Test test Test test.
And let's go ahead and say it is 6:30.
We are going to go ahead and call this
meeting to order. And first we'll begin
with roll call. We can go ahead and take
care of roll call.
here.
» Present.
>> All right. Thank you, ma'am. Appreciate
that. Okay. Let's go ahead and stand and
let's go ahead and do our pledge of
allegiance.
>> Okay. Amen.
» To the flag of the United States of
America and to the republic for which it
stands. One nation under God,
indivisible, with liberty and justice
for all.
>> All right. Thank you so much. Appreciate
that, council. All right. Let's go ahead
and jump into item number three. And
this is a presentation, discussion, and
direction concerning the budget for
fiscal year 2026 to 2027. And the areas
that we're going to go ahead and cover
are the water and wastewater utility
rates, b the tax rate, and c other
departmental budget uh changes or
challenges. So, let's go ahead and uh
start with A with water and wastewater
utility rates.
>> Yeah. So, um I'm going to just uh
introduce you all. I know uh most of
youall I think were here last time uh
when uh New Jen was here. Uh but um been
working over the last I guess couple
months again with uh Matthew uh Garrett
and his team at New Gen. uh we had a lot
of changes uh you know and and I know he
will go over that but since the last
time uh last year when we um we made
utility rate changes obviously as you
all know uh we issued new debt uh in the
utility uh which does have a factor in
uh kind of the utility rates uh and so
uh Ivonne and I spoke and we felt like
it was really critical to really hone in
on where our utility rates need to be. I
know there's been a lot of conversations
at the council level of what that needs
to look like. Uh and and the idea was um
let's get somebody in here that um
really understands that world uh best
practices and the like. Uh and so uh we
brought Newgen back in uh and started uh
to speak with him and his team. And so
Matthew is here to kind of give you a a
picture of of where we're at uh with
those conversations and uh kind of how
we potentially look at proceeding. I
know he's got a couple different maybe
options to kind of explore. So, I'll
turn it over to Matthew to kind of walk
through that conversation with y'all.
So,
>> and that should work. The big
>> Yes, sir. Thank you very much. Howdy,
mayor, members of council. Matthew
Garrett, partner with New Gen Strategies
and Solutions. Always good to be back in
front of you. Um,
so when Zach called us, right, we were
going to do a quick update and the quick
update turned into we've got a lot going
on and then we have a master plan and we
have a laundry list of projects and
there's no way we could fund them all,
but we have one big one and we'll talk
about that in a minute. Um, so what does
that look like to Lidal going forward?
So the good news is you're looking at
this beyond one year at a time and
that's what we're going to do. Again,
we're going to forecast that fiveyear
horizon, kind of talk about the needs.
Um, a couple things that we're going to
talk about. You you do have a little bit
of growth coming in. I think we max out
at around 180 new connections in 27 and
then we level off to 100 and then kind
of wayne because we can't be sure of
what's coming after.
But like most right forecasts, we want
to put the known and measurable inputs
in and then the further out we get the
less we want to bet on the come right.
So I think that's a good conservative
approach. Additionally, last year we had
recommended that that small business
rate which is equal to residential
effectively be gone. Uh parts of it have
remained and so we're again recommending
that small commercial just be roped in
and charged like all other commercial.
Um primary reason is you've already
addressed the meter size equivalency,
right? So a larger meter can now pay
more. And so within your commercial
class, you already have segregation or
differentiation and who pays based on
potential volume, right? Additionally,
you also have um volumetric rates which
pick up the volume component. So again,
no good reason in our mind for that
small commercial customer to continue
paying a lesser rate, especially in the
face of major investments. Um yeah, so
that and we are continuing a phase in of
that meter equivalency. We'll talk about
what that looks like. Important note,
last time there was a communication
problem and we did not include a debt
service which is currently on the books
of a half million dollars. Um, so that
made things look a little better than
they really are. So we've added that in.
Additionally, you've since issued debt
is 26 issuance 25. Yeah. And that's
around 350, 370 uh peranom in principal
and interest payments. Um, so we
factored that in. You do have a
wastewater treatment plant. subject to
winning big tonight. Uh you will need to
fund it and uh that is a rough roughly a
million dollars per year payment even on
a 30-year note. And among the many
things that Zach and engineers will
share around their master plan, we only
funded that one in this horizon. So all
that to say, it's not we aren't
packaging up the wish list. We're
putting in the need and the need is
still a big jump at a $19 million clip,
right? Across 2,000 connections, maybe
2,300 2400 by the end of this. Uh that's
a pretty good jump.
That said, your your cost will grow from
2.7 million to over 4 million. So that's
the hill we have to climb. That's an
average annual increase of cost alone of
10 and a half%. Now, here are the costs
that make that up. your O andM like a
lot of operations and maintenance
expenses your people other than
well we don't have any major jumps right
so you're not adding 10 staffers and so
your on andm your operations line is a
pretty steady growth uh in accordance
with inflation
your capital outlays are anticipated in
that yellow line or yellow yellow middle
bar excuse me so you do have some cash
capital each year uh and lastly that
projected debt service. Um,
so the yellow line is very faint, but
you have your existing layer of debt
service. Again, that's around 900,000.
You add again another million once that
wastewater treatment plant debt comes
on. And that'll first affect you in 29
if you issue in 28. Okay.
So again, currently uh the residential
and small commercial rates are identical
uh except for the asterric which is that
your residents pay a volumetric winter
quarter average. Um additionally another
footnote, you do have multi-unit billing
and so that will affect each unit build
like a single family equivalent uh at
the 5/8 inch base rate. Pretty common
approach. Uh that said, your minimum
charges are between $20 and $83. Uh
there aren't many residents with a
4-inch meter, probably zero, actually.
Uh we may have a couple larger inch and
a half meters out there. Um I'm sure
they may have approached Zach and talked
about what to do if they want to get a
smaller one. U but this mostly is
affecting your small commercial today.
Um you do have an inclining block rate
as discussed before. That is a good uh
opportunity to send a price signal. If
you do not have some conservation price
signal, you would very likely have to
build additional capacity, more storage,
more elevated storage to pressurize your
system just for July through September,
right? Just for the big piece when it's
104 outside and people are watering. Um,
so to that end, this is a good approach.
One thing before we leave this slide,
I'll recommend in the future, we are in
the industry and in Texas kind of going
away from included volumes. your minimum
charge is already pretty low and then
you are effectively including 3,000
gallons in the minimum. There are other
ways to to handle different customer
types. Um we haven't suggested that
change today, but again as we have a
pretty steep hill to climb, you have
other rate strategies you can employ in
the future and this is one that probably
warrants a review
with that. Uh same is true on um sewer,
$22. Uh and then you have an inclining
block rate right there.
Commercial rate structure. Again, just
want to point out we do have uh the
meter equivalency starting in. So that
was at about 20% of the industry
standard. We did that because we didn't
want to expression rip the band-aid.
didn't want to have a major rate shock
to our commercial customers, but we do
anticipate phasing them in to the full
additional cost of having a large meter.
Again, that principle is that a large
meter puts additional demand on your
system and as a result, its minimum is
higher to represent your fixed cost
which are higher for those larger
meters.
So, my doomsday chart and I apologize
for it. It is the burning platform. It
just says we can't stay here. If you do
nothing with rates and you need to spend
what we have according to plan, it
doesn't work right. So, as the dashboard
goes, your expenses are in that gold or
orange bar, revenues, uh, they're at
around 2 million. Don't keep up. Um,
because your growth's not enough to to
pull it over, uh, the additional burden.
Your debt service coverage, the bond
community will not like it if you're not
making your notes. Uh, and so you miss
on that mark. And then we literally go
negative. And so uh I share it only to
show you the impetus. We we do have to
do something about rates. Um as proposed
again
to say one more time, we are planning to
increase the commercial rate phasing in
up to that 40% of meter equivalency.
Again, meter equivalency is sort of an
industry standard. uh there are basic
metrics that say this meter is two
times, four times, eight times the
capacity. Uh and that's why these rates
are now moving up. You'll see that 1 in,
2 in, and 4 in have a little bit bigger
steps than they did before because we're
implementing a 40% equivalency factor.
Meanwhile, the rate goes up from 20 to
27. Uh on the residential base bill,
we've left the 3,000 gallons included
for the time being, trying not to do too
much at once. Um it's a lot to explain
uh if we do too much at once. Uh again,
the sewer rate was 22 before. We're
recommending 2970
going into 2027. And you'll see the
other rates have some increases along
the way. No change to the winter average
policy,
but we have assumed that this new
residential chart does not apply to a
small commercial customer. Right? So
we've taken them off this slide. small
commercial now is going to live with
other commercial pay their if they're
small lower minimum charge and pay
volumes just like a commercial customer
would. Um so again the rate
differentials here um we have increased
right the equivalency up to 40%. Uh that
puts that commercial rate at 38.48
uh and you see the associated changes
kind of rowby row. I don't want to read
the detail to you. Any questions though
on the the residential changes to rates?
Any of my
opinions on a design?
>> Go back to the commercial.
>> Yes sir.
>> So Pete, how many just on top of your
head, how many of our small businesses,
you know, start falling into the 2 in
and above?
When you look at the small businesses,
» we have kind of like I have an idea.
>> I don't I don't know. I do have the
data. Didn't we move all the 2 inch and
above to normal commercial or do we have
a few left in small?
>> I think most of them.
>> Okay. So, so we're looking at the
>> but that was there's still some like
have a situation where
Ivon and I were looking the other day.
We we pulled like the top 10 users,
commercial users, right? I'm just going
to point an example, not to like point
any of our users out, but like AutoZone
for instance, is listed in our system as
a small business commercial. That's just
because originally it was based on meter
size, but a national brand probably
doesn't make sense to be listed as a
small business commercial. So I think
with the idea behind us moving to that
meter equivalency is why we felt like
it's probably doesn't make sense anymore
to
keep the two distinguishing small
business and commercial and just have
them just switch to commercial because
they're already going to be paying less
based on their need. So
that's why we have that. That's just one
example. I think I think that's where
the shop might be or you might get a
little bit but those businesses totally
agree with you in a sense but I'm just
looking at say just even the one inch
right now with a small business if they
they're paying you know local business
it's like 2267 and we're going to jump
all the way to 4874
until
you know small business that goes along
with that
>> and we do have I know we have the data
on who's listed there
>> yeah I mean I have my laptop. I assume
you didn't want me to pull it out and go
deep, but I can if we actually want to
talk about detail.
>> I was just wondering how many fell in
there. Oh, yes,
>> that was basically it. We had enough.
>> Yeah. The good news is we are not only
increasing the minimum equivalency. So,
the bigger ones are going to feel share
in in the pain and the burden. but also
to that same commercial customer
politely as a council, you can say, "Our
residents are going up $7 on the minimum
and you're going up 12 or or whatever
that delta was. I forgot the reference,
but um yeah, there there is a a shared
uh it's not like we're just doing this
to commercial. We're not we're not
paying the bills off of rates only that
they're affected by. So, but we can
provide that data. We can follow up uh
as well to council if that would help in
decision making. I'm sorry I didn't have
it with me.
>> A few a few of the residents. Yeah.
Especially, you know, those that are
very very limited, but I know the big
jump is going to be for those small
business just we did have a few
residents after we
see this last year that were on higher
meters that have come in and said, "I
want to go down to a lower meter." So,
we did have a few of those that went
down to a lower meter. They probably
didn't realize they were on a higher
obviously
be on a higher side. So
>> yeah. So we have had some changes and
fluctuations
not.
» Thank you.
>> Oh yes sir.
» All right. So with the proposed rates
sort of in hand um we go back to the
dashboard. Right. We've tinkered. We've
retoled. And now we can make uh the
bills, right? We were able to pay for
our increasing expenses over time. We're
able to hit a debt service coverage rate
of better than one. Uh right now, I
don't believe we have a bond covenant
that requires that red line there, that
1.1. Um that's a target, not a mandate
at the moment.
um should your financial advisor or the
next debt issuance have a hard and fast
line then we we can't accept less than
right so if 1.1 becomes the new floor
we'll have to do a little more in 29 if
all my other assumptions hold but I'm
not assuming that at the moment uh
especially if you're doing taxbacked
debt uh oftentimes it doesn't carry that
additional pledge because you have the
full faith and credit of your taxing
ability should you ever need to right
and so um on a CO or certificate of
obligation, it's very common that you
would not have to have an additional
revenue pledge above and beyond paying
for operations and paying for the debt,
right? Because you've got this backing
of your tax ability, not that you plan
to use taxes. Additionally, right now,
uh, because we're on plan and because
we're hitting debt service coverage and
we're phasing in meters, you do see that
in years three, four, and five, we start
to actually build a little bit of a cash
balance, right? We're not really
trucking along. Our target there is 90
days. So, it's not like
we're not living paycheck to paycheck
anymore, but we're also not playing bank
and have two years of cash in the bank.
That said, it's my full expectation by
probably the end of next year and
certainly by the end of 2030, uh, you,
the engineers in your system, will
probably have another need. Remember,
I've only put in one big capital
project. And the list is pretty
substantial, 30 to 40 projects. They
aren't all required today, but in the
next three years, something else I
assume will be identified. And so what I
didn't do is I didn't lowball the
outyear rate impacts because there's a
good chance something's going to fill
the additional surplus that that has. So
again, you're not making decisions I
think this year for 5 years later,
probably just thinking 27 uh in this
current budget. And so with a bit of a
focus there, um but the plan as shown
does work. We do continue to phase in uh
the meter equivalency until we get to
100% in this plan.
Um, so that's another uh next year if if
it's me or Zach or team, that's the next
step that's already on plan here is to
continue phasing in our meter
equivalency.
With that, what does that mean to our
resident, right? And and I can't talk
about rate increases without thinking
about your resident. Um, we feel for
them. We know it hits hard, but your
budget is taking a pretty big hit as
well. Uh currently that typical bill at
55 5500 gallons is paying 5130 and we'll
show you here in a bit that that's
pretty low compared to the market
already. Um and moving up to 69.26 is an
increase of 1796,
right? So roughly it's not technically
$8 per service. Um so it's about 10 more
on wastewater
um and a little shy of that on water.
But all in, it's a total bill impact of
$18. And that's what most residents
think about. What's my total change
monthtomonth? The increases do level off
a bit in the outy years. You see, we did
bring those increases down. $11 yet
again in 28, 1285, and 29. That is
consistent with the year we have to make
that first million dollar debt payment.
uh and then we're able to taper off
because we will have kept up with the
debt but the rates we needed in place uh
even with these smaller amounts you saw
we we were able to build a little cash
right
so that's the residential rate impact
commercial bill impact uh this is a
substantial water user a 2-in meter and
75,000 gallons per month right so this
isn't small commercial um that said
currently they're paying about $926
that goes up 357 about a 38% jump.
Uh and we have some comparison slides on
residential to go over. But
>> if if we build wastewater based on water
consumption, why isn't the increase
proportional?
>> And I'm sorry, if we build wastewater
I'm sorry,
>> based on water consumption, why is the increases why are they not
proportional as you go up? Well, we
actually put a little bit more on
wastewater and in your rate design.
>> When you look at the commercial, the
wastewater, the green bar does not
increase in the same proportion as the
blue.
>> Right. So, a couple things are
different, right? We have different rate
design. For starters, we're starting to
charge in commercial for the first 3,000
gallons. So, that's off the top. And
then the unit rates vary. The next
>> My understanding is the wastewater
charge is based on the water
consumption.
>> It is. It is.
>> So then why would it not be equal all
the way across?
>> Oh, and I think this is it, right? So
you're taking Yes, sir. One key part of
the formula is the consumption. But then
that consumption goes through these
scales which differ dramatically, right?
No charge for the first three on the
left, 81 cents on the right, 243 on the
left for the next seven.
>> So the waste water does not follow that
same schedule.
>> So in water, we're giving the first
at the base rate. sewer.
So,
>> so the green bar should be larger than
the blue bar
because those are proportions
at on the initial that's that's
residential. You go to commercial.
>> Yes, sir.
>> So, if you look at the uh the green bar,
it's less than the blue bar. yet we're
given a 3,000galon credit for the blue.
Why would the green not be larger?
>> So it doesn't read this chart wrong.
That's that's what I see.
>> You are not, sir. But but if I were to
put the two rates and and I
unfortunately they're not parallel,
right? I can't they don't line up well.
But if you were to cross reference 0 to
three on the left at nothing to 81
cents.
>> However, we do charge for sewage.
>> You do per waste water.
>> You do. And then 243 for the next seven,
but then less for the next seven in
wastewater. 8.91 for the next 15 and
only 486.
>> We do the same thing for residential.
>> Yeah.
>> The the the higher the water, the less
the the waste water.
>> Yeah.
>> I mean, if we're doing that the same the
same for residential
>> that we're doing for commercial.
>> Yeah. Well, residential and commercial
are the same type,
» right? But we're talking about
discounts. You're saying that once they
get to a certain point, it's less.
That's what you just said.
>> No. So, it's an inclining block rate.
Um, and so, so again, on screen, the
volumetric rates only go up. The more
you use, the more you pay per unit.
However,
the current rate schedule and the
proposed rate schedule, for instance, at
the 50 to75 on water, you're paying 1134
per unit. But in wastewater, that same
amount is only 810 per unit,
right? That's something that could be
changed. But the one reason that could
be the case is that the principle around
peaking, right? The fixed infrastructure
you have to build for high volumes of
water is different than it is for
wastewater. Wastewater really is general
flow. Other than high strength
customers, if you had any industrial
customers with, you know, really bad
waste water, it's actually a function of
most flows are similar. But on the water
side, as people get into those higher
uses for any given day, you hit a peak
day. And at some point, TCEQ says, "You
have too much peak in your system.
You're not supplying enough. You could
even have pressure issues. I know the
group back here could tell you better
than I could because I've never been an
operator." But at some point, you have
to build additional capacity to meet
that peak.
>> So, pull up the commercial.
>> Yes, sir.
So this is doing the same thing.
>> Yes sir. You are paying more for every
unit of consumption but the rate for
each K gallon or thousand of gallons is
different between sewer and water. We
could put those lock step but the the
reasoning around that peak pricing for
water is because it has a clearer
relationship to the system demand.
>> What comes in goes out.
>> What's that?
>> What comes in goes out.
>> Yeah. Well, there's that
>> theoretically.
>> Yes, sir.
>> Uh, okay. I mean, I'm just saying as
long as they are the same, right? But
when you look now, go to your your
graph.
>> Oh, yes, sir.
>> Your bar chart. There you go.
>> Commercial.
>> If you start off with the commercial,
the residential.
>> Yes, sir.
>> You see how the green is increasing more
than the blue. Right now, you go to
commercial. Look at that. It's not
changing. Wastewater is not changing in
comparison to the blue. It's also
>> it's not it's not the same proportion.
>> True. But if I were to scale this down,
>> well, I'm just saying this does not look
fair. That that's what I'm getting at.
>> Okay. You just think wastewater should
pay more.
>> No, I'm just saying we should be paying
the same thing because if you look at
this graph here,
>> look at residential versus
>> the visual.
>> Yeah. From a visual standpoint, it looks
like res
>> on on the on the wastewater.
>> Okay. So, it's it's just how I'm going
to take the money from your wallet. Am I
going to take it, you know, directly
from the front pocket or am I reach
around for the for the wallet? And and
when you look at the at the drawing, you
know, the the wastewater is what I'm
getting at.
>> It's not in the same ratio as when you
look at the commercial.
>> You also have four res,
>> but either way, it's still it's still
who's paying the burden. It should be
equal,
>> right? If I were to
>> If not, commercial should be actually it
should be the opposite. commercials to
be paid more than
>> I mean we could come up with different
commercial rates that
>> I'm just trying right now I'm just
trying to be fair based on what's being
presented and I don't see that as being
fair across the commercial versus the
residential right
>> taking into say could it also be that
there are more residential than there
are commercial
>> absolutely
>> that's why there there's higher green
>> no that would the portions are still the
same
>> the ratio will not change based on the
number of customers it's still the same.
>> Yeah. The big difference is we're
showing you a 75,000galon wastewater
customer and then we're comparing it to
a resident who's only got 5500 gallons
of consumption. So if I wanted to show
you more like for like on the green
versus blue, then I could go to maybe
it's AutoZone, maybe their usage is
5,500, right? Couple flushes and some
cleanup. Um but if you had a commercial
user with a 5/8 inch meter, they're
still paying more, right? on their base
charges.
>> Not according to your chart.
>> Well, that's a it's a
>> different that's I mean I'm gonna get
stuck on that. It's that scale. That's
exactly what it's telling me.
>> I wish you I wish you can move forward,
but
>> but here's Yeah, I know. I'm trying to I
wish that it was it was in a different
way. But here's here's in my math book.
So look at take away the graphs. Okay.
>> Take away the the the the Well, not not
you per I mean just in here. Okay. I was
like, "Okay, great."
>> So, you're looking at this. Go ahead and
put this one here. Go ahead res
put it on there.
>> Okay. And do the gap analysis so you can
kind of figure out. Once again, I'm
thinking in my head, and that could be
dangerous, but I'm looking at the gap
difference that you actually have
between the two. So, when you look
proportionally, look at the the the
spread that you have. You're looking at
about a $5, you know, in in the
different increments, right?
>> Mhm.
>> You with me?
>> Mhm.
>> Okay. So now go ahead and put the
commercial on there.
>> Yes, sir.
>> So when you do the analysis and now
you're doing the spread, look at the
difference between the spread.
>> Right.
>> So that's where it skews the it skews
the the actual bar chart.
>> So it's more about the gap and the
spread. So I know what he's talking
about.
>> Sure.
>> But just doing it I that's what you need
to pay attention to. So you actually
have a bigger spread. That's where the
commercial side is going to be because
of the gap.
>> But based on our billing system, we
don't look at that. Based on our billing
system is what comes in goes out. That's
the way it should be and that should be
represented.
>> But it shouldn't be that way. It's based
on on volume.
It's like we're like we're comparing a
resident that uses 5500 compared to
someone a user that's using 75,000. So I
mean it's like if we'd have to find a
commercial user that uses 5500 or closer
to 5500 to really show a bar graph that
makes sense.
>> But that's the purpose of the visual bar
graph is to show you the ratio the the comparison
» look at it this way.
>> Yeah. No, I I see the numbers there, but
still it's it's if you look at the
wastewater, it's not being built
proportionate to the the water when you
compared to the residential.
>> Yeah.
>> And that's what I'm getting at. It
should be the same.
>> Yeah. But that's that's what changed,
>> right?
>> But the volunte
is the same.
>> Yeah. I mean it is I mean
>> but not the building part of it
>> changing where nothing has changed
what's being charged to the res.
>> Yeah. We'll look we'll look at the the display. Okay. We'll come back. But
>> yeah, you might need to get a fair
analysis of of the difference between
commercial and residential.
>> Yeah. Let's just look at the display and
just look at the gap analysis and do it
as a proportional
>> as close as you can get it.
>> Yeah. Yeah.
>> Just just look at that. I think we'll get what you know in a sense a
little bit more better visual by being
able to do that.
>> Yeah. So
>> be able to do Y.
>> Okay.
>> All right. Let's go ahead and uh let's
go ahead and keep going.
>> Yes, sir.
>> Well, this is this is the one I kind of
like in some ways, but not in other
ways, but it's it's good.
>> Fair. I think the residential regional
comparison just so because this is where
some of us as we go through this process
are going to get approached by our
residents and they're going to be asking
>> and this is a good one where you can
look and say hey let me tell you about
folks around us and how we tie into that
so
>> absolutely right so currently we are
winning quote I don't know we're we're
at the bottom of the chart
>> that's winning
>> I say I say it in how you look at it
Yeah, right.
>> What are we doing?
» Yeah. Sorry for the joke. I was kind of
>> trying to playing off what the mayor
said. Like this is a kind of a
double-edged sword. We we aren't maybe
charging enough for this service. And
that was evidenced when we looked at the stability of the fund if we don't
change rates. Period. And we have
substantial increases coming. Million
dollars more in debt on top of the
800,000 we already have. We've got to do
something about that. Even with the
proposed rate change in 27, now again, I
had more rate increases proposed in the
out years, but if this one change takes
you from the bottom of this chart to the
middle of the pack, and it's an
important note, this is reflecting their
current rates. San Antonio has already
posted their proposed rates for the
coming year. I didn't use them because
it's not acted on yet. It's not adopted.
And so you can go to their website, you
can look up their rate schedule and you
can find what they're going to charge
next year. A lot of these communities
may be looking at the same thing. A
number of them as well, right? Helotees,
Terrell Hills, and not Leon Valley,
Castle Hills maybe. Oh yeah. Yeah,
because they're all the same are the
outside San Antonio rates. So they too
will go up lock step. At least that's my
understanding. I wasn't able to confirm
with those cities, but they are outside
the city and they're served by saws.
Yeah. And and we did use the saws
outside city rates.
>> Yeah. Yeah.
>> They don't have their own water. So they
saw
» Yeah. And some of those are already
locked in. They can't grow anymore.
Yeah. They're already limited. So, you
know, in the sense of any
infrastructure, it would just be the
replacement. It wouldn't be for
expansion
>> as the other two. But you know the
unique thing about it if you look and
you look at the colors
>> the same.
>> No, look at the disproportionately go
ahead and look at how much you actually
have between the water and the
wastewater. I mean look at the one on
the top divine and and look which one is
bigger than the others and you go down
and compare the others. So that that
also shows you where some of the other
communities are having to spend a lot
more money in one compared to the other.
>> So it depends on their needs are what
they express their capital.
>> Yeah.
>> So it's interesting to look at that and
then look at our proposed one and you're
like okay we're we're that's right in
the middle and then in a sense it's kind
of balanced a little bit you know based
on the needs that we actually have. Um,
so just a food for thought and a sense
of consideration to try to take care.
But
>> would the average customer bill go up?
>> Uh, we have that
>> $7.
>> Yeah. Yeah, we have that.
>> Yeah. See, when I look at this graph, I
see something different.
>> Well, it' be it'd be more like $18
total. Um, so that the question as to
the typical
>> Let's see what I see.
>> There we go. I see income per capita.
That's what I see. The differences
>> income per capita.
>> You're talking about Natalia versus
Castle Hills. And and it's true. They are landlocked. They can't expand
beyond, you know, their current
boundary.
>> Yeah. But some but hills, Castle Hill,
all those are made by salt.
>> Yeah.
>> They are salt. So they are
>> which is the other side of that factor.
Yeah. So
6.5%.
» Yeah.
>> No, I mean I agree that the it needs to
come up. I I I agree with with being for
the proposed part is it's just I had
said in a previous meeting the opposite
is when I see that number and I'm
deciding where to live is going to be my
choice
>> because they have a lower utility bill
than say Castle Hill or or Natalia, you
know, any of the other surrounding
areas.
>> Sure.
>> But that doesn't mean that makes us
uh efficient
>> to say.
>> Yes. Yeah. So, just back to Alderman
Martinez's question, the the typical
impact is $18 or $1796 more precisely
when you do the water and the wastewater
bill difference. Um, and then sort of
dovetailing what San Antonio plans to
do, you're off by what, 6 32 cents right
now for Terrell Hills, Helert, and
Castle Hills. If they go up by that
6.9%, you're immediately going to beat
three other cities on this comparison.
>> When everybody else recalibrates the 27,
your 27 will be contrasted to theirs.
And those three are likely going to be
above you. Again, um we're still we're
still in a lot. I mean, I don't want to
get into other stuff, but don't I could
easily say, let's compare ourselves with
our property taxes. San Antonio to us,
it's 98,
>> right,
>> in our tax rate. So, you can make it up
in other ways to be able to say that
this is a good place to live. The last
thing I want to put on this and and the
council I want to say take the time to
say thanks to public works to Zach uh
all of our folks in here because don't
forget that before we could get here and
Matthew being able to help us out with
this is we were dealing with that there
was no way we could figure this out
unless we took care because we didn't
know how much water we were actually
using and the consumption and
everything. Now, now we're close. Now we
can figure it out. And if people ask,
hey, we worked on it. Now we have, it
would be hard for us to make a decision
and be very gray. Now we're a lot more
black and white. So, this is a perfect
time for us to go ahead and and start
looking at this based on what we have in
front of us.
Great. And then while I showed this
comparison, if you needed to be the top
of this chart to provide safe and
reliable clean water to your residents,
I'd recommend you be at the top of this
chart. Right? Comparisons aside, you got
to do for your community what you have
to do because they won't come if the
rates low and the water's brown. All
right? Uh so so that's your paramount
responsibility is to make sure that
you're providing safe and reliable water
and wastewater services and and your
team is doing that. So I'm not saying
there's a problem. I'm just saying
I think I think they'd be more upset
with problems in your system than the
increase needed which puts them back in
parody with the rest of the community
for similar services. So, it's not a
great story to say we have an increase
coming. It does help to show that we
were behind and and to echo the mayor
kudos to the team for effectively
operating a barebones ship and keeping
it afloat
um and and doing so gracefully.
anything else on the comparisons or the
rate plan?
Because the next slide really just kind
of gets into some other things that you
might consider. Um, this is now very
forward-looking. It's not even the rate
plan for 27. I've already said this
once, maybe stop including volumes in
the base.
So, you'd start charging for those 3,000
gallons. Um, you could reduce the number
of tiers, maybe simplify a little bit.
nothing you have to do. It's not that
you're wrong today. These are just other
rate design options. Um, and then you
could mirror the commercial differential
in the water minimums that you have in
wastewater minimums. And I have a number
of communities throughout the state that
charge commercial more, not just because
their meters are bigger, right? That
that's equal, right? If you have a big
residential meter, you're paying more,
but because commercial can pay a little
more. Um, and so I have more and more
communities looking at that and making a
decision to charge a differential. One
presented this week was a 5%
differential. All rates need to be 5%. I
have another community that charges a
20% differential,
right? And they have $2 billion in their
CIP.
So they're going to need the money and
it's a huge community as you imagine,
right? Um but there is a differential
today on the rates and we're going to
maintain that for commercial. So again
we're not saying you have to do those
things but to the point of the balloon
how who pays what proportionality we
need the same amount of money to operate
the system safely. We could squeeze a
little bit right and shift a little more
of the burden to our commercial
customers perhaps without breaking the
bank for them which might ease the
burden on our residents. That's a tough
decision you'll make, but I can analyze
it. If if you instruct Zach and team to
look at it, we'll come back uh with some
of those options in in future years. So,
again, I wanted to paint a picture. This
isn't the only plan.
>> No, sir. This is these are some other
things to consider in the future to
mitigate the continued increases I've
showed you.
>> Uh past that, just want to say thank
you. Uh but I'm happy to entertain any
other questions or go back to slides
that
>> So I want to break down the uh the
increase.
>> Sure.
>> Um
what I don't see is I don't see numbers
for the on and m in comparison to our
current rates.
» Do you mean the actual cost per year of
your operating cost?
>> Okay, I have that.
anybody wants. I just don't have it all.
I apologize. Let me grab that.
I should have I could have shown that
perhaps here on your cost projections.
» So the rates that should keep take but
just so the rates that we're actually
adopting this is starting the next the
next fiscal year.
>> Yeah.
>> So it go 27.
» Yeah.
be able to do that.
>> So, your cost uh your operating cost in
2026 I show as being from a budget
basis. Um included some onetime items
about 1.9 million. Some of those onetime
items are coming off. So 27 I'm showing
1.8 million.
Uh so 1.845 845 in 2028, 1.906
in 2029, 1.968
in 2030, and 2.038.
So, it's approximately $125,000
more
um
than the 26 budget because you had some
one-time monies, right? Uh the average
rate of growth, again, we've already
kind of discussed where those are.
average increase all in is about 10.5%
inclusive of debt but your on& and M is
growing very slowly. Um I didn't go into
all the the various factors but we could
talk about the inflation factors applied
a little bit if you want.
>> No I want to focus on the debt service.
So the comment was that because of the
debt service is the
emergency state of having to increase
especially over the next 5year period.
Uh this debt service the debt service
was incurred to
work on existing infrastructure or did
it include future?
>> You're talking about the one that was
>> whatever debt service is being talked
about as being part of the reason we
have to increase the rates.
>> Yeah. So the the increase uh the the
increase that we just had was for the
new well
>> right. So that was the 5 million that we
issued in 26. That's
>> right. That's for future growth.
>> Yes, that's for the future growth. Okay.
Uh the 17 million that I think he that
Matthew built in 1617 million that's
shown on there uh is the projected debt
service that is for the wastewater
treatment plan.
>> So if you notice that
>> that's now that's going to be for
enhancements of our current
>> that is for to make the the growth
that's the
plans for but don't have.
>> So when we took out these these debts,
did we tell the taxpayer we were going
to charge them on their utility to be
able to pay these off?
>> No. So when well the original the debt
that we just um debt that we just issued
was uh obviously under a co. So it was
the idea that um it could be covered
without distribution taxes but
>> that and and and connection fees or
whatever those tap fees
>> right
>> impact impact
>> impact. There you go. Thank you. So
which are only paid by the developers of
new development
>> but that's the purpose of the impact fee
is to pay for any future growth
>> which should not be a burden of the
current citizens.
>> That's great.
>> Right.
>> So this debt service that I keep hearing
about this is debt service that we're
incurring because of the the growth of
lid
>> but yet we're having our current utility
customers paying this.
>> Yeah.
Right. So 12in line CO
>> that was CO
>> that should have been installed when HB
came along
>> right but when we took out these these
certificates of of debt or whatever it's
called
>> we did not inform the the general public
that it was going to be taken out of the
utility that they were going to have to
pay for through the utility.
>> So a portion of it from the utility but
a portion of it in a sense
>> but is that what we what we expressed to
them when when we had the the public
meetings? Yes,
>> we told them that these these debts that
we're incurring are going to be part of
your utility bill.
>> So, just think about it. I mean, what
are we actually
>> No, I I know how we can come about
paying for it. But what I'm getting at
is that we should not be taxing our
residents for future growth. That needs
to come through
uh
>> I I guess budgeting.
>> So, I don't think here here's the thing.
I don't think we obviously I wasn't here
when we issued the original scale and
that was for the 12 inch line the
elevated tank
>> right the booster station that right um
I I can't say that we probably
explicitly sat here as a council or the
council at that time said hey be
prepared your rates are going to
increase because of this like normally
that doesn't happen we didn't I know for
a fact we didn't do that with the de
just issue but I think it's uh We we
notice that we send out notifications
send out you know we have a you know
that hey we're issuing these projects
this debt is being issued it's kind of a
>> right and that's why we took out bonds.
>> Yeah I mean
>> but the bonds were not going to be t
they weren't earmarked to be paid by the
utility bills
>> but
>> so let me let me just hold on and just
so we can go ahead and take care of this
stuff uh because we got to do that. So,
just an example, here's the table.
For years and years and years and years,
water-wise, we've been down here.
>> The city has been covering the gap from
here to here,
>> right now. We need to make up for that.
That's that's that's without being said.
>> Yeah.
>> We have to make up for that.
>> So, all those that we've been there. So,
two of these projects directly fall into
that being able to do that. the rates
that we were charging and that we've
been here in a sense where the council
said, "Well, we don't want to burden the
folks and we stayed down here." The next
thing that came up was, "Well, we don't
know how much of a gap it is. Let's
figure that one out before we decide
where the line is and we got to start
going above it." So, for years and
years, we've been down here and we've
never elevated ourselves. So technically
some of this this CO is things that we
should have done down here. We should
have actually if if we would have
increased our rates at at this timeline
we would have never had the cos
>> because it would have been increasing
year
but I mean I'll express it as finance
» you're
coming these meetings for 27 years
>> and u I've heard this,
you know, over and over again that we
need to increase our rates and uh and
then normally we we don't ever go along
with whatever whatever company. That's
just my opinion as a citizen, not but we don't go along with whatever we we
say, well, we're going to do a little of
and then several years later, we're
right back in the same boat. I just I
mean, I could pretty much give this same
thing without his numbers for what he's
talking about. So I So like as the mayor
was saying, this has been ongoing.
It's it's it's just never really we kind
of not y'all, not us. You've done it to
protect people like me, the people
paying the bill, but it's really we're
just being kicking the can down the
road. That's just my input is, you know,
from being here and listening.
>> Makes sense. I mean, he's the president,
right?
>> Yeah. But the resident should not be
paying for future grill. That's that's
what I'm getting at.
and and and I don't know if it's legal
or not if we can actually charge a a
current utility customer for future
growth.
>> So, let me let me ask I'm going to turn
it around. I'm going to put my other hat
on. So, how can the city go back and ask
for the residents to cover all this when
they never made?
>> Yeah, but where
>> I mean that that's that that was my
original question based on and M where
are we at? And then we need to also go
over like at least 5% or whatever the
percentage is go over that to make sure
we have enough money to cover current
infrastructure.
>> I guess my my question would be for that
debt payment right for the principal and
interest on those cos like next year and
we were going to get into it with the water but I mean that's even next
year alone it's just shy of a million
dollar payment for princip and what I'm
getting at pay that out of
>> this increase is not uncalled for. Yeah.
>> Okay. And and no in no time did I say we
should not do this increase. Yeah. What
I'm getting at is that this utility rate
increase should be based on what the
mayor is saying,
>> based on what our our future
infrastructure, current infrastructure
needs to be able to maintain it, but it
should not include paying debt. That's
something that we took out in order to
bring in these new subdivisions. But
they're
>> and we never told the the the general
public that your utility bill is going
to go up to be paying for these.
>> But our current customers are going to
be benefiting off of the new
>> they won't and everything.
>> The thing is they won't benefit from
that.
>> It's not going to the same sewer. It's
all going the booster pumps. They're
going to be more water.
>> It's actually going to handle the the
additional customer population.
>> I know. So So they're going to be
benefiting off the same thing. So yes,
they should have to
pay for, you know, bigger and better
growth of vital because they're going to
be benefiting off the same stuff that
everybody else is. If you're a new
customer or not or a new resident or
not, everybody's benefiting off the same
thing. So it it all falls into one like
one big hat because everybody is g
again, everybody's benefiting off the
same. If we put a new booster plant, if
we put a bigger sewer, you know, it's
not, oh, the old customer sewer is going
to go to the left and then who's going
to go to the right. It all goes to the
middle. So, they're going to be
benefiting off of that.
>> Isn't it implied by calling yourself a
city resident that uh any bills like
this you pay are for the general good
>> of everybody,
>> both now and in the foreseeable future.
I mean, what is our
>> we if we do nothing and we need to put
in a new water tower all of a sudden and
in the future it's going to be $8
million
our model.
>> So you want to grow, right?
>> Yeah, we're on the grow. So I think it's
implied in being a resident that
residents help with the growth and
development of the city
>> and and we have more we have more
commercials coming in, right? We have
that's going to help also
>> the developers do pay their portions,
>> right? And they should only pay I mean
it's only going to pay for that specific
impact you know for that elequ
» if you're putting the soap box there I
will stand on
>> you go ahead former finance director
>> but see I don't know where you stand
with your engineers and your impact
process. Of course, Zach had to listen
to this at a conference and he had to
listen to it at a conference call, but
I'm going to just quickly I say educate
you because I don't know if you know the
depth of the impact fees, but if you're
looking at impact fees and if you as a
council say growth should pay for
growth, impact fees are governed by
local government code chapter 395. In
that it says you need an engineer, not
Matthew, not New Jen because I'm not
one, to give you land use assumptions
and CIP, right? You stack them up
differently. You've got a numerator of
CIP over units of growth. It then says
you have to give them a credit equal to
50% of that. So inherently the statute
says growth can't pay for all of growth.
However, and this is not a purposeful
commercial, but one thing I do in Austin
and Fort Worth and McKenna and a number
of other communities is a credit
calculation. And the credit calculation
in statute says you can do 50% of their
cost, the growth cost, or you can do a
financial calculation that allows you to
achieve better than 50% from growth. So
in all my communities that are growing
and blowing and have the sentiment that
I've heard from you,
>> better than 50%.
>> Well, actually just the opposite because
the the 50% method cuts you at half. A
finance credit calc usually lands you at
growth paying for more like 60 to 75%.
Right? And so didn't mean it to be a
commercial, but I want you to know in
the statute, you're not limited to a 50%
of the impact fee. That's one of two
credit methodologies.
And should you want during that study to
look at a credit calculation, we can
bolt on to most any engineer and do
that. Um, and without knowing everything
you're doing, are you doing roadway?
So, just water and waste water. So, I
could do that probably for $25,000. Come
present on it.
>> And honestly, it pays for itself in the
first 25 homes.
Um, so again, it it sounds like a
commercial. You have to update every 5
years, but I have so many communities
and so many councils that don't
understand that part of the statute that
they blindly accept 50% when they could
be getting near twothirds of the cost
paid by growth. So, thank you. Sorry,
stepping down. Um, we presented this
soap box went away.
>> Yeah. Yeah,
>> that soap box is taken away.
>> Sorry. Sorry. Kicked it.
>> So, I know we have a lot and we got
different things. Um, let's go ahead and save some of the thoughts and let's
go ahead and continue on and let's
finish up with the other stuff. Sure.
So, we can go ahead and
>> So, he's going to go back right and
you're going to bring us some more info
on the wastewater on the he's talking
about and stuff. So, we'll come back to
this.
>> We need some direction. Obviously, we
need to make some decisions pretty
quickly to meet some of the, you know,
the statuto requirements for public
hearing, that kind of stuff.
>> So, if he can get what what Councilman
Rodriguez is asking for, right?
>> Specifically, the things that y'all are
wanting to see,
you know, be happy to to get with
Matthew.
Obviously, it's a little cheaper if I go
ahead and he gives me the presentation
next time and I can present that to
y'all or whatever. We can save some cost
next time.
>> I'm good. I'm good for that, you know,
and think, you know, if y'all are
comfortable with that after we get some
of that from him. But
>> the timeline that we actually have to go
ahead and implement this,
>> we we're still okay. Uh it probably
would be um uh we might have to push it
to the the second one in September, but
it might come right after the budget,
you know, which is okay. So hopefully
>> the decision that you're looking for for
this is whether or not we want to go
ahead and do the proposed. I I mean, we definitely want to see if there's any
additional information that y'all need
to be able to feel comfortable with the
rate that's being proposed uh on the
water and wastewater. Uh if y'all are
comfortable with that or if you'll need
any more information so Matthew and his
team can process that. If not, then
that's obviously what we're going to
proceed with and and we'll start working
on what we do. That's so I'm I'm gonna
again get him to speak with me. I know
he asked for some more info, but with
seeing what he's presented and, you
know, your example of the bar and being
below, I I feel that we need to go ahead
and make a decision to go ahead and
increase it now versus waiting for
another two weeks and then trying to get
it in and rushing and trying to put it
out for the public to hear. I I I think
we need to do it now. I mean, it it $18
for some people, it's a lot of money,
right? We understand that. But the city
can't keep taking all of that burden on
or we're just going to keep falling and falling and never be able to
catch up or get in.
>> So,
uh, special. So, this is So, this is not
considered a workshop.
>> Yeah, just I've seen
>> Yeah. Well, it's not it's they won't
have it listed as a as a workshop. It's
listed as a special meeting, right? So,
I think with that we do need a vote. I
think we need to go ahead and vote.
>> So then would I make a motion to go
ahead and approve the rate increase for
the new fiscal year for the what is it?
>> Water.
>> Yeah, I would say I would say go ahead
and direct staff because obviously we'll
have to actually have
all that kind of stuff. So I would just
>> go ahead and Yeah, direct staff to go
ahead and go with the proposed and go
ahead and mention it. It's a 33.08.
That's what you're actually looking for.
uh be
>> so when he comes back it will resemble
right kind of more the the nitty-gritty
the actual charges by type and class.
>> Okay. Yes sir.
>> Okay. I just want to make sure.
>> Yeah.
>> So you'll have you'll have all different
rates based on the meter size.
>> Okay. Got it. Got it.
>> I would say based on the proposal.
>> Yeah. Proposed. So go ahead and direct
staff to go ahead and
>> start working on what needs to get done
>> for the rate proposal that was presented
tonight.
>> Residential and commercial. residential
and commercial for the 12th of August.
>> So if we approve it, there's no way we
can go lower on it. Um we can when we
present it.
>> So let me let me hold off hold up right
now. We'll go into discussion. Do I have
another motion? Do I have a second
motion on that?
>> I can do it. You said fourth of August
12th.
I was presented today at the 12th of
August.
>> Okay. So I got a motion now discussion.
Here we go. Go ahead.
>> Oh yeah. I'm just saying if if they
approve it, but we able to just say for some reason it's too much, we go uh
so you say the 33, we do 30. Can it
still be u so when when I when I what
I'm going to do based on that if that is
the vote ultimately if if the majority
passes that direction tonight, I'm going
to start working on getting it set for
that proposal and bring it forth. And if
you all choose at that time after you
know chewing it over and looking at you
think hey actually on second thought we
want to go down a little bit presented
at that time then that's when we need to knock that down
>> and and we also have the public hearings
>> correct
>> so we would have public hearings
involved with that.
>> So the current rate proposal increase is
35%.
>> Yes.
» Okay. Anything else for discussion?
Okay. All those in favor?
» One, two, three, four. Okay. Nace.
>> Hi.
>> Got it. Okay.
So, let's continue our work with that.
We'll take the next phase and uh
» thank you for your presentation, sir. Go
ahead and take the next
>> the next step. So, we can go ahead and
further do that. All right. Thank you,
sir.
>> Thank you very much.
>> Appreciate it. Please look at those
numbers so we can go ahead and get make
sure that we can take care of the uh the
uh Mr. Rodriguez's, you know, the the
proportional portion.
>> I'll follow if you're up on what we
need.
>> Yep.
>> Okay.
>> So much.
>> Appreciate that.
>> All right, Zach. Tech, here we go.
>> All right. Uh so the worksheet uh was
included uh on the dis there for y'all.
Uh this uh nice little packet here. Uh
it says 2026 tax rate calculation
worksheet. Uh I'm really just going to
call y'all's attention to the very back
um page which has uh Loretta Holly's uh
signature on the very back. So last last
page. Um so you'll see there uh that is
uh shows the no new revenue tax rate the
voter approval tax rate and the
dimminimous tax rate and then
she left this sheet uh as well maybe in
color maybe not I don't remember
>> maybe not yeah okay um and so that just
shows some additional uh breakdowns of
what that would look like Um so
um obviously the uh no new revenue rate
uh is slightly lower than our uh current
uh tax rate. Uh and then uh the voter
approval rate uh is obviously a little
bit higher um than that. um staff. Uh
just as we have in the last couple
years, we are recommending to take it um
up to uh just right below the voter
approval rate. Um so that way uh we're
not going over the voter approval rate.
Um but uh and that number is what is uh
currently been built in um to the
numbers uh within the the changes that
we've made on the the budget. So that
would be the uh 485
Um and that is shown on the
>> uh
total
>> approval
>> total tax rate here. Uh so the the voter
approval is
>> 485025.
So we're just taking that 025 off
basically.
>> Um
>> so 485.
>> Yeah.
>> Um the uh kind of just to go over some
other numbers on here uh on on the sheet
that um Ivonne had kind of produced for
y'all. uh the total taxable number at
the very top uh corner uh that is the
total certified value number that uh we
got from all three tax entities. Um and
uh then you'll see the the three uh
again the three current the no new
revenue the the voter approval rate uh
what the staff again is recommending and
then just some breakdowns on uh on some
home valuations. So, two, you know, on a
200,000, $250,000, a $300,000 um
valuation home, what those um rates
would look like for those uh homeowners
uh with those valuations. So, uh which
is something that um if y'all recall
last year, we had to the tax
uh code changed where we have to show
kind of like a taxpayer statement. Now
when we produce the agenda when we go
for budget uh next uh when we adopt the
budget uh next time we actually have to
put a taxpayer statement where it shows
how it would impact homeowners of a
certain thing. So this is very key
information uh to to produce out there
and and it also helps if you know
depending on which direction council
takes when you're talking to people if
you get asked too. So what that would
look like.
>> So I'm looking at both but I want to
make sure. So our current rate is that
one.
>> Our current rate is
>> 43
>> 439 439.
>> Okay.
>> The no new revenue uh is proposed at
409. So that would mean that if we
adopted that that's that's us saying
we're not bringing in any additional.
We're not bringing anything more or
less. We're just
>> So that's just so you get confused.
Don't look at the one that is up here on
the left. Look at down here for the
current. Okay. So it doesn't confuse you
with So it's literally So it's a
43 going to a 48, right?
>> That's what staff is recommending, but
of course that is totally up to council.
Um
>> well, if we go above that, it needs to
go out for
>> if you go above that, which obviously I
would never suggest to do, uh we'll need
to go out for a vote. Uh and then I
don't even know what that even that
looks like. I've never done that. So,
um, yeah, unless you're adopting the
dimminimous rate, which I don't even
know how to do that either. So, I
wouldn't even start that process.
I don't even want to talk about that.
That's uh Yeah. and you and they're
recommending this increase because
>> um well I mean we can get into the
budget but with the increases that we've
seen from expenses and things like that
I mean just overall we're just
suggesting
>> um you know we've
>> I know when we talked about the audit
this last year and I I know the auditor
had said you know the general fund took
a big hit right so um we're we're trying
to we're trying to replenish the general
fun. We're trying to get Yeah. I mean,
there's certain things we're we're
really trying to replenish, right? Um so
based on expenses, things are costing a
heck of a lot more nowadays, right? Um
and it sucks.
>> Um salaries. Uh so that's where we we
think, but um obviously it is a council
decision. It is something that you know,
but the other thing is is
what would happen is we need direction
to go ahead and propose a tax rate. I
always suggest going with you can
propose higher and come down. You can't
propose lower and go up. So again, kind
of to the last conversation, but this is
a little different. You can always
propose high and go down. So, um I I
would suggest go ahead and we propose
the voter approval and then if we come
to that tax rate setting hearing and we
s we think, okay, we're actually
comfortable with something a little
less, then we can adopt something a
little less. So,
>> so with that in mind, council,
>> do you need a motion on this?
>> Yes, sir. I'll make a motion that we set
the tax rate for a year at 0.485.
» I'll go ahead and may a second. Okay.
Any discussion on that? We need
>> this u additional revenues can be used
to pay off our debts.
» It goes at general fund. I mean it goes
I mean it's going to increase general
fund. Yeah.
>> A portion a portion is um
>> a portion of the tax rate is for INS and
a portion of it is general fund. So a
portion of the tax rate is debt service.
So yeah
>> right it is it is it is
>> yeah.
>> Okay. Any other questions? All those in
favor?
>> Any opposed?
Okay. Appreciate that council.
Okay. Uh let's go ahead and finish the
last one which is other department
changes.
» I'll be start off the conversation with
if she wants to jump in she can. Finance
lady.
>> Finance lady. Um so uh we're primarily
going to um talk the last three kind of
sheets here. the the summary and then
the two kind of other other sheets.
Yeah, y'alls are probably in maybe some
>> Got it.
>> Yeah. Um so again, we we went ahead and
plugged in the um the tax rate that 485
uh
>> for this right here
>> for this. So this is this is showing
that 485. Uh we have kept the the 3%
shown uh still in there.
um for the salaries. Um and uh
everything that we had agreed to at the
last budget meeting um we have stuck
with any of those unfunded requests were
not put in. Unless we talked about it
and agreed to it, we put it in. But
anything that was not discuss or you
know was not agreed to or still may
remained unfunded we we did not put in.
So generally where that kind of leaves
you um I'll kind of walk through. So the FY 2627 budget line item or column
is where I'm going to live on that
summary page. Uh so your your difference
in your general fund which again is
going to make up most of your
departments. It's your admin, your
court, police department, parks, the
newly created public works department,
animal control, library, community
center, and um obviously city council.
Um so based on expenses and projected
revenues, we are projecting a um a
positive balance of 321,000.
So in the positive, which is great. So,
uh, especially again given where we were
last year, we expended a lot of money
out of the general fund and took our
fund balance down quite considerably.
So, that's that's a a huge positive.
Um, debt service, uh, you see there the,
uh, revenue and expense, a little bit of
a positive there as well. Hotel, motel,
uh, even uh, and then we get into kind
of where we have issues.
Uh and you know it kind of leads from
our last conversation. Obviously we when
it comes to utility um but you have your
utility fund uh and your sewer fund.
is doing pretty well.
Our sewer has always done fairly well.
Um the expenses stay pretty light
normally in our sewer. Uh so we are in
the positive in sewer at 280 or at least
what we're we're projecting. Um, but our
utility fund and honestly the largest
percentage of where that uh in the red
is coming from is
that close to a million dollar payment
from the uh the bond. So we're in the
whole $1.6 $6 million in
>> for the CO
>> water.
>> And most of that, obviously, a million
of that is, you know, from the CO
>> payments uh from uh the principal and
the interest. Um Ivon and I have
scratched our heads. We don't really
know, we don't know what to do. Um, we
provided both the water fund and the the
sewer fund and that's what those other
two are just so y'all can see. Um,
honestly,
it's going to come down to um we can
obviously show um
uh Ivonne probably won't like me saying
this, but I don't know that we even said
this. We can we can probably show um
uh a um a negative, but the problem is
going to be that um it it
I it's going to turn into
a matter of unless it's an absolute
necessary purchase,
it
>> it's a no. I mean when it comes to the
water at this point.
>> So do these calculations include our
proposed
>> No, now we didn't have that. So there is
going to be a little bit of a change in
>> there is going to be a little bit jump.
>> Say it's going to take at least one
year, one cycle to get back in the
positive.
>> Yeah.
>> So
>> it's going to take a while.
>> Well, one year after the next year, yes,
we should be back up.
So
>> that's why I wasn't in disagreement with
the rate increase. Yeah.
>> Yeah. So, this definitely that will
actually show on on that. So,
>> yeah. So, that doesn't because we didn't
have necessarily that we didn't know
which direction y'all were going to
take. So, we didn't have that at the
time um built in. So, that that will be
a change.
>> I can tell you from the commercial side,
there'll be a few of them that we will
gain some good
>> that will be a change. Um
>> is this going to affect our city rating?
It could. You talk about like our our um
>> aa whatever we are.
>> We were already affected once this last
year and it very well could.
>> Um
it but it it honestly is going to be
Yeah. I mean, it's going to be a matter
of I know we we just, you know, talked
about and I talked with the staff today
about, you know, we're finally getting
the credit cards and and it's great and
all that, but it's honestly going to be
like they're going to have to ask for
permission before purchasing anything at
this point because it's just a matter of
>> cost. But we pretty much care everything
for future.
>> Yeah.
Five years. Unless it's an
absolute emergency or we have to have
it, it's going to be, you know, I'm
gonna have to tell them no.
>> And when you think about it, when you
think of the utility
from from
2022
to now, we have had some type of water
project.
>> Yeah.
>> Or water.
>> We pretty much take care of that now. So
by now November right bush. So so now by
November of this year technically all of
our water projects everything that we're
out there that's going to be taken care
of. The only one thing that is going to
be remaining is just going to be the
waste water
>> and it's starting.
>> Yeah. So yeah. So in in some ways we
have
>> yeah we did incur but it honestly this
stuff and once again I I got to
emphasize especially with two of those
projects two of those projects should
have been long time ago. Yeah. You know
why
when when did they put the the booster
stations out there? How many years ago?
It was way before you. Right. So why why
did they decide to do three instead of
four? It's normally paired.
You know, they went with that and now
we're the ones having to deal with that.
You also got to remember how much should
we spend to cap well number three.
>> Oh
>> 150 200 something I don't know. Yeah.
>> To cap the well
studies.
>> The well the well itself the well itself
should have been capped back since 2009.
at
least.
>> Yeah.
Should have been capped. We had to
absorb that, too. So, yeah. Right now,
when you look at this Yeah. But I like
to look back and say, "What have I
done?"
>> I agree.
>> And and honestly, you know, I think
we've done a lot. Yeah. It put us in a
little bit of a tight spot, but we are
going to be a lot better in the future
because we took care of the stuff that
needed to be done and we don't need to
worry about asking the finance lady Ivon
for additional funds to try to figure
out how to take care of a water project.
>> So, it'll it'll be it'll be it'll be
better. It's going to be a lot better.
The other thing I will note, we did uh
we did remove
um out of this to help alleviate some
and I know it doesn't look like it
because it's still 1.6. Uh but we did
move um Pete uh Pete's salary into the
public works budget to help. So that's
been moved to the general fund. Um so
his his salary has been moved over
there. Obviously, we had talked about
the the new truck
>> purchase was already moved into the
general fund because it can it has a
little more flexibility to help support
that and obviously we're still in the
positive as seen as and talked about.
So, um we've tried to be as strategic as
possible, but yeah, it's um
unfortunately it's just um until and and
we've talked about it, but until some of
these things that we've, you know, we're
in negotiation with and we've talked
about till they hit, we're just going to
be unfortunately a little bare bones for
a while and and we're just going to have
to muddle through. So,
>> and we'll just take care of be that way,
but that's the way we got to be
>> and we'll just be able to just
>> it'll be okay.
It'll be it'll be okay.
>> So,
>> we stay on top of
>> Yeah.
>> So, uh
>> and you know, and honestly, I mean, I
know
I always I always dread the AP, you
know, conversation at the council
meeting because I know you're going to
find something in there and I'm not
going to have an answer to, but you
know, call us out if you think there's
something in there that doesn't make
sense, you know. So, you know, and I
know that's always after the fact, but
still, I mean, it's, you know, things
that we can
>> put up
that
>> uh well, some some things were already
going out, right? It's just a matter of
um depending on what the services are um
and the timing of it. So, it just I
mean, if if you're asking something
specifically, we can get offline and
figure out and I can I can just little
expensive talk like
all that adds up.
>> Well, we're bringing that in house.
That's what I'm saying. So all that adds
up protecting that, right?
>> Yeah.
>> You know, there's other little things
that you know.
» Yeah.
>> That ends up also help.
>> Yeah.
>> Another I know they probably don't like
me saying it, but another thing we've
talked about and really on them about
getting them tested so we can stop, you
know, paying some guys, you know, to
hold licenses, right? And and they're aware of those conversations.
We've had that. So, I mean, that just
helps, right? like we're we've had
those. So, yeah.
>> Yeah,
it'll be good.
>> Council, any questions on the actual
changes or anything? Was there anything
since we have the departments here? Was
there any changes I on what they
submitted and what they were asking for
just to make sure we can get their
input? I think we did we did make we did
add chief's uh certificate, right?
>> Oh yes.
>> And then we looked on there. I think
when we got the three things we talked
about moving money
>> anything that was agreed to council that
night.
» So we got we got Cassandra covered. send
out we'll send out an updated one to
everybody so they have that
>> mayor ask you this there's something
that that I see like hey you know what I don't think his salary
fits that person or this can we do do I
have to go and put them on the agenda
and we talk about it or bring it up and
say I recommend that you know of course
I understand we're talking about money
and we're we're in we're talking about
But, you know, I think there should be
an increase on this part or, you know,
for a certain
>> what I would what I would think would be
good is is work it to where get Zach
involved
>> and we get an HR expert to come in. You
know, not not charge a lot. Okay. Just a
little bit.
>> Well, I mean, even even going outside
and seeing what other cities you could,
you know,
>> we need to see if we've we've
participated in some salary surveys
because other cities normally
participate in them. And if we
participate, we we can get they'll send
us
>> the results. You get access to the
results, right?
>> It goes across everybody,
>> you know, public works or police
department, the library. I'm just saying
in general, just we have a great team.
>> Yeah.
>> Across the board with everybody we have,
you know, and if there's things that we
can do to help keep keep that going and
yes, it does cost something high.
>> Yeah. I do take, you know, from what
Rich said the other day, you know, about
>> family medical,
>> you know, he pays out for family
medical. I was just like,
>> yeah,
>> I was, you know, going on,
>> you know, so there's just things that I
would like to
>> help compensate on some stuff if we can.
>> Yeah.
>> Because of items like that.
>> Yeah. And that speaking of RFPs, like
that RFP went out today.
>> So for like the broker, the insurance
broker. So
>> it's in the paper. Yeah. So that went
out today. So to try to find an
insurance broker to find those options,
right?
>> Correct. Yeah. Unfortunately, that's not
>> But at any point if any council member
was wondering about pay for somebody, go
with Zach so we can get the HR involved
to try to figure out, you know, we might
already have the data or have access to
the data or maybe we never talked about
it and we need to get somebody to kind
of give us an idea. But either way, it's
still going to come back to us to go
ahead and review if we're going to make
changes and when it's going to be
appropriate for us to make the changes.
Uh but yes, it would
>> and the salaries were provided for
y'all. We we did give those as another
sheet. I mean, obviously I we didn't
necessarily have anything for sure we
wanted to talk to y'all unless y'all you
wanted to say anything, but you know,
but we did we did mention
>> we did put on there different uh
percentages.
>> Yeah. Yeah. Yeah.
>> Did we did put on there different
percentages again knowing that right now
what's in the budget is 3% is built in.
But um
>> I just wanted to highlight how much the
3% is costing the budget. And at 3% in
general fund, it's going to cost almost
51,000,
water almost 4,000 and sewer for uh
4,800.
Um
the one issue that he's talking about
would be in the police department. And
you can just kind of look at PD and we have discussed that issue and had
already planned on coming up with
something. We'll fix that.
>> Good. Thank you.
>> Yes.
>> I don't know what it is. I don't know
what the solution.
>> The good thing is it's general fund.
So, um
this basically just tells you how much
each percentage
um
we had talked and thinking,
but after your comment, maybe not that
this may not be a good idea this year or
maybe look at it mid year just because
funds are so tight. It's not going to
give us much money, but
>> it's currently set at three.
>> Yes. In the budget, it's at 3%.
>> Y'all
be good.
All right.
Zach, need anything else?
>> That's it for myself.
>> Okay. Do you need anything with the
budget, the changes? I mean,
>> that was it. I mean, nothing's really
changed. Like I said, we build those
things in that we talked about, we'll go
ahead and send out updated so everybody
has a copy of that. If there's anything
that comes out of that um that you see
if you know, please get with me, let me
know. Uh you know, but we'll kind of
proceed accordingly and get the like
utility stuff working and um prepare for
getting it adopted. Yeah.
>> So, what you presented right here, you
said changes. There are some changes in
here.
>> It No, it was mostly to go over.
>> Okay. So, we don't need to vote because
Okay. Yeah. I just want to make sure.
>> You're good.
>> Okay. I'll be able to do that. All
right. It was more the opportunity in
case we needed to.
>> Got it. Okay. So, I think that one we
should be okay.
>> All right. Council, uh, any anything
else? Anybody has a question? Anything
dealing with the budget? I I just want
to reiterate kind of you always say, you
know, we're not projects now that should
have been taken care of long time ago.
Um and I say to public because you know
they going to see an increase in a lot
of tax and water and you know um you
know I've heard some some comments on
people from my area. Hey, you know my
water bill is $460, right? And it's
going to go up again. But but again
we're doing it for better assistance and
again things taken care of now.
So just want to reiterate that that you
>> Yes sir. Yes sir.
» Yeah. Along with a few other projects
too. Hopefully everything lines up for
us.
Okay, with that in mind, it is 7:56
right now. Do I have a motion to
adjurnn? Got a motion to a second.
>> All those in favor?
>> Any opposed? All right. Thank you.
Appreciate it.