City Council - Special Meeting

Good evening. The special city council meeting for the city of Copper's Cove held July 30th, 2026 is called to order at 5.30 p.m. Madam Secretary, please call the roll.

Mary Yancey.

Here.

Christina Strophos. Here. Rita Hogan. Here. Howard Hawk.

Here.

John Hale.

Here.

Del Chudway.

Here.

Vanya Hart. Here. Jack Smith.

Here. All right, we got a full house. We move to item C, public hearings in action.

Item one, public hearing on the fiscal year 2026-2027 proposed budget and plan of municipal services. Arianna Beckman, Director of Budget.

The time is 5.30. We'll open the public hearing.

There we go. Good afternoon council, mayor, city manager, everyone in the audience and those listening at home. State law requires that the city holds a public hearing on the proposed fiscal year 26-27 budget and plan of municipal services. The proposed budget was presented to council and also filed with the city secretary on June the 16th and the public hearing was scheduled at that meeting. We have also published the notice in the newspaper and also the city's website and channel 10. as required by state law. So the purpose of tonight's hearing is to give the public an opportunity to comment on the proposed budget before it's considered for adoption. And the adoption is scheduled for August 18th at six o'clock. Staff recommends that the mayor open the public hearing and receive any public comments.

Is there anyone to speak? Is there anybody to speak? Let me say that one more time. Excuse me. Is there anyone to speak during the public hearing on the proposed budget? I say again, anybody to speak during the public hearing on the proposed budget. All right, the time is 5.32. We will close the public hearing. Now we move to item C2.

Public hearing on the fiscal year 2026-2027 proposed budget for the Copper Shove Economic Development Corporation. Fred Welch, executive director of the Copper Shove Economic Development Corporation.

The time is 533. We'll open the public hearing for item C2.

Thank you, Mayor, Lisa, and City Council. The Economic Development Corporation is a political subdivision over the City of Copperas Cove, so we follow the same procedures in terms of our budget preparation and adoption. The EDC's budget for fiscal year 26-27 was adopted at our May board meeting. As part of the budget process, it also then has to be presented at a public hearing, and and also then on August 18th, as the city adopts its budget, our budget becomes a component part of the city budget rolling in. So we're just here to answer any questions.

All right, council, any questions? Is there anyone to speak? The citizens are on this public hearing item C2. Again, anyone to speak on the public hearing item C-2? All right, the time is 5.34. We will close that public hearing. We move to item D, action items.

Item one, presentation, discussion, and direction on the ad valorem tax rate for fiscal year 2026-2027. Arianna Beckman, Director of Budget.

Okay. Mayor and council tonight will be, uh, uh, presenting the proposed 27 property tax rates and the impact of, uh, each of the option, uh, on the city's budget. Uh, we'll begin with explaining how the tax rates are calculated, uh, under taxes, uh, under Texas truth in taxation laws. Then we'll review the certified property values, the no new revenue and voter approval tax rate calculation, and then we'll discuss the options, each of these tax rates, how they affect the general fund. The goal tonight is to provide you with information so you can make a sound decision on August the 4th, which is next Tuesday. So before we look at those calculations, we'd like to explain some of the terminology used during this presentation. The city's property tax rate, it's made up of the maintenance and operation rate, or M&O rate, which funds city's day-to-day services such as public safety, parks, administration, and other operating departments. The second component of the tax rate is the interest and sinking rate, or INS rate, which is used to pay principal and interest or the city's outstanding debt. State law also requires us to calculate two benchmark rates, the no new revenue tax rate which is a rate that would generate the same amount of revenue from existing properties as the previous year, excluding the new property growth. The voter approval tax rate is the maximum rate that the city can adopt without calling an election. And that consists of the MNO portion and the INS portion. And we will see those here shortly. So each year, the appraisal districts, which we work with, Correal Appraisal District and La Paz District, they provide to us the certified values by July 25th. Those values become the basis for all our property tax calculations, and the property tax calculations are done by July 25th. Coryell County Tax Assessor Collector, Justin Carruthers. And those calculations are included in the agenda. And they follow a specific format and formulas that we have to follow in order to come up with those rates. And the city does not have control over those calculations. This chart here shows the city's freeze adjusted taxable assessed values over the last three years. As you can see, for year 26, there's a decline of approximately 0.5%. Even though the decrease is relatively small, it does reduce the tax base on those property tax revenues that we will receive. The next few slides will go over the tax rate calculations that are required by the state of Texas. Again, these calculations follow specific formulas and are not determined by the city. So the first step is to calculate the amount of taxes generated from last year's tax base. In order to do that, State law requires several adjustments, including removal of tax ceiling and properties that first qualify for an exemption. After those adjustments are made, we determine the adjusted amount of taxes collected under last year's tax rate. So the important takeaway from this slide is that it establishes the revenue targets which will be used to calculate the no new revenue tax rate in this slide right here. So this slide here applies that revenue target that you saw in the previous slide to this year's adjusted taxable values. Again, several adjustments are required by state law. Those include removal of new improvements and other items that were not part of last year's tax base. After applying all those required adjustments, The resulting no new revenue tax rate is 67.8856 cents per $100 valuation. So if city council considers adopting the tax rate, this tax rate right here, it will produce the same amount of revenue that it did last fiscal year. The next few slides, the next couple of slides show a list of debt requirements. So in order to calculate the voter approval rate, we first have to determine the amount of outstanding debt that has to be paid in the upcoming fiscal year 27. So the next slide will list the outstanding debt by issuance year to include certificates of obligation and the general obligation. Then we determine what other sources are used. And in this case, we are using fund balance, as previously discussed with the council, in the amount of $750,000. So after those adjustments are made, our net debt to be included in the next fiscal year is at $5.7 million, and that will be used to calculate the debt portion of the tax rate. As you see on the bottom of the slide, we did adjust the amount for 2026 Certificates of Obligation. As you may recall, when we were discussing those projects to be included in the 26CO, we did remove some of those items. In particular, in interest and sinking, that will affect interest and sinking fund. We'll remove the renovation of the City Hall in the amount of $600,000, so that amount impacts this number here. Also, we phased out the cemetery project, so those two projects affect 2026 CAO principal interest payments, so we did adjust those amounts in this presentation, which is different from our proposed budget, because our proposed budget includes the full amount. So once we determine the net debt requirement, we calculate the debt rate by dividing that amount by taxable value available to support debt service. The resulting debt rate is 25.6970 cents per $100 valuation. Unlike the M&O portion of the rate, this rate right here cannot be changed. So any changes you make on the fourth, it will be to the maintenance and operation portion of the tax rate. Because by our state law, you have to pay your debt. And whatever that rate is, which in this case is 25.6970, that's what's going to be adopted. The slide here calculates the M&O portion of the voter approval tax rate. So we begin with last year's M&O. rate, then state law requires a series of calculations to determine the no new revenue M&O rate, which is then increased by the allowable 3.5% growth factor that is established in state law. The result is a voter approval M&O rate of 47.5561 cent per $100 valuation, which is then combined right here with the debt portion for a total voter approval rate of 73.2531 cents per $100 valuation. Any questions so far? Council, any questions around? The chart here provides a comparison of the current tax rate with the two benchmark rates, which are the no new revenue tax rate and the voter approval tax rate. And as you can see on the bottom, the debt portion does not change. The only component or piece of the tax rate that changes is the M&O portion. Now we're gonna look at how each of these tax rate option impacts the property tax revenue. The table here compares the estimated tax levy and anticipated revenue under the current tax rate, under the no new revenue tax rate and the voter approval tax rate. And those tax rates are listed here on top. But if council would consider the current tax rate, the general fund revenue would decrease by $840,000, the amount in red here. Under the no new revenue tax rate, that impact to the general fund revenue is a little bit over a million dollars. And for under the voter approval tax rate, there will be an increase to their revenues in the general fund in the amount of $194,000. The slide here shows how each tax rate option affects the general fund if we kept the expenditures consistent. Although under each option we maintain a fund balance which is over the ideal fund balance, those amounts differ depending on which tax rates you consider for adoption. The table here shows the general fund impact of each tax rate, not including the existing proposed budget deficit of $771,000. Again, under the current budget tax rate, the expense reduction needed would be $840,000. So if you do adopt that tax rate, we recommend that you reduce your expense by the same amount. If the no new revenue tax rate is considered, that change will be a little bit over a million dollars. If voter approval tax rate is considered, then there's no need to reduce expenditures. The next scenario, it takes into consideration the existing deficit of $771,000. And as you can see, those amounts are much higher, with the no new revenue tax rate being at $1.8 million. So even under the voter approval tax rate, The expense reduction will be $577,000. Any questions? Any questions? The remainder of the presentation will focus on the proposed changes to the budget. So within the general fund, we have a revenue change of $194,000 if the council does propose a tax rate that is equal to the voter approval tax rate. UNDER THE EXPENDITURES, WE HAVE ONE-TIME COSTS. AGAIN, THAT CITY HALL RENOVATION PROJECT THAT COUNCIL HAS ASKED TO MOVE THIS UNDER THE GENERAL FUND OF $600,000. WE WILL USE FUND BALANCE FOR THAT PROJECT. THAT'S WHAT FUND BALANCE IS INTENDED FOR. AND THEN THE NEXT TWO ITEMS, THOSE ARE ANNUAL COST. So we have included personnel reclassification requests that we have previously discussed with council, and the details are in the following slides. And then the non-city agency budget allocations, when we presented those requests to council, council asked that those be fully funded. Proposed budget already includes $10,000, so the 91,000 will be in addition to that. So with those changes, we're looking at expenditures being over revenues by $1.3 million. Out of that amount, again, $600,000 is for a one-time cost for the City Hall renovation. The ending fund balance will still be over the ideal fund balance. Any questions here?

No questions.

Mr. Mayor? Yes. Not particularly a question but just a comment that I would like to make in regards to the non-city agency budget allocations. I truly believe that we need to look at that number a little bit more closely, especially seeing where we are now in our budget. We are in a deficit and I believe that that number needs to be looked at a little bit more closely and maybe we can have that discussion today before we go into going into a vote on Tuesday since we're here. Thank you.

And these are all the requests that we included in here. Again, $10,000. It's already in the budget. The 91,584, it's an addition to the 10,000 that's included in the budget. So I'll just, Mr. May, if I can.

Go ahead.

Okay. So we approved a budget of $95,000 for the upcoming year, and we are The change to that, as you can see with the numbers, is 91. Well, it's close to that. Actually, we adopted 186 with the difference of 91, 584. The plan should be staying within the budget. During the past years, we have been very, well, the city's been very generous to create a budget for our nonprofits, which I, of course, I'm totally for. We need to support them as much as we possibly can, but we also have to understand where we are right now and how we need to be a little bit conservative with that. And this is one of the tougher conversations you have to have, especially when we work along so closely with these organizations. But I'm sure that they get it. I'm sure that they understand where we are right now. And because of the past years of us being able to go over the budget in order to be able to assist because of the money being there, we were able to do it. we're at a certain point where things are starting to happen. And we need to look at that in the upcoming years. So for me, I would like to stay within the budget that we approved. And if for some reason we need to be a part of being included in making a budget, establishing that, then maybe that's something we need to do too. That's something we can talk about. But I just needed to voice that part for myself that we just need to look at that number a little bit more closely and just stay within the budget. Difficult decision. Very difficult for me to say, okay? But I used to work, believe me, it's coming from a place where I used to be a director of nonprofits. I've had work in nonprofits. I get it. I understand the hustle. I totally get it. But we really, truly need just to look at that number a little bit more closely.

Do we have the original request? Or do we go back and just subtract from each of these budget allocations to get back to the 95?

Mr. Mayor, if I may. I agree with what Council Member Hart said. I would also just like to go back to what I said a few weeks back. And I know this is hard, and I know they do a lot of good for the community. I would still like to recommend $85,000 to HOP. And then the other additional $2,000 to each organization, that would put us back at $95,000.

The HOP allocation is already included in the budget. So the remaining $10,000 that are included in the budget is for the remaining of the agency, so.

That's a proposal. Is there direction from the council?

I can support that. I don't like supporting that, but from a budgetary standpoint.

DAVID BURRAGE. Practicality. Do you have something, Christina?

CHRISTINA HADLEY. I was going to say, yeah, I can support that too. I completely understand the need for assisting our nonprofits because they aid our citizens, everyone in the community. But having a balanced budget and staying within our means is ideal for our future.

Mr. Hogan?

I don't have anything to say about that right now.

I'm sorry?

I'm not going to say anything about it because I'm involved in one of the nonprofits that is listed.

OK. Anybody? Howard? Yes, sir. Speaking of the HOP, can we kind of reduce some of the HOP funding to make this balance out so all the organization can get the proposed funding that we talked about prior?

Mayor. Councilmember Howard, Hawk, the answer to that is yes. Council can do whatever you want to do. Understanding that everything you do has a consequence. So by reducing the allocation to the HOP, it will have an impact on the level of service the HOP provides to our residents. And I don't have an answer of what that impact is. I can tell you that the city of Harker Heights, just a year or two ago, I forget when it was, they chose not to allocate the full amount that the hops that they needed to contribute to maintain the level of service. Their level of service decreased. The hours, the number of vans that were running in the community, and the number of drivers, which then impacts the number of hours and how often those vans can run. I just don't know what the impact is, but there will be some level of impact.

I know Harder Heights, I know Coprish Cove, was there another city that was at the 85 level?

No, I think Belton is below Coppers Cove and Harker Heights, but their population is below that as well. Right.

But they're in a different... And the number of rides is much more in Coppers Cove plus the distances.

Correct. And the difference is that it's what is called a UZA, and that is... Forgive me for not remembering what the UZA is, Council Member Hart. But we're in a UZA that includes Copperskove, Killeen, and Harker Heights. Then there's a second UZA, which is Temple and Belton. And those funds do not intermingle in between the two UZA's.

Mr. Mayor, if I may, last year they was asking for $97,000. We was able to get them down to $85,000, keeping the same services. So that worked out in our benefit. And if you look at the federal budget that they're working on now, there's even going to be less funding for transportation out in the rural areas. So this is just something to remember. We have the citizens. We're at the end of the line. We've got to look at taking care of them, make sure they can get around as well.

Anybody else? So where would we go from here, Arianna, as far as? Will we give direction right now at those amounts or we'll re-present it?

OK, so today's presentation is just kind of give you an overview of everything before the vote on Tuesday. And you'll vote on the proposed property tax rate on Tuesday, whatever that rate will be. And then we have another agenda item, changes to the budget. And doing that agenda item, then you'll be able to provide direction on the rest of these items. I'm sorry.

I don't have anything right now because we're going to wait until Tuesday. But I'm certainly not for cutting any senior Meals on Wheels program. I think they do a great job, and they help a lot of seniors in the community. And we just had the presentation for the Children's Advocacy Center. of Central Texas, and that's very helpful for the police department. And that's when we came up with that number. So I'm leaning towards not cutting a lot of this. So I mean, that's my personal opinion. But I know that I'm just only one member up here. DAVID BURRAGE.

Do you have some options that Arianna can? I assume you would put these in some kind of a table, I guess, Arianna?

Yeah, we can.

Okay.

Okay. I mean, set the tax rate at something that will pay for all of it. That's the option I have.

Cut the tax rate. Is that what you said? Set the tax rate.

Yes, set the tax rate at something that will pay for all of this. Okay. Okay, thank you.

Mayor, so do you want me to? record each of the recommendation here. I can create a new type and do that, but it's up to you all.

I guess we can just redo it right now.

It just went away.

Are we looking at options in place one, like place one? How are you having that set up?

So yeah, Mrs. Begman has it set up by place. So each council member can provide their own recommendation. Or you don't have to provide a recommendation.

Okay, I'll start.

Each person doesn't have to provide a recommendation.

Do we have to go in order, or can we just... We don't have to go in order, right? Okay. I'll start it off since I'm speaking about it.

Would you like to be recognized?

Yes, please.

You're recognized.

Thank you, sir. Look, I even sit up taller, too. You see that? Okay. Serious business here. Okay. Hill County, we're going to $85,000. I can't do much with that. And I would like just to split the 10,000 evenly between the five remaining. Just to keep it balanced and fair for everyone.

Anybody else? Mr. Mayor? Yes. I propose the same thing, $85,000 for HOP and $2,000 for each of the other agencies. OK. Jack?

Leave it as is.

OK. Mr. Mayor? Anybody else? Rita?

Leave it as is.

Mr. Mayor, I support Councilwoman Hart and Councilman Treadway's recommendation for, yeah.

Mr. Hogg, do you have a proposal or do you want to abstain or what? I abstain, sir. Do what? I leave it like it is. Leave it like it is. Mr. Hale?

I can support both. I have reasons that I can support both. I think we all do. But I think that my reasons, I think that my reasons are going to step on the side of keeping it the way that it is. OK.

So we have four that would prefer to keep it the way it is. One, two, three, four. Mr. Mayor?

Yes. Was that a record vote?

No. Why are we doing this? This is for direction. Just to help Arianna.

Okay, certainly that's it. So before we move to the other funds, I would like to briefly review the reclassification requests that we did review those during our personal improvement plan back in March. They are listed in the order of priority. So we have all these are reclassifications, by the way, and the total financial impact of these changes is $89,800. So we have under police department reclassification of two communication operators, two team leads. We have for fire administration reclassification of the current admin assistant to executive secretary position. Under the fire EMS operations, changing or reclassifying nine firefighter two to fire engineers. And then the next three items are within the municipal court. So we are proposing to reclassify the deputy court clerk to assistant court administrator, and then establish level two and three for the rest of the clerks. And the last reclassification is within the animal control department. So we have a part-time kennel assistant. We would like to reclassify that to a full-time kennel assistant. Again, these are all existing position within the city, so there's no new position. We're just asking to change the job duties of these positions to whatever they're being proposed, and the financial impact is listed for each of those changes. Any questions here?

Anybody? Questions?

Okay. The next, well, these are the general fund balancing options. We have reviewed these with council in the past, but their recommendations are that to balance the budget and the general fund, you do adjustment to the tax rate, utilize fund balance, However, using that from year to year is not sustainable long term. You have the option to exclude market and or COLA pay adjustments. Again, market is for all public safety. And COLA is 3% COLA for the rest of the city employees. And the last item is defer the 2026 CO. We did have changes to COLA. the projects that were included and those amounts, uh, you saw, uh, you, well, you'll see what those changes are here in, uh, in a minute under interest and sinking. Uh, but the 2026 CEOs are scheduled to be awarded for sale on Tuesday.

Ariana. Yes. Do we have an amount of what the cold up pay adjustments will cost for general fund?

I think it was not 198,000. Okay. Thank you.

Anybody else?

The changes to the water and sewer fund, again, we are changing the 2026 CO principal and interest payment. There's a reduction of $68,000 to this fund. To changes in the interest and sinking fund, there's a decrease in the 2026 CO principal and interest payment in the amount of $175,000. We are proposing that we use $750,000 of fund balance for debt payments because that's the only thing you can use the fund balance for in this fund. Street maintenance fund change related to 2026-CO is a reduction of $132,000. changes to the hotel occupancy tax fund when those requests were presented to council. Council asked that those be fully funded. So we have made those changes. In addition, the state law says that the art category, the amount allocated under the category should be 15% or less. So we had to make some adjustments to be in compliance. So we did... Pro rate those amounts and these are the new amounts but that concludes the presentation for tonight again on Tuesday now that you have all this information you'll be able to make your recommendation on the proposed tax rate We'll set the public hearing on the tax increase and the date and location to adopt the tax rate. These changes that you just saw to all those funds, you'll have the opportunity to either approve or not approve. On the 18th, it's when we have the public hearing on the tax increase, and then we'll adopt everything, proposed budget, tax rate, long-range plans, and the fee schedule. And that is all we have for tonight.

Thank you, Mayor. Well done, Mrs. Begman. Mayor and Council, this is a lot of information. We understand and we also understand the fact that this information was not posted last week because the timelines that we're under with state law and as when we get those certified values and then the calculations can be done. If you have questions leading up to Tuesday, please communicate those questions with me. Talk to me. If I'm not available, I will make sure that somebody is available to talk to you, but I will likely be available because this is really important for you to understand, for you to get your questions asked leading up to Tuesday with the proposed tax rate vote.

Council, any other questions or comments? All right, that concludes, if I'm not mistaken, that concludes everything on the agenda for tonight. So the time is 6-11. We stand adjourned.