveling outside of Texas, you have no insurance coverage. >> No. No. in an emergency. Yes, you're covered for an emergency. But like one of the scenarios that Carol used in scenario number three is >> you want to go see, let's say you have a lung disease and you want to go to uh Dallas, oh, not Dallas, uh Mayo Clinic. >> Mayo Clinic. There you go. Great. >> You want to self-reer, you want to go over to the Mayo Clinic. >> That's not going to be covered under the HMO. under the PO, it's going to be covered if the Mayo Clinic is in network. Um, >> Texas is a pretty big state with a lot of good doctors. >> I mean, you kind of have to really push the envelope to be seeking specific care, but the Mayo Clinic would be one great scenario. >> Mayor, so you still have access to the teleaalth under the HMO and if you're out of town, >> Yes, ma'am. >> they can call in a prescription to a pharmacy somewhere wherever you're at and it's all covered. Yes ma'am. On all three plans actually the tele medicine is available under all three plans. >> Yes. And we did have a situ an actual employee who was out of town has the HMI plan was not feeling well. They contact the MD live to do a virtual with a Texas doctor and she was still able to utilize the plan and then get her prescription done. On this next slide, again, if we don't do any changes to like no plan design changes, just the rates incorporating that higher percentage, the the next slides are what it would encompass regarding the contribution rates, which would be even more significantly higher for all the plans, the PO plan, the HMO plan, the high deductible plan and also our retirement plans with no plan doesn't change. >> Sure. So, um, essentially with that, uh, with the no changes, instead of a 24% increase, we're looking at a 34% increase. >> Yep. >> So, you change the plans, you still have the 24% increase to cover that $8 million or $12 million deficit that we're following, 12.8 million deficit. And if we were to do nothing, then that would force us to to come up to the 34% level to cover that 12.8. 8 million deficit >> because the plan design would offset that by about four and a half million by doing and that's the only the plan design that we showed you. We can come we can go back and provide up whatever you all decide we can do other plan designs to see how the numbers would look and again would that also shift on the contribution component as well >> and and when you do that if if you don't mind making the comparisons to the private market as well so that people I and I think a lot of people do understand right I'm sure they've gone to investigate how can I keep my health costs more reasonable for my budget and they've gone online some of have gone online to do that research and it's just a very bleak market right now. You know, the the national environment is impacting us here. >> Um but to make it clear to people that >> the city is still trying to provide a good service >> at what in this market is a reasonable cost. >> Yeah. >> Oh, he did. >> Um so the I guess the the question or the just reiterate if you all could come up with some kind of other creative programs that instead of raising it 24% let's say we raise it 10 which I you know but then we say we're going to implement these cost-saving measures and over two years we're going to end up saving money projected because we're not going to be like in other words we're going to stop the bleeding and there's got to be some bleeding going on like pun intended in the plan because there has there has to be something that we can do that we're just not seeing. >> And I guess I just want to reemphasize the increase is the the claims are what are driving our costs. If employees need to use the plan, we want them to use the plan, but it's those costs that come back, right? >> No, but we've talked about like these situations that it's like there's a free-for-all in some of these areas that are costing more. Correct. you know, everybody's eating, you know, everybody's going. >> I can help reduce it. >> That's what I'm saying. Like there has to be something because it's really not just our workforce is unhealthy is more like we are paying an extra charge because of certain services that we're utilizing. So, if we can cut that vendor out and find a better vendor or whatever and limit um then that's where we need to get creative on the offerings because I don't want to approve. I don't want to say yes to a 20% entry increase, much less a 30%. And if that those are the only options, then that's not that's not sustainable because next year it's going to be another increase and the year after that it's going to be another increase and our employees are going to get to a point where they come to work just to pay for their health insurance and they can't afford to live. >> Um, so um and then If if I can please get the numbers of how many employees are in each. Do we have that now or is that if you need to email it like later today? But >> I I can definitely email that information, >> right? Because that's very helpful to understand how many people were impacting. It'd be also nice to see like what savings impact there would be if X number of people chose the HMO plan next year instead of Is that something that can be modeled out, sir? Yeah, we can model different scenarios of migration. I would caution us as far as setting budget assuming that >> No, I just mean just an idea >> or even you could show us kind of like the question that was asked. I know we are unlikely to do this, but just to see what it would save if we got rid of the PO plan. I'm not suggesting we do that. I'm just saying to see the numbers to see how much it actually just to help us understand the big picture. >> Yeah, that's something >> um and then you know attacking some of these biologics you know that like were mentioned I mean eight people on skyrizzy $400,000 five people in Trimfaya for $400,000 four people on Humera for $265,000 so I mean that's 13 that's 17 patients you know with well over a million dollars in those three medications um you know you mentioned some biologics that um are going to be generic now the bioimilars. >> So making patients aware of that. Also paxlovid >> a lot of a lot of paxlovid for covid $285,000. I mean I haven't seen co in my clinic in a long long time. Um and not every patient needs paxlovid. It's only really for like high risk patients. So attacking some of those that are just you know I don't know just a >> I do think you can go on a tighter formulary which will create noise that's really important to understand. So the tighter formulary >> but noise for the fewest number of patients. I'm I'm we're talking about 13 patients there people that you know and just not that they shouldn't. >> Uh no absolutely and and there are other >> there are other options that are >> there are other copay features. Um y'all are very generous with your co-pays on specialty drugs and the fact of the matter is that some of these medications you just mentioned they cost $8,000 a month. >> Yeah. >> Yeah. and people are paying >> what what's it your special >> $150 for an $8,000 a month medication. Maybe that needs to be a little bit higher just so that people can appreciate just how important it is to take care of that medication because >> so if if if that so if a patient is on Sky Rizie they are paying you said $150 >> $150 >> which I mean I personally I think that's I mean I think that's fine >> and they're having to get it from >> I don't think they should have to pay $500 a month you know for their skyia obviously rheumatoid arthritis is really debilitating disease you know um you know with a lot of pain involved. So I mean I'm not trying to be inhumane here. I'm just saying if there's similar ones that are going generic, you know, if we can encourage, you know, patients to pursue those. But I mean, and Blue Cross does have a program that's launch that launched January of 2026 for its fully insured clients and will start to roll in to the fully insured clients at their renewal. if you want it that will require people to take the bioimilars instead of these higher cost medications. >> Mayor, if I may, >> so are you saying that if a if a person uh pays $8,000 a or let's say they're on a medication that's $8,000 a month, um they pay $150 and then everybody else in the plan pays the difference. >> The city pays the difference. the city >> that's part of it comes to the city as a claim. >> So it's not purchased by the fund balance of the health account. >> Well, yes, it's so Blue Cross Blue Shield sends you >> Hold on. I mean, I'm trying to take long to dig through some some some stuff here >> that this this is this is all super complicated and this is the first time we've had the opportunity to give such a deep dive into all of the the the details of how this works. So Blue Cross pays the pharmacy on your behalf and then every week, every Friday, the city receives an invoice from Blue Cross for all of the claims that were paid, medical and prescription. And then the city sends that payment to Blue Cross within 24 48 hours at the most. How you fund that, that's your job. You determine whether it comes from the fund balance, whether it comes from >> reserves, wherever, but it gets paid by the city. >> Okay. Okay. So, I'm going to go back to what I said before. You guys are telling us increase 20% or increase 30%. Now we're actually getting into like, you know, the weeds here where we're looking at other areas and you're saying you're saying that the city is paying for the total cost of somebody's prescription medication. Correct. Okay. We haven't talked about dealing with that as an option because we could look into options for that where it's like maybe the employee pays half, maybe they pay more because you just said we're generous. Those are not presented to us as options as how to tackle the problem that we have. And of course, I don't want to increase >> right >> employees out of pocket, but if they're >> they are taking these medications that are very expensive, somebody's paying for it and it's either them or it's everybody. >> Yeah. So that's where I mean we haven't had that conversation at all in this how long have we been talking about this? Three hours now. >> So let me point out on your current benefits um right here where it says tier one, tier two and tier three >> uh >> on the presentation. >> Where does it say? >> No, it doesn't say 11. >> Page 11. >> Oh, it's on the screen. Okay. So, tier one, tier two, and specialty. So, tier one refers to generic medications. Sometimes those generic medications are actually less than that $15 co-pay and the member would pay that lower cost. Tier 2 or what are called uh >> preferred. >> Preferred. Thank you. Preferred brand. >> Preferred brand. The preferred brand are remember we spoke about those rebates and how those rebates come about. Well, those rebates come about by getting on the preferred listing that Blue Cross puts in into place. So, pharmaceutical companies that are preferred or pharmaceut pharmaceuticals, not the companies, but the medications themselves, preferred medications are going to have that lower $40 co-pay. non-preferred medications are going to have a higher $60 co-pay and the specialty like the $8,000 medications have that $150 co-pay. All of your co-pays, your deductibles and your co-pays, they all aggregate. And when they hit this $8,150 calendar year maximum or $3,300 on the HDHP plan or the HSA plan, $8150 on the PO and 2500 for the retirees on the GFR1 plan. When all of your co-pays hit that amount, from that point forward, everybody's covered at 100%. That's the federal guideline, not guideline, it's the federal regulation established by the ACA and it's been in place for a number of years. So, I love the idea of that 50% uh co-pay on those quick on those high dollar medications. If I was on that medication, first of all, I'd come over here to this HDHP plan because I'd only pay one time and I'd hit my out-of- pocket maximum and then the city would pick everything up for the rest of the calendar year. You follow me? If I'm on this HMO plan and I pay 50% of my $8,000 medication, so $4,000 in uh January and then $4,000 in February, by March, I'm covered at 100% and the city is paying everything. >> Do you have Mayor F, do you have stats on the um how many people actually hit that max out of pocket? >> Yes, we Yes, we do. And how many people are hitting? And then how much? >> We get that every month. That's one of the reports that we go over with the with >> Oh, how many people are hitting the max? >> Lass is going to look that up right now. >> Is it in here? >> No. >> Well, I think we can maybe go over this the next time we meet because we're getting we have a lot of stuff to cover. Yeah, I just >> I I just wanted to interject because we're we're focusing and I I think, you know, it's important information to find out about these specialty drugs and and how much they cost. But I I do want us to be aware because I believe we're kind of focusing on drugs that perhaps um we're looking at maybe being more uh choice driven. Uh there are certain cancer medications that are $9,000 $10,000 a month >> and more >> and more. I yeah they can be much much more and it is not um you know thinking about increasing costs and everything to cancer medications. I I just want us to be aware of the patients who are actually accessing these drugs, using these drugs, um and and the the unique circumstances they find themselves in that we don't lump everyone together. >> Correct. >> That it's simply drugs of uh that are desirable versus drugs that are lifesaving. >> And I think that's that's very very fair that these medications are truly treating serious illnesses. They come at a very expensive cost. But to to answer your question, uh, Miss Bettis, to date, and this is for this plan year, only 47 claimants have exceeded more than $5,000 in out-ofpocket expenses. So, the vast majority of your employees are under that amount. But one of the very first slides that Natalie shared with you was that it's the highcost claimants that are really driving the overall uh utilization. And believe it or not, these people that are on these $8,000 a month medications, they wouldn't really count as a high-cost claimment because >> somebody help me with my math here, but what's 8 time 12 is uh >> 96. >> 96. Um, ma, you're never going to come to me for math problems. I promise you. So $96,000 that's not going to hit that threshold, >> which is the stop, >> right? >> $300,000 is where we're starting to look at those high-cost claimments. So, it's it's just that there's some really expensive treatments out there that, as council member Sig Roy so accurately points out, they're lifechanging. They they're life extending. Um, rheumatoid arthritis is debilitating. So, maybe this medication means somebody's able still able to still come to work versus not being able to work at all. But it comes at this huge cost. >> Well, I know that the city offers like separate cancer insurance and stuff like that. I mean, I'm not trying to be insensitive or anything because I know that this is a serious problem in our community and just altogether, right? But, um, we do have additional insuranceances that are supposed to kick in and cover like additional costs. So I don't know if maybe everybody is participating in these where those plans would kick in to cover addition some some of the costs. >> They're not insurance policies. I mean they're not health insurance policies. They're sold by insurance companies but they're not health insurance policies. So they're going to cover out-ofpocket expenses. They're designed to help complement your medical benefit. But your medical benefit is still going to always absorb the bulk of the cost. The cancer plan is a great example. I like to you to say that your medical plan's going to cover everything for cancer, but you're going to have extra expenses. Obviously, your deductible. If now you have to travel to uh Houston, the cost to get to Houston, the hotel or the Airbnb, all of those extra things, that's where that comes in. If you don't have it, you've got to pay for that out of pocket because the city of Laredo isn't the city of Laredo is paying for your treatment at MD Anderson, but they're not paying for your transportation to MD Anderson. And they're not paying for the meals you need to eat while you're at MD Anderson. >> So totally separate. >> Yeah. So they're they're separate. But you had some great questions earlier about preventive care. And as it turns out, now I don't know how to turn >> back on. >> Is it back on? All right. >> Last month, last month, Blue Cross Blue Shield came down and they they brought a whole team that met with um our team, with Gallagher, and with HR and finance to give an overall review of the annual plan performance. And there's all sorts of good information in here, but you asked specifically about preventive care >> and I wanted to share this because I think it's really great. So the good news is that the city is at or above the benchmark for most of the types of preventive care that are covered. For colon cancer, we're covered uh folks aged 45 to 75. The benchmark is 38.9% participation. You're at 38.3. So, you're right there with what the rest of the world is doing. The bad news is that the rest of the world is still getting an F because we're not hitting 80% of everybody or that is eligible to do these services aren't isn't doing them. the city is doing as well as the rest of the population. >> Yeah. So, some employers offer to their wellness program not just the annual physicals. Like today, I signed for someone who worked at a different company uh for their mammogram, their papsmear, and their physical. So, if we can incorporate cancer screening into the wellness program for points, then that would be, you know, because right, I've never I've only had city employees come to me and say, "Hey, can you write a letter that I've had my wellness?" Which also it' be really convenient if you just had a form for the physicians to sign on for the day instead of having to do some letter, you know, that's just just have a form we can sign. That'd be great. The city gets a report from Blue Cross Blue Shield monthly of who's gone in for these services and they they allocate that point to the wellness program. >> Yeah, but it doesn't have to be an annual visit. That's my thing is insurance wants it to be coded as an annual visit. >> In my world, there's no such thing as an annual visit, especi time. There's no magical annual visit. So that'd be nice. I'm saying with the form, >> but for I'm sorry, I said I meant preventive visit. So it'll show that you went in for your papsmear for your mammogram and so the city is tracking that on the back end without requiring the patient. >> That assumes the physician codes it properly and puts the right code which is not always the case. So >> that I can't uh guarantee. >> Okay. Like in other words, let's be a little bit make it easier on the employee and you know to get these days off and these wellness points instead of making them jump through hoops and their physicians. >> Keep in mind that first of all, they're not having to jump through hoops to get that report over to the city. That's automatically generated based on the the uh claim utilization, the claim showing that they went in for preventive. But I think what Dr. King's referring to is that if the doctor doesn't code it as preventive, it's not going to get caught as preventive. We always remind people that for every service you seek at the physician, hospital, lab, whatever, you get an explanation of benefits, whether you get it in the mail or you look it up on the app. But if you I'm sure that if you could bring the the EOB screenshot to the city, that would be sufficient to show that you went in for your pre preventive services. Or if you look at your EOB and you say, "Hey, I went and saw Dr. King for my papsmear and look, it it didn't come out like that." Then that's when we say something's not right. And follow back up. Well, we should still have higher participation. If people are getting days off just for getting checked, we should have 100% participation and we don't. So, there has to be a reason why people are not opting to do this to get a day off. Like there's something going on. >> I agree. And I think that the sad news is that obviously as a country we're not doing a good job of doing it at all. But the city is in line with the benchmark and we hope to see that continue to improve because we see that last year again looking at the first one colon cancer last year was 35% this year it's 38.3%. We didn't get more gastroenterologists from one year to the next. So, it means people are getting in and they are doing it. So, we're making progress, but it is slow. Um, we just need to keep making steady progress. >> Apologies for interrupting. I'd like to make a motion, mayor, that this item come back to us. Specifically, this is about medical so we can discuss another day because it's going to take us hours to discuss this. So, if if I can make the motion uh to recommend it to staff, please poll us. We can bring back just medical coverage insurance plan only before the next budget meeting. Please if we do that because we need a lot of time, a lot more to talk about. >> Motion and second. >> Could I offer an amendment? >> Yeah, >> because they've already they went through the whole thing and they discussed the plans and right now it's sitting at the 24% plan option and the 34%. But we've incorporated some different ideas and if if you could include those and and and bring back a couple more options, even if it's just to compare. >> Absolutely. Everything's on the table. a plan that includes a 10% smaller percent increase and how we can afford something like that. >> I'll accept the amendment. >> I'll second it. >> Motion is there. >> Second. >> Second. >> All in favor? >> I opposed. Motion mayor. Mayor, if I may, I want to make a motion to go to second session to to find out the about the Saturday study. >> Um. >> All right. Motion second. It needs to be >> second. We have to >> There's a motion. >> Motion second. All in favor? >> Motion passes. Executive session. >> Back to executive session. No agreements remain. >> Mayor and city council, I want to thank you for your time today. It's been a it's been a fast five hours >> fast. >> And uh we we had a lot of good conversation. Everything that we talked about today will actually help us to prepare one for the next meetings and the conversations we have and to help us uh prepare the budget that everybody can be proud of. So thank you so much for your time. >> Motion to adjourn. >> Motion second. All in favor? Both. Motion passes. Meeting adjourned.