[0:06] Yes. Good evening and welcome to our specially called meeting and budget

[0:12] workshop. Uh today is September 1st, 2026.

[0:17] It is now 6 pm. Uh we do have a quorum uh present for tonight. uh to my right

[0:25] and that'll be to your left if you're watching on Facebook live or YouTube uh

[0:31] we have uh Councilman Julius Buckley and next to him uh Councilman Rosco War,

[0:38] Councilman Brent Mwaters, our city manager, Mr. Lee Typton,

[0:44] yours truly, uh, Councilwoman Desiree David,

[0:50] Councilwoman Rachel Hall, and Councilwoman uh, uh, Dr. Tanya Clark.

[0:57] And I'm going to ask our own Deacon Rosco War if he offer us prayer tonight.

[1:03] And Miss David will do uh, our U flags for us tonight. Texas flag and oh glory.

[1:13] Yeah.

[1:31] Lord,

[1:36] thank

[1:42] you bless

[2:00] Lord city workers

[2:06] continue

[2:11] by no long.

[2:28] Amen. >> Amen. Amen.

[2:30] » Would everyone please the flag

[2:36] » to the flag of the United States of America and to the republic for which it

[2:41] stands. One nation under God indivisible with liberty and justice for all.

[2:48] » Texas flag. I aliance to thee Texas one state

[2:55] one and indivisible.

[3:08] Okay, we'll now move on to our uh public comments.

[3:12] Any person with city related business may speak to the council in compliance

[3:18] with the Texas Open Meetings Act. The city council may not discuss or vote on

[3:22] any matter raised in public comments unless it is specifically on the agenda.

[3:28] To speak during a council meeting, the presiding officer must recognize you.

[3:34] And with that being said, uh, Miss Oneita, do we have anyone signed up for

[3:38] tonight? Okay.

[3:43] Okay, since we have no one signed up to speak tonight, uh we're going to move in

[3:49] to uh open our public hearing tonight. Uh

[3:56] public hearing on fiscal year 2026 2027 budget. It is uh

[4:05] now 6:05 and we will open our hearing.

[4:15] I give him a minute.

[4:29] Okay. Since we have uh no comments on in our public hearing, I will now close the

[4:37] public hearing at 6:05.

[4:43] Okay. Now, I'll call the regular meeting to order

[4:48] and um that'll be 603. Okay. Uh we're going to

[4:57] start out with item number three. And we're going to go back to item number

[5:02] two. Uh, okay. Item number three, approve

[5:07] contract with Blue Shield, Blue Cross Blue Shield for

[5:12] employee benefits and authorize the city manager to

[5:17] execute the contract. Miss Angela, you mind stating your name

[5:21] and title?

[5:30] Angel director

[5:41] contract

[5:47] questions.

[6:10] red light.

[6:16] » Yeah, there it goes.

[6:19] » I do just have one question. I remember uh speaking about it last time and I

[6:23] understand the only difference is needing to claim a primary care

[6:27] physician. Is that correct with the current plan? And then they would need

[6:30] to get the referral to a specialist. >> Correct.

[6:33] » Um how does that delay um special care needs? Like does it mean that they might

[6:40] be waiting three or six months in a referral process or can they still

[6:43] pretty much get immediately get the care that they need through um their primary

[6:47] care provider or a specialist? >> That's going to be up to the primary

[6:51] care provider. So if they feel that Sorry.

[6:54] » Yeah, ma'am. Would you mind stating your name and

[6:57] » Oh, my name is Alison GM. with Hub International. Um, so that depends on

[7:01] the primary care physician. If the primary care physician feels that the

[7:05] patient is authorized for a specialist visit, then they can prescribe that

[7:08] referral right then and there. If they do not feel like they need it and they

[7:11] want to run a couple tests beyond the initial visit, then yes, it can cause a

[7:16] delay, but that is up to the primary care physician's discretion, not up to

[7:20] the Blue Cross plan. >> Okay, great. Thank you.

[7:28] Any other questions? >> Okay. Do we have any other questions u

[7:36] concerning Blue Cross Blue Shield employee benefits?

[7:42] » Okay, there be no other questions.

[7:47] » Make a motion we approve contract of Blue Shield, Blue Cross Blue Shield for

[7:51] employee benefit and authorize city manager to execute the contract.

[7:54] » Second. Okay, I have a a motion. by Mr. Buckley. I have a second by Mr.

[7:59] Magwaters. Any other questions or comments?

[8:04] Okay. All those in favor?

[8:09] Okay. Motion carries. Seven to zero. Uh thank you, Miss Angela.

[8:15] » Thank you. >> Thank you, ma'am. Be safe going home.

[8:20] » Okay. >> Sorry.

[8:23] » Okay. We're going to go back to item number two. have a safe trip home. Thank

[8:27] you. >> Okay.

[8:29] » Okay. We're going to go back to item uh number two and uh Angela, you can stay

[8:34] there. Consider and approve the revised city of Cleveland employee handbook.

[8:40] Uh Angela.

[8:46] » And we should have Miss Christina who's going to be um joining us virtual. She

[8:52] was not able to attend due to the weather.

[8:58] Good evening, council. This is Christina Peters. I'm with Charlesworth Consulting

[9:02] and I had the privilege of working with your HR department with Angela and

[9:06] Felicity on revising the employee handbook. Uh primarily the old one that

[9:13] was in existence. We just wanted to make sure it was updated, it complied with

[9:18] both federal and state laws, make sure we were in compliance, um, and did an

[9:22] overhaul to make sure it was easily accessible to employees, make sure it

[9:26] was searchable, um, and in a format which they can understand. So, we spent

[9:31] a large amount of time going through each section. Um, I know you all have

[9:35] had a chance to review it. We spent many many sessions with both HR directors

[9:40] have reviewed it and had an opportunity to ask questions and provide comments as

[9:45] well as the city manager and legal has done a review. So I just wanted to be

[9:50] here to answer any questions for you folks if you had any questions in

[9:54] particular on certain policies or on the process just to make sure everybody was

[9:58] in full understanding uh to move forward with the final copy of the employee

[10:04] handbook for the city of Cleveland.

[10:11] I do have questions. Um, and so who am who am I addressing because there's

[10:16] several questions in regards. So am I addressing you or the consultant or who

[10:21] am I speaking to? >> You can address the consultant and she

[10:23] can answer them for you. >> Okay. All right. Um, so I'm on page 16

[10:29] of the I'll just start there for anyone who's looking. Um this is about the job

[10:36] postings and applications and and the second sentence begins job

[10:43] vacancies will normally be posted both internally and externally unless

[10:49] otherwise approved by human resources. And my question for our city staff is

[10:54] why we're using the uh the language of normally and not having

[11:00] a policy where we post all positions uh both part-time and full-time in external

[11:06] and internal um and removing the word normally

[11:12] for city staff or the consultant in regards to page 16. I'm yeah p sorry one

[11:17] says 16 the other one says 20. So on this

[11:21] » it's fine. So this is just just the wording. I mean that can this is an

[11:25] editable document. This is a living document. So as time progresses, we

[11:28] wanted to make sure it was in a capacity where changes could be made as

[11:32] situations arise. Normally is typically put in there. Um in the event that you

[11:36] just want to post something internally if you have a large ACU um applicant

[11:40] pool of a certain position internally. Sometimes that option is pro um is

[11:47] preferred by both city management and HR but normally is in there because you're

[11:51] right in most cases it would be posted both internally and

[11:55] externally but again policies are meant to give so employees know what the

[12:01] boundaries are. They know what the protocols are. They know what they're

[12:04] allowed to do and what they're not. But we also want to make sure that we

[12:07] account as HR professionals. we can't account for every single situation that

[12:12] may occur just because it's a changing environment, things come to play and

[12:16] quite honestly policies are put in place because at some point um in the in the

[12:22] past something has happened that has required a policy to be written. So

[12:25] normally just captures the event that a situation were arise. Typically this is

[12:30] pretty normal. You would see most cities there are opportunities where they feel

[12:34] like the AC applicant pool internally is of high caliber and there's several

[12:39] people to apply and we'd rather promote within. So that's just allowing that

[12:43] availability if that were to arise. >> But it doesn't exclude it from always

[12:49] being internally and externally if that's how HR and city management want

[12:52] to proceed. >> Okay, great. and and I uh you're exactly

[12:56] right in regards to, you know, certain things happen and we have had things

[13:00] happen within the city with uh job postings in the past and certain people

[13:05] being given positions that have landed this city in the news. And so I think

[13:09] when we are coming up with the policy that hasn't been updated in 20 years

[13:13] that we're showing that we are, you know, um as far as transparency that

[13:18] we're we're posting jobs and whether you're internal or external, all

[13:22] candidates will be reviewed. you have the the system that gives you those cut

[13:26] questions, you know, your your questions that knocks um applicants off if they

[13:30] don't quite meet the standard, right? So, I just think it would be a good idea

[13:34] to have that in place of that we do post internally and externally. Um, instead

[13:40] of saying that we sort of have a policy normally, uh, this is to me is a little

[13:45] bit more gray. Um, because it could be about any position all the way up to

[13:49] city manager and all the way down to a part-time employee, right? So that's my

[13:54] first question um or for discussion with council or city staff. Um the second one

[14:00] is on page 19 slash23 whichever. Um

[14:10] » in regards to the interviews. >> Yes. Yes ma'am. Um on this one um it

[14:15] says all interviews must include the participation of human resources and the

[14:19] department director or their design. Um panel interviews are encouraged uh for

[14:24] the preferred selection method to ensure consistency. um right off the bat is uh

[14:30] I believe we have a pretty small uh human resources department that's pretty

[14:34] busy and if we have again a part-time library aid being uh interviewed for a

[14:41] position it would make sense for the timeliness of um everyone and all their

[14:45] duties that the department head and whomever is on their staff and the team

[14:49] that would be hiring would be able to facilitate that. uh when it says

[14:52] participation of the human resources, if we're including a human resources

[14:57] director in all interviews, uh that salary is a pretty high salary. Director

[15:01] salaries are higher than employee salaries and so the cost of taxpayer

[15:05] money is do we need two directors in all um interviews or can we rely on our

[15:13] department head directors to facilitate that and to choose who will be on the

[15:19] panel from their team. So per this policy, this was already in

[15:25] play. So this was um a policy that the city was already following where human

[15:29] resources was present during all interviews. It does not designate that

[15:33] it has to be the HR director. It just has to be human resources. So it can be

[15:37] anybody within that department. That being said, for cities that are

[15:41] typically under 200, this is this is very common um

[15:47] for a couple reasons. one, it's the only consist consistency check that exists.

[15:52] So, we HR is there to make sure that they are in compliance with laws. No

[15:57] one's asking a question they shouldn't be asking. That the questions are not

[16:02] only fair, but they're consistent across the practice where you're not um asking

[16:06] some candidates a set of questions and then pivoting to something else for

[16:10] somebody else. You know, these are open records. If there's written notes, HR

[16:16] collects those at the end of each of the interviews. Make sure that they're saved

[16:20] for a period of time. Again, it does protect against le legal exposure just

[16:25] again to make sure sometimes when you have people in, they don't know what to

[16:28] ask and they ask things that they shouldn't. It also allows for protection

[16:34] for the department heads as well as the people being interviewed. So, I do think

[16:38] this is very common. Obviously in a city of 1500 employees this is not possible

[16:46] but you know I currently consult on an HR perspective for several cities up

[16:50] here in North Texas. All of them are under 200 and this is very common in all

[16:55] of them. It's been the process that's been in place for quite a while. Um I do

[16:59] agree it doesn't always have to be the director. it just has to be someone in

[17:02] HR. And the only reason again is to ensure consistency and transparency and

[17:08] fairness throughout the evaluation of all the candidates. It's just making

[17:12] sure that everybody's on the same playing field because again, like you

[17:16] said earlier, transparency is so important and the interview process. You

[17:20] know, it's very easy to ask a question that should not be asked to someone who

[17:24] isn't living and breathing this policy all the time. So, it's just put in as a

[17:29] measure of protection for your staff, for the candidate, and for the city as a

[17:33] whole from a liability standpoint. >> Okay. And I do have a followup on that

[17:37] in regards to the consistency of what they're asking. Just as someone who has

[17:41] participated in pan panel interviews, both um on both sides of them. Um

[17:46] consistency would typically come with a piece of paper of written questions and

[17:50] everyone would be provided with those. It wouldn't necessarily take one

[17:53] specific person from HR to say what questions are approved to have to sit

[17:57] there. I I guess I'm just going with manh hours. If we have a small HR

[18:01] department, whether it's a director or she has one or two assistants, one

[18:05] » one uh HR generalist, >> just one. So there's only two people for

[18:09] the whole city versus relying on the training. You mentioned something like

[18:13] um trained to handle the questions that might not be compliant with laws. Um,

[18:19] I'm going to say that our directors are um well-versed in their in their hiring

[18:26] process and that they would be able to complete any training that any other

[18:30] individual on human resources could complete in order to make sure that they

[18:35] are being consistent and if we're looking for consistent questions, uh,

[18:38] those can be printed. Um, I just it's about the setting a policy that looks

[18:44] like we're pulling multiple departments and doing something whenever directors I

[18:48] feel like could take that control on their hiring process and be trained just

[18:53] as much as any additional re human resources to um to be in compliance of

[18:59] laws and knowing what we were asking because you you print it out, you write

[19:02] it down. and our directors are very capable and competent and they can

[19:06] choose people on their team to have two or more people in that interview.

[19:11] » Yeah, it does it does state that the department director or the design. So

[19:15] the department director does not always have to be the one in there. I think

[19:18] those are valid points. Again, our our roles to as we rolled out these

[19:22] policies, are they best practice? Are they widely accepted? Is this you know,

[19:26] if you pull any policy book from any city in the state of Texas and there's

[19:30] over 4,000, none of them are going to look identical. Everyone's going to have

[19:33] their own set of processes or procedures um that differ vary throughout the book.

[19:38] This is very common practice in smaller sized cities. Again, there's no right or

[19:43] wrong answer. It's just as a policy what the city of Cleveland would like to do

[19:47] in this system in this instance and this is what they've been following up to

[19:51] date. So, I would assume if there was an issue from a time capacity, they would

[19:55] be aware and maybe you know want to edit that. But at the time being, again, our

[20:00] job was to make sure was this best practice? Did it violate any compliance?

[20:05] And it just again it's just another layer of consistency and transparency

[20:10] throughout the process. >> Yes, ma'am. And I'm I'm going to come

[20:12] back to that and I guess with the compliance or best practices compliance

[20:17] again, I believe our directors would be in compliance and do that. I'm just

[20:22] going back to the language. It says all interviews must have HR, but they may or

[20:26] may not have the department director of the department being hired. Um, and I

[20:30] feel like that should maybe be flip-flopped. Like your director of the

[20:34] department hiring for their team should be there and they may or may not ask HR

[20:39] to come in and assist because they would be aware of compliance and training and

[20:44] questions and we would trust them with that, right? Because if there's only two

[20:47] people in our HR and you know it's a busy city, it's a small city wearing

[20:51] many hats. If we did have to always the must, the word must with HR, if it was

[20:56] the director of HR, again, we're looking at pulling someone away from their more

[21:02] day-to-day um responsibilities potentially at the

[21:06] higher cost of taxpayer versus departments just having that like local

[21:11] control, right? Like that's your department and you can ask for HR for

[21:15] consistency. Um, but I feel like everyone can be trained and know exactly

[21:19] what to do. So, it's just the must word. I feel like maybe should be

[21:24] » if I may interrupt. Sorry. So, when we do these interviews, I do give out

[21:29] binders and at the front of their binder, they're given a guide on what

[21:33] not to say, um, what is not legal. Um, and even with that guide and me being in

[21:41] there, there's been multiple times that I have a director or somebody from the

[21:47] panel who would not ask the question as is. You would think that it would be

[21:52] something simple and sometimes it's just I mean for whatever reason but that that

[21:58] is why HR is in there to you know interrupt and and say that we have to go

[22:05] exactly according to these questions. These questions are given to the

[22:08] directors and to the panel. Um, and we, you know, do, you know, sometimes say,

[22:14] you know, make sure that you read it as is, but there has been multiple times

[22:18] that they, you know, veer off of what that question is. Um, but and and I

[22:24] understand that in that regard, and that might be a training with the directors

[22:27] as far as stick to the script, right? Because then if we're saying someone

[22:30] needs being there watching over a director providing an interview for

[22:33] their department to make sure they're not asking something that wasn't in the

[22:36] script um or for compliance then we're saying again if it's as an HR director

[22:41] versed in the law all directors can be versed in a hiring law through a

[22:45] training because then we're going to go back to it's the cost of taxpayer money

[22:48] an hour of your time where is it most valuable sitting in all interviews with

[22:53] the word must or being asked for an assistance because a new director says

[22:57] hey I've never really interviewed will you come and help me and be a mentor to

[23:01] me as I interview versus maybe an experienced uh director with 20 years

[23:06] that you know can stay in compliance and move forward with their team. Um so as

[23:10] far as for council that's my question on this page predominantly it's the must

[23:15] with the for human resources versus the director. Um, and then

[23:20] » I'm sorry. Can I get clarity on what you're what you're communicating?

[23:22] Because I hear you continue to exclude the department director. But if you read

[23:27] the sentence and the way it was written, it says must include the participation

[23:32] of human resources and there is no or there. The or does not come into play is

[23:37] in the event the department director is not able to be present. So I I keep

[23:42] hearing that the department director there's alternatives, but there's not.

[23:46] That is a clearly defined sentence where two people that they're asking to be

[23:50] there. My second comment or I want to get clarity around what exactly are you

[23:54] asking is the participation of human resources. It does not define what that

[23:59] needs to look like. It does not say she has to be present. It says she has to

[24:04] participate. Her participation could be that she provided a training. her

[24:09] participation could be that she came in and sat in the first part of the

[24:14] interview and then she may have to leave. It does not say and it also does

[24:19] not say that the human resources director is actually making the

[24:23] decision. She is not one of the voting members. She's only there in presence to

[24:28] protect the city. So, I guess where I'm really concerned is why we're stuck on a

[24:33] word that does not define her role or position in a hiring opportunity.

[24:39] » Okay. Yes, ma'am. So, and again, this is interpretation of whoever's reading

[24:44] whenever it said must include the participation of human resources and

[24:48] this is an updated version than the one we got before because the one before did

[24:51] say human resources director I believe. >> Uh it just said human resources. Okay,

[24:55] then that's my mistake on the department director or their design. uh the

[24:59] department director or their designate. I thought that you just said right now

[25:02] that if the department director couldn't make it, they could send someone from

[25:06] their staff. Did I hear you say that correctly?

[25:10] » Correct. So, it's basically human resources. It's the department head and

[25:14] we typically have a panel of three people. If if there is a supervisor or a

[25:18] manager within that department, that person, you know, for the most part is

[25:23] there so they can give feedback to their department head. Um after we do the

[25:28] interviews then everybody has to submit you know a summary of who their

[25:32] selection is and why. Then that information is then forwarded over to

[25:35] the city manager who has the final say so as to who is actually selected.

[25:40] » Okay. So according to this language of must include the participation of human

[25:44] resources as Dr. Clark was asking for clarification. This did not mean human

[25:50] participation and this policy was written in regards to you might just

[25:54] provide a training andor a manual and or a book. So the the message behind this

[26:00] or the interpretation does not necessarily mean a person from human

[26:03] resources. Is that accurate? Because I believe that's the question.

[26:07] » No, that's not what I said. What I said was with the word must, there are

[26:12] variations in how that can look. we're getting stuck on a word that is slowing

[26:17] down a process. But then what you were saying was that we were not inviting the

[26:23] department director and that's not what the language says. The language says

[26:26] that at least those two people in whatever that capacity looks like has to

[26:31] be there. What I hear you I think what I hear you're saying is that you want to

[26:36] have bulleted opportunities to clarify the must because if you're going to use

[26:42] your word interpretation must does not mean she has to be present. Must means

[26:48] that there is some level of involvement from HR but just the fact that she's

[26:53] pulling applications to provide us an opportunity to even select a candidate.

[26:58] She has to be involved. You cannot hire someone without having the influence of

[27:04] human resources. So I guess where I'm really trying to gather in this moment

[27:08] and in this space is what exactly do you want? Do you want to remove the word

[27:13] must or do you want us to clarify must? Because we're just circling the wagons

[27:18] on a word and we're not moving forward and the goal is to move forward. So, I

[27:22] guess if you would take a moment and define exactly what you want, then we

[27:27] can give you an answer or take a vote so we can move forward because I'm I'm

[27:31] really having a rough time sitting here getting stuck on the word must.

[27:35] » Okay. And so, just for my own clarification to provide that, I'm just

[27:40] going to reask what I think I already asked. When you read must have the

[27:43] participation of human resources and the department director of their design,

[27:47] does the department director have to be there? Yes or no? based on that

[27:50] language. >> It's either anybody from HR is there.

[27:54] It's either me or Felicity, >> but it's not always me.

[27:57] » Okay. And I'm just talking about department director. I'm sorry. I wasn't

[28:00] even referring to human resources. I was just talking about that department

[28:02] director part. That was the question is based off of that language. It is

[28:07] someone from human resources involved. And it sounds like in person, not with a

[28:10] book or a training. And it is the department director or their design.

[28:14] They might send someone else. So someone it could be two or more but the must

[28:20] would be HR would be there may or may not be the director and so my

[28:24] clarification of the must was turning that around. Is there a possibility that

[28:29] the director must be there and it may or may not include the support of HR to be

[28:33] there with them. That's the one specific question

[28:38] about the word must. I think that would depend upon the department director

[28:41] again or their designate. If it was in say public works and and I don't know

[28:45] your structure, but you have a superintendent or you have a a

[28:48] supervisor or you might have multiple panels. If it comes down to two and you

[28:53] need to do it again, maybe the director doesn't feel like they need to be in the

[28:55] second round of interviews. So, Angela knows the pulse of the department. She's

[28:59] obviously communicating with them throughout this entire process and

[29:02] making sure that their needs are met, make sure their answers are met, and

[29:05] that she's there to support them in this role to make sure that they pick the

[29:09] most qualified applicant. I think this statement clearly was just put in place

[29:14] to document a process that HR is going to walk alongside the department

[29:18] director or their design within an interview to make sure, and in all

[29:23] fairness, you know, when you're in another department, your craft is not

[29:27] HR. your craft is public works or police or marketing or whatever the case may

[29:33] be. So, it's very easy. You can have all the training in the world. I have been

[29:37] sat interviews with extremely competent, intelligent, well-versed directors and

[29:41] in the moment a question gets asked not because they they wanted to go around

[29:47] any rule of compliance. It's just not what they live and breathe. So, HR being

[29:51] in attendance is only there to support them and rein things back in. And I'm

[29:56] assuming Angela and Felicity, they monitor and they manage their time to be

[30:00] able to accommodate and it might not be the whole interview. It just depends on

[30:04] that particular instance. So this policy was just put in place to provide the

[30:09] boundary and the guideline that human resources is going to walk alongside

[30:13] that department and that director through this process to make sure they

[30:16] have the most qualified candidate. >> Okay. Thank you. My next question is on

[30:21] page 20 though I guess if there's other council members with feedback or

[30:26] direction on if change of any questions that prior um is it does say that all

[30:32] employment is extended through human resources all offers which is I

[30:36] understand standard HR is going to reach out for the hiring process. I'm just

[30:40] curious if that um going back to the posting of they may or may not be posted

[30:46] positions and going back to what our city has faced in the past where maybe

[30:51] um HR has moved somebody into a role without it being posted. And so is there

[30:56] something that's going to be added to the language here that includes after

[31:00] positions are posted or um interviewed for in regards to before extending the

[31:07] offer? No, this this is just in reference to

[31:12] the actual hiring process that the actual offer must come through HR for

[31:17] multiple reasons and then those are conditional upon and the and the

[31:22] important part of this policy is that is conditional upon successful completion

[31:25] of the background check, physical exam when applicable drug testing etc. in

[31:31] terms of the application or the job posting that was covered prior where we

[31:36] have already discussed this that would be um normally internally and externally

[31:40] and again that's only put into place if the situation arises where you know city

[31:45] management and HR feel that in a certain instance or what if there is no internal

[31:50] well I guess there wouldn't be you could cross but there might be an instance

[31:55] where again you have six very qualified people who all would fit that role very

[31:59] well and they've all indicated interest in that position, you would,

[32:04] you know, post that internally, go through the same process and hopefully,

[32:09] you know, internally promote whatever the case may be. But this only addresses

[32:14] the hiring process of the offer and then that it's conditional upon those items.

[32:20] » Okay. So, it's just the paperwork. Wonderful. Okay. And then my last

[32:23] question is on the page 2226 about uh transfers and reassignments. Um, and

[32:30] again going back with some of the history the city has had with different

[32:34] transfers and reassignments and when we have ended up in the news, it says

[32:38] department directors may request a promotion or a transfer prior to six

[32:42] months of service with a written request to HR. Reassignments may occur as

[32:46] necessary to meet operational requirements. So you could have uh, you

[32:50] know, some again anywhere from part-time all the way up to city manager positions

[32:54] open, right? And so if you're looking at reassignments, my question is about if

[33:00] uh directors are requesting a transfer and if they are in department A and they

[33:05] want to request from a employee of department B, do both directors of

[33:10] department A and B have to meet and agree first before a transfer is

[33:15] initiated and approved? And so because I know that that's

[33:19] something similar like for example in the school system if I work at one

[33:23] campus and I want to transfer to the other campus for another grade level or

[33:28] position both principles would have to be in agreement of that transfer. So are

[33:33] both directors in agreement of transfers or is it just one that says I would like

[33:38] for this employee to transfer to my department and they can get permission.

[33:42] It would be inherently both departments and then it would be requested through

[33:46] HR and approved by the city manager. >> Okay. So both directors would be

[33:50] involved in the discussion and then they would take it to HR and then it would be

[33:53] approved by the city manager would be the process for transfer.

[33:57] » Yes ma'am. >> Okay. Because the way that again my

[34:00] interpretation of the text is it it sounded like just one director could

[34:04] just request a transfer to HR and just take an employee and it may or may not

[34:08] involve the involvement of the other director. the employee may have been

[34:12] working with. So that's all the questions

[34:15] » director >> I I would you know I would never want to

[34:18] put another employee in a department with everyone wasn't in agreement. So in

[34:21] this case, yes, both of them would agree. It's the right thing to do. It

[34:25] would go through HR. City manager would approve. All is well.

[34:30] » All right. Thank you. >> Okay.

[34:32] » You are so welcome. >> Anybody else have any other questions?

[34:37] Any other comments?

[34:42] » Okay. Do I have a motion to >> I would like to make a motion to approve

[34:46] the revised city of Cleveland employee handbook.

[34:49] » Second. Okay. I have a motion by Miss David. I have a second by Mr. Mwaters.

[34:57] Okay. Any other questions or comments?

[35:02] Okay. All those in favor.

[35:07] Okay. Motion carries. Seven to zero. >> Thank you, council.

[35:12] » Thank you so much. >> Okay.

[35:16] Okay. Now, we're going to move on to item number four. Uh Uh, Mr. Mayor, uh,

[35:20] I'd like to make a motion that we table number four as the dates.

[35:25] » I believe there's some confusion in some of the dates. So, I make a motion we

[35:29] table number four. >> Okay.

[35:31] » Okay. I have a motion to table item number four, the road closure request

[35:38] for the Cleveland Athletic Booster Glow-in-the-dark 5K funright razor on

[35:43] September 12th. Okay. I have a motion by Mr. Mwaters and there's a second by Mr.

[35:50] Ward. Okay. All those any other questions?

[35:54] Okay. All those in favor? Okay. Motion CL caris 7 to zero. Okay.

[36:01] Uh item number five, authorize amendments to the infrastructure

[36:06] maintenance agreement with McKenley development for section 9 of Grand Oak

[36:10] reserves public improvements.

[36:15] Okay. Uh, thank you, Mayor and Council.

[36:19] [clears throat] Millia Lavar. >> There you go. State your name.

[36:21] » Millia Lavaro, director of community and economic development. Um, so this is an

[36:26] item that we presented last at the last uh regular meeting. Um, and so since

[36:33] then there's just been some um uh amendments sought by the developer. um

[36:39] they didn't have very much time to review the uh text when it was turned

[36:44] around um by staff in the city attorney's office. So, in fairness, you

[36:49] know, that was kind of their first opportunity to look over some of the uh

[36:52] the text. So, they just came back with a few things. We've kind of outlined that

[36:56] in the staff report and it's certainly there for you to review in the red

[36:59] lines. Uh but again, this can be kind of summarized to they wanted to clarify

[37:04] when the effective date was going to take effect. um and really u when that

[37:10] would start. And so there's a two-year maintenance period outlined in this

[37:14] agreement. Uh and that would have that would effectively start um uh take

[37:19] effect in November 25, which is when they uh receive substantial completion

[37:25] for those infrastructure improvements in that section of Grand Oaks. Um and then

[37:30] kind of they wanted to elaborate on the kind of inspection process after that

[37:35] two-year maintenance. uh window and um just kind of elaborate on some of the

[37:41] text that was there and kind of just spell that out more clearly. And then

[37:45] they changed a few terms um like one of them was detention facilities that's

[37:50] just generalized to improvements now which is probably more broader in our

[37:54] favor. And then uh also wanted to change uh you know it says initial payment that

[38:00] should really be the total payment for this uh consideration um since this is

[38:05] in lie of bond shy bond for the maintenance.

[38:10] So I'm happy to entertain any questions. That was the synopsis of the amendments

[38:16] to the agreement.

[38:22] Any other questions? Okay, if there are no questions,

[38:28] make a motion we uh authorize amendment to the infrastructure maintenance

[38:32] agreement with McK McKinley development for section 9 of Grand Oaks Reserve.

[38:36] » Second. >> Okay. I have a motion by Mr. Magwaters.

[38:39] I have a second by Mr. Buckley. Any other questions, comments? Okay. All

[38:44] those in favor? Okay. Motion carries. Seven to zero.

[38:51] Okay. We're going to move on to item number six. Approval of the final plat

[38:55] of Grand O Reserve phase 3 section 9 approximately

[39:01] uh 9171

[39:05] acres situated in the Joseph Finner Survey abstract number 441

[39:14] Cleveland Liberty County, Texas. generally located along Pine Ben Court.

[39:22] » Um, correction, apologies. So, I was just looking at that last bit. So, this

[39:27] is generally located um along Grand Oaks Boulevard

[39:32] » uh that was just left over from uh a recent plat case, but this is the kind

[39:37] of sister uh item to the the maintenance agreement that we just looked at. And so

[39:42] this was kind of the the maintenance agreement um was the last thing that we

[39:47] needed in order to comply with our subdivision ordinance that would allow

[39:50] us to move forward with the final plat for this section uh of Grand Oaks. And

[39:56] so this section would provide for 20 uh 45 lots, four blocks and nine reserves

[40:02] called Grand Oaks Reserve Phase 3 section 9 final plan. So staff has

[40:07] reviewed it. We do recommend approval. Uh we do happy to answer any questions.

[40:17] » Make a motion we approve item six.

[40:23] » Okay, I have a motion and a second on the table. Any other questions?

[40:29] Okay, no questions. Uh all those in favor?

[40:35] Okay, motion carries seven to zero. Okay.

[40:41] Okay. We're going to move on to item number eight.

[40:47] Okay. Seven. Okay. Hang on. I'm thinking Oh, one's cut off on my sheet here.

[41:03] Okay. Okay. Sorry about that.

[41:08] Okay. Uh, second reading of a resolution authorizing real property acquisition

[41:14] project of the Cleveland Economic Development Corporation for acquisition

[41:19] of real property and property improvements.

[41:25] Uh, thank you, Mayor Council. Again, Amelia Lavaro, director of community

[41:28] development, uh, community economic development. So again, uh at the most

[41:33] recent regular meeting, we did have a first reading of this item and this is

[41:37] the uh statutoily required second reading uh in order for um these funds

[41:43] to be utilized for this purpose for this recently designated project. Uh but

[41:48] yeah, this you know resolution kind of or just uh generally kind of recognizes

[41:53] the duly uh followed process and the kind of authorization of the funds for

[41:59] these purposes. I don't know if there's a discrepancy uh but the dollar amount

[42:03] in question u is2,000 294,500

[42:10] u dollars

[42:16] happy to answer any questions and this is related to the following item as well

[42:27] » reading so we need to make a motion to adopt.

[42:30] » Yeah. >> The resolution.

[42:32] » If there are no other questions,

[42:42] » you're talking about >> Well, there technically there is a

[42:46] second reading of this. There's a resolution.

[42:48] » We need to approve the second reading, >> right?

[42:50] » Make a motion we approve the second reading of the resolution authorizing

[42:53] the real property acquisition product of the Cleveland Economic Development

[42:56] Corporation. >> Second. Okay, I have a motion and a

[43:01] second. Motion by Mr. Maguat, second by Mr. Buckley. Any other questions?

[43:08] Okay, all those in favor? Okay, motion carries.

[43:14] Seven to zero. Okay, we're going to move on to item eight, a resolution approving

[43:20] and authorizing the EDC board president to execute a p purchase and sale

[43:26] agreement for acquisition of uh 5165 acres of real property legally describe

[43:35] lots 11 through13 block one in the original town of Cleveland. Block one,

[43:43] Cleveland, Liberty County, Texas. Thank you, Mayor Councel. Again, this is

[43:50] related to this uh second reading of that that resolution. Uh this this item

[43:56] is really pertaining to just the actual um execution of that purchase and sell

[44:01] agreement. So, the last one was kind of the funding. This is more the um actual

[44:05] transaction. So again, this would help us uh secure uh some property uh in

[44:12] Cleveland to be used for authorized um uh projects as relates to uh parks

[44:21] projects. So happy to answer any questions if you

[44:24] have any.

[44:31] Make a motion we approve item eight. Resolution approving the author in

[44:35] authorizing EDC board president to execute a purchase and sale agreement

[44:38] for the acquisition of 5165 acres real property.

[44:44] » Second. Okay. Have a motion by Mr. Buckley.

[44:48] Second by Mr. M. Waters. Any other questions?

[44:52] Okay. All those in favor?

[44:57] Okay. Six. Okay. Motion carries. 6 to1. Okay. Thank you, Emilio. Okay. Item

[45:05] nine, approval for staff to move forward with the replacement of uh two mixer at

[45:13] wastewater treatment plants.

[45:20] Good evening, mayor and council members. I'm requesting council approval for

[45:27] staff to move forward with the replacement of two mixers for the

[45:31] wastewater treatment plant. These mixes are critical component for

[45:36] this for the treatment process. So the idea is

[45:44] one was covered under insurance because it has n natural damage happen with the

[45:48] weather and so forth. So that would be covered under insurance.

[45:52] The other one we are asking for to purchase

[45:57] for bid which we we we recommended h equipment for that for that purchase out

[46:04] of the three recommended h equipment to purchase these uh

[46:09] these mixes for the wastewater plant. >> So the original estimate they didn't

[46:16] have their taxes included on it. Yes, the original is correct. It's just

[46:23] that the other one, which I should have stated, the other one was covered on the

[46:27] insurance and it would cover the other one and the the existing one that I'm

[46:33] asking for, we'll pay for that auto prom, this was something that y'all

[46:38] voted on last council. Um I think when he just got up, we kind of misspoke and

[46:42] said it was just going to be one. It is two,

[46:44] » but one of those will be fully covered by the insurance proceeds. So we just

[46:48] wanted to bring that back to make sure that

[46:51] what y'all approved. >> Okay. Not a small question.

[46:57] » Make a motion to approve for staff to move forward with replacement of two

[47:01] mixers at waste water treatment plants. >> Second.

[47:05] » Okay. And a motion by Mr. Buckley. I think a second by Miss David. Okay. Any

[47:11] other questions? Okay. All those in favor?

[47:17] Okay. Okay. Motion carries seven to zero. Okay. Item number 10. Uh

[47:24] discussion on proposed fiscal year 2026 2027

[47:30] budget. Mr. Typton.

[47:34] » Thank you, Mayor Councel. I brought my expert with me today. So,

[47:43] » she might not be happy with me.

[47:52] » So, we are currently still working on the TNT worksheet. Um

[47:57] Pam has been on that all day today. There's some numbers we're still going

[48:00] back and forth with the county on. So, hopefully we'll have something with

[48:03] y'all for that for y'all shortly on that. Go next.

[48:10] So, this is just a general snapshot of the two main um

[48:14] revenue streams that we have for the city, which again is your the taxes and

[48:18] the sales tax.

[48:22] Again, I think there was probably some misinformation or something maybe online

[48:26] about this. Again, it was the projection of what the sales tax was going to be

[48:31] versus what we brought in. So that there's no bearing on the city

[48:35] whatsoever. We can't control sales tax. We go to the next slide. This is the

[48:41] total general fund revenues for everything. So you still see property

[48:44] tax, sales tax at the beginning. All the rest which is your franchise taxes,

[48:48] pilot, license, and permits. That is the total

[48:52] revenue stream. So you can see obviously at the bottom it's 301,940

[48:58] which is again over total revenue.

[49:08] Pam and I sat down and we went through every single line item that we had. We

[49:14] were able to cut a few more areas and locations.

[49:17] Those would be some other operating supplies as furnitureures and fixtures.

[49:21] Um, we were able to balance the budget currently. And this right here kind of

[49:26] just shows you, you know, your far right line item will tell you the parenthesis

[49:31] is what we had taken away from that like administration. You'll see 55,000 was

[49:36] removed. um some of the larger ones you see, and Pam, you could probably go

[49:41] further into this, but like we said, the um water and sewer

[49:47] funding, we removed some employees that were in that percentage- wise and moved

[49:52] them back into the general fund. So, that's why you see the the cost

[49:56] difference there. So what he means by that is that we had um uh employees in

[50:02] the parks department and our garage department that were budgeted out of

[50:06] water and sewer. Um after speaking with our financial advisor, it was his

[50:12] recommendation that we justify the transfer from water and sewer. So in

[50:16] doing that, we wanted to make sure that everything that's allocated to water and

[50:20] sewer should be there. So part of the increase that you'll see in water and

[50:25] sewer is because we removed employees that were not water and sewer employees

[50:30] from the water and sewer budget.

[50:35] Important.

[50:40] This again is going to reflect your total revenues versus total

[50:43] expenditures. So your proposed budget, we're sitting

[50:46] at zero. Total is 12,000 or 12,430,221.

[50:55] These are our debt obligations. Our current debt obligations are at the top.

[50:58] Our next year was going to be reduced for our bonds and reduced for water and

[51:03] sewer. And again for the total debt for next year is 2,379,329.79.

[51:14] I wanted to highlight again, you know, the the ability of the staff to reach

[51:18] out and get a lot of grants for the city and the total amount is 37,75127

[51:25] worth of grants. City matching to that is 8,720,000.

[51:31] I think it's a very noble effort to try to save city

[51:37] taxpayer money with that. And that's a lot of money they went in and got with

[51:40] some very little match money. Again,

[51:47] this is just kind of a recap from previous medical insurance for a new HMO

[51:51] plan was introduced and it also introduced a fixed employer

[51:54] contribution. Um, it did save the city money upwards of $165,235.

[52:01] Those general increases are what we had to do in the budget were for property

[52:05] insurance, electricity, natural gas, street lights, gas equipment

[52:08] maintenance, and vehicle maintenance.

[52:13] These again were the ones that we proposed that are going to be

[52:15] reoccurring for the following budget. So these are the ones that will stay

[52:19] ongoing. These are not the onetime costs.

[52:26] And then these are your onetime purchases. So these are mainly all of

[52:28] these are what comes out of your general fund, your fund reserves. I want to make

[52:32] sure I say that right. Fund reserves. >> That's the uh fund balance. The reserves

[52:36] is the 25% that's required by law. We keep 25% of operating. So if you have a

[52:42] $12 million budget, you're required by law to keep 25% of that, which would be

[52:46] three million that we cannot touch. So that is in the reserves. Um as of last

[52:52] year, uh 25 audit, we were at 72% which equaled um 8.9 million um 72% of our

[53:02] reserves, which that 72% means that we're 72% of what it takes for us to

[53:06] operate. So it takes us 12 million to operate. 72% was that of that is 8.9

[53:11] million. With the projections for this year, we're trending to hit 2 to utilize

[53:16] $275,000 out of reserves for this year, which will leave the fund balance at 8.7

[53:24] million. And then we have allocated in the budget for next year 697 million. I

[53:30] mean, sorry, 697,000. >> Oh, okay.

[53:33] » Call things. Okay. 697,000 out of the reserves of that the $500,000

[53:40] firet truck that was approved during this year will not be received before

[53:44] 9:30. It won't be completed. So we carried that over to the budget for 27.

[53:49] So we're actually whereas last year we utilized 300

[53:54] 300 something,000 last year three sorry about

[54:00] it was about 300,000 373. Yes. We utilize 373.

[54:06] We're only utilizing in in addition to the 500,000 for the firetruck 197. So we

[54:12] have decreased the amount that we're pulling out of reserves, but the fire

[54:16] truck is included in that 697. So once we subtract the 697 from the 8.7, that

[54:22] will leave us with a little over 8 million, which is 65% of reserves. And

[54:27] the law only requires that we keep 25%. I don't want it to get down to 25%. So

[54:32] I'm not just spending money to >> we at 65%.

[54:37] » That's an estimate. >> And the law requires us to be

[54:41] » at 25%. That that's what the charter says and the uh state law and our

[54:46] charter is in line with the state law. So we're required to keep 3.1 million

[54:50] and we're estimating best guess of current if anything happens this number

[54:55] can change is 8 million21 at the end of fiscal year 27. that but that depends on

[55:01] the property tax revenues that depends on the sales tax revenues that depends

[55:05] on the de um uh economic development uh development services the permitting

[55:12] those are the big three biggest um revenue streams that the city has and

[55:16] those are things that we really can't control as far as property tax we have

[55:20] the packet that y'all have it was built off of what we had at the time I will

[55:25] tell you now I have been here since six o'clock this morning working on this TNT

[55:29] And that is going to change. We um the TNT worksheet that I received on the

[55:34] 28th of August um said that the no new I mean the voter approval rate which is

[55:40] the highest rate that the city can adopt without going to the voters was 79%. We

[55:46] did uh 79% 79 cent. Sorry I'm exhausted. 79 cent we did a not to exceed rate of

[55:54] 75 cent. If we're wanting to adopt 79, we're going to have to start the process

[56:01] over with the publications and the um record vote where you guys vote on it

[56:07] and everything. The issue with that is the values decreased. The property tax

[56:13] uh the certified appraised values have gone down. I'm working on this today.

[56:19] Last year's values were 829 million and this year's taxable value is 719

[56:26] million. The only way you make up for that difference is by increasing the

[56:30] rate keep increasing the tax rate which I did not want to do. Last year when we

[56:34] corrected the rate for the debt service, we had an excess collections of

[56:38] $800,000. Spoke with the tax assessor collector.

[56:41] He was worried that that rate wouldn't work. And I reassured him we collected

[56:45] everything we needed and more. So, it's not 800,000. It's better than what it

[56:50] was, but you're never going to hit the nail on the head with that because you

[56:52] don't know how many residents are going to pay their taxes. You don't know

[56:55] exactly what the appraised values are going to be after they go to the

[56:58] appraisal review board. So, there was a decrease in revenue. One of the main

[57:02] things was, I believe it was House Bill Nine, House Bill Nine, um that increased

[57:08] the personal property exemption from 2500 to 125,000. There are 425

[57:15] properties that are in one of those codes. There's four of them, but 425

[57:20] properties that have an exemption of 23 million that they did not have last

[57:25] year. And then there's um three more that total up to a total of about 30

[57:29] million that we are now exempt. They're exempt from paying the property taxes.

[57:34] So the personal property basically that is a business that has um contents that

[57:40] they use to for profit that they're going to utilize to um operate the

[57:45] business resell or whatever it may be. So the for an example you can use

[57:50] Walmart 125,000 is nothing inside Walmart but that's an exemption that

[57:54] used to be at 2500 that is now 125,000. These are numbers we can't control. I

[58:00] have worked um tirelessly with the Liberty CAD and the tax assessor to

[58:06] ensure that the information that they're giving us is uh correct. We are limited

[58:10] as a city as what we can request for the CAD because requesting them to change

[58:15] the appraised values is illegal because that benefits us. I just want accuracy.

[58:19] Is this correct? So I I reached out to some colleagues uh outside the city.

[58:24] They told me what information I should request and I have requested that

[58:28] information. um

[58:31] based off of what it is that you guys want to do. If we're going to stay with

[58:34] the 75, which will create a budget shortfall, we balanced it um with this

[58:39] one. We worked on that, stayed late, got it in balance, got these numbers on the

[58:43] 28th, which was after the budget had to be um provided to you guys. And um based

[58:50] off of that, we have another shortfall of about 300,000 because of property

[58:54] tax. It has nothing to do with sales tax. Well, yes and no. Sales tax also

[58:59] affects property tax. I want y'all to understand that because sales tax um a

[59:04] portion of the city sales tax one6 25% out of a$150. So if you look at the $150

[59:09] as quarters, it takes six quarters to make a $150 take one quarter which is

[59:14] one6th of it goes to uh portion goes to EDC, a portion goes to property tax

[59:19] relief. So once we when the um the more we collect in sales tax, it lowers the

[59:25] property tax rate because it relieves the citizens of having to pay property

[59:30] tax based on the more sales tax we generate. When the sales tax decreases,

[59:35] that property tax rate now goes up because the sales tax relief is now

[59:38] lower. So it's an inverse relationship. So that's another thing that's affecting

[59:42] this rate because pro uh sales tax is has uh gone down in the last year. So

[59:48] that's something that we're looking at. Um,

[59:51] I I need direction. Uh, we can start the public uh publications over. Um, if

[59:57] y'all are interested in going to the 79, um, I was not expecting the taxable

[1:00:02] value to decrease in the way that it was, that's not something I can control.

[1:00:06] But the 800,000 when we had that excess collections last year, I worked on the

[1:00:12] spreadsheet and I said, what does it look like if we if all things stay

[1:00:16] consistent and we remove the 800,000? was maybe two cent increase that we

[1:00:20] thought we would go back up to have to make up for debt service payments. But

[1:00:25] with the decrease of the 800,000 plus the decrease in the taxable value, we're

[1:00:30] having to do uh a higher rate than 75 cent if we want to be able to collect

[1:00:37] enough to not have a deficit. So

[1:00:40] » So just to be clear, just just to be clear, staying patents

[1:00:45] creates about a 300k shortfall. >> Yes. to the bank.

[1:00:48] » Yeah. >> Yes, I do have that. Um, a part of that

[1:00:51] is I have it here. Give me one second. A portion of that is uh attributed to the

[1:00:57] sales tax. We originally the package you have has a revenue of 3.7 million. That

[1:01:04] 3.7 million was calculated based on um the three and a half%. Okay. So the law

[1:01:11] allows for us to increase revenue for sales of property tax by 3 and a half%

[1:01:17] each year. So our projected revenue is 3.4 million. If you add three and a

[1:01:23] half% to that, that gives you a number and then the new property is not part of

[1:01:28] that calculation. New property is not subject to the cap. So what I did was I

[1:01:32] took that number, added three and a half to increase it. Then I took the new

[1:01:35] property value and multiplied it by the um estimated tax rate and that's where

[1:01:40] we came up with the 3.7 ran it by Lee. We it made sense. That's what we move

[1:01:45] forward with. Well, because the tax rate has to be higher to generate that uh the

[1:01:51] three and a half% it also increases the amount that goes to the TUR. If we tax

[1:01:56] on 63 cent, the TUR gets what's in the slideshow about 275 and 215,000.

[1:02:02] If we go up to 70 uh 75% 75 75 cent the TUR is now getting

[1:02:11] 308,241. So it's like even though we increase the

[1:02:15] rate the TUR is still going to their um allocation is going to increase as well.

[1:02:21] So with all of those things in play, the deficit is now the 320. But it's not

[1:02:27] just the property tax. It's the property tax minus the tourist that increases as

[1:02:32] well. >> I'm going to piggy back off of uh Mr.

[1:02:37] McWater's question there. Um staying at the 75 cents that we discussed in the

[1:02:42] last meeting with about the 300,000 budget shortfall. Is there a plan to

[1:02:47] balance that? >> We are required to balance it. That's

[1:02:51] the direction that I'm needing because we you we can't adopt a you can adopt a

[1:02:55] budget that's not balanced but that would require us to go into fund balance

[1:02:58] which you don't want to do for reoccurring costs. So we can either go

[1:03:02] back out to for the restart the publication requirements and uh vote on

[1:03:07] a higher rate or we can try to make some more cuts. And that's the next part or

[1:03:13] part B of the question because then my next question was uh would cuts be made

[1:03:17] first um in the process and would that be off of we had some supplementals that

[1:03:23] were requested and so I'm just curious if we are looking at cuts first and if

[1:03:28] supplementals would be cut first to continue operations of what had been

[1:03:33] already um budgeted or like what is that potential plan if it stays at the 75

[1:03:41] Courtney, can you go back one slide? >> So, essentially, aside from those that,

[1:03:47] you know, I say non-discretionary like electricity and property insurance,

[1:03:51] these are your supplementals. That that's that's the only thing we've

[1:03:55] added to the budget. That's it. >> We didn't add any positions.

[1:03:59] » Well, one's in water, sewer. >> That's the

[1:04:02] » That's the transfer over. >> No, the the water and sewer position

[1:04:05] that's added is being funded out of water and sewer. Water and sewer is

[1:04:09] their own fund. When you look at your uh packets, the budgets, it says general

[1:04:14] fund 100. That's I call when I talk to my team, I tell them that's our bucket.

[1:04:19] That's one bucket of money. Fund 300 is another one. Fund 300 is funded by

[1:04:24] everything that uh is generated out of the water office. It's like a um

[1:04:28] enterprise fund. It's a for profit. So, it's the water bills, the tap fees, the

[1:04:34] late fees, everything water and sewer. So the position for water and sewer is

[1:04:39] 100% covered out of water and sewer revenue. It does not it's not property

[1:04:42] tax or sales tax related. >> Okay. Um and just to summarize this last

[1:04:48] year were we at 62 or 63 cents. >> 63.

[1:04:52] » We're at 63. So, we're looking at either moving from 63 to 75, which would

[1:04:57] include a shortfall, and there would have to be additional cuts, or we're

[1:05:02] looking at direction of potentially going up to 79 cents, because we can go

[1:05:07] all the way up to 79 without voter approval.

[1:05:09] » Yes. >> Okay. And I got one other question, not

[1:05:12] related to the rate. It's what you said about the fund balance, having a healthy

[1:05:15] fund balance that we're only required 25%. Um, I believe y'all posted

[1:05:20] something on your social media not long ago. Didn't y'all get accolades for like

[1:05:24] a double A or AAA bond rating? >> Bond rating increase.

[1:05:27] » Okay. Um, does going down to 65% though that's still above our minimum and it's

[1:05:32] great. Does that affect that rating at all if you dip to 65% from wherever you

[1:05:37] were at? >> I cannot answer that with decisive like

[1:05:40] definity, but I do know that the rating is not often. So things could change

[1:05:44] between now and the next rating. It's not rated annually. I believe the

[1:05:48] paperwork that I saw said the last rating was maybe 2017. Don't quote me on

[1:05:52] that, but I went back through my files, the uh electronic files that we have to

[1:05:56] see when the last information was submitted for that rating and it was

[1:06:00] maybe five years ago. >> Okay. And that's the only reason I asked

[1:06:03] about that because I knew y'all had worked hard for that rating and it was

[1:06:05] going to contribute to the financial health and I just didn't want to make

[1:06:09] sure that something would make us go backwards in that.

[1:06:12] » No, but they won't come back and rerate us based on that. But it is something

[1:06:16] that you don't want it to be a trend, right? Because we if you look at the

[1:06:20] last five years, it did kind of trickle down and then it came back up. So,

[1:06:24] » okay. Thank you. >> Oh, and I will say also when it comes to

[1:06:29] cuts that we did have public works who agreed to freeze two positions for six

[1:06:33] months to help with the deficit. So, we are doing everything we can to ensure

[1:06:38] that we're being as uh fiscally responsible as we can. I don't know

[1:06:43] » where else we can shave off. Just to give it a history, I believe it was 77

[1:06:46] before it went to 63. Correct. >> Yes. Yes.

[1:06:50] » And the reason why it went down to 63 was because of the excess we've had in

[1:06:53] our interest in sinking. And so we understood that it was going to

[1:06:56] eventually go back up after that once we align that because

[1:07:00] » you're not supposed to keep that much money in your

[1:07:02] » tinus. >> So we knew it was going to go up, but I

[1:07:05] think, you know, this year, you know, I kind of

[1:07:09] told Pam earlier, I think it was kind of the double whammy. You got the the bill

[1:07:13] that hit us from 2500 to 125,000 and then of course sales tax and

[1:07:19] » they both kind of played on our current situation

[1:07:23] » and and that sales tax situation is just not here in Cleveland. I mean it's it's

[1:07:30] everywhere with the prices, you know, on the on the gas, the groceries, I mean

[1:07:37] you name it. So, uh, hopefully we can have a better year, uh, next year on the

[1:07:43] sales tax. >> And, and just to be transparent on the

[1:07:46] sales tax, we do, um, contract with HDL. They do sales tax audits for different,

[1:07:52] uh, entities. And I reached out to them to get a better explanation of the

[1:07:57] shortfall because for the last two years, prior to this year, for fiscal

[1:08:01] year 25 and 24, we collected $800,000 more than what we budgeted. So we

[1:08:08] assumed that trend would uh continue because we have the growth in the two

[1:08:13] tures. We have the growth south of us to where a lot of those people shop here

[1:08:17] and um we assume that that would be the trend. Well for whatever reason um it is

[1:08:23] not. We had some development that slowed a lot of times. Uh what people don't

[1:08:28] understand about sales tax, it is paid to the destination point. So if somebody

[1:08:33] in New York orders something and ships it to you, we get the sales tax for

[1:08:36] that. That's why the sales tax when you're placing an online order is not

[1:08:39] calculated until you get ready until after the address is put in. So we

[1:08:44] collect that. We did have some collections that were due to audits. So

[1:08:47] those were one-time payouts that were thought to be just a an upward trend an

[1:08:53] upward trend because we did have like I said in excess $800,000 for two budget

[1:08:58] years. So it it was different factors that played a role in it. It's not just

[1:09:02] a decrease in sales locally. That makes sense.

[1:09:14] What is council's um appetite on changing the rate? Are we moving f

[1:09:20] forward with the 75 because we have to come back.

[1:09:28] Are we individually giving our opinion or collectively?

[1:09:31] » This is not an official vote. If we are starting over, we have to do a um the

[1:09:36] record vote would have to be I'd have to start over and do the official

[1:09:38] documentation and everything. >> We have to essentially come back and do

[1:09:41] another special council meeting to do to suspend the 75 and introduce the 79

[1:09:46] cents. >> But there wouldn't be any additional

[1:09:49] extra action so to speak if we stayed 75. Oh, just just the adoption on the

[1:09:55] 15th. >> And this is what we have today. Um the

[1:09:59] tax assessor is out of the office. I've been talking to him on the cell phone

[1:10:02] today. He'll be back on Friday and I'm going to go line by line with him to

[1:10:07] ensure that what we have is accurate. >> But if we stay at the 75 that increases

[1:10:14] we end up with a new deficit. >> Yes, it's the 320. We'd have to cover

[1:10:19] » do additional cuts. But you have a plan for that deficit like freezing the

[1:10:22] positions that you mentioned. >> The the freeze is in what resolved the

[1:10:26] previous deficit that was presented at and I think I think that's really

[1:10:30] important uh to note Pam. um they did a lot of work because the original

[1:10:37] shortfall in the sales tax as you remember from last meeting was 600,000

[1:10:41] » and they went through line by line and and did some pretty pretty significant

[1:10:45] cuts to balance that >> without having to do the dip in that

[1:10:49] they were. So they're I mean they they definitely, you know, applaud y'all.

[1:10:54] Y'all did a lot of work to eliminate that. And I know this was a definitely

[1:10:58] news that no one no one wants to hear, but uh but yeah, that's that's where

[1:11:02] we're at. We last month when we were here, we had a or few weeks ago, we were

[1:11:06] at a 600 shortfall and now we're at 320 is basically where it's at. But y'all

[1:11:11] went through a tremendous amount of cuts already. Essentially, what was presented

[1:11:16] when we say balanced budget, that was at the 70 uh 75 because that's what we had

[1:11:21] TNT wise. getting that new information and now at 79. That's where it comes in

[1:11:27] now to where if we don't go to 79, we're at an additional 300 shortfall that we

[1:11:31] would now have to go back and fix that. >> Well, I don't know if we're individually

[1:11:37] providing our opinions. I know this is just direction, but I'm going to go

[1:11:40] ahead and just say my opinion is to stick with the 75 before trying to

[1:11:44] increase the 79 for our residents. So, my vote would be in favor of maintaining

[1:11:48] the 75 and looking back at where we might have to cut additionally.

[1:11:57] Yeah, mine's a 75 also. >> Yeah,

[1:12:01] » I say 75. But I think you know in a it's it's not

[1:12:06] good but then again u

[1:12:12] you know this council you know uh we inherited you know our

[1:12:18] predecessors you know uh they've always been very

[1:12:23] conservative you know with our with our money. So,

[1:12:28] uh, we can we can withstand some of that because see, back in the day, we didn't

[1:12:32] have any cushion. I mean, some of the I think Chief Brousard and Anderson and

[1:12:38] Miss Conn could probably remember some of those days where we didn't have any

[1:12:42] any leeway at all. But uh you know we we can uh I just rather stay with that 75

[1:12:50] and uh we can you know cut back whatever we can cut back. But uh and look forward

[1:12:56] to next year you know with this uh whatever they call the affordability

[1:13:00] thing you know with the gas and and the and the groceries and and uh pretty much

[1:13:06] everything you know prices are high on everything. So,

[1:13:10] » and and just as a reminder, um, and I think this is worthwhile for everybody,

[1:13:15] our our all the public to understand, >> going down to 63, we all knew was a

[1:13:21] one-time thing because of the overage. >> We didn't know what it was going to look

[1:13:24] like. >> We didn't know exactly what it was going

[1:13:26] to look like, but that that we knew that was going to be a one-year relief. Uh,

[1:13:31] and prior to the 63, we were at >> 77 years and then 78 for one.

[1:13:37] » So, so just to just to kind of put that into perspective, we're still coming in

[1:13:42] at 75 better than than what we were the previous two years before we had to go

[1:13:47] down last year. >> Mayor,

[1:13:49] » yes. >> I just want to add because I want to

[1:13:51] make sure that and and Brett, I'm so grateful that you lifted that point

[1:13:55] because that was a point that I was toying within my mind. I want to make

[1:13:59] the connection to the information that was shared because I want to ensure that

[1:14:02] we don't get misinformation. So when you talk about the fact that we had that

[1:14:07] one-time purchase, I want to connect that to the statement about our

[1:14:10] financial readiness. And so when and I know you were very conservative in your

[1:14:14] response, but I want to say out loud that when those agencies look at our

[1:14:19] financial readiness, they actually applaud you for what you did because you

[1:14:23] recognize that there was a one-time expense of the fire truck, the police

[1:14:27] car, whatever it was that we had to make a conscious decision to make. We made

[1:14:32] that and now we have the opportunity to increase that back. So the rating is not

[1:14:38] going to penalize us for making a one-time decision. Now, if you were

[1:14:42] doing that because we had to consistently cover bills that we did not

[1:14:46] anticipate and we did not forecast, then they would hold that against us because

[1:14:51] then you're not being good financial stewards of the money. Correct?

[1:14:54] » But I want to make sure that we're clear that there's no misinformation. Our

[1:14:59] financial rating is not at risk because of this one-time purchase that took us

[1:15:04] from a 77 to a 62. >> That's actually that's two different

[1:15:08] things. The 77 to the 62 is the property tax rate. Okay. The 600,000 is a onetime

[1:15:14] » 694. Yes. That that is not that does not affect us negatively because the you can

[1:15:21] allocate one time cost fund balance because fund balance has to be used for

[1:15:25] something >> for something because you can't just

[1:15:27] continue to. >> Yeah. No, it would that it's uh the best

[1:15:31] option, the best practice is to use it for one-time expenditures because when

[1:15:36] ongoing costs are allocated to the fund balance, you're going to deplete your

[1:15:40] fund balance. >> Exactly. So, I just wanted to make sure

[1:15:42] that we didn't get a misunderstanding about our financial rating because that

[1:15:46] wasn't really connected in the moment, but I understand why the point was made

[1:15:50] because we were celebrating that we did have a good financial rating, but yet

[1:15:54] one is not going to negatively impact the other,

[1:15:57] » right? And the tax rate the the what happened with the tax rate is that there

[1:16:01] were some um errors with the tax calculation like know how else to say

[1:16:06] that but um there was excess revenue collected in the INS INS was restricted

[1:16:13] to bond payments debt payments that's it so over the course of May since the TUR

[1:16:19] since the TUR went into place we started collecting excess revenue in the um debt

[1:16:24] service the INS fund and last year, you cannot go back and um you have to

[1:16:30] certify the excess amount in the TNT worksheet. You can only do that for the

[1:16:34] prior year. So, when I came on board and I noticed it, it was left alone. And

[1:16:40] then, uh last year, I just kind of fought it until we figured it out what

[1:16:44] was going on. And so it was like 800,000 at that time even though the prior year

[1:16:49] before that was in excess of 200,000 that we could only um no uh utilize the

[1:16:56] 800,000 for the prior year. You can't go several years back to use this excess

[1:17:00] collection. So the $800,000 was put into the TNT worksheet which significantly

[1:17:06] dropped that uh tax rate. >> Yeah. Just for Yeah, just for clarity. I

[1:17:10] was just speaking of the tax rate because it seems like it's a lot. Oh my

[1:17:15] goodness, we went from 63 cents per 100 to 75. But I just think it's very good

[1:17:21] for everybody to understand the context of that. We we knew it was going to go

[1:17:25] up because we were running at 77 and 78 in years prior to this this year.

[1:17:31] » And so rebounding from the 63 to a 75 doesn't even get us up to where we were

[1:17:36] in 24 and 25. >> Yeah. And I think that 75 wasn't that

[1:17:41] around 2018 we were at 75.

[1:17:46] » So we still you know ahead of the curve you know from where we were. So, uh,

[1:17:53] but, uh, you know, going forward, we just got to, uh,

[1:17:59] you know, look at that sales tax and, you know, bring in some new businesses

[1:18:03] here. And, um, but it's going to get better. And, and at the end of the day

[1:18:09] though, we are okay. I mean, we're not in dire straits. We're okay.

[1:18:15] Could be better, but we're okay. And it's been a lot worse in in previous

[1:18:21] years, but the city of Cleveland is in good standing, good credit rating. Uh,

[1:18:27] you know, we had that $37 million and and bond money that we're starting to

[1:18:32] distribute that you can see with the lift stations and the work that we're

[1:18:37] doing uh in our public works. So, you know, we we have a lot to, you know, uh,

[1:18:43] hold our heads up about, you know, and and with that grant money, that was that

[1:18:48] was something that that's never been done in Cleveland. And, uh, I think that

[1:18:52] the taxpayers will here within the next year will really get to see a

[1:18:57] difference, you know, as we start to, uh, spend that money, you know, and and

[1:19:03] apply that to to uh improvements, you know, in our infrastructure. So, we're

[1:19:10] okay though. >> Anything else?

[1:19:15] Thank you.

[1:19:19] » Okay. We don't have to take a vote tonight, do we? Okay.

[1:19:25] That's any other discussion?

[1:19:29] » Make a motion we adjourn. >> Okay. I have a motion to adjurnn.

[1:19:33] » That's all adjourned. Go on.

City Council Workshop 9/01/2026

Transcript