City Council - Regular Meeting

Again with the invocation and pledge, led by Councilwoman Marsh.

Dear Heavenly Father, we come here before you with a grateful heart, asking for your covering over our city and everyone who serves it. As a new school year approaches, place extra hedge of protection around our students, at all of our high schools, colleges, elementary schools. And Lord, thank you for all that you do. Bless every person that helps with education from housekeeping all the way to the superintendent. Please put an extra hedge of protection of our city leadership, employees, Mayor Hayden, and every person that helps out with our community. Please give us the wisdom to lead humility to listen, and courage to serve. May your grace cover Tyler and your peace guide us in peace.

All right, I'll entertain a motion for approving the minutes from the June 24th meeting.

Make a motion to approve the minutes from June 24th.

All right, I have a motion. Do I have a second? Second. I have a motion from Councilman Nichols and a second from Councilwoman Hawkins. All in favor? Aye. Any opposed? Minutes are approved. All right, today begins our budget presentation. Mr. City Manager Ed, P1. Are you okay this morning?

Facilities probably won't get mentioned in the budget, but sometimes, yeah, some things stick around here. Just got to use a little bit of elbow grease. Mayor Haney and City Council, thank you for the opportunity to present the proposed budget for fiscal year 2027. This budget continues our focus on the services and infrastructure that support daily life here in Tyler. It makes significant investments in public safety, streets, drainage, water and wastewater systems, parks, downtown maintenance, and the employees who provide those services. The proposed budget also responds to changing financial conditions. We are balancing the need to maintain dependable services with the responsibility to plan carefully for major equipment, facilities, and infrastructure that will serve Tyler for years to come. As we review the proposal today, I will highlight the investments, operational changes, and revenue adjustments recommended for the coming fiscal year. Public safety remains one of our highest priorities, and the fiscal year 2027 budget continues investments in the necessary equipment and facilities for our police and fire departments. The proposed budget for the police department allocates $523,768 for the fifth year of the Axon subscription program, which ensures the ongoing use and replacement of crucial law enforcement technology, including body cameras, car cameras, and tasers. This program not only provides essential equipment, but also guarantees that the department has access to the latest technology without the need to repurchase for the department annually. For the Fire Department, the half-cent work includes $8 million for the demolition and reconstruction of Fire Station No. 2 on Old Bullard Road, as well as the $5.8 million for the construction of a new fire training facility. This new facility will be located near Station 5, moving it away from the Rose Complex, which is an area frequented by many visitors. Additionally, the budget allocates $604,191 for the second payment on previously authorized fire engines. We will also continue the demolition of substandard commercial structures with $200,000 proposed from the Solid Waste Fund. This work helps address unsafe properties and supports the health and safety of our community. Over the next several years, the City will need to replace a number of major public safety vehicles and pieces of equipment that are nearing the end of their useful service lives. These are significant capital expenses that cannot be fully absorbed within the annual operating budget without affecting other essential services. For the police department, the identified capital needs total approximately $2.3 million for the purchase of several specialized police vehicles. The fire department's identified needs include $6 million for six fire engines and $4 million for two ladder trucks. This investment will ensure that we can replace vehicles in a timely manner while maintaining a reserve of equipment. This approach minimizes the risk of having vehicles out of service when we need them most. Historically, the City of Tyler maintained one of the lowest property tax rates in the state of Texas. As a pay-as-you-go city, we purchase capital equipment, such as fire engines, with cash. However, recent changes to state property tax legislation disproportionately affect cities with low property tax rates like Tyler. As a result, we are now forced to consider taking on debt to fund these capital improvements, which will ultimately lead to higher costs for Tyler residents in the long run. Together, these purchases represent approximately $12.3 million in major public safety capital needs. Planning for them now will help the City replace aging equipment before it becomes unreliable while continuing to provide the level of emergency response our community expects. As construction progresses on the Downtown Improvements Project, the proposed budget begins planning for the care of completed areas. The budget includes $252,232 from the tax increment reinvestment zone number four for a maintenance. This funding will help protect the city's investment and support the ongoing care of the new public spaces and improvements as they are completed. Using the tourism and hotel occupancy tax funds, we will continue to make targeted improvements throughout the Rose Complex. It is important to remember that these funds must be allocated to projects that generate tourism. The proposed budget includes $50,000 for phase four of the stamped concrete bed replacement in the Tyler Rose Garden, and $245,000 for phase two of the demolition and improvement work at the former fairgrounds, including the construction of the outside deck of the historic Mayfair. Last year, the City Council approved a budget to create holiday lights displaying in the garden. This initiative doubled the number of visitors in December, increasing from 5,000 to 10,800. This year, we plan to enhance the Holiday Decorations Master Plan for the Rose Garden Center by adding $30,000 to the budget. These additional elements will help the garden shine even brighter during the holiday season. Together, these projects continue the work of maintaining and improving one of Tyler's most visible tourism and community destinations. The proposed budget maintains our commitment in investing in parks and recreation facilities throughout Tyler. We're allocating $802,500 from the Park Improvement Fund for enhancements at Stewart Park, located on Frankston Highway. Additionally, the budget includes funding to replace the chiller at the Glass Recreation Center. We also recommend the city reinstate an in-house mowing crew to maintain more than 1,000 acres of parkland. This would involve hiring one crew leader and four maintenance technicians with a total personnel cost of $298,740 plus $175,497 for equipment. While we anticipate savings beginning in the first year, those savings may be lower initially due to the need to purchase new equipment. Overall, we estimate savings of $65,000 in fiscal year 2027, $225,000 in fiscal year 2028, and over a quarter of a million dollars in fiscal year 2029. Bringing this work back in-house will allow the city to have more direct control over scheduling and service while also generating greater savings over time. We propose establishing a new street crew comprised of four to five positions dedicated to assisting with crack sealing and base repair projects rather than continue to contract these projects each year. By utilizing city staff for this work, we estimate we can cover an additional 7.68 lane miles through the annual asphalt enhancement program and an extra 16.9 lane miles through the seal coat projects. The initial cost to create this crew is estimated at $1.04 million, compared to approximately $1.25 million in projected contract costs for 2026. Based on these figures, this initiative is expected to save around $200,000 in the first year. In subsequent years, savings are anticipated to reach approximately half a million dollars due to the absence of initial capital expenditures needed to establish the crew. This approach not only increases the volume of work completed, but also offers a more sustainable long-term financial strategy for the city. As technology advances and becomes more cost effective, we are discovering new ways to improve our services. We propose adding software that will utilize the city's current fleet of dash cameras, along with additional vehicles equipped with Samsara technology to automatically identify and prioritize roadway issues. These issues may include potholes, surface deterioration, infrastructure damage, and public safety hazards. The system is expected to integrate with existing work order platforms that we have and provide verification tools to support operational decisions. On the traffic side, we are continuing the intelligent transportation system timeline. The fiscal year 2027 budget includes an additional $31,500 for traffic signal maintenance, bringing the seventh year total for maintenance investment to $208,000. The Quality Street Commitment Fund, funded by two cents of the tax rate, provides dedicated resources for the maintenance of Tyler Streets and public alleys. For fiscal year 2027, the proposed budget includes $1.5 million for crack seal projects, $869,772 for brick street projects and maintenance, and $165,000 for public alley repairs and maintenance. These investments support both preventive maintenance and repairs, helping extend the life of our infrastructure and address needs throughout the city. Tyler Water Utilities is continuing to invest in equipment and infrastructure that help protect water quality and keep water and wastewater services reliable. This proposed increase of $173,000 for operating improvements will enable staff to monitor water quality more effectively, protect critical equipment, and maintain consistent water pressure across the system. Additionally, the budget allocates $13.6 million for cash-funded capital improvements. Key projects include the $6.07 million dedicated to upgrades in our wastewater system and $7.53 million for improvements to our water system. For residents, these improvements translate to more reliable service, improved water quality protection, and a reduced risk of service disruptions as we replace aging equipment. Since these capital projects are funded with cash, the City can implement these upgrades without taking on additional debt. The proposed budget continues investment in stormwater infrastructure and drainage. It includes $700,000 for capital stormwater projects in fiscal year 2027, along with $5.8 million in half-cent funding for drainage projects. These resources allow the City to continue addressing drainage needs, maintaining existing infrastructure, and planning projects that help reduce flooding risk. For the Solid Waste Department, this budget is intended to provide a path forward toward more sustainable operations while continuing to provide high-quality service at a reasonable cost to residents. The Department needs to look closely at both how trash collection services are delivered and how they are funded. Several options are being evaluated, but no operational changes would take effect until January 1, 2027. We intend to bring back the proposed options to Council early in the 2027 fiscal year. The proposed budget also includes $130,000 for new route software. This technology will give the Department better information to manage routes, improve efficiency, and make more informed operational decisions. Earlier this year, the City Council adopted the Tyler Tomorrow Comprehensive Plan. Now it is time to begin implementing some of those proposed changes. The budget includes investments aimed at helping to help the City evaluate development more effectively and plan for future growth. We are recommending an additional $110,000 to complete a watershed timing analysis. Combined with $50,000 previously approved this current fiscal year and carried forward, the total anticipated project cost is $160,000. The study will evaluate watershed timing, drainage patterns, and potential impacts related to future development. The results will help the city determine whether updates to stormwater regulations, design criteria, or mitigation requirements are needed to protect public infrastructure, reduce flood risk, and support sustainable growth. The budget also includes a $200,000 State of Texas General Land Office grant for an update to the Unified Development Code. Our employees are central to every service the city provides. The proposed budget includes a 2% pay increase to all civil service employees and a 2% merit increase for eligible employees who meet performance expectations. The estimated cost, including benefits, is $1.86 million. The city is self-insured and will continuously evaluate premiums to ensure our plan remains sustainable for the long term. Rising health costs are a major concern as they continue to increase. For this reason, the budget accounts for scheduled increases in employee health premiums. The Bluebonnet plan will see an increase of $10 per month, the Azalea plan will increase by $20 per month, and the Rose plan will increase by $40 per month. The general fund supports many of the services residents rely on every day, including police, fire, parks, streets, traffic, the library, municipal court, and animal services. Tyler continues to have the lowest property tax rate among Texas cities. Because of that, sales tax is the largest source of revenue for our general fund. For fiscal year 2027, we're budgeting sales tax revenue at 2% above the current year forecast. That growth is important as the cost of providing city services continues to increase. Property taxes, which I'll discuss in more detail shortly, provide about 32% of the general fund revenue. To put that in perspective, property tax revenue alone does not cover the cost of our police department. That is why maintaining a diverse mix of revenue is so important. In addition to sales and property taxes, we continue to pursue franchise fees, grant opportunities, and other funding opportunities that help us provide high quality services, retain and equip our employees, and meet the community's growing needs. So where does each general fund dollar go? The largest share supports public safety. For every dollar the city spends from the general fund, 37 cents goes to police and 26 cents goes to the fire department. Together that means 63 cents of every dollar supports our police and fire departments. The remaining 37 cents supports the other services funded through the general fund, including public services, streets, parks, municipal court, the library, administrative functions, and other city operations. To use an example of just as far as to kind of show the point about just as far as how these essential and other sources are funded, I want to talk a little bit about just what would happen if we closed our library. We take pride in our library operations, and they offer valuable services to our community. People love the library. They love the services that it provides. But if we were to eliminate the library, we were to say to close it entirely for the year, that would fund the operations for the police department for 21 days. So you would not even get a full month out of closing off this service that is essential and needed by the community. It shows as far as the tightness that comes with the general fund and the services that we provide. This context highlights our funding decisions. A significant majority of the general fund is already dedicated to essential services, particularly public safety, leaving a much smaller portion available to address the city's other needs. Tyler's taxable property value increased by about 2.6% this year, reaching approximately $12.35 billion of personal and business property. The proposed property tax rate is 24.2063 cents per $100 of taxable value compared with the current rate of 23.6452 cents. At the proposed rate, the average homestead valued at $286,241 would pay about $693 in city property taxes. That is an increase of approximately $48 per year or $4 per month. Overall, the city expects to collect about $33.97 million in property tax revenue, an increase of $1.71 million. The proposed budget continues the phase transition to uniform volumetric rates. This change is not expected to affect most residential customers because they typically use less than 25,000 gallons of water per month. The adjustment will primarily affect commercial industrial customers with higher levels of water use. Making this transition is also critical to promote water conservation and to gain eligibility for improved bond interest rates and grant funding through the Texas Water Development Board. For residential and commercial water customers within the city, the rate for the first 25,000 gallons will remain unchanged at $3.75 per thousand gallons. However, the rate for 25,000 to a million gallons will increase from $3.29 to $3.75 per thousand gallons. Industrial water rates will follow a similar structure with proposed inside city rates ranging from $3.04 to $3.41 per thousand gallons, depending on the level of usage. Wastewater rates will also continue transitioning towards a more uniform rate structure. For customers inside the city, the rate for the first 25,000 gallons remains unchanged at $4.10 per thousand gallons. Rates for usage above 25,000 gallons would increase, with the largest changes affecting commercial and other high-use customers. Rates outside the city would follow a similar structure. Single and multifamily homes continue to have wastewater volume charges capped at 10,000 gallons. Because of this cap, most residential customers would not be affected by changes at higher usage levels. Several changes in the proposed budget would affect utility bills this year. First, the regulatory compliance fee would increase to help pay debt issued for projects required under the EPA wastewater consent decree. This fee would increase by $5 on October 1st and another $5 on January 1st, bringing the total monthly fee to $36.17 after January 1st. Dividing the increase into two phases spreads the impact across the fiscal year. Another increase is expected for fiscal year 2028 as a result of any debt approved by the City Council related to the consent decree in fiscal year 2027. The proposed budget also increases the fee paid by the commercial waste haulers by 6% and increases the water franchise fee by 1%. The proposed budget also changed how stormwater fees are calculated beginning January 1, 2027. Currently, the fee is 7% of a customer's water, sewer, and irrigation charges, so it can change based upon water use month to month. Under the new method, the stormwater fee will be based on the amount of hard surface on a property, including roofs, driveways, sidewalks, and parking lots. These surfaces create runoff because they prevent rainwater from soaking into the ground. The city would measure this area using equivalent residential units or ERUs. One ERU would equal 3,454 square feet of hard surface and would cost $4.90 per month. Residential properties would be charged in whole ERUs with a minimum of one. Commercial and other non-residential properties would be charged based on the actual amount of hard surface. This change would be more equitable connecting the stormwater fee more directly to the amount of runoff a property creates rather than how much water the customer uses. This is a major change we will present more in depth at our next council meeting and again no changes would go into effect until January 1st. The proposed budget includes several fee adjustments intended to improve cost recovery. For new residential building permits, this rate would increase from 35 cents to 47 cents per square foot based on 60% cost recovery under the International Code Council formula. For example, the permit fee for a 2,500 square foot home would increase by $1,050 to $1,422. The zoning sign deposit would increase from $20 to $50 to recover the higher cost of producing and maintaining the larger notice signs required by the state of Texas under recent legislation. This year, we evaluated the landfill fees for solid waste in comparison to other landfills in the area. We propose increasing the landfill royalty fee by $19 in two phases, an increase of $12 on October 1st, 2026, and followed by an additional $7 on April 1st, 2027. Additionally, the access or tipping fee would rise from $15 to $25, which is expected to contribute approximately $500,000 to our parks capital fund. These increases will help us remain competitive and provide a better return on investment, as well as fair compensation for an asset owned by the residents of Tyler. It's important to note that these fee increases will only affect landfill users that are not inside of the city and will not impact our utility customers. As part of the budget and tax rate adoption process, the Council will be asked to take the necessary actions required by state law to adopt a proposed tax rate. This rate will serve as the ceiling for further discussion and will be used for publication purposes. Additionally, the Council will establish a schedule for public hearings and final consideration. Staff recommends holding the public hearings during the next regularly scheduled City Council meeting on August 26th with a second public hearing at the meeting on September 9th. We anticipate bringing the tax rate and budget to the Council for adoption at the September 9th meeting. I'd like to express my gratitude to our budget team and all the departments that contributed to this proposal. Their efforts reflect months of reviewing community needs, evaluating options and balancing available resources with the essential services our community relies on. I also want to thank the Mayor and City Council for your guidance throughout the year. The proposed fiscal year 2027 budget demonstrates a continued investment in our employees, our infrastructure, public safety, quality of life, and dependable services for all residents of Tyler. Thank you for the opportunity to present the fiscal year 2027 budget for your consideration.

Thank you. I appreciate the presentation. I also want to thank Kedrick and Lauren. I see them here this morning. Thank you very much for your time, detail and efforts and your entire office for putting in the work on this budget. Thank you very much. I know this budget wasn't an easy one with the constraints that we are facing with the state right now. So thank you for your tenacity and working through this one. I know, Ed, I have some questions for you, just some follow-up questions, and then I'll open it up to everybody for some additional questions. Ed, you briefly mentioned when the dollar bill was put up there, kind of where everything kind of goes, and you mentioned our... Property tax revenue doesn't even cover our police department, so I wanted to give those numbers. The property tax revenue is expected to be $34 million. Our police department budget, $39 million. And our fire department budget, $27 million. And a lot of that has to do with increasing costs that we see from some of, like our suppliers for the Axon equipment that we're doing this renewal program for. Can you go into detail a little bit about what that percentage increase is on our tasers, our body cams? our dash cams and why those costs are increasing. I know Chief Toller mentioned a certain percentage for that contract. So if you don't know it, we can ask Chief Toller.

And Chief Toller may come up and provide some of the details on those pieces. We're now at the fifth year of that contract and time for renewal. And as with many of the different things that you probably deal with in life, much of the technology costs are continuing to increase. And those are the same for the city. And so what we and so with that then those companies look to pass on their costs and increase those costs and so we look at the negotiation on those. We are one of the first adopters of the body cameras. We adopted body cameras back in probably about 15 years ago for our police department and that technology as we found It became outdated, and so much as what we purchased, then we had to go repurchase as far as for the new equipment as it becomes updated. We moved to a subscription program in order to be able to have the most up-to-date as far as body cameras, in-car cameras, and the tasers. And so with that, it becomes then a continual cost that's with that, and those are going up. Chief, do you want to talk a little bit about just the percentage increase that you're seeing this coming year?

Yes, sir. We went into this contract for an extended period of time, for the five-year period, as we get ready to renegotiate that going forward to start next December. What Axon tells us is that their annual cost rate of increase is between 4% and 8%, depending on the demand. And they are the leading provider of all these services in the nation. And as we try to negotiate that down to get an extended period of time as we negotiate, it's important that we put those in there because if we lose a tager, one gets damaged, one, our body cameras, anything stops working, they replace it to us at no cost during that service period that we're looking at. We're going through that process now, and we anticipate everything increasing in price as we get ready to move forward.

Thank you, Chief. Ed, you talked about CEOs. That's not something that we are considering with the adoption of this budget. That's just initial discussions that we'll have for later down the road, correct?

Yes, sir. And so the mayor brings up an essential point that kind of we talked about at the beginning of the session. presentation. And that is, you know, in the state of Texas, there are different debt mechanisms that are utilized. The one the city of Tyler has utilized quite often has been revenue bonds. That is tied specifically to, especially your utilities debt that you've taken on, you took on revenue debt or bonds in for the new conference center, tied to hotel oxy tax revenue that you receive. So none of it though tied to property taxes. um and so the other instruments that the city or the state provides are general obligation debt and you probably heard quite a bit about those in relationship to things like the county for the new courthouse or for their road maintenance project programs for the school district for their as far as improvements of all the schools here in tyler so they have a portion of their property tax rate that has debt that's associated with Your current property tax rate has what's called an interest in sinking fund, and that amount is zero. We've been very proud of that now for about the past couple of decades. Because that keeps our rate as one of the lowest in Texas, it makes it as far as just something that is affordable for our citizens and our community and businesses. But the difficulty that the state has provided or put us under in relationship to the constraints on how much you can grow that property tax rate, what you are able, currently everything you collect goes into maintenance and operations. And so even the 24 cent property tax rate we recommend to the council for consideration still goes all into maintenance and operations of the city. But that is constrained to about a three and a half percent growth every year in relationship to the revenues that you can generate. And so with that constraint, that has created an unintended consequence then of where for fire engines, for major police vehicles such as SWAT vehicles, command trailers, those type of things, of how do you pay for those and fund those? And that's where we look at the other instrument the state provides, which is certificates of obligation. So one of the conversations that we will bring to the council during this next fiscal year will be about a conversation about possible issuance of debt related to certificates of obligation, which the council has the authority to issue for capital equipment for our public safety, for our fire department and our police department in order to make sure that they have the equipment they need in order to take care of us. And so that is a conversation we had. If the council does approve that debt and issue that certificate of obligation, that will then become part of the tax rate calculation for fiscal year 2028. So 12 months from now, we could be having this conversation related to a possible tax increase on adding things to what the interest and sinking side based upon any actions we may take in this coming fiscal year.

We're still going to need fire trucks going forward, and that kind of plays into our ISO rating and the CALEA certification. Talking about the police department, you know, we have the best departments in the nation, and that's something we want to maintain. And with that comes the responsibility of keeping our equipment up to date, keeping our equipment where the firefighters can use it and respond to calls efficiently. So that's That is something that we are going to have to consider as we go down the road to ensure we have the right equipment. On the equipment piece, there was a lot of technology discussed. It's great that we're incorporating a lot of new technology so we can remain efficient. One of that was the same as Sarah. Can you explain a little bit more in detail how we will be able to utilize that Samsara technology related to potholes and, you know, possible issues with our streets?

Yeah, the Samsara one is, this is where, you know, probably the only time I will get giddy during the presentation. Just because this is something I've dreamed about for the three decades that I've been working in municipal government, is to have the extra eyes in a vehicle looking for the problems on the streets. We have vehicles that travel up and down our streets continuously and they're doing their jobs. They're taking care of streets, they're picking up trash, they're patrolling, they're doing all their different functions. But sometimes we miss the potholes and we miss as far as street deterioration or sometimes a hazard that may be on the side of the road that doesn't pertain to the job that we're doing at that point in time. What's great is we have 105,000 other eyes, set of eyes, I guess we have 210,000 eyes, on the streets as far as of our community that's been able to be very good at using our apps and other instruments in order to get us information about, hey, there's a pothole here, there's my street has failure here, that type, sinkholes, that type of thing. And we are very appreciative of that. But the use of the SEMSERA technology that's already employed in our vehicles that is kind of monitors our drivers and as far as how they are out there on those streets and it's more of a risk management type of application. We have the ability now through some couple of the items that we had in this budget that allow us to then turn that technology so we can be able to have monitoring the streets themselves and their street conditions, and then creating work orders from that. So while we will still are thrilled to take in the concerns and all the additional, like I said, the eyes of the citizens that help us out each and every day, to have then our vehicles then picking up as far as street conditions and reporting that to us is quite an advancement that we're being able to employ.

Will the goal be to still repair potholes once they're reported within 24 hours?

That is still the goal. Now the question always is if we have essentially an increase in information coming in and work orders, it will slow it down to some degree, but that will still always be our goal.

Switching to water, you mentioned the water rates will likely not change for the residential users because the first 25,000 gallons will remain at that current rate. For those that are listening and watching, I'm sure there's a ton of people watching our city council meeting. Do you know what the average household uses in water?

Average household? Ketrick actually may. It's going to be less than 25,000. Is it around 8,000? About 8,000. I would say 8,000 to 10,000 gallons is what most families are utilizing at their homes. And so... The way that this has been designed for this year, while they will see an increase in the EPA regulatory compliance fee, the other rates that we charge from the water and the sewer especially will remain flat for our residential customers. So that and then in addition to that, you may be about to ask this one, but in addition to that, the way that you're looking at reworking essentially the way that you charge for drainage to the equivalent residential unit, the ERU, that will also have an impact on our residents. Hopefully seeing that start to decrease slightly. It may be relatively negligible for the residential customer in regards, but but there will be a slight reduction they should see in that ERU unit as it is applied to their homes.

Not only are we changing the ERU structure, but that's also a state requirement. We're coming into compliance now with how the state wants us to kind of determine that ERU value.

Yes. The state of Texas, especially in a lot of its grant programs, well, not grants, but actually loan programs that it provides for water and wastewater services also looks at drainage type, but it also wants to see how are you charging? Are you charging at what is really a more equitable rate for how the service is provided? That's the reason you've seen on the utility side that this is, you know, continuing phase three of moving on with our uniform volumetric rate, moving from that declining rate structure to a uniform volumetric rate. to make it more equitable for all who utilize our water and wastewater systems. And so the same is in effect now that we have to look at in relationship to our drainage fees. Because our drainage fees are, it doesn't, you know, for you can think about some of your larger as far as big box and the like, industries, et cetera, as far as where there is quite a bit of paving. A lot of as far as then runoff is created from that. Whereas most residential homes, a lot of that runoff is absorbed into the ground, into the soil. And so it's kind of kept there on their properties. So we want to make sure then that what you pay for that drainage fee is equitable to then the impact that your property is having.

All right, last question for me. We obviously talked about the regulatory compliance fee with the consent decree projects. And we hear a lot of, you know, we're almost finished with this project. Does that mean those fees will then start rolling off of our utility bills? And so, yes, we're wrapping up year nine, getting into year 10, but just so everybody's aware, kind of explain why those fees are on there and why they will not roll off after year 10 when we complete this mandated project from the federal government.

That's a big question. And so bear with me on the answer because it may be a little lengthy. So the city of Tyler is in an EPA consent decree because for decades it didn't do the maintenance on its wastewater lines. And ultimately that's what we're talking about. A lot of people kind of think, oh, are you talking about treatment plants? No, we're not talking about treatment plants. Those we have quite a bit of investment still to do in improving for the wastewater treatment plants. But we didn't really make as far as do the maintenance and the repairs to our wastewater lines in the ground to the extent that we probably should have. Thus, we had very low rates because we weren't charging anything to recover for maintenance. What is then the EPA came in approximately probably about 15 to 18 years ago to really start pushing on the city. We'd already been kind of in their sights for previous actions. But then as far as negotiation on the EPA consent decree, which went into effect nine years ago. And the intent for that was you were going to touch every line in the ground, wastewater line, and cleaning out as far as televising it, and then also improving capacity. And so really the past couple of years have been improving capacity. As you know, oftentimes on Tyler Water Utilities, they bring big ticket items to you as far as related to the EPA consent decree, but that's about most of the time nowadays for the past few years, and including this next year, is improving capacity by rebuilding lines and building bigger lines to be able to handle the amount of wastewater that flows through Tyler. And so with that, there will be one more year and there will be another debt issuance. They will ask of the council to finish off the projects in relationship to the EPA consent decree. The debt that you may issue this coming year will then get wrapped into the EPA compliance fee, the regulatory compliance fee for 2028 that we will charge. Now, as Mayor alluded to, that will be intended, if everything goes right, that will be the last additional amount that will be the regulatory compliance fee will increase by. And so next year, as far as increase that we may ask, will be the last time that that piece hits. Now, there is the thing with that is that is debt that is typically 25 to 30 years for each of those different debt instruments. that we have issued in relationship to the regulatory compliance fee. And so as those are paid off over the next 25 to 30 years and, you know, for some of it you may even start to see, I'm not going to say, raise expectations say a little bit sooner, but beyond, earlier than the 25 to 30 years, you'll start to see that decline. So just as it increased because of the debt issuance, as that debt issuance gets paid then over the next 30 year kind of period, that will then start to decrease to the point of then, hopefully, you know, and we'll come back 30 years from now to see what happens, but that that regulatory compliance fee is pretty well nil. So that's how that instrument and then the regulatory compliance fee were created.

Thank you, Ed. That's all the questions I have. Again, thank you for your work with this, and Kedrick and Lauren, thank you. This is a budget that... places an emphasis, like you said, on public safety, protecting the residential consumers, and at the same time recognizing our civil service employees and our employees here with the city. So thank you all for y'all's work on this. Thank you, Mayor. Anybody else have any questions?

I do have one. Yeah. One question. Along with this regulatory compliance fee and as we see that decrease as the debt is paid off, what will be the mechanism to put into place for the ongoing maintenance so we don't find ourselves in another issue like we had?

So you've actually already begun that, and it is one of the things that I'm very proud of this city council and previous city councils during the past few years of tackling the matter of increasing the rates. That's partly, I know that's probably one of the biggest concerns that you get hit with on a regular basis. I know I do at home each month. And so I need to start hiding my bill from my wife because she pays the bills, so I can't do that. But it is that piece of just the rates have increased. And the reason the rates have increased is because of the investment that you now are making into the maintenance of your system, for your water and wastewater system. It is not over. And your question, Councilmember Bays, is exactly right of just there's still, in order to not get back in this place, there's still continued work that has to be done now on a regular basis. We are able to cash fund quite a bit of the maintenance stuff nowadays because of the increased rates and how that has been working out. But when you start looking at things like our west side wastewater treatment plant, that one is a full retrofit that probably is needed for that one. And that is, much to Kate's chagrin, I don't know if Kate's with us in the audience today, But much to Kay's chagrin, while she would love to get that done in probably five to 10 years, Kedrick and I keep begging her, maybe 15 to 20, just because of the cost. When you start talking about, especially the wastewater treatment plants, such big ticket items, that it is, we try to figure out how do we balance the increase in rates that is needed to pay for those versus what citizens can afford and pay at the same time. So we are conscious of just the impact those rates have. At the same time, we are also conscious, as you just kind of very much brought forward, that we can't be in a position of then saying, well, we're done. Close the books. The next generation can take it from there. We've got to continue with that regular maintenance. And with that comes additional costs, which then works its way in through our rate structures.

Yes, thank you.

You're welcome. A brief question. You had mentioned grants. Do we receive any federal grants for our water infrastructure replacement to assist with that?

No, not for our utility system. Most of the grants from the feds kind of work their way down into the state level. So I made mention of just the general land office one. uh that we're doing for the udc update um and sometimes especially for our our street programs um and for improvements for making to on our traffic um or for even for trail systems we'll be getting we'll get federal grants through the state uh for uh those type of projects for utilities most of that has been kind of coming through texas water development board at the state level and a lot of those are low interest loan type programs And that's where, you know, the changes that you're making to your rate structure kind of help put us in a position for being able to go to the Texas Water Development Board for more kind of grants that, or not grants, actually low interest loans to kind of help with some of the different projects that we have in mind. There is something nagging at me.

We got one with the airport related to the work that we're doing to hopefully get a second airline.

Yes, the FAA has been, and that's where the few times we have been able to do straight grants with the feds have typically been public safety related or airline related through the FAA. And we've been very successful in FAA grants to help pay for runway expansions, you know, as far as, you know, try incentives for new airlines. You know, we continue working with Congressman Rand on a new air traffic control tower and see potential for that. and years to come. And then on the federal side, you'll occasionally, like the Edward Byrne judicial grant that you'll pay, you'll approve every year on the police side that comes down from the feds. And then COPS grants, safer grants that pay for police officers or firefighters for, you know, kind of the first three years we've been able to get those. But in the case of utilities, there hasn't been a lot, if much, that kind of comes down on the federal level. Sometimes it will be targeted. You know, Corpus Christi, and you hear all about their problems, and you're always grateful you live in Tyler when you read about Corpus Christi. But with their water treatment plant, they have, I think, been able to get some federal funding, but that's because of such an experimental type thing that they have to do because of their inability to have water. And so sometimes you'll hear about those type of situations. We are in contact with our congressman. The mayor has been able to... work with our Congressman on knowing, making sure that he understands that, especially on our utility side. Because if we can't provide water, if we can't provide wastewater, we can't grow. And if we can't grow, he can't have more constituents. And it's that if there is opportunities at the federal level, please make sure that we are at the table.

yeah we i met with him last last week i believe it was and we talked about federal grants for the airport and and other options that we can explore with his office yeah kate's coming up here i don't know if she has anything i said something wrong

I think I know what may have been bugging him is that we did actually have an opportunity. Mr. City Manager is correct that we don't usually have opportunities to apply for grants, but in the last legislative session, House Bill 500 made it so that we could submit an application for a grant-funded project, which is that elevated storage tank that we're planning to put out on um, Earl Campbell road. Um, and that, uh, we submitted the application for that. That was due at the end of July, um, for $19 million. So we will be finding out by the beginning of this next year, Jan in January, um, if we receive that grant, but I believe that we are very well, um, very well positioned to obtain that grant funding. So we're really excited about that opportunity.

Yeah, Ed, I have a question for you. Back to the dollar bill slide. So that's pretty popular. I feel like I get asked about this one a lot. It's very self-explanatory. Just for clarification, would you kind of talk about the transfers out in the sixth sense? Will you just kind of go over that just so we're very clear?

So the transfer, actually I'm going to have Kedrick address the transfer. You're talking to Kedrick.

Kedrick didn't wear a tie for nothing, so come on up, Kedrick.

He's been standing back there for a while.

They all got me, so... Basically, if you look at those fund financial statements, they're divided into about three different areas, your revenues, your expenses, and transfer outs, transferring and transfer outs. But basically, the transfer outs are one fund supporting another fund that's not quite self-supporting, like IT, cemetery, transit, yes and so those those are our transfer outs but if you look in that fund financial statement on the general fund toward the bottom of the financial statement you'll see all of the funds that the general fund is supporting so and transit is a very large part of that so thank you

Anybody else? Inflation's real. I mean, people just, I get the comments all the time of wise things going up in the city. It affects government services also. I mean, gas prices, diesel prices, everything, construction prices, employee races, right? So it's real, and this budget reflects the time we're in nationally. That's a big picture.

And I always take pride in that we're such good stewards of taxpayer dollars. I'm always so proud of that.

Steward with a D, not a T. And I would say, should we speak to what cuts we have, difficult decisions we've had to make on cuts to mitigate fee increases, et cetera, that maybe could we speak to that? Or is it too soon to look at those things?

No, ma'am. Is it too soon? Always too soon. The pain is still too real.

Just so that people understand that we haven't just decided to raise fees because costs are up, that we've also had to make some difficult decisions and cuts that may feel painful to some.

Yes, ma'am. And a lot of that Especially every time, as I was making mention earlier, the way that the new, essentially the new legislative, it's not new, it's been going on for a while, but we knew that the pinches were going to continue and they were going to continue to to get worse and worse because of the state legislation to decrease what ultimately you could... Keitrick and I are old-timers. We call it rollback rate, but it's the voter approval rate, what that could go to. Because it used to be 8%. C.A. Tyler would hardly ever go up to the 8%, but now at the 3.5%, the state, again, unattended consequences, has created a mechanism of where you're stuck kind of going to that piece because of the inflationary factors and other costs, increased costs that continue to... come onto you for what the services you have to provide. And we've gone through this kind of a few different times, and especially is one of the biggest ones that becomes kind of a pain point, is where you are funding different groups outside of the city. So back in, I want to say, 2016, 2017, we had kind of a major purge of outside agencies that the city funded. And this was things like Bethesda. You know, things that provide incredible resources to our community, but at the same time, because of the financial constraints we were under, just we couldn't continue being those, you know, the helping kind of fund those type of programs. And so we made some major cuts back, you know, I guess now probably it seems about eight years ago or so related to a lot of our outside agencies. This time around, now we have some outside agencies that are funded through the hotel oxy tax. And so those that we have contracts with for different special services, especially groups like Visit Tyler, we've been able to kind of continue to work with them because we have a healthy hotel oxy tax fund. But on the general fund side, we do have to evaluate where are there, Essentially, adjustments that need to be made. Where are there, as far as with different organizations, that we need to make cuts or adjustments in order to be able to provide for ultimately what the city, what our property taxes and sales taxes are collected for in relationship, especially I'm glad the That slide is still up there for those specific services that are prescribed by our community that they want to see their dollars go towards to service them and to assist them with their lines. And so we did have to make some different cuts there. Some of the different departments, we continue to push for efficiency. One of the things that we made mention of and I want to really highlight is you know, the evaluation of some of our contracted services we have and looking at their continued costs. The Parksman was one I made mention of. We have 1,000 acres of parkland. The cost for contract services has continued to increase. And I want to make sure that it is As we talk to then the owners of those services, they are very mindful and understand of, look, this is what it costs. And they've tried in the past to figure out, how do I cut my cost in order to be able to still provide the service? Because they enjoyed being a contractor for the city, and we enjoyed their services. We're good. This wasn't a quality complaint or a customer service problem that we're having. Their costs have also gone up on the private side, and they can't continue to meet essentially the cost that we can provide, essentially what we can pay for, for the cost of what we need done. And so that's the reason we're doing as far as experimenting with moving forward with the creation of a mowing crew, of which we have initial capital investment on the equipment, but then being able to have that to be able to mow all of our parks. Same with our streets group. Again, not a problem with in regards to quality services of our contractors or anything like that. It's just looking at what those additional costs have grown by because of their inflationary costs as well. City is not the only one that deals with inflation. Everybody does. And so for private businesses, they still have a bottom line they have to reach and so as we look at to say for some of this work can we be able to do at a cheaper uh cost than than them because of just their ongoing costs uh are increasing too on the private side so those are things that we've had to evaluate um and to tackle yeah thank you for explaining and it's not like we can just borrow from hot funds because we're required by law to keep them in a certain lane i always appreciate when council members don't like going to jail

I do as well. Exactly. Thank you for addressing that. You're welcome.

Anybody have any other questions? All right, we have to schedule a public hearing on the proposed property tax rate and proposed budget both for August 26th and September 9th. So I will accept a motion to schedule public hearings on the proposed property tax rate of $24.2063 per $100 of assessed value in the proposed budget on the August 26th and September 9th, 2026 council agendas.

So moved.

Is there a second?

I second.

I have a motion by Councilman Childs and a second by Councilwoman Hawkins. All in favor? Aye. Any opposed? All right, motion passes. also have to have a motion for placing the adoption of the tax rate um on the september 9 2026 council agenda so is there a motion to place proposals to adopt an ad valorem tax rate of 24.2063 cents per 100 of assessed value in the fiscal year 2026, 2027 budget as action items on the September 9th, 2026 city council meeting. So moved. I have a motion. Do I have a second? Second. I have a motion by Councilman Nichols and a second by Councilwoman Dark-Bays. All in favor? Aye. Any opposed? all right motion passes ed kedrick thank you very much you're welcome sir all right that takes care of p1 so moving on to m1 something exciting leanne

Good morning mayor. Good morning council. I am here for the final puzzle piece for Stewart park. So I'm excited about that. I hope everyone else is as well. Um, we put out a bid, um, for, to furnish all necessary materials, equipment, superintendents and labor. for Stewart Park development on June 12th, and we opened the bids on June 19th. We did have seven bidders, which was great. We went with the lowest base bidder, which was Schumacher Construction at $295,000. I know that this may seem a little low, but I want you to just keep in mind, please, for everybody that's also watching, that we've already brought to you Craftsman and CXT for the restrooms. So we are at a total of $630,000 for Stewart Park right now. And as another reminder, the funding is being sourced from the Cape Town Beautiful Capital Improvement Account, which is the landfill dumping fees. So this is no cost to our citizens. So it is recommended Oh, sorry. There are all the bids up there, just I'm sorry. And as you can see, 295,000 was the cheapest. You will notice a big fluctuation between some of these, and that's because some of the alternate bids that we had were all over the place. And so some of them absorbed them in their base bid. Some of them did not absorb them in their base bid. But if we have money left over, we will be adding those alternates back. So it is recommended that the city council consider authorizing the city manager to award bid number 26-031 for the Stewart Park development to Schumacher Construction LLC to furnish all necessary materials, equipment, superintendents, and labor in the amount not to exceed $295,000. Thank you, Leigh Ann.

Anybody have any questions for Leigh Ann? So moved. I have a motion by Councilwoman Hawkins. I have a second. Second. I have a second by Councilman Nichols. All in favor? Aye. Any opposed? And one is approved. Thank you, Leigh Ann.

Thank you.

All right, M2. I've gone down my list. It was going to be Darren, then it was going to be Chief Coble, and now I think it's fallen to you, Cameron.

Sorry. Cameron Williams, Director of Engineering Services. So we have a professional services design contract for Fire Station Number 2 today. As a reminder, Fire Station Number 2 is located at Old Bullard Road and Reek Road, and we recently purchased the adjacent track to help with the expansion of this These are two photos. You have the existing station number two on the left, and then on the right is that additional tract that we just purchased to help with the reconstruction of this location. So we did do a request for qualifications for architecture services, design services. There were 11 firms that submitted, a lot of great quality firms. BRW Architects was selected based upon their portfolio of experience specifically with fire stations. You see some of the stats up there. what they've done on fire stations. They also, on their team, they have included a branding corporation for Site Civil, EMA for their mechanical electrical plumbing, and Kilgore Surveying for surveying, and Terracon. So they have some local firms that they've teamed with to pursue and complete this work. and so you kind of see the breakdown of their design services they'll look at several different layouts for the station and what that's going to do and then ultimately complete those construction documents we are planning to do a construction manager at risk project and so they'll work with the contractor once that that contractor comes on board for that and then ultimately provide some construction administration services during the project and so with that it is requested that city council authorize the city manager to execute a professional services contract with brw architects in the amount of 740 470 for the design of fire station number two replacement cameron you've heard me talk about this one for a long time and when i first got on council five years ago this was one of the things that

I was interested in seeing completed, and we tell everybody, it's like turning an aircraft carrier up here on council. Nothing moves quickly, and so it's taken a while to get to this point. But I'm proud of this project and the team that we have on this project, so thank you for your work on it. I'm excited to see this one. Anybody have any questions for Cameron?

Can you state the age of that fire station? Because, I mean, it was shocking to me.

I do not remember.

1972. Oh, wow. So we've got a good, useful life.

It's been there for a while. Yeah.

Wow. Anybody else have any questions for Cameron? All right. With that, I'll entertain a motion on M2. So moved. Second. I have a motion by Councilwoman Dark-Bays and a second by Councilman Nichols. All in favor? Aye. Any opposed? And two is approved. Thank you, Cameron. Consent agenda. Anything need to be pulled or approved as is?

I'll make a motion we accept the consent agenda as presented.

I have a motion by Councilman Nichols. I have a second. I second. Second by Councilwoman Marsh. All in favor? Aye. Any opposed? The consent agenda is approved. Mr. City Manager's report.

That's probably the most you'll hear from me in like a full year. And so a few items of note, Mr. Mayor and City Council. Last week, the Tyler Fire Department participated in a specialized training focused on safely responding to emergencies involving Tesla electric vehicles. This is one which you sometimes hear about on the news with the electric vehicles and the fact that the batteries underneath them and et cetera. just that it is a different type of car fire to have to fight than what we've all kind of are used to. And so firefighters learn about the vehicle's built-in safety features, how to isolate the high voltage electrical system, safe vehicle cutting techniques during extraction operations, and the unique challenges associated with electric vehicles fires. And so we sincerely appreciate Tesla and the regional field trainer for sharing their knowledge and providing this valuable asset and training to our department. Keep Tyler Beautiful's annual daffodil and wildflower sale is back. Support community beautification while adding vibrant color to your own landscape with daffodil bulbs and wildflower seed mixes. The online sale is open now through September 30th with order pickup scheduled for Thursday, October 22nd at the Rose Garden Center. So you can go online to place your order and help keep Tyler Beautiful bloom. And also, I want to thank the city, the mayor, and the city council. Y'all helped participate in the 13th annual School is Cool event last Thursday, August 6th. It was a great turnout with over 2,000 free backpacks full of supplies and lots of services and vendors available for our community. We thank our parks team, executive town team members, our city council members. I think, Councilman Chiles, you gave haircuts or vaccinations over at the Rose. Yeah, he got the bougie spot over at the Rose Garden Center. And so, but y'all helped make this a successful back to school. And as mentioned, you know, a couple of different times, even during the prayer today. from councilman marsh school tyler isd is back in session today different schools kind of have different times where they're getting back in just visiting with chapel hill superintendent yesterday they don't start till next week so those kids are still getting to sleep in but y'all with school is cool and just so many other different things that y'all are involved in it really did help kind of set the stage for what will hopefully be a great school year for many of our children here in tyler And then finally, one of my favorite events, Pawchella. I always feel like we need to have strobe lights and stuff going on as we talk about it. It will be this Saturday, August 15th, over at Fun Forest Pool. If you've got a dog or you just want to go pet other people's dogs, this is a great opportunity to bring them. The pool closed last weekend. That was our final day as school went back into session. And then also all our lifeguards all go back off to college, etc., But kind of for the final day of the pool before the full clean-out and everything, we turn it over to the dogs, and they have a great time at Paul Cella. So, again, that will be this Saturday evening over at Fun Forest Pool.

Thank you, Ed. You're right. Today, Tyler has to start his school back. So, you know, those of you on the roads, exercise a little more caution, exercise a little more patience. Traffic patterns changing this morning and again at 3 o'clock this afternoon. So just be mindful. Parents are taking their kids back to school today. And then we mentioned the fire department a couple of times. Our very own Councilwoman Dark Bay's recently stopped by fire station number one and visited with those guys up there. And I know they really appreciated that. And that's something, you know, if y'all haven't done, you know, stop by and say hi. I was just mad they didn't feed me. But that's okay. If you ask them, they will. They were the roast in the oven, but I came at the wrong time.

I'll plan that better next time.

That's right, yeah. They always appreciate when we stop by. Anybody have any questions for Ed or anything else?

You want more questions, Ed? Yes, ma'am. Just joking.

All right, with that, I'll entertain a motion to adjourn. So moved. All right, we are adjourned.