City Council - Special Meeting

It is 6.30 and we're calling to order the Elgin City Council special meeting for August the 11th, 2026. And we'll start with our call to order and we'll begin with Mayor Pro Tem Love.

Love here.

St. Pierre here.

Mayfield here.

Krim here.

Shan here. Hyness here.

Gibson here. Silva here.

All members are present except Miss Pena.

I'm sorry, she did call in to our city secretary.

Family issue, please.

Oh, okay, okay, okay.

So I need a motion for excuse.

I'll make a motion to approve.

And I'll second.

It's been moved and seconded. We'll begin with Mayor Portio and Love. Love, yes.

St. Pierre, yes.

Mayfield, yes. Crim, yes. McShane, yes. Hymas, yes.

Gibson, yes. Silva, yes.

My invocation will be by Mayor Purtill.

We bow our heads. Oh God, we come before you today asking that you steady our hearts and sharpen our judgment as we enter this budget season. Help us as council and as city staff to work together with open minds, open hearts, be respectful, and a shared commitment to doing what is best for our community. Let us lead to make decisions that are responsible, sustainable, and mutually beneficial, not only for the employees and the departments, but also for the taxpayers who trust us to steward their resources wisely. Help us to look beyond individual interests and keep our focus on the long-term success, stability, and prosperity of our city. Give us the courage to ask the right questions, the patience to hear different perspectives, and the integrity to make choices that are fair, fiscal responsible, and beneficial to the entire community. May our conversations be productive, our disagreements remain respectful, and our decisions reflect good stewardship and the genuine desire to serve those who have entrusted us with this responsibility. In Jesus' name we pray. Amen. Amen.

Stand for our pledge of allegiance. We have no one signed up for public comment, so we will go on to our new business. As for review and discussion of the proposed City of Elgin FY 26-27 annual operating budget as presented by the city manager, including but not limited to possible discussions of revenue, And expenditure projections, department budget and personnel requests, discussion of major funds, capital improvement needs, and anticipated challenges, and review of proposed tax rate and fee adjustments, if applicable. Beginning with one, the utility departmental budgetary request.

Yes, Mayor, thank you. So I'll jump in here real quick. We'll be calling up... Mr. Gonzalez, but what I did want to do is ask. Time. to be coming out. Oh perfect and so thank you for the correction. One thing that I did want to note as Ms. Nevajas comes up is that we will put up the screen if we can seeing that that'll go first the utility rate. I had up on the screen the running tally that we were had been using and we'll be using. We'll put that back up. But as you can see, the running tally that we left off with, and we'll be putting that right back. This is, is that something we'd want? Yes? Okay, so first of all, I apologize and stand back on this. I just wanted to see if that's, go ahead. We have several different divisions that make up the utility.

Oh, Michael Gonzalez, Public Works Director. Thank you, Council, for having me. Thank you, Mr. Eads, for the late notice invite. I appreciate being here. We have several different divisions that make up the utility department, and one of those divisions is the utility billing department. Of those, you've got the clerks that work in the office and the meter readers. Mr. Bejas is going to present to you a couple of requests related to the meter readers.

Good evening, mayor and city council, city manager. So I have very few things to request. I'm just requesting, I don't know where I'm supposed to, oh, that's it. Okay, so the only thing I'm requesting right now is two trucks for our meter readers. I have currently three meter readers in the field, and they drive all day long, five days a week. Sometimes more when we have cutoffs. Typically we have about 60 cutoffs. twice a month and after hours if we get calls for customers that have paid their bill, then one of my meter readers is on call and they go out to that property and turn the meter back on. So those trucks will rack up the miles and so that's what we're looking at is replacing two of the three.

Just a reminder for the council, we're talking about two different funds as we kind of move into these discussions. The general fund, which is where most of your requests happened last week, and then we have the utility fund over on this side. We'll talk about that a little bit more as we get into the evening. When we think about items in the utility fund, it's the rate payers that are paying those, It's a service that we have no intention of ever interrupting, although emergencies notwithstanding, they happen. This continuous service 365 all day long, when we think about the prioritization of lists of non-immediate services, we can prioritize those and think of those. We take a slightly different approach when we think about the utility fund, is these services must get to the residents just about any time. When the staff comes to the council and city manager with these requests, that bears on our mind as well. How can we best operate this utility as a constant ongoing cycle? Up first, we have the division of the wastewater plant. We've got utility systems manager behind me, Joey Miller, and we'll both tell you that if you visit our plant, it is operationally excellent, right? We've had some of us, some of the council members out there to visit the plant. Some of the items that we did not get the opportunity to address in our plant expansion, as you may recall, there was not an interruption in service when we expanded our plant. It was ongoing. Some of the items that we just had to essentially cut from that list was the placement of a bar screen that's nearing its end of its life cycle. The bar screen helps the operators. It's that first catch before inorganic solids come into the plant. What the crew is doing right now is manually removing debris from that bar screen, which is doable. We have been doing it for about a year or two now. We know there's a better way. There's not a community or a utility operating a bar screen that hasn't had issues with it. Ours has got those same issues. It's just coming to the end of its life, it is at the end of its life cycle. And our recommendation is for replacement of the bar screen. It didn't get picked up in the plan expansion. The next thing is the AB. This is, And I know I've got Joey staring into the back of my soul right now. So the AV is where all of your organic material comes to decompose. And what we found over the years, and this is another system that did not come offline, is that we have something made up of two parts, organic material and inorganic material. As you may know, the inorganic material does not break down. And so after years and years, sediment is the best way to think of it, We've come to the understanding and knowledge that it's built up there in the AB. So our recommendation as staff, especially staff that does this quite a lot more than I do, our recommendation is to clean that out. Happens over a period of years. This one hasn't been done in quite some time, over 20 years. for that one next as we move down the list and similar to last week when we go in our mind we're cutting from the bottom and moving up these items definitely useful we'd make we'd make every opportunity to use them there at the plant is our main storage facility for any It has a pipe rack building, so all of our pipe, all material, any pumps that come to be replaced typically come there to the wastewater plant to be switched out with other. What we do is we just coordinate with the entire division to see who can help us unload this, bring that piece of equipment over to the wastewater plant, unload it. Again, if we're moving chemicals up two or three stories, we have to coordinate to do that. We have to get a couple of guys together. This telehandler just helps us do that more efficiently. Offload trucks and also move material up and down. Then also, too, these guys are traveling all over the state to acquire testing, the testing that we can't do in-house. Joey does a lot of that testing. Then we're going to go to other communities to do that, and the replacement pickup there at the bottom helps us do that. There's only two pickups there at that plant. It serves five people. One of them is around 2013 model. The other one's fairly new. This would be a replacement from the bottom model. Now, that's pretty quick, and I talk relatively fast.

Do we have a telehandler now?

We do not.

Okay. Yeah. Mm-hmm.

It's a good question. If there's more like that, let me help you answer them.

I have a question. Sure. So you mentioned that the sediment buildup hadn't been cleaned for some 20 years. Is that part of the regular maintenance or how does that, how'd that come to be?

It should be part of regular maintenance. The price tag there is kind of what prohibits us from doing that before. Years and years ago, all great staff have this hesitation, myself included, to come to say, hey, can we get upwards of $100,000 to do this? But I think we're in an area now, a new set of staff and kind of a different vision that this ought to be done on a more frequent basis. Also, too, we've had a couple of... weather-related emergencies that have contributed to that sediment buildup that we hadn't had before. So processing the most amount, still under our permanent limit, processing the most amount of material coming through now, which is how we came here.

You said regular maintenance. What's the time frame? How often is regular maintenance on this?

One moment, please.

Come on up, Mr. Miller. Please.

No, sir. Just look at me and I was going to look sad for y'all. Nope. On the cleaning of the aeration basin, you'd probably want to look at it every 10 years or so to keep it. The issue that we have with that aeration basin is that we only have one. And it's not something that we can take out of line or offline. So we have to do this while it's still running and spinning and everything like that. But it is probably one of the most important things that we do at the plant.

Without getting into too much detail, what's the process to clean that?

Well, we've talked to a couple companies and one comes in with kind of a robot that they go in and it picks it up and what we have in there is the shape of the aeration basin is oval and up at the front of the oval we have two aerators which sends the the the mixed liquor or the activated sludge around. But when it gets to the back end of the oval, it kind of slows down. So it would be you would kind of think of it as if you had a bottle of water and put dirt in it and shook it up and then set set it down on a table. What would happen to the dirt? It would settle to the bottom. So what we have is when it comes around on the backside and slows down, then those heavier solids start to settle out. So we're hoping that the majority of the cleaning can be done right there at that at the two back ends okay so removing the buildup requires materials or equipment that we don't own oh no sir we can't this is not something that we can do on our own so we're calling in right yes professionals to do that yes sir okay thank you thank you

The cleaning of the AB is something that was requested last year. We all recognize the position that we're in in these last two years. Good questions. So this is another division that Joey manages, and so I may tap on him again. So this is the clean drinking water coming into the system. We have a SCADA system that manages the whole system. This, as we know, we're making an attempt to move from cellular devices that report on these things to radio devices with the LCRA. We got most of that figured out in a way to fund it. This is also just upgraded. To the rest of the system currently we have just under three users that can remote in and that's great You know the smaller staff that worked out well for us as we're growing in staff We have the opportunity to reach them at home remote work And so they can get to the problem should there be any faster and those alarms help us get there faster this price there is not only to Complete some of the upgrades in the field, but also buy more licenses that we have that will need to operate the equipment We do have a security system there at the plant. This is to upgrade that and to kind of expand the footprint of that. Over the years, and I'll talk about the next two, If the plant is running well, and if the operators have a way to get to each site, the third biggest challenge that we've found out there is keeping back the jungle. Operating in a way that kind of keeps, we've got fire suppression, you know, where we keep the vegetation back away from the plant, but also too, these are giant trees. In weather events, they've kind of fallen down. We've done our best to fix up and shore up the fences and areas to be compliant, which is what we are. This just kind of helps us get to a better managed state of that. With that shredder too, we've got about eight miles of transmission line come from the well fields out east into our plant and then back into town. These machines just help us maintain that. We're currently maintaining it with smaller machines. This is just a means to help that. In the same way, we kind of cut from the bottom and move up. We recommend those top ones to be kind of essential to the operation. So we got the wastewater treatment plant at the end. We've got the water treatment plant at the beginning as they're producing drinking water. Here in the middle, the folks you see around town the majority of the time, this is called collections and distribution. These are our customer facing team that you may encounter if you've had a sewer backup or maybe a leak at your home or something like that. Currently these guys have had just, tough time just around the corner from us just just a block away from here these pickups these service vehicles help them do their job here in the field it's probably the guys that you've seen most around town the dump truck something that we're recommending as staff just to move more material. And so we have two eight yarders in this division right now. With an eight yard dump truck, if you get to eight and a half yards or whatever hole you're digging, you gotta stop. You gotta go dump that. You're not gonna run around town. Just slightly over. And so that kind of adds time to dig in the hole, which is understandable. It's something that we've worked with already. But this just kind of gives us more free board to load more material. The on-call truck is a seven days a week truck. that is visiting all of our lift station sites. It's racking up the miles, just a replacement of that one. And then we have two service trucks that kind of work on the collection side and the distribution side. Collection's gonna be hauling a jetter trailer, and it's ending its end of life cycle. And then we have a service truck on the distribution side, and it's kind of the same configuration, large 450 pickup with a service bed on it. This one will replace the older of those two. As we're getting into an area of more service, more customers, more calls per day, it's our recommendation as staff to fund that as kind of two different groups. And so these two FTEs, that's kind of full-time equivalent, just build to that crew that's already there and allows them to kind of split up on different projects. In any kind of digging project, in any kind of... Sewer backup takes a few less people. You know, that's kind of the common criticism of us, and I understand it completely. Why are there four guys working on that one project? Each one of them there has a role. Each one of them there has a division of safety that they're responsible for. If we're going to split that crew, we need to make sure they have the ample amount of people in order to split that crew. Just based on the volume of calls that we're getting, we're recommending going to this, if not this year, in the next year. adding certain subdivisions to our inventory like Briarwood kind of necessitate adding to our staff.

What's the increase in call volume percentage-wise?

That's a great question. Then I'm gonna get to you in an email just after this. Got it.

To all of us, right? To all of you guys, that's right, yeah. And as we ask questions like that, I hope that it's understood that it's true.

I think you just misspoke on that one.

Okay, thank you.

That's kind of an overview of the utility division, how we operate. I'm happy to answer questions. Like I said, I couldn't have done that without Joey here. It would be a great time to have him answer another one if you've got one.

You were talking about the tandem dump truck. That's right. How many yards?

The current one that we have right now with the single axle is eight yards. We'd be looking for a 12-yarder in that setup, that configuration.

it complements the other right it's not replacing it uh replacing our oldest one and so we'd go to an eight yarder mixed with this this larger one and you mentioned they were up on pretty high on mileage can you estimate where

Yes, I think on the dump trucks, and I'll get you an exact number, we're around the 80,000 mile mark, which is a really good question, especially for diesel pickups and things like this. This is a really good question.

Breaking it in.

Yes, your city miles are so different than your highway miles, and the way we kind of move around town. So, Mr. Bejas, with your request, your city miles are almost double just the wear on your pickup.

Yeah, it's all stop and go.

stop and go in and out and those kind of things yeah and then um luckily these trucks you know have kind of lived on a paved surface but the unpaved surface is just going to even double just the wear and tear on this but it's a good point to bring up you know hey my car can last this but that's kind of the position i know michael we don't is there any benefit to consider leasing these vehicles The same, or similar, I should say similar, I haven't engaged this type of financing. A similar type of financing is available to public works vehicles than it is to the police. And it's an option that actually the utility department has used before. We haven't found kind of a great match, great partnership on that, but it is an option that we will explore. With this new, vendor that's approached the police department I think we'd start there to see if they have a good relationship but it's it's really up to leadership means we expand our fleet it just maybe it makes more sense to outright buy and what we do is probably look for it on the gently used market

mayor if i may before he steps off um or as we go to perhaps next item uh the the way we separated this was purposeful just for your information so general fund we wanted to keep in that sort of framework where it's tax driven those sort of ideas and then we wanted to put what is where you have enterprise funds or those more commonly known as those business type models, which is what we're talking about here. And that's precisely why we have our our team back there that did the RAID study. And so it separates from the ideas, even though we have both presentations, they're separate for a reason, right? So we have that list that was created, the first one, which is funded a whole different way with whole different systems. But through the RAID study that they're about to give you right now after this conversation was done on a different day. because I do want y'all to put on a different hat today to run that desperately like a business, because they will explain the position that we're in, and I include us all for a lot of reasons, and that way we can marry it up and then to see how, obviously, you hear from the department the need, just like you did with police and parks and everyone else on the other side, but right now with them and then having the rate studies is where you can actually have some solutions in there. Because as a business, you're gonna hear, and I don't wanna steal a lot of it, but you're gonna hear also like we have some pending debt that we gotta deal with too. And there are solutions to it, but today it's like walking in right now, you're a board of directors for a business. And so this is the first step to say, look, the business is saying, because of growth, I mean, our team's here, Bo's here, Kaylee's here, we're all here. We've got these conversations to say, this is the cost of doing business, and the business is growth. but to put a fine point on it is that's a detail that we give you to then realize and then um i think we have some of that detail uh in the study that's going to be presented but i just that mindset was was purposeful like it wasn't i didn't want to mix the two conversations because it's really hard even for staff to kind of sit here and kind of be like yeah i know we're talking about parks but these are rates taxpayers uh and these are rate payers you know it sounds similar there's two different two different things that we're talking about so i i don't you know i'm done with that mayor i just wanted to point that out before we call up uh the next item but i think that was it for the presentation

Any more questions on that topic before we move on to number two? Okay, number two is a presentation of the 2026 Utility Rate Study from the New Gen Strategies and Solutions. Michael.

So just to remind the council how we got to this position, wanted to start out somewhere on the map of what our rates are, how do they compare with the communities around us. Council gave that direction to the staff, and the staff went out and put out a request for qualifications, several different firms. We had firms respond, and NUGEN was one of them. We got our scoring committee in there, and we kind of did some calling around as well as our scores. came to the conclusion of NUGEN. NUGEN had worked with some of our partners in similar communities and so we felt it was a good fit not only to scoring, kind of suggest that as well. This study, staff has been working with this firm to provide them detailed information about our operation and kind of how we operate, our debt that we have in the system, our operating costs overall day to day. and they have put those numbers into a packet they're delivering to you now, and also a presentation that they're here to give to you. Today we have Alex behind me and Sean up front from NewGen Solutions, and they're gonna give you this detailed presentation, a scenario, two scenarios to present to you today, but they'll get into the details into the nuts and bolts of this. We'll have them present.

All right. Thank you. I'd like to thank the mayor and the city council for having me today to present the results of our rate study before you. My name is Sean Henderson. I'm a senior consultant at NewGen Strategies and Solutions in our Austin office. I've been working on water, wastewater, cost of service, and rate design studies for about three years now. And I acted as the project manager on this study. So I'm going to go through this presentation. at a pretty high level. Feel free to interrupt me at any time if you have any questions or if you want to go into more detail, we can do that, but I'll try to keep it high level so we can stay on time. So just a little bit about our project approach and our methodology, how we approach this study. First, we develop a revenue requirement forecast. What that means is we took your 2026 budget. We worked with city staff to adjust that budget on a line item basis to exclude any one time costs or special projects from that to come up with a normal year's budget worth of operating expenses. We then inflate that over the five year forecast period on a line item basis. And then we add in your capital improvement plan as well. So that gives us our revenue requirement or what you need to recover from rates. We then use a methodology called the base extra capacity methodology to allocate that revenue requirement across your different customer classes to give them their fair share of costs to provide service to those customers. Then we look at how we forecast your current rates to perform over that forecast period against those costs that are needed to be recovered from rates. And we also look at the customer class level to determine who's paying their fair share and whose rates need to go up. And that informs our rate recommendations. So what is a revenue requirement? Put simply, it's your O&M expenses. We layer in your rolling stock replacement or your equipment replacement, your cash capital outlay that Michael just presented before you, and then you've got your larger capital improvement projects. That's to support your system growth, your large replacements, and that gives you your annual revenue requirement. That's what you need to recover from your service rates to cover your operating expenses and costs for the utility. So a couple of key issues that came up in this study I want to highlight. The utility funds are currently owing a balance of $1.8 million between water and wastewater. So we were asked to design rates that do recover that owed balance and get the utility back to even and balance the books also you've got some significant capital improvements and upgrades over the coming years and it's actually a spotted a typo it's wastewater treatment is the big one where you're looking at expanding your wastewater treatment plant if your system continues to grow And so this is a look at the capital improvement plan. We've separated this out at the summary level, and we actually worked with a firm of engineers. Kim Lee Horn helped us look at your capital improvement plan, review the projects, verify the cost estimates were accurate, and break them into non-growth related projects and growth related projects. The idea behind that is your non-growth related capital projects should come from your existing rate payers. They're paying to just maintain the system, replace what's already there, but the growth related capital projects, the projects that the city will have to pay to expand capacity for the system, So it can support the growth in your city. It should not come from your existing rate payers. That's for the new developers who come in and expand your city to pay for.

And so... John, is that slide in our handouts?

the cip i do not believe it is in the packet that you have there today this is just a draft packet of our analysis and we will be issuing a draft report with a more comprehensive packet in the coming weeks okay for the for the city council to review anything you wanted to add there robert

No, no, I was going to mention that to the Council as well.

Okay, excellent. So what we're focused on with the rate study, we're just looking at that non growth related capital projects portion that's going into your utility rates. So $5.9 million over the five years, you can see roughly five and a half million dollars in FY 2027. So that's a large expenditure we're actually recommending the city propose a debt issue to pay for that so you can spread out the impact on rates and avoid a much more significant rate increase in fiscal year 2027 to pay for those projects so we developed two scenarios for you today, they're in your packet. One scenario is to recover that owed balance for the two utilities, not including the equipment replacement that was just presented by Michael. We also added a second scenario, recovering the owed balance by the utility funds, as well as paying for the equipment replacement over the next five years that was just presented. So we take your O&M expenses, we add in your debt service, that includes your existing debt service, as well as the proposed debt issuance I just mentioned on the roughly $5.5 million in capital. That leaves you with your gross revenue requirement or your total expenses. We then use some miscellaneous revenue offsets to help offset some of those costs. Those are any non-rate revenues, late payment revenues, et cetera, wastewater tap fees. Those help to offset those costs, and what you're left with is a net revenue requirement. That's what you need to recover from rates. So we forecast that to be $4.5 million for water in fiscal year 2027 going out to fiscal year 2031. We expect that. to be just shy of 4.9 million dollars so scenario two as i mentioned the only change here is we added in that equipment replacement roughly 730 000 in fiscal year 2027 that's we assumed that to be split evenly between the water and wastewater utilities so 365 000 for water in year one and then $500,000 in equipment replacement annually thereafter. So 250,000 goes to the water utility in years two through five. So your net revenue requirement under this scenario is $4.9 million in fiscal year 2027. We forecast that to grow to $5.1 million by fiscal year 2031. Now looking at the wastewater revenue requirement, again under scenario one without the equipment replacement, net revenue requirement roughly $4.85 million in fiscal year 2027. We forecast that to grow to roughly $5.2 million in fiscal year 2031 for wastewater. And that second scenario where we add in the equipment replacement for wastewater, that's now, we forecast that to be $5.2 million in fiscal year 2027, growing to roughly $5.5 million in fiscal year 2031. So a look at your current rate structure. This is for water. So you've got a two part rate structure. You've got your fixed meter charges that increases as your meter size increases, which is an industry standard. And then you've got a volumetric rate structure that uses an inclining block structure. What that means is as you use more water, that rate goes up. which is also pretty standard in the industry. I want to mention currently in your rate structure, you are not charging residential and commercial customers for the first 2,000 gallons of volumetric rate that is included with their fixed meter charge. So we'll discuss that in a second. so our five-year rate scenario for water under scenario one without the equipment replacement we are not proposing any increases to that fixed charge at this time for your residential commercial irrigation customers under this scenario we find that that fixed charge is recovering sufficient costs for its portion we are recommending some slight changes to the residential volumetric water rate structure and that's just increasing the gaps between those different consumption tiers currently those gaps are pretty narrow compared to what we see in other clients and other utilities the idea behind that inclining block rate structure is you want to encourage water conservation without a large difference in price or a significant difference in price, you're not likely to see any customer behavior change in terms of water use. So what we're proposing is a 10% and then a 15% and a 15% increase between tiers two, three, and four respectively, compared to that $4.12. And so that's what we're recommending for residential both inside and outside is just increasing the gap between those consumption tiers. And on the commercial side we are recommending that the commercial customers be charged for the first 2,000 gallons the same rate that they're charged for 2,000 to 5,000 gallons. We're also recommending a 21 cent increase in fiscal year 2029 and a 22 cent increase in fiscal year 2031 to that first consumption tier rate. So the $4.12 going up to $4.33 in fiscal year 2029 And finally, up to $4.55 in 2031 for commercial inside customers. We're recommending the same gaps between consumption tiers for the commercial customers as the residential customers. So beyond 5,000 gallons, that rate goes up 10% to $4.53. then up 15 cents, or up 15%, excuse me, for 9,000 to 13,000 gallons to $5.21, et cetera. Now for the irrigation customers, we find this customer class is under recovering the cost to provide service to these customers, the most of the three customer classes. So we are recommending $1.24 increase to that first consumption tier for irrigation. We're recommending a similar increase between the consumption tiers for irrigation, but this time at a 15% increase between all four tiers. and then a 54 cent increase again to irrigation rate in fiscal year 2029, bringing that first 4,000 gallons up to $5.90 per thousand, and then an additional 30 cent increase in fiscal year 2031 to bring that first consumption tier to $6.20 for irrigation, which I'll mention is pretty common for irrigation customer class rates in other utilities. So here's how we forecast those revenues to perform under that first scenario. We would expect the utility to slightly under recover in fiscal year 2027 before recovering its cost the next year. And then we would be able to pay off that owed balance over the coming four years for a cumulative over recovery of $469,000 over the five year period. So that's cash that you could set aside in a reserve fund to pay for some of these emergency repairs and projects. All right, looking at that second scenario, you add in the equipment replacement and the rates need to go up to cover those additional costs. So under this second water scenario, we are recommending a $1 increase to that fixed charge in fiscal year 2027 with no further changes to the fixed charge thereafter. I will mention this is just for the three quarters inch meter. As that meter size increases, you've got ratios between those meter charges where the rate goes up. So this is a $1 increase for the three quarters inch meter. For the one inch meter, I think it's currently roughly one and a half times the rate for a three quarters inch meter. So that rate would go up for the one inch meter roughly $1.50 for that fixed meter charge. Then the volumetric rates. Same thing, we're recommending that 10%, 15%, 15% increase between those four consumption tiers, and we're recommending a 21 cent increase to the residential inside rate for that first block in fiscal year 2027, an additional 22 cent increase in fiscal year 2029, bringing that base consumption tier up to $4.55 per thousand. For commercial, Similarly, we're keeping the gaps between consumption tiers consistent with that first scenario. For rate increases on the volumetric side, we are recommending a 41 cent increase to commercial inside customers in fiscal year 2027. That's a 10% increase. For commercial outside, they're going up 62 cents in fiscal year 2027. That's a 10% increase. So the percentage increases are consistent, but the dollars and cents between inside city customers and outside city customers varies. So in fiscal year 2029, that's an additional 5% increase, and in fiscal year 2031, a 5% increase. For irrigation, we are recommending the $1.24 increase consistent with scenario one in fiscal year 2027, then 10% increase in 2028, a 10% increase in 2029, followed by two 5% increases in fiscal year 2030 and 2031 to help get that customer class to recover the cost of providing service to those irrigation customers. And this is how we would expect those revenues or forecast those revenues to perform over the forecast period, the next five years. They would under-recover the cost of service for 2027 and 2028 before covering costs in 2029 and recovering that owed balance by year five, 2031. You would have roughly $230,000 at the end of the five-year period you could set aside in a reserve fund. Now looking at the wastewater rates. So you currently charge a monthly fixed charge to all residential and commercial customers, regardless of their meter size, $36 a month. And then you've got your volumetric rates for wastewater as well, based on their winter average consumption, November through February. That first 2,000 gallons for wastewater is included in their fixed charge, similar to your water rates currently. And then beyond 2,000 gallons, your wastewater customers are paying $4.12 per 1,000 gallons. So under that first scenario for wastewater, we are not recommending any fixed charge increases for your residential and commercial customers. We are, however, recommending you charge for those first 2,000 gallons the same volumetric rate as you're charging for beyond 2,000 gallons, as well as a 29 cent increase to the volumetric rate in fiscal year 2027, bringing that rate from $4.12 to $4.41. an additional 22 cent increase in fiscal year 2028 to bring the rate to $4.63 per thousand and a 23 cent increase in 2030. So what we did with the wastewater rates aside from fiscal year 2027 is we recommended rate increases in the even years for wastewater whereas the water rates we saw were increasing in the odd years 2029 and 2031. That helps so your customers aren't seeing their bills jump as significantly in one year to the next, and rather that's spread out over the five year period. You've also got some wholesale customers. for wastewater. And these wholesale customers all have contracts that specify that their rates are driven off of your retail rates. So we cannot recommend any different rate increases or structures to these wholesale customers. Bound by contract and determined by the retail rates. So based on the retail rates we recommended, this is how we forecast those wholesale wastewater rates to be. Travis County MUD 14 has a different condition than the other wholesale customers. Basically charge a 10% administrative fee or a 10% credit off of their bill And that's due to you know, they perform their own maintenance on their system they use their own billing personnel and staff to collect the residential usage and and determine what those bills should be and report back to your city and so instead of the $36 a month they pay $32.40 per connection per month for the fixed charge, and instead of the $4.12 per thousand gallons, they pay $3.71 per thousand gallons. Your other wholesale customers have a different condition on their contract. They pay the same fixed charge per connection, but their volumetric rate is determined by a credit calculation the portion of your utility billing costs as a percentage of the city's or the utilities operating and maintenance expense budget and so that was calculated last at 15.22%. Under our rate study, we're actually calculating that percentage is going to be lower over the next five years based on our revenue requirement forecast, meaning their credit to their volumetric rate will be less. So their volumetric rate will be higher under our calculation than the previous calculation. And here's how we expect the wastewater utility to perform under those proposed rates for scenario one. Again, slightly under recovering the revenue requirement in 2027, 2028, and then we start to catch up in 2030 and 2031, where we pay off that owed balance from the utility fund. look at scenario two again this is with that equipment replacement added into the revenue requirement we are now recommending a two dollar fixed charge increase for residential and commercial and fiscal years 2027 and 2028 bringing it from 36 dollars to 40 dollars in year two and then the volumetric rate increases are the same as scenario one And so you'll see the only change on the wholesale rates is that Travis County MUD 14's fixed charge rate is now increasing with the increase to your retail fixed charge increase. I will point out under this scenario though, the volumetric rates did change slightly for your other wholesale customers. That's because the percentage of your utility billing costs as a portion of your O&M expenses is slightly different with that equipment replacement added in. And this is how we expect the wastewater revenues to perform under those proposed rates for scenario two. Again, recovering your costs, paying off that owed balance from the utility fund, and setting aside some cash for reserves. So let's look at those reserves under the two scenarios. You've got scenario one for water and wastewater in green, and then scenario two with the equipment replacement in blue. So you can see the utilities owe a balance currently. By year four we get close, fiscal year 2030, we get close to paying off that owed balance before finally in fiscal year 2031 actually having roughly half a million dollars in reserves for the utilities to help pay for you know, non routine maintenance or special projects, emergency repairs that can come up. And this is a look at what we would expect the average residential bill to look like under these proposed rates. This is scenario one. So in fiscal year 2027, a very small change to the water bill that's due to spreading out those consumption tiers. But the wastewater bill is going up and so you've got an on average assuming 5,500 gallons a month of consumption the total utility bill is expected to go up by $10 and And under scenario two with the equipment replacement costs, you now see a $2 increase to the water bill, a roughly $12 increase to the wastewater bill. So we would expect under scenario two that average residential bill to go up just under $14. And this is how those rates look compared to some of your neighbors. So currently, City of Elgin's water and wastewater average bill would be slightly higher than Manor and Bastrop, but lower than Hutto, lower than Taylor. And I've got two utilities down there that only have water customers, no sewer customers, but Aqua Water Supply Corporation is one of them, and Manville Water Supply Corporation is another. And both of their water bills are currently higher than your current rates. You can also see up there are your proposed scenario one and two rates and the increase to that average bill. Under those two proposed scenarios, there's no change in this hierarchy. You stay right where you're at. You're higher than Mainer and Bastrop, but you're still lower than Manville, Aqua, Hutto, and Taylor under both of those scenarios. I will say your water bill does go up above Hutto's, but with their higher wastewater bill, you're still at an average utility bill lower than that. And so our recommendations would be to increase rates for the beginning of the next fiscal year for whichever scenario the council decides is appropriate. and then continue to monitor the wastewater and water rates, how they perform against your budget in the coming years, adjust as needed. If you're seeing more capital improvement projects that you need to take care of in the five years other than what we forecasted, or your maintenance costs go up higher than what we forecasted, then you may need those rate increases sooner than we've proposed. And then lastly, our recommendation is after paying off that owed balance from the utility fund to build up a reserve fund. We usually recommend to try to get to 60 or 90 days of operating and maintenance expenses. That helps you cover any under recoveries from rates. You maybe have a wet year where people aren't using as much water or you've got some emergency repairs you've got to address. All right, thank you so much for letting me get through that. Now, I'd like to open it up for any questions.

You done said all of that, and then want us to continue. Thanks. My question is, scenario two is based off the added equipment and everything they have on this list. I'll point to this, but everybody see that over there?

$730,000 per person.

Okay, so if there are some stuff that is taken off, is that adjusted or would it still be the same?

Then the rates could potentially be adjusted. However, I would say those reserve funds are needed. So if anything, it could be additional reserve funds to put in the utility fund because what we came up with did not get you to 60 or 90 days of O&M expenses in a reserve. Okay.

What's the average resident? Where do they fall? Usage? What meter size?

So the average residents, most people are on a three-quarters inch meter. And this bill calculation was based on your average residential customer. So we are seeing from your billing data that they're using on average 5,500 gallons a month. This would be your typical residential customer's utility bill for water and wastewater. They're currently paying roughly $111 per month. They would be paying $121 a month for water and wastewater service under the scenario one fiscal year 2027 proposed rates.

Can we call Ms. Doty? I just want to add something.

The city, we bill on per 1,000 gallons. So that 5,500 would only be billed at 5,000, not 5,500. And this is only showing you water and sewer. Trash is on that bill as well. So that might be the difference of what it's gonna increase for the water and sewer part of the bill. But the $111 is the whole thing, water, sewer, and trash. what is the average what's the average trash right now it's 2706 but remember that we have a contractual increase with waste management annually that's based on the cpi it's capped at five percent so it can't go over five percent but we can always it can always be under i can guarantee you it's not going to be so the rates that we put into the budget for this year do reflect that five percent increase for the trash for commercial and residential

and if I can add something especially for tonight's discussion and where we're at tonight tonight this council will be discussing or looking at this like the comp study where you'll be deciding or technically accepting the report You then go back as a council, we'll go back as staff, and that's why this report to be finalized will be coming. Because from that information and the additional questions that may come to be used within our budget, process still to come that are included will come from this and that way you can take a deeper dive go through the numbers even more to say gosh this was a little high here can can can we do a little bit different here he's able to to generally speak to that because obviously they ran the numbers and objectively as a third party But the pressure's not on right now, right now to solve that question today, today, right? We have a timeline and schedule, he knows all about it, right? And so that's what I mentioned, like tonight is really focused on some key things. Tonight is really accepting the report as complete, technically complete. But he's not going away, just like comp study folks are still able to be accessed. for fuller detail and that sort of thing. And so that's why also this report will be handed to you and any other detail that we can provide outside of this detail. But tonight's presentation was this is the report. But there's no rush to kind of figure all, ask every single question you have. tonight but if there's more don't feel rushed to be like you're supposed to make some sort of determination tonight because something may come to you tomorrow tonight even um but the idea is to get this in your hands uh tonight and this is accepting tonight is accepting this report i accept it as a deliverable that they've completed to be able to let's say get paid you guys are still able to say can you can you massage it a little this way this seems a little high or give me how you came up with this idea there's still the subject matter experts and we can still go back to say you know run it with maybe this or run it with maybe that um but generally speaking i think what he's telling us right now is you know we are backed in the corner there's some debt that we gotta solve

And as a business, these are your options, stockholders and board members.

And there's only certain ways you can kind of do this. But if you think it should be weighted on this side, on more commercial side, on residential, front end, back end, however that's decided, whatever ideas you have, please, that's what the company or the firm he works for, tonight or later on.

Yeah, so I know there were two slides that were important to me, right? The comparison slide where we looked at the different cities that we compared with, and we were comparable with pretty close there to Hutto and Manor, right? I mean, lower than, I mean, Manor's lower than us, Bastrop's lower than us. So based on your analysis and the statistical, how did we determine, is it literally just what they're paying per gallon? And is that how you came to determine it?

So this analysis is based on all of these utilities in cities' current utility rates. Most of them are charging fixed charge volumetric rate per 1,000 gallons, as you mentioned. And so we plugged in the same assumptions for City of Elgin's average residential customer using 5,500 gallons a month versus these neighboring utilities. uh, rates. And so that's how we came up with this. I will say this only shows those other utilities current rates, not what they're doing for next year as we, as we showed with proposed scenario one and two. And so, uh, I mean, look around the state and what's happening with water all across Texas. I can almost guarantee these other cities and utilities will be raising their rates if not next year than in the very near future as well.

Yeah. data pulled from those communities, I think Beau and both Joey would agree with me, They're our neighbors geographically only. They run completely different systems. Not different technically, but it's really important to know and to understand that just kind of the area that Elgin serves, all the muds that we serve, going through this process over the last couple of months, there's some catchphrases that we caught onto like, this is gonna be confusing when we get to them. Our wholesale customers, that's not a discounted rate, that just means a one-time customer, behind a big meter. we didn't want the council to get any ideas that they were getting a better rate or anything like that. Also too, if we compare ourselves to these other communities, that is true, that is the bills that they're paying, but just geographically only. These are residential, right? Residential, right.

These aren't wholesale, these aren't commercial, And so I think linear feed of pipe versus number of residents that are actually having service provided. I know that we're kind of spread out, right? I don't know if it's more spread out than Mainer, but I mean, I take that into consideration. Do you guys, did you look at that and can you kind of give us any background or do you have any?

We didn't look at the engineering behind the different systems. This was simply a financial analysis based on that average utility bill calculation.

Not necessarily a number of linear...

no we took actually we took the communities this was these were communities that staff recommended in our kickoff meeting that they would like to look at benchmarking the rates and so we thought you know benchmarking against neighboring geographical cities made made a lot of sense but like michael mentioned not every system is different and unique has their own capital costs they're they're treating different volumes of water and so it yeah it's it's hard to make a perfect apples to apples comparison even when you're looking at your geographic neighbors.

No, we won't find anybody that's the exact same. Statistically, not possible. Exactly. And then the other, I think, was when you were indicating the amount of debt service that could get paid off by year, and then where we'd end up with the revenue positive. Can we look at that slide? So...

And to get us to the positive is scenario two.

By 2031, they both do.

It shows how much in five years will be. One minus equipment, one plus equipment.

So scenario one really is just taking what I think he's telling us is what's necessary to get us out of debt, and that'll take us to five years, let's call it. Scenario two is doing the same thing except adding about three quarters of a million worth of equipment, right? So it'll take us just a bit longer, but you also then get that equipment that's needed or requested, let's just say. Is that accurate, Sean?

That's correct for fiscal year 2027. We assume some equipment replacement in years two through five as well.

But as it's laid out, that's a difference between scenario one and two. It's... The math in between is about the same, but technically it's almost like you're starting with scenario one that is paying off your debt, and then scenario two is paying off your debt, but adding it to it, generally speaking.

And the debt service is not any new debt service in here? This is just existing debt?

How do you want to explain that? So there's both. This $1.8 million owed balance from the utility fund is separate, but also included in the revenue requirement and the rate study is your existing debt issuances to pay for utility projects, as well as we did propose some debt to cover your $5.5 million of capital projects next year as well. So that debt service, we assumed 30 years, 6.5% interest on that new debt issuance.

And is that the book that we were always looking at to service those capital improvement projects?

Yes. What we've included, though, is this idea of tending to this negative one and a half that's been sitting there with unresolved answers, and we're just hitting this straight on. And look, to be honest, I mean, we wouldn't suggest this, and we're not even, I'm not here in a way different, and I wouldn't suggest it if I had the ability, to go any faster. Our rate payers wouldn't be able to sustain it, but we can get to this in three years, but the rates would be outrageous. right so i know these are greater rates like higher rates and getting there but if you know if our question is well why does it take five years well that's because that that's probably the most what i believe sean believes is the most sustainable way to kind of get what we can with the rate payers for you maybe maybe not but But you can get there out quicker. I mean, it's a business. You can just say, you know what, change that by do 50% more and you'll get out. I don't know if it's technically with math, right? 50% faster is probably not. But you know what I'm saying? You can do it faster. We just don't think the rate payer would probably be able to sustain that pace. And so we've taken that curated approach too. I think they did to be cognizant of that. But if, again, if the council so chooses at a certain point to say that's too slow to get out of that red to get us in a different position based on what the community is for, the rate there is the same, we work with that.

And the capital projects, city manager, the capital projects that you're including?

Do you have that list of projects?

The list of projects will be in the report. We kept it just summary level for this presentation. Yeah, true.

One of the things I noticed, just kind of looking at some of the other communities, our consumption rate is a little higher for a small community, it looks like, as opposed to gallons per day, that sort of thing, per person. And what I'm getting around to, I guess, is if maybe we're a little more aggressive in conservation, that we might be able to reduce, not rates, but the cost per

The best way for conservation is rates. That changes behavior fast. Right. And I'm sorry to say that, but.

But we're a little higher than most people. I mean, most communities.

I was just gonna say that is why so city meets all the requirements you have a drought contingency plan you have a conservation plan but the city has never enacted any kind of stage conservation just because your infrastructure has been able to keep up so even in the hottest of the days you haven't gotten a notice about increased rates or only watering on certain days or during certain times for those who have been here in Elgin you probably have never seen that Those are in Saratoga farms probably have seen that coming from aqua Since they're on aqua water supply and the reason that is is just the infrastructure you currently have and the Area and the number of residents that you're serving Your system can keep up with that We've had that conversation former council members always say how much of the water are we actually using that we have access to even in this summer maybe 30% less than that 25% of the water you have access to is what you're actually using even in the worst of days throughout the year. But as city manager said, you haven't enacted any of those that would actually have people use less because there's no penalties or anything for that. You guys have basically been construction, a large amount of construction on the meter water that you guys sell to contractors, not only here working in Elgin, but we're working in other areas just because you don't have those limits that you've had to fight up against.

We were kind of spoiled in a way. We were always told we had plenty of water and didn't need to worry about it.

And that's still the case. I mean, I don't think your rates that you're doing now, I think it needs to be very operationally focused. I think the last rate increase actually done by council, you're talking five or six years.

Yeah.

So you've held rates that low, even though aging infrastructure, maintenance budgets being the exact same and doing more with less over the last half a decade. And you got to remember, you went through the winter freeze during that time. and all the system constraints and impacts that put on there. There wasn't a emergency fund that was done to major capital or maintenance or anything like that done during that time. That was all picked up by the rate payers at that time and just made work by city staff during that time. So when you look at it in that course over the last five to six years, why you're running a negative balance. It's not all come from one. It's just been incremental. That's kind of added up. And at this point, Robert said three years you could consider. It kind of took you five years to get to where you're at the negative basis. We kind of looked at it being a five year plan to get you back to what you would consider a normal operating. And then you would reassess at that point in time of what that next infrastructure If you're ahead of the curve there, you might be reducing rates at that point in time. If council went with other plans that penalize, if we went into drought restrictions or stages and things of that nature, those are all things that are for future consideration.

Just to clear up the record on this thing, the city has, as far as I know, has never borrowed money from the utility fund, is that correct?

So we, no, borrowed technically, you use transfers, that's the city function. Right, right. So what you're able to do with a transfer is pay for administrative costs that the city provides to that department. The HR, the legal, all the city functions that that department provides. receives because again as we speak in two different buckets um this is a business that's being operated for um for revenue and when we speak of the other general fund that is not that that is a taxpayer function uh you are able though to charge uh that administrative fees and those fees at allowable rates to be transferred over into the general fund.

The reason I ask is some folks blame the city or administration or whatever for causing this deficit.

I would say you do it as Robert says. There's real costs that the city incurs that is related to the utility fund with your staff personnel who are doing that, and that's what that transfer's meant. I think the fact that you just have not looked at the rates in so long. I've had those conversations. I think some council members thought that they put in an escalation clause already, that it was supposed to go up by itself each year, or that was trying to be finagled. Ultimately, it's got to come back to council every year, and you set a new rate. You go back out to the wholesalers. You notify everyone, and the rates go on. And so it should be one of those things that potentially is looked at during the budgeting process every single year council looks at it again and then decides where it should be going right

But again, that too, and having said that too, with even how much your transfers in, transfers out are, is part of your budget document. I know in other cities where I've been in, there were other enterprise funds. In one place, there was a bridge fund. that was a 70 80 million dollar fund even of itself because it was such a large operation and the intensity of it much like that large city's water and wastewater was too the transfer end was sizable but justifiable because of the operation and so it's not a magic number it is one that smarter people than me calculate and know. From what I've seen and what I know, at least for now, I know transfer in, transfer outs have happened, and that's a normal operating thing. And that's what I know about it, too.

OK, so I usually tell my wife She pays this bill, and I think we have it on auto pay. So I haven't noticed that there hasn't been an increase in five years, personally. I don't know that many of our constituents know that. I know that. You knew that?

Yeah, my bill has been $117 for about five, six years, flat, every single month.

I can remember when I paid less than $60 when I first moved here. I mean, I remember that. I remember gas, too, when I was little, too. Last week, my wife told me, My account got exposed or whatever, and so I had to put it on my card because she was working. I said, well, let me take care of it, and I talked to somebody in Dodie's office. And when I heard the number, I was surprised. And I thought, wow, I remember when it was a lot lower. But even where it's at, we haven't raised it in five years. So that gives me a little bit of background to help understand our position. And I hope that we can get that list of capital projects that are included here. It'll be in your report. Give me an understanding of what it is that we're trying to catch up with.

Will we be supplied a digital version of all of this?

Without doubt. We have our consultant here, and we can get all that.

Please.

And I think you're able to turn it around rather quickly. Rachel?

Thank you. Thank you, Council Members. Thank you, Sean. Thank you.

Good job.

Okay, so some of them need a break, but before we do that. No, no, no. I got this. Okay, so. So before we do that, though, we need a motion to accept

I'll make a motion we accept this. And I'll second. All right, so we'll begin the council number four, CRIM.

CRIM, yes.

McShane, yes.

Hymas, yes. Gibson, yes. Seeley, yes. Love, yes.

St. Pierre, yes.

Mayfield, yes.

Okay, it is 7.45. It is 7.50, and we're reconvening our special meeting. All right, the next thing is number three, presentation of balanced budget by the city manager. As according to Article 4, I mean Article 5, I'm sorry, Section 2B and Article 7, Section 2 of the Elgin City Charter.

Thank you.

City Secretary, can you put up the slides?

Sorry. Perfect.

Thank you, Mayor, City Council. So we're passing out right now your budget documents for our 26-27 balance budget document. So as I've been noting and throughout the way, throughout our budget workshops and conversation, we are not finished. Really, we are, I don't know, I'd say probably midway in our conversation. Today, and I'll go through some finer points in this, and really, I'm going to focus mostly on the next item, which is going to be the tax rate conversation. Right now, what I want to do is point out some highlights in the document that's being presented. Now, I'll start also by saying whatever's been done in the past, how you've received budgets in the past, the presentations you've had, I know I'm gonna be doing it different because I wasn't here, right? Or another city that you've seen or how it's been presented. I do it a certain way. It is purposeful and there are reasons for it. But as I present, the balanced budget book in front of you as required by charter i want to make sure that obviously that's in your hand and we can work forward from that from this part right But as you receive the document and the expectation is as we go through these couple of slides that I'll point out certain things, we're not gonna go page by page because guess what? That's gonna be after tonight. That'll be when we go into and start talking about those dates that we have where we're gonna go ahead and talk in those deeper dive discussions, right? Because you're gonna be giving me feedback on what just happened today with this. with other items that you want to see. And if you possibly have some ideas on tax rates that you want to propose or talk about after tonight and give me direction on, then that is rather simple, to be honest, in the budget world. Because I'll make it just, I'll say it up front. I know the calculations and what they produce. And I already know from the blank screen and now back screen exactly what the current wishes have been, a lot of your priorities. So let me just go through this and it'll start to explain, but first I wanted you to receive your balanced or your charter required budget, balanced budget. So then we can move forward past that There is no need to take a vote on that, but I do want you to receive that so then we can process forward and I can talk about some of the highlights in what we'll be talking about with tonight's agenda, which will include some of the tidbits coming forward. And I didn't give you handouts and anything else because I did wanna be more succinct than usual so that we can get to the business at hand, which is the next item, which is the tax rate, which is where you're gonna be doing most of your business. That doesn't mean you can't stop me and say, what do you mean by this point or that point? Because everything I'm gonna talk about in this couple of slides are based on summaries of all the booklets that you have in front of you. So we'll be talking about the utility fund request from what we just saw today and how it relates. In there, you're going to see the EDC budget, the operational balanced budget itself, right, that I present, the tax rate options that you're going to find in your book that we'll describe, Pam. and working with when we bring up the tax item and further describing our thought process and how we got here with our budget and how we go and proceed forward and some of the driving detail behind it. Again, we're gonna go through greater detail and we can do it tonight as much as you want, as granular as you wanna get. But I did save tonight for, and we did want to focus tonight on what's required for us to do because I need to gather and get your direction to set the required tax rate for Friday's posting that our city secretary needs. so that it can be posted legally within the required timeline. And we need that by Friday. So I mean, your decision making is critical tonight to figure that portion of what we're talking about. Everything else that we talk about that is above and beyond more or less extras that could come from any tax rate discussion, It's stuff that we can figure out afterwards and beyond. And let me explain that in simple terms. up there on the screen we're showing initial 5.2 million dollars that we saw last time and i'm sorry on the big screen if you remember that and i know i think mr silver wasn't here but on the big screen there's a whole list of all the departments we just added utilities department and i don't put it up there because that's being dealt with with the utility fund or the water wastewater fund this is all general fund items which is the tax rate stuff, okay? So this is how simple this could be, is that as we discuss forward when the tax rate item comes, and we'll get into detail, but this is how simple the math could be. I'll tell you right now, for every penny that would be considered, it generates $117,000. If you do $117,000, and multiply that out four cents. It's a half a million dollars. You have right now $3.4 million that we've brought it down. The comm study alone is $760,000, which by the way, I desperately think we should do. So you may say, Robert, huh? 650. so you may say robert but if we gave you four cents five cents four cents that's not even enough for that Well, I could tell you if you were to do that as an example, using just as an example, I would tell you we are prepared as a staff, because we've been working on this for a lot of hours, a lot of weeks, to say we are prepared to work as a team to use that, whatever give this council gives, to be able to get to as many of those priorities that you laid out for us as we can based on whatever you're able to provide. period I'm not here we're not here to lobby any such rate in fact the book you have in front of you and I know I said this via communications separate communications but in front of you this balanced budget is exactly at the same rate 61 cents. But it provides you absolutely nothing. It provides our city absolutely no movement forward. So in city terms that means we are going backwards. But I'm also not here to put any guns towards anybody's heads to do absolutely anything. I do sit here as your city manager saying I do, we do, I do have recommendations. Our staff has worked very hard to be able to put options on the table. So as we discuss forward, we're gonna show you options and abilities. But it comes down to very simple things. I mean, if the only thing right now that is a lever, because it's not the utility rate, that's not gonna get you anything in here on that list. We're talking the board stuff, really. And if the only lever that we're talking about right now, that's all, is that tax rate, then we're really saying, what's between 61 and 71? If you're willing to do anything, And I say that with the highest respect to this council and to our community, that's what we have to work with. And then we do the very best that we can do with that. And so we come to be able to answer those questions when we get to that tax item to be able to see what we're able to do with that to be able to achieve more. Because if you tell me, look, we can only eat out four or $500,000 and that's all we can give you guys. We're gonna tell you then we're gonna go back because we have time, because then we post whatever we need to post for Friday. Then the process is we work, we come back with whatever you gave us and then we say, you tell city manager this is what you gotta work with, go back, come back and tell me what you did, what you're able to do with it. I'm gonna say we cut down this, we're able to cut down this, cut back this, travel comes a little down, membership goes a little bit down this way. and we got the priority, which was X, Y, and Z. As an example, right, that is, I'm using that as an example of a path that can be taken, only to say, and I know, Council Member, I didn't wanna stop you, but I did wanna say that the first part of this was providing this as a document, because it's legally required per charter, so I wanna make sure that was done. Part two is answering any questions, obviously, Council Member Silva, but then after the questions were asked, you could technically move on to the council item, and I can go through these points to start getting into the nitty-gritty of page one, two, 10, 50, go back to page one, three, 10, five, whatever it may be. Because to be honest, if we're stuck on me giving you the book, then we're stuck on $0.61, the current rate, and absolutely nothing at this point. But I wanted to start off on that foot. I didn't want to walk in saying, look, council, if you don't give us $0.08, we're never going to cover a whole. That's some communities. That ain't us. That's some other city managers. That ain't me. I'm actually coming to you with a balanced budget.

We can walk away, all be friends, and you don't have to raise one penny of tax.

But I will tell you this, would that be the best thing for all of us? That's a decision that everyone will have to make, and we're gonna make the best, or give you the best information to be able to make that best decision. and so that's all that i wanted to lay on the table before you go into the next item which is a very difficult item right because there's no vote except the current item uh councilman roland i think you were going to ask me something i apologize i got i'm sorry

you had me at tax sorry um i got a question just just for understanding and clarification for myself um you're saying peyton has to give out what by friday uh because our last i thought the last council meeting we had on tuesday when we we did this that was for the public comment and

So what you voted on for, thank you. So what was voted on at the last meeting was all the different rates, right? And what you voted on was setting the maximum allowable, right? So you said we're not going over 71 cents. So what was left and what needs to be published by this Friday in the Courier, right, to be able to get it in on time to meet the deadlines, which is this Friday for the Courier, is to publish to the public what rate is to be known so that when we have the public hearings, they know what rate they can come and talk about They need to know what rate in the newspaper so that they can come and talk about it during the public hearings. So the deadline for the courier, not necessarily for us, is, go ahead, also, Ms. Honorable City Secretary.

Hi, Council. Peyton Standifer, City Secretary.

Honorable, excuse me.

Excuse me. No, so we have to publish a notice of public hearing. We do this every year. Nothing new here. But we have to give the tax rate that we are basing everything off of. So if you change the tax rate, then citizens need to note that. That needs to be in our public hearing. Am I making sense? Are you guys following? So we don't want to put false information out to our citizens, obviously. And the deadlines for the courier are, they're deadlines, there's no moving those.

So to put a pin in this, the current tax rate being proposed, in a sense, is the current, 61, because that's what I'm giving you to have a balanced budget. We found ways to make that happen. And so that you can come in here in a comfortable setting with the ease of being able to look at that board and say what truly is with your city manager and staff sitting here to be able to answer those hard questions for you. Because I didn't want to walk in here with a gun to your head saying you must do X, you must do Y.

Just as a refresher, Robert, can you tell us again what the voter approval tax rate is? Do you have that so we can put it up on again?

Or...

the concept itself in terms of what that means in terms that's so we actually have that ready for you so let's just go and have that

If you wanna compare that, so it's 10 cents from what we currently have at 61. But if we put it into relative terms, which we are prepared to tell you right now based on a $100,000 home, or based on the average home price, we're prepared to tell you right now. So, go ahead.

Both. 100,000, let's go with 100,000.

Give us an example.

In your binders on the left side is the tax rate scenario page. And that might help you out.

Go ahead, Beth.

The tax bill for the average homestead within the city limits is $326,400. And that's what we did this rating off of. The last column is your annual increase, not your monthly increase. So that first one would be almost $3 per month when you look at it on a monthly basis. The voter approval rate, if you'll look at the column that says currently in the budget, and then the additional revenue base, if you go to the voter approval rate, you'll add $909,000 to the revenue. That's where you'll be able to fund the items that are on the board. If you stay with the current tax rate right now, you'll see that we're at a negative $271,000. to give you an example of that when we did the budget last year gas was two dollars a gallon this year it's four dollars a gallon there are some things that happen that you can't plan for um and then there's also the over 65 freeze that affects that number so if you look down that column the additional revenue base gives you an idea of where you might need to be based on what you choose to fund on a hundred thousand dollar home It is, if you stay with the current tax rate, it's flat. If you go to no new revenue tax rate, you get an extra $10 expense per year. If you go with the voter approval rate, it's $100 per year more on your tax bill, based off a $100,000 home.

We have $100,000 homes here?

Well, there are some, yes.

Oh, yeah. Just give me a number what's the value yeah and you can extrapolate from from that was the other idea too if you needed to

So, Mayor, while she's doing that, can I ask for one thing? Can I just go through some key points in here? And I'll be fast on these slides. So I know that that's the next item on the tax stuff. Those are great questions, but I just want to go through real quick stuff, right? Which is a quick, not that this is gonna be lost over because you have the book with all this detail. But in summary, with a lot of this stuff here, again, it's going to summarize all the funds, obviously, and just putting these numbers in there so that you all will see what we're talking about with this budget that's coming up. And so I know y'all can sort of read that, but I'm not focusing on y'all trying to kick me off my game.

But it ain't going to work. I'm not on my game. Not this paper.

Sorry. So back to what we're looking at. So 22.5 actuals with our adopted and proposed. So really what we're looking at, $32.5 million. We're down 6.7% versus FY26. We'll discuss that. revenues down 5.6% versus 26 we can discuss that as well revenues over expenditure 1.7 million dollars but we're structurally balanced we can explain that as well these are jump off points that just points that I wanted to make in the budget book itself general fund obviously proposed balanced budget but in there as you break it down you'll see that we are talking about a 17.7 million dollars as we're walking around uh discussing it uh that's what we do have um 58 of it comes from taxes and franchise fees um 17 or i'm sorry 14 from development fees uh 12 from grants and transfers uh You got utilities at 10 and fines 6%. And then you split up between your departments. Obviously, police taking a large portion of that. And so we start breaking it down. notable shifts uh that we identified property taxes uh up uh 257 uh thousand to six point five five um that that may seem as sizable perhaps uh but in the grand scheme of things uh not doesn't shift the needle in fact we're going to talk about how The freeze of the 65 plus has really hit us right in the chin. We'll explain that, but it really has. Sales tax revenue is down by about 10% and we really need to watch that because we are really different than other communities that are around us and sales tax just makes us very susceptible, unlike others. and we'll name it like a main or a backdrop. They just have just others. Professional services, which obviously is a big difference with the SD3, the transition changes the game on us.

So property tax rates.

Those are the ones that we're just discussing right now. So great anticipatory question by all. I got pretty graphs, so thank you, Pam, but mine are better. So to answer those questions, they're up there. We'll again be talking about that. So there were greater, better explanations on the water and sewer fund. So we'll leave that aside. There were greater explanations. EDC, Odyssey, they work on their, I'm not gonna say their own budget, but they manage. Ms. Frye being here, thanks for joining us. Always great to have you. We'll talk about that later. My own office, I do want to bring this up because you're going to see it in there. This is going to be a recommendation. I am suggesting, and this will not be a new FDE, but I am suggesting a reorg. What I've seen and what I've known, I had to assess, but I desperately need help. And even though it seems as though there's a lot of scatterbrain going on, there's a reason for it too. It's not just... squirrels in my head there's actually a lot of stuff going on when you look at other cities that are even like us come close to us there's just there's no comparison we're gonna be grown-up cities we need to act like grown-up cities and not just from my office and I'm trying to get that done with other offices And so I think it really starts there to be able to help out on the ground because I am trying to address a lot of your concerns. I'm trying to address a lot of operational concerns. And as we grow, the need is there. So, and having said that, I've got a way that this can be created with the current FTE. The minimal charge to this change, I think it's minimal. We penned at about maybe $50,000 for this to happen, but it will be invaluable for my sanity and for our operations. Fewer mistakes will happen, that I can be more quick to answer your questions And I can be better for our departments and our employees because I just don't have the bandwidth.

In a town this big, I mean, I go down the street,

to go to Bastrop and they're batting with two or three. I just need one, right? And so that's my request is just to do that. Like I said, I don't need, I need to reclassify a current FTE. And that's what I'm asking for. That'll solve a lot of problems. And it's gonna create opportunities for people that have been with this organization for a long time. and so we'll get to that when we need to get to that but yeah that'll be an incredible opportunity for a lot of people and an incredible opportunity for our staff and and for you guys as well i'll explain when we get there but i got to bring that up the item also in there you'll see communications That's really a move. And so Sonia will be on the move, not physically, but organizationally. So obviously we have Marcial. Welcome again. So Marcial, as PAO, will be directly under me. And so as that goes, so does Sonia. They both will. Marcial is now coming in as supervisor of Sonia. They come in as partners. And so both will answer to my office. And so that will create that common team. So that truly will be no after cost. That will be just a reorg real quick. Then there's some notes on why the budget of the executive is down. One key thing, ESD. If I need to explain that further, I can explain it, but I think that's a rather simple mathematical equation. Staffing highlights, total authorized employees, 183. Total FTEs, full-time equivalents, 156.5. If you all see a half-person walking around, let me know. We're still trying to find them or her. General fund is 132 of them, 21 and a half divided by three, kidding, that is the three, two that we can't find over there at EDC, but 21 and a half at the utility fund, or that's being paid out of the utility fund. And so as the notable restructure positions that some I named, and some that have been asked for that you've seen, outright, the IT position, the custodial, maintenance tech, the assistant police chief, that is notable in a way that comes to us by way of another reorg. And this reorg comes by way of a more traditional form of what we see at the police departments. So the chief has recommended to me, and I support the recommendation to go from the commander and mostly commander form with the chief commander and that sort of organization to more traditional, you know, deputy chief, you know, chief, lieutenant structure, right? No names, no nothings, but that structure gets put that way. So that's what I'm used to. That's what I'm used to seeing. That's what most cities, to be honest, are done that way. So when I heard it come from his lips, I'm like, thank you. commanders to me, that doesn't translate well. It probably doesn't recruit well, as I mentioned to Pam, because I don't know if that's a step down, or if I go to my next job, how do I describe that to my next person? So that's gonna come to you in greater detail, but I support that idea. And we'll work that forward. The records clerk we talked about. Juvenile case manager talked about facilities positions. And the police lieutenants and cadets. That was, again, up on the board as we find it today. Those are budget items. So I think, sorry, again. I'm telling you I would fall along and I don't click. Sorry about that. Last thing, last slide. So requested council actions tonight as we go through this, aside from the tax rate, Really, it's just going to be no voting that I'm asking for in this. It's to really just provide discussion and provide direction on the utility fund department request and the rate study. We heard some of that. There were some questions about that rate study. So you're going to provide some detail on that. You're going to review in the packet the EDC budget that, you know, the EDC board has seen. And so that's going to be in there. Divide, rise, direction on the proposed 2027 operational balance budget, which this is this. You're going to take it home. You know, kick back, relax. Glass of tea. See what you like, don't like. And the last item, which is your next item, is discuss property tax rate options ahead of September public hearings. And when that is happening, that is where leaving today, I'll know what we have to work with. And so by that time, we're already talking in between having other opportunities at a council meeting also to say, what are we coming up with here, right? So you've included those things. And again, it's gonna be, I wish it was more complicated because I don't think we're gonna have like $2 million to play with.

I mean, unless council says, right?

But if it's few moving pieces, then I think it's gonna be rather simple to identify those priorities. and i can do a lot of that heavy lifting let me just say now but i don't want to take all of that away from your hands as well i'll stop there unless you have questions mayor okay so he has presented his balanced budget to us

And so we'll move on to number four, because there's no action on that. He just had to present it per our charter, and he has done so. The next part is number four, presentation and discussion of property tax rate options. So here's where the nitty gritty comes in, where we have to make a decision on what to have posted.

Mayor, I know that we had discussed the roll-up table at the last meeting I was in, but then and discussed what was proposed, I got to watch that online.

I didn't get to attend.

I had some questions about that. And one comment I wanted to make is, were 100% of the proposed requests from staff adopted and listed on this sheet? Or 90?

No, that's just what our feels were, what we felt like was important to us. We didn't take anything off.

We didn't take anything off.

The only difference in the money was that the police stuff, we don't have to pay until next year. Yeah, because we're leasing it, so our first payment wouldn't be until next year.

But that's not included in this number. Right, that'll be included next year. So the five Right Y'all don't get mad at me. I'll be saying a wish list. Yeah. Yeah, that's fine. That's fine. It is 100% of the wish list. Based on budget is what they're gonna decide what they can each department get on that.

Correct. Okay. So, Council Member Silva, to answer, I'm sorry, but column D, that's the entirety, that $5.3 million, that is the entirety of all the requests.

Every single one. And none of that is in the balance.

Nothing is in here. So then what's happened is that the council, and we were all involved, right, that you saw, kind of saying, well, this maybe not so much. We're able to kind of whittle it down to about that 3.4. Right, which means like the vehicles that we can pay later kind of stuff was taken off. I'm good with that. There you are. I'm good with that. But none of it is built in. And then I'll say one last thing. The balanced budget, which is out of 61 cents, has not a penny of that on it.

I got that. That's it, sir. Okay, so the point I was trying to get to is take the wish list, extract what we think is realistic, and from that number determine what we should look at in terms of the tax rate, right? Versus saying, hey, here's the tax rate, and then y'all come back and tell us what you want to work through in the wish list. So I thought that was the approach that we talked about.

I don't know we did we did go ahead okay so if I can say this as a city manager as city manager the approaches are just so drastically different in different cities and even with different councils and so the approach I took now because I've done it differently the approach I took now with this council is I want to respect not only current conditions, but even past conditions. I want to make sure that this council felt heard, that they had a part of this, and that everything, all staff came and got an ability to speak to council. I'm not talking about past people. That I don't care about. I wanted to make that happen. And then I'm gonna say this, this way, is I didn't also want to pre-fill anything myself. Right, right. left it at zero because i could have said i want to put 68 cents because i as city manager which to be honest the full authority is there right that's vested in me say i want and i heard the priorities that comp study and these other pieces should be and you already agree that that was a priority so i could do that and say the budget that I'm presenting to you today is built on 68 cents, and so here's your budget, here's a balanced one, but here's your budget that I'm proposing at 68 cents, but now you're walking in with a gun to your head saying if you don't give me 68 cents, these people don't get pay raises. So who's the bad guy now? It should be me. Not you all. So there's different approaches than I said out of respect to the processes before and the way we can start a couple different ways. So I thought it's simple this way to say, 117 gets you this amount. How much can it be talked about? And then from there, I can tell you now, as much as you can give us, I know the priorities. We know the priorities. And that's the easy math on this. It really, because the other way,

it really needs you guys out i'll be honest with you i respect the approach you're taking and it must be my misunderstanding or i don't know if anyone else on the council remembers us talking about let's go through this What I heard you say is we all agreed on the number that's up there right now, and I don't know if that's an actual true statement.

No, we agreed that it can be up there, but we didn't agree that it would be up there. Okay, right, right.

And that's the part that I'm trying to get to. I thought we're going to look at that and say, okay, let's look at it now more realistically. And we can do that.

I think we stated our priorities, and that's what our job is, is to tell them what the priorities that we have. and then you gotta figure out how to make it work. I think we can do what you're talking about. Based on what kind of money we gonna get.

A little bit more now too, because I think before we didn't have the proposed valuations of the property, so we couldn't go too far into depth, but now we have that, and we can see what these numbers will actually bring us. So now we can do what you're talking about.

Yes, and I got that, right? This helps us learn the impact to the citizens, constituents.

And speaking of that, I mean, and this is relative to this, that there is even some history of the tax rates themselves that are relative to just a couple years ago, from what I understand, that Pam or anyone else can speak to. I mean, both told me the story of how the rates were, right, Pam? You want to state that fact? Where they were brought down to the 40s. 49 cents during my tenure and because there's an ability to do it right and so now we are we're playing almost catch-up right in a sense and it it definitely benefited the taxpayers at the time but you're the cost of everything are so far ahead of you now that while you're playing catch-up it's it's it's almost seems like we're hurting the citizens on them But when you look at it as, and this is not a business that we're running, remember, that was the water rates. What we're saying is we're just trying to pay normal bills, normal bills. And we're not trying to make any profit at all. We just can't pay to put gas in vehicles because we're on a $2 budget. and it's five bucks in gas as an example and i'm using those terms right but because that's that's where we're behind and so again i'm not here to sell you any number what i'm trying to sell is the places where we're coming from and the reason why you even recently had to do some i respect that too all right look i watched last year's council too and that was a struggle i get it right But you're also coming back, last year was the same struggle. You're trying to pull yourselves up from that 49 cent too. And I'm not saying do the same, but I'm saying your struggle is still present. And you can ask any one of your staff members, whether it be in the development side, economic development side, your people from 20 plus years, whoever. Because we speak in unison in the saying that we believe in what we're saying to you. And really, I think it's up to you guys.

And that's good, right? That's good. We want the staff to be one staff with a single direction in mind. That's great. I want to hear from the council to see if anyone on the council has that.

But also, I just want to go back to that. Because I do remember when we had the rates at that $0.49. Can we unpack that a little bit and how we were able to do that? And I think we did a quick synopsis, but I think it's very important for council members and for our citizens to understand how we were able to do that back then and then what changed to where we have to move forward and go higher now. Because I'm gonna be honest, that's been a struggle for me, sitting on the council, seeing it go from 49 cents and then to the 60s and now we're looking at some 70s. So I think it's just,

I don't know if I can explain it correctly.

But if we start the conversation, I think that's good.

The higher your value, the lower your tax rate. Okay. So our value with your freeze at 65 has hurt the city.

Okay.

Because 12% of our population is in that over 65. Mm-hmm.

And they typically have higher-valuated houses, I would assume, too, sometimes, maybe. Maybe. I don't know.

It doesn't break it down to tell us.

Okay. I'm just assuming. That's just an assumption.

So typically, the higher the value, the lower the rate, now that things are balancing out. And then you have some debt you have to pay, too. So that's what's bringing this here. You've added, I say you, the council has added different things. I'll speak on what I know. Say, for example, a COLA. You've added a COLA to, and staff doesn't disagree. We appreciate it. But when you didn't raise the tax rate to pay for it, you cut something somewhere else. And that's something that people aren't talking about. If you're going to give something, it costs money.

How long have we been giving and not giving roughly so we can kind of quantify it in our mind I can give you an educated guess I'll take it ten years

Yeah and so again perspective definitely helps when when kind of making decisions on that to be able to not kind of go back for sure in decisions. We're trying to not just forecast, but make plans for today and tomorrow is a reality that we're finding ourselves today, unfortunately. And what we'd like to provide you is whatever information we can so that we can make the best decision. And we just don't have that decision. We know another thing as well, and the reason why I asked Pam about the freeze on 65, just my limited time here, what I do know is this, because I was even told by Isaac himself, former interim, I guess, you know when that freeze proposal was put on and which I think is a great thing it's a smart thing for sure for communities you don't have an exact that's not an exact science and so when that happens is you don't know how to really estimate too well on that until the following year and when the bill hits you it's almost like going shopping and and then you're already checking out and you've already consumed all your products and be like, oh wow. So Bill has come due. I don't shop like that. Well, I'm glad. I hear what you say. So what's happened is Bill has come due this year and it is way more than we thought. And so now we can use today, this year, or last year's projections to base it forward, and we're gonna be as conservative as we can be moving forward. We know it's a growing population, but that doesn't answer today's issue for us. And so, and don't remember too, I mean, this is all not Knox. guys you are also we i'm proud to say that there's 2.9 plus million dollars in your general fund reserve that's not a small feat that's that's a kudos to you all do we have that um impact the number for the 65 plus freeze

The number of people or the dollar?

The dollar amount. Or like an estimated.

If you said 12%, that would be 12% of it.

Of your taxable value. I think it's on line 22 of the TNT form, which I didn't bring with me. I apologize for that.

Page 15 has a population age group number.

I wanna share, I think that that tax freeze was done in 21. And so in 21, you look at the values in 2021 versus the values in 2026. If you were 65 in 2021, in 2026, you're still paying at that same value you were at in 2021. Your tax doesn't go up, even though your value does. And so as property value has increased, also the population has increased. and people are aging every year, that hurts.

And if only the school district tax goes up.

The school district is where, in my opinion, should be.

But again, the taxing agency that gets the biggest brunt of cost of service is your city. So your school, God bless them, they do what they need to on the school side, but your police, sometimes your fire, but your roads and everything else is provided by your city.

Okay, and my only point was that I was personally gonna rely on whatever number we came up with of agreed to and necessary buckets so that I could say, OK, now I've got a number that I've got to estimate based on one penny equals $177,000. That's how I would approach it, because that's what I thought we were going to do. But I think now we're looking at saying, come to a number first, and then we'll figure out what's happening over there.

Well, we can still reference it. That's a more, I know it's more simpler in nature, but the only other approach would have been that I already come to you with a list of goodies that I think we need, and then force you guys to say, or me force you to say the only way that we can pay it is by telling you I need six pennies. And I didn't wanna do that. Because I can tell you right now, I can do the math right now and tell you what we can do because again, to get comp study, Pam, how many pennies we need?

Seven, six? Page 63. Sorry, that wasn't the right answer. Page 63, I know that's kind of difficult to read, but I have put your new request charts in there for both funds to make it easier as you kind of go through to decide what your priorities are to help figure out what that number should be. We need $655,000 for the comp study.

Okay, thank you for that number. You're welcome. Because I don't want to speak for the entire council, but I think we were on the page of the comp study, so off the bat, we're already looking at 655?

Yes, and I have already started the process to be creative, to find out different ways of implementing that.

Okay.

Yeah, but this is . No.

And then Pam, when we're looking at this tax scenario one, we want to look at the additional revenue base? Correct. Is that what we want to look at? Correct. Okay. So already we're kind of looking at number six, just for the comp study.

And if you want to, sorry, if you want to figure a different calculation, I have, I have Dodie here.

And so what are these calculations that we're looking at?

The value of the property and what the different scenarios do.

On a $500,000 home, it's $500 a year.

Yeah. Like what it would be if it's... for a $500,000 home.

And that's under that scenario eight, voter approval rate? Yes.

OK. And there's not a 67 in here. If you want to know what that 67 does, we can talk through that.

Calculate it. And remember, too, for tonight, that's the question. Because it may be like that solves or gets that portion of even the budget. But if we wanted to do more, City Manager, can you go back and counter the budget here just more between now and the next meeting? Because I think our priorities are also set on do you, you know, with some other of these priorities, like we still need to get some equipment or we're really focused on the laser beams on the night scope goggles or whatever that you said that last time. Whatever those things were, whatever you said. in other words today we're dealing just with that item and and trying to see what the abilities are because we definitely have 3.4 that we know we wouldn't suggest that you would that you would because we know it's not we wouldn't even ask for that but i know i can ask you for definitely i mean if you were to ask me Crickets.

Okay, so I don't know if the rest of the council wants to.

It's about a million dollars worth of stuff that I think we desperately need. But can we come up somewhere else, like strip here to get those valuable things that I think as a community we need? Yeah. Could I have come back and told you, hey, we need 68? Heck no, I wouldn't have told you that.

Okay, so I'll let the rest of the council jump in, but correct me if I'm wrong, we're leaning towards the comp study, yes? Maybe, possibly, no?

Not without the detailed data that I think I may have just gotten. I don't feel confident in increasing anything at the moment without Unless I'm talking about something else, maybe.

No, to pay them. Yeah, to pay them that market.

Yeah, I need to see the details. I got a very basic version of it. And from what I saw was that our salaries were aligned. And so I'm not sure why we're so focused on making sure that everybody gets raises. They already get colas, which... more than what most of us get because I know I haven't received a COLA at my work in the last four or five years or so and so without looking at that data about no so you're leaning against compensation

Yeah, and so that's why I'm just trying to get kind of like an overview of like what our priorities are so we can kind of lean into a number. And if we were leaning towards going with the comp study, we already are kind of looking at scenario number six, which would add the $656,000 to the general fund.

Do you need more time to look at that information before I can say yes or no? No, I respect that. Because like I said, what I saw was that we looked like we were pretty aligned.

But we're under the gun now, so...

So we've got to do something.

Yeah, we have to establish a tax rate.

As he said, if we establish something, then they will work backwards to accommodate what makes the most sense. It's what we did last year. But we can't just stop.

Pam, if we establish a tax rate, we're not held to it, right? Thank you. That's the question I wanted to ask.

Yes, because what we did last year.

Well, I mean, but we could set it higher, but we could lower it.

You can't go above 71, right? Right. And what you establish tonight is what goes on the posting to the public. Right. So we don't want to put 65. We don't want to say 65 cents tonight, but then you come back September 1st and say 71.

Right, isn't that what we did last year? Last year we said it at the highest initially and then we talked about it and then we ended up voting later on.

So let's be clear, we're not establishing a tax right tonight? No. You're giving a proposed... We're not going to be giving direction to the city manager to use a certain number and go back and make it work and see what we can get. Yes. And what we say tonight will be posted in the paper. And we can't go back and change that. Right. Correct. Because it will already have been posted. That's what the public hearings will be on. So we are only giving direction on a number for the city manager to work on.

and for the public hearings to be held on, but when we go to actually vote on it later in the budget process, it can be different from that number. Yes.

No, it can't. No, it can't. No, wait, I thought it can. It can be lower. It can be lower than the 71.

Okay, but we can't go higher. Which is why last year- But we already set the ceiling.

Correct.

That's already been done.

Right, it can't go past that. Can't go higher than that.

It can't go higher than that. Right. So tonight, if we were to say, we're setting this, this is just for the new- We're considering this to be posted. Exactly, yes. We're not setting, we're just getting direction. Right, direction and terminology is correct.

Right, because I'm getting a little- I don't want to say confused because I'm following, but it sounded like we were setting something tonight. No, we're not setting anything.

We're setting something for the newspaper, not for the public. We're not setting. We're giving a direction. Yeah, we're not setting.

That's it. We're not setting.

I can explain this in a simple term. Thank you. You're welcome. If you're looking at today's tax rate, you're showing a $200,000 deficit. So we know we have to go above that. We know that this budget, based on that dollar amount, is going to bring you a deficit. You do not want to pass a budget that has a deficit, right? It's not balanced. Right. So, you know, you've got to go up a little bit from that number, you know, you should go Okay, I think we just need us

thank you so what you've received to be clear let's roll this back so going back to the you did receive a balanced budget because we covered the hole that she is talking about right yes And that's that. I think what Pam is saying too is that if we continue to do this at the pace that we're going, then we'd have to continue with the same results and we are not doing that. Mayor Pro Temp, thankfully corrected probably the statement that I was making incorrectly, thank you all, and to say that there is an ability, and the mayor, I think, were chiming in as I was out, or maybe misstating or not saying it clearly. whatever it is that the number that we're putting into the paper for friday to be published is one that this council feel as though or the one that i need to go back and build a budget a further budget with as we go into the public hearings with And can there be opportunities for it to be different? Yes. So am I stating that correct, city secretary? Are we clear here? Council, we're all clear for sure.

OK, when you say different, is it different from going up or different going down?

As long as it doesn't exceed 71.

But it gives me that, that's why you're giving me, this council's giving me direction so that I can go forth and conquer with that dollar amount.

And play with the wish list.

Correct. And so that the people who might want to attend that public hearing can then show up with that idea that the budget that they're looking at what should be already considered with that tax rate that was published. Now, can it be changed for sure with great debate and discussion? For sure, right? But I do need a working number so that I can go back and conquer based on which list is as well. So I guess I was a little bit strong in the conversation maybe on getting to an answer to be able to have that. It felt that way. I'm bringing that back, and I apologize if that was the conversation. So apologies to this council.

All right. So now if I can ask just one more thing. The scenario eight, is that just the voter approved or is that the one that we're saying funds all of that as well?

It doesn't come close. Nothing funds all of it. Okay. Lotto.

Lotto. So additional revenue. That may be. So this is the additional revenue and that funds. Well, a third maybe, or which number are we looking at? The last recommended?

Close to a third.

Yeah, right, just under a third? Okay. And see, that's the kind of discussion I want to have because these decisions can't just be arbitrary and say, hey, here you go, go out and figure something out. I want to be able to say to my constituents, I came to that decision because it does something. Correct. And I want to be able to say what it does. I don't want to say I came to that number because I had to make a decision tonight.

Without doubt. And there is support, not only from myself, we have staff that has the experience and the years to be able to provide to that. A lot of them are sitting here, which I would go to, and they already know that they are accessible with this sort of conversation for this level of detail. they are being made known tonight to be accessible for these questions to be able to get this moving forward and so let it be known because we've been working really hard to be able to do the very best for you guys and trying to change the way it's done i know this little small little very hyper detail that we're jumping into kind of confuse the matter maybe a little bit, but we're trying to change the way it was presented so that we can get it better understood so we can go back to wherever it may be and kind of just talk about it differently, where it's maybe understood a little bit better. So apologies for that, Mayor, but I think we're back on track and maybe the conversation gets back to wherever you all are at. And if you need us, we're here to discuss more for you in any detail.

Council? Yeah. Wait for someone else to join the conversation.

I don't want to hog the conversation.

I'm just still trying to wrap my head around it. It's just so many numbers.

You remember tonight that whatever number is chosen is for the public to speak on. Right. And for Robert to work with.

So are we at the point of somebody proposing a number? Where are we at?

Yeah.

Right.

Or debating. So, Mayor, do you want to hear staff recommendation?

Yeah, I was going to say, where's staff recommendation? That's what I would suggest. Wait. Don't say what's Pam's recommendation. How about let's do city managers.

What is the city manager's recommendation?

What is mine? Let's see if you're right.

What's the city staff recommendation?

City managers, not Pam Landers'.

I know there is hope for something grander.

We can make it work. We can make anything work.

if council can help with that uh we'd be grateful for it potential with 68 because it averages out to about 28 a month if you also consider our utility rate increase yes And that's not that bad. It also leaves us with like 510. And again, you know, let me be the evil one here. If all we're getting is 510, I'm not putting it towards salaries. There are things that this city needs more that are more important than a compensation study. We need equipment, we need other things. And I'd rather that money go to that.

And if we can get benefits, I think.

Yeah, I'd be happier with trying to look at maybe some perks and benefits and whatnot, but I think I'd be comfortable with tax rate number four.

I'm also saying 68 cents.

And I'm with the 68 as well.

I thought you're going to say motion.

I'm sorry. No, no, no, no.

I didn't say motion. I didn't say motion. I didn't say motion.

We want to debate that on the council. That's our nickname by the way.

Unfortunately, Elgin's at an awkward stage right now. We're having to pay ahead of time for the growth that we're experiencing. I compared Elgin's tax rate to some of the surrounding communities and Mainers is 83 cents right now. And look at their tax base, commercial tax base. But they're having to pay ahead to cover the infrastructure and stuff that they need for the growth they're experiencing. And that's what we're having to do. And plus pay for some of the past.

And we don't have a lot of sales tax revenue to compensate. We don't have the sales tax revenue or the property tax.

I mean to be honest I mean y'all done a pretty good job because we're not in here discussing a million dollar hole that we're trying to dig out of right we can start there I mean you're we're blessed in that sense but can we do better

i think so you know round rock has a 32 or 33 cent but they're they also their average home is four hundred thousand dollars and they've gotten a lot of money a lot of sales

So where are you going listening?

I say 68 also, but I would argue for the the comp study to be fulfilled in terms of my theory has always been and I preached this 30 years ago Is that you have to take care of these employees? Because they'll take care of your stuff for you And I still say that we lose more by this constant turnover and those folks leaving here to go somewhere else. We don't realize the loss we suffer in terms of even money-wise.

So we have those calculations ready to go for all we have to see.

It was about $200,000.

Is how much we've lost in people leaving for someone else.

Per employee. yeah I mean based on leaving and recruiting and retraining and the history that leaves SHRM had an article that said it was around 200,000 for every turnover yeah in the city

Based on our city, Bob?

It was just in general.

Is it more than the city staff earn? Oh, yes. Yes. Except our city manager.

The comm study will pay for itself if we do it. when we don't suffer those losses, it'll pay for itself. You do make a good point.

No, I think, in my opinion, I look out here and I see people that I know I've seen here for a long time, that I know have a dedication, right, to the city, and I appreciate that.

But you also see all the new hires.

Well, yeah, there are new people, but I think we've made some new positions.

That means your HR department is strong.

Yes, you guys, we're keeping a lot of staff. That's what the study told us, right? We do a good job, but we can't. Yes, our turnover rate is very low.

So what do we need?

So I'm hearing that we need to direct the city manager for a tax rate of six point, I'm sorry, .685873 to prepare a budget on that, and then that's the rate that will be posted in the newspaper. Is that what I'm hearing?

Yes, ma'am. Yes.

Yes, ma'am. Yes. How about you?

Okay, so I'll make the motion to direct the city manager to present the tax rate of 0.685873.

And I'll second the motion. All right, so we'll begin with Deputy Mayor Poteet.

St. Pierre, yes.

Mayfield, yes.

Crimm, yes.

McShane, yes. Hymas, yes.

Gibson, yes.

Silva, yes.

Love, yes.

All right, motion carried. This is always the hardest part.