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I want to welcome everybody. Good evening to our guests, and this is a special

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meeting of the Sealy City Council that has been posted as prescribed by statute,

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and we will call this meeting to order as our custom to begin with prayer and

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pledges of allegiance, and we invite you to stand and join us.

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Councilman Curry, would you lead us in a prayer?

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Yes. Most gracious and almighty Father, we just thank you for this day, Lord.

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We thank you that we are gathered here for a special meeting to make the best

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decisions for the citizens of Sealy and for the future of this community.

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We ask that you would grant us blessings, wisdom, and knowledge as we continue into

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the agendas for tonight. In Jesus name we pray. Amen.

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Amen.

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I pledge allegiance to the flag of the United States of America, and to the

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Republic for which it stands, one nation under God, indivisible, with liberty and

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justice for all. I honor the Texas flag.

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I pledge allegiance to thee, Texas, one state under God, one and indivisible.

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Thank you. If our secretary will call the roll and certify quorum, please.

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Mayor Bielski present. Councilman Necker present. Councilman Noak present.

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Councilman Miller present. Councilwoman Curry present.

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Councilman Zavalac present. Councilman Virgil present. Mayor has held quorum.

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Thank you. As anybody that's followed us, we did invite the members

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and board of the ESD to join us in regards to the subject matter on district number

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two and sales tax. They have declined to participate.

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I think you got an email, Kimber, through their attorney and through a verbal

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conversation. So we feel like it's important that the public understand

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where we, as representatives of the taxpayers of the city of Sealy, are trying to

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educate everyone on our needs and how this will determine the future of Sealy,

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Texas, and the growth that we can do.

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And so at this time, as part of the business discussion and possible action

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regarding the interlocal agreement, utility billing, and lease with Austin County

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Emergency Service District number2-

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Mayor, you just want to note that there were no public comments this meeting.

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No public comments. I'm sorry. Yeah, I've just-

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Just for the record

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... heads up and

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Okay.

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Yes. For the record, there was no one that signed up to speak on-

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Thank you

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... the petition or public comments. So we will continue forward with this.

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We have been working on this for over a year, asking and trying to come up with the

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negotiations. Several council members have met individually, and we're here today

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to inform the public and try to get a greater understanding

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of the monumental need that this city has to get some of that sales tax or we

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quit growing. And I think our staff has prepared some information.

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We have binders, all of us have, that have been given this information in the past

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on how we could work with this, conversations with the comptroller.

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And Kimber, I'll let you do the lead. If you'd start, please.

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Well, actually, you covered my opening statement.

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Oh, shoot. Okay.

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So thank you. We can move forward with our EDC executive director's presentation

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prepared for you.

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Mayor, members of council, what I'm presenting tonight is information that you'd

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requested previously at a meeting on September 1st.

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At that time, we had not received a letter that was subsequently received on

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September 4th from the district, and so that information has been included in this.

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However, the other information is representative of the binder that you were

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given that, as the mayor touched on, goes back several months when this discussion

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first began. And tonight, I was just going to provide you with a factual overview

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of what information has been spoken about, what different

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proposals have been made, and where we stand today.

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And then after that, Mike Barrel will give you some information with regard to

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utilities and other matters concerning this.

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So to start off with, three things to know.

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The issue is about having fair revenue allocation between the two parties

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and service costs for the services that are provided by the two parties.

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ESD number 2 still provides emergency service response to us and to the larger

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district, which we'll show you in a moment.

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The city share would also be shared with us, the EDC, as it is with regards

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to other sales taxes collected by the city or within the city.

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And why this matters is that this affects, again, emergency service funding, city

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growth responsibilities that we have both today and as we grow and go grow into the

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future, and the economic development resources that help support Sealy's future in

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attracting not only development, but good development to help sustain

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us. Next. And one thing I wanted to point out, and city manager had provided this

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before, was an overview from the budget, and it was identified in the

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budget that for many years, the city has been working on

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a limited cushion of

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general fund reserves. And as you all know and have been working very diligently to

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improve upon, that situation has improved over the years.

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In 2021,

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we had roughly 11 days, operating days of reserves available.

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September 30th, 2024, we saw a great turnaround in the efforts that have been taken

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over the past few years, and that is to get us to 90 days, and the city's first

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achieved its 90-day futuristic goals.

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And that goal is not unique to Sealy, that being 90 days.

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That's a standard that's used throughout the business of cities.

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Since then, the position has strengthened.

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At one time, we had 80.5 employees. We now have 64.5.

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Again, we're lean and mean and have been able to reduce staffing

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by 16 positions, or approximately 20% of the workforce.

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Not to mention that the vacancy management that's taken place during the time in

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which we have vacancies, making sure that the money that is saved during that time

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is put back, and hence it's been able to drive the 90-day reserve, or help

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drive the 90-day reserve. And then the partnerships, grants, and other

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opportunities that we've been able to go out and get to help

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us with the cost of providing services and the

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infrastructure necessary for a growing city such as Sealy. And then also planning.

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We have our CIP that's been underway, and Mike will touch on that in a moment.

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The studies and the dollars that have been put forward for that, for emergencies,

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for engineering, with respect to the position of the grants, and when we have to

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have a lot of this information in place and ready to go when we go out for grants.

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Cash for appropriate one-time investments that we must maintain.

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And then those studies, again, help support that and help also convey the need to

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the public of what we need to provide the services necessary.

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And what this progress means is it creates opportunities for the city that we did

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not have before. Again, it was bootstrap back several years ago, and still, we're

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still in the process of getting better.

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But over the past several years, we've made great strides with respect to that.

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And again, that's kudos to you, the council, and for the staff to be able to really

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drive this management. And so this matters for growth because it creates the

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service and infrastructure and also the demands that are coming as a result of the

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growth that we see coming down I-10 heading west and we will have to deal with.

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And we want to make sure that we have enough unrestricted operating revenue to pay

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for all that's coming and all that we'll need to have that citizens have come to

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expect of us. And then the planning implication with this, the first step in

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planning is annexation consideration, and that's a large component of this,

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and recognizing that the city may not generate a critical component of general fund

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revenue needed to sustainably fund operations and services.

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And so we have to take advantage of sales tax, we have to take advantage of

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property tax for those general fund services that we provide.

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This is an outline of the boundary of the ESD 2.

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The red line represents the entire boundary of ESD 2,

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and the yellow is our current city limits.

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We'll work on getting a map, work with GIS to clear ETJ because that

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does impact this discussion, but we weren't able to get that for tonight, but we

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are working on doing that. But I wanted to give this just to provide a background

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for the scope and size of the district, and us relative

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to the size of that is quite small compared to the district itself.

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And then, just a short timeline that has first started with 2011,

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the Station 1 ground lease in Sealy.

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And then before 2020 in the affected areas, and the affected areas being those in

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the ETJ and the city EDC sales tax structure was applied before

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that time. Since 2020, there was an election in which the voters

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approved the ESD number 2 sales tax authority in the applicable district area, that

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we will speak to in a moment, and then Sealy annexed areas that still remained

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inside ESD number 2 for emergency services from '21 to '22.

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And then in '25, the city and ESD, as the mayor mentioned and the city manager,

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began discussions on interlocal agreement.

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Brings us to the present and a recent letter that the city received from the

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ESD number 2, with a proposal offering a 60/40 split with

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conditions. And, again, we'll speak to that in the upcoming slides.

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And today, again, council wanted and the district were to be here to talk about and

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provide to the public the background and the information and discussion necessary

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for any agreement and what that might mean.

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And so the bottom line, again, is the 2020 election changed what was going on prior

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to that in the revenue picture, and later the annexations created the need for a

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clear agreement, and it brings us to where we are tonight.

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And this is just

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a representation, because one of the things that we have been talking about is that

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we have growth that'll take place both inside the city of Sealy city limits and

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also in the ETJ of the city. And future voluntary annexation of properties, as you

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know, is one of the discussion points for this agreement.

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And if the voluntary annexation took place, then pay a sales tax to the ESD, not

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to the city, which the city would still have a cost for providing such service,

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police, and road infrastructure, given what we have today.

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And so the discussion is how can we make sure that those that are providing

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service, that being the city in this case,

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have the revenue coming forward from sales tax to adequately

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help pay for these types of improvements and services that are paid through our

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general fund revenues, sales tax being one of the largest.

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And then also touch on, as you all very well are familiar with, the 2020 water

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moratorium that took place, and the city was under a moratorium for two years due

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to the inability to serve the connections.

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Again, kudos to the city and to the council and management for

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getting their arms around that and coming out of that.

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They were able to invest to get the infrastructure in place, and just as Ryan

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Tinsley, our city engineer, had presented to you a few meetings back, we are in a

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good position at this point in time for future connections and being able to

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service those connections as needed.

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However, you'll still see growth taking place, and water wells, groundwater, as we

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know, is very expensive to undertake and source tanks that take place as well as

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all the pipes and

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infrastructure it takes to deliver that water has to be paid for from somewhere.

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And one of the things that's in this discussion goes back to the original,

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back in 2011, or 2012 and forward, with respect to the purchase of water

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or the agreement for water, for the ESD to provide the service that they do.

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And that is one of the speaking points that you have in your packet tonight.

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Who's involved? And again, I think we touched on this pretty well, but the ESD and

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our different roles of ESD, city, and EDC.

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Again, they provide fire protection, emergency response, and services, in the

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district of which the city of Sealy is within.

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It receives dedicated ESD tax revenue, both in sales tax and in property tax.

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City of Sealy provides the municipal services.

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And again, that's the responsibilities for growth, utility, streets, drainage,

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general local government parks, and the like.

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And, so that's the role that the city plays.

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And then the EDC, we receive one-third of the city sales tax allocation under the

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current local split and use this for funds for economic development purposes.

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And again, the nexus of economic development in the city, in

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order to do good economic development,

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it is critically important to have the utilities in place and ready for service

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when opportunities come and arise, and so EDC plays a role in that.

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Again, this is not whether emergency services should exist.

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Everybody in this room agrees it has to.

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And,

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it's a question of how the revenue is divided when the city annexes overlap within

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the ESD and the service area that we showed you earlier.

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This is a breakdown. This came from our discussion, or the council's discussion one

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evening about giving a scenario of where we were at before 2020,

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where we were at after 2020 without the revenue sharing agreement in place, which

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is our current position, and then what it would look like.

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And at the time, we did not have the letter from the district, but since then we've

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gotten it. And so did a calculation on those three levels showing, again,

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before 2020 election, current situation, and then the ESD proposal, if it were to

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go through the share of the sales tax and how it would go out.

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And this is based on a million dollars of taxable sales in affected area.

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One thing that we can't do right now is we don't know what's going to develop

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where. And so

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I chose a million dollars of taxable sales to give you a benchmark to kind of show

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an illustration of how this would be divided.

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And as you can see, with the division of this, it

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represents the 60/40 split, 60 to the ESD on the last one,

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40%, which would be divided between the

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city and the EDC respectively at one-third.

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Based on the current situations where I utilized was that of that

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40% that the city and EDC would have, it would be split at a one-third,

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two-thirds of the sales tax collected.

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And so it gives you an idea of what that would look like on a million dollars

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sales.

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Next is where the situation currently stands, as we were just pointing out.

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What the ESD has proposed is a sales tax allocation mentioned at 60% to the

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ESD, 40% to the city side and a share to Point City and EDC.

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Allocation to three identified annexed areas and future annexations after agreement

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of execution, and that's critical in that with future annexations right now, we

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don't know what those would be, and we would have to analyze each of those when

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they come about in order to determine the economic impact and benefit or

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cost that would go along with those. That would be critical.

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And currently proposed at a term in perpetuity.

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And then important clarification, the 40% city share I mentioned a little bit

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00:17:46,015 --> 00:17:51,594
earlier, the city and the EDC, it'll be a dual stream under which the current

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00:17:51,654 --> 00:17:55,225
split, two-thirds will go to city and one-third to EDC.

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00:17:55,914 --> 00:18:00,534
And again, there's the plain language as it relates to the information presented in

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00:18:00,564 --> 00:18:01,225
the slide.

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00:18:02,515 --> 00:18:02,754
Next

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What additional conditions are proposed from the ESD? Station one ground lease.

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Extend the current station ground lease for 50

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00:18:14,250 --> 00:18:17,220
additional years, for a dollar per year, which

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00:18:18,750 --> 00:18:24,000
the dollar per year has been in existence from the beginning, and this is a

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00:18:24,090 --> 00:18:28,020
long-term property commitment by the city on land of the city's.

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00:18:28,680 --> 00:18:33,540
Station utility language. Remove the ESD responsibility for certain past, current,

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00:18:33,570 --> 00:18:38,490
and future utility fees that they are requesting, and monthly costs to be provided

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00:18:38,580 --> 00:18:44,520
at city taxpayer expense. That is to be able to get the water necessary to

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00:18:44,580 --> 00:18:50,280
perform the services that they do, both inside the city and outside at this point

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00:18:50,280 --> 00:18:54,480
in time within station one. This

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00:18:56,400 --> 00:19:02,310
shows who pays, again, certain utility-related costs to the city's taxpayers

245
00:19:02,790 --> 00:19:07,590
and not the ESD's use of the resources inside or outside differentiating between

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00:19:07,621 --> 00:19:11,730
the two. That resource does go outside of the city as well.

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00:19:12,600 --> 00:19:16,080
Station two infrastructure. The city would provide for water, sewer, gas,

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00:19:16,140 --> 00:19:20,910
infrastructure connections to be constructed for ESD number 2 at city taxpayer

249
00:19:20,910 --> 00:19:26,790
expense. Again, this is at the request of the ESD and their proposal from September

250
00:19:27,060 --> 00:19:31,470
4th, and this could create one-time capital infrastructure costs to the city

251
00:19:31,530 --> 00:19:34,740
taxpayers, for us to have to put that infrastructure in.

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00:19:34,801 --> 00:19:40,320
Again, Mike will cover that, I believe, in some information following this about

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00:19:40,350 --> 00:19:44,160
what that might look like and what the cost associated with that might be.

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00:19:45,030 --> 00:19:49,380
Station two, which is a station that is projected.

255
00:19:50,280 --> 00:19:55,350
City would pay ongoing monthly utility costs for what they're requesting for ESD

256
00:19:55,410 --> 00:20:01,020
number 2 use at station two at city taxpayer expense again, and this could create

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00:20:01,140 --> 00:20:03,030
ongoing operating costs to

258
00:20:04,350 --> 00:20:09,450
the taxpayers, both, again, servicing inside and outside the

259
00:20:09,810 --> 00:20:14,160
city within the ESD district, which we showed earlier is much larger than the

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00:20:14,400 --> 00:20:15,240
current city limits.

261
00:20:17,310 --> 00:20:19,020
Future agreement could mean to the public.

262
00:20:19,080 --> 00:20:24,960
Again, a little bit repetitive, but an agreement could allow ESD number

263
00:20:25,111 --> 00:20:28,560
2 to continue receiving most of the current sales tax stream while sharing a

264
00:20:28,621 --> 00:20:31,290
portion with Sealy, which we're not currently getting.

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00:20:35,430 --> 00:20:38,880
Through due diligence, I think residents will want to know how public safety

266
00:20:38,940 --> 00:20:42,660
funding remains stable and that it remains stable because it is important to all of

267
00:20:42,780 --> 00:20:47,100
us, all of our lives, both inside the district, outside the district, and within

268
00:20:47,100 --> 00:20:50,850
the city and outside the city. City and utility costs.

269
00:20:50,850 --> 00:20:54,960
Some proposal terms could place infrastructure or utility costs on the city, as

270
00:20:54,990 --> 00:21:00,090
we've mentioned before. Residents may want to understand which costs are one time,

271
00:21:00,210 --> 00:21:05,970
which ones are ongoing, what are maintenance costs, and who ultimately would be

272
00:21:06,060 --> 00:21:10,590
paying for those, and it'd all be contingent on where

273
00:21:12,000 --> 00:21:13,530
the different developments would take place.

274
00:21:14,070 --> 00:21:17,339
And it would be something that would have to be looked at on a case-by-case basis

275
00:21:18,210 --> 00:21:22,080
based on the current proposal. Economic development resources.

276
00:21:22,350 --> 00:21:28,080
If Sealy receives a shared amount, one third again would go to EDC under the

277
00:21:28,140 --> 00:21:33,660
current local split, supporting economic development efforts to continue to

278
00:21:33,780 --> 00:21:39,570
increase the sales tax provisions and hopefully offset the

279
00:21:39,900 --> 00:21:41,970
property tax burden on residents.

280
00:21:42,510 --> 00:21:47,160
Key public takeaway at the end is the 60/40 agreement, and as we

281
00:21:48,000 --> 00:21:53,611
understand it at this point in time, on the 1.5% ESD allocation,

282
00:21:54,121 --> 00:21:59,070
and that just shows the breakdown on a 60/40

283
00:21:59,730 --> 00:22:03,600
split with a split between the city and EDC on the 40.

284
00:22:06,301 --> 00:22:09,900
What should citizens listen for as we move forward?

285
00:22:10,230 --> 00:22:12,420
What exact tax revenue is being shared?

286
00:22:12,540 --> 00:22:18,270
Citizens should be able to see the sources clearly and understand the issue

287
00:22:18,361 --> 00:22:23,790
about allocation transparency and not change from local tax ceiling,

288
00:22:24,810 --> 00:22:30,720
into the local tax ceiling, excuse me. City side share to be divided.

289
00:22:30,990 --> 00:22:36,420
Any public presentations should show the current Sealy split correctly and as just

290
00:22:36,450 --> 00:22:40,020
shown to you with regard to the city and EDC.

291
00:22:40,861 --> 00:22:45,000
Cost that the city would accept. An agreement may involve, again, we've talked

292
00:22:45,030 --> 00:22:49,861
about the lease of the property, the infrastructure, utility obligations, and

293
00:22:49,890 --> 00:22:55,680
additional revenue split that would have to be determined on each case

294
00:22:55,861 --> 00:23:01,170
as the annexations took place or came forward. How would services continue?

295
00:23:01,260 --> 00:23:05,190
Residents want confidence that, again, emergency service responses are great,

296
00:23:05,520 --> 00:23:09,420
municipal services continue to be great, and growth-related responsibilities remain

297
00:23:09,480 --> 00:23:13,861
supported with infrastructure in taking care of those needs as we grow.

298
00:23:14,730 --> 00:23:20,700
And again, the perpetual agreement can have long-term consequences,

299
00:23:20,760 --> 00:23:23,700
so terms should be understandable to the public.

300
00:23:23,760 --> 00:23:29,611
Again, transparency and in clear terms as to what the agreement would

301
00:23:29,670 --> 00:23:31,560
be and how it would go forward.

302
00:23:34,710 --> 00:23:40,560
Just in summary, again, 2020 ESD sales tax, the election changed the way

303
00:23:40,680 --> 00:23:46,560
local sales tax allocated. ESD 60/40 was where we were at today with

304
00:23:46,621 --> 00:23:47,430
the proposal.

305
00:23:48,750 --> 00:23:52,830
And again, conditions against property and infrastructure and utilities.

306
00:23:53,520 --> 00:23:59,220
And we also spoke to the split. Final takeaway from here,

307
00:23:59,580 --> 00:24:04,380
based on what we understood and presented tonight, was how to balance emergency

308
00:24:04,440 --> 00:24:08,730
services funding, city services responsibility as well, and local economic

309
00:24:08,760 --> 00:24:12,900
development. So there are three parties in this that are affected and the different

310
00:24:12,930 --> 00:24:18,270
levels of service that each provide, and any final agreement should be for the

311
00:24:18,330 --> 00:24:23,460
Sealy residents to understand where the money comes from, how it's divided, and

312
00:24:23,551 --> 00:24:25,830
what public obligations come with it

313
00:24:27,060 --> 00:24:29,280
when you have an agreement or reach an agreement.

314
00:24:29,880 --> 00:24:32,520
So again, it was a quick overview of the information.

315
00:24:32,549 --> 00:24:37,380
I hope I covered what you asked for, and I'll turn it over to Mike at this point.

316
00:24:37,680 --> 00:24:39,900
Thank you. I want to make a couple of comments, please.

317
00:24:40,740 --> 00:24:44,280
I took from their audited financial statements, and I've given this out before-

318
00:24:44,700 --> 00:24:48,180
Got you. Sorry. Leave it out there because I want to go back to something before

319
00:24:48,210 --> 00:24:53,430
... And in 2021, the ESD sales tax revenue, 2021 was

320
00:24:53,460 --> 00:24:58,260
$121,911. In

321
00:24:58,500 --> 00:25:04,440
2022, it was $319 and $273. This

322
00:25:04,500 --> 00:25:07,890
is their sales tax revenue from their audited financial statements.

323
00:25:08,280 --> 00:25:08,280
Okay.

324
00:25:08,340 --> 00:25:14,280
In 2023, it was $382,836. And as

325
00:25:14,371 --> 00:25:19,590
we continue to grow and people used online shopping, their sales tax was

326
00:25:19,590 --> 00:25:25,530
$461,183. That's an incredible amount of

327
00:25:25,621 --> 00:25:31,380
sales tax revenue that they received, and those were in annexed areas that we, as a

328
00:25:31,470 --> 00:25:36,420
city, were not able to recover anything for our taxpayers that basically are being

329
00:25:36,480 --> 00:25:38,250
double taxed. Okay, I'm sorry. Go ahead.

330
00:25:38,310 --> 00:25:41,130
No, you're okay. I just wanted to stop them before they turned it off.

331
00:25:41,790 --> 00:25:45,390
Can you go back to the slide four please, the one that shows the table?

332
00:25:48,210 --> 00:25:52,440
So you had it highlighted here at the bottom, but I think it's important for the

333
00:25:52,500 --> 00:25:58,111
public to have kind of maybe a real-life explanation of what this total

334
00:25:58,170 --> 00:26:02,970
local is. So if you go into Walmart today, and you make a purchase, and you look at

335
00:26:03,030 --> 00:26:06,510
your receipt, you're going to see 8.25% sales tax.

336
00:26:06,991 --> 00:26:11,551
Okay, the state of Texas gets six and a quarter, they get 6.25 of that, and then

337
00:26:11,580 --> 00:26:15,000
they dictate that 2% of that is capped at local.

338
00:26:15,060 --> 00:26:18,690
So that means 2% is shared across the county and the city.

339
00:26:19,170 --> 00:26:23,220
The county takes a half a percent, and that's what we see there in the Austin

340
00:26:23,310 --> 00:26:28,500
County column. That's the .5. And then what's happening is that the

341
00:26:28,590 --> 00:26:33,330
ESD has now consumed the total remaining, which is the

342
00:26:33,510 --> 00:26:38,700
1.5%. So if you go back now to the map that was on-

343
00:26:41,851 --> 00:26:42,241
At the beginning, yeah

344
00:26:42,241 --> 00:26:43,530
... the second or third-

345
00:26:43,950 --> 00:26:45,270
Second page

346
00:26:47,071 --> 00:26:50,520
... page. Okay, so now what's happening is everything that's outlined in red that

347
00:26:50,580 --> 00:26:55,380
is not yellow, ESD is consuming the total cap of

348
00:26:55,560 --> 00:27:01,260
1.5% from that. If the Sealy were to

349
00:27:02,071 --> 00:27:02,730
grow

350
00:27:04,230 --> 00:27:09,780
inside of that red area, we will not be able to consume any additional sales tax

351
00:27:09,810 --> 00:27:12,660
from that because they have consumed all of it

352
00:27:13,644 --> 00:27:17,814
There's nothing left. We can't go above the 2%. We can't tax on top of it.

353
00:27:18,504 --> 00:27:20,424
Even if the city annexes it?

354
00:27:20,904 --> 00:27:22,434
That's what I mean. That's what I'm saying.

355
00:27:22,495 --> 00:27:27,444
So if that yellow portion grows inside that red portion, we're not getting any

356
00:27:28,644 --> 00:27:34,225
sales tax revenue from that as part of it, because they've consumed all 1.5% that

357
00:27:34,284 --> 00:27:34,794
remains.

358
00:27:36,745 --> 00:27:40,584
I know Mike is up next to speak, but I just want to make a clarification on the

359
00:27:40,734 --> 00:27:46,404
ESD, Emergency Services District, but in reality, this is only the

360
00:27:46,495 --> 00:27:48,745
fire department. This is not ambulance services-

361
00:27:48,745 --> 00:27:49,225
That's correct

362
00:27:49,344 --> 00:27:50,334
... or medical services.

363
00:27:50,394 --> 00:27:50,784
That's correct.

364
00:27:50,784 --> 00:27:52,764
This is only the Sealy Fire Department.

365
00:27:53,154 --> 00:27:55,554
And many ESDs have dual purpose.

366
00:27:55,614 --> 00:27:55,764
Correct.

367
00:27:55,764 --> 00:27:57,234
For EMS and fire.

368
00:27:57,294 --> 00:27:58,014
Correct.

369
00:27:58,074 --> 00:27:59,304
And if I can add for clarification-

370
00:27:59,304 --> 00:27:59,874
That's excellent

371
00:28:00,084 --> 00:28:02,004
... if I could clarify what you said a minute ago, Mayor.

372
00:28:02,544 --> 00:28:07,194
The subdivisions you're talking about are things that we annexed in already that

373
00:28:07,225 --> 00:28:11,934
are in the ESD 2 territory, and we're not eligible.

374
00:28:12,264 --> 00:28:16,644
So we already have some development that we've approved that are in these impacted

375
00:28:16,764 --> 00:28:22,554
areas. No one had the crystal ball in 2020 when we were voting, or whoever voted

376
00:28:22,614 --> 00:28:28,134
for it, I don't remember. But at that time, as a volunteer fire department, we knew

377
00:28:28,165 --> 00:28:32,874
we needed to pay firemen. We needed that because volunteers were going away, but

378
00:28:32,995 --> 00:28:37,434
never in my wildest dreams would I have figured it would grow to this proportion.

379
00:28:37,915 --> 00:28:38,544
So thank you for that.

380
00:28:38,605 --> 00:28:42,204
And Mayor, I'd like to just put on the record, this is a letter from Glenn Hagar on

381
00:28:42,294 --> 00:28:47,184
June 16th of 2022. We sent them our annexation maps to the Texas Comptroller.

382
00:28:48,054 --> 00:28:53,154
"Because this annexation overlaps part of Austin County Emergency Services District

383
00:28:53,784 --> 00:28:55,524
2, the annexed area

384
00:28:56,874 --> 00:29:01,374
is now located in multiple taxing jurisdictions that impose a local sales and use

385
00:29:01,434 --> 00:29:07,225
tax. As a result, the combined local sales and use tax rate is 3.5%, which

386
00:29:07,284 --> 00:29:12,715
exceeds the 2% local cap. Consequently, the

387
00:29:12,894 --> 00:29:18,624
city sales tax rate will be reduced in the annexed area that overlaps

388
00:29:18,745 --> 00:29:23,814
Austin County Emergency Services District 2 in order to bring the total local rate

389
00:29:23,874 --> 00:29:24,654
to 2%."

390
00:29:26,665 --> 00:29:29,184
And that includes the 0.5% from the county?

391
00:29:29,784 --> 00:29:30,415
That is correct.

392
00:29:32,274 --> 00:29:34,794
Would you go back to slide four, please, sir?

393
00:29:36,355 --> 00:29:40,074
Oh, thank you. So just to... I'll get perspective.

394
00:29:40,284 --> 00:29:44,995
So I use my friend AI and just say, "Hey, how much does a Lowe's Home Depot

395
00:29:45,084 --> 00:29:50,634
generate annually by store?" So if we were to get a Home Depot, they generate $60

396
00:29:50,665 --> 00:29:56,514
to $75 million in revenue annually.

397
00:29:56,605 --> 00:30:01,915
So to put into perspective, that would be $900,000 annually in sales tax revenue.

398
00:30:03,324 --> 00:30:08,605
Okay. All that currently would go to the ESD if it was in our ETJ and they wanted

399
00:30:08,634 --> 00:30:09,745
to be annexed in.

400
00:30:11,154 --> 00:30:14,334
Zero currently goes to the City of Sealy.

401
00:30:14,424 --> 00:30:16,254
So yeah, I think we have to put that in perspective.

402
00:30:16,314 --> 00:30:21,894
Now, to me, what's outlined here is probably more like a 150-home

403
00:30:22,074 --> 00:30:26,725
residential area, annually, that we may see sales tax of about $10,000.

404
00:30:26,814 --> 00:30:30,294
So in the grand scheme of things, $15,000

405
00:30:31,554 --> 00:30:32,725
is not a whole lot, right?

406
00:30:33,204 --> 00:30:33,504
No.

407
00:30:33,924 --> 00:30:37,134
But when you talk about bringing in a big box store potentially that wants to be

408
00:30:37,225 --> 00:30:42,355
annexed into the community, that's where I think the city has a lot of its angst,

409
00:30:42,444 --> 00:30:46,434
right? Because again, we're being asked to serve, but we're not getting anything to

410
00:30:46,465 --> 00:30:51,684
be able to serve. We don't have a lot of the

411
00:30:51,745 --> 00:30:56,094
leverage to offer them incentives to move into our community, which people want

412
00:30:56,814 --> 00:31:01,884
growth in our community. But at the end of the day, this unfortunate situation,

413
00:31:03,264 --> 00:31:08,694
of course, I didn't sit in the House and the Senate legislature of Texas, but I

414
00:31:08,725 --> 00:31:11,934
don't think they consider the full impact when they pass this legislation,

415
00:31:12,174 --> 00:31:12,654
honestly.

416
00:31:15,084 --> 00:31:17,004
Robbie, did you want to add anything at this time?

417
00:31:17,124 --> 00:31:21,415
Yeah, I had something I'd like to say, but I was hoping to do it at the end.

418
00:31:21,475 --> 00:31:24,294
Well, I think if it's with these slides, it's good.

419
00:31:24,355 --> 00:31:28,165
If it's anything in relation to that, let's just talk as we go, and we can always

420
00:31:28,225 --> 00:31:30,024
come back and rehash it. It's up to you.

421
00:31:30,114 --> 00:31:31,524
Okay. No, I'll be

422
00:31:34,855 --> 00:31:39,864
good. So, my concern about the importance of the fire department, everyone knows we

423
00:31:39,894 --> 00:31:42,355
need that, right? This is what we kind of discussed a little bit earlier.

424
00:31:42,774 --> 00:31:46,014
My concern is the proposed agreement failure reflects the financial

425
00:31:46,074 --> 00:31:50,245
responsibilities that each party will carry and whether it will remain sustainable

426
00:31:50,304 --> 00:31:56,215
as Sealy grows. The proposal cannot be evaluated solely as a 60/40 revenue split.

427
00:31:56,274 --> 00:32:00,475
In addition to allocating 60% of the revenue to the ESD and 40% to the municipal

428
00:32:00,564 --> 00:32:05,034
side, the proposal would place additional property, infrastructure, and utility

429
00:32:05,124 --> 00:32:09,504
obligations on the city. In other words, the proposal would not only leave the city

430
00:32:10,105 --> 00:32:13,674
with a smaller portion of the revenue, it would increase the city's financial

431
00:32:13,704 --> 00:32:17,995
responsibilities. Those additional costs must be calculated and considered as part

432
00:32:18,024 --> 00:32:21,954
of the proposed allocation, as they will have a direct impact on our taxpayers.

433
00:32:23,574 --> 00:32:28,374
The city already has broad responsibilities, including police protection, streets,

434
00:32:28,554 --> 00:32:32,634
drainage, utilities, planning, permitting, administration, debt obligations, and

435
00:32:32,665 --> 00:32:35,574
the long-term maintenance and replacement of public infrastructure.

436
00:32:36,384 --> 00:32:42,204
These responsibilities increased as Sealy annexes property and experiences new

437
00:32:42,264 --> 00:32:44,184
residential and commercial development.

438
00:32:45,534 --> 00:32:49,465
The municipal side allocation is also not entirely available for ordinary

439
00:32:51,234 --> 00:32:52,975
city operations, as we discussed.

440
00:32:53,184 --> 00:32:56,634
It must account for the economic development tax approved by the Sealy voters in

441
00:32:56,665 --> 00:32:57,594
1997.

442
00:32:59,665 --> 00:33:05,424
So in my opinion, it's really just a math issue, as some of the council

443
00:33:05,454 --> 00:33:10,495
members have pointed out. So to better understand an appropriate allocation, I've

444
00:33:10,524 --> 00:33:15,264
worked through a fiscal analysis involving more than 50,000 growth, development,

445
00:33:15,355 --> 00:33:17,484
and financial responsibility scenarios.

446
00:33:18,114 --> 00:33:23,334
With the different allocations and time horizons are included, the analysis

447
00:33:23,394 --> 00:33:25,674
produced millions of individual comparisons.

448
00:33:26,665 --> 00:33:30,954
The scenarios consider different development types, rates of growth, infrastructure

449
00:33:31,014 --> 00:33:36,534
demands, service responsibilities, developer participation, and both short and

450
00:33:36,594 --> 00:33:41,874
long-term financial effects. Obviously, this is not an exact science, and no model

451
00:33:41,934 --> 00:33:44,184
can predict every future development or expense.

452
00:33:44,454 --> 00:33:49,134
However, the results consistently indicate that the city's responsibilities are

453
00:33:49,194 --> 00:33:54,114
substantially greater than the 40% municipal side share offered by the ESD.

454
00:33:55,225 --> 00:34:00,624
Based on the extensive modeling, I believe a 90% municipal side and 10% ESD

455
00:34:00,684 --> 00:34:06,264
allocation is more of a reasonable starting point for negotiations

456
00:34:06,324 --> 00:34:10,015
based on the capital expenditures and liabilities of each party.

457
00:34:11,004 --> 00:34:14,395
I would also respectfully invite the Sealy Fire Department to prepare and present

458
00:34:14,424 --> 00:34:18,624
its own fiscal analysis. That analysis should identify its operating expenses,

459
00:34:19,374 --> 00:34:23,214
projected service demands, capital needs, available revenue, reserves, and

460
00:34:23,245 --> 00:34:27,204
anticipated costs associated with future growth so that taxpayers of Sealy can

461
00:34:27,265 --> 00:34:28,944
understand exactly what is at stake.

462
00:34:29,995 --> 00:34:33,954
Both entities have an obligation to taxpayers to support proposed percentages with

463
00:34:34,015 --> 00:34:35,605
transparent financial information.

464
00:34:37,074 --> 00:34:40,314
If the ESD analysis produces a different result, we should place the analysis side

465
00:34:40,374 --> 00:34:43,944
by side, compare the assumptions, and work towards a reasonable allocation

466
00:34:44,004 --> 00:34:46,044
supported by best available information.

467
00:34:47,634 --> 00:34:50,364
Getting the allocation wrong would not be good for either party, obviously.

468
00:34:53,904 --> 00:34:57,414
If the ESD receives too little, its ability to provide dependable emergency

469
00:34:57,474 --> 00:35:02,214
services could be affected. But if the city receives too little, it may be unable

470
00:35:02,275 --> 00:35:06,564
to afford the roads, utilities, and police protection, administration, and

471
00:35:06,654 --> 00:35:11,094
infrastructure needed to support new development and annexation.

472
00:35:11,634 --> 00:35:15,744
This could slow Sealy's growth. Slower growth would not affect only the city.

473
00:35:15,804 --> 00:35:21,414
It also would reduce the future sales tax base, property tax base, and development

474
00:35:21,504 --> 00:35:24,504
opportunities that help support ESD operations.

475
00:35:25,764 --> 00:35:29,244
A properly structured agreement should therefore be viewed as a shared investment

476
00:35:29,304 --> 00:35:33,114
in sustainable growth. As Sealy grows, it's possible both the city and the fire

477
00:35:33,144 --> 00:35:35,334
department benefit from a stronger tax base.

478
00:35:36,025 --> 00:35:40,224
If allocation makes growth financially impractical for the city, both parties may

479
00:35:40,284 --> 00:35:44,934
lose future revenue. The taxpayers supporting these entities are also frequently

480
00:35:44,964 --> 00:35:46,554
the same residents and businesses.

481
00:35:46,764 --> 00:35:50,844
This should not be treated as one public entity winning and another losing.

482
00:35:51,474 --> 00:35:55,434
The objective should be an allocation that allows both organizations to fulfill

483
00:35:55,464 --> 00:35:59,664
their responsibilities. At the end of the day, the Sealy Fire Department is not

484
00:35:59,724 --> 00:36:01,764
legally required to share its current revenue with the city.

485
00:36:01,824 --> 00:36:04,464
I recognize that and appreciate its willingness to negotiate.

486
00:36:04,704 --> 00:36:09,775
However, the council has a responsibility to evaluate the entire proposal of not

487
00:36:09,834 --> 00:36:13,584
only the revenue being offered, but also the additional expenses and long-term

488
00:36:13,704 --> 00:36:18,414
obligations being placed on the city and taxpayers both parties are responsible to.

489
00:36:19,464 --> 00:36:22,464
We want these discussions to continue to debate and believe there's an agreement

490
00:36:22,525 --> 00:36:26,184
possible, but it should be supported by transparent financial analysis, clearly

491
00:36:26,244 --> 00:36:30,684
defined responsibilities, and a structure that allows both the city and the fire

492
00:36:30,714 --> 00:36:32,544
department to benefit from Sealy's growth.

493
00:36:35,424 --> 00:36:38,244
Thank you. Councilman Berg, do you have anything you want to add at this point?

494
00:36:38,304 --> 00:36:41,124
I want to give everybody a chance to-- Based on Councilman-

495
00:36:41,214 --> 00:36:42,594
Yeah, I want to share some things, too.

496
00:36:42,684 --> 00:36:46,554
So just to pick up on a couple of the points that are made so the public

497
00:36:46,584 --> 00:36:51,294
understands. Normally, if a big box store comes to town and they request to be

498
00:36:51,324 --> 00:36:54,864
voluntarily annexed, then we would collect 100% of the sales tax.

499
00:36:55,164 --> 00:36:59,154
In the current situation, without an agreement, we would collect zero, as has been

500
00:36:59,214 --> 00:37:01,764
said. But we would still be providing,

501
00:37:02,994 --> 00:37:06,684
through interlocal agreements, policing services.

502
00:37:07,044 --> 00:37:09,864
If something happened there, the police would patrol.

503
00:37:10,134 --> 00:37:14,275
There would still be that kind of demand. Roads, Bill had the slide up.

504
00:37:14,334 --> 00:37:18,775
There's all kinds of things the city would provide, and as that map showed, the

505
00:37:18,864 --> 00:37:22,704
city is approximately 14,

506
00:37:24,894 --> 00:37:30,594
what is it, square miles in size. And the ESD documentation says they're

507
00:37:30,984 --> 00:37:36,355
119 square miles. So today, that's a lot of rural area, but we're having a growth

508
00:37:36,414 --> 00:37:41,514
conversation. So as the city grows and grows, we will be the smaller piece of that,

509
00:37:41,844 --> 00:37:43,704
and they will be the larger territory.

510
00:37:43,764 --> 00:37:47,664
And yet you'll be having the city of Sealy provide the policing and some of the

511
00:37:47,754 --> 00:37:50,184
other stuff because the fire department doesn't provide that.

512
00:37:50,544 --> 00:37:54,954
So as we said, the allocation is very important as to Councilman Neckar's point.

513
00:37:55,434 --> 00:37:58,525
So you may say, well, they're offering you 40%.

514
00:37:59,784 --> 00:38:02,364
We haven't had a conversation yet about what they're asking for.

515
00:38:02,424 --> 00:38:06,384
Bill had it on the slide. But just to clarify, they want utilities.

516
00:38:06,804 --> 00:38:11,364
They want the infrastructure to the new station number two, which could mean

517
00:38:11,574 --> 00:38:16,164
hundreds of thousands of dollars to run infrastructure lines under the highway.

518
00:38:16,434 --> 00:38:17,934
And you'll have some of that once you-

519
00:38:17,994 --> 00:38:20,724
And I want to steal Mike's thunder. But I'm just getting to cost.

520
00:38:20,784 --> 00:38:26,634
There's a big cost associated. And so for us, if

521
00:38:27,114 --> 00:38:30,894
you're listening on the video or in public, you might say, "They're offering you

522
00:38:31,074 --> 00:38:36,594
40%. What's the problem?" The problem is there's a perpetuity

523
00:38:36,714 --> 00:38:41,964
agreement for all of this stuff, and they use bulk water to provide for that entire

524
00:38:42,355 --> 00:38:47,004
119 square miles. And so we're having to ask, should the city of Sealy, you saw the

525
00:38:49,404 --> 00:38:51,504
water tower and the groundwater storage tank.

526
00:38:51,564 --> 00:38:55,554
Should the City of Sealy, who currently provides water for those things, be

527
00:38:55,614 --> 00:38:59,244
providing the water for the entire emergency services district when they collect

528
00:38:59,275 --> 00:39:03,804
the property tax, which is allowed by the state, plus this new tax which is

529
00:39:03,864 --> 00:39:09,264
implemented? In 2011, we signed, the city, before any of us were here, signed a

530
00:39:09,355 --> 00:39:13,464
ground lease that said, "You can build a new fire station number one on city

531
00:39:13,525 --> 00:39:18,984
property." And the agreement called for them to pay for utilities, but the city's

532
00:39:19,014 --> 00:39:23,934
been really generous. The ground lease is for a dollar a year, which is a

533
00:39:23,994 --> 00:39:28,344
formality, and then the utilities are supposed to be paid, but the city has never

534
00:39:28,404 --> 00:39:33,803
sent them a bill up to this point. So the city's been really kind, even before this

535
00:39:33,864 --> 00:39:35,244
group and even now, to say, "You know what?

536
00:39:35,303 --> 00:39:39,924
We want to support emergency services, fire stations as much as we can." But we're

537
00:39:39,984 --> 00:39:45,054
in a spot now where if we're being good public servants and looking forward to

538
00:39:45,114 --> 00:39:49,494
growth, we have to have the conversation about should the taxpayers be stuck paying

539
00:39:49,525 --> 00:39:53,454
the bill as the growth happens if we're not collecting the tax.

540
00:39:53,964 --> 00:39:54,204
So,

541
00:39:55,554 --> 00:39:57,294
I just wanted to outline those points.

542
00:39:57,324 --> 00:39:59,275
That's correct. We'll continue this conversation.

543
00:39:59,364 --> 00:40:01,074
Councilman Curry, anything at this time?

544
00:40:01,764 --> 00:40:06,594
I have two more things. One is I have this sheet that said, "If Proposition A

545
00:40:06,684 --> 00:40:11,544
passes, what will it cost me?" And then it says on there, "The election will not

546
00:40:11,634 --> 00:40:17,214
affect sales tax rate within the city Sealy limits." Well, nobody knew the city

547
00:40:17,275 --> 00:40:22,914
limits-- I mean, nobody had the crystal ball five years ago to know the enormous

548
00:40:22,974 --> 00:40:28,944
number of people coming west. And that's not really the true story, because

549
00:40:29,034 --> 00:40:32,754
anybody that voted for this in good faith thought it would never, ever hurt the

550
00:40:32,814 --> 00:40:34,644
city taxpayers. And

551
00:40:36,174 --> 00:40:41,124
part of the deal is it has. And I think before we leave, I think it's important

552
00:40:41,154 --> 00:40:44,754
that people know these are some of the board members that I even appointed when I

553
00:40:44,814 --> 00:40:47,394
was county judge. Charles Byrne is their president.

554
00:40:47,724 --> 00:40:49,644
James Toman is their vice president.

555
00:40:49,974 --> 00:40:54,294
Lori Muhaki is an officer, Jeremy Waters and Daniel Atwood.

556
00:40:54,744 --> 00:41:00,114
I mean, those are the people that have been appointed to be the taxpayer advocate

557
00:41:00,234 --> 00:41:04,134
for the community. And they are a taxing authority.

558
00:41:04,494 --> 00:41:06,894
They do have open records meeting requirements.

559
00:41:07,374 --> 00:41:11,544
They should do more to make sure the public knows what's going on.

560
00:41:11,664 --> 00:41:17,244
I think Kimber indicated that there's property tax advertisement was in the paper

561
00:41:18,294 --> 00:41:23,484
one time, maybe. You saw that, and there was an increase to that, too, I think is

562
00:41:23,514 --> 00:41:24,654
what you had indicated.

563
00:41:25,134 --> 00:41:25,704
Correct.

564
00:41:25,764 --> 00:41:29,424
So, I mean, there's a lot of things going on, and we're not trying to be the bad

565
00:41:29,514 --> 00:41:35,454
guys. We want public safety. But to look out for the future of the city and

566
00:41:35,484 --> 00:41:39,084
the growth, as everyone has indicated, we're stuck.

567
00:41:39,624 --> 00:41:41,724
We want people to understand when they say, well-

568
00:41:41,934 --> 00:41:43,525
Make sure you talk loud enough for the video-

569
00:41:43,614 --> 00:41:43,644
Yes

570
00:41:43,644 --> 00:41:45,355
... because sometimes the video doesn't pick it up.

571
00:41:45,444 --> 00:41:49,164
Don't they want the city to grow? And the answer is yes, but we want to do it

572
00:41:49,254 --> 00:41:50,544
fiscally responsibly-

573
00:41:51,084 --> 00:41:51,384
Correct

574
00:41:51,474 --> 00:41:52,674
... to the extent we can.

575
00:41:52,764 --> 00:41:54,775
Okay. So let's go on to the next piece.

576
00:41:55,014 --> 00:41:56,184
Can I just mention one more thing?

577
00:41:56,184 --> 00:41:56,275
Sure.

578
00:41:56,304 --> 00:42:01,824
The other thing that I keep going back to, and it's really easy to get confused.

579
00:42:01,914 --> 00:42:04,584
So like when we're talking about a 60/40 split,

580
00:42:07,554 --> 00:42:08,004
you have to

581
00:42:10,914 --> 00:42:13,525
hone in on what the city would annex.

582
00:42:13,855 --> 00:42:19,284
So yes, we're talking about the entire outline of the

583
00:42:19,344 --> 00:42:24,714
district, but 40% would go to the city for what it annexed.

584
00:42:24,804 --> 00:42:29,304
So one of the questions I was going to propose tonight, if the board would've

585
00:42:29,364 --> 00:42:35,244
joined us, would've been, what does it cost to provide

586
00:42:35,364 --> 00:42:38,275
fire services to what we've annexed so far?

587
00:42:38,664 --> 00:42:43,584
Because I guarantee you, it's less than 60% of

588
00:42:44,904 --> 00:42:46,644
that cost today.

589
00:42:48,384 --> 00:42:50,783
And I would just like to also make a note with annexation.

590
00:42:50,904 --> 00:42:56,184
So one, as the annexation laws changed a few years ago, you can only annex pretty

591
00:42:56,244 --> 00:43:00,684
much generally by voluntary annexations, and they must be contiguous to the city

592
00:43:00,714 --> 00:43:06,234
limits. So we cannot go, if you pull that big map up, we cannot go annex way out to

593
00:43:06,294 --> 00:43:12,084
the further reaches of the ESD territory unless we've got contiguous property.

594
00:43:12,534 --> 00:43:16,974
So I want to make sure that the taxpayers or the public understands that, one, we

595
00:43:17,034 --> 00:43:19,734
can't just go unilaterally annex anymore. Generally.

596
00:43:19,764 --> 00:43:24,355
There's very, very few exceptions, which deal with like military and airports.

597
00:43:24,564 --> 00:43:29,904
Okay? And number two, it must be contiguous, which means touching the

598
00:43:29,994 --> 00:43:33,355
city limits for us to be able to annex.

599
00:43:33,714 --> 00:43:38,214
So we don't get to go reach all the way up to the top or the bottom unless there's

600
00:43:38,275 --> 00:43:42,954
a way to get there. And the clarifier is the 60/40 applies to things that the city

601
00:43:43,014 --> 00:43:45,174
would annex, not to the entire-

602
00:43:45,474 --> 00:43:45,984
Correct

603
00:43:46,074 --> 00:43:47,454
... ESD two territory.

604
00:43:47,514 --> 00:43:53,184
That's correct. It would be only for a voluntary annexation into the city limits.

605
00:43:53,214 --> 00:43:58,374
And on the demands that they're asking for the city to

606
00:44:00,384 --> 00:44:04,764
pay for the water and the sewage and the gas and the police services, this would

607
00:44:04,824 --> 00:44:07,105
fall on the taxpayers, the citizens.

608
00:44:07,584 --> 00:44:13,434
We would be the ones absorbing the cost to extend our city services to

609
00:44:13,494 --> 00:44:19,044
these areas. So that would be an impact to each and every citizen of

610
00:44:19,164 --> 00:44:19,674
Sealy.

611
00:44:22,494 --> 00:44:28,044
If the city chose to annex, and if we chose not to annex, then we're back to the

612
00:44:28,074 --> 00:44:32,424
not growing. And this is causing us to not grow because we don't necessarily want

613
00:44:32,424 --> 00:44:34,194
to put that burden on the taxpayers.

614
00:44:34,525 --> 00:44:35,394
That's correct.

615
00:44:35,454 --> 00:44:37,824
Yeah. And just what I have

616
00:44:39,114 --> 00:44:44,994
given to me a couple months ago, at that time, $70,481

617
00:44:45,084 --> 00:44:50,994
was waived on utilities for just 2026, and this was two months old, so this was

618
00:44:51,114 --> 00:44:53,004
a June statement they've given to me.

619
00:44:53,064 --> 00:44:58,044
So it's significant amounts of money that each person that's paying property tax

620
00:44:58,105 --> 00:45:03,234
and living inside the city limits, and then when our water bill has to go up to

621
00:45:03,264 --> 00:45:07,464
meet the needs for that impact statement of the amounts of water that they use for

622
00:45:07,525 --> 00:45:13,404
bulk water, which is significant, and they're able to grow and get grants for water

623
00:45:13,494 --> 00:45:18,084
trucks and extra things that Councilman Neckar and I saw that day.

624
00:45:18,144 --> 00:45:21,474
We were at their meeting on the budget. I mean, they were buying lots of things.

625
00:45:22,704 --> 00:45:28,525
And yes, the time will come, but honestly, I think we're using a fire hose for a

626
00:45:28,584 --> 00:45:32,994
bucket right now because we haven't grown to that extent yet, and we can plan for

627
00:45:33,054 --> 00:45:33,684
the future.

628
00:45:33,804 --> 00:45:37,764
I asked the city manager for an updated number on that, just coincidentally to what

629
00:45:37,794 --> 00:45:41,574
you're talking about. The number you said, Kimber, and just correct if I'm wrong,

630
00:45:41,634 --> 00:45:47,610
as of March 2026, is $166,440 Yes, and

631
00:45:47,670 --> 00:45:49,230
Mike does have more information.

632
00:45:49,260 --> 00:45:52,650
Okay. All right. Are we ready to go? All right, Mike, you're on.

633
00:45:55,530 --> 00:45:55,980
We just want

634
00:45:57,270 --> 00:46:02,280
our viewing public to know this council is united in this effort to protect the

635
00:46:02,340 --> 00:46:08,250
taxpayer. We're all being very cognizant of public safety, but at the same

636
00:46:08,310 --> 00:46:10,680
time, protecting the public. Thank you.

637
00:46:12,510 --> 00:46:15,960
Staff was also asked to provide a summary of the city's predicted cost and

638
00:46:16,020 --> 00:46:19,920
potential financial impacts for utility infrastructure required of the ESD's

639
00:46:19,980 --> 00:46:22,530
proposal, received on September 4th.

640
00:46:23,460 --> 00:46:28,320
The city engineers provided a preliminary cost opinion for extending water, sewer,

641
00:46:28,410 --> 00:46:34,351
and gas infrastructure to serve ESD's number 2 proposed station on

642
00:46:34,410 --> 00:46:35,880
Farm Market 2187.

643
00:46:37,351 --> 00:46:41,670
The estimated infrastructure cost is approximately $674,000.

644
00:46:42,390 --> 00:46:46,290
In addition, water impact fee, $27,048.

645
00:46:47,130 --> 00:46:49,351
Sewer impact fee, $30,272.

646
00:46:51,180 --> 00:46:53,971
Start over. I'm sorry. You're reading faster than I can write.

647
00:46:54,360 --> 00:46:54,660
Okay.

648
00:46:55,770 --> 00:46:56,700
Go with the first one again.

649
00:46:56,730 --> 00:47:02,010
The estimated infrastructure cost is approximately $674,000.

650
00:47:03,810 --> 00:47:09,270
In addition, water impact fees would be $27,048

651
00:47:09,810 --> 00:47:11,340
for a two-inch water meter.

652
00:47:12,900 --> 00:47:17,370
Sewer impact fee, still based on a two-inch water meter, would be

653
00:47:17,400 --> 00:47:19,020
$30,272.

654
00:47:20,910 --> 00:47:23,491
That brings the current identified amount to approximately

655
00:47:23,520 --> 00:47:27,270
$731,320.

656
00:47:29,460 --> 00:47:34,260
Additionally, in consideration of ESD's condition for the city to remove any

657
00:47:34,320 --> 00:47:39,000
provision from the existing ground lease agreement requiring the district to be

658
00:47:39,060 --> 00:47:44,880
responsible for any prior, current, or future connection fees for monthly utility

659
00:47:44,940 --> 00:47:49,650
costs associated with gas, water, sanitary, sewer, drainage, and solid waste

660
00:47:49,741 --> 00:47:50,430
services.

661
00:47:51,870 --> 00:47:57,420
Finance Department staff reports that 2025 internal audit found the facility's

662
00:47:57,510 --> 00:48:03,210
metered utility consumption had been documented but had not been incorporated into

663
00:48:03,241 --> 00:48:05,940
the city's billing process since construction.

664
00:48:07,530 --> 00:48:10,080
A staff-supplied schedule now reports

665
00:48:10,110 --> 00:48:15,690
$166,440.82 in accrued

666
00:48:15,780 --> 00:48:20,670
gross service charges from fiscal year 2012 through March

667
00:48:20,880 --> 00:48:22,170
2026.

668
00:48:23,550 --> 00:48:29,101
Since the city began metering bulk water usage at the ESD 2 station number 1

669
00:48:29,730 --> 00:48:30,420
facility, the

670
00:48:31,830 --> 00:48:37,560
projected annual utilities cost of all utilities, including three-inch

671
00:48:37,620 --> 00:48:43,471
bulk water, which serves the entire 117 square mile service area of the

672
00:48:43,530 --> 00:48:47,430
district, not just the 14 square miles of city limits,

673
00:48:48,930 --> 00:48:54,300
two-inch water line service, one-inch sprinkler line service, sewer,

674
00:48:54,960 --> 00:49:00,869
gas, solid waste, groundwater fee, drainage fee, smart

675
00:49:00,930 --> 00:49:06,330
meter fee. These total approximately $72,000 annually.

676
00:49:07,320 --> 00:49:12,601
This projection is based on the current consumption rate for the area served at the

677
00:49:12,660 --> 00:49:14,640
current fiscal year utility rates.

678
00:49:15,840 --> 00:49:21,750
The ESD has also requested the same provisions for future station number 2 on Farm

679
00:49:21,870 --> 00:49:27,690
Market 2187, which doubles the projected annual utility cost from $72,000

680
00:49:28,260 --> 00:49:29,730
to $144,000.

681
00:49:31,050 --> 00:49:33,420
These conditions would be in perpetuity.

682
00:49:34,471 --> 00:49:39,210
And note of a financial note that they also are requesting an additional 50-year

683
00:49:39,601 --> 00:49:43,200
addition to the ground lease that the city

684
00:49:43,260 --> 00:49:45,870
gave.

685
00:49:45,930 --> 00:49:50,910
And the existing ground lease is 30 with the automatic renewal for 30 if they opt.

686
00:49:51,000 --> 00:49:51,630
That's correct.

687
00:49:51,630 --> 00:49:52,020
So 60 to 50.

688
00:49:52,080 --> 00:49:55,560
It's already a 60-year potential lease, and they want another 50.

689
00:49:55,770 --> 00:49:55,770
Which total proposed-

690
00:49:55,800 --> 00:49:59,640
So it gives you some concern on are we literally selling them the land at that

691
00:49:59,670 --> 00:50:01,050
point? Is it de facto sale?

692
00:50:04,890 --> 00:50:06,601
Okay. Is there anything else?

693
00:50:06,960 --> 00:50:07,440
That's it.

694
00:50:07,530 --> 00:50:09,030
Okay. So I guess that kind of

695
00:50:10,260 --> 00:50:14,940
puts gasoline on the fire again, so to speak. Here we are.

696
00:50:16,170 --> 00:50:16,770
I don't know.

697
00:50:19,710 --> 00:50:23,101
What did you say, 14 square miles and then a hundred and something square...

698
00:50:24,510 --> 00:50:25,530
There's just no way.

699
00:50:26,640 --> 00:50:29,670
Do we want to talk here a little bit about the agreement just to-

700
00:50:29,700 --> 00:50:31,741
Well, that'll do, yes, I think so

701
00:50:31,800 --> 00:50:33,690
... the interlocal, just to publicize that.

702
00:50:33,721 --> 00:50:37,320
I think those bullet points, yes. You have yours in front of you? Perfect. Okay.

703
00:50:37,380 --> 00:50:38,160
Let's do that.

704
00:50:41,101 --> 00:50:44,730
And I know we have not had a sit-down meeting with the board.

705
00:50:45,210 --> 00:50:48,090
I went to the meeting starting last November by myself.

706
00:50:48,660 --> 00:50:52,890
Councilman Curry went with me to one meeting, and Councilman Lerma went with me

707
00:50:52,950 --> 00:50:56,700
to... You went with me to two. Councilman Lerma went with me to one.

708
00:50:57,450 --> 00:51:01,830
Councilman Necker went with me to one, and we were just there to plead and make our

709
00:51:01,890 --> 00:51:03,540
statement under the public session.

710
00:51:04,080 --> 00:51:04,710
And tell them-

711
00:51:05,070 --> 00:51:07,200
And then they would go into executive session.

712
00:51:07,230 --> 00:51:11,910
We would never have a dialogue like we wanted to do today, and they're not here.

713
00:51:13,080 --> 00:51:17,610
And then I think individually, you met with their president of the board, and then

714
00:51:17,731 --> 00:51:21,090
I think Bobby even met with one of their board members.

715
00:51:21,481 --> 00:51:24,210
So we have tried to be reasonable.

716
00:51:24,270 --> 00:51:28,650
And just so the public understands, the reason we didn't all go is because if we

717
00:51:28,680 --> 00:51:31,500
have all of us show up, we have a quorum.

718
00:51:31,560 --> 00:51:33,960
So there's state rules about us not all show.

719
00:51:34,290 --> 00:51:39,060
Yeah. And that's why we're posting the agenda, and we're all here in together with

720
00:51:39,090 --> 00:51:43,680
the video and a public record. Perfect. Thank you. Okay.

721
00:51:43,770 --> 00:51:46,560
You're going to read the letter since it was attorney to attorney, would that be

722
00:51:46,620 --> 00:51:48,060
the easiest way? Or Councilman-

723
00:51:48,270 --> 00:51:48,330
It's-

724
00:51:48,451 --> 00:51:50,460
Mike, do you want to go through it? What do you want to do?

725
00:51:50,790 --> 00:51:55,170
We've really gone between Bill's and Mike's, we've gone through the substantive

726
00:51:55,231 --> 00:51:57,930
points of the letter. It's everything that,

727
00:51:59,940 --> 00:52:04,740
they say they will, the 60/40 split, but they want the utilities and,

728
00:52:06,090 --> 00:52:09,960
it says, I'm just going to read this part here, "The ground lease revision to

729
00:52:10,050 --> 00:52:14,490
utility provision Article 5, utilities of the ground lease agreement for station

730
00:52:14,580 --> 00:52:17,971
one shall be amended to remove any provision requiring the district to be

731
00:52:18,030 --> 00:52:22,110
responsible for any prior, current or future connection fees or monthly utility

732
00:52:22,170 --> 00:52:26,490
costs associated with gas, water, sanitary, sewer, drainage, and solid waste

733
00:52:26,520 --> 00:52:29,820
services." And again, they want that for station number two as well.

734
00:52:30,240 --> 00:52:35,820
There are no parameters, at least in this letter, that the bulk water would not go

735
00:52:35,910 --> 00:52:40,530
outside of that service station. And so I just want to make that clear.

736
00:52:40,590 --> 00:52:45,481
Now, whether they mean for it to not go outside the service, it doesn't say that.

737
00:52:45,540 --> 00:52:48,030
And so I just want the council to be aware that

738
00:52:49,891 --> 00:52:54,180
they could go technically fill up in perpetuity,

739
00:52:55,830 --> 00:52:58,020
but maybe that's not what they meant. That's not what they said.

740
00:52:58,351 --> 00:53:01,141
I don't know really what they meant, but that's what it says.

741
00:53:02,370 --> 00:53:04,110
Okay, Chris, go ahead.

742
00:53:04,201 --> 00:53:10,170
So the only thing that I keep coming back to is, I think on

743
00:53:10,231 --> 00:53:15,540
both sides, right? We're trying to get an agreement that adequately funds ESD, but

744
00:53:15,630 --> 00:53:20,520
also recognizes the city's cost serving, our cost serving in growing these

745
00:53:20,610 --> 00:53:21,570
particular areas.

746
00:53:22,800 --> 00:53:24,150
One of the things that bothers me,

747
00:53:25,351 --> 00:53:28,560
probably even more than the 60/40, is perpetuity.

748
00:53:29,400 --> 00:53:33,960
I think perpetuity already came to bite us once with the election that took place

749
00:53:34,020 --> 00:53:35,820
in 2020, and now we're stuck with

750
00:53:37,231 --> 00:53:38,610
what we voted for. So,

751
00:53:41,250 --> 00:53:46,500
I feel like at this point with this letter, we are so far from coming to

752
00:53:47,221 --> 00:53:49,530
something that both parties are going to agree to.

753
00:53:51,391 --> 00:53:55,201
But for me, I think it's, like I said, it's not even necessarily the 60/40, it's

754
00:53:55,231 --> 00:53:59,040
more so that we want to lock this all into perpetuity and not have a chance to

755
00:53:59,101 --> 00:54:02,490
renegotiate or reevaluate it as we do grow.

756
00:54:02,760 --> 00:54:04,770
So if I could add, that's a great point.

757
00:54:05,250 --> 00:54:10,830
The split we talked about originally with them, well, how would that work?

758
00:54:11,520 --> 00:54:14,520
Would they get all the money and then they would write us a check and they would

759
00:54:14,550 --> 00:54:16,981
have to figure out, you can't just do 40%.

760
00:54:17,070 --> 00:54:17,701
You can't do that.

761
00:54:17,731 --> 00:54:19,380
You have to do 40, right, I'm dreaming.

762
00:54:19,951 --> 00:54:24,330
You got to do 40% of the part that would be within future annexed areas.

763
00:54:24,750 --> 00:54:28,440
And so it becomes a complicated calculation, and so I believe the mayor and maybe

764
00:54:28,471 --> 00:54:31,500
it was one other talk to the Comptroller's office.

765
00:54:32,160 --> 00:54:32,851
Kimber and I, yes.

766
00:54:32,851 --> 00:54:32,971
Kimber.

767
00:54:33,000 --> 00:54:33,000
Yep.

768
00:54:33,060 --> 00:54:33,300
And,

769
00:54:34,530 --> 00:54:38,550
you all can take it from here if you want to, but they basically said, "We will do

770
00:54:38,610 --> 00:54:43,710
the split for you at the state level, but whatever you set up, you're not going to

771
00:54:43,740 --> 00:54:48,391
get to change it around." It becomes, am I quoting correctly, locked in and it's

772
00:54:48,451 --> 00:54:51,721
permanent. Whatever the split is, that's the way the split stays, right?

773
00:54:52,110 --> 00:54:54,240
And so it goes to your point about perpetuity.

774
00:54:54,810 --> 00:54:59,280
It might be nice to say, "You know what, why doesn't the city try a 20-year deal

775
00:54:59,370 --> 00:55:02,496
and see how that works?" And go from there.

776
00:55:02,587 --> 00:55:08,286
But according to what it sounds like they told us, wherever we agree to is-

777
00:55:09,456 --> 00:55:12,606
I think you could probably change it if all the parties agree.

778
00:55:12,696 --> 00:55:13,896
I do want to make a note, though-

779
00:55:13,956 --> 00:55:18,246
Well, I mean, I'm talking about the Comptroller's willingness to change the math.

780
00:55:18,366 --> 00:55:20,256
Am I misquoting, Kimberly?

781
00:55:20,976 --> 00:55:24,516
I don't believe that... I mean, I wasn't on the phone call with the Comptroller.

782
00:55:24,576 --> 00:55:30,277
But if, let's say, you do a 60-40 split, and in 10 years everybody seems come by,

783
00:55:30,486 --> 00:55:33,876
and they're like, "Let's do 90/10 for the city," I think they can do that.

784
00:55:33,906 --> 00:55:35,256
We would just let the Comptroller know.

785
00:55:35,286 --> 00:55:35,466
Yeah.

786
00:55:36,096 --> 00:55:39,606
I wanted to mention something for the public record.

787
00:55:39,966 --> 00:55:42,876
The city originally asked for an in perpetuity contract.

788
00:55:43,446 --> 00:55:49,325
However, that was not predicated on them asking for in

789
00:55:49,386 --> 00:55:54,636
perpetuity water, sewer, gas, solid waste, et cetera,

790
00:55:55,266 --> 00:55:57,337
nor was it predicated on

791
00:55:58,866 --> 00:56:03,906
them asking for the utility connection all the way to the new station.

792
00:56:03,966 --> 00:56:08,587
And so I don't want it to come back and say, "Well, you asked for that, we gave it

793
00:56:08,677 --> 00:56:13,596
to you." We did ask for that, however, it was not predicated on those other

794
00:56:13,626 --> 00:56:14,196
conditions.

795
00:56:15,066 --> 00:56:19,807
So I'm not an expert, but we do know that other cities, this is not an idea that

796
00:56:19,866 --> 00:56:24,666
this council cooked up, my understanding, and you correct me if I'm wrong because

797
00:56:24,696 --> 00:56:28,866
you're the attorney. The city of Hutto, Liberty Hill.

798
00:56:29,166 --> 00:56:34,146
We have some other ones that have implemented these types of things because this is

799
00:56:34,206 --> 00:56:38,376
an issue elsewhere within the state because of, as Councilman Miller said, the

800
00:56:38,436 --> 00:56:43,656
legislature set this up, probably was not realizing what all of that would mean.

801
00:56:44,226 --> 00:56:48,456
If you Google, I encourage go Google city of Hutto ESD.

802
00:56:48,547 --> 00:56:54,096
There was an article that came out on the 5th or pretty recent about them and their

803
00:56:54,186 --> 00:56:59,166
ESD and trying to come up with a renegotiated split, and they are fighting amongst

804
00:56:59,196 --> 00:57:03,307
themselves. I believe Hutto is going to try to start their own fire department, and

805
00:57:03,396 --> 00:57:09,337
so that just came out within the last few days. And so it's ongoing in that city.

806
00:57:10,596 --> 00:57:15,756
Mike Barrow came up with some other cities that were able to work out an amicable

807
00:57:15,906 --> 00:57:16,446
split.

808
00:57:18,066 --> 00:57:22,686
And those, Mike, I don't believe, had any sort of ties to infrastructure or

809
00:57:22,777 --> 00:57:24,696
utilities in perpetuity. It was just a split.

810
00:57:26,346 --> 00:57:29,076
And so this is a unique

811
00:57:31,386 --> 00:57:33,666
ask that they want in order to do this.

812
00:57:35,016 --> 00:57:40,807
Based on a very brief conversation with their attorney and their response,

813
00:57:42,036 --> 00:57:46,206
I don't really get the impression they're looking to negotiate really any further,

814
00:57:46,297 --> 00:57:48,036
but maybe they are.

815
00:57:49,236 --> 00:57:52,596
Can you read the end of the letter? Because we've approached them multiple times,

816
00:57:52,626 --> 00:57:56,946
and I think we had a repeated response that you sort of characterized as, "This

817
00:57:58,236 --> 00:57:59,826
is it. This is what we're offering."

818
00:58:00,966 --> 00:58:06,036
It just says that they've demonstrated willingness to work with us.

819
00:58:07,506 --> 00:58:12,036
But it kind of says that the city is agreeable to these terms, the district is

820
00:58:12,066 --> 00:58:16,057
prepared to move forward with finalizing the interlocal agreement and the related

821
00:58:16,116 --> 00:58:18,516
ground lease amendments and agreements.

822
00:58:19,506 --> 00:58:22,266
But it's not, "Hey, let's..."

823
00:58:23,706 --> 00:58:24,846
The council invited them

824
00:58:26,196 --> 00:58:31,866
to a public meeting tonight to sit down and talk, and they declined that multiple

825
00:58:31,927 --> 00:58:33,786
times, and so

826
00:58:37,476 --> 00:58:39,337
that's their response.

827
00:58:41,706 --> 00:58:44,346
Yeah, I think that was a response when we countered with

828
00:58:46,626 --> 00:58:50,677
alternate ideas, and they came back with the same as my point.

829
00:58:50,736 --> 00:58:50,916
Came back-

830
00:58:50,946 --> 00:58:54,726
They came back with it a little bit different than, I believe, the last one.

831
00:58:54,816 --> 00:58:56,436
It's come back so many times.

832
00:58:57,936 --> 00:59:03,036
It was a little more, I think, definite on they weren't looking to have anything

833
00:59:03,096 --> 00:59:06,246
built outside the city limits. We would be responsible for that.

834
00:59:06,277 --> 00:59:11,557
They clarified it was just going to be station number two, so that was a narrowing,

835
00:59:11,677 --> 00:59:12,516
which was helpful.

836
00:59:13,866 --> 00:59:19,476
But the in perpetuity of the water, that was all very similar to one of the

837
00:59:19,536 --> 00:59:19,896
prior.

838
00:59:20,136 --> 00:59:25,896
I do have the 5-28-26. Kimber's so great with her notes.

839
00:59:26,406 --> 00:59:30,337
I'm going to, Kimber, read your notes that I still have in my files.

840
00:59:30,726 --> 00:59:33,906
It says, "Mayor Mike and I had a meeting with Russell Gallagher, manager of the

841
00:59:33,966 --> 00:59:37,236
local government and transfer teams for the state Comptroller.

842
00:59:37,656 --> 00:59:42,096
Senate Bill 2965 pretty well gives them what they want.

843
00:59:42,516 --> 00:59:46,116
One and a half years ago, it would've been easier to negotiate an agreement for

844
00:59:46,177 --> 00:59:50,646
sales tax, but then the city would be responsible for using the sales tax to fire

845
00:59:50,706 --> 00:59:53,166
protection. However, the law has changed again.

846
00:59:53,587 --> 00:59:57,606
We are allowed to negotiate based on a strategic partnership agreement regarding

847
00:59:57,696 --> 01:00:02,496
sales tax revenue sharing of annexed areas." And then it goes on and says, "The

848
01:00:02,616 --> 01:00:06,666
annexed parcels would be identified as separate entity and sales tax would be split

849
01:00:06,726 --> 01:00:10,087
between the ESD and the city at the state level.

850
01:00:10,416 --> 01:00:14,256
And we at the city level then split with economic development.

851
01:00:14,466 --> 01:00:18,366
It would still all come to the city just like it does now." But that's a little

852
01:00:18,396 --> 01:00:21,547
misleading because that money would not...

853
01:00:21,816 --> 01:00:24,666
And the big deal is our money pays for our law enforcement.

854
01:00:24,996 --> 01:00:30,456
It's public safety at its very best, and we've got top-notch people here right now,

855
01:00:30,547 --> 01:00:35,166
and we don't want to lose the staff that Chief has hired, and we want them to have

856
01:00:35,196 --> 01:00:41,016
the vehicles they need. And to be in competition for who gets the most calls,

857
01:00:41,376 --> 01:00:46,266
how many are on our staff tonight? Captain Hudson, how many do you have people

858
01:00:46,297 --> 01:00:46,986
working tonight?

859
01:00:47,256 --> 01:00:48,366
We have three tonight.

860
01:00:48,427 --> 01:00:50,797
Three. Do you know how many are at the fire station?

861
01:00:51,366 --> 01:00:54,337
If they're all there, they're seven. Seven on and seven off.

862
01:00:54,726 --> 01:00:59,496
And you have three, and you look at that call volume you give us, holy smokes.

863
01:01:01,356 --> 01:01:04,896
Yeah, there's no napping at your place, and no cooking no barbecue, I know that.

864
01:01:05,646 --> 01:01:09,516
And that's the things we have got to understand for our taxpayers.

865
01:01:10,566 --> 01:01:14,736
It's really, really a big deal. And how we fix it, I don't know.

866
01:01:15,156 --> 01:01:18,307
But I support law enforcement. We got drug trafficking.

867
01:01:18,337 --> 01:01:24,186
We got crazy stuff going on in town, and our force is working so hard, and our

868
01:01:24,246 --> 01:01:26,677
people need to know where their money's going.

869
01:01:27,756 --> 01:01:32,315
And if we're paying for this bulk water and all of these ancillary utilities to

870
01:01:32,405 --> 01:01:36,666
serve, what? How far out? I'm not good at mileage.

871
01:01:37,057 --> 01:01:40,236
30 miles out or 40 miles out? How far does that district go?

872
01:01:40,326 --> 01:01:42,216
Good question.

873
01:01:42,277 --> 01:01:46,656
And those new subdivisions that are coming in on 1094, they're going to be part of

874
01:01:46,716 --> 01:01:49,536
this. And who do you think's going to end up showing up quicker?

875
01:01:49,986 --> 01:01:54,216
Because county probably has two or three on tonight to cover the whole county, and

876
01:01:54,277 --> 01:01:56,976
that's it. So who's quicker? It's going to be our officer.

877
01:01:57,307 --> 01:02:00,156
And I would just add, you bring up law enforcement.

878
01:02:00,216 --> 01:02:04,686
In order to stay competitive and make sure we employ a good police department,

879
01:02:05,016 --> 01:02:09,486
we've had Senate Bill 22, which the legislature also passed, which put more money

880
01:02:09,576 --> 01:02:15,246
into the county's pocket, rural sheriff's departments, to be more competitive,

881
01:02:15,307 --> 01:02:20,047
which means we've had to spend more on law enforcement in order to keep good

882
01:02:20,587 --> 01:02:21,246
resources.

883
01:02:21,456 --> 01:02:24,906
But I don't bet they have more than two or three on to cover the whole area.

884
01:02:25,027 --> 01:02:30,246
They might have a supervisor sitting somewhere available on a serious call.

885
01:02:30,636 --> 01:02:31,236
But

886
01:02:33,696 --> 01:02:36,427
I hate to say it, but I'm all about public safety for both.

887
01:02:36,516 --> 01:02:40,626
But who's got the greater urgent need every day 24/7?

888
01:02:42,756 --> 01:02:45,186
Now, how do we go on with this agenda to move on?

889
01:02:45,427 --> 01:02:49,866
Because the business item, if we're ready to talk about it, is the interlocal

890
01:02:49,956 --> 01:02:54,307
agreement, the utility billing, and the lease with the Austin County Emergency

891
01:02:54,396 --> 01:02:55,716
Service District number 2.

892
01:02:56,166 --> 01:02:59,226
This is the hard part where we all get our head against the wall again.

893
01:02:59,316 --> 01:03:00,606
So what are we going to do?

894
01:03:03,186 --> 01:03:07,626
I will open it up and like I said, again, I think we're really far off from coming

895
01:03:07,656 --> 01:03:08,826
to an agreement, and I think

896
01:03:11,946 --> 01:03:13,807
we are at least responsible for

897
01:03:15,036 --> 01:03:17,166
at least starting to charge utilities.

898
01:03:18,186 --> 01:03:21,307
But we've already made that determination, right? We've already voted on that.

899
01:03:22,087 --> 01:03:25,596
We voted on it once, and then we delayed it because he was going to see how far

900
01:03:25,686 --> 01:03:26,376
back we could go.

901
01:03:26,436 --> 01:03:28,777
Yeah, but we've already decided.

902
01:03:28,807 --> 01:03:30,666
But we need to do that again officially.

903
01:03:30,696 --> 01:03:35,136
For clarification, if you all do want, how far back and what you want me to

904
01:03:37,716 --> 01:03:38,196
ask for

905
01:03:41,706 --> 01:03:42,576
on utility only.

906
01:03:44,256 --> 01:03:50,016
But personally, I think that the main thing is to start charging, to start getting

907
01:03:50,076 --> 01:03:53,976
that utility process going and start charging for the usage.

908
01:03:54,456 --> 01:03:55,807
How many do we start the bulk water?

909
01:03:58,206 --> 01:04:00,966
Maybe we start from when we have the bulk water.

910
01:04:00,966 --> 01:04:02,286
Go back to the meter of the bulk water.

911
01:04:02,316 --> 01:04:06,036
The meter of the bulk water. I think that's a reasonable

912
01:04:08,628 --> 01:04:11,329
I'm going back 15 years that we didn't build them,

913
01:04:13,608 --> 01:04:16,278
which I think you probably could vis-a-vis the contract.

914
01:04:16,579 --> 01:04:16,998
2025.

915
01:04:17,748 --> 01:04:22,699
2025? But the bulk water is where the numbers really, I believe, started popping up

916
01:04:22,788 --> 01:04:24,648
is when we put the meter on the bulk water station.

917
01:04:25,008 --> 01:04:28,608
And so we could certainly send them an invoice for that.

918
01:04:28,788 --> 01:04:30,079
For this fiscal year, so that was-

919
01:04:30,588 --> 01:04:33,228
So I'd say whenever y'all started to do that bulk water meter on.

920
01:04:33,438 --> 01:04:37,368
And it wouldn't be just for water, it'd be for all the utilities that are provided.

921
01:04:37,728 --> 01:04:42,348
And that would be a certain, because that's when you started seeing the uptick in

922
01:04:42,408 --> 01:04:48,258
the costs. And you're not saying, "Oh, hey, we're going, yeah, here."

923
01:04:48,888 --> 01:04:53,179
I think it kind of stays in the line of us being, we're trying to be as reasonable

924
01:04:53,209 --> 01:04:55,667
as possible in negotiating through this.

925
01:04:57,018 --> 01:04:57,739
That's a good point.

926
01:04:58,459 --> 01:05:01,489
Just to confirm, that was all within those utility funds, right?

927
01:05:01,579 --> 01:05:04,068
They can't be used for things like police service.

928
01:05:04,668 --> 01:05:05,268
They're all in the-

929
01:05:05,358 --> 01:05:05,778
That's right

930
01:05:05,838 --> 01:05:06,108
... the water-

931
01:05:06,199 --> 01:05:06,858
That's right.

932
01:05:06,918 --> 01:05:07,278
That's right

933
01:05:07,398 --> 01:05:08,329
... gas funds.

934
01:05:08,388 --> 01:05:09,978
Enterprise funds.

935
01:05:10,098 --> 01:05:11,449
Yeah, enterprise funds. Right.

936
01:05:11,538 --> 01:05:14,209
Where the sales tax dollar really helps us provide the-

937
01:05:14,748 --> 01:05:14,808
Yeah

938
01:05:15,018 --> 01:05:16,638
... the emergency services that we provide.

939
01:05:16,699 --> 01:05:19,368
So I think that's something very important that people need to understand.

940
01:05:19,429 --> 01:05:25,308
And I know at a recent meeting, we were asked by Assistant City Manager Barrow to

941
01:05:25,368 --> 01:05:30,798
provide direction about what projects approach the city, give him some direction,

942
01:05:30,858 --> 01:05:35,058
give the staff some direction on what to entertain so that they don't lead

943
01:05:35,118 --> 01:05:40,878
developers on. And so it may or may not be proper to do any

944
01:05:40,998 --> 01:05:46,158
action tonight, but if we're saying that it limits us, then I think,

945
01:05:46,998 --> 01:05:51,138
in my opinion, I would want staff to prioritize things to happen inside the

946
01:05:51,168 --> 01:05:56,058
existing city limits and to prioritize things that generate high sales tax revenue

947
01:05:56,748 --> 01:06:01,788
instead of things that don't. Because we have a limited land-locked area to grow

948
01:06:01,818 --> 01:06:05,358
within the boundaries that are here and take advantage of that.

949
01:06:05,418 --> 01:06:10,579
So to me, that would be direction to give them, if not tonight, after something was

950
01:06:10,608 --> 01:06:12,949
worked out, so that we could. But...

951
01:06:14,028 --> 01:06:18,498
Mike, we have about three developers that are just sitting there with their arms

952
01:06:18,558 --> 01:06:22,308
crossed, waiting to see if we work out anything with the ESD.

953
01:06:22,758 --> 01:06:28,158
And to get those rooftops gives us nothing but financial burden.

954
01:06:29,298 --> 01:06:34,248
A little property tax, but remember, the legislature has put on a homeowner, the

955
01:06:34,278 --> 01:06:40,188
property tax is constrained, so there's very minimal money in that.

956
01:06:40,248 --> 01:06:41,538
Mathematically, yeah.

957
01:06:41,568 --> 01:06:42,558
Mathematically. It goes back to-

958
01:06:42,618 --> 01:06:44,929
No exit. I mean, I'm sorry. Go ahead.

959
01:06:45,378 --> 01:06:48,228
So I don't know. I don't know what's the right thing to do.

960
01:06:48,318 --> 01:06:49,008
I just know

961
01:06:50,418 --> 01:06:52,608
we have a responsibility to the taxpayers.

962
01:06:52,668 --> 01:06:52,938
We do.

963
01:06:52,968 --> 01:06:58,098
And we have a responsibility to let them know these people meet on the second

964
01:06:58,158 --> 01:07:01,968
Wednesday of every month at the fire station, and if they have concerns, they need

965
01:07:01,998 --> 01:07:03,199
to call these board members.

966
01:07:04,218 --> 01:07:08,088
And I would say the conversations that I had, which with Kimbra and

967
01:07:10,308 --> 01:07:14,388
Charlie Burr and Mike, and then I'm trying to think who else was on that meeting

968
01:07:14,418 --> 01:07:15,018
with us, but-

969
01:07:17,148 --> 01:07:18,288
Was Kenny there?

970
01:07:18,348 --> 01:07:19,218
And Kenny was there.

971
01:07:19,818 --> 01:07:20,388
The chief, yeah.

972
01:07:20,657 --> 01:07:21,018
And so

973
01:07:22,938 --> 01:07:28,818
I don't know how to say this. I think the fire department is focused

974
01:07:28,878 --> 01:07:34,008
more on the rooftops, whereas that's great for the city as well.

975
01:07:34,338 --> 01:07:36,888
But I think the city is more concerned with

976
01:07:39,618 --> 01:07:40,398
big box.

977
01:07:41,778 --> 01:07:42,079
Mm-hmm.

978
01:07:42,108 --> 01:07:44,929
And the potential that provides us.

979
01:07:46,368 --> 01:07:51,348
I assume if you live in Sealy, you probably can't imagine driving to San Antonio to

980
01:07:51,378 --> 01:07:55,338
do your daily shopping. You probably go out to Katy or Houston.

981
01:07:55,368 --> 01:08:00,079
That's the closest area. And it's growing. Brookshire's growing.

982
01:08:00,408 --> 01:08:02,598
People said Brookshire was not going to be a bedroom community.

983
01:08:02,658 --> 01:08:04,248
Well, it's turning into a bedroom community.

984
01:08:04,338 --> 01:08:05,148
It's getting all this

985
01:08:06,348 --> 01:08:11,568
wall of warehousing. It's coming to Sealy, guys. It is coming.

986
01:08:11,688 --> 01:08:17,508
Like it or not, it is coming. And with that follows Target, Lowe's,

987
01:08:18,168 --> 01:08:24,138
HEBs, and all these other things that if those want to be annexed, we are going

988
01:08:24,138 --> 01:08:25,908
to get $0 from that.

989
01:08:27,618 --> 01:08:33,018
And so I think that's really what I'm concerned with most is that loss of revenue.

990
01:08:33,348 --> 01:08:37,128
As we can see, $1 million doesn't, or as we saw, a million dollars doesn't really

991
01:08:37,188 --> 01:08:42,888
generate... $1 million of sales tax or revenue doesn't generate that much in sales

992
01:08:42,949 --> 01:08:46,608
tax, and that's primarily from a residential, just rooftop.

993
01:08:47,029 --> 01:08:52,668
To me, we should be concerned more with the business growth that's coming this way,

994
01:08:53,178 --> 01:08:55,699
and that's what I am most concerned with.

995
01:08:55,758 --> 01:09:00,709
So, and again, I think it's differences in perspective. I'm not a fireman.

996
01:09:00,768 --> 01:09:05,118
I'm not on the ESD. I don't know, and maybe it's not, but in the conversation that

997
01:09:05,178 --> 01:09:09,588
I had with him, it felt like that was the difference of perspective was houses

998
01:09:09,768 --> 01:09:11,539
versus commercial space.

999
01:09:12,918 --> 01:09:17,209
So short term versus long term. I'm thinking long term.

1000
01:09:17,508 --> 01:09:19,758
We can't think short term in these situations.

1001
01:09:19,818 --> 01:09:23,178
We have to think about 10, 15, 20 years down the road.

1002
01:09:23,688 --> 01:09:25,428
If we don't make a good decision today,

1003
01:09:26,989 --> 01:09:31,668
one person's going to be flush with cash in their pockets, with shiny new toys that

1004
01:09:31,699 --> 01:09:35,568
they're running around on the streets of Austin County, and we're going to be left

1005
01:09:35,598 --> 01:09:38,838
holding the bag to be able to support our community, and that's not a good

1006
01:09:38,898 --> 01:09:41,808
situation for the taxpayers of Sealy.

1007
01:09:42,468 --> 01:09:46,279
The blessing I love is our young people are coming back to Sealy.

1008
01:09:46,489 --> 01:09:50,718
The next generation is coming back. Y'all came back. My kids came back.

1009
01:09:50,779 --> 01:09:54,438
Y'all came back. Y'all could've gone anywhere, and we're wanting your children to

1010
01:09:54,498 --> 01:09:57,198
come back when they graduate from college and school.

1011
01:09:57,498 --> 01:10:00,648
And if we don't have a healthy, safe community, you think those kids are going to

1012
01:10:00,709 --> 01:10:04,308
come back to Sealy? They're going to find other places to raise their families

1013
01:10:04,368 --> 01:10:08,328
where the city is sustainable, and we won't be a sustainable city.

1014
01:10:08,388 --> 01:10:13,608
So it's our legacy to leave what we can, and I hope we can do it right.

1015
01:10:14,928 --> 01:10:18,198
I think we should counter. I think we should go back to whether it's

1016
01:10:19,878 --> 01:10:22,459
we get the 60 or we get the 80, or we get the 90.

1017
01:10:22,518 --> 01:10:25,578
I'm like, "Okay, Councilman Miller, speak it up.

1018
01:10:26,058 --> 01:10:27,228
What do you want to counter at?"

1019
01:10:27,799 --> 01:10:29,959
Well, I'll just say real quick before you do,

1020
01:10:31,967 --> 01:10:32,868
at 80/20,

1021
01:10:34,068 --> 01:10:37,638
all the concessions that are being asked for, I'd really be willing to entertain

1022
01:10:37,697 --> 01:10:43,668
some of those. But at a 60/40, 60 to the ESD, 40 to the city, doesn't make

1023
01:10:43,728 --> 01:10:47,928
sense. Just economically, financially, it does not make sense.

1024
01:10:48,168 --> 01:10:52,158
So we have to come to a better term than what's being provided.

1025
01:10:55,368 --> 01:10:58,698
Yeah, and I think a big portion of that, like I mentioned, is the expenses.

1026
01:10:59,118 --> 01:11:04,398
And so we look at all the expenses the city has, not only just Sealy, but any city

1027
01:11:04,459 --> 01:11:08,748
in general, compared to what a fire department has.

1028
01:11:09,288 --> 01:11:13,248
And based on every different type of development, it doesn't really matter what it

1029
01:11:13,338 --> 01:11:19,248
is, the city has majority of the expenses, and whatever that number is, in

1030
01:11:19,278 --> 01:11:22,308
my calculations, it's about 90% of the expenses.

1031
01:11:22,368 --> 01:11:28,008
And so if we're getting less than 90%, then we are taking a hit that our

1032
01:11:28,098 --> 01:11:31,248
taxpayers are going to have to pay for out of their own.

1033
01:11:31,308 --> 01:11:36,888
So I think it sounds like we're probably willing to do that, but again, that's a

1034
01:11:36,978 --> 01:11:41,808
clear, "Hey, let's everyone cover your expenses," which mathematically and

1035
01:11:43,098 --> 01:11:47,928
as a whole should matter for... It's what everybody should want.

1036
01:11:47,988 --> 01:11:50,118
No one's trying to pad their pockets here. We can't.

1037
01:11:51,228 --> 01:11:52,608
The city or the fire department. So,

1038
01:11:54,348 --> 01:11:54,528
yeah.

1039
01:11:55,128 --> 01:12:01,098
That 90/10 split, I'm just curious, did that factor in what the city would

1040
01:12:01,158 --> 01:12:02,358
get from property tax-

1041
01:12:02,628 --> 01:12:02,898
Yes

1042
01:12:02,928 --> 01:12:04,848
... from those communities as well?

1043
01:12:04,938 --> 01:12:05,209
Yes.

1044
01:12:07,248 --> 01:12:13,188
So to your point and Councilman Miller's point, for the public, just a reminder,

1045
01:12:13,398 --> 01:12:18,228
if this had not been put in place, if this vote had not happened, when we annexed,

1046
01:12:18,288 --> 01:12:21,049
we would've gotten 100% of the sales tax.

1047
01:12:21,438 --> 01:12:22,818
The county also would've taken their-

1048
01:12:23,658 --> 01:12:26,238
Right, but we would've gotten 100% of what we normally get-

1049
01:12:27,049 --> 01:12:27,198
I see

1050
01:12:27,288 --> 01:12:29,148
... for the rest of the territory, yes.

1051
01:12:29,209 --> 01:12:29,568
And so,

1052
01:12:31,218 --> 01:12:36,738
I agree that we have to focus on things that are more tax generating because we are

1053
01:12:36,858 --> 01:12:42,438
land-locked in this scenario, and the residential growth can come on the

1054
01:12:42,528 --> 01:12:47,959
outside of the city limits anyway because that's ideal in my mind, because then

1055
01:12:48,018 --> 01:12:50,088
you're not paying city tax and a MUD.

1056
01:12:50,598 --> 01:12:55,788
It's actually a good idea that within the city, we try to have the industrial and

1057
01:12:55,818 --> 01:13:01,068
the commercial or whatever, the sales tax, the big box, and outside, good for the

1058
01:13:01,338 --> 01:13:06,648
homeowners to not pay double tax and to not be in the city limits.

1059
01:13:06,858 --> 01:13:12,709
So it's win-win to me if we prioritize things like you were talking about.

1060
01:13:18,384 --> 01:13:21,384
I mean, I don't know what the answer is, but it's not going to be very easy for us

1061
01:13:21,444 --> 01:13:24,924
to try to negotiate when we can't even get the other party in the same room.

1062
01:13:27,474 --> 01:13:29,814
And come back with a counteroffer or something.

1063
01:13:30,264 --> 01:13:32,574
Well, I had a thought. I'll just put it out there.

1064
01:13:33,564 --> 01:13:37,704
We talked about billing from the bulk water date, which I think is very reasonable.

1065
01:13:38,334 --> 01:13:38,454
And

1066
01:13:41,154 --> 01:13:42,894
then you just take a break

1067
01:13:44,245 --> 01:13:47,094
from them, and we see where you are in a year.

1068
01:13:49,314 --> 01:13:50,184
I don't know.

1069
01:13:50,964 --> 01:13:51,774
Which been since last November.

1070
01:13:51,804 --> 01:13:54,504
I think we go back and offer them something because...

1071
01:13:54,564 --> 01:13:55,404
And they might--

1072
01:13:56,694 --> 01:14:00,294
Maybe somebody's going to watch this video, and maybe someone will go talk to some

1073
01:14:00,354 --> 01:14:02,964
of these people. That's all we can help but pray for.

1074
01:14:02,995 --> 01:14:06,144
And we post it on our website and everywhere as we can post it.

1075
01:14:07,073 --> 01:14:09,594
That's all we can hope for, is that we educate the public.

1076
01:14:09,654 --> 01:14:11,574
No one's here from the media, from the newspaper.

1077
01:14:11,874 --> 01:14:16,194
We can do a press release together, and hopefully, all of us get together and try

1078
01:14:16,224 --> 01:14:19,854
to put something together. The public deserves to understand.

1079
01:14:20,214 --> 01:14:24,054
We have Austin County EMS, which is another taxing district separated.

1080
01:14:24,114 --> 01:14:25,434
Councilman Decker brought that up.

1081
01:14:25,764 --> 01:14:29,814
And then we have fire, which is another taxing district, and then we have-- And we

1082
01:14:29,904 --> 01:14:34,644
charge the school district, and we charge the county for water and sewer and all

1083
01:14:34,704 --> 01:14:39,414
their services. They don't get anything free. So what makes this group special?

1084
01:14:39,444 --> 01:14:40,944
And tax audit, right, Mike? Yeah.

1085
01:14:40,944 --> 01:14:45,804
But that's because they were volunteers for so long, and everybody had their heart

1086
01:14:45,834 --> 01:14:49,554
on their sleeve, and they wanted-- It's a volunteer, and we wanted our volunteers

1087
01:14:49,584 --> 01:14:53,844
to be appreciated and wanted, and there's no volunteers anymore.

1088
01:14:53,904 --> 01:14:55,914
I think they have one volunteer on that staff.

1089
01:14:56,724 --> 01:15:02,424
Yeah. To Councilman Burch's point, we do collect more property tax, but

1090
01:15:02,814 --> 01:15:03,834
even at a,

1091
01:15:05,785 --> 01:15:11,484
my calculation, 2,000 homes residents, even supplying the ESD with a new fire

1092
01:15:11,544 --> 01:15:17,184
station, new engine company trucks, new additional firefighters to meet the need of

1093
01:15:17,245 --> 01:15:18,444
that many people,

1094
01:15:20,514 --> 01:15:25,285
their percentage of the cost is 13%. Ours is 87%.

1095
01:15:25,884 --> 01:15:29,694
Do you hear that? 13% versus 87%.

1096
01:15:32,214 --> 01:15:34,884
Are we able to take multiple motions on this agenda item?

1097
01:15:35,814 --> 01:15:35,964
Like-

1098
01:15:36,144 --> 01:15:37,764
Like taking the bullet points of the letter?

1099
01:15:37,854 --> 01:15:38,664
Well, I just mean,

1100
01:15:41,214 --> 01:15:45,864
it sounds like there's consensus that we want to at least start charging for bulk

1101
01:15:45,894 --> 01:15:47,995
water and maybe back charge. So maybe that's one motion.

1102
01:15:47,995 --> 01:15:49,134
So let's start with that.

1103
01:15:49,164 --> 01:15:50,844
And then we can start talking about-

1104
01:15:50,904 --> 01:15:54,294
Sure. That would be easy. That would be a nice way to do it, and then we're clear.

1105
01:15:56,995 --> 01:16:01,884
And then just so I'm clear, are we wanting to back charge to that date for all

1106
01:16:01,974 --> 01:16:04,224
utilities, or are we just looking at bulk water?

1107
01:16:04,554 --> 01:16:07,824
I think that might be reasonable for all utilities.

1108
01:16:07,854 --> 01:16:08,004
Yeah. Mm-hmm.

1109
01:16:08,004 --> 01:16:12,474
Because what was the date of the bulk water? It was 2025. We have that date.

1110
01:16:12,924 --> 01:16:16,344
Yes. I don't have the exact month, but I know it started in 2025.

1111
01:16:17,094 --> 01:16:20,874
The ground lease said that they would pay for all the utilities as part of that

1112
01:16:20,904 --> 01:16:21,504
deal, right?

1113
01:16:21,654 --> 01:16:22,014
Correct.

1114
01:16:22,374 --> 01:16:27,114
So I'll go ahead and remake my motion that I made at the meeting prior- ...

1115
01:16:27,144 --> 01:16:33,113
to go ahead and charge for a back bill to the bulk meter date per the terms

1116
01:16:33,174 --> 01:16:36,024
of our contract with the ESD.

1117
01:16:36,535 --> 01:16:37,164
I second.

1118
01:16:38,094 --> 01:16:41,304
We have a motion and a second. All those in favor, please say aye.

1119
01:16:41,364 --> 01:16:41,634
Aye.

1120
01:16:41,814 --> 01:16:42,444
Aye.

1121
01:16:42,504 --> 01:16:44,694
Any opposed? Motion carries.

1122
01:16:45,535 --> 01:16:50,184
And does that also-- So I know we did after back charging, but does that also then

1123
01:16:50,274 --> 01:16:53,694
start charging for all utilities as of today?

1124
01:16:53,814 --> 01:16:54,774
Yes. And we'll start that, yes.

1125
01:16:55,104 --> 01:16:56,874
Okay. I don't think we need a motion for that.

1126
01:16:57,084 --> 01:16:57,444
That's-

1127
01:16:57,745 --> 01:16:58,164
I think that is-

1128
01:16:58,164 --> 01:16:58,404
... obviously-

1129
01:16:58,434 --> 01:16:59,064
Per the contract.

1130
01:16:59,124 --> 01:16:59,874
Yeah. Per the terms.

1131
01:16:59,934 --> 01:17:00,954
That was a good point, yes.

1132
01:17:01,014 --> 01:17:01,344
Thank you.

1133
01:17:01,374 --> 01:17:01,734
Terms of the contract. Good point.

1134
01:17:01,734 --> 01:17:03,864
So we're forfeiting X amount of dollars.

1135
01:17:03,954 --> 01:17:04,134
Right.

1136
01:17:04,794 --> 01:17:06,414
I wouldn't say we're forfeiting.

1137
01:17:08,424 --> 01:17:12,444
We have a contract with them. There may be a way at some point if we need to

1138
01:17:12,924 --> 01:17:13,974
legally look back.

1139
01:17:14,574 --> 01:17:15,324
And we have a lease.

1140
01:17:15,564 --> 01:17:16,224
And we have a lease.

1141
01:17:16,434 --> 01:17:17,184
That's our property.

1142
01:17:17,724 --> 01:17:19,495
But for now, we're going to go ahead and start with that.

1143
01:17:19,764 --> 01:17:20,094
Okay.

1144
01:17:22,074 --> 01:17:23,394
Anything else on this?

1145
01:17:23,454 --> 01:17:24,384
Now onto the,

1146
01:17:25,794 --> 01:17:27,504
want to entertain renegotiating or-

1147
01:17:27,894 --> 01:17:28,164
Right.

1148
01:17:33,564 --> 01:17:38,304
I think since we started the process of back billing, I think we just need to just

1149
01:17:38,394 --> 01:17:42,804
sit down and be still for a minute and see what happens before we take some

1150
01:17:42,894 --> 01:17:43,854
additional steps.

1151
01:17:44,844 --> 01:17:46,764
Yeah. That's kind of been my thought, too.

1152
01:17:46,824 --> 01:17:47,334
Yeah.

1153
01:17:48,324 --> 01:17:53,064
Like Councilman Miller said, the biggest concern to me is in the future for

1154
01:17:54,144 --> 01:17:59,184
high-impact retail, box stores, things like that, that would really contribute to

1155
01:17:59,214 --> 01:18:02,454
the sales tax revenue of the city. We don't currently have that

1156
01:18:03,745 --> 01:18:06,174
staring at us in the face right at this moment.

1157
01:18:07,464 --> 01:18:13,434
So I don't want to waste staff's time going back and forth and negotiating when

1158
01:18:13,524 --> 01:18:15,414
we know what's going to probably happen.

1159
01:18:16,044 --> 01:18:16,314
So

1160
01:18:17,694 --> 01:18:23,245
in my point of view, we'll start the billing procedures as per the contract,

1161
01:18:23,904 --> 01:18:28,914
and we'll just kind of play it day by day, and if something pops up, some

1162
01:18:29,064 --> 01:18:34,404
development pops up, then we can take a new look at it, whether or not we want to

1163
01:18:36,594 --> 01:18:42,474
annex that project or, and at that point in time, the consideration

1164
01:18:42,535 --> 01:18:46,434
to the ESD. Maybe that will open up negotiations

1165
01:18:47,814 --> 01:18:52,854
at that time. So I think that's probably, in my mind, that's the best idea, is to

1166
01:18:53,364 --> 01:18:59,064
just go ahead and start what we already voted on, start charging the

1167
01:18:59,304 --> 01:19:02,484
utilities, and we just have to take a breath.

1168
01:19:03,714 --> 01:19:08,964
And I think tonight was good. Staff did a great job of presenting all the

1169
01:19:08,995 --> 01:19:09,594
information.

1170
01:19:10,974 --> 01:19:16,614
So that's all out there now. And we're still open. We're still amenable.

1171
01:19:16,674 --> 01:19:21,174
We want to do what's best for the city, what's best for the citizens, what's best

1172
01:19:21,474 --> 01:19:23,964
for the ESD, too. We don't

1173
01:19:26,484 --> 01:19:29,514
want to hurt their side at all either.

1174
01:19:30,474 --> 01:19:36,384
We just want the best for the city going forward, and I think if we

1175
01:19:36,444 --> 01:19:38,874
just take a breath, we can still accomplish that.

1176
01:19:40,014 --> 01:19:45,263
The state legislation is potentially looking at, I know they've mentioned

1177
01:19:45,324 --> 01:19:49,164
something, one of the representatives mentioned something to me that maybe some of

1178
01:19:49,194 --> 01:19:52,764
these laws may change, and this may all be a moot point in next year or so.

1179
01:19:53,184 --> 01:19:54,474
Tim, you have said that-

1180
01:19:55,044 --> 01:19:56,364
Oh, does Peter want to say something?

1181
01:19:56,904 --> 01:20:01,704
You have said that your other cities have had success testifying at the

1182
01:20:01,764 --> 01:20:02,574
legislature.

1183
01:20:03,504 --> 01:20:06,234
Right. On pending bills. Bills that were pending.

1184
01:20:06,984 --> 01:20:07,824
Oh, on pending bills.

1185
01:20:07,854 --> 01:20:12,594
Yeah. So if the legislature has something about an ADU or lot size, I've had

1186
01:20:13,014 --> 01:20:18,924
representatives, so council members go and speak on behalf or against those bills.

1187
01:20:19,044 --> 01:20:22,614
I don't want to put you on the spot, but is there something pending related to this

1188
01:20:22,764 --> 01:20:27,774
where the city can share our viewpoints, someone from the city or the council, I

1189
01:20:27,834 --> 01:20:28,644
don't know how it works,

1190
01:20:29,934 --> 01:20:35,814
who they sent, but can go out there and share our experience for just

1191
01:20:35,874 --> 01:20:40,644
to let them know so that they can explore possible solutions, if not this time

1192
01:20:40,674 --> 01:20:40,854
around?

1193
01:20:40,854 --> 01:20:42,984
We can certainly talk to your legislators.

1194
01:20:43,854 --> 01:20:48,144
To my knowledge, Senator's been really good about a bunch of us GML pre-file bills.

1195
01:20:48,474 --> 01:20:52,824
I have not seen anything on ESDs, but I have, and I think there's others in here

1196
01:20:52,884 --> 01:20:54,234
that have talked to our senator.

1197
01:20:54,294 --> 01:20:58,974
The senator is very concerned about the agreements, not only obviously for us in

1198
01:20:59,124 --> 01:21:02,064
her district, but all across the state, because the other senators are looking at

1199
01:21:02,124 --> 01:21:05,274
this as well, and it's a major issue. And so she is very concerned.

1200
01:21:05,304 --> 01:21:06,564
She's told me directly that, so

1201
01:21:07,974 --> 01:21:08,844
I don't think it's over.

1202
01:21:10,194 --> 01:21:14,064
Would we want at this time, I think we've heard several people say this, I don't

1203
01:21:14,424 --> 01:21:17,394
hear any disagreement, but staff has asked for direction.

1204
01:21:17,934 --> 01:21:22,044
So I don't know, maybe I'll make a motion, and I'm not sure how it needs to be

1205
01:21:22,134 --> 01:21:27,894
structured. We can modify it if you don't like it, but a motion to direct the staff

1206
01:21:27,984 --> 01:21:29,544
to prioritize

1207
01:21:31,524 --> 01:21:36,535
big box retail, sales tax generating, commercial type development

1208
01:21:37,884 --> 01:21:40,285
for the existing city limits area.

1209
01:21:43,974 --> 01:21:44,634
That was a motion.

1210
01:21:45,294 --> 01:21:46,884
That's your motion. Do we have a second?

1211
01:21:47,214 --> 01:21:48,294
Mm-hmm.

1212
01:21:48,354 --> 01:21:51,024
I mean, and that could be as simple as a 380 agreement.

1213
01:21:51,054 --> 01:21:53,214
It could be as simple as a tax abatement agreement that-

1214
01:21:53,514 --> 01:21:53,785
Yeah

1215
01:21:53,785 --> 01:21:56,064
... they'd have to obviously bring everything, all of those back to the council.

1216
01:21:56,124 --> 01:22:00,444
I'm just saying staff has asked for direction on what do they tell developers when

1217
01:22:00,444 --> 01:22:04,854
they come to the door? Should we be bothering spending our time pursuing CELE or

1218
01:22:04,884 --> 01:22:09,624
not? And so if we let our interest be known, it's not shutting anything down.

1219
01:22:09,684 --> 01:22:10,074
It's just-

1220
01:22:11,064 --> 01:22:13,884
Well, we have developers that are waiting on kind of this agreement, too, right?

1221
01:22:13,884 --> 01:22:13,884
Right.

1222
01:22:13,944 --> 01:22:14,844
So we need to figure out-

1223
01:22:14,964 --> 01:22:16,734
Yeah. He's got two or three he's got to call-

1224
01:22:16,974 --> 01:22:18,054
We need to figure out-

1225
01:22:18,084 --> 01:22:20,934
... to say, "They didn't work with us." I mean

1226
01:22:23,634 --> 01:22:25,734
Would you please repeat that question?

1227
01:22:26,574 --> 01:22:30,924
We have two or three developments that are currently in discussions, right?

1228
01:22:31,014 --> 01:22:31,044
Yes.

1229
01:22:31,074 --> 01:22:31,674
And so,

1230
01:22:33,054 --> 01:22:35,785
they were waiting on this agreement and the outcome of it, right?

1231
01:22:35,813 --> 01:22:36,024
Right.

1232
01:22:36,054 --> 01:22:37,495
And so we've got to figure out what

1233
01:22:39,864 --> 01:22:41,694
is the feedback we give them at this point.

1234
01:22:41,785 --> 01:22:43,194
Yes, that's what Mike needs.

1235
01:22:44,604 --> 01:22:47,694
And we just had a motion that was basically saying...

1236
01:22:48,864 --> 01:22:50,124
Can you repeat what you just said?

1237
01:22:50,634 --> 01:22:51,354
That's right.

1238
01:22:51,654 --> 01:22:53,454
It was commercial and not residential.

1239
01:22:53,604 --> 01:22:59,004
Off the top of my head, it was commercial, not residential, high revenue,

1240
01:22:59,245 --> 01:23:01,285
retail sales tax generating.

1241
01:23:02,754 --> 01:23:02,934
Right.

1242
01:23:02,995 --> 01:23:06,324
I know Sandra's like, "What is all of that for the log?" But...

1243
01:23:07,764 --> 01:23:11,334
We don't have a second on that either, and I think someone's asking if we need it.

1244
01:23:11,454 --> 01:23:11,544
So-

1245
01:23:11,904 --> 01:23:14,484
Do we need that, or is direction just guidance?

1246
01:23:14,544 --> 01:23:14,754
Yeah.

1247
01:23:14,785 --> 01:23:15,714
Do we need a motion?

1248
01:23:15,984 --> 01:23:17,724
I mean, I'm not that disagree with what you said.

1249
01:23:17,754 --> 01:23:20,274
I feel like that's more a priority.

1250
01:23:21,294 --> 01:23:22,434
Kind of a policy mind.

1251
01:23:22,584 --> 01:23:27,804
Yeah. And I agree. I think that until we have an agreement, we should prioritize,

1252
01:23:27,834 --> 01:23:32,814
and maybe even planning-wise, maybe even come up with new ways to develop

1253
01:23:32,874 --> 01:23:38,514
those high impact commercial or retail inside the city

1254
01:23:38,544 --> 01:23:42,894
limits. But I don't know as a specific motion.

1255
01:23:42,984 --> 01:23:43,074
Yeah.

1256
01:23:43,285 --> 01:23:43,524
I'm just-

1257
01:23:43,554 --> 01:23:45,234
Let rooftops come first, though, right?

1258
01:23:45,324 --> 01:23:48,924
So that's kind of a chicken before the egg as well, right?

1259
01:23:49,014 --> 01:23:54,234
So if we delay more rooftops, we're delaying potentially more big box stores, which

1260
01:23:54,324 --> 01:23:57,535
then we're delaying the growth of city, which is what we talked about.

1261
01:23:57,624 --> 01:24:00,654
I feel like we're going in circles now, because if we're saying that rooftops

1262
01:24:01,344 --> 01:24:06,594
without the sales tax is financially not feasible, then-

1263
01:24:07,704 --> 01:24:09,924
That's where we go to if this city is as a-

1264
01:24:10,224 --> 01:24:11,964
But I think those rooftops in the

1265
01:24:14,035 --> 01:24:17,334
new one on 1094, that's going to be a gazillion houses.

1266
01:24:17,694 --> 01:24:22,734
I think the rooftops just out of the city limits will still shop and eat and town.

1267
01:24:22,794 --> 01:24:25,164
It's still coming this way. If we can put the-

1268
01:24:26,094 --> 01:24:28,404
If we generate enough of those-

1269
01:24:28,495 --> 01:24:28,644
Yes

1270
01:24:29,214 --> 01:24:32,064
... that traffic, we will get those big box.

1271
01:24:32,094 --> 01:24:34,404
We'll get the HEB and a few other things.

1272
01:24:34,464 --> 01:24:40,314
I guess, in terms of direction, do we need to do something with the motion?

1273
01:24:41,124 --> 01:24:42,894
Well, I want to make a comment on it before-

1274
01:24:43,104 --> 01:24:44,394
We haven't been second yet, so we can still-

1275
01:24:45,114 --> 01:24:49,944
Yeah, I want to make a comment on that, which is my thought is this is direction so

1276
01:24:50,004 --> 01:24:55,134
that the staff has it, and so that the EDC can say, "Council has

1277
01:24:56,304 --> 01:25:00,204
said this is the way they want to go." So I wouldn't have to have it, but I think

1278
01:25:00,444 --> 01:25:00,745
it's just direction.

1279
01:25:00,745 --> 01:25:04,104
That's exactly what we need, because Mike is dealing with three developments, we've

1280
01:25:04,104 --> 01:25:08,604
been dealing with for almost a year, that we have been putting off, bringing back

1281
01:25:08,664 --> 01:25:13,824
to council, telling them that we're pending negotiations for an ILA with the ESD,

1282
01:25:13,914 --> 01:25:16,254
Interlocal Agreement with the ESD.

1283
01:25:16,914 --> 01:25:22,824
So I think what you need is a definite yes or no directive from the council as

1284
01:25:22,884 --> 01:25:25,134
to whether or not to move forward with those-

1285
01:25:25,464 --> 01:25:26,694
Are those coming from the-

1286
01:25:26,694 --> 01:25:27,474
... annexations

1287
01:25:27,504 --> 01:25:31,824
And these are developments that want to be annexed. They're not in the city limits.

1288
01:25:32,124 --> 01:25:33,234
I said some residential.

1289
01:25:33,234 --> 01:25:33,564
And that's the catch.

1290
01:25:33,684 --> 01:25:35,154
They're all being annexed.

1291
01:25:35,214 --> 01:25:40,134
We've already installed our water meters and all our stuff, and for no financial

1292
01:25:40,193 --> 01:25:40,464
gain.

1293
01:25:40,824 --> 01:25:44,844
Well, Emma, I'm trying to picture, I know you want direction.

1294
01:25:44,904 --> 01:25:48,714
This is really just more about an ESD issue, not a complete and utter development

1295
01:25:48,745 --> 01:25:48,894
issue.

1296
01:25:48,954 --> 01:25:52,794
Well, and I hesitated to bring it up as a motion-

1297
01:25:52,884 --> 01:25:53,785
They need direction

1298
01:25:53,785 --> 01:25:56,964
... but I thought under what other meaning topic would it fall?

1299
01:25:57,024 --> 01:25:58,434
Like, you know what I'm saying?

1300
01:25:58,704 --> 01:25:59,724
It's a result-

1301
01:25:59,754 --> 01:26:03,414
It's directly tied to this, yeah. If we can meet tonight and-

1302
01:26:03,474 --> 01:26:07,824
It is, and I agree. That's why I want to give you all enough leeway, but I don't

1303
01:26:07,884 --> 01:26:10,194
also want it to turn into a whole development workshop.

1304
01:26:10,374 --> 01:26:10,764
Right.

1305
01:26:10,854 --> 01:26:12,384
Yeah. We're not... I mean,

1306
01:26:14,754 --> 01:26:19,495
typically when I make a decision on developments or potential developments, I like

1307
01:26:19,554 --> 01:26:20,694
to look at each one individually.

1308
01:26:20,724 --> 01:26:21,624
Individually.

1309
01:26:22,044 --> 01:26:24,174
So it's pretty difficult to make a-

1310
01:26:24,594 --> 01:26:29,184
So I think there's a difference between what I was proposing and maybe what we're

1311
01:26:29,245 --> 01:26:35,064
talking about, which was I'm saying, as a general matter, give staff

1312
01:26:35,124 --> 01:26:38,424
direction to prioritize the things that I listed earlier.

1313
01:26:38,574 --> 01:26:39,174
Okay.

1314
01:26:39,234 --> 01:26:44,514
Not to say we can't have the other stuff, but that if someone comes knocking at the

1315
01:26:44,574 --> 01:26:46,614
door and says, "Hey, we're looking to do a development.

1316
01:26:46,704 --> 01:26:50,334
Is your council going to play with us, or are they really not interested?"

1317
01:26:51,894 --> 01:26:55,734
They voted to prioritize because we had this issue with the ESD, and so we're

1318
01:26:55,794 --> 01:26:59,814
trying to put the right stuff within the existing stadiums, because once that space

1319
01:26:59,904 --> 01:27:00,894
runs out, it's gone.

1320
01:27:02,634 --> 01:27:02,754
So

1321
01:27:05,184 --> 01:27:05,364
should

1322
01:27:06,594 --> 01:27:11,454
we request an agenda item at our next meeting to give direction on development?

1323
01:27:11,574 --> 01:27:12,144
I feel like that would be-

1324
01:27:12,414 --> 01:27:16,554
But your illustrious city manager just asked me, and that might be a little bit

1325
01:27:16,584 --> 01:27:20,124
better, have a little more robust conversation and a little more-

1326
01:27:20,604 --> 01:27:23,274
During my comments, I'll actually request that, if that's okay.

1327
01:27:23,334 --> 01:27:28,044
Sure. So Edward, do you want to rescind your motion?

1328
01:27:28,194 --> 01:27:30,444
Sure, if I need to. There wasn't a second, but I mean-

1329
01:27:30,535 --> 01:27:30,714
Okay.

1330
01:27:31,224 --> 01:27:32,245
That's where I was. Yeah.

1331
01:27:33,264 --> 01:27:34,464
Okay. Not because we had no second.

1332
01:27:34,554 --> 01:27:35,424
I do have a question.

1333
01:27:35,574 --> 01:27:35,995
Yes, sir.

1334
01:27:36,054 --> 01:27:39,535
Do we need to make a motion to officially reject this Interlocal?

1335
01:27:40,524 --> 01:27:44,724
I don't know if you... That's up to the council. I don't think you need...

1336
01:27:45,144 --> 01:27:47,544
I think a no response is a response.

1337
01:27:48,324 --> 01:27:50,364
I think they're going to watch this, and they're going to know that you're

1338
01:27:50,544 --> 01:27:52,764
certainly open to continue to dialogue with them.

1339
01:27:52,824 --> 01:27:55,794
But at this time, you're not accepting this.

1340
01:27:55,914 --> 01:27:56,514
I don't know if you have to

1341
01:27:58,285 --> 01:28:01,285
necessarily reject it. We're going to send the utility bill out, and then we're

1342
01:28:01,314 --> 01:28:01,704
going to tell them.

1343
01:28:01,704 --> 01:28:03,894
Well, since it was lawyer to lawyer kind of way-

1344
01:28:03,894 --> 01:28:04,194
I'm saying like-

1345
01:28:04,194 --> 01:28:07,314
... handled, that's up to you. I think you should call the attorney.

1346
01:28:07,344 --> 01:28:10,614
We should instruct you to call the attorney and tell him what's going on.

1347
01:28:10,974 --> 01:28:11,274
I don't understand.

1348
01:28:11,274 --> 01:28:14,484
Send her a letter. I know. Another letter.

1349
01:28:15,745 --> 01:28:19,164
Do we want to make a motion for the press release?

1350
01:28:19,464 --> 01:28:19,674
Mayor-

1351
01:28:19,704 --> 01:28:19,854
Yes

1352
01:28:19,854 --> 01:28:21,474
... and the city manager can do that as well-

1353
01:28:21,684 --> 01:28:21,684
Yes

1354
01:28:21,684 --> 01:28:22,164
... under their purview.

1355
01:28:22,194 --> 01:28:22,824
Yes, thank you.

1356
01:28:22,884 --> 01:28:25,944
Unless you want to have a formal motion. You have the authority.

1357
01:28:26,004 --> 01:28:28,074
You and the city manager, you have that right here.

1358
01:28:28,164 --> 01:28:29,004
Let's go that way.

1359
01:28:29,094 --> 01:28:30,924
Unless you want it to be on the record to do a press release.

1360
01:28:31,014 --> 01:28:32,634
I think it'd be good for it to be on the record.

1361
01:28:32,694 --> 01:28:35,484
That way everybody, they're going to say, "Why'd they say that?"

1362
01:28:37,614 --> 01:28:40,374
Get up and tell these, "Oh no, leave me out of that one."

1363
01:28:41,035 --> 01:28:46,584
I'll make a motion that the mayor works with city staff to publish a press

1364
01:28:46,674 --> 01:28:51,114
release regarding all the details with the ESD.

1365
01:28:52,194 --> 01:28:52,464
Heard.

1366
01:28:52,764 --> 01:28:58,224
I second. Motion and a second. Further discussions? I'll call for the vote.

1367
01:28:58,285 --> 01:28:59,934
All those in favor, please say aye.

1368
01:29:00,204 --> 01:29:00,414
Aye.

1369
01:29:00,774 --> 01:29:04,464
Any opposed? Motion carries. Thank you very much.

1370
01:29:04,524 --> 01:29:06,745
I'm going to make a motion that we adjourn.

1371
01:29:07,554 --> 01:29:10,285
Hold on. Don't we want to do the reports and announcements?

1372
01:29:10,374 --> 01:29:11,154
Oh, did I miss those?

1373
01:29:11,184 --> 01:29:12,204
Let's do number two.

1374
01:29:12,264 --> 01:29:12,264
Okay.

1375
01:29:12,294 --> 01:29:14,334
Reports and announcements. Councilman Bergus.

1376
01:29:14,424 --> 01:29:14,874
Oh, okay.

1377
01:29:15,444 --> 01:29:15,654
Seth.

1378
01:29:16,044 --> 01:29:16,584
That's fine.

1379
01:29:16,644 --> 01:29:16,974
Curry.

1380
01:29:18,024 --> 01:29:22,254
I'd like to request a future agenda item to talk about direction for staff of

1381
01:29:22,404 --> 01:29:26,664
development within the community, which would include not only within our city

1382
01:29:26,724 --> 01:29:32,544
limits but also potentially if we were able to entice a box store,

1383
01:29:32,694 --> 01:29:36,324
right, into the ETJ to continue conversations around

1384
01:29:38,454 --> 01:29:39,294
Interlocal Agreement.

1385
01:29:39,624 --> 01:29:42,384
That's great.

1386
01:29:42,474 --> 01:29:43,104
Thank you.

1387
01:29:43,164 --> 01:29:44,964
I didn't see that coming.

1388
01:29:45,024 --> 01:29:45,384
I think Seth-

1389
01:29:45,624 --> 01:29:46,764
I don't know.

1390
01:29:46,854 --> 01:29:50,094
Okay. We'll handle that motion. Somebody started to make a motion to adjourn.

1391
01:29:50,394 --> 01:29:50,785
I did.

1392
01:29:50,874 --> 01:29:51,234
Edwards.

1393
01:29:51,294 --> 01:29:51,774
Second.

1394
01:29:51,864 --> 01:29:53,514
Okay. All those in favor, please say aye.

1395
01:29:53,634 --> 01:29:53,934
Aye.

1396
01:29:54,474 --> 01:29:56,004
Thank you very much. Meeting is adjourned.

1397
01:29:56,064 --> 01:29:56,844
Have a great evening