City Council - workshop

We call to order the August 18th City Council workshop. Did anyone sign up to speak?

No, sir.

Moving on to workshop agenda item number one, discussion of issues relating to the fiscal year 26-27 Deer Park Community Development Corporation budget. Mr. Stokes? Mrs. Costa will take that one.

Good evening, mayor and council. So real quickly, I don't plan to spend too much time on this item. But there are a few things about the upcoming CDC budget that we want to highlight. So a preliminary budget for CDC went to the board on April 27. And then the board approved their final budget at their July 27 meeting and recommended that this budget that's in front of you this evening be brought to city council for approval. So this year's budget includes total revenue of $4,620,000, which is made up of mostly sales tax revenue and some investment revenue, and then the prior year revenue number of just over $2.21 million. That's just pulling from fund balance in CDC to make the budget whole, so revenues and expenses match. Next, we're going to go over expenditures. And I also, before we do that, I just want to say that sales tax is performing very well. We've budgeted conservatively again, but we expect this year's targets to exceed budgeted revenue, and so we anticipate that next year is going to look healthy as well, which is great. That's citywide, and that's fantastic. So four expenditures. The main expenditures here come from the other operating expenditures, which we're going to talk about, and then the capital outlay. The supplies and services are pretty immaterial. They're routine items for postings and audit costs and things like that. As usual, I'm going to blow this up a little bit. It's a little hard to see. I apologize for the small font. But we're keeping a $250,000 just reserve in there for minimum fund balance. We don't plan to get close to that. But in the event that for some reason we do, we carry that year over year to make sure that we don't fall below that number. We are planning for a 1.4 to 5 million dollar transfer to the DAC just as a reminder The DAC was not ever intended to fully self-sustain itself. It's funded from user fees and from support from CDC so that's what that transfer is there and then this 2.4 million is transferred to the city's debt service fund for payment of the type B debt and Next is the most exciting part of the budget, which is anticipated capital projects for CDC. So there's a restroom renovation for the sports complex, addition of restrooms at San Jacinto Park, adult fence replacement at the sports complexes. Mentioned field five restoration. That's an exciting one that's been talked about for a while. So staff and the Parks and Rec Commission and CDC are very excited to get that going. security lights to the city parks, shade canopies at city parks, and then a parking lot expansion at the adult sports complex. They were going to do a skate park. And just for timing and project purposes, that got pushed into a prior, I'm sorry, into a following fiscal year. But this is a comprehensive list of all the projects that CDC plans to cover next year. With that, if y'all have any specific questions about any of this, Nicole and Kenny are both here and can answer any project questions or revenue-related questions if council has any.

Are we going to build a concrete skate park?

Kenny, will you talk about the skate park? I told Kenny he wouldn't have to speak, so I'm very glad that you asked that question.

So the design right now, yes, is for concrete. I actually met with American Ramp Company last week, and they put together some proposals. Based on funding, we would probably phase in and start something a little smaller. We're still trying to identify a location as well, but one of the issues we had when it was at Dow was it wasn't concrete and the heat was causing an issue. So, yes, it would be. The plan is to have a concrete skate park. Yes, sir. Yes, sir.

Moving to agenda item number two, discussion of issues relating to the quarterly financial reports for the fiscal year 25-26, third quarter ending June 30th.

Good evening, Mayor and Council. Yes, we're looking at the quarter three financial report tonight, which is through June 30th. So that's quarters of the way through the year. We'll always start off with some highlights. I apologize for my voice. I've got an itchy throat, so I'm... I'm going to struggle through this tonight. So our first highlight is regarding revenue. Through June 30, 92% of our general funds budget revenue has been collected. We have seen positive trends in sales tax, like Sarah mentioned, investment revenue, Ambulance fees, industrial district revenue, all of those revenue streams have performed a little bit better than expected, leading us to receiving the 92% collection by the third quarter. So it's always good to see that. Our second highlight is our investment revenue. Investment revenue has remained strong this year. We did see a slight downturn in the rate. The Fed funds rate right now is at 3.5 to 3.75. It's been there since December of 2025. This time last year, we were sitting at 4.25 to 4.5, so a little bit less than where we were last year, but it still performed well. We did anticipate that when we did our budget that it was going to go down a little bit. But even with that, citywide, we've earned for the quarter $1.1 million, and year-to-date $3.75 million in investment revenue alone. So still very, very strong. And then our last highlight is our expenditures. They are trending on target with our budget. We've realized we're encumbered about 71% of our budget through June 30th. Just rationing that out, we would expect to be about 75%. So this number lets me see that we're probably trending below budget, and we'll probably end with below budget this year. We'll move on to property tax. So by quarter three we've collected 46.3 million in property tax and industrial district payments. You can see on the slide collections we've received each quarter with 28.9 million received in the first quarter, 16.7 million in the second quarter, and 666,000 in the third quarter. Of the total $46.3 million collected, broken out, that comes to $31.9 million in property tax payments, with $22.2 million of that being allocated to the general fund and $9.7 million allocated to debt service. So that's a combined number. And then $14.39 million of that is industrial district payments. We've collected 103% of our budget for property taxes and 102% of our budget for industrial district payments. So those revenue streams are right on target with where we expect it to be, a little bit better. Our collection rate, which compares what we actually build to what we have collected for property taxes, is at 97.42%. And for industrial district payments, 99.98%. So we continue to have a great collection rate in the city. And then we'll go on to sales tax. So here are the numbers for our sales tax. It's reflective of seven months worth of collections. So we still have five months to record. So just keep that in mind as I give you these numbers. Across all revenue accounts for sales tax, that's all of our districts, CCPD, FIRE, CDC, we've collected $5.23 million in quarter three, with $2.6 million of that being allocated to the general fund. In comparison to last quarter three in 2025, we had $5.24 million, which is about $10,000 less than this year. And that's a 0.19% decrease compared to last year. So a little bit of a decrease, but really not a material one at all. It's really essentially the same as last year. Last year was a great year. So I'm just really happy to see us performing the same. YEAR TO DATE WE'VE RECEIVED 11.8 MILLION IN TOTAL COLLECTIONS WITH 5.97 MILLION OF THAT BELONGING TO THE GENERAL FUND. THIS IS APPROXIMATELY 72.83% OF OUR BUDGET AGAIN WITH FIVE MONTHS STILL TO COLLECT SO WE ARE EXPECTING TO SEE THIS OUTPERFORM OUR EXPECTATIONS AGAIN THIS YEAR. YEAR TO DATE TOTAL WE'RE SEEING A .54% DECREASE FROM LAST YEAR'S YEAR TO DATE SO AGAIN Quarterly, we're pretty much flat. We're pretty much the same as last year. And then also looking year to date, we're half a percent less than last year. So performing basically the same as last year. So very, very good. And then we'll go on to our enterprise funds. So the city has three enterprise funds. That's our water and sewer fund, our stormwater fund, and the Dow active complex fund. And looking at our water and sewer fund, first, it has realized $11.15 million in revenue, which is 69% of its budget for revenue. This is eight months worth of collections because this is building arrears as well. So there's still a few months to collect. For the expenditures, we've realized we're encumbered $12.5 million. which is 74% of its budget. So again, using that 75% metric, we're pretty much right on target with the expenditures in the Water and Sewer Fund. For the Stormwater Fund, we've earned $309,000 in revenue, which represents 61% of its budget in the revenue, and then $339,000 in expenditures, representing 60% of its budget for expenditures. And then the DAC fund has earned $595,000 in quarter three, representing 57% of its budget for revenue, and then $1.56 million in expenditures, which equals 73% of its budget for expenditures. And we'll go on to fund balance. So this is our general fund reserves that you're seeing here. On this slide, you can see on the left is our adopted budget, which is $60.16 million. And then you can see how the budget is divided out among departments and how we've allocated our resources in this budget. And then on the right side, you can see it's broken out by a percentage. So it's the same figures. It's just the actual dollar amount and then the percentage on each side. You can see on the right-hand side, we ended the quarter with $54.17 million as our fund balance. So our fund balance remains very stable. Our policy is to have 90 days of reserve. So we exceed that by a significant margin. We have 329 days of reserves, and it funds about 90% of our current budget. And with that, we'll move on to debt. Okay. As of October 1st, we have an outstanding debt obligation of $139 million. Our debt service payments for 2026 are approximately $13.8 million, which is made up of $8.24 million in principal payments and $5.59 million in interest payments. We make those payments in March, and then we will have another interest-only payment in September. With that, I will conclude the report and answer any questions.

Thank you.

Thank you.

Item number three, discussion of issues related to the proposed updated solid waste collection ordinance.

I'll take that one, and then David will help me out as well. I want to start off by bragging, as we all know, about how awesome our sanitation department is. They do just an amazing job. They're so well-received, and I think our citizens really, really appreciate them, deservedly so. Another thing I want to point out in the context of our budget and setting the tax rate and that type of thing, I think we don't say this often enough. While no one likes paying property taxes and it's easy to be discouraged about what things cost and whatnot, in Deer Park, you still don't pay a fee for residential trash pickup. And we give you 104 quality trash bags through the course of the year. And another piece of that is every Wednesday, you can set something heavy out. Well, I'm back up to say another awesome thing is when a hurricane comes or a storm comes, we are always the first ones to pick up while we watch some of our neighboring cities, especially the one with 2 million people just on the other side of us. They wait months to have that picked up, months to have picked up what we get picked up in days. But every Wednesday, a resident, any of us that live here, can set out bulk trash, and the city comes and picks it up. And we're very proud to offer that service. The employees that provide that service take tremendous pride in the work that they do. One of the things, this does not happen very often, But it does happen on occasion, and we want to talk to council about do we want to change it or not. If someone cuts down, trims trees, usually most lots in Deer Park are relatively small and have a relatively small number of mature trees that need to be trimmed. And when that's cut down and set out front, it's generally speaking not that big of a deal to go get it. for our crews to go pick it up. On occasion, there can be instances, and y'all probably seen it before, where, and I'm not talking about a weather event, but just as a matter of routine trimming needing to take place, someone will cut down a handful of large trees and they'll set it out and it will be taller than any of us can reach and stretch from me to David. And when that happens, it takes our crew, and I'm not exaggerating when I say this, we can have our crew spend one entire week where all they do is pick up that one household's trees. And that comes at the expense of helping out 10,000 other households because so much time is tied up on that one household. And again, this doesn't happen real often, but we would like that... Recently, the issue came up. And we looked at our ordinance. And we really don't have a regulation. We don't have a limit. And I thought the citizens were very reasonable to work with. And we told them, we're only going to be able to get so much at a time. And they understood that. We don't want it sitting out there. Usually, when it's piled up, it's often where the drainage is. And you don't want it blocking the drainage, especially in the summertime. In that particular instance, we were able to go get it much quicker. It didn't take weeks. It took days. But that tied up our crews a lot of their time. The fees of dropping that solid waste off, just the disposal fees, were hundreds and hundreds and hundreds of dollars. And I say without exaggeration. The amount of time, effort, and true expense that went into a situation like that is probably more than that resident pays in city property taxes over the course of many years. We are giving, pick a number, $4,000 or $5,000 worth of value. That's what it would have cost to have it privately hauled off to a house that is going to pay $1,000 a year. And we're not complaining about that. But I do want that to be recognized. And I do want our citizens to hopefully recognize. And that's one of the many, many, many things that's great about living in Deer Park. But all that said, this circumstance is going to arise again. And it could arise again with a homeowner that's not as nice about it and is just saying, there is no ordinance. I expect this to be picked up and is ugly about it. And we've looked at what our neighbors do. Tim pulled up, Alexander pulled up, City of La Porte. Tim's recommendation was let's limit it to 10 cubic yards a week. And that's what the City of La Porte has in their ordinance. That is still a lot, a lot of volume. And in most instances, no different than the one I described earlier, odds are very high we're still going to be able to go get it. We just want to have some protection if we can't get it If we need to tell the resident, we can't get it. But also, we want council to bless this because it's going to be you seven to get the phone calls or something to put on Facebook or that type of thing saying, what a terrible city. I put out all this stuff. It didn't get picked up. Hopefully, there's some recognition amongst all of us of what is reasonable and the volume that's reasonable and that it's handled in a reasonable manner. So our recommendation. is 10 cubic yards. David, do you have anything to add to that? Do you want to talk about how many pickup truck loads is 10 cubic yards, just to give some perspective?

Usually you have this where it's just kind of a truck bed, a normal pickup truck bed. The other thing that we want to put in there, too, is the fact that if we do have a hurricane, If we do have an emergency event like URI, you know, a freeze where there's going to be a lot of green waste, we will enact if we have an event that's certified by the mayor or the governor saying this is an emergency, and we can enact our debris management plan. And then we can bring in a third party, which includes monitoring and also picking it up. That has nothing to do with this. This is a weekly pickup or heavy debris every Wednesday.

But if that seems reasonable to y'all, we would like to come back with a limitation of 10 yards a week.

So hypothetically, let's just say we have one of these things happen and somebody puts 40 yards out of their road. So you're saying to me that you're only going to pick up 10 yards once a week for the next month?

Per the ordinance, if passed, we would have the ability, without the citizen saying this isn't fair to the citizen, we'd have the ability to say.

How are you going to handle that? You're going to only pick up 10 yards a week? We would probably still pick it up. And leave the other 30 for the rest of the month? Or are you going to tell them, no, we're only going to pick up 10 yards and you need to get the rest of it hauled off? Well, what we're proposing would be 10 yards a week.

So it could remain. Now, there's problems with that, too, because it's ugly and the neighbors are going to grow up. And again, a lot of these things block drainage paths. And that can have issues. If we wanted to say only 10 yards, we could. I think Tim's concern with part of that was it could be a new 10 yard. One week, it might be. Green waste, the next week it might be a couch. It could be other things too.

Are you sure this has got enough verbiage to cover what you're intending? Or you still want to leave it open?

In talking to Tim, I think they're comfortable with it being open. Just want some council backing that if they have to tell somebody no, that we've all agreed that this rule is in place. But otherwise, they'll do their best to pick it up.

Can we make some recognition or just awareness that maybe says that it's only supposed to be a week? If you have 40, you need to store it in your garage and put out 10. I mean, I know you don't want to say exactly that, but just some kind of awareness that says that we really only want you to. I mean, I know in Bay Oaks, I go to Bay Oaks first step, and I know that after the hurricane, for, I would say, six to seven months. Oh, yeah. And those are million-dollar homes, and they had piles higher than me that are out there forever. And I know it was kind of trashy looking, and I don't want to upset people, but, I mean, you know, I mean, I know Dorothy was not a fan of that. That was a lot, and those trees were huge. And I can't, I mean, I was impressed that they did it as fast as they did, because I didn't think there was any money.

We can certainly run a social media campaign just for awareness. And when we discussed this at the staff level, we also talked about that we have code enforcement requirements and ordinances as well. And so if we are in a situation where we do have to say, OK, we can only do 10 cubic yards a week, then we have other metrics in place to address stuff sitting on the curb.

You sure we don't want to look at including some kind of verbiage similar to what we did on the transfer stage in regulating commercial narratives, where people are hiring a commercial contractor to come in there and do all this work and then just put it out in the street? Because everybody knows we'll pick it up. That part's true.

That's a several, maybe a thousand, like you're saying, to dispose of that, that contractor's taking advantage of your part of the industry. Do we want to look at it? I would guess that, I mean, we'd have to ask Tim, but I would guess that more than half of what's put in curbside like that was done by a commercial contractor. This particular incident.

Do we want to look at limiting that kind of narrative? Because now you've got the taxpayers of our community subsidizing one individual that is choosing not to pay the full rate of getting that work done and having that debris hauled off. And then everybody else in the city is having to pay for that.

But how are you going to? I understand what you're saying. It's not that I don't agree with it. But how are you going to know who did it and who didn't? Get a permit. Go get a permit. Cut down that tree.

It's either go down this road or just leave it the way it is and keep doing it to some extent. I mean, I don't have a problem with the 10 cubic yards, but I do have a problem if someone puts 40 or 50 yards and it's there for a freaking month, unless it's my house.

If they leave it there over a certain period of time, it's a code violation, so they can enforce the code violation aspect of it about leaving debris out on the curb that long.

How many cases are we having this per year?

I would say this is the one incident that I've seen this year of this type of thing. Last year we had somebody just clear their land and they kept putting it out there and it was quite a bit. It wasn't as much as this last incident, but it was quite a bit.

Does staff have any interest in going down this forbidding commercial narratives?

We've not talked about that. And I don't think staff would want to go that route. Those guys take pride in what they do. And they love that they provide that service. There's a lot of benefit to it, a lot of benefit to the taxpayer and the homeowner. I just think there needs to be a reasonable limitation. And I think the 10 yards a week is a reasonable limitation. And if that doesn't work, if we run into more problems, We'll gladly come back to council and say, we tried this and it didn't work. Let's look at what else might be better.

Well, I know the way Justin was referencing it, it might be hard to distinguish, but it's not that complicated to distinguish when a commercial crew comes in and does their job versus a homeowner. I mean, it's very easy to distinguish that at the transfer station, or it was before all that became a narrative.

I mean, I kind of don't know about the permit, though, because I wouldn't want somebody... to be like, well, I have a dead tree, and my husband's going to get out the chainsaw this weekend, but he's got to go get a permit first.

Yeah, well, there again, I think it would be very clear, because if it was your husband, he wouldn't cut the whole tree down.

No, he'd call you. Probably.

And there's not too many weekend warriors of husbands that would cut a whole tree down and haul it out to the front of their house.

I think we're overthinking what they're wanting.

We are?

Yes.

I'll just say we're good with the 10 yards as proposed. And if that doesn't work or we run into more problems, let us then come back and say that wasn't enough. Let's find something more.

Well, I can tell you in my own business to go to the dump for 10 yards, that would cost me $300 to get that dropped off.

But then we probably did, this summer, with the one instance we're talking about, over $1,000 just in dumping fees. And then you add to that all the work that our guys did.

Which doesn't include the labor and overhead equipment and all that kind of stuff.

So you don't want to have about 40,000 people one time a year.

Yeah, yeah. Most people, you can only cut down trees so many times with this.

OK, since I'm overthinking it, I guess we're good.

No more overthinking.

We're done. That's all we have on the workshop item. This meeting is adjourned.