Greetings, and welcome back to what promises to be another stirring edition of ZacCast. I am Chad Janisek, here with Patrick Lawler. How you doing, Pat?

I'm good, man. How are you doing?

Doing great. Hey, today we've got Kyle Lester. He's the finance director for the city of Colleyville, Texas. Kyle, welcome to the show.

Hey, thank you for having me.

Absolutely. We are glad that you could join us. Uh, uh, obviously, this is a busy time for not just you, but pretty much everybody in city government. Uh, but in particular for you, because, uh, you are starting the budget process. And given all of the uncertainty that's going on with, uh, the COVID-19, I know that, uh, in the county that you're in, they just issued a shelter-in-place order for all non-essential work, basically, a couple days ago.

Mm-hmm.

So, um, definitely there's going to be some economic impacts that come with that. And as you start your budget process, we thought it would be good just to chat with someone and kind of see how you're handling it, see what kind of things that this is changing for you, and, and what your approach has been. And, uh, so yeah, why don't you just talk to us a little bit about how Colleyville's reacting to, uh, to some of these, these issues?

Sure. Well, um, I guess, first, I, I wanna clarify ... Uh, you mentioned, you know, Tarrant County has the shelter-in-place, uh, mandate. Um, and I think, uh, most cities, uh, I don't know if I can say most cities, uh, educated guess, I would say most cities in Tarrant County, um, have adopted the Tarrant County Emergency Management protocol. Um, 'cause every city has to have something, right? Uh, Colleyville actually has its own. So what the county, um, you know, dictates actually does not formally affect Colleyville. So, um, the shelter in place that the county tried to implement, um, a day before the state did, um, didn't actually affect us. Um, our, uh, our elected officials have been adamant that they, they don't agree right now that we need a shelter in place. Um, you know, they, they've been, they've been cautious, and they have, of course, uh, issued an emergency declaration that's been similar to the, uh, you know, the, the precautions that cities have come to, uh, in, in the recent weeks. We've shut off all, um, public access to, um, uh, city facilities. Uh, our staff is still coming in. Um, we're still working. We're, you know, we're maintaining our boundaries, our social distance, and all that stuff, but we're still coming in, we're still getting our job done. Um, and that's, you know, that, that's w- what Colleyville, where Colleyville's at right now. Um, we didn't actually, uh, formally get to shutting down essential businesses until the state mandated it, and then, of course, we fell under that umbrella. And, uh, and so, you know, all of our restaurants have gone to carryout, delivery only. Um, and, uh, and, and, you know, we're, we're, uh, I guess that much more cautious because the state has stepped in. Um, it doesn't look like the state's gonna issue a, you know, um, shelter-in-place, statewide shelter-in-place mandate. Um, Governor Abbott's been very reluctant to do that. Uh, I don't know how long he'll hold out on that, but so for now, we're not under that Tarrant County shelter-in-place mandate. But it, it's still ... You know, we're still being as cautious as we can be. A- and speaking of caution-

So-

... I mean, that's- oh, yeah, go ahead.

Oh, just gonna say, you, you still have all your staff coming into City Hall every day. You had kickoff today, right? But you did that virtually.

We did. Um, so, uh, you know, we're, we're also ... I mean, all of this, we're, we're taking it very seriously, and one of the things, you know, i- is I was trying to set up budget kickoff. Of course, this is my first budget uh, I'm doing with Colleyville. I came on here September of 2019, and um, I, I was just thinking, you know, uh, all, all kickoff really is, is here's the process, here's the forms, let's talk about our outlook, and then that's it. And so with the CDC saying, "Look, try try and limit the people you're with to, to under 10," you know, knowing our department directors, uh, I suggested that we, we set up a WebEx meeting, um, and, and test it out, and then just have people tune in, you know? And you could have however many managers, directors, you could set up a conference room if you wanted to, and we could still get everything done we need to do and be safer, you know, than, than if we all showed up. And surprisingly, I'm not really a tech guy. You know this. Um, but-

Mm

... it, it went well. Yeah, it went, it went very well. Um, and, and we got it done, and, you know, the message, uh, yeah, it really is just, uh, you know, things are up in the air, but uncertainty is... In all honesty, I mean, that's where, that's where your real budget guys live, it's in uncertainty. Um, because you're always trying to plan, you know, for a positive year, a middle-of-the-road year, and a negative year at, at most, uh, or at least. Um, and so that's, that's kind of what we're doing, is we're examining what segments, you know, of our retail base could be hit by what's going on, um, how long could they sustain that hit, potentially, uh, and then, you know, listening to certainly opinions out there on, on, you know, if we do go into a recession, what's it gonna look like? How long could that potentially last for? Um, and then taking into account who our, our residents are. I mean, we have higher property values. We're a, we're a high property tax, um, city. We rely mostly on property tax.

Yeah, it's really only till, uh, only recently that you've, that you've really started to develop commercially, like in the past, what, 10, 10 years to- that you've started to really expand, um-

Uh, yeah, I'd say so

... from a, from a retail standpoint.

... yeah, no, I'd say so. Um-

I know Patrick knows a lot more about Colleyville's history from that standpoint, 'cause he's- he was good friends with their former economic development director, but, uh, it's-

Yeah, he was Alan Grantburg.

It's always been, it's always been kind of a nimby thing in, in Colleyville, where they, they didn't really want a whole lot of, uh, commercial growth, but that's kinda changed-

Yes

... over the last few years.

Eh, the, the guard, especially politically, the political guard has changed significantly, uh, over the past, really just over the past, like, six years, uh, as far as I'm aware. And, and that's been part of it, is how much, how much of Colleyville do we want to develop, and how much do we want to keep that semi-rural, you know, hometown feel? You know, what's, what's our direction? And right now, um, you know, there, there's sort of this hybrid of we're gonna develop, but we're gonna develop and we're gonna have our own signature identity. Um, think of like... Patrick, you're from, you're from, um, uh, Katy, right?

That's correct, yes.

All right, so you, you're familiar with, like, the aesthetic of the Woodlands?

Yes, very much so.

All right. That, that, that's kind of a bit of the vibe that I get with, with where Colleyville's going. Maybe not, not as, not as, you know, Woodlands-esque, but it's, it's very, "We want our own identity, and we want people to know when they're in Colleyville and when they're not." And when you're in a mid-city and you, you've got Hurst on one side, you know, Grapevine, Southlake, to ask... You, you need to try and get someone to notice when you're in one of those areas can be pretty difficult, because they're just driving down 26.

Yeah. So description of that is, is Colleyville is basically sandwiched between Grapevine on one end and North Richland Hills and Hurst on the other, right? And Southlake.

Yeah, that's basically it.

Yeah.

Southlake's there, yeah.

And Euless. Actually, right up against Euless as well, right? Off 121. So yeah, you, you, you guys really are... I mean, to find your own identity, you, you have to do something special.

We do, and that's, that's what we're trying to do. We, we've got a lot of, um, development and a lot of just, I, I guess I would call it, like, signature, you know, things that we're trying to do. You know, thing- things that if- once you enter the city, you know, our northern gateway, we're, we're putting up some, you know, some, uh, facade there, that, that sort of, "Hey," you know, lets you know you're, you're coming into Colleyville. Um, and, and the way that we're-

Texdot really helps with that, too, because, uh, that construction project on 26 is like... I think it's gone on for 10 years, so you, you kinda know when you enter Colleyville-

Tex-

... because Texdot's working there.

Yeah, for now, yeah. For now, it's, it's when you come to a standstill in traffic, "This is Colleyville." But-

It's, it's close though.

Texdot's gonna close-

Texdot's getting close.

Yeah, it's getting close. It's getting close, and y'all have a beautiful city hall.

Oh, city hall's amazing. I love going into work.

But let's talk about your kickoff a little bit.

Okay, hold on. Time out, time out. I'm sorry, I'm sorry. Hold on. Can I tell one story about Colleyville that's just crazy awesome? So we, we play a lot of baseball tournaments in Colleyville.

This is your podcast, too.

Hey, this- yeah, I know. So we, we, we play a lot of baseball tournaments in Colleyville, and this is just something that I notice in, in the world. So at the baseball fields... Which, by the way, Kyle, beautiful facility.

Yeah.

One of the most beautiful city-run baseball facilities I've, I've ever been to. Uh, really, really nice facility. But they don't mulch their landscape beds. They have pecan trees that grow all throughout this park, and they shred pecans as their mulch for these beds. Now, I... You know, look, I'm just a normal Joe who lives in Parker County, Texas, but pecans at the grocery store are pretty darn expensive. I'm just gonna point that out, and in Colleyville, they shred them for mulch. That's my two cents.

Look, look, we're gonna talk about parks and rec, so I'm just gonna tell you, like, like, Hurst is Pawnee, and we're Eagleton. That's, that should be all I have to say about it.

Wow, there you go. There you go. Nice. Throwing down the gauntlet, I like it.

We have Michael Blubaugh on retainer. Um, get- getting back to your, uh, Chad, your budget question, um, you know, we, uh, again, like, we don't know everything... Uh, obviously, we don't know everything about what this pandemic is gonna bring to us. We know it's gonna hurt, at the very least, through the next several months. Now, if that's the end of it, um, Colleyville's in, in a fine place to come out at the end of that. We actually have a very healthy balance sheet, um, general fund's in a good place, uh, and, and I don't, I don't really have worries beyond that, if that's the duration. But the thing is, we don't know that. So what I generally do is I'll prepare a few different forecast, uh, scenarios. Um, those would be, you know, if, if, you know, if it's a couple of months, and, and the hit that we feel is primarily in this fiscal year, or maybe the implications are beyond that, and we have businesses that can't recover, and then businesses that don't come in to fill those businesses. Um, how does that look? How does that affect our tax rate? How does that affect our, um, half-cent sales tax for CDC and CCPD? Uh, because that puts more pressure on the general fund. So really, the name of the game is being flexible and having, having, I guess, kind of contingency triggers that you can pull and say, "Okay, this appears to be happening. Let's, you know, let, let's pull this trigger. Let's, let's think about, you know, shifting kind of how we fund things." Um, the situation you don't wanna be in is the situation of a financial manager or city manager that has not already assessed their risk. Um, the first thing I did when I got to Colleyville, and I really learned this from working at Weatherford, is to take a look at your revenue portfolio and your exposure and say to yourself, "Okay, if we, if we come to this catastrophic point where-... we're having to consider something like furloughs, you know, or, or, or widespread layoffs or a lot of program cuts. What triggers that? Like, what, what leads us to that point? Um, and as you know, for Weatherford, a very sales tax-heavy city, what it would be would be, you know, obviously, the economy tanking us, not having any sort of contingency plan on how to fund things that we're doing. Um, Colleyville's in a much better position. Um, we're a little more insulated. You know, obviously, we're not impervious to it, but I think we, we have quite a ways to fall before we, we get to that point, and even, even on the way down, we have a lot of, uh, different levers that, that I think we can pull before we get to those drastic measures of furlough or, or layoffs. And, and I, I certainly wouldn't think that that's- that, that's definitely not our intention to get there, and I don't think that's where we'll be.

So my favorite part about budgeting is you get to this, uh, you get to a point when you've been doing it in the same place for long enough, where you basically know, like, where every dollar is, and wh- you know, just, uh, when something random comes up, and a question gets asked to you, you, you can just kind of see step A to step B to step C about if I make this one change, how does that affect everything? And it's sort of this zen moment, uh, that you, that you eventually will get to as a either a budget director or budget manager. Um, I assume that you're not quite there yet 'cause you've only been there for a few months, but, uh-

No, definitely not

... it's, it's good to know, like, the first thing that you did to get to that point was a risk assessment and, a- and, uh, not like from a risk management standpoint, like, you know, your, you know-

Yeah

... operations and safety training and things like that, but just your financial risk. You know, where are the, uh-

Mm-hmm, mm-hmm

... where are the potential areas of weakness, and where are the strengths? Um, that's, that's a really important thing to do when you first get into a, a, a role where you're managing the finances and budget.

Yeah. Well, and I'll, I'll tell you just a few of those. I mean, like I said, we have the half cent CEDC, CCPD, and we rely on those, a- and we've, we've actually increased the, uh, position count in CCPD in the last year. Um, and i- again, if we have a sales tax problem, our general fund in isolation can, can handle that. Uh, CEDC, CCPD, that's, that's where it really starts to, to weigh on it, and then they have to shift things back to the general fund, and so those things don't exist in isolation. Um, hotel-motel tax is the same way. We have one hotel. It's, it's pretty profitable. We have a, you know, decent, uh, hotel-motel fund balance. Um, but again, that's economically elastic, so we, we may end up, um, at, at a point where some of those special events and those things that we relied on those revenues before, we, we can't do that for a year, maybe two years, uh, and that's really where the pressure comes from in Colleyville.

So talk to me about your kickoff again. Let's go back to that.

Sure.

And obviously, uh, you know, y- you mentioned that one of the things that you do in a kickoff is just talk about the process and procedures, and that's great and fun, and everyone loves that, but, um, another really important aspect of your kickoff is the story that you're telling about what you're trying to accomplish in the upcoming budget year. Um, like-

Mm-hmm

... that kind of helps guide the departments with their requests and helps them understand ahead of time what is and is not likely to get recommended for funding. Um, so, you know, as you've kind of prepared for this day for the last few months, you've, you've probably had a story in mind, uh, the things that y'all have done over the past few years and where you're planning to go, the city's strategic plan, uh, comprehensive plan, like how, how all these things fit together.

Sure.

How does that change in the last couple of weeks, um, when, uh, you know, as this situation has grown more and more, uh, intense?

I, I think i- in general, you start to see how mu- how many of those goals, which one of those matter more than others, i- is, is the best way that I could put it, because all, all those goals are gonna compete against one another. Y- you want to, for example, you know, uh, staff up, uh, PD and fire, for instance. That, that's always something a lot of cities are, are after, but at the same time, you want a low tax rate. Um, you know, Colleyville has, i- in the last two years, has adopted the... well, what was the effective rate, and now is the no new revenue tax rate. Um, and they, they would love to keep doing that. That's a very high priority for them. Um, how does that compete against, you know, like I said, if your, your sales tax does tank for, you know, more than just this fiscal year, for next fiscal year and part, part of 2022, you're gonna have to put off one of those goals. And so I, I think that- that's really where the rubber starts to hit the road, is you say, "L- look, all of these are here, and we, we all want to accomplish them. We're on the same page, but you have to prioritize them," and you have to say which ones are more important. And, and that's kind of the message going into it for, I would say, for council more than for staff, because staff's focus is going to be, "What do I need to do for my operations? You know, how, how do I... How do I best deliver the same service level that I'm delivering now, and if I wanna increase my service level, why, and who's gonna benefit?" That's fine. The, the ultimate decision level really comes to city management and council, and that's when you have to tell them very frankly, "Look, if this is your, your first goal, here's what you sacrifice for over the next couple of years." And, and so I think i- going into any given budget year, that needs to be your message of goals are always gonna compete against one another. Um, the, you know, the economy, the, uh, basically, what we're up against is what it is, and, and here's, here's the unknowns. Here's what we don't know. So, um, our, our message, you know, generally isn't gonna change too much from year to year, at least, at least not from my standpoint.

... I, I wanna point something out, uh, which you kinda hit on this a little bit, Kyle, but because this- that we've had a statewide disaster, I don't know how many cities have really realized this yet, but in the new tax code that the legislature adopted last year, we no longer have a cap, that the cap is increased to 8% for the next two years. Have, have y'all talked about that-

That's right

... at all at Colleyville?

So, um, we have. Um, Colleyville was, um... I- I, this was before I got there. I believe our, our mayor and, and I think our city management team, um, sort of helped champion, uh, some of those, those property tax caps. And so they know they're out there, um, that, that the 8% is now in play. Um, I, I, I mean, that's- I can't imagine a scenario right now in which we would go up to that point. Um, I can tell you that the flexibility, just in the last couple of weeks, the flexibility on tax rate, uh, for, for Colleyville has, has grown, um, a lot more than it, than it had been before that. Before that, it- I wouldn't say it's rigid, but it was very, you know, "We can do this no new revenue tax rate." And, and now it's... the language has, uh, has changed a little bit to, "Look, that's what we're aiming for. If we can't get there, we understand. Let's just really map out why we're doing it, what we're..." So, so I think it's softening a little bit. Um, we're certainly... I, I, I, I mean, I would bet my next paycheck that there's, there's no way we're, we're going to, in any way, go up to an 8%. Um-

But Colley- I mean, Colleyville obviously is a extremely fiscally conservative city, right? So, I mean-

Yeah

... it's, it's kinda known as that.

Very so.

But I, yeah, I do think it's interesting, uh, 'cause I've had this conversation with a couple different cities, that's come up in the conversation, is like, "Man, but-

Of course

... you know, we- if we have to, we can compensate with property tax." It's amazing how fast that conversation's come up.

Well, of course, it has. I mean, it-

It's not surprising to me. If you, if you listen to any of the conversations during the legislative session, it's not surprising that cities will try to take advantage of, uh, a moment when that 3% cap goes away.

Well, you're gonna have a ton of cities that take advantage of it twice. They're gonna take advantage of it 8% this year and 8% next year.

I mean, the writing is on the wall from the state level that they're gonna try to limit the ability of cities to manage their own property taxes. So if you have this opportunity, I'm like, uh, I, I'm not the kind of person to say take advantage of a crisis, but if you have an opportunity to, uh, to shore up that property tax for the next 10 years or so by, by utilizing the, the higher cap, uh, I would suspect a lot of cities will probably take it.

Well, and you can't bank it. That's the other thing.

Oh, you can't.

With, uh... You can't, you cannot bank that 8%. Whereas if you don't, if you don't hit that cap in normal years, you can actually bank it. I think it's up to 5%. Is that right, Kyle? You may want to correct me on that, but I, I think it's up to 5% you can bank and do in future years.

I, I didn't think it was 5%, but yes, you definitely can bank for a rolling three years.

Yes. So, so I, I think it's, uh, you know, I, I think it's very interesting to see how cities are gonna react to the situation. Kyle, I wanna dig really into the sales tax, 'cause that's what, with our clients, most recently, we've been dealing with, which is, what is our loss? How much is it going to be? And how- you know, 'cause we, we are... The, the good news is, is that we're at a time in the budget year, you know, we're at, uh, we're at re-estimate time, right?

Mm-hmm.

So we're at a time in the budget year where we still have time to cut back on services so that we can end on a balanced budget.

We haven't hit the s- we haven't hit the street maintenance season yet.

That's correct. We haven't hit street maintenance season. That's the biggest thing. So sorry, public works department, you're probably gonna get hit.

Yeah.

Um, but, but the question, the question is, is how much have you started to dig into the actual projections of loss of sales tax for Colleyville?

Uh, you know, that, that's an interesting question. For the past week, that's, that's at least 20% of what I've been doing with my time. Um, so the biggest thing that's been hit for Colleyville has, has generally been, um, food and, and beverage establishments, restaurants and bars. Um, and they're still doing business. Most of them are still do- still doing business, but they're really reducing how much business they're doing. They've obviously cut their staff, um, and people have... You know, we have a few liquor stores in Colleyville that are highly patronized, so I would say that in general, you know, even though the gov- the governor has said, you know, "Hey, restaurants can deliver mixed beverages and stuff," I, I wouldn't think that there's a lot of that going on. What, what's probably happening is people have gone to Goody Goody and, you know, bought their own stuff, and now they're at home, and so our mixed beverage taxes are probably gonna be non-existent for the next couple of months. Uh, and that, that's what I'm, that's what I'm planning on, is very little showing there. Um, from a sales tax perspective, um, you know, I'm, I'm... M- my biggest concern isn't really this fiscal year. As you said, Colleyville is a very conservative, um, you know, fiscally conservative, uh, uh, city, and, and we can weather a, you know, a, a hit for the next several months. The question is, how long this is gonna last? And, um, and, and if we do lose restaurants, um, permanently, we have some that permanently shut their doors, are we gonna have ones that replace them? Um, and that, that's kind of... That, that's where my concern is, is at this point in time. 10% of our sales tax comes from, uh, those food and beverage, you know, establishments. And so, you know, if I assume conservatively that, that, uh, w- we take, I don't know, just, just from that segment, let's say, uh, uh, a hit of about 8%, um, you know, I can do that and then-... you know, turn around and say, "Okay, well, people are basically going to grocery stores," but we also have some recreational, you know, areas there that, that people aren't going to either. So really what I'm trying to do is look at several different scenarios and, and come up with, okay, a best case, middle-of-the-road case, worst case scenario, and then see what the next few months really have to offer. Um, the great thing about- I wouldn't say great, but the beneficial thing about when this hit is this hit early on in the budget process, and so we should have some, you know, early idea of how this is going to at least immediately affect us within the next two months.

Yeah, you'll have sales tax data for March, uh, in July before you propose.

Exact- yes, exactly, and then we'll have our final-

I'm sorry, sales tax for, uh, for May.

Yeah, y- yeah, sorry. Um, and that's when I'll have my, my final property tax values. And, you know, as I said, Collinville is a property tax-heavy city, so, you know, we, we rely much more on that than sales tax. Um, and that, that insulates us a little bit, you know, from some of this, this noise that we're having. But, uh, the issue right now, honestly, as, as a budget guy, is just to be flexible and to tell all your department directors and your city manager, be very open about you, you need to be prepared for potentially something very bad, to where we don't have a lot of room next year, that maybe we need to think about, you know, scaling back operations if it's a very deep and long recession. Um, fortunately, that's not what I've been reading, but, uh, I mean, this is unprecedented, so-

Are, are y'all-

really just be flexible and know where you can... No, go ahead.

Sorry. Uh, at this point, are y'all or are you thinking more of a, like a fund balance hit for next year type of scenario or a scaling back operations or just not doing as many new things? Would a fund balance hit be a higher, a, a higher priority option for you, just so that you could kind of maintain the status quo while you determine the actual length of, of the impact?

Well, if you can afford to do that, um, you know, I think that that's probably a pretty beneficial thing. Having, uh... Now, having said that, this does afford you the opportunity to, to really take a strategic look at your operations and say what's- what do you really wanna do, and what can you live without? And in all honesty, if you can live without something, um, in, in a bad economy, then you can live without it in a good economy, and so you always need to take that strategic look.

If you can deliver alcohol from a, uh, you know, from a restaurant- ... during a pandemic, then why can't you do it when there's not a pandemic, right?

Uh, exactly. Why, why the hell not?

I just wanna say, that, that's spoken like a true- that, that is spoken like a true budget guy, right? Not like a city manager. Okay, a city manager would never make that statement, Kyle. But a budget guy who doesn't want the city manager to spend money, that's the statement he makes right there.

Yeah, he's, he's-

Yeah, I'm not-

... he's got me on that one.

Yeah.

I don't, I don't necessarily- I don't, I don't want us to not spend money. I'm not a, a... You know, we're not about hoarding. We just wanna spend it strategically, and, and, um, then-

That's, that is, that is a total falsehood. Budget guys want people to spend no money. I would ask Chad all the time-

No, no, no, no

... "Chad, do you have money for this?" And the immediate answer was no. There was never, there was never like a yes.

Yeah.

It was just a no. If you give a mouse a cookie, I'm gonna want everything at the end of the day, and, and you just can't do that.

Okay, well, well, now, now you're showing your cards, that, that you-

No, absolutely

... me in saying, "Do I want this?" You're saying, "Give me the world."

Absolutely. If I can get just a little bit, I'm gonna take everything.

You're setting the chess game right there, so you're, you're sort of validating the other point.

Yes.

But just-

Exactly. Validating the reasons that I had to say no initially.

That's correct, yes.

I'm, I'm, uh, I'm not the type of budget guy that just says no to say no. Like, we, we're here to do, uh, perform a service. What I'm saying is, if, if in a good economy you add just because you can, that's not a good reason to do what you're doing. A- and that doesn't come to light until you're in a bad economy. That doesn't come to light until you're forced to choose between, oh, okay, program A, program B, and then you realize that maybe program B was never a wise thing to do in the first place, and that- that's what I'm getting at. That- that's, that's where this becomes a useful thing to go through, even though it's painful, and, and no one actually actively wants to go through it.

So the... What you're saying, I 100% agree with, and it's the mentality that we used in Hudson Oaks. Anytime, uh, a person would leave the staff, we would reevaluate the entire organization and determine whether or not that pr- position was still necessary moving forward, or should it be converted to something else? I mean, the staff that they have right now, uh, is nothing like the one that we had three years ago before we had our finance director leave, before I left. Uh, you know, they've got several new positions because that's what the city needs now, uh, and we didn't just need to carry forward the same thing that we were doing. So yeah-

Right

... I, I fully agree that it's an opportunity to, to evaluate the things that you have and, and determine what you really need.

Sure. And, and having said that, you know, getting back, getting back to your original question, um, I, I am certainly not eager, definitely not as a, a young member of the staff, but, but even just as a finance director in general, I, I, I don't want to force anybody to cut anything. And I don't think, I don't think that should necessarily have, you know, be your go-to if you've done your homework. You know, you should be able to, again, assess your risk and know areas, know, know what you can do to try and sort of weather a storm. Um, for us, if it's... I, I am kind of relying a bit on fund balance, at least until we know what we're dealing with, because this is so unprecedented. I, I don't... I mean, I can, I can project all I want, um, and I can come up with plans under different scenarios, but until I know what scenario we're under, I'm, I'm not gonna try and-... prematurely pull the trigger, I guess, or, or, or ask the city manager to do so.

I think that's something-

Yeah, I saw a post-

-a lot of cities do. Real, real quick, Patrick, I'll let you go with it.

Go ahead. Yeah, yeah.

Uh, a lot of cities are quick to pull the trigger when they... at the first sign of distress, and I think that you do need to have a steady hand, uh, as you move into these uncertain times. I mean, you have fund balance for a reason. Um, it's not a matter-

Mm-hmm

... of, you know, deferring a decision, it's just, let's just see what the actual impact's gonna be before we do anything crazy.

Exactly.

Well, I, I saw- and this relates to a lot of the special services we're doing for clients right now. We're doing a lot of on-the-fly, weekly loss projections, uh, for clients throughout the state of Texas, and I, I saw a post today on LinkedIn from a guy who was a finance director for well over 30 years, and his post was: What does a finance director tell a city manager at this, at this time? And, and it basically went into detail on how you give your city manager the absolute worst-case scenario, and you lock everything down, and you stop basically all spending across the board. Uh, a- and I just thought to myself, "Man, as a city manager, I wanna know what they really think."

Yeah.

I don't want the worst-case apoc- apocalyptic scenario. I wanna know, like, what, what is it? And, and I, I don't wanna call the client out, uh, because we're, we're doing a lot of work-

Mm

... for them, and, and they're doing a really good job right now. Um, but they did some initial assessment on their sales tax, uh, on, on how much they would be losing, and their assessment was apocalyptic. I mean, it was re- it was-

Yeah

... it was so apocalyptic that they had an entire industry, utilities, which utilities are not gonna go anywhere, phones, electric. We're, we're still... You know, cities that get sales tax on those items are still gonna get sales tax on utilities. And, and-

Right

... utilities made up a higher percentage of their sales tax than they were actually projecting to bring in in this apocalyptic scenario. And I'm like: Guys, that's not even possible. Like, people still have to have their lights turned on. And so, you know, I, I think we need to e- exactly what Chad said. You've gotta take a step back. You have to look at it, uh, and, and do your analysis, and, and you don't have to freak out. There's no reason-

Mm

... at this point to freak out. And, and Kyle, you, you have really, in this conversation, uh, you're really... 'Cause I, I know you personally, right? You're super level-headed through this right now, and I'm impressed by it.

Yeah. I mean, it's, it's not... Well, I mean, that's the thing, though, it's e- e- going back to, I guess, what you were saying about the initial knee-jerk reaction from a finance director, that's- it's very defensive, it's very, it's very cautious, but at the same time, you're asking your city manager to basically shut down, um, pretty much everything they're doing, um, all the plans that were made by council, everything else, um, on worst-case scenario speculation. And really, what you should be doing, y- your job as a finance director is to say, "Listen, I- we obviously don't know. I don't have a crystal ball. Here's what I can tell you. Here's where we can flex, and here's where things get a little rigid. Um, I've got a few projections. I've already done them," key. Um-

Mm-hmm

... and, uh, a- and, and we can maintain our status quo right now. Let's wait and see. It's gonna be a few months. It may be rocky, but we can get through this, and we're gonna ease into whatever solution we have to ease into. Um, it may hurt, it may not, but, you know, we're, we're not gonna just try and pull the cord and, you know, pump up the parachute. Like, we can, we can be a little more level-headed about this."

A- a- and I think that's a, that's a fine approach. I mean, that's a, that's a really, really good approach to take to an event that I think right now, finance directors are trying to look out two or three years to say that this event is gonna be a... Y- you know, everybody's assuming this is a recession or some type of depressive situation financially, right? And we don't know that yet.

Yeah.

All, all we know is that this is gonna last weeks, and, and, and we don't know how many weeks, so why are we projecting two years or three years out when really all we know is it could last weeks? Why aren't we just looking at the week-by-week loss at this point and taking it week by week?

You know, I, I'd say, and this may, this may be a little more in-depth of an answer than, than, uh, people might be thinking, but, you know, I, I've been thinking for a while, we're, we're definitely due for some kind of a slowdown. Uh, you know, this is the largest, has been the largest economic expansion, even though it's slow expansion, um, the longest economic expansion, um, we've had in this country. And, and so I think everyone, uh, a lot of attendant finance directors were looking for a slowdown, and so when this came up, it became, "Okay, this is it. Now, everything that we've, you know, uh, thought about or trained for or, or, you know, projected for is, is coming to fruition." Um, what's- what we need to keep in mind is i- this is vastly different from '08, '09. You know, '08, '09 was a massive systemic problem in our, uh, mortgage markets and our financial markets, um, decades of bad legislation. Uh, a lot of things colluded to make '08, '09 happen. This is not that. This is an external... This is not a bad economic actor. This is an external hazard that's coming in, that's disrupting our markets, and the question that we have to ask ourselves is, you know, h- how, how long do we think this will go on? How quickly can we recover? I can tell you that Colleyville residents, um, just getting back to my, just, you know, locality, um, tend to be higher in terms of wealth, uh, in terms of property values, and even though their savings may take a hit, um, I think we will be insulated, um, to a certain extent from sort of the effects of this. That doesn't mean it won't hurt, and that doesn't mean it's, it's not gonna be-... a problem for us, but I don't see this being a catastrophe yet. I mean, I can plan for a catastrophe, and that's fine, but I'm not gonna sell my city manager on a catastrophe, because quite frankly, that's not my job right now.

Awesome. Kyle, thank you so much for the, just the background, the, uh, the context, you know, from a budget standpoint, and like someone actually dealing with this in the moment. Um, I'd be remiss, though, if I didn't take the opportunity to, uh, to bring up a question that you actually posed to me recently. Um, and we kind of put it aside and said, "Let's, let's talk about this on the podcast." Um, and especially since we didn't- we somehow managed, like, a 40-minute conversation without a single Office reference. I'm extremely disappointed. But- ... uh, you asked me the other day, if Leslie Knope were my assistant director, would I keep her because of her productivity-

Yeah

... or fire her for her blind impulsiveness and reckless actions? So I actually, like- ... went back to rewatch the first couple seasons of Parks and Rec. If those of you who don't know, Leslie Knope is the deputy director of the Parks Department in Pawnee, Indiana, uh, which is a fictitious town, and, uh, let me just first say, whoever wrote that show was amazing. They had so much background research, or they worked in city government for a very long time, but it- everything from, like, the way the parks department operates, and the planning department, and the libraries, and, uh, when, uh, when he meets... When she meets Louis CK, the police officer that they end up, you know, they end up dating-

Yeah.

Oh, my gosh, he talks just like a police officer, even about, like, h- how he's attracted to Leslie Knope. Uh, like, "Yes, I found her, uh, attractive, and, uh, after I spoke with her, uh..." You know, it's like, just the, the way that they all speak and, uh, and act is so lifelike, at least in the first few seasons. Um, but yeah, so w- why don't you go ahead and give your thoughts on that question, Kyle? Because I know that you got in some trouble-

Sure

... on, like, a Facebook group or a Reddit, Reddit sub, you know-

Yeah

... post or something.

No, I, um... So first of all, I- the only disappointment I have from Parks and Rec is that they never showed a finance office at all. 'Cause that, that- coming from a finance office, that would be comedic gold w- with, especially with Leslie Knope's personality. Um, but, uh, I, I go back and forth on this. So, yeah, I was a part of, like, a, a nerdy, like, Parks and Rec fan group on Facebook, and I mentioned on there, "You know, I think I might honestly have just fired Leslie Knope in the first few seasons," and I just got dog-piled on. I'm like, "Ah, okay, whatever." But i- the real... I mean, the real thing that, that I think I, I was really getting at was that, you know, Leslie, uh, at least for the first two seasons, whenever she didn't get what she wanted, um, she would go above her superior's head, and even worse, she would go to the press and try to undermine city council, city management. Um, and especially in local government in, in Texas, local government, that has the capacity to, to make things a lot more disruptive, ha- have a lot more negatives than any positive that could potentially happen, you know, from that. And so if that continually happened, if that's all that Leslie Knope was, was, you know, "It's my way, and I don't care what you want," uh, even if it was well-intentioned, um, I definitely would've taken some kind of personnel action. Uh, y- you just, y- you can't do that. Um, i- if you, if you, if you try and venture in... A- I know that we, we talk about, like, politics versus administration, and we're taught, taught about that, and there's certain things that bleed over, but when you blatantly try to spit in the face of, of your, your city council as a staff member, that's when you, you've definitely gone over the line.

Well, she later runs for council.

She does, ex- e- exactly.

Which kinda... Yeah.

That's, that's why I'm saying only in the first few seasons. 'Cause once she runs for council, you're like, "Eh, this has gone clearly beyond, you know-

Yeah

... mm, any-

Reality

... scenario." Uh, yeah.

It's literally-

But if you, if you-

... not realistic.

Literally the least realistic I've ever seen. Um, no, but if you give me, if you give me Leslie Knope, uh, Harvest Festival.

Or Tom Haverford.

Uh, yeah, I would've fired him immediately. And I would've invested in, I would've invested in Sparkle studs. Twinkle, twinkle, big star.

Or, uh, Entertainment 720.

No.

So it's been a while since I watched Parks and Rec. I remember, uh, when it, when it came on, I had, uh, I had just moved to Weatherford, and I was managing the parks maintenance department, and it hit home s- like, just perfectly. Um, because parks people are very excited about parks, and that's great, because that's, that's their job. Uh, but Leslie Knope-

Yeah

... is just the quintessential parks person, and, and so it really resonated with me there. Uh, uh, there's an episode where she, she finds out that the library department is, uh, has put a claim in on her pit lot, and, uh, it's her boss's ex-wife, Tammy, that is, uh-

Yeah

... the deputy director of the, of the library department, and there's this huge internecine struggle between parks and libraries, and they hate each other, uh, which I found that quite funny, too. But the thing about Leslie is, uh, at least in the beginning, she's just really naive. Like, she's super ambitious-

Yeah

... but she's really naive. Um, like, at one point, uh, uh, they go to a neighboring town to build a park with this Kaboom, uh, organization. And she comes back-

Yeah, yeah

... and the planner is like, "You know, why don't you just go do it? Like, you don't have to ask for permission, just ask for forgiveness." And so she says, "So who do I ask to, uh, to know if I don't have to ask for permission?"... it's like she's such a rule follower. But like, she, you know-

Yeah

... she starts to kind of break rules as the thing goes, and like you said, she, she starts to go a l- way beyond the bounds of a, you know, a public servant. Uh, at least a non-elected public servant. But I don't know, part of me thinks that you could, you could utilize her ambitiousness, and, uh, you might term it as overzealousness. Uh-

Yeah.

I, I feel like there's... Maybe it's partly 'cause she's in a smaller city, but there are- there's a, there's a lot of opportunity in bigger organizations where a lot of people are doing the same job, um, where that sort of ambition just kind of gets drained out of you over time. Um-

Mm-hmm

... so if you can find someone who has the drive, then you just have to fi- find a way to harness it for good, you know, not for evil.

Yeah.

Um-

But that's- well, that's a fair point because y- you know, I guess I hadn't really thought of it that way, but you're, you're absolutely right. Like, y- the... as much red tape as, as government has, and as much as you hear the word no, I mean, you can, you can really become kind of more like, uh, Larry, Gary, Jerry Gingrich Gergich, whatever his name is, you know? Where you just kind of show up and do your job-

He's just there

... and leave, and it- yeah, and you, you don't want that either. So I, I think, you know-

He's just there, and nobody remembers him. Like, nobody thinks about him. He's just there.

Exactly. He's just living off of the public, you know, dollar and not really doing much to contribute to it. So, so I think, I think, you know, initially what I thought was, "Oh, fire L-," uh, but I, I probably w- I would soft play it definitely and be like, "Look, your ambition's great. Here's what I need to see from you. Um, definitely stop going to, to the Perd Hapley Show. And, and don't talk to Joan Calamezzo or anyone else in the media, and, and, you know, and, and I'll do everything I can to, to help you move to the next level and to accomplish the goals you want to accomplish. But we're gonna do this the right way and not subvert, you know, everybody else in the city." And, I mean, that's, that's honestly the only point I was trying to make.

How would you like w- how would you like working for Ron Swanson?

I, I

Talk about someone saying, "All of them."

I want all... Yeah. Correct. I want all of the meat. All of the meat.

I'm afraid what you heard was, "Give me scrambled eggs," when what I said was, "I want all of the eggs you have." Um-

That's correct.

No, I... Um, you know, from a personal standpoint, I would like having a beer with Ron Swanson. Um, he had a- absolutely no business being in government. Uh, so no, I don't- I wouldn't wanna work for him unless I was more in the private sector.

I'll say this, I, I sympathize a little bit. Um, I, I, I lean a little bit more, um, I'd say, like, anti-political, not really, uh, the biggest fan of government generally. Um, but so going into government was a little bit strange. Um, but I always kind of felt like, you know, if I wasn't doing it, then someone else who maybe didn't care as much about being, you know, fiscally responsible or-

Mm-hmm

... operationally responsible, maybe they'd be in my, in my position. Um, so I, I kind of have some sympathy for Ron. Uh, he's a little bit of an a, a, a, a caricature, obviously, 'cause it's a comedy show.

Yeah.

Um, but the one thing I loved about Ron is l- later in the ep- in the series, um... I don't remember what they're building, maybe a park, maybe something else, and someone comes up to him and asks him for this permit, and he just hands them this sheet of paper, and it says, "I am permitted to do this."

No, I'll tell you what it was. He, um, he was doing the... This is how, oh, man, this is how much of a parks and rec nerd I am.

Mm.

He was, um, doing the staff appreciation lunch, and it was a barbecue, and he brought, he brought a live pig, and he was gonna slaughter it and throw it on the grill. And, like, the parks ranger was like, "Uh, you can't do that here." He's like, "Why not?" And he was like, "Uh, it's against, um, at least five laws and, like, a dozen health codes." And he's like, "Oh, don't worry, I have a permit," and he hands it to him, and it says, "I can do what I want."

Yeah, that became a meme in our office for a few months.

Yeah. No, it's, um- i- well, and one thing you said is, like, you, you would rather someone who cares and understands the scope to be in that position. Um, and that's actually why I got into government. Uh, not to bring this back to a non-comedic thing, but like, i- initially, I, I wanted to do something very different with my life. I interned with Tarrant County Housing and Community Development right when Katrina hit Louisiana, um, and we had a bunch of displaced, um, you know, evacuees. And I saw firsthand from, you know, a young, uh, 20, 21-year-old standpoint, how inefficient and ineffective, um, government could be, and it just, it, quite frankly, it pissed me off. And the more I got into it, the more I was like, "I, I could do a better job than, you know, most of the people I'm seeing." And so that, that's honestly why I got into it. So in a weird way, I, I guess, uh, I'm your Ron Swanson, Chad.

Or am I Duke Silver?

Oh, that knows Ron.

And on, and on, and on that note, we need to, we need to wrap up this- ... this podcast. So, so Kyle, man, I wanna thank you, uh, once again for coming on and talking to us. I know it's a tough time. Um, we're actually recording this podcast late at night 'cause everybody's been working long hours during this period, so just wanna take the, the, the time to thank you, and, uh, and for coming on and chatting with us, and, and giving us some, some insight into what's happening, uh, in your world and in Colleyville and budget and finance, and so, uh, thanks a lot. So, um, from Chad and I, guys, uh, obviously, this is a tough time for many communities out there. If you need help, if you need assistance, uh, we are here to connect you with other professionals in the field or to assist you with those projections if you need it, so just get in touch with us. Uh, but otherwise, uh, we're- you know, we, we are, we are there for you in spirit and trying to help you out as much as possible. So thanks for tuning in, and, uh, we hope to catch you on the next, uh, episode of Zaatcast.

Yeah, thank you, guys. If you're listening to us on the website, we really appreciate it, but it'd be really awesome if you would follow us and subscribe on iTunes or Spotify. And if you like what you heard, just give us a five-star review. That helps other people find us. Uh, but otherwise, we'll see you all next time.