City Council - workshop

Mic check, mic check.

Hi.

Can we unlock the door? It is that way. OK, cool.

A resident said they came at 3, or I guess they must have been early. And they said it was locked.

Everything all printed out?

Like, oh my God, like, like stressing me out, man.

You know, I really feel like today is one of those days. Would you like me to?

No, y'all need to put pants on for the first time in five weeks. Five weeks. And it wouldn't load.

Okay.

That's right.

Brother hit me with that needle. And of course, Kenna. That's the biggest needle I've ever seen. Are you signing up? Kenna?

She said, absolutely not. Huh?

I don't know, but he was begging people over there. They got a local restaurant to gift an appetizer if you gave blood. He told his reserve officers to come in.

And he said, sure.

Come what's been called.

Come what's been called.

Come what's been called.

Is it?

I think I saw a multi-cable maybe in the back.

Let me go see if I can find it. So I don't know if it's for chargers or for data.

Let me go see.

Now they have Yolo. Yolo replaced Esmeralda.

They have their own ways.

There's a lot of people.

And actually I'm used to them sitting next to, next to city clerk anyways.

I like sitting over there better. Let me get Natasha's screen.

Are you excited about Jordan?

Very excited. He was just in my office earlier. So where it was, Mayor, I went up there. They told me, he said, normally the chiefs come if they graduate, if they pass a test. I said, look, don't tell them I'm here. I'm in the parking lot. I said, don't. And she texted me. She goes, he passed. I said, what about that time the phone rings and it's him? And he says, I told you I wasn't going to let you down.

I said, I heard Jordan.

I said, I'm walking in the door. He was so nervous. I shook his hand.

He was sweating bad, right? I said, hey, it's over. We're done. So he is.

Yeah, yeah.

Okay, thanks.

Tori, that little talk with him. He said, hey, I'm glad with all this. It means nothing to me. You're joking. He'll do fine.

Oh, yeah, they just started that. Brian? No.

You don't have to help me. I don't care. You're that big.

Somebody wants to be in the children's parade.

I'm forwarding it to you right now. Amen to that. Yeah, we'll talk about that.

Okay. I will call to order the workshop agenda for July one, twenty, twenty six at three PM for the. Well, actually three of two PM for the city council and team of public facilities corporation. I don't have anyone on my list to address council. nope so we will move on to the discussion items which is a budget workshop july 1st 2026 and i believe y'all have a cip draft and some sort of budget that ryan gave us oh you're over there or not yes ma'am just so we could confer if we had a question just for this meeting okay um

On the CIP draft, I just wanted to highlight that we have added two items for PD. One, a side-by-side and ATV, more to try to update from the old units. And then two police vehicles. I know I put Dodge, Durango, but I don't know if we're dead set on Dodges.

It's going to be Ford Explorers.

Ford Explorers.

Yes, sir.

Board Explorers.

And cheaper in the long run may not be cheapest in the long run.

We did some research in the maintenance on those things. They've been falling apart. So you figure out any way you're going to pay for it up front or at the end. Mr. Thorne.

and then uh and the uh budget document is uh they're all the revenue uh accounts that we have um and the projections uh we're kind of looking at for uh 2027 um if y'all want to go through some of them the highlighted ones uh i would like to make a suggestion

This is the first budget cycle that I've gone through where we have a seasoned city manager and a seasoned finance manager in my five years sitting up here. My suggestion is let's come to an agreement on this revenue option, pitch it back to Cesar and Ryan, and let them bring us back a balanced budget. So we're not sitting here arguing about all these CIP and what's most important. Let that happen with the man that runs the apartment, in my opinion. So that's just my suggestion. I have vetted most of these revenue items. I know you're going to go line by line, but I mean, they're actual. We made phone calls. We've got agreements. So I mean, I think we're pretty close on what This is going to be our revenue for next year. I think your biggest, I mean, negative is going to be permits because we've been spoiled with Meritage. They've only got 41 homes going to be built for next year. So permit cycle is over. So we've got to make up that revenue that we've been taking for the last three or four years with Meritage doing 100 homes a year.

And a lot of that's paid up front. So we were talking about that today. A lot of that revenue from the permits are paid up front and the The inspection fees haven't even hit yet because they haven't started that home that they've already paid for.

And I'm quite okay with that if the rest of the council is.

That would be my suggestion.

No, I would love that. That's fine with me.

Because in the past, I didn't feel like we had that, and we had people that didn't understand the budget, didn't understand the cycle. Now I feel very confident with the two gentlemen sitting over there. So I would like to see us come to an agreement on this and then pitch it back to them and let them bring something to us in two weeks or the next meeting. Yeah, that's a good one to have. We balance the budget because there's no room on this side because we can't raise taxes because we didn't make the audit. So this number is real. Yeah. So, I mean, there's not any wiggle room here. So these are our numbers. Unless somebody wants to get really aggressive and try to increase sales tax, which I would highly unsuggest just because the economy is turning. So that's just my opinion.

Well, in my last conversation with Cheryl Johnson, based on the ad valorem taxes, she said it would be late in July before we got hard and fast numbers from her, from all of the ones that were protesting.

If we could also just, Mayor, and I'm not sure if the two weeks was included in that, but it is likely going to be slightly delayed more than that as well. There's been an unusually higher amount of protest. They've even included Friday evening sessions and Saturday sessions for the judges to have these panels with these groups. So we're in limbo that they did set aside.

I'm still waiting for one to come back to me if they have any scheduled appointments for me. Correct. So that does not surprise me.

It is a record-setting time. Okay.

the line Ryan I highlighted some of the big ones if y'all want me to just start with those and if y'all have questions on maybe some of the littler line items I wouldn't mind going kind of line by line just to update so everybody especially the two new council persons up here that haven't done this before maybe they just at least get an overall umbrella view of what all of these are absolutely we'll start with the Avalorum so um

you can see a little increase from the previous year. Um, so we have roughly about, uh, I think it was like $20 million, a new property on the ground from the previous year, which wasn't taxed as like the improvements. So, um, using what our tax rate was last year, it, it would add about $40,000 to our, uh, our total. So that's, that's why there's a little increase right there. Um, but, uh, with if the tax rate comes down lower, then it'll be a little bit less than 40, but I think pretty comfortable with that number I have for the abnormal tax. And then Centerpoint Energy, I was talking to Darren. Darren made a great point today. We increased to 155, which, and it actually could come in higher with the new homes that were built, but I don't get them reports until as they come in with the quarterly reports. So they don't do any forecasting for us on energy usage. And then AmeriWaste, we have a little increase in AmeriWaste. We're bringing in around $9,300 a quarter. So that times four will get us close to that 35,000 number. And then Comcast, people are cutting services, more just streaming instead of the full cable packages. So I'VE BEEN IN CONTACT WITH COMCAST AND THEY CONFIRMED WHAT I EXPECTED, THAT JUST PEOPLE AREN'T USING THEIR SERVICES LIKE BEFORE. SO WE'VE MOVED THAT DOWN TO $5,000. THE MISCELLANEOUS FRANCHISE FEES. RIGHT NOW FRONT TIER AND VERIZON ARE GOING INTO THAT LINE ITEM. Together, they may be $5,000 a year. So I just kind of lumped them in with all the other little miscellaneous franchise fees we get, like for someone having their AT&T or their little satellites on top of a pole or something.

But the bulk of that's Frontier and Verizon?

Yes, ma'am.

Okay.

And then... Would you like to ask to wait... As you get at the end, if you have any questions. It's just a real quick one. On the Ameriways, have we confirmed that because the report that I looked at, that only included franchise fees for the commercial, not the homes? Correct. And so that's is pretty standard. We get no franchise fee up off the phone.

Yes, ma'am. As far as I understand, yes, ma'am. It's just the businesses. And we got a list from AmeriWaste, and we're going to verify, like, make sure there's not a...

The only mechanism that we could do that is if we build it internally, but it doesn't make sense because there's not enough money.

That's how we figure the cost internally to fill it back out.

So AmeriWaste does the billing, so we don't qualify for So we just want to make sure no one's missing on the list that they have.

And for the contract, they're supposed to just give it to us without us even asking. And I may be wrong. Correct me. It's like, okay, that seems about right. And we can compare. Yes, ma'am.

Well, they do send some back up. So if we request it.

So if one report had X and then all of a sudden this next report, you know, it dropped off. You know, just trends.

Yeah. And that could be someone didn't make a payment that month and then it's more the next month because they paid double. So that was, where was that? Mixed beverage tax. No. Yeah, mixed beverage tax. We did a little increase there because we brought in a couple new restaurants.

And, you know, oh, my God, what is that restaurant? The Coconut Grove.

Lupe Tortilla. Lupe Tortilla and things like that. And we'll keep monitoring the mixed beverage. And then sales tax, we kept it even. The reports we're having is tourism is down.

Oh, yeah, go ahead. I just wanted to say at the council meeting here, one of the items that I put on the city manager report was tourism report to show that we are down. Our length of stays is longer, but there is still a slight fall in tourism, which obviously with our budget, we do rely so much on sales tax. So I did want to bring that to your attention, and I can cover that during the council meeting. But it is tied to this part of the presentation. So I just want everybody to note that and we'll cover that for them.

Yeah. And we've been having a great year so far and having some really good numbers in some months. And we're only 1.8% over what we budgeted. So, you know, a slight turn could, you know, a rainy month or anything like that could really hurt us in the next two, three months.

So...

It's coming. It's coming. And then, so that takes us down to court tax retainer. I kept that even. Service fees for court, we increased 5,000. We just had an increase in workload, right, Jerry? Jerry knows the court revenues better than I do. And then line burger fee, we kept that the same. uh increased uh fines and forfeitures just a little bit um and then oh my god what is that oh oh what is o n l m omni that's that's tied also the oh my dyslexia was kicking right there uh We upped that too, just a little bit, because that's like, you know, per... More warrants. And then we upped the time payment fee. That's... That's the... Payment plans. There we go. We decreased the warrant fees after we figured out that we only get $25 to $50 a warrant, more realistic number.

$75?

Okay. We may adjust that one.

Right, if I can real quick. If you guys notice the trend, We're trying to stay balanced over the last two fiscal years and what's projected to be at the end of this year. So that's why some of the numbers align with that. Also, as we know with court, that's just relevant. We can't bank on revenue or say anything in general. All we can do is forecast based on what we have right now. So we don't expect there to be a very large dump. we're just going by the trend of the last few years to try to have some consistency. Obviously the numbers during which you show the 2023 is the downside of what COVID was doing and what was happening, and previous admin that was here, and then some staffing changes. Now you've got a full staff, you've got full continuity, so we feel strongly that these numbers that we will hit these projections, although they're projections based on what could happen. We don't know what could happen. So just keep that in mind. Obviously, anything that could affect that. But we are thankful that we do have some grant funding that has allowed us to have some LPR cameras that help us with some of this stuff and also being fully staffed and having some of the equipment that we need to get the job done has helped.

And then the municipality jury fund, we bumped that up to kind of what we've been getting the last two years. Same with the truancy and credit card fees. And then the court judicial fund, I kept that the same. Local youth fee admin. I cut it down to 50 because I'm not even sure what that is. So we got it one time. So I probably should have made that zero. Court technology. And security fund, that's a new fund because they're now combined. So it used to be two separate funds, and now they're all going into the same bucket now, which is a lot nicer in the long run. LEO's training, that's a grant that we get reimbursed for training for our officers for certain, I don't know what special training, is it special training?

Yeah.

Any? Any. Okay, awesome. KCDC management fee, we left that the same.

I have a question on that. I did an analysis and I'd be more than happy to do a presentation to council. I pulled the reports from all of the similar sized economic developments as well as non-profits. rate that we're charging uh appears just doing a trend analysis and i'll be glad to rack it up to be on the low side and unless anyone has an objection i'd like to bring that analysis to the council and because my proposal is it goes up to 125

I'd like to see it come to Cesar and Ryan, and then they bring it back and fix it.

And that's fine. As we're equal council members and with all due respect, you are the president of KCDC, so I would like to just as have a fair input and I was more than happy to provide that to them. That'd be awesome. Is that reasonable? Is that a fair compromise?

Which line item is this?

The KCDC management fee.

It's currently set at $100,000. It's sound by what I just heard Councilman Thorne believes that we should bump it to $125,000. Oh, okay.

I didn't switch the page over.

We just increased that last year because it was $25,000 and

And then they, and I probably agree with their analysis. If we had an economic development manager, like most EDCs do have, I just serve that purpose and don't get paid. So that's why we trend downward, in my opinion, because I spent four hours today on EDC stuff.

And noted, and again, so I'll just provide my information. And as you said, they can come back with recommendations. Thank you.

And then we got hotel management fee, $40,000, same. And the facility management for hotel is the same. We decreased the permits and licenses to $200,000 for Mayor DeChambeau projecting 41 homes next year.

And then the other hurdle we do have in this category is the water water district has no water. Well, we don't have any major developments coming because we have no water to offer people. So, yeah. so are we saying that the 200 000 that we put is still not conservative enough do we need to drop that i think we decided 140 150 on heritage and then we figured another 50 just about general we looked over time we've been doing 50 just in general i mean that there's enough that tracks turnover in the businesses currently the 330 businesses that we have so i think i'm i feel pretty comfortable with that number but we don't have any major projects coming due to the

And if we do get a major project, you know what? They'll just bring in more money.

Yeah, be a good problem to have. What is that?

The next one's burglar alarms.

I dropped it down to 800. So kind of average of the last five years, but we'll bring it in for the burglar alarm piece. And then... Business registration left at 200. Fire inspections dropped to 20, 30. We haven't really came close to the $30,000 in the last few years.

Well, theoretically, it should be 30 because everybody should be getting an inspection once a year. That's $100. Yeah. We've got 330 businesses, so it should really be $33,000, but we haven't figured that out yet. I've obtained that. I know we're working on it.

Yeah, we have not figured out the capture of that completely.

I know we did all the inspections at one point, and we did not get paid. So that was not a good formula. So now we've gone the other direction where we get paid before we do the inspection. And as you can see, we've got, what, 117 businesses, and we're 200 short. How many businesses are there? 330, I think was my Garcia's list.

326, 327, somewhere in that range that you gave me at one time.

But bright side is we have collected more money than we have in the last four years so far this year.

So hopefully we're trending in a better direction on that. STRs bumped it up to $11,000. And then wrecker fee, we dropped down to $6,000. I think we lost a few wreckers. The clear channel lease contract, it got bumped up to $75,000. I think after like four or five years, it went from $60,000 to $75,000. Yeah, $60,000 to $75,000. So that was good.

That's supposed to be elevated to when the freeway's finished. Really? And when Lee Vela was here for the hurricane preparedness countdown, he's aware of that. I don't know if anybody wants to follow up with him or not, but he's supposed to come out and raise that sign up so that it's more visible to cars on the overpass. That was part of the original lease, I think.

At their expense?

Yeah. Okay. Okay. I was like, oh, my gosh. It's not going to be raised.

The event line item, that's for little farmer's markets and things like that, what we bring in.

Just so other council members know, Cesar and I talked about this, and we did a small fee for each vendor that came in instead of us trying to chase sales tax for 20 little vendors that come in on Friday night that equates to almost zero in sales tax in the long run. We just did a flat fee, so every time they come to town, they pay $85 a

It's $12.50 per booth, per visit, per day.

For us to capture some revenue off these little vendors that are coming into town. And if they do claim their taxes in Kemah, then we realize that gain as well. But this is just a way for us to make sure we're realizing gains from the money being spent in our town.

And then open records request. I left that at $500. Interest, we dropped it a thousand. Interest rates have just been slowly dwindling down.

Then is that different from the money market? Or this is just like, what's it? Bank down the street, the bank and the money market.

It's all the all the money we have that it's collecting interest.

So Trump just changed the Federal Reserve manager. So his initiative is the lower interest rate. So I assume we'll see. Aggressive interest rates drop over the next 12 months.

I would think so.

And then, uh. Community Center rentals left it at the $20,000. Decreased the parking lot revenue to $80,000. I know we're working on...

We're working to address some of the challenges that we're having. The expenses are lower than they've been before. We thought we were being charged for services that we didn't need. However, some of the revenue is also lower. Again, attributed to some of the drop in tourism, but also attributed to some of the challenges that we're having there with that current vendor. So we are meeting with that vendor and with other possible vendors to try to see what it would look like.

Next is the, oh, go ahead.

Yes, there has been ample thought about that. And I think that when we are in a position to fiscally support everything else, that probably has the entirety of the budget. Maybe we could look at that. It has been brought up when we had our Chemo Business Alliance kickoff meeting. It was one of the things that was suggested at that time. But there are other factors that we may have to look at to make that happen. It's actually... I will tell you there's an indirect item at the 4 o'clock meeting that may address that or speak to that. I don't know that we're in a position because of our financial situation headed into this fiscal year to do that, but we will follow counsel's will, whatever the actual will of the actual body is. But it is something that has been requested to be considered or reduction in rates or whatever the case is, especially Monday through Friday or Monday through Thursday. thursday i think was when they had eighty thousand dollars they had four million dollars worth of business those bars don't do that so right and we have to support them with the police and everything else so i i think they can scream all they want and and and there's other there's there is a potential of us to do that um i've actually i've started working with the possibility of having some type of entertainment district or something like that for that area try to think outside the box to try to make that actual amount up, but also. I wouldn't call it a crime control district, it would be more of an entertainment district.

but it's worth a long-term thought. It's obviously not going to be the best one,

We have a agreement with our sales tax vendor that we have with HDL. I had engaged with them in a meeting yesterday involving several different things as we were preparing for the budget. That's one of the items that came up. They are going to look into the parameters that we might have so we can say within the actual gutters to make sure that we're down lane, but it's too soon to say yet. I don't know what we'll pull off in time for this budget, but their discussion has been initiated in that. So to indirectly answer your first question about parking, we're looking at other ways to reduce the burden on our taxpayers if we can.

The next one is rental income. We lowered that a little bit due to vacancy at the visitor center. but we're hoping to get a new tenant in there during the year, which would probably take us over that $50,000. So we try to be conservative with that 50. And then the hot transfer from communication and marketing, well, we just left that same. That's basically going to come off the expenditures numbers for a few accounts out of the communications department. And then the KCDC transfer in is to help pay for a public works employee.

For what?

A public works employee for the parks.

And just back up one quick one on the rental income. You said that we lowered that because of what did you say?

The vacancy at the...

Okay.

I'll try to make it quick. You're doing great. You're doing great.

If we could bounce back real quick to CIP. At the last meeting, we asked if there's any other items that you guys saw or anything you guys want to prioritize, because obviously we can't fit all of these things into the CIP. Ryan has started working on a preliminary draft where we try to sprinkle some of these items. But if you had any items of priority that you wanted to look at, OR ANYTHING YOU WANTED TO ADD THAT YOU DIDN'T SEE ON HERE FROM ANYTHING YOU'VE HEARD FROM YOUR CONSIDERANCY, ANYTHING ELSE THAT YOU WANTED TO DISCUSS, OR ANYTHING THAT MAY DRIVE THIS NEXT FISCAL YEAR'S BUDGET ONE WAY OR ANOTHER, I THINK WE WOULD LEAVE ENOUGH TIME FOR THAT DISCUSSION NOW.

NEW SPEAKER DOES ANYONE HAVE ANY QUESTIONS OR COMMENTS FOR EITHER RYAN OR CAESAR?

on CFE or just on what we just finished?

Anything. The whole budget conglomerate.

Just one comment. And I've slept a few nights since our last meeting. So I had thought that we were going to put a priority versus one, two, three. And maybe I didn't communicate that well.

We haven't compiled that completely yet. Actually, we just got some of these CIP items about maybe two hours before the meeting, some of these new ones. So we are still putting those in priority. If we can afford some of these within the actual budget year, for example, one of the things that we looked at doing was getting a plotter. If we can somehow squeeze to get that before this year, that item may come off. WHEN WE ARE IN THE ACTUAL BUDGET YEAR RIGHT NOW, WE'RE STILL WITH THREE MONTHS OUT, WE'RE AT 75% OF THE YEAR. WE'RE LOOKING TO SEE WHAT WE CAN DO WITH THESE ITEMS THERE TO SEE WHAT WE CAN OFFSET AS MUCH AS POSSIBLE. SAME IS TRUE WITH INCO 10. SOME OF THESE THINGS, WE WON'T GET ALL OF THEM AND IT'S GOING TO BE VERY HARD FOR US TO prioritize that in a way.

I'm talking about within departments. I'm not talking about the list, but within the department. Because for instance, if I may, for instance, with the pump station, that's obviously going to be a priority, in my opinion.

Sure. No, absolutely. But to go along that rate, it would prioritize above the community center generator installation, which we talked about last time. Maybe the caveat would be to have a switch put on the community center. In addition to that, we've also reached out to the County Office of Emergency Management to see if there's a possibility for assistance with that. There is some TDEM grant funding that's gonna be coming out here soon that we're looking to apply for. The same could be said about the Public Safety Communications Tower. We know that we can't afford that with our budget. We know that we can't take such a leap, so we are fighting for grant funding for a lot of these things. We're also working with Clean Coast Texas on some of those pump station items that are on there. So even if we do budget for some of them, And even if you do award money for these CIPs, we're going to exhaust everything else before we get to that component. A complete priority right now on all these? No. But we will be working on that tomorrow morning.

I'm sorry. I wasn't here at the last minute. I was sick. I watched the video. I might have missed it.

I was just wondering, for instance, like a number one. Is it possible just to have like a number one component within budget constraints. And then a question for you, and you're going to have to refresh my accounting. On the CIT item, because I realize public may be different from government, doesn't it have to be amortized over five years or something like that? Yes, ma'am. So some of these...

Yeah, and I know you made a comment about that, and we were just trying to get everyone's list, basically. Absolutely. So they were already making – they were already in the forms of putting the big items in, and we're like, hey, just put everything in there. That way it's all uniform, all together.

And, of course, even with a big item, what made me say we would like to start working towards building for that.

Mm-hmm. Absolutely.

Thank you.

Can you do yours as well real quick? Can you categorize yours one day, whatever?

Oh, no, no, no, no, no, no, no, no.

This is just something that we've already started doing and there's no sense. We're already going to meet about it tomorrow morning.

We're not going to get it to you.

I know PD sent me theirs today.

I want to give time to my fellow council. Again, I just follow up. I want to refer to my, uh, the time to my other 2 items. They may have.

Any other comments or questions.

Well, if we direction we're going to the 1 ever, we didn't put that to a vote as far as. to this revenue? Are we going to send it to Cesar and Ryan for bringing it back to us with a balanced budget?

Yeah, I think that's the direction we can give them. And we don't have an action item on the agenda, so just give any direction to do that.

Just so I know on here, the only note that we've taken as a possible change to the revenue has been an increase of $25,000. Correct. That's the only consideration that we have on the table right now based on what we showed you. IF THAT WERE TO GET APPROVED, THERE WOULD BE AN INCREASE OF 25K ON THE LINE ITEM OF KCDC MANAGEMENT. ANY OTHER CHANGES THAT STAND OUT ON REVENUE SO WE CAN DO AS WAS SUGGESTED?

NEW SPEAKER I WANT TO TAKE THAT QUESTION.

NEW SPEAKER THE ONLY THING I HAVE A QUESTION I HAVE FOR YOU ALL, DO YOU ALL LIKE THE WAY THAT LOOKED WITH THE BOOKLET, WITH THE HIGHLIGHTS ON EVERY OTHER LINE AND THE SIZE?

Yeah, the size is not.

Sure, last year I had a problem. Me and that printer were fighting each other. I'd fix one format, and then the next thing you know, everything's microscopic on the eighth page. And I know I got a hard time from an old council member about that. He's like, I can't even read it. So, but cool. Awesome. Thank you all so much for your time.

Thank you, Ryan. Thank you for your effort. So we will adjourn the meeting at 3.37 p.m.

Okay, so that's a good majority of that list.