City Council - Special Meeting

Thank you very much for being here this evening. I call this special meeting to order, New Braunfels City Council to order, sorry. Today's date is August 17, 2026, and the time is five o'clock. We request that all cell phones and other devices be on silent except emergency on-call personnel. Madam Secretary Gale, can you please call roll?

Council Member Carter. Here, Mayor Pro Tem Capizzi.

Here.

Council Member Edwards. Here. Council Member Spradley. Here. Council Member Lebowski. Here. Council Member Shaw. Here. And Mayor French.

I am here. A quorum is present, and we will proceed. Please join me with the invocation presented by Council Member Spradley, followed by the pledges of allegiance. Thank you.

Please join me in prayer. Gracious Heavenly Father, we come before you today grateful for the opportunity to serve our community and entrusted with the responsibility of making decisions that affect our citizens of our city. As we begin tonight's meeting, give us wisdom, patience, and discernment. Help us look beyond the numbers or competing priorities and remember our citizens, our decisions represent. Lord, our time is challenging with many different priorities. Guide us to be good stewards of the resources entrusted to us. Guide us to act with integrity, transparency, and guide us to make smart decisions that strengthen our city today while preparing our city for tomorrow. Lord, we ask for your protection over our first responders. Watch over our police officers, firefighters, paramedics, dispatchers, and all who answer the call when citizens need them the most. Keep them safe as they serve. Keep them with courage in difficult moments and bring them home safely to their families each and every single day. We pray for our men and women of our military, both here at home and serving in harm's way around the world. Protect them in all they do. giving strength to their families, and guide those who lead them. We are forever grateful to their service to our nation and protect the freedoms that we enjoy here today at City Hall. Finally, Lord, may your spirit guide us, our council, to listen and understand. seek common ground, and always put best interests of our community first and ahead of our own personal interests or differences. We thank you, Lord, for our many blessings given to our city. May our work today be honorable, our decisions be wise, and our elected service reflect the trust in the people that call New Braunfels home. In Jesus Christ's name we pray, and we all say amen.

All right, right now we're gonna move on to a workshop. This is item A, presentation and discussion regarding the fiscal year 2027, proposed budget and plan of municipal services, and the 2026 number, new revenue and voter approval tax rate. City Manager Robert Camerino.

Thank you, Mr. Mayor, members of council. Tonight is the first of three workshops that we have scheduled for this week. As I mentioned when presenting the proposed budget last week, that tonight we would be focusing in a lot more on the general fund as well as our tax rate. And so certainly some of the same slides that I showed you on Tuesday of last week you'll see tonight, but we've also included a number of of slides that provide you with additional information to be able to, one, talk about not only what's in the proposed budget in a little bit more detail, but then also, as mentioned last week, to really tee up the discussion regarding our tax rate and the opportunities that are before us. We've been able to update the proposed tax rate slide. As you recall, there were just very few cities that had proposed their tax rate last week when we presented that slide to you. A bunch of cities have actually proposed their tax rate since then, and so we've updated that slide for you as well. In the very next slide, Thank you. This is the same information that you saw last night regarding the proposed tax rate. The current budget is built on the same tax rate as fiscal year 26 at 40.89 cents, however, and is below the no new revenue rate. And also we are seeing the lowest property value growth since 2011 or 15 years. And certainly the growth that we are experiencing is driven entirely by new growth with existing taxable values declining. And in fact, I also forwarded you an article earlier today from the Texas Tribune regarding some of the same situation the same circumstances that other cities are experiencing across the state of Texas with regards to maybe weakening sales tax revenue, which thank goodness we're not in that situation, but certainly weakening property tax revenues and inflation and other budgetary impacts that are necessitating some very serious moves on other cities across the state of Texas. Again, we'll go into a little bit more detail on the strategic initiatives that are incorporated into the proposed budget, a little bit more information on compensation increases and provide you some history on the amounts that we have been able to provide with the City Council's support on compensation increases over the past few years, what's incorporated in this current fiscal year, or next fiscal year's budget, excuse me. Health insurance contribution premium increases, we've been able to go nine consecutive years without increasing health insurance premiums for our employees. Unfortunately, we're not able to go 10. And so we actually started open enrollment today with employees so that they can choose whichever plan that they want to select. We have three plans that they can select from with regards to health insurance, but certainly have increased premiums for employees, but then also increased the premium or increase the cost or the contribution by the city to those premiums as well. Jared will go through some information on the positions that have been incorporated into or proposed in the budget. And then the 12 firefighters, again, as I mentioned, we've been able to cover the costs, mostly cover the costs with They increased contribution from our partner at ESD number seven that we provide services to on a contractual basis and certainly want to recognize that partnership with ESD seven because it is a tremendous partnership. Mayor and Council not only have they increased their contribution on the O&M side, but also have partnered with us on equipment as well. And then, of course, the fund balance reserve target has been maintained in the general fund. That's key to help us maintain the AA rating that we have with Standard & Poor's and Moody's and all those others. That's important when we actually go out to issue debt for bond projects that have been approved by our community. And so the better your credit rating, the better the interest rate that you're issuing at. And so being able to maintain those reserves is key to maintaining that credit rating. And with that, I'm gonna turn it over to Jared, who's gonna pick up the rest of the presentation. I'll certainly add where I think it's appropriate, but we've been working very closely on providing you some additional information. And as we talked about last week, we thought that there may be some conversation about other things that maybe this council would like us to consider to include in the budget. As I mentioned last week, we've been scrubbing those revenue estimates and going through those revenue estimates. That's why we put on the table at least the conversation about the no new revenue rate, for example. We'll show you different scenarios and the cost impacts of those scenarios to the median taxable value or average value across the community as well to be able to have that conversation. And with that, I'll turn it over to Jared.

Thank you, Robert. And just kind of a recap for the outline or for the workshop today. We're gonna start off talking about property values. Go into a little further detail than Robert did last week because as he mentioned, as we'll mention today, certainly seeing a shift for fiscal year 27 and tax year 26. When you look across the state though, again, where we are with property values, we're certainly uh in company a lot of folks across the state are dealing with declining existing values which we're saying that at a budget workshop for the first time as long as i've been here and been working on on the budget since fiscal year uh 2011. i think when we're talking about property values it's also worth already thinking about fiscal year 28 and i know that may sound crazy because we're just starting our fiscal year 27 budget process but it's never too early to start kind of considering the trend that we're seeing and where we may be next year and so I'm gonna talk about that a little bit at the beginning of the presentation and also at the end of the presentation. With the general fund being the city's main operating fund, again, that's where you really have the most discretion on where you may wanna consider reallocation of resources or addition of resources. And so it's good to focus on the financial position of the general fund. So we'll do that. As Robert was saying, wanna highlight some certain major initiatives. Certainly not gonna go through that long list again, but we're happy to revisit any of those funded initiatives that we have put in the proposed budget. But the main ones like compensation increases, The increases to our city self insurance fund and the impact that has on employees want to go through that in detail as well as the positions. This is also where we've inserted any of the requests for additional information that council requested last week on the 11th. And then again, I wanna leave a lot of time certainly at the end to discuss the proposed tax rate. As Robert said, put some additional information in there for you to consider and expanded the information from median taxable value to average. I think it paints a little bit of a different picture and gives you more information to make an informed decision. And of course, at the end of this, we'll be really looking for some feedback on how you wanna proceed on the proposed tax rate because As mentioned last week, you are agendized tomorrow and Wednesday as a backup if needed to take a recorded vote on the proposed tax rate. I think it's important that everyone realize that once you vote on that proposed tax rate, it just sets the maximum rate that you can adopt as a governing body. We need that recorded vote so that we can provide notice in the paper for what the official proposed tax rate is. But I think as we're going through today's presentation and you're considering what direction you wanna provide staff as it relates to tax rate. It's just important to know that's why that's important for today and ultimately tomorrow and if needed on Wednesday, because we will go through that recorded vote so that we can notice appropriately on our website and in the paper. So again, you saw this information last week. Two interesting takeaways again is that the total certified values for 25 actually went down around 160 million from where we thought they would be back in July of last year. Again, the two factors that we observed for what drove that were the amount of value that was under protest coming in lower once those protests were resolved, and then a higher than usual number of exemptions that were filed for specifically homesteads and disabled veterans that those can be applied retroactively and applied after that deadline. Those are the two factors that really drove that decrease from certified 25 to certified final. And then when you look at the 26 certified values, only seeing about a half cent increase. The more important metric though is once you remove frozen values and looked exclusively at taxable values, again, you can see the growth there from 25 to 26, about 2% in growth overall. But as Robert just said, that came entirely from growth in new value added to the rolls from 25 to 26. So again, a little bit of new information for the presentation, but this information is included in the budget message of the document. This breaks down growth in new value, which is the dark blue color, and growth in existing values since fiscal year 22, so the last six years. Of course, the important takeaway there, that this is the first time that we've seen an actual decline in existing values in fiscal year 27, about $126.5 million that we saw, again, representing a reduction in existing values. When you look over the past six years, what certainly still jumps out on the screen is that massive increase in existing value that we saw in fiscal year 23. It's worth mentioning that that same year, this organization reduced the tax rate by 6.1 cents that year. So there was a corresponding reduction for that significant increase in existing value that we saw that year. Again, that happened here locally across the state as well. Property values were increased quite significantly that year and many local governments just like us responded appropriately with a tax rate reduction that fiscal year. Before I go on to the next slide, I think it's worth mentioning that The past six years we've also been able to rely upon a pretty consistent, you know, 350 to 400 plus million dollars of new value being added to the rolls. But when we start thinking about fiscal year 28 and beyond, I think this data is interesting. This is some new information for you. Over the last six years, you can see this is tracking the number of residential and commercial new building permits issued, okay? And if we were to look back from fiscal year 21 and go to the previous 10 years, averaging well over 1,000 new residential home start commercial, I'm sorry, residential permits issued each year. But you can see specifically fiscal year 23, 24, 25, we are certainly tracking at a much lower rate and expect this to be kind of a telling indicator of where we may be as it results in new value added, new taxable value added over the next couple of years. That's not something that we're gonna continue to bet on realizing again the same level of new value being added. I think we need to rely on these building permit figures as kind of a premonition of what is to come in the next several years. Again, another graph that demonstrates the trend in growth in new and existing taxable values. Again, I think the graph is broken down by Comal County and Guadalupe County, but again, the graph on the right kind of combines the two, and you can see it's just been a downward trajectory from fiscal year 23, again, arriving at the 2.1% that was previously referenced. And again, we're gonna get into this, but I think what we're seeing with these values is that we need to reconsider our projections for growth and taxable value when we're considering not only the 2027 bond program, but even the remaining issuances for the 2023 bond program that we have yet to issue.

So again, something additional to think of.

Again, Robert went into this information last week, so I won't go into too much detail. I've already talked about the two factors that we observed that impacted the certified 2025 values last year and where those arrived once completed. Again, though, when looking at tax year 26, fiscal year 27, and really what's driving the lowest growth in value that we're seeing, and of course declining existing values since 2011. I think there's three things that really can summarize that. One is just general market normalization. Several of you council members have referenced this as well, that you've observed that here in New Braunfels, but just general market normalization. I've got some data here pretty soon about the increased protests. We're certainly seeing protests increasing throughout the city of New Braunfels. And then of course implementation of House Bill 9, and I wanna go into that in a little further detail. But House Bill 9, again, that was passed through constitutional amendment in November of 25. This increased the business personal property exemption from $2,500 per account to $125,000 for commercial properties. That eliminated $182 million of taxable value here in New Braunfels. And so it is important to call this what it is, right? Like while this provided tax relief to businesses, And I'm certainly not saying that's a bad thing. I'm just trying to provide some context on what the downstream impacts of that are, right? So while I provided that relief, it certainly is an unfunded mandate on local governments, right? Because that means that the rest of the taxable property has to absorb that impact so that we can at least try and generate the same amount of revenue from one year to the next. So that's an interesting way to think about House Bill 9 and how that's, again, affecting cities and counties downstream. But $182 million, and taxable value when you're already facing the lowest levels of growth since 2011 certainly has had a compounding effect that we certainly were not anticipating. And as we said, I wanted to just kind of give you a little bit more information, but in talking with at least the, the Comal chief appraiser, have seen significant increases in protests filed in the county. You can see there from 26,000 in tax year 24 up to 34,000, almost 35,000 in tax year 26. It's about a 33% increase. Robert talked a little bit about it last week, but there's been some companies that have become very efficient at how they can actually... to perform those protests on your behalf. those of us that have lived here probably saw some advertisements from companies like Onwell. And I know I was talking with the chief appraiser, kind of the regional manager from Onwell in this area said that business in this area had grown by 50% from last year to this year. So again, it's certainly having an effect on those annual protests. And again, not saying that's a bad thing. I'm just trying to provide some information and context on why the values kind of came in and where they came in this year. So shifting over to the general fund, again, the city's main operating fund, focusing on revenues first, you can see from the fiscal year 26 to the fiscal year 27 adopted budget, growth in revenues of around $6.6 million. That equates to about 5.9%. As it states there on the slide, I mean, we were fortunate this year, as you'll see on a later slide, that sales taxes have increased at a higher rate than originally projected. So when you take those increased sales tax collections, increased franchise taxes, almost primarily from New Braunfels Utilities, and then increased charges for services revenues, like our partnership with ESD-7, that is really what gave us the opportunity to balance this budget without considering a property tax rate increase in what was delivered to you, right? Growth in those revenue sources. Again, just looking at it from fiscal year 25 to the current year budget, and then looking at it across the different revenue categories. As we've discussed at length, primary revenue sources, sales taxes, property taxes, and franchise taxes are the city's three largest sources of revenue in the general fund. Collectively, they make up 74.1%. And again, as we had outlined in the strategic plan, we do try and reduce our reliance on these three revenue sources for the ability to certainly rely less on property taxes in the general fund. to not have to rely as much on sales taxes, as we talked about, that's a cyclical and somewhat volatile revenue source. And so again, this really forces us to look at those other categories, fees for services, to make sure that those are set at the appropriate benchmark rates and cost recovery rates. So again, at 74.1%, this has been trending downward, again, just as we had identified in the strategic plan. Again, another way to illustrate the general fund's reliance on property taxes and sales taxes. Again, while we're proud to be able to rely on sales taxes and the general fund more than property taxes, as Robert mentioned last week, it certainly comes with an additional layer of risk given the cyclical and volatile nature of sales taxes. And again, as we were saying earlier there with property taxes, you can see kind of the downward reliance on that, at least since fiscal year 2025. Again, drilling down a little bit into sales taxes, you may remember that last fiscal year, we were able to revive the partnership with HD Supply. Couldn't have come at a better time, given the discussion we're having on property values, right? They represent a significant portion of our sales taxes. Again, you can see that came on board in November of 25. That is entirely what is driving the significant increase in sales taxes year over year. And so that's why we try and reflect, at least until November of 26, we reflect the overall gross sales tax performance, and then we reflect the net when we take HD supply out of that. So that kind of speaks to what's happening, again, once HD supply is removed from the equation. So the good news is HD supply sales taxes coming in higher than anticipated. and the net of HD supply growing above budget. So again, two positive things to carry into fiscal year 27. It's worth mentioning and some of you may remember that the fiscal year 26 budget did incorporate revenues from HD supply, right? But what we did was we allocated those entirely to one-time initiatives and investments, okay? This fiscal year, we just did not have the flexibility to do that. And so what the fiscal year 27 proposed budget does, it only allocates 50% to one-time and the remaining 50% to recurring initiatives, okay? Again, the other revenue sources in the general fund, again, I think a couple of things that I would point out here is the downward trend in licenses and permits that we're seeing, and we'll continue to plan for that. The upward trend in charges for services, I know we've said it multiple times, but I'll say it one more time. That's primarily driven by the fee modifications that you all have approved for ambulance collections. and modifications to that interlocal agreement with ESD-7. Those two things are really what has driven the growth in that revenue source. So shifting over to expenditures, again, growth from fiscal year 26 adopted budget to fiscal year 27 is $5.5 million. or 4.8%. And as the slide suggests there, there's several large initiatives that really make up the majority of that increase. Those are compensation increases, operating costs associated with the family sports park, the employer contributions to the city self-insurance fund, which we'll talk about later, and then funding for new positions and initiatives. there's always a lot of focus on how our general fund dollars spent. And so again, breaking this up into two different kind of measures, one by program area. You can see where 57% of all expenditures go to public safety, 14% quality of life, 15% organizational support. Organizational support also includes any of our non-departmental costs. Okay, so the city's insurance premiums for coverage, payments for the tax office, the appraisal district, any inter-fund transfers. So again, it's worth mentioning that any of those non-departmental type costs fit within that category. And then looking at it in a different way, by category of expenditures, you can see that 76% of all general fund expenditures is employee salaries and benefits, with 21% coming from operating expenditures, 1% from capital expenditures, and then the remaining 2%, a very small amount for transfers, contingencies, and debt service. Again, it's always worth bringing back up the importance of a strong fund balance for any city or governmental entity. Again, it affects our ability to react to a natural disaster, a financial disaster, and again, has a major impact on the interest that we ultimately pay when we issue bonds and go to market. And so again, it's worth stating one more time that the budgeted ending fund balance for fiscal year 27 meets both the city council target of 30% of recurring expenditures, as well as 25% of all expenditures, which is outlined in our financial policy. And again, making sure that this budget is structurally balanced is also important, meaning that we are projecting recurring revenues that either meet or exceed our recurring expenditures, right? Again, some highlighted new initiatives. Again, beginning back in fiscal year 25, we started kind of categorizing funding initiatives to align with the strategic plan. So regardless of funding source, both in your budget message and here in these presentations, kind of assign any of the funded initiatives to certain strategic priorities. And it's worth mentioning that there's $12.1 million of funding in this budget that we can tie back specifically to the strategic priorities. And the graphs there on the slide demonstrate it both by recurring and one-time funding, as well as strategic priority. And again, of course, we also then identify how many of the new initiatives support certain objectives and performance measures within your strategic plan. So 24 have been supported and then that is broken down again by the strategic priorities. As I mentioned earlier, not planning to go through the initiatives in detail, I just wanted to highlight some of the major initiatives. Again, the striping crew and equipment, this is a pretty major initiative that I know many of you have requested and discussed in the past. This is gonna be a four-person crew. The equipment, of course, that goes along with it, we're modeling this crew just after Comal County, who actually has a crew as well, four-person crew with this exact same machine. Again, our commitment with the establishment of this striping initiative is that we will be striping all lines within the city annually. The next one I want to highlight is the traffic calming expansion again. What we're trying to do here, I know you've probably heard from some of your constituents how when traffic calming initiatives and plans, whether it be speed humps or a variety of other initiatives, they sometimes find their way to a backlog because we're only able to do so much with the funding allocated each year. So the last two years, we've added funding to the budget because we wanna be in a position to where when the city council approves those plans, we know we have the funding available to address them immediately. Ideally, we wanna get to a point to where our TCS team actually has enough funding where they can go out proactively and try and put these traffic calming initiatives in place before they're even requested by citizens. That's our ultimate goal. Again, compensation increases. I've got several slides here that really speak to what has been, what really feels like a 15-year journey to align our compensation scales to that 26 benchmark list of cities that we evaluate. And so I'll go in through some more information on that. But the proposed budget includes, as Robert had mentioned, 2.5% cost of living adjustments for eligible sworn personnel they would also receive their annual step increase, which is about 2 to 2.2 to 2.25% on an annual basis. The health insurance contributions, again, increases our health insurance contribution by 25%. I've got some numbers later that really drill down into that a little bit more. But that was the cost of the organization of $1.85 million, just to make sure that fund remains solvent. I wanna stick with compensation for a while. This is one of the things that you all requested last week, just some context about what have we been funding the last several years for compensation increases. So our HR team kind of put some bullet points together that highlight those initiatives from fiscal year 22 to fiscal year 26. One of the things that kind of jumps off the page is fiscal year 23. Again, that was a year where all municipal budgets across the state were significantly affected by inflation. And that was also that year where we saw that significant increase in property values as well. The budget that year had the capacity for a significant cost of living adjustment. And believe it or not, this was falling in line with what a lot of cities were doing in Texas as well. Try and provide compensation increases that help aid into kind of that massive inflation we were seeing in the economy at that time. This was actually a council-led initiative. I can't remember exactly what percentage we led with in the proposed budget, but the city council gave us feedback. Hey, we need to try and do more. We went back, scrubbed our numbers and we're able to fit that in. But you can see for the most part, our compensation strategy has tried to rotate in between market increases and then cost of living and merit increases kind of alternatively from fiscal year 22 to fiscal year 26. I think a takeaway, when you look at the fiscal year 27 strategy at two and a half percent, it's certainly a little bit lower in comparison to those prior years. We recognize that. That's something that Robert and Jordan and myself tried to make clear at the beginning of the budget process is that was likely going to be an outcome, knowing that we had the challenge of the self-insurance fund because the funding for that employer contribution is gonna come from the same pot that we're considering funding compensation increases. And then also knowing that we needed to do a better job of trying to balance the need for compensation investments with position requests. And the graphs on the next couple of slides will show that. We still continue to have a significant demand from departments to add staffing across this organization. Last year we invested heavily in employee compensation, funding the entirety of the 2025 market study, as well as a COLA in one fiscal year. But you may remember last year, the only positions we added were two full-time positions in PD and three part-time positions in PD. And so going into this budget process, we really tried to commit ourselves to having a better balance between really what was three major initiatives, right? Compensation, ensure the solvency of the self-insurance fund, and adding positions across the organization. Oh, bummer, okay. Well, I'll tell you what, I can still do this. So what, no. So what this is showing is, no, I'm gonna get there, I can pull this off. So what this is showing is the percent behind the market for police, fire, and non-uniform pay scales for the market studies that we've done all the way going back to 2013. So the graph there on the left is the 2013 study, 2016, 2019, 21, 23, and 25. Okay, so here's the takeaways. When we first started doing market studies here in the organization back in 2013, the police department was roughly 17.6% behind the market, which is blue, thank you. Red is fire at 22.3% behind the market. And non-uniform was roughly 14.8% behind the market. You fast forward all the way over to the end of this graph, The last year study, PD was 4.8% behind the market, fire was 4% behind the market, and non-uniform was 4.7% behind the market. And again, last year we funded that market study in its entirety, as well as a COLA on top of it, right? So we've been working on this, like I said earlier, for what feels like 15 years, doing our best to try and catch these pay scales up to the benchmark average of those 26 cities that you as a city council adopt and we measure against. That all really segues well into the strategic plan reference to, again, you hear Robert talk about it regularly, right? How the employees are the greatest asset in this organization, right? And so these are several important metrics that everything that we've been talking about, compensation, self-insurance fund and having competitive benefits. it really kind of comes back to these metrics too, right? What's our turnover rate look like? And you can see our full-time turnover rate has been trending downward. I think the industry standard for government agencies is roughly around 20% annual full-time turnover. The strategic plan has a goal of maintaining a rate lower than 15%. And you can see we're tracking to meet that goal again this fiscal year. We've met it every single year for the past five years with the exception of fiscal year 22. The other one that we track and measure against is the percent of full-time employees that are leaving the organization for reasons associated with advancement opportunities and compensation. We're trying to get to a point where that is less than 50%. You can see last year was the first time where we hit it at 39% of employees leaving the organization for those two reasons, advancement opportunities and compensation. It's gonna be close, but we may hit it again this year in fiscal year 26. You can see the metric there through June 30th. All right, so sticking with our self-insurance fund, really towards the end of fiscal year 25, third quarter, we started seeing a pretty significant increase in health insurance costs. From fiscal year 24 to fiscal year 27, we expect overall fund costs and health insurance costs to increase by 46%. As Robert has mentioned multiple times, we're very proud of the fact that we have been able to avoid not only premium, but also employer contribution increases for just about nine years. And so on the employer side, the budget includes a 25% contribution increase, and then of course on the employee side, a corresponding 25% premium increase. I think it's worth mentioning what that actually means as far as dollars for both, right? And so we'll go through the impact to employees here shortly, but for the organization, That 25% increase in employer contribution means that we went from contributing $9,510 per full-time budgeted employee to $11,888 for the purpose of funding healthcare. Again, it's been a long time since we've had budget presentations with employee premium increases, but I wanted to provide this information so you can see the impact to biweekly premiums. And so there's four graphs here that we've got, two on each slide. The first one shows the increase in employee premiums biweekly. The city has three plans. We have two PPO plans, so there's two standard PPO plans. That's the gold plan and the silver plan. And then we have a high deductible health plan, which is the bronze plan. I think an important metric that I've got there in the slide for you is that 70% of employees are enrolled in that silver plan, and then only 9 1⁄2% of employees are in the gold plan, okay? And so what these graphs show you is what the employees can expect to see as far as premium increases in October once the new plan takes effect. So you can see there for employee only for silver, a $3 per paycheck increase, $1 for bronze, 13 for gold. Employee, I won't go through all these, but I'll focus on silver. Employee and spouse for the silver plan, you can see going up $43 for biweekly premiums as employee and spouse. employee and children, it's going up $29 for the silver plan and then in the family plan going up $59 in the silver plan as a result of those 25% increases. Okay, so I just wanted to highlight some additional initiatives. So in organizational excellence, wanted to highlight the facility attendance, because again, that's a call out directly from the strategic plan to make sure that we are allocating operating costs and staffing associated with capital projects. So these facility attendants are gonna be kind of working at two facilities. They'll be working at Mission Hill Park, but also working at the Zipp Family Sports Park when special events and tournaments warrant it. Capital project manager, again, we've talked at length about our TCS team and the additional federal and federal funding they've been able to tap for capital projects, working with our 4B board or EDC and getting additional funding for capital projects. And again, we need to make sure we have the appropriate level of staffing to oversee those projects. So the budget includes another capital project manager. Several other positions I wanted to highlight, the administrative assistant in police, the communication specialist. Our communications and community engagement department is still a relatively new department. That department was formed primarily through centralizing folks across the organizations that were doing communication work. The only net new position that this department had received since the department was formed was a special events coordinator, but that actually came along with the responsibility of coordinating special events. So it was really more of a growth of the department as far as roles and responsibility. And so this is really one of the first positions that we're adding the department to meet the increased demand for service. Again, the buyer and finance, as we talked about with that additional funding coming through the organization, specifically the federal funds for supporting new capital projects, a lot of the federal funds have additional administrative requirements that require our purchasing team to really stay on with these projects from cradle to grave. And so this is really to allow them to meet that administrative workload that comes along with those additional projects. Again, administrative assistant, human resources, HR is actually one of the only departments in the organization that does not have a dedicated admin assistant staff. And so this is really to create some consistency across the organization. Both our police and fire chief continue to come up with strategic and creative ways to utilize data to make operational decisions. And while this position will sit in IT, really it's gonna be dedicated entirely to meeting the data analysis needs of both PD and fire on an annual basis. Again, we've talked about those, the previously grant funded positions at length again, but we have luckily developed revenue strategies to offset the cost of that coming on board. Again, the budget includes funding for two emergency dispatchers and an additional detective to reduce caseload across the entire CID team. Again, you saw this information last week. These are the additional positions that are included in this year's budget. Again, 17.5 FTE across the entire organization, the majority of that being in the general fund. The additional information that we have for you at the request of city council is how many positions were unfunded that were requested by those departments. This focuses on general fund departments. And so the takeaway here, of course, is that across funded and unfunded 55.25 FTE were requested. And this has been the norm for the past several years, approximately 50 to 60 position requests just from general fund departments alone. I think this helps explain something I said earlier, which is at the beginning of the budget process, we really felt we had to have a better balance between compensation investments, ensuring the solvency of the self-insurance fund, but also adding positions in the organization. As we presented last week, though, I think, especially as it results to staffing additions, it's certainly worth kind of looking over a multi-year period It sometimes takes a year or two for positions to be onboarded, especially if it's a completely new position type, for positions to be onboarded and really brought into the organization and for that impact to be felt. So again, this illustrates position additions in the general fund from fiscal year 23 to proposed in fiscal year 27. And many of you are used to seeing this graph. I mean, there's been an emphasis and a focus on adding positions to the police department as long as I've been working on the budget, at least since fiscal year 2011. And so I think it's worth at least looking back at the last 10 years of the positions that have been added in the police department, given that emphasis and focus and that priority of council. And you can see that from fiscal year 2018 to fiscal year 27, We've added 62.75 FTE to the police department budget that represents a 40% increase. Okay, I'm gonna go into the fiscal year 27 tax rate discussion now. So again, as Robert had mentioned, the proposed tax rate is 40.89 cents, which is the same rate from last year. except for some minor rounding, both components, both the maintenance and operation and the interest in sinking or debt service portion remain the same. I think it's important to mention once again, as I did back at your retreat and as Robert did last week as well, that the debt service portion of the rate does include the capacity for the continuation of our rolling tax note program. As a reminder, that has been our primary focus for replacing vehicles across the organization, and that is planned for your August 24th agenda. I'd like to put this graph out there just to put some context into where property taxes go when they're paid by either residential property owners or commercial property owners. I think it's worth mentioning that the city portion of the bill is only about 27% of the bill. with the county being 20% and the school district being the remaining 53%. Full disclosure, the city used to represent around like 23 or 24% and the school district used to represent around 56 or 57%. Why those percentages have gone down over the past couple years is directly tied to the efforts by our state legislature to reduce the burden of property taxes. As you all I'm sure have read, the legislature has injected billions of dollars towards property tax relief. That's primarily come through two mechanisms. The first of which is just straight school district tax rate compression. So what that means is they're investing billions of dollars into just reducing the school district O&M rate, right? So that rate's getting reduced for the benefit of the taxpayer, and they're backfilling it with additional state resources. The other way is through increases to the homestead exemption for school district taxes. So I think through constitutional, at least two constitutional amendments, maybe three, I think it's two, the homestead exemption for school district taxes has increased from 40,000 to 140,000. the state then backfills that with additional revenue so the school districts are made whole, so to say, and then there's the benefit to the taxpayer, right? So what that has done a little bit to this graph is it's increased our portion a little bit and decreased the school district portion a little bit. Again, just kind of focusing on recent tax rate history. Again, since fiscal year 2020, the city has reduced the tax rate by approximately 7.9 cents. As I was saying earlier, a big chunk of that, the majority of that, came even just in one year, in fiscal year 23, when we decreased that tax rate by six cents, when there was that massive increase in existing values. I think it's always worth giving an additional explanation on the no new revenue rate and the voter approval rate, so I'll do so. As a reminder that no new revenue rate is simply the rate that is needed to generate the same level of tax revenue on properties that were on the rolls last year and this year, okay? And the voter approval rate is the highest rate that you can adopt by law without triggering an automatic election, okay? So again, when we think about why is the current rate below the no new revenue rate, it's entirely because of the fact that existing values went down, okay? Wanted to spend a little bit more time specifically talking about the debt service portion of the rate. As I was saying, at the August 24th City Council meeting on your agenda will be the consideration of a $2 million tax note. A tax note is just another form of municipal debt, like a certificate of obligation or a general obligation bond. A tax note, though, is for short-term, is a short-term debt instrument. The amortization or payback period on that is only seven years. Therefore, it's intended to replace equipment that has a shorter useful life, right? It's worth mentioning that 95% of that planned $2 million tax note is intended to be spent on public safety vehicle replacements that are eligible for replacements. We'll make sure that's documented well in the agenda report, but just so that you know, $2 million of that tax note is for public safety vehicle replacements. As I was saying earlier, what has happened with the property values is certainly going to require us to go back and do some recalculations and some new forecasts, not only for the 2027 bond, but also for the 2023 bond. You look at this graph and you can see there's still $65 million for the 2023 bond that has yet to be issued. OK, we need to go back, run some scenarios and consider this schedule for these remaining bonds just to determine when exactly these projects will require the bond proceeds to make sure they're not delayed. That's certainly our commitment to make sure that the projects have the funds when they need them. But again, with these values, it certainly does give us enough reason to go back and recalculate that, make sure that we're well prepared and well positioned to move these issuances forward when the projects need them. Same thing for the bond. I think it's certainly gonna make us recalculate what that capacity may be. at no tax rate for a future bond. Because the truth of it, y'all, is that that capacity may not be there when we really reconsider what's gonna happen with property values over the next two to five years. As Robert had mentioned, we were able to get quite a bit more information on our 26 benchmark cities and what they're proposing for fiscal year 27. So some information about where those rates are from an average perspective. So when you take the average of all 26 benchmark cities for fiscal year 27 or the five that have yet to release that information, the average is 50.6 cents. That means that our current rate and our proposed rate is 9.7 cents or 19.2% lower than the average across all benchmark cities. Some takeaways and something that is certainly new for fiscal year 27 when looking at our 26 benchmark cities and how they may be responding to very similar conversations that we're having. And they may be seeing, I'm guessing, they're seeing very similar things that we're seeing in the property values. The data is interesting that of the 21 cities that have proposed their tax rates, 12 of those are proposing a tax rate increase. Seven of those are proposing keeping the rate the same while only two of them are proposing a reduction. You can see that the average tax rate increase that those 21, I'm sorry, that those 12 are proposing is 2.4 cents. There's a pretty wide range there. That range is from half a cent, so 0.5 cents to 5.7 cents. And just like the conversation that y'all are planning to have, these rates are certainly subject to change. There certainly are city councils that are probably gonna be considering decreases to some of those proposed increases. There's certainly probably some cities that are gonna be considering increases as well. So, but this is definitely a change of direction from what we've seen from the same list of cities over the past three to five years. So at your workshop last week, considering the conversations that several of you had, I wanted to prepare some additional information on at least the impacts to median homestead properties and as Robert said, as average homestead properties. And I think it's also worth kind of going back a little further and as a reminder, the city has not increased the tax rate since fiscal year 2014. Again, as I was saying earlier, growth in existing and new values gave us the flexibility not only to not increase it, but to reduce it to the tune of approximately nine cents, while still having the capacity to consider council priorities, city management priorities for each budget every year thereafter. So as we discussed last week, both the median taxable value of homestead properties in Comel and Guadalupe went down from tax year 25 to tax year 2026. This graph has changed a little bit. from last week, but based on the conversation that you had, I felt it prudent to illustrate what the impact to median taxable properties would be, not only at the current rate for 25, the current rate for 26, and the no new revenue for 26, but also what a one set increase would be, and then what the voter approval rate is, right? So we've done that for both Comal and Guadalupe County. But I can't say this enough. That's simply one measure. That's a median homestead property. It's incredibly important to emphasize that a property owner's tax bill is based on their individual taxable value. So it's possible that, it is definite that even if we were to adopt the current rate, which is below the no new revenue rate, there will be property owners, residential, industrial, commercial, vacant land, that their specific properties went up this year and they will pay more in taxes, right? Even though we're adopting the no new revenue rate. The no new revenue rate is looking on the collective of properties, not individual. And so to provide another example, again, we felt it prudent to show what the average taxable homestead property is doing. And the biggest distinction you can see is right there on this first graph, right? So while the average median taxable value in Kamau County went from 287 to 281. The average homestead property in Kamau County went from 306 to 311. So what does that tell you? That tells you that the residential properties on the higher end of the market are affecting the average, right? And even in Guadalupe County, yes, it went down, but it didn't go down as much as the median did as well. So this is the same graph that I showed earlier, but of course it's for average. And you can see it paints a little bit of a different picture, especially in Comal County when looking at average residential homestead properties versus median. And this table kind of ties it all together. So again, I do kind of want to go through this table kind of in depth, right? So the first two columns show you the increase or decrease for a median homestead property, both Comal and Guadalupe. If the current rate is adopted, if the no new revenue rate is adopted, if there's a one cent increase, and if the voter approval rate is adopted. And then it shows you the exact same thing for Comal, right? So I'm gonna stick with Comal. So while if the voter approval rate, maximum rates you can adopt, a median homestead property only sees a $21 increase from one year to the next. The average though sees a $70 increase.

Say that one more time, if you don't mind. Yeah, no, not a problem.

Believe me, I think this is probably one of the most important tables in the presentation.

Let me catch up with you.

Yeah, I think this is one of the most important tables in the presentation, especially if the council's even considering a modification to the tax rate that the budget is prepared in. So I'm gonna go through a couple of examples. So at the current rate of .4089 cents, a median homestead property in Comal would pay $24 less in property taxes to the city of New Braunfels, okay? But because of the fact that in Comal, the average homestead property is going up, right? In Comal, even at the current rate, an average property would pay $20 more. What I'm trying to do here is illustrate the difference between median and average. While median is a better illustration of what's happening as the market as a whole, the average is telling you that home prices at the higher end of the market are helping to cover up some of those reductions that you're seeing at the median and the lower end of the market. I'll go through another example in Guadalupe County. So the median homestead property in Guadalupe County is going down to the point that even if the voter approval rate is adopted, it's still a $1 reduction in taxes paid, whereas the average Guadalupe is paying $8 more at the voter approval rate. Yes, sir. You know, as I was saying earlier, and believe me, I know we're heavily focused on fiscal year 27, and we will be for the next several days at least. We have a long way to go until we have our budget and tax rate hearings and second and final readings on the 14th of September. But again, it's never too early to start thinking about fiscal year 28. Again, as I said earlier, this sudden shift in property values definitely makes us think differently about the 2027 bond program and also the remaining issue in schedule for 2023. You know, as we've said before, right, like that growth in property value has been a reliable source to address initiatives and programs that the city council and leadership has wanted to see included in the budget. Given that, I really do think that we should probably start our fiscal year 28 budget process much earlier. The city received preliminary values around the end of March, beginning of April. I really think that we should work into our process more council discussion, council workshops, because I think there's gonna be a need for us to be having tax rate policy discussions much earlier. And so I just wanted to put that on your radar, put it on record too, that it's probably worth us looking at our process and maybe modifying it given what we're seeing in property values this year. So this really is the last slide before I wanna open it up to discussion and questions that you have for us. But based on the questions that were asked last week about the no new revenue rate and the question from the mayor about the voter approval rate, I wanted to put this on one slide for you. Again, at the current rate, as we talked about earlier, no tax rate increase, as Robert and myself have said, we've scrubbed our revenues. Any additional funding or initiatives that the city council gave us direction to include in this budget, more than likely we would need to come back with a corresponding reduction to something else. At the no new revenue rate, as it states there on the slide, that would require a 0.67 cent tax rate increase. That would provide approximately $845,000 in additional general fund revenue. I wanted to provide just one more scenario for y'all to look at. At a one cent increase, that would provide approximately $1.25 million in additional general fund revenue. But again, you'd be above the no new revenue rate at that point. And then at the voter approval rate, as we said earlier, which is the highest rate you can adopt by law, that's a 1.6 cent tax rate increase. And that would provide approximately 2.05 million in additional general fund revenue. And so I'm gonna pause there for a while unless Robert or Jordan have anything else to add. Certainly would love to hear your thoughts and direction on where you think we should focus as far as a tax rate. or additional initiatives or council priorities that you think need to be funded more broadly in this budget. We've certainly done this in the past with previous city councils. What seems to work pretty well is kind of giving us kind of broad direction and an idea of where you guys would like to head and we can certainly come back with various scenarios tomorrow and Wednesday if needed.

All right, no one else from here? Anyone up here want to ask any questions? Councilwoman Carter?

I thought you were going the other way first. Yeah, it's all right, I'm ready. I was writing notes, though, and I wanna make sure I have all my notes together. So thank you for your presentation. As always, Jared, very, very nicely done. What I will say is that the FY 2023, while that was real nice and everybody gave a 6.1% or 6.1 cent decrease, you often pay for moves like that because your services unfortunately trail the growth. And I think we are currently experiencing that where we are getting to play catch up with everything. That compounded with a decrease is gonna exacerbate this problem. Growth, a lot of people think spells great things. Go out and grow so we can charge more taxes and get more money to work with. What they don't factor in is the services that are required to meet that growth. So punishing example of well-intended but there's consequences that trail with that. So I'm not real impressed with that. And I'd like to say, I don't want to overcorrect, but as I said in the last meeting, we are digging the hole deeper every time that we don't make a move to increase taxes because it feels good, right? I don't want people yelling at me for increasing taxes. However, I'm a realist that I drive in here and there's bumps everywhere and I've got a police station that needs 14 or 15 more people and they're the people that I'm gonna be looking at at two and three o'clock in the morning when somebody's tried to break into my house. Same thing with the fire department, down 11 on funding and they're the people that when I have a heart attack, I'm gonna be looking at saying, please save my life, okay? So, We're gonna have to address those things in my view. My questions about, is there somewhere in this book, and I was looking through here, that tells me what kind of positions, what are these roles in the police department that are not being funded?

Yes, that information is itemized in the appendices.

Is it in the appendix? Okay, that's where I was looking.

Yeah.

What page is it, or roundabout? I hadn't found it yet.

It begins on page 271 through 273. It's titled Unfunded Resource Requests in the appendices. 272 in here, sir. Okay.

Okay. They always tell you to go to the back of your insurance policy for what you don't get. So I go to the back of the book for what I don't get. Those are the most important things usually. So I'm gonna guess that we didn't see an SRO last year and it was on the unfunded list. Now I'm gonna guess that there's some SROs on this list, are there?

Yes, ma'am, if you go to page, well, at least 272 in my book, you can see where we actually have broken out. We actually break out the position request by department, so you'll see PD on 272.

So that alarms me, because now it's two years without an increase in the SRO, because I do believe that we see a detective, which was also requested last year, and it's much needed. But my point being, there's nothing to sacrifice there in my view um sros are very important to the schools and i thought that we received remuneration for those do we not are those really a budget item yes well mbisd reimburses us for 75 of the recurring cost okay so the city yeah this the city picks up the remaining 25 so we can't fund 25 of however many officers they ask for here or do we have to reflect the whole salary? I'm trying to understand how you show that.

We would only need to have additional recurring commitments for the 25% portion.

So I could get four officers for one, theoretically. How much money I have to come out of pocket with, right? I'm just saying.

Yeah, and yes, and that cost comes from the general fund.

Right, okay. So I think that, Council, we need to pay attention to that. I also am not a fan. I'm just gonna say this. I am not a fan of tying budgets to initiatives. This drives me a little batty because one, I didn't put these initiatives in here And I think that we need to seriously visit these as far as economic mobility, enhanced connectivity, community identity, organizational excellence, community wellbeing. You went out of your way to make sure there were numbers attached to all those and I appreciate the work you do. And sometimes elected folks put city officials as well as federal officials in a box and they say, this is the buzzwords we're gonna operate around. For me, as a citizen, I care about safety, I care about my roads, and I care about the overall appearance of the city. Anything outside of that, if it comes down to values go in the toilet and they reduce by 50%, I mean, I hate to say it, but everything else becomes unimportant to me. I have to sit as a council member and say, in times of budget, What is important to the people? And I could pretty much tell you what would come back in a survey that I would issue. Everybody else seems to have a hard time getting them back. I'd probably get a record. But I think that we really need to look at this because they're going out of their way to adapt to something that to me is very artificial. It's very flowery. It's very feel good. We're here not to do that as council. Really, as a city and government, how much of your role should be around flowery stuff? It should be around fact-based, what we should be doing for the taxpayer. What should we be doing for the citizen? And I think that would drive this budget a little differently. And those are just cold, hard facts. And that's just the Tony way of looking at things. The... Insurance, can you tell me where retired folks, like Robert's gonna go to retirement, where will he show up in this graph, or any retired people, as far as where their rates went?

Yeah, I think we have about eight.

Is it on here?

No, ma'am, it's not, but I have that information right here. I'm happy to give it to you. We have about eight employees, eight previous employees that are on our plan. As you can imagine, they pay a higher amount for health insurance. Given the fact they pay that higher amount, even though the cost of retirees has increased at a higher rate than existing employees over the past two years, because they pay that higher amount, recommended that they pay 12.5% increase over two years instead of 25% increase this year. So they had more time to absorb that. I wanna give you one example though. So for example, the silver plan, employee only, they currently pay $819 per month. That would go up to $921 per month at a 12.5% increase. And they're welcome to stay on that plan from the moment at which they retire until they turn 65.

Okay, so at 65, they'll go to Medicare.

Yes, ma'am.

Okay, so people retiring early take note. Insurance is a real thing. Happens in the federal sector too. I just didn't see it in here and I was wondering are they classified the same? And I get it, people are getting older, I'm not here to chew you out or anything like that. Now, as a result of this very sharp increase and maybe it'll help employees feel better too, I'm not sure. Have you or do you bid the health insurance as a group plan? So, you know, have Blue Cross Blue Shield, have Aetna, have whomever, you know, is still in the market. Do you bid that against there to see the pricing, how it would be or how it could be versus, And the reason I say that is I don't see so much of a problem. I think I shared with you all. I pay almost $1,000 a month for insurance for my family in a group plan. So I know, I mean, it's probably gonna be higher. One, I think it'll help if you just get a bid on a group plan. But two, I think it's a very real possibility that we need to look at the risk of having a self-funded or self-insured plan. And I know that you probably do that kind of stuff, but we don't wanna be over, I mean, it's like you said, danger of liquidation and all that kind of, that ooh, you know, red flags start going off. And I think that that risk becomes a little bit higher as you grow. You know, it's like, well, when's too much too much to put the city at risk, the citizens? And how close can we get as far as going to a group insurance versus, self-insurance, makes sense?

It does. Or was I talking in a- No, no, no, no ma'am, it makes perfect sense. Usually the bigger you become as an organization, the more likely you are to be self-funded. The fact that we're self-funded, I think if we were fully insured, I think we would have been having this conversation even as early as last year. Luckily in our self-insurance fund, we had a $4 million reserve. That helped really carry us through from July of 25 to now. We're drawing down on those. We drew down on those reserves last year by the tune of a million four. We'll draw down on them again this year. And so, I mean, I'm glad that we had the flexibility by being self-insured to delay this to fiscal year 27.

But you and I both know. I mean, and unfortunately, I know it all too well. One terminal illness, one terminal diagnosis, you are away from... that fund really, which I know you have the stop gap and all that kind of stuff, but say you get four or whatever, they start taking you down pretty quick as far as the dollars. So it's just a thing for me, maybe it's a comfort thing that you do in your slower months, not when it's high season that you go out and make these comparables.

I do think it's worth mentioning too that Like us, a lot of cities, they're working on their benefit design, whether they're fully insured or self-insured, all the way up until the budget's done, right? We're just trying to find everything we can to minimize this premium and contribution increase. As cities are now rolling out their budgets, anecdotally, we're hearing that we're not alone in this. I read an article over the weekend that the city of San Antonio is projected to be $40 million over budget. for health insurance. And it's interesting because even though they're significantly larger than us, it itemizes very similar issues they're dealing with, like increased ER utilization across the board. Again, we're seeing the exact same thing within our plan.

Right. And the medical environment is at best shaky. So, I mean, it's just something that I think might make the employees feel better of where they are versus where they could be. And it might also be you know, a real consideration given the changing dynamic of the medical field. Just my two cents on it. Otherwise, I don't have any more questions right now.

One of the things I did want to mention, and I'm sorry, I just wanted to respond to one of your questions earlier about the 6.1 cent tax rate reduction in fiscal year 23. that I failed to mention earlier is that, remember, the state of Texas requires property tax rate reductions when you have significant increases like that. So in some ways, a large portion of that reduction was going to happen no matter what.

Because of a property tax rate calculation that's required by the state? to identify the voter approval rate, the known new revenue rate. You're capped at three and a half percent in growth on existing properties, so.

Well, and I know they're always on you about bringing it down. It's just, I usually go to the end of the line when they tell you to do that kind of stuff. I mean, you could ask my staff today. I say, I know it sounds good and all, but just go to the end of the line. That way we might be able to... screech across with a little less. But you know, it's just lessons learned, unfortunately. And some of it, as you said, you only have so much control over. But I won't even address the tax rate. Everybody knows what I already think. So on that topic, because I've stated it, I think it's necessary. But I'll yield to everybody else.

Councilman Spradley.

Yeah, thank you. Jared, thank you for the presentation. And I actually remember five years ago, you told council don't get too comfortable because eventually the property taxes will come down and here we are. So unfortunately you made the prediction. If you go to page 28 or slide 28, it talks about employee cost of living adjustment.

Ooh.

Is that right? Yeah, 2.5% cost of living adjustment. Where did that number come from? I'm reading that the national average is around 3.5%.

Yeah, it came from what the budget could support while remaining structurally balanced.

And do you know what the number would be, the difference between 2.5 and 3.5%? About $950,000. Oh, okay, I'm gonna write that down. You know all these numbers off the top of your head.

I think I need to come prepared with that. We also try to anticipate questions that may come our way and so we do get prepared.

And then I did exactly what Council Member Carter did. I went to the back of the book and she missed one I think important. Legal assistant. We need a legal assistant in the budget in my opinion. The unfunded request is 94,000, I guess. I don't know if our city attorney has an idea of that or not. And there's a cybersecurity manager with all the security threats out there, none of those are going away. I think that's also important. She already mentioned the school resource officers. I'm puzzled on that. A part-time criminal investigator, 65,000. A drug destruction unit. I guess if you get drugs on the street, I guess they burn them up. Is that right, Chief? Yeah, that's only 7,500 bucks. A facility assessment, so I suppose that's assessments for all the facilities citywide, is that correct?

I believe that request was for City Hall specifically.

Just for here?

I believe so.

Yeah, I'll take a look at it, see if I can provide you some more detail.

And then we're talking about streets. She mentioned fire streets, police. I don't remember everything she said, but three equipment operators, crack sealer. Crack sealer is important because it protects the current asphalt from water going through the asphalt and making that worse. And then I read ADA improvements across the entire city, $2 million. So how would we fund that? That sounds like a bond project also. EDC? EDC?

We have recurring funding. That was the full amount requested, but we do have recurring funding for ADA improvements.

And then a traffic data counter. With all the stuff coming to City Council with school zones and people parking everywhere, I think that's important. That's only $20,000. So those are mine. So we kind of align. Probably not 100%, but we probably align probably pretty close. Right? I personally don't think that the point 4089% would be sufficient because there is a lot of things that we need to talk about and there's a lot of things that we need to do. And we're not gonna be able to get there if we do that, even kill across the board. So just things to think about.

They're all important, aren't they? They're all beneficial. I think another position that hasn't not yet been mentioned but I think would be extremely impactful. I will certainly move up above some of the other positions that have been stated or inspectors in the fire department. But I think we seriously need to consider if there is gonna be some additions that I would consider above some of those other positions. Inspectors on the fire department? Yes. I just wanted to make sure that I put that out there for discussion. What do they do? They do inspections, the fire department, so they'll do annual inspections, for example, of schools, senior assisted living.

After a fire?

Pardon me?

Before a fire or after a fire?

After. These are life safety inspections of schools. Before a fire.

Oh, to make sure they comply with. Yes, yes.

All right. During construction, annually. Right. I thought it was like an arson investigator. No, sir, not arson investigators. These inspectors would do annual life safety inspections of schools, for example, assisted living facilities, childcare, daycare centers, and so we certainly need.

And what do they cost per person?

I'll certainly get that for you, but I know what the chief is recommending, civilian inspectors, because we currently do utilize a civilian inspector. Non-badge. Correct.

Okay.

All right. Thanks.

Councilman Edwards.

Okay. On the fire inspectors, I think we're short for, but we really could get by with two for now. Do we get any offset revenue on that? In other words, they pay for the inspection in some cities. Yes. So we can balance that with a revenue stream or ish. All right. Civilian or officer? Which way are we leaning? Civilian. Civilian inspector? Keeping the cost down, right? Page 104. We had money in for the cultural district application and promo video. Can the EDC or the TERS eat that 25 grand? I know it's not a big number, but I'm just trying to see where we can alternate source it.

We can look into that. All right.

Second one, page 110. Are there new grants available to fund the 124,000 for the flood siren project install? I know the state had some money out there for it. If we can see where we can get either out of state or fed on that to offset against our budget.

Yes, sir, there is actually some funding with the Texas Water Development Board, but that funding is allocated for equipment, not O&M costs. Okay. But these are costs that we're actually sharing with Comal County in a partnership with Comal County such that they would actually maintain not only their own system, because we'd actually would have the same equipment, but also maintain our equipment as well.

Okay, page 133. Can the EDC or ZIP TERS fund the 36,000 for the 10 soccer goals?

Well, the tourism didn't have really any money in it yet because we just established it.

It was just a question. All right. We know that all departments are understaffed, but maybe a different choice on how to get to some of these. So could we start with a part-time communication specialist versus full-time to give us time to eat into the next payroll or delay the time we put them on? In other words, a six-month drag, then you bring them in so you can phase in to control your budget on any of this.

We have done that in the past, sir, where we have brought new positions on, not necessarily at the beginning of the fiscal year, but months into the fiscal year to be able to accommodate other initiatives that we want to include in the budget. That's also a budget balancing strategy.

Well, it's worth saying that's actually incorporated for all of the positions that are in this year's budget. They're only funded for nine months.

Do we have any idea what our budget is as it affects for this research that we're doing on the police department as far as the legal and the cost of inspection and everything that we're expending on? on the Bronfels Police Department building that we've mandated by the council. Do we have any idea what that number is going to be? Because we need to include that in this budget of what we're looking at and what our anticipated cost is into that. I'm concerned about a couple of things. Number one, you're correct, 27 is gonna be flat if not a pullback. The numbers we're seeing as of close of business on July 31, the residential housing market went into a near buyer's agent, buyer's side, okay? We have four to five months of inventory, which is the largest amount we've had since the early 2000s. In comparison of the 2023 numbers and the numbers we're seeing in 2026 that are happening now, we see significant number drop. We are seeing as much as five to 10% reduction across the line with exception of new. But even new, if you average it per foot, is smaller houses, but it's holding the value up. so it's kind of artificial. Veramendi and Merrifare offset that because of their price point situation, but we're seeing in the older neighborhoods a continued aggression that's in there. You add that to the fact that we've significantly reduced growth as far as new things in, so you're gonna take a hit in 27 for the next budget cycle on impact fees across the board, which will affect what you're doing on roads. And we're gonna have to have allocations in there to continue to maintain. And then by A&M, everything, I sent the articles out from what Texas A&M Research Center said. So we're looking at what that adjustment will be on sales tax. I think we have to budget, mandatory items that we have to have. There's not any room for fluff and stuff, even with a tax increase. And so I think we've got to be very spot on, especially where we're weak in payroll, because that's long-term and permanent. We're doing our... estimations for 27 and 28 and it's an aggressive look at what has to be done. Lastly, We really need to take care of the things that are most important that the public is talking about, streets, personnel, PD, fire. We've got new parks coming on, which we have them in for the budget, which is good. I think we need an estimate coming back to us on the delay anticipated on bond? What are we gonna delay that the public has anticipated that we got approval from the public for the bond, but we may not be able to start the project because we're waiting for the funds to shift, right? You wanted to say something?

I did, I just, at this point, we don't feel that any projects are gonna be delayed. What we feel we need to do is just evaluate our issuance schedule, reevaluate our cash flow needs for the project to see if there's any opportunity to modify our issuance schedule. But we will make sure that the projects have the bond proceeds when they need them to avoid delays.

And it's also going to be very critical because of this balancing act between some of these things of what fee adjustments will be necessitated. And the other is we're going to have to lean into the CBB a little bit for the Condentious Reusers Bureau, their marketing wing to help keep the sales tax up. During the pandemic, we had a pullback a little bit. We still had sales tax growth because we had new retail, but the tourism dollar is, you know, the things that were created by the legislature to help economies balance were hot tax and sales tax, and how we did it, and of course, with the tours. We're gonna have to see how we assist in the offset to keep you from going negative in 28 is more of my worry than 26. And then on the healthcare thing, MBISD, when I was on the school board, we had a big change in administration, personnel, and a bunch of things. We had to do the research between staying with Blue Cross Blue Shield as a provider or going self-funded. And we ended up making the shift because we weren't really big enough to get the big discount and the nationals. And so that community effort environment really put us in the position. And I did a calculation. Our insurance cost, I guess, average is about $5.71 per hour, $11,000 in pocket change, right? I mean, that's pretty reasonable. in the marketplace. The reinsurance, what's your reinsurance cost in that? Or stop gap?

Or stop loss?

Stop loss.

Let me go back and pull that information. I can bring it tomorrow.

And you're bidding that annually, right?

Yes. We bid three things. We bid just general TPA, so like whose network are we gonna access? Blue Cross, Aetna. We bid the stop loss actual coverage. Right. Right? Sorry, two things. Yeah, we bid stop loss and then we bid the actual coverage.

And do we bid the pharmaceutical side?

Not separately, no. Okay. We have looked at that, but not right now.

There's some that, for Christus, even though they had Blue Cross Blue Shield as a Christus system, all of the pharmaceuticals that if you signed up into their programs, all came out of Oklahoma. So your prescriptions were mailed into it. So, just as a... Mayor Potemka-Peasey.

Yes, sir. Great job putting this thing together. I was just sitting here listening to you talk about how values have gone down, the impact of HB9, I think it was, the homestead exemptions changing, the reduction in growth, all those things, yet still you all managed to balance the budget, find employee pay increases in there somewhere, and still manage a reserve at the end of it all and still fund all these things too. So you truly made a silk purse out of a sow's ear, congratulations. On the insurance increase and the, yeah, the insurance premium increase and then the employee compensation increase, tell me how that kind of works out between, I mean, is that going to essentially end up being a wash? Or, I mean, I imagine there will still be some compensation increase, but it kinda happens.

For most employees, yes. For most employees it will be a wash. Yes. Okay.

And I know that you're giving it all you can with the budget that we have, but I just kinda wanted to point that out for council here that I think that's pretty much where we're gonna end up being at. I'm in the same position with the rest of council as far as adding on additional public safety. The fire inspectors, that is something I had on my list as well too. And I think listening to everybody talk up here and where I'm at as well with it, I think from our retreat that we're at, we pretty well, I think everything that everybody's asked up here pretty much aligns with what we talked about at our retreat. public safety, roads and drainage, and employee compensation, and adding new positions if we possibly could. The paralegal or legal assistant I think is something that I'm also interested in seeing too. On the tax rate increase, I'm not really exactly sure where I stand on that just now as far as whether, no new revenue, or the voter approval rate or somewhere landing in between. Is there something we can do as far, and you and I talked about this a little bit before, possibly running some scenarios with different variations of that? Okay, so I think you said at a penny, I think on one of your slides you said at a penny. It was, yeah, it's right here on my screen. So it's gonna be 1.25 million at a penny, right? So we could kinda take that, see what that, see what those dollars would fund based off of the asset we're all talking about up here on council, right? Versus if we did the no new revenue rate, what, 850,000, something like that, 845, which is gonna be significantly lower. But if we could kinda get an idea from you on that when we come back in here and talk about it, okay, at 1.25, We could get this many fire inspectors. We could get this many police personnel. We could get, you know, the paralegal, yada, yada, yada, and so on, right?

So, I think that's it. We'll certainly develop some scenarios based on the no new revenue rate. The once it increased, would you all like to see a scenario with the voter approval rate?

I think at 800 grand, just on that one. Yes, I would. You only end up with like six officers. By the time you put vehicle, uniform, equipment expense, all of that.

I mean, I think I would like to see a scenario at the voter approval rate also. Because, I mean, $1.25 million is not going to go real far. Exactly. it gives us some options to look at and see exactly what we're getting. Certainly do that. The bang that we're getting for our buck, you know what I mean? And as creative as you all are, or have been so far, I'm interested to see what we got, so.

That almost doubles it, if you look at it, it almost doubles it.

And I really do like the proactive approach that you had in there, on the traffic calming plan, and looking at trying to get proactive on that as well. I'm a big fan of that, so. All right, good job, thank you.

Councilwoman Carter? Oh, I'm sorry. Are you finished?

She hasn't spoken yet. Councilwoman Shah. That's me, thank you. A few weeks back, we talked about specific personnel in the fire department that have reduced the number of people who use the emergency as their main source of healthcare. What is that position? And I know that they want another one of those people in the team. So what is that position called? I can't remember what it's called, but is that, I'm looking at what you, they asked for versus what they're getting. Is that the MIH paramedic person?

MIH coordinator, ma'am.

Yeah, I'd like to see that because I know that's a one person operation right now. And they have definitely reduced significant, I don't want to be offensive, frequent people that use that as their main source of healthcare. And they've reduced that number significantly, like 20 a year or something like that. So if we get a second person on that, I think that would be very beneficial overall. on the back end saving money on that aspect. I also fully agree we need a legal assistant. And then I'm looking at the number of personnel we have on hand in these different positions on page 81. And I see we have 30 people at the library. How does that get factored? Like how is the library staffed with 30 people versus the, airport has 15 people? Like how does that pan out? How is that decided?

Well, those are the positions that were authorized in the previous year.

Okay.

Yeah, so we don't reset. I wanna make sure I understand your question. So we don't reset the staffing levels every single year.

Is that the level that's needed though? I mean, do we look at that and say we need 30 people or 15 people or 25 people or whatever?

Yes, correct. I mean, we're constantly looking at staffing levels in all of our operations, specifically at the library. We're having those conversations right now because we are anticipating the opening of the Walnut branch. But we do operate two branches. They are open seven days a week. So that is the staffing level that is required to keep programs moving and keep the doors open.

You said they're seven days a week?

Yes. The library?

Mm-hmm. And then... Completely agree the SROs. When we talk about the increase on this, I know that Jared, you explained it to me a much more simple level at the retreat. Could you just do that again for the general public when you say one cent, like is that one cent per dollar or how does that, like can you just kind of break that down a little bit more please?

Yes, this would take our tax rate from 40.89 cents to 41.89 cents. That's per $100 of valuation. Okay, yeah. So whenever the city council ultimately votes on the proposed tax rate, there is a series of resources actually at both appraisal districts, Comal and Guadalupe appraisal districts, where you can go online, you can punch in your address, and it'll tell you exactly how much you'll owe in city taxes, school district taxes, county taxes, at the current rate, at the proposed rate, at the no new revenue rate, at the voter approval rate. So we certainly encourage all of our residents and any property owner to use those tools to see exactly how their individual property tax bill would be affected.

Awesome, and then just one more. The individual paid in and the city paid in for the healthcare. At the end of the year, is there a rollover for that or is that pretty much expended throughout the year?

No, I mean, we're very fortunate that we had built up a pretty sizable reserve during the good years where we didn't require a premium increase in contribution increase. We had built the reserve up over $4 million. But the cost increases that we referred to earlier in fiscal year 25 and fiscal year 26, we'll burn through more than half of that for sure, but we'll roll over the rest.

Okay. I think that's all I have for now.

Councilwoman Lebowski.

Yes, thank you for your presentation. I know it took a lot of work and I appreciate that. And being that I was at one time an employee for the city, I know how hard y'all work to find cost savings on the health insurance. So thank you for doing that. I had wrote down that, and most of it was already brought up. I do agree that legal does need a legal assistant. Very much agreed with Spradley on the cybersecurity. I think it's very important. And then on police, I do think that they need a criminal investigator, the admins, and the police techs. also, and the SROs. That was one of the important ones also. And then I wanna continue the citywide ADA improvements also. And I'm not sure yet where I stand on the property taxes yet. So hopefully I can give you an answer by tomorrow maybe. But thank y'all.

I think having the scenarios could be beneficial for you all to finally kind of determine where you may or may not be with regards to a tax rate. Yes, thank you.

Councilwoman Carter.

Sorry, it's me again. All of y'all sitting out there are very patient and we do appreciate that. Additionally, I would never want to impart to you that you're not important. All of you are important, your jobs are important, but we have to answer to the public and what they decide is important. The other thing is, I see your unfunded list. Robert, I don't know if you have this or not, you may already have it, but can we give these folks a chance at Survivor Island, like these unfunded, that they can each make an argument? And I'd accept it by email, I don't know how council would feel, but Spradley's over there looking at me like, what the hell is she talking about? What I'm trying to say is, I wanna see from their words why this is important to them, what's on this unfunded list. Because I can sit here and speculate how that matters, but I'd rather hear from Lozano in his words, like I said, if you put together a list of this and then I can click that button and see what that means, what it is, and I think that would give us a better way to assess what money we could net how much we could fund, how much we could push towards maybe EDC or whomever to alternative funding sources, but I really think that they should have a shot to defend their unfunded request. Not that they haven't done that to you, but we're talking about the tax rate, so it might move us. Not that y'all can't move us. Jared does his best.

You know, every year, as I mentioned in my very first presentation, I've done 30 of these. Thank goodness this is my last one. Because they get challenging. They get very, some years not as much as other years, but some years very challenging. And it's very difficult to ultimately make a determination as to what will be proposed, because every request that comes our way is valid, it's justified, it's needed, right? It's going to make it extremely difficult to come down to what you think may need to be budgeted, if you're hearing from every director about justifying their requests. I can tell you right now, they're all justified, but then what can we ultimately afford, right? And what are your priorities? And so I'm wondering if the council wants to hear the same, because then we'll spend quite a bit of time here doing that. And then you're pitting directors against directors. That's just not the environment that we built here. What I could do is maybe copy the request and send those to you. Maybe put them in a file and send those to you. And that way you have their request in writing and you can see the justification behind it because some have included data.

That's what I'm asking for.

Yeah, some have included data that justifies the request, right? Workload, indicators and those kind of things that may be helpful for you.

Because I don't wanna knock somebody out because they got a high dollar figure here, like a 1.2 million. It may be the most important thing on this list. I don't know. But unless and until I see that, and I could sit here and strike things out like, oh, that doesn't sound important. But that's essentially all I'm asking for. If you have those, I mean, for me, it would be helpful. I don't know about for you all, because I want to be fair to these folks. And I'm not saying you're not being fair, but I'm like a disentangled person that I don't deal with it every day, day in and day out. You've got to do it. That's what this is. Right.

This is every request from every department across the city. So I'm just preparing you. It's substantial.

I'm sure it is.

And I would like to say some of those.

But I'm willing to put the time into it for these folks.

Thank you. Some of those, we don't really need that, right? Like the SROs? Right. We don't need that justification. That extra position at the...

Help me out.

Yeah, legal, yeah, we need that position, right? There's some things we don't really need. And all of our priorities are police, fire, safety, and roads, and then people, right? I think if it aligns with that, I think we're all good.

I suspect that there's still gonna be so few dollars and so many requests that it's going to be easy and difficult at the same time. If you know, I mean, it's gonna be obvious, I guess, is what I suspect is gonna happen. But when we, because I mean, just taking, for example, at one penny, 1.25 million, I mean, you start adding on some personnel and you give... you know, you bump up the employee compensation, you do one or two other things, you're gone, that's it, it's gone, it's over, so.

And then it also requires a fund balance requirement, right, so it's not just the cost of the position, the salaries, the benefits, and the equipment, then you've also gotta then add on to that the fund balance requirement associated with that, so just understand that.

Did we ever, We approved two full-time positions for PD and three part-time, is that correct? Or vice, or was it the other way around? In the last?

That's correct. It was two full-time public service assistants or police service assistants and then three part-time personnel here. Okay, were we able to fill those yet? Actually, the part-time, I believe, positions are posted and I believe the PSAs are coming soon.

Okay, thank you. Yes, sir. Any further discussion up here? I like to go last. So I did get the book. I'm gonna read over that a lot. I did take notes on what I was seeing here today. And the one thing I did look, safety and security for the public is the number one thing. And so, I guess on slide 10, slide 10, let's see. Actually, yeah, I'll just go a little out of order. Slide 10 would be I do see some numbers here of loss that we, I guess, are not gonna get, and that was for, is the state gonna reimburse us from any of this?

No.

No, sir. Okay.

Capital N, capital O.

Okay. No, sir. Slide 21, if you don't mind, I'm just gonna go up slides. So I see here, what do you think off the top of your head was the highest we've ever paid for any city disaster?

Probably a couple million for a flood.

Do you think we actually need about $34 million on the side just waiting for a disaster that may not even go up that high?

Government standard is three months of operating expenses, which is roughly 25%. Okay. Okay. All right. And it's only a one time. So even if the city council did decide upon a lower reserve, we could only use it one time and it's gone.

But this is not just for emergencies, right? It's also for maintaining the bond rating. Correct, yeah.

And that's what I was gonna get to is the risk of dipping into those reserves below that fund balance target is then you then start to jeopardize the city's bond rating.

All right, that makes sense. And as well, I think people forget when you're far away, 1998 and then we followed two years with the flood and it really changed budgets up a lot in those years. And I mean, we almost were digging into the fund balance And that's why it's there. School district's the same thing. I mean, come LISD because the number of changes, they're looking at digging into a fund balance.

Slide 30. It's gonna be between slide 30 and 43. I'm looking at the FY26, you had 2.5 COLA for all un-uniform. And for the uniform ones, I'm just wondering why we have a 2.5. Are we getting a three for uniform?

So in fiscal year 26, non-uniform employees, so not anyone that is PD or fire, received a 3% COLA plus market cap to 10%. Uniform team members in police and fire got 2.5% plus their step increases, which average between two to 2.25% increase. Yes, sir. Okay. Yes, sir. So you also have to add the step.

I was kind of impressed on Saturday night. I went out to downtown just to walk around, and there was police officers and cruisers everywhere. I was amazed. I was like, this is, it was very secure. I really liked that. I was just, man, these guys are out there all the time. I was kind of, I was impressed. So the slide 43, this one here is for

unfunded for the police department and fire department very very high i know we're getting six this week right we're gonna swear in six this week uh yes sir i believe so plus it also will include an overhire in the swearing in what i mean by that is not a position that's actually authorized but let's say they had, I'm just gonna use a scenario, let's say they had five vacancies, but they had seven really qualified applicants, right? So they fill the five, plus if the chief feels like those two just cannot pass up, they're excellent candidates, then he's then authorized to also hire those two and then overhire what's actually authorized in the budget. He's authorized to over-hire up to 10 positions. Yes, sir. Which is actually implemented not long ago, which is a tremendous benefit to the police department.

Oh, yeah. I'm almost done here, I swear. 48, slide 48. The one thing I was trying to understand was the Comel County at 20%. We are paying, I understand, Comel County?

No, sir, this is just the average property taxes paid by percentage, meaning what percentage a homeowner or a property owner pays to NBISD versus how much they pay to the city of New Braunfels versus how much they pay to Comal County. Okay.

All right, it answers questions in my head.

And the percentages may vary slightly if it's a resident that lives in Guadalupe County but is in CISD. Those percentages may vary slightly.

All right. One more. Maybe I didn't see it. I didn't look through the whole book yet. The flock cameras. Now, who is paying for all the flock cameras? Is that the police department?

That's the police department, yes, sir. And we actually have a presentation coming up. September, I believe, 19th. Is it 21st? Thank you. September 19th. Okay.

Okay.

That will actually go through a presentation with you on those fly cameras. The license plate readers is what we call them, license plate readers, and how many we have in the benefit of those LPRs across the community, sir.

One more, one more. That page where it showed tax rate not going up and tax rate going up one cent, that one. Go back. I tried to understand... It says current rate, you know, .4089. $24, is that how much it would be for a medium household? You're at, that's monthly, or is that? That's the annual reduction. Annual reduction. So you were saying that if we went to voter approval rate, I'm looking at these numbers here, and I'm trying to understand, I'm looking at it going, it's 21. Is that... I'm trying to understand, you were saying something, to me, looking at the slide, if I didn't know what I'm looking at here, which I, this doesn't make sense to me. I'm looking at .4250 and it's at $21. I'm looking at 4089 is 24.

So yeah, right, so for a median homestead property in Comal County, if we adopted the voter approval rate of .4250, that median homestead property owner would pay $21 more annually in property taxes to the city of New Braunfels. That same property owner would pay $24 less annually if we adopted the current rate.

Less in the parentheses.

Yeah, correct. Yes, sir. Yes, sir. The parentheses. Okay. Yeah, it's an annual, these are reflecting annual increases or decreases.

Okay. Yeah, thanks, that's all I got.

No, I appreciate the opportunity to provide a clarification. Oh, no, no problem.

That's all I got. Any further discussion up here?

None of these calculate, this is just pure tax, property tax. What we don't see is those that are in some of the areas where we have MUDs and other taxing districts. The county, they have multiple districts for their ESD and so on and so forth. So we're talking about what our effect is on the tax bill, not the public's total tax bill. And so we have to look at that bite at the same time.

That's a good point, because we don't try to assume what either Comal County's tax rate may be, or NBISD's tax rate may be, or CISD's tax rate may be, so we're only showing you the impact of the City of New Braunfels property taxes paid only based on these proposed tax rates. Not proposed, but based on these various tax rates that are on the screen.

All right, you good to go up here? Thank you very much for this presentation, okay? I'll have more questions tomorrow, I'll tell you.

Please, if you want to email them to us, that'd be great as well, because then we can be prepared to respond to that during the meeting. Okay. Okay, and it could actually help then if we're developing scenarios, beginning to develop scenarios tomorrow, it might be helpful as well.

Okay. Okay?

Okay.

So I'm going to announce the dates, the times and locations at which the budget and tax rate are scheduled to be adopted. The public hearing for the tax rate and proposed budget will be held at a meeting beginning at 6 p.m. Thursday, September 10, 2026 at 550 Landa Street in the City Council Chambers. The FY2027 proposed budget along with the 2026 tax rate will be adopted on Monday, September 14, 2026, at a meeting beginning at 6 p.m. here in city council chambers. All right, the next item on the agenda is the presentation. Item A, presentation and update on the west side. Are we going to public?

It's not posted for that. You can if you want. You're not legally required to and it's not an action item. Actually, we probably should because arguably that's an action item that we just did.

I'm going to open the floor to the public. If you want to go behind the podium, just state your name if you live in the city, not in the city, in the ETJ. Thank you.

Slide five, if you could pull up slide five. I want to thank Mr. Warner for a very thorough presentation and for holding the rate steady. We've been in sort of a Goldilocks time the last five, six, seven years that taxes have gone up, but we've been able to say rates have gone down or stayed the same. That's changing, so I think we need to look at some new things. I have a question for Mr. Warner. The amount The difference there is in taxable values is freeze slash TERS. What is the percentage between freeze and TERS? And what exactly is freeze composed of?

Thank you, Mr. Warmke. The freeze is composed of any values that are not subject to taxation because the senior freeze, for example, right? And so this is the amount that, you know, based on these scenarios we're discussing, right, increasing it, not increasing it, right, this is the amount that we use to calculate any impacts to revenue, right? The amount that is reduced because of freeze and TERS, I think roughly 650 million is TERS and the rest is frozen. The split between freeze and TERS, do you have that? I can get that. Let me pull that information and bring that tomorrow. That way I'm not shooting from the hip. Is that okay? Okay.

Let me just make an observation here. If you go to the slide before, the certified values are basically $15.4 billion. And you go to this slide after the churns and the freeze, and they're like $12.9 billion. It's about $2.5 billion that we are not receiving revenue on. Now, you all have heard me many times talk about what I don't like about TERS, and I'd hope to have some more detail here to break it out. But we are essentially not getting a contribution into the general fund from that TERS money. Where does it go mainly? Police and fire. Where do we have the biggest hole in this budget? Police and fire departments and people, not equipment, people. The expensive part is people. And we're going into a new phase here. It's been pretty easy to make things look good with everything going up amazing. So that's going to change. So I think it's time we really start looking at some of the things that are diverting money out of the general fund. That's TERS. It's also 4B from sales tax. We really need to look at those as opposed to just figure out how to raise taxes on citizens to make it fit. so they can pay an unequal amount of taxes for people that are getting a break. Thank you, God bless you.

Good evening. Larry Lane, District 2. Our neighbor made a very interesting comment about TIF and TERS taxation, and he's absolutely right. The money is diverted and not available to general fund. One other point on TIFs and TERSs is if we need to create special taxing districts to attract developers, perhaps There was no initial demand for the type of projects that are proposed, approved, and ultimately built. Stacking and packing, that's not New Braunfels' character, but that's what we're approving. A couple other things on the budget. I noted an entry for traffic calming. Traffic calming, I would generally describe as traffic restrictions. So please put a caution sign on your budget as you go through that. And I know that with the 300 page document, I confess I've not gone through the entire thing. You all are probably farther along. I don't have people to help me with that. So those are two points. Let's look at our full-time dedicated lane striping team. The Rolling Stones, back when I was a youngster, had a tune to the effect that you can't always get what you want. but you'll get what you need. Do we need something like a four-man with equipment dedicated lane striping team to repaint every stripe every year? I trust that the paint and other coatings in many cases will last a little bit longer than a year. Ladies and gentlemen, I've got other points. Regrettably, I can't refer to slides, et cetera, but I appreciate your time. And I'll finish up with a description of what any city should be about. The P's, the three P's, primary duties, pavement, pipes, and police, with a few other public safety things thrown in. Everything else is nice to have, but not necessary, and the fact that we've not increased the mill tax rate in several years does not mean we're required to now. It's up to you all to set the priorities, but unfortunately, you'll be setting the tax rate before you get to the priorities. Thanks for your time. I'll be back tomorrow, maybe with more questions.

Is there anyone else?

Can we ask for a clarification from Jared on that TERS being directed into the general fund?

Well, when the city establishes a tax increment reinvestment zone, right, the growth in property value from that point forward gets reinvested back into the geographical district. And so one of the things I think is interesting, this isn't the question you asked, but I can't help myself but provide the information. So the Creekside Tour is, of course, the city's oldest tax increment reinvestment zone, established back in 2007. Because of that tax income reinvestment zone, 10% of all sales taxes that get generated in the city originate from the Creekside Town Center, right? So it's kind of like a, right? There are property values and therefore property tax revenue that must be reinvested back into those zones for the appropriate uses as defined by the project and finance plans, a lot of which go, all of which go to public improvements, actually. However, though, had that tax income reinvestment zone never occurred, would we then have the retail and therefore the sales tax revenue that is generated as a result, right? It's a difficult question to ask and to answer.

Well, you know me, I'm gonna ask it. But you gave me the answer. I mean, I don't think that that can just dump back into the general fund by as specified.

No, it can't. For example, the Creekside TERS, TERS number one, is set to expire in fiscal year 2032. At the end of that expiration, your choice as a governing body is to extend it and continue investing in that area or to let it expire. And at that point, all of that assessed valuation comes back into this calculation right here.

Mm-hmm. at a much reduced return?

No, ma'am, at the full amount. It completely dissolves at that point.

It dissolves?

Yes, ma'am, it completely dissolves.

Okay, that's what I was, I mean, I was, my hand was saying that. Okay, and that's what I thought.

Yes, yes, ma'am.

All right, thank you.

No further comments from the public. I'm gonna close public comment time, and we're gonna move on to the presentation. Presentation and update on the Westside Community Center, Jordan Matney.

Mayor, City Council, good evening. Jordan Matney, Deputy City Manager. As you know, at the beginning of 2026, we transitioned the Westside Community Center operations from reporting to the Library Department to reporting to the Parks and Recreation Department. Our goal with that transition was to open up opportunities at the Westside Community Center to expand fitness opportunities and to expand programming. As a little bit of a history for the Westside Community Center, the city acquired the property in 2011 and it was placed underneath the library department as far as operating is concerned. The success of our mini branch, our mini library branch inside of the Westside Community Center eventually led to the 2019 bond proposition for the Westside Library. That facility has been completed, is open, and is operating at a high level. And so we began to look at operations of the Westside Community Center and how we could move those operations to increase opportunities for the community. This facility also serves as an important community asset as well, so it is our emergency operation, move into emergency operations, it serves as our emergency shelter, also serves as a warming and potentially a cooling center as well. That is staffed by our CERT teams with assistance from public safety and then also from library personnel and from Parks and Recreation personnel. It also serves as a nutrition site during the summer for the summer lunch program along with several other locations throughout the community. As we transitioned to the Parks and Recreation Department, you can see our staffing team that exists at that location. We also relocated our athletic staff to that site as well for some additional oversight. You can also see our operating hours seven days a week at the bottom of that slide. So traditionally, we have operated through door counters. So we have door counters established at the entries of both library branches as well as the Westside Community Center. Our proposal is to move to our recreation software that will help us understand unique users and usage throughout the facility. We also want to increase programming at this location and make sure that we are maximizing community engagement. And then of course, as we continue to try to do, we are looking to reduce the reliance on the general fund and come up with alternative fundings and potentially fees. So what are we proposing as new programming at the Westside Community Center? I think one of the things that we're looking at the most is the overcrowding of our group exercise classes at DOS Rec. So group exercise at DOS is one of the most popular amenities that is available to our patrons. and we are at maximum capacity, and we have been for quite some time. Some of those classes require registration in advance, so you have to have a ticketed entrance because there is such a high demand We want to structure our group exercise classes at Westside Community Center to augment DOS in order to create some relief. We are looking at class times so that we can stagger those. So if a group exercise class fills at DOS, there's an opportunity to go over to the Westside Community Center. Of course, we want to provide youth and family and after school amenities as well as additional fitness amenities as well. In your proposed budget, we do have funding to increase fitness opportunities at the Westside Community Center. You can see the proposed layout in the picture. And so with that, we are looking to move towards a membership structure at Westside Community Center. We're proposing an individual rate of $10 per month. That will include the fitness room, any community activities that we have at the location, as well as all group exercise classes. As we do at DOS, we're going to utilize our insurance memberships. This allows for individuals to have a free membership to the facility because their insurance covers that. So we work directly with the insurance providers and then the individual gets a membership to the facility. And the important thing that we want to make sure is that nobody is turned away from the facility. So we have, tomorrow night you'll hear about goals from the Parks and Recreation Department. You'll hear about their scholarship program. that we're expanding to the rest of the department. We look to utilize that and we want to make sure that the community is always welcome at the Westside Community Center. The door scanners, when we apply industry standard to that, we expect about 1,000 unique users. And you can see our goals and estimates for the users in the facility. So just to highlight, total active members of 244, and then monthly day passes, about eight per day, 240 a month. RENTALS HAVE ALWAYS BEEN A SOURCE OF INCOME FOR THE WEST SIDE COMMUNITY CENTER AND WE'RE CONTINUING THAT. AND THEN YOU CAN SEE SOME OF THE OTHER OPPORTUNITIES AT THE WEST SIDE COMMUNITY CENTER FOR ADDITIONAL REVENUE. AND YOU CAN SEE THE COST RECOVERY FOR THOSE DIFFERENT OPPORTUNITIES. AS FAR AS TIMELINE IS CONCERNED WE HAVE TRANSITIONED TO THE PARKS AND RECREATION DEPARTMENT. WE ARE STARTING TO MODIFY PROGRAMS AND OFFER ADDITIONAL OPPORTUNITIES. Once we made this presentation tonight, this presentation was actually scheduled for your retreat, but because we had such good discussion at the retreat, this got postponed to this evening. So we want to publicly roll out the new plan in the future for the Westside Community Center. Funding on October 1st will allow us to purchase additional equipment, and then we're looking at an official changeover on January 1st. And with that, I'm happy to answer any questions.

Any discussion up here?

Question?

I'm gonna open it to the public. Do I open it to the public for a presentation too?

You can if you want, but since there's no action, it's not required.

Okay. Well, thank you very much. Thank you. Thank you. You do have one question? If you don't mind, just state your name and where you live.

Larry Lane, resident. I have a question regarding that presentation. There was a notation of a fee structure. If an individual currently attends at that facility a line dancing session put on by a third party, not by a city entity, will that individual now be charged a community center fee to attend such a session?

Would you like me to answer that question? So yes, we do have third parties that instruct classes at the Westside Community Center, but that does cost us. We have to pay for those instructors. So the goal is to transition participants at the Westside Community Center into the membership structure. But as I mentioned, We're going to work with those individuals to make sure that they can continue coming to those classes. Yes.

Thank you. I still have a little confusion because I didn't think the instructor was paid by the city for my information. Thank you. I'll follow up.

Thank you. Anyone else from the public? I'm going to close public, open public hearing or closing the public for this session. I'm going to move to presentation B, a presentation, a discussion on the 2026 roadway impact fee study. This is going to be Bernadette Faust and Pete Kelly.

Good evening, Mayor and Council. I'm Bernadette Faust. I'm Capital Projects Manager with the Transportation and Construction Services Department. I'm here tonight to introduce you to the 2026 Roadway Impact Fee Study and Adoption Process. Good news for you is that we have no action for tonight. This is really just informational to begin to introduce you to the process to adopt the study. which will happen over the next few months. So over the next few months we'll have a number of city council and roadway impact fee advisory committee meetings and that will culminate with a public hearing to adopt the new study. Very much like your budget process where we're required to introduce information in a timely fashion to the public and then take action at a point in the future, our roadway impact fee study and collected fees follow that same process. So I'm going to provide you with a brief introduction to roadway impact fees and then our consultant Pete Kelly with Camley Horne and Associates will dive a little deeper into the details. The roadway impact fee program in the state of Texas actually began in 1987. About 20 years later in New Braunfels we began collecting roadway impact fees in 2007. It's governed by chapter 395 of the local government code and what that means is that we don't get to just choose what those fees are. There's a scientific formula that relies on sound engineering principles and on planning principles in order to come up with what our maximum assessable fee is. And then the job that our roadway impact fee committee and you as council have after that is to establish what portion of that fee we're going to charge to the public. So our last fee and study update, let me back up, our last study update was in 2020. We're required under Chapter 395 to update our study every five years. We're in 2026, so we're a little bit behind. We had some legislative changes, which Mr. Kelly will speak to, that drove our schedule for the adoption of this study. And it requires us to update it every five years. In 2020, the study update occurred and city council at that time gave direction to take a tiered approach to how we would adopt fees. So we were given the direction to provide a fee structure that was adopted at 50 percent of the maximum assessable fees for a single family home, and that we would take a tiered approach, so we would come back the next year and increase it further. When we came back in late 2021 council, gave us direction that they preferred that we go to the maximum assessable fee and we've been charging that fee ever since. So right now we're charging the maximum fee that we can under chapter 395 of the government code for roadway impact fees. So our new study looks at how things have changed. It's a really timely thing that we're having this conversation now because you talked earlier about the changes in real estate, Council Member Edwards, in the housing market, and that really drives how roadway impact fees are calculated. And we've also talked about the increase in construction costs, and that also drives how impact fees are calculated and what the maximum assessable fee is. So I've included in your packet a list of what our planned adoption schedule is for the upcoming months to be able to adopt the new fee structure. It is a two-step process, so we'll come to you to adopt the study itself and then we'll come back to you in order to establish the collected fee after the study is adopted. And with that, I'd like to introduce you to Pete Kelly with Kimley Horne & Associates who's been responsible for creating our 2026 impact fee study and he'll provide some additional details.

Thank you, Bernadette. Good evening, mayor and council. Pete Kelly, professional engineer in Texas with Kilmeade Horn, performed the roadway impact fee study. Bernadette gave a good overview of where we are in the process with the roadway impact fee update, also some of the history regarding state law and also here in New Braunfels. The intent of tonight's presentation is to just go back over what impact fees are, how they're used, why they're used, just a general refresher on that, the mechanisms within state law that drive the calculations and the policies that come forth out of the impact fee update. Again, review a little bit of the history of how impact fees have been used here in New Braunfels and go over the next steps. So some of the basics and frequently asked questions is where I'll start first. As a reminder, impact fees are a one-time fee assessed to new development. That is recognizing that as new development comes in, they will impact the road network and they will be assessed through impact fees for their impact. And those fees, those funds are to be used only on the infrastructure costs to serve future development, to serve new growth. So, It's not a recurring fee and it's not a fee paid by existing or current residents. Impact fees are a legal way to collect a flexible fee to use towards transportation infrastructure. So it gives the city flexibility to spend that money within a broader service area. And again, as Bernadette mentioned, many of the parameters of impact fees and how they're assessed and governed are driven by Chapter 395 of the Texas Local Government Code. Just a brief overview of some of the things that can be paid for with impact fees. Primarily it's going to be the cost to build projects that are on the impact fee capital improvement plan. And that's gonna be roadway projects to build to thoroughfare plan standards, which may include traffic signals, bridges, and other transportation improvements. Along with those improvements, you're gonna need certain costs like surveying and engineering fees, those are recoverable through impact fees. Also land acquisition costs, projects that are funded by debt, that debt service is also impact fee eligible. In addition, our planning studies related to accommodating future growth, that would include the roadway impact fee study as well, can be paid for with the impact fee funds. Some of the costs that are not eligible to be paid through the impact fee program include projects that are not included in the impact fee capital improvement plan, repair operation and maintenance of existing facilities, upgrades to serve existing development and administrative costs to operate the impact fee program. Just wanted to go over some of the reasons why a community may choose to use impact fees or continue to use impact fees. And there's some of the same reasons why they were brought about in the 80s, which is that they are equitable, predictable, they ensure accountability, and they're proportional. equitable meaning that developer comes in, whether you're first to come in or last to come in in a given area, you're paying the same fee. They're predictable in that developers can look up the schedule, the rate schedule online and know what impact fees will be assessed to their development. ahead of carrying out that project. Impact fees also assure accountability by state law being put into place that there's a clock on funds that are paid to the city through impact fees. They need to be spent within a certain amount of time on infrastructure or be refunded to the property owner. And also the impact fees are proportional. They're directly related to the amount of demand generated by development within the city. And that is calculated based on a system-wide impact. Some other things to go over is checks and balances. So the impact fees, as Bernadette mentioned, is not just a number that the council or staff can choose. It has to be calculated by a third party. So independent licensed professionals prepare land use assumptions, the thoroughfare plan, which is the master plan that the impact fees are based off of, also the impact fee capital improvement plan and the calculation of the maximum assessable impact fees themselves are all by third party professionals. And then additionally, every community that has impact fees is required to have an advisory committee you have the Roadway Impact Fee Advisory Committee and that's required by state law to oversee the implementation of impact fees and also to continue to advise council between updates. A few things on the administration side of impact fees. So roadway impact fees are assessed based on their impact to the road network and that is quantified using vehicle miles. We have a table in the report that shows a list of land uses and essentially quantifies per unit of that land use how much traffic demand is placed on the road network. And so that is how proportional impact is determined. Impact fees need to be updated every five years with changes in growth and market changes, changes to infrastructure needs and underlying master plans. It's important that these studies are updated every five years. That is also a requirement of state law. One important thing to point out as well is the difference between impact fee assessment and impact fee collection. As Bernadette went over before, there was a time period where only 50% of the maximum fee was being assessed to residential properties. The city currently collects 100% of the maximum fee. So that is a decision by council. When you see the maximum fees for the 2026 impact fee study, you will have the ability to assess up to the maximum fee or below that amount. And just to reiterate again, impact fees collected within a given service area need to be spent on infrastructure projects within that same service area. There were a few updates to the state law regarding impact fees in late 2025, and I wanted to go over those with you today in case you had any questions about those. One of the updates was an increased public involvement window for feedback on the impact fee update. Currently, There's now a requirement that the impact fee reports are made available 60 days before the notice goes out that a public hearing is going to be held. So effectively there's a 90-day minimum window that that report is available on the city's website for people to look at, which is currently available now on the city's website. Previously that requirement was that the study need to be posted on or before the date that that notice went out. indicating there would be a public hearing. In addition, there is a new limitation on how often impact fees can be increased, and that is no sooner than three years from the last time impact fees were increased. That applies to the maximum fee and the collection rate. The two exceptions to this are programmed escalation is allowed, so if an amount less than the maximum fee is being collected, for example 50%, an escalation up to a higher percentage can be programmed in over that three year period. The other exception is if an impact fee collection rates are decreased, that is allowed to occur in less than three years. Another change that was implemented is that a two thirds vote is required to approve the land use assumptions, capital improvement plan and maximum fees. Previously, that was a simple majority. In addition, there were some changes to the requirements for the advisory committee. It is now required that 50% of that committee have representation from the real estate development or building industries. Previously, that was a 40% requirement. And planning and zoning commissions can no longer act as the de facto advisory committee. In addition, there was also an added external financial audit looking at the impact fee programs since the previous update, so this applies only to updates, not to new impact fee studies, and that requires an independent outside auditor to look at the impact fee program, and the auditor cannot have done anything, any other services with the city in the previous 12 months. And that will be presented, the results of that audit will be presented to council and to the advisory committee in September. Just a quick overview of impact fees in New Braunfels and the program over the years. Just a review for roadway impact fees. The state law does require that service areas be no larger than six miles. That required the subdivision of the city limits of New Braunfels into six service areas. And impact fees can only be collected within the city limits and not in ETJ for roadway impact fees. So this map shows the six service areas. There have been some minor updates since the last study due to annexations and de-annexations, but largely the boundaries have remained the same. Just reviewing again the fee structure and the history of decisions that have been made for impact fees over the last six years. The most recent study was adopted in February of 2020 and the decision then was to collect 50% of the maximum fee for residential properties and 25% of the maximum fee for non-residential properties. That became effective August 1st of 2020. In 2022, council elected to raise the collection rate to the maximum assessable fee as determined by the 2020 study with effective date of March 1st, 2023. um and then for 2026 the maximum fees we do reflect an increased maximum fee across the board and that's based off of increased construction costs since the last study increased project needs and then fewer building permits fewer growth projected Some of the recent fee uses with the impact fee program in the city include the intersection realignment at Post Road and Green Road, the FM 306 and Hunter Road traffic study, the FM 725 and County Line Road traffic study, the roadway impact fee update itself, and there are some upcoming projects that will receive funding from the impact fee funds as well, including Zip Road and Old Zip Road intersection construction, the Sauer Lane corridor study, and the Singer Hall Road schematic design. So these are just some examples of some impact fee capital improvement projects that have been partially funded or wholly funded by impact fees. Going through the next steps to give you an outlook of the adoption process and the coming meetings. This is our first meeting today. We'll be coming back in September to present the land use assumptions, the capital improvement plan, and the maximum fees. The advisory committee is getting that same presentation tomorrow, so we'll be able to get any feedback or questions they may have tomorrow to share with you at the September meeting. We'll follow a similar schedule going into late September to come back and discuss in more detail proposed collection rate options with you and what you might wanna consider there. And then moving forward into October, having the first, having a public hearing on October 26th, the first ordinance reading, and if needed, the second public hearing and ordinance reading on November 9th. Any questions?

Thank you, thank you, sir. Any questions from council up here? Council Member?

This may not be. Gary, do we have the CIP up and ready to balance with them? Right?

The Ridley impact fee study is available on the city's website. In your packet, in the presentation, it's at newbronfords.gov forward slash RIF for Ridley impact fees. And the Ridley impact fee CIP is included in that study.

And each zone or district, each councilman would get to see what's in that CIP so they're aware when we start talking about the fees.

That's correct, sir. The Redway impact fees are collected by service area, not by council district. And so it's very likely that any council member may have two service areas that are collected, but all of those are divided. And they have maps with the locations of the projects available on the city's website.

Any further discussion up here? I do have five little questions from your slides. It says impact fees, they don't cover administrative fees. So who covers administrative fees, the city does?

They reference administrative fees. They're talking about my salary or anyone with the city that is already an employee that is involved in managing the program. The planning study, the CIP study, which we've consulted with Kim Lee Horn on, is an eligible expense and is paid by roadway impact fees, but the cost of our finance department to manage the funds or my cost to manage the program are not eligible fees in the program.

Thank you. I'm just wondering why not. But is that the law? Or is it? It is. Okay. Another question I had was, you said when we collect the fees from all these different areas, is it law again that it can't go into another zone? Yes, that is correct. So who came up with that? The state did? The representatives did? Or who voted on that? That's kind of like the weird, I don't like that idea at all. You have different areas of the city that need help. And if impact fee was collected in that little area, you can forget about them ever having help, right? State law, yeah, that was a bad idea. And then I see, why every five years to update? And then I see on another slide that it requires a minimum of three years.

Yes, so every five years a study needs to be updated and that's part of state law, state law requirement, mostly due to you may see changes in patterns of growth at that time or infrastructure has been built out and we'll need to change the capital improvement list to make sure we're up to date with the latest trends and then.

We can't do it every three years?

So the three-year requirement is new. That came into place last year, and that's really, you cannot increase impact fees sooner than three years. So if you were to update the study and it reflected a higher fee, you couldn't charge a higher fee.

I think it would be a good idea to do it every three years, me, because waiting five years, the prices of a lot of things could have gone up. Impact fees would be less impactful, right? So there was a change in the CIAC. I guess the planning and zoning was kicked out. Do you think that was a good idea? Who made that?

So that's also part of state law in Chapter 395.

I think there's people up there in the state that really don't care. And that's just me. I think the impact fees are very important. And they're taking... They're taking... the city's control over impact fees away. That's what I'm seeing. That's me. Maybe I'm wrong. But that's all I got. Is there any other discussion up here? All right.

Thank you.

Thank you very much. Thank you. Let's see. Are we going to executive session or just no tonight?

Okay.

That ties up everything for tonight. There being no further business to come before New Braunfels City Council, this meeting is adjourned.

Thank you very much, everyone.