Greetings and welcome back to ZacCast, the official podcast for local government nerdery. I am Chad, that's Patrick. It is 10:23 AM, and not gonna say it, sorry Pat, I think there's, like, a 49% chance that we have more than zero Oklahoma fans. So I'm just gonna let that one go.

You're so incredibly proud of yourself. You know, uh, to, to be fair, I mean, it was, it was a shellacking of epic proportion. I mean-

It was fun. It could've been worse, but it was a fun game. I wish I would've wa- been able to watch it live. We were driving down to Kalahari, which is this, like, indoor water park, amusement park, resort in Round Rock. Kind of like, we have ... Up here, we have Great Wolf Lodge.

Mm-hmm.

Kalahari is, like, a little bit more fancy than Great Wolf Lodge, but ... So I didn't get to watch the game. I actually s- watched the first quarter here while I was waiting for you this morning.

I mean, I just can't imagine going to an indoor water park with the number of kids that you have.

So we had seven in our group, and yesterday was our anniversary. So that was, like, ex- the perfect way to spend your anniversary is to go to an indoor water park with seven kids, and just, like- At one point, so we're raising very independent children. Um-

Yeah

... our, our four-year-old daughter and their almost four-year-old son, the other, you know, group in, in our party, they basically just took off into, like, the little kiddie park, ki- the ki- kiddie pool area, and they were just on their own. And you know, so this is actually kind of funny. Um, so the lifeguards kept asking them things like, you know, "Where are your parents?" Like, "What are you doing?" You know? But they have floaties on. The water's, like, a foot deep. It's just some slides. Like, they're, they're fine.

Yeah.

And we're sitting, like, right on the outside, so, like, they can't leave without us seeing them. We're just not, like, hovering over them, right? Like a helicopter parent. Um-

Mm-hmm

... and so the lifeguard asks, "Where are your parents? Who are your parents?" And my daughter goes, "I'm not gonna tell you who my parents are." Uh, she's really sassy. And so-

Yeah

... so when she's relaying the story to us, my oldest son, who is just 180 degrees different from her, he says, "It's okay. Lifeguards are trusted people." Like... Tim's just, like, a rule follower.

He's not the resident skeptic, huh?

No, he's not.

Yeah.

He, he does not have that. Like, part of my personality is the distrust of various authority types.

Distrust everybody. Yeah. So, I, I mean, here are, here are two things I have to say about an indoor water park. One, uh, I don't even know if we talked about this, y- you can't smell. So, like, the first thing that bugs me about an indoor water park is just the, just pure chemical smell of chlorine.

I'm sure it hits you over the head with, like, the chlorine. Yeah.

Yeah, it gives me a headache, and it's just, oh, it's terrible. But really, honestly, the second thing is I just cannot imagine being inside of a building with water park water running everywhere and just the screaming of the kids constantly. Like, it would just ... It, it's like somebody would be hitting me in the he- in the head with a stick just all the time.

Yeah. So my, my-

Is it just super loud?

... my disclaimer on this is that, um, I'm not the biggest fan of this concept, but I, I go 'cause I, I have to go. Um-

Yeah. How many times have you, how many times have you been to the indoor water park at this point? All, all, all indoor water parks combined.

So, so this is the third time. We went to Great Wolf Lodge once-

Yeah

... for, like, a joint birthday party thing with my son and his friend. Um, and then I f- That was, like, during, during COVID I think, which was awful-

Yeah

... 'cause Great Wolf Lodge already has its issues, but then you have to wear a mask the whole time, and it was, it was not, not the most fun. You didn't have to wear a mask in the water park, but everywhere else you did. Um, and then we went back for a couple days. I, I mean, in terms of, like, just g- like, as almost like a staycation, there are worse things that you could do, because at least the kids are occupied. Um-

Yeah

... but, uh, now that they're a little bit bigger, they don't have to have us hovering over them quite so much.

But these places are sold out every weekend, right? I mean, they're making-

I mean, they ... I'm sure they're making quite a bit of money 'cause everything's expensive, but it wasn't super, super crowded.

Yeah.

The, the water park area at Kalahari is much bigger. Um, and they have, uh, some music playing in the background, so it's not just, like, total chaos with kids screaming everywhere.

That's good. And they do have an arcade area, right?

They do, which my son-

Yeah

... just loves. He liked the crane games.

Yeah.

He just will go nuts for the ... He's pretty good at them, too.

He wins.

Mm-hmm.

As long as he wins at the crane game, you know, it's, you know, it's good. I get stuck occasionally on Facebook Reels watching, like, the people who are trying to beat the crane game and, like, the money, like, the money drag game. You know what I'm talking about?

Yeah, like the Wizard of Oz thing-

Like, where you put a quarter in and it falls, and it, yeah

... where you, like, push the, and it pushes it forward. Yeah.

It pushes it forward, and, you know, some- sometimes I'll, I'll get stuck watching that for quite a while just to see if this guy's gonna win. It's, it's terrible. And I, I really-

Yeah. So-

It's a terrible habit. So ...

So there's a, there's a piano game that I'm really good at. And usually it's relatively inexpensive, but you can get, like, a lot of tickets on it. So while my kids are playing the crane games, which don't really win you any tickets, um, and my youngest ones like to do, like, the motorcycle racing, I'll just go over there and just win, like, thousands of tickets for minimal cost. That way they have tickets they can go get stuff at the, you know, the little shop area. And also, sometimes-

Wow

... they have, like, a cornhole game, which is super fun. I got the jackpot-

Yeah, and you're pretty-

... on the cornhole game three times in a row at Great Wolf Lodge.

Well, y- you're also very good at cornhole. You have a lot of practice at it. Um, you used to play cornhole at Hudson Oaks in the middle of your lunch hour, sometimes during the middle of the actual working day.

Did I, so, uh, this has just absolutely derailed this conversation so far, but, uh, so we got those cornhole boards for our Craft and Cork event, our wine and craft beer event.

Yeah, which they just had last weekend.

Mm-hmm.

Super successful again. Great event.

And, and so we brought them into the council chambers, and Doug and I, uh, Doug, who we've had on the, on the podcast a couple times, he, he works with us at, at, at Zack. Um, we had a best of seven of seven of three tournament that lasted for months, and we would just go in at lunch, play a couple games, and just kinda keep tally. Um, we didn't actually finish it.

You never ended up winning.

Doug was, he was-

He never finished

... he was quite a bit ahead, but then he had to, they left.

Okay.

So yeah, we didn't get to finish it, but...

That's good. So you never truly got beat by the Canadian.

Uh, if, if we had finished it, I would've probably felt like Oklahoma this weekend.

It was that bad.

It was, it was pretty bad.

All right, moving on. You've, you've got a couple things you wanna pop on me and get some reactions, some quick reactions.

Really just, just two quick things. Um, one of them I'm not even sure we're gonna keep in, 'cause it's kinda snarky. Um, but the first is on the way home, so I, I spent a, a lot of time in the car this weekend. I don't listen to a lot of pop music. Um-

Yeah, let's talk about the a lot of time in the car real quick. Let's give a description. So we're at TML in San Antonio.

Yeah-

Right

... so I drove to TML and drove back. That's Fort Worth to San Antonio.

Drove.

Drove back-

Yeah, so you went

... on Friday, drove down Saturday morning back to Round Rock.

Yeah, so.

So it was a-

You're a great dad

... good amount of driving. I'm not used to that-

Good hu-

... working at home.

Good husband. Yeah. To, if, if your wife is listening to this, you're a great husband.

I guarantee you she's not, but I appreciate that. Um, so one thing I noticed on the way coming back yesterday, a lot of the music that's on, like, the Hits One SiriusXM, it's bas- it's not even just sampled, it's just straight up old songs with new lyrics. Um, like-

Okay

... the Rick Astley Never Gonna Give You Up, like, that's a song, and it's basically the same song with just different lyrics. The, you remember that, that I'm Blue song from I think Eiffel 65 from, like, the late '90s? That weird, like-

No, sing it to me a little bit

... I'm not gonna sing it. It's that, it's like a Euro-

Well, just give me-

I'm blue, da ba dee, da ba die. Da-

Oh, okay.

Remember that song?

Yeah. All right.

Like-

Yeah. Okay, yeah

... it's literally the-

Like a skating ring song.

Yeah.

That song to me is like skating ring. Yeah.

It's like a shot for shot, note for note remake, just with different words. There's, um, Britney Spears has a Elton John song. I mean, I know that, like, sampling is not a new thing, but this to me seems a little bit more than just sampling. It's, like, straight up just using the same songs and changing the lyrics. And anyway, so it reminded me or it made me feel like the music industry is kind of moving where the movie industry has been for the past 10, 15 years, where, like, everything is just sequels and superhero movies. So I'm wondering, like, is the music industry also kind of in this stagnation mode? But I, I don't know for sure, because I don't listen to a lot of pop music.

Where your head goes always amazes me. You're literally in the car driving, and somehow this, this, like, pops in your mind. Uh, you know, I've really never paid attention to it. One, my, my music listening habits are so different. It had been s- changed, because I don't, I don't listen to XM. I don't really listen to radio at all. I'm a Spotify guy, a paid Spotify guy, right? So, like, I don't wanna, if I don't wanna listen to it, I skip it, and Spotify just learns my algorithm, right? And typically-

It may, it only just playing songs that you would probably like anyway.

Yeah, which y- you know, really ends up gravitating my listening to '90s R&B, right? Um, you know, kinda late '90s rap, like Nelly, N- Eminem, um, you know, that area. Some, some pretty solid rock. I'm gonna, I'm gonna embarrass myself. There's some Creed on my playlist there. Um, you know, I was a big Creed fan back then. Um-

So, like, just the, just the hits?

You, you, you've belted some.

Just the hits or deep tracks? Do they even have deep tracks, Creed, or is it just, like-

They don't have deep tracks, no

... just, like, Higher and there's My Sacrifice.

Scott what's-his-name was so, so surface-

Scott Stapp

... in his music. Yeah, so, um-

Have you ever seen the, have you ever seen their performance at the, um-

I like Collective Soul, too. Collective Soul's a, that, that's deeper. Collective Soul's got some deeper, deeper tracks.

Have you seen the video of Creed's performance at I think the Cowboys Thanksgiving game?

No.

You should YouTube it. Uh-

But I did, I'll, I'll YouTube it

... as a Creed fan.

It was a terrible performance, or it was really good?

No, it's, it's like, it's remembered as kind of like an epic football performance.

Yeah, I mean, man, I, at the end of it, like, I, I went and saw Creed in the Woodlands, uh, Cynthia Woods-

You would have

... in high school. And, uh, dude, you know who, Collective Soul opened for them. I actually went for Collective Soul, um, and, 'cause look, Creed is a little more poppy in the way that their song, like, is written and, and, you know-

Yeah, it's written to be popular

... C- correct. Collective Soul really, they were more artist. Um, to put that, like, in the rock terms, that's how I think. Like, Collective Soul and, um, and, like, Incubus are very the same to me. Like, I really like Incubus-

I love Incubus.

Yeah. I like their music because they're true musicians. Uh, and they, even when they were big, and they're still big now, but they love to play, like, small venues. Like, they used to play, uh, Fitzgerald's in Houston, and, like, I had a buddy who had a band that would open for Incubus. That was just cool that they really loved the music that much to play those venues. Um, so anyways, back, back to my, my point, Spotify is, it's just, it's kinda changed the way I listen to music, because I, I don't hear any new music, so I really haven't noticed that. But it doesn't surprise me that it's going that direction. I mean, just look at clothing. I mean, we're back in 1990s clothing. Have you looked at what your wife has bought recently clothing-wise?

Um, I mean, does it, no, I guess not. Sorry. Sorry, babe.

I, I mean, like, like, the new tr- the new trends are-

Like JNCOs?

... you know, really like-

Are JNCOs back?

No, no, no, not like, not like JNCOs, but like the colors-

Mocassins?

... the browns and the-

Doc Martens?

There are, there are some comeback of the boots. Um, you know-

Flannel

... and, you know, obviously... And what now?

Flannel, like some, some grunge coming back.

Yeah, there's some flannel. When you, when you see the Christmas pictures that I just took, I'll have to send them to you so you can see them, but they're, they're very like flannel 1990s clothing, like all the way across. And so it's ... I don't know, it just makes me laugh that we've kinda made that rollback. But I feel like people are trying to build on nostalgia. Like, it's the same thing with music. If a beat worked before, I'm gonna stay with that nostalgia beat.

So have you ever heard of this, um, the four chords at the heart of every pop song? Have you ever seen this?

No, and I know nothing... I, I'm like dangerous about music.

I know you don't know anything about music.

I don't know anything about chords, yeah.

So basically there are, there are like... There, there's a specific chord progression and you can kind of twist it a little bit, but it's basically these four chords that essentially every pop song uses, and that's what makes a lot of them sound so similar. Um, but it's just this formulaic thing, and so there's actually this, this quartet or this group of people who, like just, they just go song to song to song, and they're just playing the same music. It's really interesting just to kinda see how formulaic some of it is. And that's what makes people, uh, in my opinion, like... I know this is gonna... Some people will groan, but like that's why I like Dave Matthews and, and groups that play a little bit different style music, and, and groups that have some jams and some solos and stuff in their music, 'cause it's a little bit different than just what you hear on the radio.

Yeah, but I, I'll, I'll turn on some of like the hits, the Spotify hits, and I'll, I'll give you an opinion on this later. I, I really haven't-

Okay

... I haven't heard it or listened to it.

Yeah. So my second thing, I came back from Italy. I'm gonna leave some space here just in case we wanna cut this, 'cause again, it is kinda snarky, but, um... And I know it's not 100% fair. But my second thing is I just came back from, from Italy, right? Spent a, a week or so over there. Um, kinda did a tour from the Amalfi Coast up to Tuscany. And honestly, even in some of the smaller cities, I mean, like I finally found a sort of American-style suburban area, um, on the outskirts of Bologna. And after that whole week, I know I spent a lot of time in sort of city centers and stuff, but, um, where just like here, it's a little bit more walkable. Um, but even in some of the smaller towns like Cortona out in, in Tuscany, it's like 22,000 people, but it's a pretty... Like you wouldn't... It's not a place you would wanna drive cars, right? Um, so we come back and we go to TML, which is in downtown San Antonio. Our hotel is like 3/10 of a mile away from the convention center. And, um, I just had-

You're about to call me out for my-

No, no, no, no, no

... my fatness here?

Not even you. I j- I just had this sort of not really an epiphany, just kind of a, like depressing concern, 'cause we talk a lot about walkability in local government, but I just... I'm, I'm just growing a little bit more skeptical that we're ever actually going to make it a priority. And that kinda hit home when I walk out of the hotel and I see like almost two dozen people with their TML, you know, tags on, waiting for their Ubers to go 3/10 of a mile to the con- the convention center. I don't know if you have any thoughts on that. I know it's not fair.

Ye-

And I don't wanna be ableist because some people can't walk, but nevertheless.

So I, I... So out of four trips to the conference center... Was it four? Yeah, four for me, 'cause I left Thursday night. Um, I took an Uber three times. One, I just got done working out. I had no legs left. It was, it was terrible. A- anybody who knows me, I'm a, I'm a bigger dude, right? You can't see me on the, on the camera. I'm, I'm a bigger dude, but I've... I really have, like, started working out like four or five times a week, and it probably annoys Chad and, and our team the most because they always text me at like 11:00 and they're like, "What are you doing?" I'm like, "I'm on the bike. Call you back in an hour." You know, something like that. But the other time it was hot. San Antonio got hot on Thursday, and I was like, "Man, I don't wanna sweat." We were going to dinner that night. I didn't wanna change. You know, um, this really should probably get cut. Uh, you know, call me Matthew McConaughey, but I stopped wearing any perspirant. I stopped wearing aluminum-based deodorant.

You still wear deodorant, just not the antiperspirant.

I, I still wear deodorant, just not the antiperspirant. Um, and it sh-

So you're sweating, but it doesn't smell as bad. You just have to reapply more frequently?

You have to reapply it more frequently, yeah, and, uh, in order, you know, to not stink. It says 48 hours of protection. Don't believe it. Um, you know, we, we could have a whole podcast on how I, how I decided not to use, you know, antiperspirant deodorant anymore. Uh, but, you know, the, the reality is, is that, I don't know, it's just, it's small things like that that just make it uncomfortable to walk. Um, and, and so I, I didn't. Yeah, ca- call me out on that one. It was really bad.

I did rent a, a scooter twice, and what I will say about the scooters is I've ri- ridden on them before. Uh-

On a seat or no seat?

No seat. Um-

Okay

... but I've done it in San Antonio and Austin. It's a lot of fun, but on a short trip it's way too expensive. Like, there's a 3.50 start fee.

Yeah.

And then my 3/10 of a mile, like five-minute trip was like $4.50. So like the actual time usage was pretty minimal, but I mean, that seems like it's not something that you're trying to use to get like all the way across downtown.

And when you put it into financial terms, now granted I was using the company credit card, so you know, there's that. But the Uber was like $9, and then you feel bad that it's such a short trip, so you've gotta give like a five to six buck-

You gotta give a good tip

... tip.

Mm-hmm.

You gotta give a good tip. So, yeah, so 15 bucks.

But if you have four people, you're talking 15 bucks. You know, that's, that's a little bit less expensive per person than the scooter. But I feel like if we, if the city-

Give it all the skinny peopleLeft me. They left, they left me to take the Uber by myself. One, one time Allison felt bad for me and rode with me.

So, okay, so what are we now, like, 20 minutes in? Let's get to some actual meat and bone, meat and potatoes. What do you think?

Yeah, absolutely. So, so we started the conversation yesterday, and when we started the conversation, we decided that this would be a really good kind of session topic for the podcast. And so specifically what we, we were talking about and what we wanna get into is when you are identifying a return on investment for, uh, a neighborhood or a home specifically, for a residential single-family household, how do you assign sales tax revenue to that individual house? Right? And I'm gonna kinda let you start with, like, what your opinion is to make it easy versus, you know, maybe what the difficult part of that would be. But ultimately, we're trying to figure out, okay, hey, if I put this single-family residential house on the ground, I make X in property taxes, I make X in sales taxes. How do we, how do we figure out how much we make in sales tax on that individual home? What type of formulaic approach do we take to that? And, um, and how do we justify that approach? That was kind of the start of the conversation. We got, like, I don't know, 30 seconds into it, and we're like, "Oh, this is gonna be a good convo, so let's have this later." So we're, we're here. It's later. Give me your thoughts on the different approaches you think we should take.

Yeah. So basically a little staff meeting here, uh, on the podcast. Um, so let's, let's back up just a little bit. Right? So in the last couple of episodes, we talked about this question of profitability and return on investment, and do our developments generate enough revenue, uh, or, and, and/or wealth to pay for the, the infrastructure and the services that they demand, right? So when you're looking at this information, property tax is pretty easy, because every parcel has a value, and you have a tax rate. And so you can just apply those two things, and you get a number for how much revenue is generated. Sales tax is a little bit obviously different, 'cause we don't know how much, uh, any individual pays in sales tax. We have, uh, sales tax gets exported, gets imported. We have business to business. We have all kinds of different things. But you, I think you don't really want to just treat a largely residential neighborhood as having no impact on your sales tax collections. Because obviously, those people are s- probably spending at least some of their taxable spending in your city. You know, retail doesn't work without shoppers, and there are not very many communities that are just retail. We have bedroom communities. We have communities that have more. I mean, you look at, like, a town like Addison, right? It-- Sunset Valley. Like, these towns way outkick their coverage in terms of per capita sales tax. Even Hudson Oaks did. You know, 2,200 people generating 3 million-plus in sales tax. So there's certainly a component of, of being able to bring revenue into your city from people who don't live there. But you, you do have to account for the sales tax that's generated by the people who live in your city. If you just said, "Okay, well, here's our brick-and-mortar, and, you know, we're looking at this sort of commercial neighborhood, and we're gonna account for all of that sales tax in that neighborhood," you're kind of giving a little bit of a short shrift to the people who are actually paying those sales taxes. Um, and it's honestly gonna make residential properties look, residential development look even less attractive. And in that way, I think it just doesn't quite tell the right story. So the approach that we've taken after quite a bit of discussion is, uh, we actually will use estimates of, you know, per household, uh, income, discretionary income, uh, or disposable income, retail spending, outside-the-home food spending. Like, we look at all of these, these different, uh, categories of household budgets, and for now, we're kind of just applying the tax rate to those retail spending, outside-the-home food spending, and making the assumption that basically every dollar is staying home.

Right.

So you have, say, 500 house- households in a neighborhood with an average retail spending of $35,000 per household. Right? So you take the number of households times the, the household spending times the tax rate, and that gives you the amount of sales tax that's generated from the people who live in that neighborhood. By doing this, we're essentially not applying anything to any commercial activity that lives, that, that resides in that neighborhood. Now, eventually, we're kinda-- we're gonna get there, but for now, we're just looking at the residential component to it.

When you say commercial activity, you mean, like, business to business, like there's a-

No, no, yeah

... there's a business located inside of a home.

Yes. But even, even just saying, like, if you have a, a neighborhood with a, with a neighborhood pharmacy and maybe a small little, um, grocery store, right? Or, or any kind of commercial development that is a sales tax payer, you know, to your city, um, any kind of business that collects sales tax for you, those aren't getting included as their actual dollars right now, right? 'Cause we're, we're basically taking the money that's, that they're, we're, we're taking the money that's reported by those businesses to your city, and we're distributing it to the people that are actually paying the sales tax, not to the business that's collecting the sales tax, right? So one problem with this approach, or one thing that's limiting with it, is that you're not actually gonna capture all the sales tax that's generated for your city. Because for, for one thing, you are going to be importing some taxes. Like, you're not gonna be getting 100% of your taxes just from the people who live there. Uh, also, just straight-up consumer spending is not the only sales tax generator. So there's gonna be some left off the table.

So my argument is that we're probably doing it wrong. So I believe we probably should find a base valueFor all of the people that live in a city based on remote taxpayers. So I believe we should take the remote taxpayers list, figure out what that sum number is, and divide that by number of rooftops in the city and assign it to each rooftop, or divide it through some type of ratio based on what the disposable income would be within those communities itself. A higher disposable income, higher percentage of ratio, to provide a baseline per household. But we should be calculating a business, a sales tax generating business as a sales tax generating business within that geographic region. So-- And that way you would never would be recording more sales tax in a city than is actually being collected.

Yeah. I can tell you right now you're not going to. The way that we're doing it, you're never gonna get, uh, you're never gonna get above the sales tax that's actually collected.

Correct. But it makes it very difficult for a city to, to really see how a development is performing if we're not actually directly giving the sales tax of that business in that geographic location to that geographic neighborhood, right?

But isn't that going to just say that you shouldn't build any residential? Because, um, I mean, maybe it's gonna say you shouldn't build any residential that doesn't have mixing of uses. But-

Right

... it's also I think gonna say you shouldn't really build any residential 'cause you're not allocating any sales tax other than things like Amazon or online shopping.

I mean, you-- I, I think, I think you could split the baby on that, right? I, I think there's an ability to go in there and say, "This business is... You know, this mixed-use development does have a benefit of, of these generating sales tax businesses, but also have a benefit of these residential ones." I, I... And I think it is more than just the remote payers that you have to calculate into the number. I think you could look at, um... You, you could asterisk it and say, "Hey, don't, don't try to add all these numbers together. We can take a little bit of this disposable income, and we can figure out what the percentage of that disposable income, or you can set that percentage of that disposable income for what it's gonna come in the city." Most cities know what their leakage rate is, and if they don't, it's really easy to find out. It's a hundred and twenty-five dollar report from Esri, right? On what your leakage is. So you could just say, "Okay, my leakage is fifty percent. I'm gonna... I'm basically gonna say that each household here is only accounting for fifty percent of its, of its purchasing power and, and ability to collect sales tax."

Right. And-

And I'm still going to show-

Well, real quick, real quick. And then the-

... the business itself-

... the other fifty percent is going elsewhere.

The other fifty percent-

To spend, right

... is going elsewhere.

Okay. So by leakage we mean-

Yeah. Going back to another city.

By leakage, we mean what percentage of that taxable consumer spending is not staying home. It's leaking-

Correct

... to other, other places.

Yeah, correct. And, and so... But I think you could show both. Uh, under those circumstances, you could, you could show both because you're also showing the importation of sales tax that's coming in as well, right? Um, a leakage analysis is specifically looking at, okay, you have a thousand residents, how much of their disposable income is being spent inside your city, and how much of their disposable income is being spent outside your city? That's the easiest way to define what leakage is. The importation is separate from that. It's not included in the-

It's the, it's the inverse.

It's the inverse, and it's not included in the leakage analysis. So the leakage analysis is not made better or more whole by, you know, the importation analysis. So I, I think it's an... I think it's okay and acceptable to have both. It's, it's acceptable to have the sales tax that's generated from that business plus the, the spending power of each single-family residential household or multi-family residential household, however we, we structured it, but I think you can have both of them. And I just think you have to put the asterisks in there to say, "Hey, we understand that this could be more than your total sum of, of one," right? But it's the only way to truly account for the benefit of residential without being detrimental to that res- that construction of residential. And, and look, I-- The way that we've-- We- I've said this forty times lately. The way that we've developed single-family residential over the past, you know, sixty, seventy years is, is super detrimental to development pattern. I mean, it's... it, it doesn't work. And even when you assign your warm and fluffy analysis model that you've assigned now to it with sales tax, 'cause you're being very friendly with it now.

Yeah. It's still not-

Right?

... it's still not covering. I'm basically saying that-

It's-

... every dollar that they spend stays in the city.

Well, when you-- So-- Correct. But y- so with that fluffy, friendly analysis, I need to reiterate what you just said there. We still don't have subdivisions that are showing a true return on their investment.

Right. And that's just looking at roads and police, right? We-

Correct

... we, we haven't yet gotten to, uh, to fire services and to parks and social services and any administrative overhead, you know, that the city-

Correct

... uh, has just for operations. Now-

And we have not allowed a toggle of those variables yet either, which is coming. Chad doesn't like to hear me say that 'cause he knows it's work on his end. But we, we haven't allowed a, a true toggle of that. You know, a cost of PD per officer could be different in each individual city, and so there will eventually have to be a toggle between communities and jurisdictions to be able to, to adjust that same thing with fire.

Yes. That we did that by the way.

And if they wanna put like an administrative charge in there, say whatever.

So let's talk... So let's talk about police. Um-

Right

... I, I do wanna get back to the sales tax because, uh, I, I think I have a solution that will mitigate some of the concerns here or the problems. But, um, when we talk about roads, we're talking about the obligations that we've put on the ground.

Mm-hmm.

We're not talking about what our current budget levels are because we all pretty much know that our current budget levels aren't sufficient.And it may very well be the case that we have insufficient funding for other types of services. But the point here, uh, with this type of analysis is not to say, what does our current budget look like versus the revenue that we're getting, right? Because that assumes that what you're doing today is optimal or ideal or sufficient. So when we look at police, what we do is we look at what is your, what is your target for, um, police staffing, right? FBI r- or not guidelines, but suggestions are like 2.4 officers-

2.4 thousand

... per thousand.

Oh, it's 2.4?

I think so.

Oh, wow.

Say it's two. Whatever.

I always...

Say it's two officers per thousand.

I always thought it was two per thousand. Okay.

Right. So if you've set a, a goal of two officers per thousand, then adding 1,000 residents in a new neighborhood would theoretically create an obligation of an- additional two officers. So, um, so you can set your staffing target, and you can set your, um, you know, annual all-in total compensation cost, uh, per officer. And then we take the population, we multiply all those things together and get you a b- uh, staffing cost for a police de- for... We get you a staffing cost for the police impact on that, that development. Now, again, this has some issues too, because we know that really the neighborhoods aren't so much... Basically, the population's more of a proxy, right? 'Cause most of the time our police are spending either, uh, they're spending them in commercial areas, right? Hudson Oaks, we did a lot of patrolling through our neighborhoods, but most of the actual stuff that we had to do was at the Walmarts, at the car dealerships, you know, in, in the commercial corridor. So it may not be 100% fair to say that this neighborhood is causing this and, and applying those costs to the neighborhood, making the assumption that the population is more of a proxy for the overall needs.

Okay.

Right? We had, we had four officers per thousand 'cause we're a small city-

Yeah

... with a lot of commercial activity.

Yeah.

So, and if you want, if you wanna have 24-hour staffing, you're gonna be well above that ratio because you don't have the economy of scale.

Correct. Yeah. No, you, you're right. And I mean, and, and that's why you have to be able to adjust that-

Right

... very well.

And so let's say fire department, uh, or fire costs. Um, there's a lot of ways that you could, you could split that baby. Um-

Mm-hmm

... and it doesn't necessarily have to do with whether there's a fire station in the neighborhood 'cause that fire station is probably serving other neighborhoods too. Like, you don't have a fire station in every single neighborhood. So you don't necessarily want to allocate all of the direct costs that occur within that neighborhood to that neighborhood. You probably will wanna look at service areas, um, or concentration of calls, things like that to, to, uh, split those costs out, right? So say if you had a n- uh, four neighborhoods that were kind of adjacent, and the service area for one fire station kind of hit all four of those neighborhoods, then you would theoretically wanna split that, that one station's cost among all of those, those neighborhoods. And you might even wanna do it proportionally based on the, the call volumes. So you, like, you can get really, really granular in this analysis, which is wonderful and very cool, and it's gonna cost you a lot of money. So it's not really what we're trying to do here. We're trying to give you sort of a high level view, so you have to kinda make some concessions. So going back to the sales tax question, uh, the way that we're doing it right now by taking household spending and applying your sales tax rate and assuming that all of that spending occurs inside the city, whether it's online, business to business, or, uh, brick and mortar, right? It's all staying in the city. You could tweak that for estimated leakage. You could say, "Well, our leakage in this area is about 30%, so let's, let's assume that 30% of that is actually gonna be lost." Okay? You can make that adjustment pretty easily, um, and keep the math relatively simple. But you're still gonna have this gap between adding up the revenue generated from all of these neighborhoods versus what are we actually collecting. It's gonna be lower. So my thought for this is take the, that, take that balance then, what's left over, and then look at your... a- assume essentially that that's your importation. So then take that number and allocate it to your, to your stores on a proportional basis. So your Walmart generates 30% of your revenue. Here's my importation revenue. Um, Walmart's gonna get 30% of it. So you can still kind of apply revenue to the actual business and where it's located, the neighborhood that it's located in, but you're, you're gonna be tr- primarily trying to capture the importation and, and give credit to that business for the importation rather than for all of the revenue that it collects.

So I, I think that's a... I'm trying to find something wrong with it, to be honest.

I'm sure there's plenty wrong with it because it's, it's a simplified model of how the world actually works. But I guess the question-

Yeah, I think the biggest down-

So-

I think the biggest downfall is, though, is that you can't, if you had a true mixed-use development, you can't really, you can't really get a full picture of how beneficial that mixed-use development is if you don't have the actual sales tax of each individual business in that area.

Well, you-

But what you're saying is, is that the people who live there are not the on- only people who shop there.

Right. 'Cause you're, now you're talking about importation not just within or between cities but within that particular development.

Yeah. I'm actually trying to simplify it, but you're saying simplifying it actually overcomplicates it, which is-

I'm saying that the way to do it that seems the easiest doesn't paint, I think, an accurate enough pictureYou could get extremely granular and overcomplicate it, but I'm trying to find sort of a middle ground where the people who are actually paying the sales tax get credit for what they're contributing, but you also can give the businesses credit for the, for the remainder, for the leftover.

So we're really getting, we're really getting into the weeds here, but I, I think it's good for our listeners to hear the, the topic and the conversation. Do we have access to the Esri leakage data for each community?

Yeah, I'm sure we could.

Like do we have access to that percentage?

Um, so the s- the, the sources-

Is it in like the-

... that we're using to ch- to calculate or to get estimates of population and income statistics, I don't think that it has leakage, but we could probably-

Okay

... we could probably get it at least at the citywide level.

Okay. So you could... So your idea is, and let me kinda reiterate how I would say it and see if, if it's the same as how you said it. Um, your idea is, okay, let's take the leakage percentage and let's times that by total sales tax number for brick-and-mortar, right? Um, whatever's left over, so whatever's leaked at that point... Well, no. Sorry. Take it, times it by the, the percentage of, of, of basically disposable income at the in- individual house. That disposable income, we figure out what that number is. We get that total number of what we consider taxable value for, to each residential house. Whatever's left over from actual collections, so you take actual collection, subtract that number from it, you would then assign that to the businesses on a equal share or a, um, like a-

I mean, I think you do proportional.

You do a proportional share based on... So obviously like a, an Apple Store and a Walmart would get a higher proportion than like a-

Yeah, Taco Bell

... 7-Eleven.

Yeah.

Yeah, Taco Bell. Okay.

So let's use numbers here.

I, I, I think, I, I think that works.

Let's say you have 5 million in sales tax collections. When you look at all-

Mm

... of your neighborhoods and you look at all the disposable incomes times the households, you get to $3 million. That leaves $2 million that you are then assuming is imported. Take that $2 million and apply it proportionally to all of the businesses that are located there, and then, then you end up with accounting for basically all of your revenue, but you're giving the businesses the credit for the stuff they bring into the city, and you're giving the residents the credit for the stuff that they s- they purchase in the city.

Dude, I think we got it. Honestly, I think that works.

I think it gets you... Th- So, um,

It gets you the best of both worlds.

Yeah.

It, it gets you, your residential households have a benefit. You can show their benefit, and it also shows you the benefit of having a business that imports sales tax.

Right. And when you have both the residential and the business inside a single neighborhood, then you're going to have most likely a more profitable development, right? Because you're getting the benefit of the people who actually pay the taxes and the people who bring in the taxes in that same development area.

So giving everybody a picture of real life, a day in the lives of Pat and Chad. This is what the question I would ask you in real life would be. How long is it gonna take you to code that, and when do I get to see it?

I mean, we got the first part of it. The leakage, the leakage part-

Yeah

... we'll need to kinda work on. Um-

Yeah

... try to find ways. I, I would love to be able to automate it, but it's not terribly difficult if we can't. Um, I would love to see if-

Well, we could just establish a leakage percentage, right? We could just enter the leakage percentage.

Yeah. So I mean, we have, we have, you know, like parameters and variables that are customizable that-

What you're saying is we're not gonna be able to hit an API and figure out what that leakage is. You don't think that's gonna be something we can-

Even if, even if we can, we can do it when we set it up. But I would love to be able to do it-

Okay

... on a neighborhood by neighborhood basis. So this neighborhood, neighborhoods near boundaries, city limits are probably gonna leak more than neighborhoods that are, uh, more interior, right? Because you're gonna be-

Which, yeah

... especially, like w- you know, the Lowe's or the Home Depot that we would shop at is in the neighboring town, which is two miles away, or I can drive 10 miles to the one that's in my city. I'm not gonna do that.

Which when we hit those data sources now, it's actually hitting the geographic area we're asking it to hit. It's not hitting the whole city.

Right. Yeah.

Right.

So we're taking the neighborhood boundary and we're sending it to Esri, and they're apportioning based on all of the data that they have, that there are-

Yeah

... X number of people who live here, X number of households, residential versus multifamily, um, crime indexes. Uh, so I mean, that could be something that we could use to weight the, the police costs is-

Yeah

... the crime index. Um, that's looking at average, uh, crime or looking at the, the amount of crime in a specific area relative to the national average, right? So if you have like 150-

So somebody-

... then there's 50% more than the national average in this particular area.

You kinda glazed over this like a really good Shipley's doughnut, but the reality is is we're not trying to go fully in depth, right?

You can't do that on a-

But those-

... an automated way. You have to look-

In an automated way. Yeah

... you have to look neighborhood by neighborhood, parcel by parcel, um, if you, if you wanna get the most accurate picture. But you can't, you can't automate that. Like that just, it doesn't scale.

But we're gonna get you like-

So you get 80%-

Yeah, of course. We're getting-

... of the way there. You get... So what you get is instead of being like precisely wrong on something uh-

Mm-hmm

... which you have the-

Yeah

... the ability to do that when you, when you get into that super granular, uh, level, you can get pretty right. And the difference there is a matter of seconds versus a matter of weeks and months and tens of thousands of dollars.

Yeah. No, absolutely. Yeah. And there are plenty of firms out there. Like, if you wanna get to that 100% mark, there are plenty of firms out there. I, I'd actually say-

Yeah, and they do great work

... I-- They do great work. I think we'll get you 90% of the way there, especially as we get better at it, right? We're, like, waiting for crime index on PD cost, I think that's, that, that's, that's another thing, right? Looking at your fire protection based on service district, that's, you know, allowing that to occur, that's, that's another way to get there. So we're-- Like anything we do with Zack, it, it's gonna build on itself little by little. If we can figure out a way to automate it and do it efficiently and work across the ecosystem, we're gonna do it. If we can't, that ten percent or twenty percent of what we can't do is if you wanna get that precision, and I don't believe that precision's gonna be that far off from the number that you're seeing, but if you wanna get to that precision, there's- there are ways to do that, and there are firms out there that will dig into that data and, and do that for you. So, um, I'm, I'm interested to see where this goes. I, I really am interested to see how it changes. You know, we've got a couple of cities in the system already that are using this, and a couple of them have been giving us feedback, which is where a lot of this conversation is coming from-

Where this came from, yeah

... the feedback that we're receiving. Yeah. And, and I wanna, I wanna personally thank those cities because they've just historically have made us so much better as, as we've grown. But ultimately, I think it's a good solution. I, I, I think trying to go that route percentage-wise is a... and do it the way that you're doing it is, is a, is a good solution. So I look forward to seeing that tomorrow in the code base.

I gotta edit this podcast at some point.

So-

Yeah. The challenge on this one-

What else you got, man?

So the challenge here is gonna be, um... Do you wanna get nerdy on this and talk through this? The challenge on this one's gonna be that there's a recursive element to this calculation now. So we have to run every neighborhood and get the total sales tax generated from the residential properties first, then we have to go back and calculate the pr- the pro rata, um, difference, and then put that back into it, right? So you have to go through, you have to loop through it once, then do some math, and then loop through it again. So that may change some of the mechanics a little bit.

And make it tomorrow.

Just so you know. So in other words, it's not gonna be tomorrow.

Uh, all right. So... Oh, did you wanna talk about this, uh, this apartment article that you sent to me?

We can.

Kinda... We've gone long, right? How many minutes are we in?

Uh, we're at about, I think, 50. We can probably cut it.

Okay.

Oh, also, uh, New York Times daily podcast today is all about the-

Yeah

... California housing, and they're about halfway through it, and they're starting to talk about some of the things that the state's doing now. So if you wanna talk about that at some point-

Talk about it. Yeah. I'm gonna listen

... you can kind of use that as a primer to-

Okay

... to get up to speed.

I'll go listen to that today. I usually listen to the daily.

Um, also, Chuck Marohn had an interesting Strong Towns episode, I think yesterday, um, about customer service and what that means for city governments.

My, my view of customer service or a different view?

Um, a... He argued for a different view. He argued that the sort of retail customer service, um, can prevent you from seeing the bigger picture and, and working, like, as a community. It's, it ha- it was basically subsidiarity versus c-cus-like, versus a retail customer service approach.

Okay.

It's interesting.

I was more retail. Yeah. So, okay.

I think you can, I think you can balance as long as you understand the reason that you're doing things. Basically, his, uh, his neighbor got a fence permit, and to be, like, the customer service friendly people, they basically, the staff just, like, pulled up GIS on a Google Map and said, "Okay, here's your property line. Go build it right there." And it was like three feet into his, his yard. Normally-

Wow

... if you're building a fence, you would talk to the adjacent homeowners and make sure, you know, all that kind of stuff.

But Chuck doesn't have a good relationship with his neighbors or what?

Not with, not with that neighbor. So.

Does he admit to that on his podcast?

Oh, yeah. Yeah, yeah.

Okay. I don't think I would ever, as a city government employee, tell them where to build a fence.

No. You don't... Why would you want that liability?

It's a pretty... Yeah, that's, that's pretty crazy. So, but I am a very, um, retail-centric manager-

Yep

... from that standpoint. I, I feel like people should... If somebody walks in the office and asks for me, I feel like they should get in touch with me right then and there. Like, if I'm not in a meeting-

Yeah, this-

... or on the phone, I should drop everything and go talk to somebody. That makes you sick sometimes, though, right? Like, that was hard for you.

It's hard for the context switching. It's hard to stay in a groove getting something done when every five minutes you could have to go up to the front.

Which a groove is Chad in a room with no lights on, just a, just the glow of a computer screen and no noises.

Okay.

That's Chad in the groove.

Okay. So why don't you listen to those, listen to those two podcasts, and then we'll have an excellent, uh, round of topics for next time.

Okay, awesome.

And our dear listeners-

I usually wrap this up

... if you wanna prep for that too, you're welcome to as well. I'll link them both in the show notes. This is basically-

This is awesome

... this whole, like, last half of the episode has just literally been a staff meeting where we just talk about like our actual work stuff-

The-

... and then record it-

That's correct

... and then let everyone hear it, so that's exciting.

Yeah.

Maybe we won't do that again-

That is exciting

... in the future for a while.

I'm gonna wrap with this. What are you gonna be doing today at 2:30 in the afternoon?

I will not be watching the Astros. I will probably still be watching a rewatch of the, uh, Texas OU game.

So just like you say, uh, you know, OU sucks.

I don't say that.

It's ten fifty-two, and OU still sucks.

I didn't say that.

Okay.

I just hint-- I hinted at it.

You hinted at it. Okay.

What other people say. Other, lot-- other people are saying, lots of people are saying it. I'm not one of them.

I just want to, I just want OU fans to know that I really want them to win that game, and I'm a, I'm a, uh, Brett Venables fan. So I'm, I'm hoping that he can figure it all out. It, it looks pretty ugly right now, but hopefully he can figure it out. The Astros play today at two thirty. Best record in the American League. Home field advantage in the playoffs.

Did I lose you?

We're going to face the Seattle Mariners. Are you ready for another Astros World Series win?

I have no idea what you said, but I'm just going to assume it was good radio.

Can you hear me now?

I can hear you now. Well, apparently my internet connection isn't stable.

Okay.

Um-

Oh, okay, awesome.

Okay, well...

Well, I'll let you edit, I'll let you edit that out however you want to edit it out. But at two thirty today, the Astros will be starting their path to another World Series win without trash cans or buzzers. We're getting it done.

I-I wish you the best of luck, something I did not wish you on Saturday night.

That is, that is correct. Thank you. Chad made a whole... Chad made one promise to me that he wasn't going to bring up the A&M Alabama game.

I didn't make a promise to you.

And he... You waited to-- I, I believe I have a text message that, uh, you know, I'll have to go back and look and see if I can find it. "I won't talk about the Alabama game on the pod," I think is what you said.

The one thing that I, I, I shouldn't have-

The play call, man, the play call

... I should have waited. So after the game, uh, so Nebraska won, which is Doug's team, uh, Texas won, which is my team, and, um, A&M narrowly, uh, lost a game that they definitely could have won. Um-

Two yards away

... and so Doug sends us a text, and he says, "Man, we almost got the trifecta." And I was like, "I don't know what you're talking about, but I got a trifecta today." I was like, "Texas won, Oklahoma lost, and A&M lost." And, uh, I said it this, I said this like maybe two minutes after the game, and, uh, Patrick's reply to me was GFY. And so for all of the, um... Anyone who doesn't know about various internet acronyms, you can Google that and, and kind of figure out what, uh, the mindset-

I was angry. I was angry. I was having a very hard time. Chad got me. It was a raw moment. It was... First off, it was like thirty seconds after the end of the game, right? It was clear to me that everybody was watching the game, as in everybody, like everybody on our Zach team is watching the game, right? It's very clear. Um, and yes, it was brutal, and Chad came back with the trifecta comment and, you know, I let you have it, and you deserved it, and then I went quiet on you because the best thing to do to Chad when he thinks he's offended somebody is to go quiet on him because then he starts to backtrack like he's lost your friendship.

I didn't backtrack, but I did apologize.

Like...

I tried to empathize with you. I was like, "Man, we lost a close one too on a last-second field goal. Like I, I feel you." And then I was like, "Okay, I'm sorry. I should have waited. This was, I don't know. It was inappropriate." And, and then so he finally came back. He was like, "I just needed my safe space." I just had to go into a room and be quiet.

I did. I needed a little safe space.

I need to do my penance. Um-

Yes, I needed, I needed a safe space. I was... I, I don't even really get that emotional about A&M football. Like I'm, I'm a true Aggie. I've been battered for years, right? That was hard for me because I'm an offensive lineman. We're at the two-yard line, and we threw the ball to a corner.

Didn't we learn anything from the Seahawks?

It's the two-yard line.

When you've got Marshawn Lynch, you run the ball.

And we have A-Chain who, uh, when was the last time A-Chain didn't get three yards of gain? Like I, I mean, really honestly, it's, it's... He, he will be a pro running back. He'll be a first-round draft pick. He's an incredible player, and we didn't hand the ball off to our most incredible player. It kill, it kills me. It kills me, so-

Do you feel like-

You got me in my full bitterness. But my Astros play today, and the world is gonna change because we're going to win a World Series.

Do you feel like, um, this shows, um, that there is parity between Texas and A&M right now, that we both narrowly lost to Alabama?

I think Texas is a very good football team. I think they're a much better football team with Quinn.

You narrowly losing to Alabama despite four turnovers, two missed field goals, and a backup quarterback, and us narrowly losing to Alabama with our backup quarterback against a Heisman winner. Does, does that seem like apples and apples?

You didn't have your backup quarterback the whole game. Timeout. Timeout. You didn't have your quarterback the whole game.

Three quarters.

You scored a few touchdowns with the guy who actually mattered, okay? But you put a lot of points on the board with the guy who actually matters, and you didn't put many points on the board afterwards, and you guys kinda are a, a one-trick pony right now. You, you have to admit, you went to Tech and lost because you didn't have Quinn.

With our backup.

Like, like I said, the kid's really good. He's a fe-- I told you. Look, text messages, records will back this up. Quinn is really, really good.

I think you called him the next Tate Martell.

Really, really, really good. I did when he left Southlake.

Mm-hmm.

Right? Because he's a Southlake kid, right? First off, you have to understand, I went to Katy.

Oh, everyone knows.

There is no love lost between Katy and Southlake.

Everyone knows.

Everyone knows. I've said it 50 times on the podcast. And Chad has said, "You sat the bench," 50 times on the podcast too. So, um, I, I, I-- There's just something about the dying of the blonde hair that gets me. They're a good football program, a good team, but I just can't handle the dying of the hair. Um, all that being said, he's really good, man. Give him some credit. He's, he's very talented. And yes, you guys are a good football team against A&M if you had him. I don't think you could win a game against A&M right now if you didn't have him. I'm just gonna, I'm just gonna s- I-- You don't have any offense without him. Like it's nonexistent. To be fair, the Aggie offense has been nonexistent too. Our defense has been really good. But yeah, it is what it is. That was a lot of topic of conversation there. We'll see how much of it makes it in there. It's gonna be like-

There's gonna be a note-

The part about Quinn being good.

Yeah. There'll be a n- I'm gonna get rid of all the stuff that you said that was pro A&M.

You know, you get all the, all the positive stuff I said about Texas you can throw in there, so.

Texas is a good football team. Cut.

Cut.

Ladies and gentlemen, when you hold-

All right, so we're gonna, we're gonna wrap there

... when you hold the keys to the master track, you can make people say whatever you want them to say. Just remember that.

Correct. Correct. So all right, we're gonna wrap there though. Uh, Chad, it was good to talk to you. We're gonna come back and chat about those other, uh, topics that, uh, that we talked about in, uh, Chuck's podcast. So if you wanna catch that before we have that conversation, uh, go hang out and, and watch or listen to his podcast as well. But other than that, thanks for listening. See you, Chad.

See ya.

I think Texas is a very good football team. I think Texas is a very good football team. I think Texas is a very good football team. I think Texas is a very good football team. I think Texas is a very good football team. I think Texas is a very good football team. I think Texas is a very good football team. I think Texas is a very good football team