City Council - Packet - Regular Meeting

Good evening. Tonight's invocation will be given by Pastor Felix Bomarin of Grace Way Church. Pastor, come on up.

Good evening, everybody. Let us pray. Our dear Heavenly Father, we acknowledge you as a Father, Father of all creation. And today we bow before you. We ask that your name be hallowed in our lives, in our families, in our city. Your name, your glory be seen and honored in every heart and every life. We ask, Lord, today that your kingdom come, your rule, your will be done in the city of Round Rock, in the lives of every member of the council and all the council officials. Let your will be done in every city and every home. Let your will be done in our schools. Let your will be done in our nation. Lord, pray that you will give us this day. As the meeting begins, you will give wisdom to your sons and daughters. As they deliberate, as they answer questions, we ask that you guide them by the spirit of wisdom, and your will will be established and guide their thoughts. We pray, Lord, that you will forgive every sin, every iniquity, every unrighteousness, every injustice. And you will guide from every error, deliver from every evil. Lord, we pray that your glory be seen over the city. Guide the city with your watchful eyes. Let there be provision for everything that is not available humanly, that you will give divinely. Divine wisdom, divine guidance in all things, in every way. We just thank you today for another opportunity. to meet and to seek advancement of this city. We pray you will help in every areas, and that your name alone be glorified, and you bless your children as they continue to serve the city and your purpose in this city. We thank you. We love you, our God. In Jesus' mighty name, amen.

Thank you. Call this next clock. City Councilman in order. Ann, please call the roll.

Mayor Morgan.

Here.

Mayor Pro Tem Montgomery. Here. Council Member Lee? Here. Council Member Flores? Here. Council Member Fleming? Here. Council Member Ortega?

Here.

Council Member Stephens? Here.

Senator, are you able to stand with me for the pledges? I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all. Honor the Texas flag. I pledge allegiance to thee, Texas, one state, under God, one nation.

All right.

Citizen communication. Any citizen wishing to speak during citizen communication, guard an item on or off the agenda may do so after completing the required registration card. All comments must be no more than three minutes in length per person. Section 2-26B5 of the Round Rock Code of Ordinances, 2018 edition. Any comments, current items not on the post-agenda may not be discussed or responded to by city council per state law. All right. I have two that are not on any agenda item. Mitchell Snyder.

There's no such thing as success without a successor is a phrase that I learned at 3826 Wheeler Avenue, Baptist Church, Houston, Texas, 77004, where Reverend Dr. Marcus D. Cosby was my pastor. And with that, he also taught that you can have a three-point alliterative message. So you can start it all with, you know, BBB or RRR or whatever. It can help. So with that, I came up with the phrase, there is no such thing as success without a successor, without a struggle, and without a system. So in this last two minutes and 18 seconds, I just want to talk about systems. And you can see systems everywhere. It's everything. You can look up at the sky at night, and you'll see a solar system. You can look at the ground, the dirt, and get bitten by ants. And you can go out, but it's actually a system. You weren't destroyed by ants. You were bitten by a system. Or you can look to your left. You can look to your right. And you can see a political system. But yeah, systems are neutral. They're not good or bad. It's like a weapon. And so the person I wanted to honor that talks about systems, well, actually not a person. You ever read the Dharma? You ever seen that? It's pretty decent. It's got some good things. And so on the back is as far as I got. The word Dharma refers to the inherent characteristic of something. So this isn't praising Jesus, but it does speak about some things that are similar to that. But you can see systems everywhere. Bruce Lee had a system for fighting. Jeet Kune Do. So the art of intercepting fists. And it's a whole conglomeration of things. Another person that had a system, Kobe Bryant. Have you ever heard of the Mamba mentality? It's amazing. If you ever need inspiration, if you ever want to be motivated to fight through whatever pain you're going through, he talks about how the dream is not that you get success. The dream is not the dream. No, the dream is when you're in complete pain and you still rise up and you still keep going. That is the dream right there. It's not about ribbons and titles and all this other stuff. It's about pain. So you must have a struggle within your system. And then finally, I just wanted to mention Scott Adams. I don't know if any of you are old enough to have read Dilbert. But it's an amazing cartoon. It's funny. It's about politics or office politics. But then his main message through his life that I got was that systems over goals. You have to have a system. And to the day that he died, he could barely breathe. He still went out like a gangster. He still went out like a real tough guy and still being positive and giving everything that he had. Thank you.

Carlos Balderas.

Good evening. I come before you today because of a decision being made in Washington concerning Title VI and EEO. Title VI is not being repealed, but the current administration has moved away from desperate impact. An important tool for examining policies that appear neutral on paper but produce unjustified discrimination effects. Now, why should this matter to the citizens of Round Rock? Because Title VI touches on institutions and services people depend on every day to make sure that things are not including discrimination or that poses any type of financial burden on people. These areas involve education, hospitals and healthcare, public transportation, and city projects. The other thing I want to touch on is EEO and the administration's Emphasis on merit. Now let me be clear, merit itself is not the problem. People should be hired, promoted because of their qualifications and capabilities. The danger comes when government treats the word merit as it eliminates the need for civil rights protections. For generations, Americans have always relied on EEO. Women have relied on it, minorities have relied on it, the elderly have relied on it, people with disabilities have relied on it. Calling the system merit-based does not automatically make the system fair. If the criteria determining merit is applied inconsistently, then we're going to have a whole lot of discrimination being had. Merit and equal opportunity should work together, not compete against one another. So the council member, as we're looking for council member 22365, is for a couple action items, which I have handed to you all. But I'm just going to touch on two right now. The other one you can read later. One of them involves the city's reaffirming of Title VI, making sure that anything that we do as a city does not place any type of discrimination with regards to any project or decisions are made, as well as looking and making sure that there's not a high level of financial burden placed on people because of that. The other part of that is EEO, making sure that or some level of EEO is applied. And on top of that, making sure that decision makers, we require decision makers to document what merit actually means when making employment decisions. Objective qualifications, experience, performance, skills, and job-related requirements, not subjective standards that can conceal discrimination. We should be able to believe merit and civil rights at the same time. A person should not receive a job simply because of their race or sex, but neither should a qualified American lose an opportunity because of race, sex, age, disability, national origin, or any other characteristic protected by the law. Civil rights should not change every four years. Equal opportunity does not lower the standard of merit. It helps ensure equal Americans get fair opportunities to meet the standard.

Can you talk real quick on Gattyskill?

The other topic I want to raise is a thing regarding Gattyskill Road. As Gattyskill Road has widened now, there's been a high level of congestion on that area in the morning and in the afternoon. And along with that, you see hundreds of Cedar Ridge High School students walk in those corridors. Of course, there's no guardrails in the sidewalks, which creates a little risk for some of the students there, other issues of accidents that could occur. My request is that we reach out to CAP Metro to maybe see if there's opportunities to provide those students with some public transportation along those corridors going east and west to hopefully remove some of the congestion that students are placing on the sidewalks. That could be an added risk, especially when you have a high level of traffic flow going on east and west of Guy's School Road now. So thank you very much.

All right. Thank you, Carlos. All right. That's all I have for items not on the agenda. Does anyone else wish to speak? All right. Staff presentation Z1, consider presentation department update from human resources department. On up, Sandra.

Good evening, mayor and council members. I'm here to report to you that the HR department is more passionate than ever to serve the people that serve this great community. Our team loves to serve with heart. We look for different ways to partner with all the departments and have positive interactions with employees. We come to them. And by the way, they're sitting right there in those two rows supporting me. The HR team shines under pressure. They step up and make change happen. I want to thank each one of them for their commitment to great customer service and their focus on employee experience. I do have two people that I would like to recognize by name. Michelle Reyes, my assistant director. This woman has elevated this department to another level. Her leadership in operations has been instrumental and the key to our wins this year. Tyler Jarrell, my HR manager, he gives me peace of mind and he manages benefits and compensation and serves as the HRS administrator. His knowledge and dedication help us offer employees the best resources available, and they have one less thing to worry about and can focus on their work, providing services to our citizens.

So thank you all.

Our mission comes to life through Serve. It's reflected in how we support our organization, engage our people, lead with respect, listen to their voices, and empower them to succeed. This is a workforce snapshot. Our current headcount is 1,770 employees. That's composed of part-time, full-time, temporary, and seasonal. We have a workforce that has a healthy mix of newer talent and experienced employees. Our workforce is relatively young but experienced. An average age of 41 combined with an average tenure of 8.1 years suggests that employees are building meaningful careers with the city, not simply just passing through. So roughly 70% of the workforce has less than 10 years of service. That's important to note. It suggests that the city has brought in a significant amount of newer talent, while maintaining a core group of long-tenured employees who carry valuable institutional knowledge. At the same time, we have more than 200 employees with 15 or more years of service. That creates both an opportunity and responsibility for us developing our newer employees while making sure we capture the knowledge and experience of our long-tenured employees. That's why retention, leadership development, succession planning, and knowledge is crucial to transfer that to continue to be important areas of the focus of HR. Year to date, we have 19 employees that have retired. More importantly, 21% of our regular workforce is retirement eligible. That is more than one in five employees. Our responsibility is to be prepared by identifying critical positions and developing internal talent. For HR, workforce planning is about ensuring we have the right talent ready when those transitions occur. And as you can see on the retirements year to date, fire, police, and public works are the highest ones. Same with eligible to retire. You have those three bigger departments up there. Another indicator we monitor closely is employee turnover. Year to date, we experience 93 separations with an average monthly turnover of 9.5%. While turnover is normal part of any organization, we look beyond the number to understand where we're losing talent, why employees are leaving, and whether there are trends we need to address. The national average for the public sector is 1.5, and this does exclude education. And so right now, we're doing pretty well, and we're trending to be under the national average. Attracting qualified candidates require us to go beyond simply posting a vacancy waiting for applicants. We're taking a more proactive approach, meeting candidates in the community, strengthening our presence on social media, developing internship and school partnerships, and building our future talent pipeline. At the same time, we're focused on telling our story and positioning the city as an employer of choice. Not just a place to find a job, but a place to build a career and serve our community. Attracting talent isn't only about whether we recruit. It's about why someone chooses us. People want more than a job. Becoming an employer of choice isn't one initiative or a benefit. It's the entire employee experience. It's about competitive compensation and benefits, strong leadership coming from city council members and our leadership team, opportunities to grow, employees having a voice, and creating a culture where people feel valued and connected to our mission. The city of Round Rock offers something very powerful, the opportunity to make a direct impact to the community that we serve. Our goal is not simply to attract people to a job. We want to attract people that have a career for a purpose. Year to date, we received more than 20,000 applications. and welcomed 531 new employees to the organization. While attracting candidates is important, we equally focus on creating opportunities for people who are already here with us. We promoted 72 employees this year, which speaks directly to the commitment to developing employees and providing opportunities to build a career here at the city. Recruiting great people is only the beginning. Once they are here, we have to invest in their growth and give them the tools to be successful. This year, we really expanded our focus in learning and development. We're taking a more intentional approach, identifying learning needs across the city, strengthening our supervisors, customizing training on needs of individual teams, and expanding opportunities for our future workforce through internships. We've also expanded e-learning for compliance training, allowing us to reach more efficiently and consistently. Wow, we've been very busy. But each of these efforts is an investment in our people and for the future of this organization. Investing in our employees goes beyond the professional development. It also means supporting them for the overall health, wellness, and quality of life. This year we continue to focus on employee engagement through wellness events, educational workshops, and webinars that give employees tools and resources to support their well-being. Our focus moving forward is not simply to offer great benefits, but to make sure that our employees understand them, that they value them, and have the tools they need to make the most of them. Our on-site clinic is another way we're investing in our employees and families. It provides convenient access to quality care, encourages preventive health, and reduces time away from work. It's a benefit that supports both the well-being of the workforce and the long-term sustainability of our health plan. Rod Care Clinic has had 1,823 patient visits so far this year, 788 people accessed care, and 140 of those were new patients. Our utilization rate is trending upwards from previous years. Supporting our employees also means to make sure that they have a safe workplace, that we proactively manage the risk associated with delivering those services to the city. We continue to monitor workers' compensation claims closely, not only the number of claims, but their occurring and the types of injuries we're seeing. Our most common injuries continue to be strains, cuts, punctures, and scrapes, slips, trips, and falls. Understanding those trends allow us to focus on our safety efforts. One of the strongest indicators of the overall performance of our workers' compensation program is the experience modifier. TML risk pool compares our loss experience against thousands of municipalities that it ensures. A 1.0 modifier represents average performance. Anything above 1.0 indicates losses above average. Our modifier is 0.30, the lowest modifier TML offers. Even more significantly, we maintained the lowest possible modifier for the last five consecutive years. That strongly reflects the safety practices, claims management, and commitment of our departments and employees to maintaining a safe workplace. We accomplished a lot, but there are a few initiatives I'm especially proud to highlight. One of our biggest accomplishments was implementing a new performance management system citywide. This was a year in the making and collaboration between HR and IT team. We moved away from an outdated process and introduced a more modern, consistent approach, one that gives a better foundation and meaningful feedback, accountability, employee development, and performance conversations. We also continue looking at how we can strengthen the overall employee experience and retention strategy. For the first time, employees received a total compensation statement at their home and a note from the city manager thanking them for their dedication and their commitment. The statement shows the full value of what the City of Round Rock invests in them, not just their paycheck, but their total benefits and compensation. We also strengthened the safety net of our employees by adding paid parental leave and enhancing our long-term disability benefit. Both are designed to provide greater support during significant life transitions. Everything we talked about today leads us to where we're going next. Our workforce continues to change. HR must continue changing with it. Our focus isn't simply responding to today's needs. We must anticipate what our organization and workforce for tomorrow. The next chapter centers on four things. Being workforce ready, developing our team, modernizing how we deliver HR services, and using data to make better workforce decisions. As we close, I want to thank Mayor and Council Members for your continued support and investment in Team Round Rock. Your commitment to the employees give us the opportunity to grow and succeed and to continue providing excellent service for our community. Together, we're not only building a stronger workplace, but we're building a stronger Round Rock. Thank you.

All right. Thank you, Sandra. Anybody have any questions or comments? Council Member Stevenson.

Thanks, Sandra, for that. And you've got two new people, relatively new people in charge. I think y'all are doing a fabulous job. It's great to see you both here. I do have two questions. So our interns, do you track how many interns come through an internship and then actually turn around and apply for a job? Even if it's not like a specific number, like 25% of them, 10%?

Well, I can tell you with this last internship, I think there's about three. Okay. And there was like 19 of them.

So it's pretty good. Yeah, really good. Yes. And then also I appreciate that total compensation statement that you did for the first time. I think that it's really important for employees to see their total value, you know, not just a dollar on a paycheck. And I'm just curious, since it's the first time doing it, how the feedback has been from the employees involved.

So far, what I have heard and what people have told me, it's been great. They loved opening that. Getting it at home was a different experience. The way it was presented, it was like in a big envelope, and it was colorful and beautiful with City of Round Rock pictures. And then just having that note from the city manager, really thanking them for their efforts, and then really being able to Break in you can see like if somebody took vacation how much they got paid for that for their sick leave For their overtime and then get a total picture of the real Total compensation that you receive from the city, you know, including benefits.

I think that's very important. I'd be curious you already have a very High retention rate. I'm just be curious if there's any trend going forward Related to employees seeing their whole the whole package. So I appreciate that. Thank you. Thank you.

I

Council Member Ortega.

Yeah, I'd like to ask almost the same question here in reference to internships. Are you saying you're going to try to increase that number Did I hear that correctly?

Of internships? Right. Well, we're trying to increase the people that we can hire from the internships. But yes, we would love to have more. This year, we've expanded the internship program. And my team just met with me and told me what else they want to do for next year. And they have really great ideas. I think the... The state or the nation is going to look at our program, because we're thinking outside the box on how we can prepare them. We're even having orientation with the mentors that are going to have interns to also train them on what an internship is and what they should be getting out of it. So I'm excited about that.

Well, thanks for that. And thanks for mentioning mentors, because I'm a big proponent about mentors. I think we all should be mentors. to serve one way or another, though, because they're the key to success in my idea. But the program you presented today was absolutely good right on. So I appreciate that and the hard work your department has put together on this. Thank you.

Thank you. Any other questions on this, though? Questions? Chancellor Fleming.

I respect y'all's group. It's so important for the health of the organization and city. So I know y'all work really hard and appreciate everything you do. I just had a quick question because I'm a numbers person. But when we were looking at the turnover rate and it was low, but it said like seasonal was really about a third of the employees. I think it was over 500 versus the 1,700 employees. So do you look at them differently for turnover? Is it year to year or are you just removing them completely? How do you look at that?

At turnover, it's a monthly rate, but we only take in consideration regular employees, so that would be full-time and part-time.

So seasonal wouldn't be included?

No, because they're just here for the season.

That's what I was wondering.

Okay.

Well, thank you.

Do you have a question, Mayor Proton?

I didn't have a question. I just wanted to let Sandra and the team know that 72 promotions to date is phenomenal i think and it speaks to your professional development of the team and i think that's that's awesome so encouraged by that thank you i mean it's it's also the supervisors and the experts in every department that are willing to share that knowledge you know with with their team members so any other questions or comments over here yeah i just want to say thank you for all that y'all do and all the work you put in and

As Council Member Fleming said, it's important for the health of the organization. So great job to all of you and your team.

Thank you so much. Have a good night. I wanted to say that, by the way.

Round Rock, have a good night.

All right. Consent agenda items listed under the consent agenda are considered to be routine by the city council and be enacted by one motion. There will be no separate discussion of these items unless requested by a council member in which event the item will be removed from the consent agenda and considered separately. Are there any items or questions? All right. I'll read the consent. F1, consider approval of minutes from the August 13, 2026 city council meeting. F2, consider a resolution authorizing Merida to execute an agreement with Paradigm Traffic Systems, Inc. for the purchase of traffic signal systems and safety barrier products. F3, consider a resolution authorizing Merida to execute quantity adjustment change order number three with Austin Engineering Company, Inc. for the Green Line Boulevard project. And that is all the consent, so I'll entertain a motion to adopt the consent agenda. So moved. Second. Motion made by Council Member Ortega, seconded by the Mayor Pro Tem. Any other discussion? And please, public council.

Council Member Lee. Yes. Council Member Flores. Yes. Council Member Fleming. Yes. Council Member Ortega. Yes. Council Member Stevens. Yes. Mayor Pro Tem Montgomery. Yes.

Mayor Morgan. Yes. Resolution is G1. Consider resolution authorizing execution of an engagement letter with Rare Law and Associates. PLLC for the appeal to District Court of the PUCT final order in PUCT docket number 48836. You doing that one?

Yes. This is an engagement letter with the law firm that has represented us throughout the course of this case. This is the rate case with the MUDs regarding the city's wholesale water rates. This has gone through the PUC process, and it was found that the city's rates were just and reasonable. The MUD districts are now appealing this case. to district court. The city is not a party directly to this case, but because we have an interest in it, we are an intervener. So this engagement letter will see the city handle the legal fees through the appeal process of this case. It's the same firm that handled it.

CHRIS JERRAMSEN. OK. Questions? Hearing none, motion to adopt the resolution. So moved. Second. CHRIS JERRAMSEN. Motion made by Council Member Fleming, seconded by Council Member Ortega. Any other discussion? And please call the council.

Council Member Flores.

Yes.

Council Member Fleming. Yes. Council Member Ortega. Yes. Council Member Stephens. Yes. Mayor Pro Tem Montgomery. Yes. Council Member Littler. Yes. Mayor Morgan.

Yes. G2, consider a resolution authorizing Mayor Descoupe quantity adjustment change order number one with AP Gulf States Inc. doing business as Adolphson and Peterson Construction for the Public Safety Training Center Phase 2 project.

Good evening, Mayor and Council. This is change order number one for Adolph and Peterson construction for Public Safety and Training Center phase two. The amount is for $923,988. and $0.25. Talked about it on Tuesday, but we'll just reiterate the drivers to this cost are Mother Nature didn't do us any favors, good for the lakes, bad for construction. So the EVOC track had to be regraded completely. It was just a mess out there. We had some existing tilt wall refinishes that we have to do out there. And then we have to install some master meters to monitor the usage on fire on the training side of the house. I'd be happy to report that we are at probably 60% completion, and we're still tracking to be completed at the end of March of 2027. So with that, I'd be happy to answer any questions. Questions?

Council Member Fleming.

I just had a question since I wasn't here Tuesday morning. So this is in addition to what the original budget was, or are we still going to be coming in within budget when looking at the total project?

Great question, Councilmember. So what we're doing, this is going to replenish my owner betterment that's inside the contract. And so we have a strategic reserve outside of the contract, still within budget, that will replenish the owner betterment. Okay.

Thank you. Any other questions? Anytime else, stop the resolution.

So moved. Second.

Motion made by Council Member Ortega, seconded by Council Member Stephens. Any other discussion? And please, public council.

Council Member Fleming. Yes. Council Member Ortega. Yes. Council Member Stephens. Yes. Mayor Pro Tem Montgomery. Yes. Council Member Lee. Yes. Council Member Flores. Yes. Mayor Morgan.

Yes. Thank you, sir. G3, consider a resolution approving and adopting financial policies related to the budget for fiscal year 26-27.

Good evening.

Good evening, Kevin.

Item G3. It's a resolution approving and adopting our financial policies for the upcoming fiscal year. Our financial policies are reviewed and adopted annually by the city council in conjunction with the annual operating budget. As I mentioned Tuesday morning, just one minor change is proposed for this year. And I do have a presentation where we'll all briefly walk through the policies, just as a reminder of what is contained within our financial policies, at least at a high level. So the purpose of our financial policies is really to demonstrate our commitment to sound financial management, provide guidance on financial goals, demonstrate compliance with all state statutes, the city charter, and follow good business practices and recommended best practices in all the different aspects of finance that we do. This chart I'm not going to read to you shows just some of the topics covered by our financial policies, which again are attached in the agenda packet for this evening's meeting. One of the topics covered is the annual budget. Since the budget is on this agenda for future consideration, I want to go ahead and talk about these. Guiding principles that the budget should address the council goals and strategic plans. We consider long-term financial impacts. So we don't look at just what we can afford, but looking at long-term financial sustainability for decisions made. Current revenues have to meet or exceed current expenditures. Also have some policies regarding administrative locations and personnel, which the FTE schedule is set as part of the budget and is adopted in accordance with it as well. We have a budget contingency plan laid out in our financial policies that we'll lay out. If we do get to a point where we need corrective action, we lay out exactly what steps we will take and in what order we will take them. Hopefully, this is a contingency plan we won't ever need. But I did want to highlight we do have it thoughtfully laid out in the financial policies as adopted annually by the city council. Looking at revenues, we have revenues. The financial policies are designed to promote a diverse and stable revenue base to protect the city from revenue shortfalls. Looking at sales tax, we have policies that limit our dependency on any single sales tax payer. Any additional sales tax revenues that do exceed our limits set forth by policy are deposited into our GSFC, or General Self-Financed Capital, where they can be used in future fiscal years to fund one-time capital needs. We have some policies on expenditures, looking at appropriations and transfers, procurement policies, making sure that we follow all federal, state, and local laws on how we buy things. The formal approval, any item over $100,000 goes to the city council per our code of ordinances, except for a specific pre-approved set on the authorized purchases list. I'll be bringing this to council next council meeting on September the 10th. These are just certain routine planned purchases that staff does recommend to council for the authorized purchase list. Items could always get pulled off if needed. And those items don't exceed $350,000 per policy. We have financial policies looking at debt, defining our debt options. Long-term debt can only be used for long-term capital improvements. We monitor and manage debt to maintain our highest credit rating, AAA credit rating, both for the general obligation as well as utility debt. Again, one minor change is on page 11 of the red line agreement attached to the packet. Staff is proposing to decrease the capital replacement reserve in the sports center fund from $3 million to $1 million. That, again, we have a minimum fund balance requirement that we're maintaining in the sports center fund. So after that, we've been holding $3 million for capital replacements. Looking at our potential liability, staff is recommending to drop that to $1 million. The 27 proposed budget does still leave that, Excess fund balance sitting there in case something happens. Just really changing the the designation of that That's the only proposed change happy answering questions questions Councilman floors, you know Kevin.

Thank you. Just a comment mostly I appreciate them the update and certainly this document has served us well for the last many years and kept us yes, sir pretty very viable and very sound, solid foundation. So thanks for the continued work on it.

Any other questions over here? Questions over here? I entertain motion to adopt the resolution. So moved.

Second.

Motion made by Councilmember Ortega, seconded by Councilmember Stephens. Any other discussion? And please, public council.

Council Member Ortega?

Yes.

Council Member Stephens? Yes. Mayor Pro Tem Montgomery? Yes. Council Member Lee? Yes. Council Member Flores? Yes. Council Member Fleming? Yes. Mayor Morgan?

Yes. G4, consider a resolution authorizing Beresha Creek Regional Utility Authority to execute a financing agreement with the Texas Water Development Board.

COUNCIL LAST NIGHT AT THE MEETING OF THE BRUSHETT CREEK REGIONAL ATTORNEY AUTHORITY OR BC AREA WAY BOARD THEY CONSIDERED THIS ITEM AND PASSED IT BACK IN APRIL 2023 THE CITY COUNCIL AUTHORIZED BC AREA WAY TO SUBMIT AN APPLICATION FOR FUNDING THROUGH THE TEXAS WATER DEVELOPMENT BOARD FUNDING THROUGH THE STATE INFRASTRUCTURE IMPLEMENTATION FUND OF TEXAS OR SWIFT FUNDING THIS AGREEMENT IN PARTICULAR ON TONIGHT'S AGENDAS FOR THE THIRD OF FOUR PHASES OF FINANCING FROM the Texas Water Development Board. These proceeds will be used to fund Round Rock's share of the phase two deep water intake project currently underway. Again, BCRA is a partnership of which Round Rock is a partner. This will be issuing $12.2 million, again, third of four planned phases. This debt issuance has been in our long-range financial plans, it's been in our debt plan, and the expenses associated with the capital outlay are included in the proposed budget, which will be under consideration later on this evening. I have to answer any questions you may have.

Questions? I'm going to tell you a motion to stop the resolution. So moved.

Second.

Motion made by Council Member Ortega, seconded by Council Member Fleming. Any other discussion? And please, public counsel.

Council Member Stephens. Yes. Mayor Pro Tem Montgomery. Yes. Council Member Lee. Yes. Council Member Flores.

Yes.

Council Member Fleming. Yes. Council Member Ortega.

Yes.

Mayor Morgan.

Yes. Thank you. G5, consider a resolution authorizing Mary to execute a real estate contract with A.V. Ranch Company, LTD, for the purchase of an 8.085-acre parcel required for construction of the proposed Kenny Fort Boulevard Segment 5 roadway project.

Good evening, Mayor and Council.

Good evening.

This is for our Segment 5 of Kenny Fort Boulevard. The project is under design right now. This project will extend Kenny Fort, which currently, as you see right here, heads north at dead ends at Old Sellers. We will take Segment 5 from Old Sellers Boulevard. We'll head north. like this, and then it would turn in right at 112. The item before you is right-of-way acquisition for the area in turquoise right here. It's a little bit over eight acres. Total cost is $2.8 million. There's still a few more parcels that we need to acquire as part of Kenya Ford Segment 5. But like I said, we're under design. And we'll continue with that. And then once we get through the design and all the right-of-way acquisition, then we'll look ahead for construction. But I recommend approval of this right-of-way acquisition from Avery Ranch Company for the Kenny Ford Segment 5 roadway. I'd be happy to answer any questions.

Questions? I entertain a motion to stop the resolution.

So moved.

Second.

Motion made by Council Member Flores, second by Council Member Lee. Any other discussion? And please poll the council.

Mayor Pro Tem Montgomery. Yes. Council Member Lee. Yes. Council Member Flores. Yes. Council Member Fleming. Yes. Council Member Ortega.

Yes.

Council Member Stephens. Yes. Mayor Morgan.

Yes. G6, consider a resolution approving the action of the Round Rock Transportation Economic Development Corporation and amending the Transportation Capital Improvement Program.

Earlier tonight, the Type B Board approved this item. This is for additional right-of-way acquisition that we need for two projects. There's two projects that are part of our master plan. About every five years, we update our transportation master plan. That identifies which roadways we need to prepare for. It's based on where the growth is occurring in the city. It's based on land use assumptions. And that's how we determine the size of the road. So here's a copy of our master plan that we've done. The two projects that we need additional right-of-way for are shown right here, Kenny Fort Boulevard Segment 5 and 6 and Wyoming Springs. Here's Kenny Fort Boulevard 5 and 6, similar to the previous item I just talked about. Segment 5 starts at Old Sellers Boulevard, comes up here and stops at 112. Kenny Fort Segment 6 will start at 112 and head through this field here and stop at University. There's a future Segment 7 of Kenny Fort that will be built with developments as you head north of University. The Type B Board previously approved $2 million for right-of-way for this project. We are asking for an additional $10 million to be allocated for future right-of-way. The costs have increased. When we allocated the $2 million originally, we did not know how much right-of-way we were going to need. So we allocated $2 million to get started with. We've gone through the design. That's where we're at now. We know our right-of-way width, it's about 120 to 150 feet wide, and now we've gone out to get appraisals, and those costs are coming in, so we need that additional money. So we don't want to, we want to make sure we put enough money in there, but not too much, so that's why we come back to the Type B board several times for design right away, and then construction as we move through the project. The second project, Wyoming Springs Extension. We're on the west side of town. This map is actually Wyoming Springs comes up here to San Bas and then it already is built through Barron's ranch right here So the project stop starts at the north end of Barron's ranch and we'll head north through Texas crushed stone property and stop in TN here at 1431 We already have 2 million allocated for right away. We're asking for 5.5 million more for 7.5 total There's just one property that we need to acquire right away here. It's about 24 acres that we're going to need. We are currently in the appraisal phase of this before we start negotiations. The total for the type B amendment, 56, is for $15.5 million that you see there. Yesterday, we looked at our capital program, and there's a few projects that we were able to move out a little bit another year. So we actually saved about $15 million for next year. So by allocating this, we're really about the same amount of money being allocated to our Type B road program for FY27. So the Type B board approved this item, and I recommend approval as well. So any questions, I'd be happy to answer.

Any questions? I entertain a motion to adopt the resolution. So moved.

Second.

Motion made by Council Member Ortega, seconded by Council Member Fleming. Any other discussion? And please, public counsel.

Council Member Lee. Yes. Council Member Flores.

Yes.

Council Member Fleming. Yes. Council Member Ortega. Yes. Council Member Stephens. Yes. Mayor Pro Tem Montgomery. Yes. Mayor Morgan.

Yes. Michael, let's skip down to H5. Where we can get Mr. Donahue and all them. That's what they're on here, right? H5? Oh, I'm sorry. I thought it was you doing it. Come on down, Kevin. Just sit there for just a quick second. Of H5, consider approval of the sixth supplemental ordinance to the matter. Consider approval of the sixth supplemental ordinance to the master ordinance established in the City of Round Rock, Texas Utility System Revenue Financing Program. First reading. Second reading not required.

Mayor and council, this ordinance is a sixth supplemental ordinance to the master ordinance establishing what you just read. This dates back to 2006. The city council adopted a master ordinance establishing the city of Round Rock, Texas utility system revenue financing program in order for the city to provide for the financing of our utility system projects. This is another debt instrument. The one we considered earlier this evening was for the BCRUA, the Brushy Creek Regional Utility Authority, on the water side. This is for the BCRWWS, the Brushy Creek Regional Wastewater System. These bonds authorized under this ordinance will be for $60 million for the purposes of our East Wastewater Treatment Plan Expansion Project. This funding is also coming from the Texas Water Development Board, their Clean Water Funding Program. This debt issuance, like the one considered earlier, has been in our long-range financial plans for a long time. It's been identified in our long-range debt plan. The capital expenses associated with it are included in the proposed budget, also on this evening's agenda. These bonds are planned, if approved, to be closed in September. Funds coming in, again, to fund the city's portion of the wastewater treatment plant expansion project. We have Richard Donahue, who serves as the city's bond counsel, with McCall, Parkhurst, and Horton here in the audience. Should there be any questions for him? We also have Cole Gilmore here for specialized public finance, also here, if there's any questions. I'm happy to answer any questions as well.

All right. Any questions on this item? All right. I will entertain a motion to adopt the ordinance. So moved.

Second.

Motion made by Council Member Ortega, second by Council Member Lee. Any other discussion? And please poll the council.

Council Member Flores?

Yes.

Council Member Fleming? Yes. Council Member Ortega? Yes. Council Member Stevens? Yes. Mayor Pro Tem Montgomery? Yes. Council Member Lee? Yes.

Mayor Morgan? Yes. All right, Michael, come on up. H. H1, considered an ordinance amended chapter 44, article 6, sections 44-149, M44-151, code of ordinances, 2018 edition, regarding environmental service fees. First reading requires two readings.

As you know, the city of Round Rock has its own environmental laboratory for water and wastewater. We're one of very few cities in central Texas that has a laboratory. The city of Austin has one. LCRA has one. But up here in Williamson County, we have a lab, and it's a very good lab that makes money for the city of Round Rock. A lot of the other cities around us and the utilities in the region bring their water and wastewater samples to our laboratory for analysis. It is a NELAC certified laboratory, so we're able to do that. Before you, in the ordinance, we want to make some changes to our rate schedule. There's just a few changes. One is when samples come into the laboratory, In a bottle, you're supposed to have some air space in there. If there's not, we have a chance to reject it. But that's not good customer service. So we want to be able to transfer that to another sample bottle. And so it's just adding $10 per sample for that fee to do that. That's one item. There's one also constituent that we're not analyzing anymore. We want to take that out of the ordinance. And then the third item is for our surcharge program. We use the sample once every six months. And then divide that cost over the next six months on the utility bill. We want to sample once a year now and divide it over 12 months. So it's not a lot of money. It's $100 for the entire year. So you divide that by 12 months. It's about $8.33 per month added to their bill. That's for surcharges. That's for restaurants and folks around town that discharge higher BOD and total suspended solids into the wastewater system. because they're discharged in higher concentrations into the wastewater system. We charge them that fee so that we have to treat the wastewater to that higher level. And we do that for restaurants. Different than the pretreatment program, which is different constituents where we require industries to treat the wastewater on site before they discharge it into the wastewater collection system. So that's the two different differentiations there. These items, we'd like to amend the ordinance. And I'll be happy to answer any questions that you have.

Questions on H1?

All right.

Aaron, entertain a motion to adopt the ordinance. So moved. Second. Motion made by Council Member Flores, seconded by Council Member Ortega. Any other discussion? And please, public council.

Council Member Fleming? Yes. Council Member Ortega?

Yes.

Council Member Stephens? Yes. Mayor Pro Tem Montgomery? Yes. Council Member Lee? Yes. Council Member Flores?

Yes.

Mayor Morgan?

Yes. Page 2, considered an ordinance amending Chapter 44, Article 2, Sections 44-32, 44-33, and 44-34, Code of Ordinances, 2018 edition, regarding water rates, reuse water rates, and sewer rates. First reading requires two.

Mayor and council, I have a presentation here on our utility rates. Every three years, we update our rates based on our cost of service. Our utility is a cost of service utility. What that means is whatever it takes for us to run the water utility, the wastewater utility, and the stormwater utility, what all those expenses are, we need to set our rates so that we recover the revenue to run the utility. We're a nonprofit. But we make money to run the operations and then pay for capital improvements. So we do that every three years. And I want to give you the results of those rates. We do not like one-year rate shock. So that's why we do the model. And it's based on the expenses that we're projecting over the next five and 10 years. So we're building into it. And many times, we've been doing in the past, we bring to you a rate recommendation, and it's for the next three years so that we're stepping in there. And that's what we're recommending tonight. There's different classes. So there's retail versus wholesale. Retail are connections and businesses and citizens that live in the city of Round Rock. Wholesale is a lot of the municipal utility districts. We have 12 wholesale customers. They have a different rate structure than the retail that's in the city. And I'll explain or go through some of those rates that we're recommending. Residential versus commercial, the way they impact our water system is different. Commercial is using it to run a business. A lot of times it's a uniform usage more so than residential. Residential, you'll see a peaking in that summer, a lot of discretionary water, outside watering, irrigation. So we look at all those things in our rate structure. Impervious cover versus pervious, that's more of a stormwater item. We're not recommending any changes to our stormwater utility tonight. For water, you're dealing with weather. It rains a lot or it's dry a lot, so we have to take averages over the last three years to get a feel for what the demand has been, and then we project up from that. So we want to make sure we recover our cost in our base fee are the fixed fee and not the volumetric fee as much. Because if you have a very rainy year, people are not going to be watering as much. And that will affect the revenue that we need to balance our budget. And then I mentioned every three years we look at that. The background, I mentioned 10 years. The background, the last time we did our rate study was in the spring of 2024. And you're going to say, all right, I say every three years, but that's only two years ago. And the reason I said that, we were in the middle of a rate case. The wholesale customers were challenging our rates. So because we were in the middle of that process in the spring of 2024, we only made changes to the retail side at that time. That's when we adopted a fifth tier for our water rate structure. And I'll show you how that's been impacting our rate payers. And then also, we had retail rate increases. But we did not have any wholesale rate increases at that time in 2024 because of the rate case that we were in the middle of. That rate case has been resolved. As Stephanie had mentioned earlier, the case is over. PUC said that our rates are just and reasonable. We follow the state laws just like we're supposed to. And we did that. And the ruling came out in our favor. Because that happened in 2025, we wanted to come back in 2026 and update our model. Because for the last two years, only retail had that increase. So retail, to some degree, is subsidizing a portion of those wholesale customers, because they still have that same rate they've had a few years ago. So this recommendations today, even though y'all approved back then a FY25, FY26, and FY27 rate, We're not going to implement the FY27 rates y'all approved. We're going to reset them. And I'm going to have tonight a recommendation for FY27, 28, and 29 going forward. I mentioned there's difference between residential customers and commercial customers. Residential, higher peaking factor in the summer. Why is that important to us? That cost us capital projects that we have to build for that month of August when the use is really high. We have to build infrastructure to be able to meet that demand that we don't get to use very much of the year. So conservation programs and things like that, if we can get people to shave off that peak, those high demand days and weeks, That helps our entire capital program, which at the end of the day helps our rates, as you'll see here as we talk about. Commercial side is more of a uniform. They're running a business, and a lot of times their monthly water usage is very similar because they're building a product or making something, they're manufacturing and things like that. So we treat commercial and residential different when we talk about tiers and things like that. So we've completed our rate model. Here's the results. As you'll see here at the beginning, retail rates over the next three years, we need to revenue increase of $4.6 million over the next three years. So we will walk into that over the next three years. For the wastewater side, we need another $2.3 million in the three-year window. And you'll see the percent increases that I'll show you. What are the cost drivers of this rate change? Operations and maintenance, right? Salary increases. The raw water cost has increased that we buy from Brazos River Authority and Lower Colorado River Authority. They have rates that go up, and we buy water from those entities by the acre feet. So every year, we pay per acre feet to them for the water that we have under contract. Chemical costs have increased. Our electrical contract is expiring. We had a very good kilowatt per hour rate, and that contract's expiring, and the electricity has gone up. So all that's plugged into the model. The next item, aging system on rehabilitation. We spend a lot of money rehabbing. So we probably about 50-50 when you talk about new construction with new capacity versus maintaining and rehabbing our existing infrastructure. We feel very important about that. The city of Round Rock is going to be here for many, many more years. And we need to invest in our infrastructure so that we keep it good. We do that in transportation with our streets. Same concept. Make sure we take care of our assets for our citizens to enjoy. Large infrastructure, we talk about these a lot. We have some regional projects that we are building into the future that's setting up Round Rock very well for our future. When you talk about economic development and being prepared for the growth of our city, having treatment plant capacity, whether it's water or wastewater, having infrastructure in the ground ready for new developments to come puts Round Rock in a good light when they come to town. That's what we're doing here. We're spending money and investing in our future with these big regional projects, but that comes with a cost, right? We're having to issue debt. We had two items before me tonight that were issuing debt for these projects. That's all rolled into our rate model that we recover through our rates or through impact fees that new developments pay. Let's see. Wholesale rate increases to also recover cost of service, and I've already mentioned that. OK, recommendations. Here's our annual increase. I'm going to skip this because I'm going to go. So let me talk about this one a little bit. In this proposal, we are making no changes to the tiers. That's going to stay the same. But one thing we're not going to adjust is that first tier on the residential side. That volumetric charge is going to stay the same. Those folks are already conserving. They're doing a great job. So really, the increases are more in that second, third, fourth, and fifth tier. And I'll show you how that's going to be. We're going to stay with the one rate for commercial. It's a uniform rate for all the water they use at a commercial property, because we don't want to impact their businesses, because that's just part of running their business. And then we'll have wholesale rate increases over the next three years as well. And those rates will range on the water side from 9.3% to 15.1% per year for those wholesale customers. And then wastewater is about 4.8% per year for all the wholesale customers. This chart right here I wanted to show you because in summer 2023, it's basically August of 2023. If we had a fifth tier in August of 2023, here is how the number of customers would have used water. We didn't have that fifth tier there, but I want to show you. Because in summer of 24 is when we adopted that fifth tier. But let's just assume in 23 we had that one. So 8% of our customers used 27% of our residential water in August of 2023. We implemented the fifth tier. And in summer of 25, only 4% went into that fifth tier. And they used 17% of the water. So we're shaving off that high usage is what this whole plan is to be. It's a conservation tool. Mayor, you've mentioned our peak days in the summer versus 2011 to now. I looked at it this morning. We used 32 million gallons yesterday in the city. That is a low number for August 25 or whatever we're at. That's a low number. Last summer, we peaked at around $36 million on our highest day. We had $43 million in 2011. So our citizens are conserving. They're being smart with their water. The landscape ordinance you guys passed, all that plays into it. Our reuse program's playing into it. And it's really setting us up really well for our future, because we've reserved water for the future. And that water is going to be there, and it's going to last longer for us as we conserve and be smart with our water supply. And our citizens should get a lot of credit for being conscientious and conserving water in our community. But I wanted to show you that this rate structure is working as far as how much total water we use in our city. Okay, here's our recommendations. I've mentioned some of the percentages, but let me just show you some of the numbers. For a residential house, this is a 5-8 inch meter. Almost every house in the city has a 5-8 inch meter. Right here, currently you pay $18.21 a month. So if you use zero water for that month, and say you're out of town for the whole month, your bill will be $18.21 for that month. I mention this column here because y'all had previously adopted these, but we're going to void those now. And here's our three-year recommendation. So 18-21 is going to go up to 19.60 in the first year, 20.58, 21.61. That's your base charge that's on every bill. The volumetric tiers are right here. So the first tier is 0 to 10,000 gallons. Most folks stay within that 10,000 gallons on a given month. $2.57 per 1,000 gallons. We're going to keep it there in 2027. Then we'll go 5% and 5% for this next two years. But this first year, you'll see some of the percentages are going to be more significant this first year as you get into the higher tiers. And then the second and third year will be 5% and 5%. What does that do to your bills? So today, let's just say it's your house. You use 10,000 gallons for a given month. Your bill today is $43.91 for that month's water. With these changes, here's your new numbers, 45, 30, 47, and 49 for the next three years. How does that compare to other cities in the state and around our region? Currently, for 10,000 gallons at your house, here's Round Rock right here at 43.91. If council approves these proposal for next year, we would go to 45.30 with this increase. I do know several of these cities are currently looking at their rates as well. So if you see us at the bottom end here today, it could get even more pronounced if these other cities approve increases. When you look at these charts, it's a reflection of how we run our utility. We plan for the future. We make new growth pay for itself. We try to be as efficient as we can. We keep our assets maintained. All that reflects in rates that are really attractive for our community. And we're really proud of that. That means we're delivering good service. Another example, say you're a higher user, 45,000 gallons a month. What would it look like? So your bill today is $254. Then it would go up to these three numbers because of those tiers, right? You're using a lot of water. How do you stack up to our neighboring cities for this amount right here? Round Rock's right here at 254. We go to 285 next year. Sugar Land, I didn't check, but I think they don't have as many significant tiers because they weren't on the bottom end on 10,000, but they're down there with us on the 45,000. So they're probably more of a uniform rate instead of a tiered structure. But still, we have very competitive rates there. So commercial, that was residential. This is commercial. We do not have tiers. We have a single uniform rate that I mentioned. Most commercial consumption is non-discretionary. It's used for their operations of their business. We do encourage commercial properties to have a second meter for irrigation only because we do winter water averaging to determine your wastewater bill. So if they use just one meter, then that's going to affect their wastewater bill going forward in the next year. So if they have a separate irrigation meter, it takes that water off that main meter where we calculate the wastewater. Most commercial properties that are larger have a second irrigation meter. The smaller ones don't necessarily have it because they don't have a lot of irrigation. I think I've just said everything that was on that slide before I even got to it. We'll skip it. Commercial rates. So here we go. It's a uniform rate. So right now it's $3.02 is our current rate. That's your volumetric rate. And then here's the base charges. It's based on the size of the meter you have at your commercial property as well. And then we'll have some slight increases going forward into the future. This is the one that was previously adopted that we're not going to adopt. So next year will be $3.21 per 1,000 gallons, then $3.37, $3.54 for commercial. Give you an example of a commercial property in Round Rock. If you're using 40,000 gallons, what does that look like if you live in another city? Here's your difference in your water usage in Round Rock versus surrounding cities for commercial businesses. Just to give you an idea. All right, that was the water talk. Let's talk about wastewater now. Wastewater is a little bit different. So the base charge today is $14.91 for a house with a 5-8 inch water meter. We're proposing to go up 8.7% here to 1612, and then another 5% and 5% for your base charge. And then your volumetric charge, today you pay $3.21. It's wastewater winter averaging. So we take December, January, February, those three months, your water usage, we take the average per month. And that's what we assume you're going to use wastewater for the next year round. So we just set that once a year, every year. And then there's your increases on the wastewater side. Let me show you my next chart. Here's wastewater. How does Round Rock stack up with wastewater? 6,000 gallons is a pretty typical average house bill. It's about 6,000 gallons a month. Here's Round Rock's current, 3417. Proposal for next year will go to 3588. You add those two together, you add the water 10,000 gallons and the wastewater 6,000 gallons, that's the combined for Round Rock versus surrounding cities. This slide here shows the entire utility bill. So if you're a citizen today, you get a utility bill from the city of Round Rock. It's going to have water, wastewater, stormwater, garbage and recycling. Sales tax is only on the garbage and recycling piece, and then your total monthly bill. So let's just go back to that average of 10,000 gallons of water, 6,000 gallons of wastewater. Your total bill is $109.55 today. With these proposed changes, these are the next three years. If all things are equal, this is the total change in your monthly bill for a normal or just a residential house. The garbage and recycling, we were estimating here because that's based on CPI. So we kind of estimated right now it's about a 3.8% CPI that we're looking at for next year for our garbage and recycling rates. Okay, that was all the retail. So now we're going to have a slide or two here just about the wholesale. We have 12 wholesale customers because they're not all water, wastewater. We have 10 on the water side and 10 on the wastewater side. For example, Sea in the Mud is just a wastewater wholesale customer. They're not a water customer because they get water from Jonah. On the other side of that, we have Fern Bluff and Aqua Texas, these top two, they're just water wholesale customers. They're not wastewater wholesale customers. Fern Bluff is an owner in the regional wastewater system. Aqua Texas is Tonqua Springs over here. They have septic systems. Just let's look at the last two lines here. So over the next three year period, here's the increases we are expecting for the wholesale customers on the water side. Split that out over a three year period, and you're looking at that around a 10% increase on water for those wholesale customers. This looks higher, but you remember, they did not have an increase those last two years. It's all about cost of service. And we want to make sure all of our customers are paying the cost that it to us that it is to deliver the service. Wholesale water is different because we basically deliver water to a meter. Let's just say it's a municipal utility district. We give them at the meter. Then the piping and the billing and the meters within the mud are a separate asset that they have to take care of. So they take that and they add that to their bill. So that's why it's not apples to apples when you're talking wholesale versus retail. But I will assure you, if our rates are as low as they're showing here, wholesale customers are getting a good price for the quality of what we're giving them. Absolutely. Wastewater. Same concept here I mentioned earlier, 4.8% increase per year. And here's the wholesale rate. All wholesale customers will have the same rate for their wastewater, $3.56 a thousand. And then it'll trend up just like that. On the horizon, Stephanie already mentioned that the wholesale customers filed an appeal with the Public Utility Commission. That's going on. Debt payments will be increasing due to the expansions. We've been talking about that. Debt payment that we'll be making is all rolled into the rates that I just showed you guys going forward. City of Georgetown's wholesale water contract, that was a 10-year contract. It is set to expire in FY 31. We bring in about $3 million a year. If we do not renew that, that could be a revenue hit to us. But we'll see. Georgetown may want to do it. But Round Rock will make that determination. And we want to make sure we always protect our system and be able to meet our needs. But if we can help our surrounding cities, we always look at that as well. We believe that if we help cities around us and they do well, it helps Round Rock to do well as well. And then I mentioned the electrical contract. We had a 3.8 cents per kilowatt hour contract that's expiring next year, and we're looking at about a 6.3 cents per kilowatt hour. I point that out because one of our biggest users and our cost is electrical power. We're pumping water several times to move it around the system. So electricity plays a big part in our rates. Here's our schedule. We did meet individually on July 21 and 22 with all those wholesale customers. Just go back all the way to January. We had a kickoff meeting with all those wholesale customers saying, we're going to be looking at rates. And then we brought them in individually in July to show them their rates. And very good meeting. They were positive. They've seen the rates. And we didn't have really much pushback. I mean, it was a good story to tell. And they understand that there's going to be increases. At the budget retreat, we talked briefly about the rates. And then tonight, we're at August 27. We're at our first reading for the rate ordinance. We'll come back September 10 with our second reading. And if approved by council, these new rates will be effective starting November 1. And they'll be November 1 each year for the next three years for the rates that I just proposed. So that's my presentation. That's our rates. We're really proud of our utility. We feel really good about our rates. We're going to continue to try to have the best rates in Central Texas and be the most efficient utility. So I'd be happy to answer any questions that you have.

Questions? Mayor Pro Tem.

Michael, on the utility, on the rate for the power utility, you have an estimated increase of 6 plus percent Is that negotiable, or is that a fixed increase? Could it be more? Could it be less?

Well, we just recently signed the 6.3, and Brooks may want to add on. 6.3, and that covers a lot of the city. We did have a separate contract just for the water plant that we were able to sign a cheaper percentage. So all the rates in the utility industry are going up. We just happened to sign that contract back earlier at the 3.6%. So we do look at rates, and we try to find the best rate possible. And that 6.3% is still a pretty good rate overall.

OK.

Thank you. Council Member Ortega?

In reference to Georgetown, the contract, if that doesn't come through, we do have a backup to take care of that, or?

Well, when we signed that contract in 2021 with Georgetown for 10 years, It was not part of our plan. We had this going on. We have our plan, how we're going to build infrastructure, meet our demands. Georgetown approached us. And a lot of times with our infrastructure and our water, we're always ahead of the game. We're expanding treatment plant capacity well in advance of when we need it. So it was a time where we have extra capacity. So when Georgetown approached us, we looked at that. And the first thing we look at is to make sure Round Rock's covered on the worst day of the year. We looked at the extra capacity we had. We were able to look ahead and forecast, and we agreed to do that for them. The benefit to us, which it was not in our rate model, the benefit was we're paying for water in Lake Travis already. So signing this deal, they're covering that cost for us. We have debt on BCRUA bringing that water to Georgetown. That's a debt payment we have to pay. Their rates, that's all... in that rate. So by us saying that, it helped our whole rate model with this $3 million in revenue I'm talking about. But we didn't plan on that. That's just kind of extra money that we're able to receive revenue for. So if it goes away in 2031, it's not the end of the world, because it's not a guarantee. All right. Thank you.

Any other questions?

Council Member Fleming.

If you will just help me with the logic. So when I was looking at the residential water, 45,000 gallons, that would be really high end, because I think you were saying like the average is 10,000, and that's what you were showing. But when you showed the 45,000, it was like $254, if I'm remembering, if I was looking at that correctly. I think it's before that. There you go. So 285, sorry. OK. But if I look at commercial and they're doing 40,000 gallons, then it's more like $145 if I was looking at that. So I was wondering why residential would be paying more for their water bill. I think if you go forward to commercial, it'll show 40,000. Yes.

Let me show you something.

So I was just trying to understand the logic to why, I guess, in essence, I mean, if the average person is $10,000, I understand, but it seems like commercial will get a little bit more leniency. So I was wondering that logic.

So 45,000 gallons per residential home. Right. You're going to fall into these tiers. Okay. So your first tier is $2.57. You're going to get all the way into that fifth tier because the fifth tier starts at 34,000 gallons. You're paying today $7.96 per 1,000 gallons of that water. Right. On the commercial, it's different. It's not a tiered structure. It's a one rate. Right here. $3.02 for all 40,000 gallons. So residential, you go into that fifth tier and the per 1,000 gallon rate goes up. That's why the residential bill is higher than the commercial bill for similar water usage. Because you're paying on commercial business $3.02 for that 40,000 gallon. You're still paying $3.02 per 1,000. Does that make sense?

It makes sense. I was just wondering why they would get a lower rate. What's the logic behind having a lower rate for the commercial versus residential?

I think the logic, we're a pro-business community, right? We want to make sure we recover our costs fairly, but we also want to know how many businesses use that to run their business. We don't want to be... On the residential side, that is they're out watering their yard. You don't have to water that. You choose to do it. Business, we want to make sure we don't overcharge them. And that's why this $3.02 rate here is between the first and second tier rate of residential.

Okay. No, I understand. Thank you.

Well, I think some of that, to Council Member Fleming's point, is why, I mean, just go back to 2011, what we were talking about. There was 44 million gallons of water used that day. And the next day when all the restrictions went in, it dropped to $11 or $12 million. And what that told us is that the higher, heavier users on the system are residential properties. I mean, I'm fortunate. I mean, that's the reality of it. And I think that's where some of that comes is that it's, you know, theirs is much more non-discretionary use versus, you know, what we have. And, you know, the thing is is that we've grown by 30,000 people since 2011. And businesses have come. and we haven't hit that 44 million gallons since. So if there were just crazy water use by everybody, then we would have burst through that 44 million gallons, but we haven't done it since 2011. I mean, so that says a lot, and a lot of that changes where the tier rates, because we were, you know, he showed the 23 how the bigger users were you know, a small percentage, but it was impacting a lot greater deal. And so I think that's some of it. On that, do you have a breakdown of, like, when you know a daily use, what percentage is it commercial versus what percentage is residential?

I can get that. I don't have it at my fingertips. I mean, do you just have a rough idea what it usually is? I'd have to calculate in my head a little bit because I know how many houses and I know about the average house.

That's right.

I was just curious. I can get that real easy. I just don't know off the top of my head.

And then I think the other thing is, can you explain when you say, you know, we're increasing the rates but we're having – new growth helps pay for itself, where does that come from and where does it go toward when you say a business comes in and what happens?

So we run the utility. There's two ways money comes into the utility to run the utility, through the rates and through capital recovery fees slash impact fees. What that is, so businesses come to town. Residential homes come to town We charge them a connection fee to their system and that fee is based on new capital that we have to spend to be able to meet the demands of the new growth and That that's figured into that impact fee that people pay so when businesses come They pay their share when they come to town to help us that we can have a water plant expansion When you water plant expansion, the person living here for 50 years should not have to pay for having a water plant expansion. The business coming here should help pay for that, because they're the reason we have to expand the plant. And so our impact fees in the year 2000, we had about the highest impact fees in the state of Texas, in Round Rock, Texas. And they said, your fees are so high, growth is going to stop. Ground rock has grown consistently. So other utilities and cities have caught on to that now. Their impact fees have gone up really high. So we want to make sure our rates are set for the service, and then we make sure capital recovery fees are set right so that that new growth coming in pays for their portion to run our utility.

So, Michael, you talked about commercial having a separate irrigation meter. Can you talk about how that's billed?

Yes, so on a commercial property, let's just say you have a commercial property and you have your first meter that's running into your business for just your normal domestic water use to run your business. You have a second meter for irrigation for that commercial business. And that's based on tiers, just like a residential house. So you're irrigating your yard. It's going through the irrigation meter. You will pay tiers. And you'll pay that separately. So that water is separated from the meter that sends water into the business to run the business. So they're two separate deals. And then the wastewater fee is connected off of that.

OK.

Any other questions?

All right. Entertaining motion to adopt the ordinance. So moved.

Second.

Motion made by Council Member Flores, seconded by Council Member Stephens. Any other questions, discussion? And please, public council.

Council Member Ortega.

Yes.

Council Member Stephens. Yes. Mayor Pro Tem Montgomery. Yes. Council Member Lee. Council Member Flores.

Yes.

Council Member Fleming. Yes. Mayor Morgan.

Yes. I think we're going to take a quick five, just before the next two items, a five-minute recess. So we'll recess at 7.25. I'll read the next item. H3, consider public testimony regarding and an ordinance adopting the fiscal year 2027 annual budget for the city of Round Rock. First reading requires two readings.

Mayor and councils, that time of the year, we have the public hearing for the proposed budget and the proposed property tax rate. The total budget is $684.1 million. This is made up of $199.4 million for the general fund, which funds most of the city's main operating functions, includes public safety, parks and recreation, transportation, Round Rock Public Library, et cetera. New staff proposed for the upcoming fiscal year is 52 1⁄2 FTEs or full-time equivalents. That's 48 positions in the general fund, mostly public safety, maintenance, and operations of bond funded facilities scheduled to open in fiscal year 2027 and a few positions for transportation, 4 1⁄2 FTEs and some other major operating funds, including the hotel occupancy tax fund, multipurpose complex, and our utility fund. The proposed tax rate, which will have more information on forthcomings, 42.3 cents. And the proposed budget includes $141.8 million for the utility fund, which accounts for the water and wastewater service provided to our customers. I wanted to add this slide in for tonight's presentation. Again, you see the total $199.4 million is the proposed budget for the general fund. This includes our base budget. The base budget does include some increases such as for our public safety contract and step increases are $3.9 million. Those are included in the base budget. Then we take on from the base budget, we have our new spending, our new programs, totaling $6.2 million proposed. Again, bringing in the total general fund proposed budget, $199.4 million. Zooming out again to the citywide view, this chart shows the $684.1 million of the proposed budget by use of funds. So $298 million is for our community investment program. These are large capital expansions of the roadway, utility, trail systems. Also completion of our wastewater treatment plan expansion and facilities approved in our 2023 voter approved general obligation bonds. Proposed budget includes $50 million to operate our parks and rec department, sports tourism department, and the Round Rock Public Library. Kind of those recreation and culture items. Includes $99 million for public safety for the Round Rock Police Department and the Round Rock Fire Department. And it includes $46 million for operations of the water and wastewater services, storm water, solid waste, and recycling. Looking at our five-year community investment plan, so again, this is five years, fiscal year 2027 and four consecutive years thereafter. We have planned expenses of $927.7 million. You can see in the chart kind of by use of funds, water and wastewater is the largest one, transportation's second. Again, expansions for the city's roadway, water and wastewater systems. Fifty-four percent of these planned expenses are to be cash 41% is planned to be debt funded with the balance coming from the city's partner on that Brushy Creek Regional Wastewater Treatment Plant Expansion Project. Our proposed tax rate again is 42.3 cents. This table here shows the various components. Wanted to point out because we saw a decrease in our overall assessed value on tax rate, our no new revenue tax rate, there the second line from the bottom has increased to 38.5 cents. That kind of forms the starting point for our tax rate calculations. The proposed rate of 42.3 cents is an increase of 3.8 cents or 9.8% above that no new revenue tax rate. The purpose of this increase is shown there in the blue rectangle at the bottom of the screen. We have nine-tenths of a cent for public safety. That's seven new police officers, one new civilian position in the police department, 15 new firefighters, and one new civilian position in the fire department. Half a cent of the increase is for operating and maintenance costs of those facilities scheduled to open in fiscal year 2027 that are funded by our voter-approved obligation bonds. Largest of those planned for fiscal year 2027 is our athletic performance center, new rec center opening at Old Settlers Park. That'll have 20 FTE-17 and Parks and Recreation for kind of operating the facility, and three in general services for facility maintenance and custodial services at the facility. And 2.4 cents of the tax increase is for debt, for the additional debt service for those voter-approved bond projects. The median valued home in Round Rock for this upcoming tax year is $370,288. The owner of this valued home, based on that proposed rate of 42.3 cents, would have a property tax bill of $1,566 a year, or that breaks down to $131 a month. The increase over that no new revenue tax rate is $11.64 per month. Single family homes make up 92% of the parcels in the city, but only make up 48% of the taxable value for this upcoming fiscal year. Commercial properties, on their hand, make up 8% of the number of parcels, but contribute 52% of the property tax revenues. Again, the commercial properties help reduce the burden on our residential property taxpayers. In that note on the bottom, single family homes pay only 18% of general fund revenues needed for city services. I wanted to point out that there are a lot of different requirements under state law for how we have to calculate and present calculations related to the budget and the property tax rate. The top line, this is specific motion language is required for council to use should you wish to adopt the property tax rate in item H4 this evening. Again, that 9.8% is the increase of our proposed tax rate over that no new revenue rate. Won't read through all these, but just again wanted to talk through. These are all required by state law. They are all calculated accurately, and they all end up being very confusing because they seem different and they're published in different places, but we are in compliance with state law throughout on all of them. This chart I presented Tuesday morning hasn't changed since then, but again, this is subject to change as our various benchmark communities are also having city council meetings considering proposed tax rates this time of year. So my team will continue to update this. We'll present this again on September the 10th at our next city council meeting. Again, subject to change. Every city is different in regards to services provided in the phase of the bond cycle they're in. Again, much of our increase this year is really due to our continued investment in the community through those bond projects approved by the voters back in 2023. At the time, 6.9 cents was communicated as a total tax rate increase for those bonds. Up to the current fiscal year, we kind of used 3 cents of that. 2.9 cents is being used in the proposed tax rate. Again, that is for the maintenance and operation costs as well as a debt service on those bonds as we continue to deliver those projects to the community. Reminder, where we are in the budget timeline, we have the first reading and public hearing for the budget and tax rate on tonight. And as scheduled, we have final adoption of the budget and tax rate next council meeting September the 10th. We've had budget information on our city website. We've had budget information put out on social media by communications and marketing team. We have a little over 100,000 impressions on social media, a little over 10,000 engagements, and almost 3,800 budget-related website page views through this year's budget process. The taxpayer website is williamsonpropertytaxes.org and travestaxes.com. These are required databases required by the state that the county tax offices put out where residents can go out, enter their address, and see the overlapping taxing entities along with their proposed tax rates as they track through the process. We've had information out on our public access television channel, available in hard copy at the Round Rock Public Library, and again, put some information out on social media. We have the debut tonight of our fiscal year 2027 budget video. This has been put together by our communications and marketing department, and I believe they're going to show it at this time.

I see it everywhere. Growth. Change. Communities trying to keep up, but not here. It doesn't make sense. How does Round Rock do it? The roads, the parks, the events, public safety investments, the donuts. They must be hiding something. And I'm going to find out what it is. signs everywhere i turn there are signs planning behind the scenes plotting pouring working building all this progress but where does it lead How long has this been going on? How many people are involved? How do they mow all this grass? It can't be a coincidence. Everything is connected somehow, somewhere. The more I look, the more questions I find. Who plans these things? Who builds them? How many restrooms are there? Where are your parents? Where does the water come from?

Who fires these keys? Hey, sir. You're scaring people. Can you please just get out of here?

Everything seemed to be running so smoothly. There had to be a secret, and I was going... Hey, man, do you need some help? What I need are answers.

All right, well, good luck with that.

This. This is where it all began. This roundish rock started it all. I must be getting close. What does it all mean? And what does that mean? I am definitely close.

Round Rock City Hall.

Wrapping up investments, talking about projections, wrapping up this year's budget. I need to know how it all comes together. I can answer that. It's all the budget. City leadership develops a strategic plan and decides how funding needs to be allocated to meet the needs and desires of our growing community. This year's proposed budget prioritizes public safety with 24 new positions between the fire and police department. We're investing millions in road expansion and our long-term water supply and delivering on voter-approved bond projects. This year's proposed property tax rate is 42.3 cents, which is about $131 a month for the typical homeowner. And thanks to Round Rock's half-cent sales tax dedicated to property tax reduction, that homeowner saves about $470 a year. It's not a secret. It's sound fiscal planning. All the facilities, roads, services, staffing, they're all planned for through the budget. We do it every year.

The budget. Who do you guess? I don't think I brushed my teeth this morning. Also, where did I leave my car? Wait. Who changes the colors on the traffic signals? Discover the truth behind the truth. Visit roundroptexas.gov slash budget.

Any questions on this for Kevin? Council Member Stephens.

First of all, good job, Sarah. Good job, Neil. I'm worried that we might lose him to a career in acting, but nice job on that. Two questions. Can you go back to the second slide? I think it was the second slide.

One more.

I think it was the new maybe keep going. It was the new one that you added. I think this one right here. So if I'm reading it correctly on our base budget,

highest one is the fire department correct with the new we aren't showing in this table the the breakdown of the department makeup of the base budget when we look at the new ads the new spending by department the highest dollar amount is fire department um they have 16 fdes 15 firefighters in that one civilian position correct okay perfect i just want to make sure i was reading that right yes ma'am and second if you don't have this answer it's okay because

It's kind of an on-the-spot question, but I know property values are down. The appraisal district has said that. Do you know how many, just a rough estimate, how many properties in Round Rock had a decrease in their appraised value versus increase?

I don't have that number. I know that the median value decreased a little over 6%, but I don't have with me tonight the number that decreased.

Okay. I was just curious. Thank you.

Any other questions on this side? Questions? Council Member Fleming.

Just keeping on the same page, the total new spending, $6.2 million, that would be equivalent to the .9 cents increase for M&O. That's where you're getting this .9 cents when we look at property tax or not?

This would be both for the public safety and the M&O from the tax rate. side of the increase in the tax rate. This new spending would correspond to both the maintenance and operations of those new bond facilities. You see that especially in Parks and Recreation and General Services, and then the public safety investments in fire and police.

So it's kind of combined, the M&O bond versus just the maintenance. OK. Thank you for clarifying.

Any other questions?

I have a couple real quick. You mentioned on the bond. you know, that we had, when we asked the voters to pass that, that we said it would be 6.9 cents. You said we're right around 3 cents. It doesn't mean that we might ever get to the 6.9, right? I mean, with sales tax, general self-finance, we're going to pay off one-time expenditures and stuff, right?

Yes, since 2023 up to the current fiscal year, 2026, we've used 3 cents. of that, and then we're using 2.9 cents this year. So that'll bring us to 5.9 cents. We'll have one cent left. Whether or not we use it will probably depend on market rates. This is the big year of opening new bond projects and having those kind of maintenance costs. Those maintenance and operating costs are hitting big this year. We still do have some phased planned issuances of those voter approved general obligation bonds over the 2028 and 2029, but those are smaller dollar amounts as we finish those projects and deliver them to the community.

Okay. And then, you know, you showed a slide on here where about 18, you know, Residential property owner pays about 18% of the general fund revenue. So if it's 48% is where the revenue comes from, So we're only doing 18, but we make up the rest of that through sales tax and other fees and stuff, right?

Yes, through sales tax, through the property taxes that our commercial properties pay.

Right. So if we didn't have the sales tax, it would be much higher, right? Yes. And if we didn't have commercial, it would be much higher. Yes, sir. Okay. All right.

Any other questions, comments?

All right. I'll entertain a motion to adopt what? Sorry. This is a public hearing. I'll open up the public hearing on item H3. Anybody wishing to speak on this item? All right. Seeing none, the public hearing is closed. I'll entertain a motion to adopt the ordinance.

So moved. Oh, sorry. Do you have language? No, that's on H3. Okay. So moved. Second.

Second. Motion made by Councilmember Stephens, seconded by Councilmember Ortega. Any other discussion? And please poll the council.

Councilmember Stephens. Yes. Mayor Pro Tem Montgomery. Yes. Councilmember Lee. Yes. Councilmember Flores.

Yes.

Councilmember Fleming. Yes. Councilmember Ortega.

Yes.

Mayor Morgan.

Yes. All right. H4, consider public testimony regarding an ordinance adopting the 2026 property tax rate for the city of Round Rock. First reading requires two readings.

No additional presentation, Mayor.

I have a question on this. So going back to your slide, we're talking about new revenue and where it shows what you had it on, where it went toward. So you hear a lot about adopting the no new revenue rate, right? So if we adopted the no new revenue rate, That would generate from our new growth about $1.9 million, right? Yes, sir. That's correct. So somewhere in that 6.2 would have to be cut?

Yes.

OK. And talking about base budget and stair-step pay raises that are already done by agreement with the police and fire, they're scheduled to get a little over $2 million in raises next year.

The combined costs for the fire and police departments, both their step increases that they get by contract as well as the contract increases, those are $3.9 million. So $3.9 million.

So the NNR doesn't even cover the pay step increases. We're not even talking about the new stuff. It doesn't even pay enough to pay our police and fire what we've agreed to.

Correct.

OK. All right. That's all I have right now. Anybody have any questions on this for Kevin? All right. This is a public hearing. I've got two cards. I'll just call the ones I have. Justin Tankersley. Let her do the speaking, too.

I'm sure you guys will not see me again. Justin Tankersley, 225 Chandler Crossing Trail. I feel like last time we spoke, it was over data centers. And that was supposed to be the save all for us so that we didn't have to increase our property taxes. That was what was promised, right? We're going to get so much money off of property tax money from these guys that we get to have low property taxes. Obviously, we knew that wasn't going to be the case, and here we are six months later talking about a property tax increase. So disappointed, to say the least. And the water increase, we were talking about that previously as well in our last meeting, and I knew that this was going to increase. And with data centers, right, we're going to have more water usage, that price is going to continue to increase. And then we're talking about how the water utility energy rate is going up. And so, I mean, these data centers are going to bring in, use way more electricity. So that's just going to continue to increase. And not only is that affecting the businesses, but it's also affecting us. And I feel like the residents are kind of always getting the foot end of the deal. And so it's not, it doesn't seem fair. that we always have to foot the bill. I mean, the guy was talking about the water. It's a choice for us to water our grass, right, to use water at our own homes, but it's an absolute right for the businesses to use water. It just seems really convoluted to me. That's what I got. And I obviously don't think that we need to increase our taxes. I feel like we pay enough. If we're going to have all these businesses come in, these data centers that are going to be paying $600,000 in property taxes every year plus, why are we still having to put the bill? So that's what I have.

Questions?

Anybody have any questions? All right. Thank you, Justin. Thanks, guys. All right. Gary Oldham.

Good evening, Gary Oldham, 2928 Clinton Place in Round Rock. Back in May, when Prop B was on the ballot, we were warned, threatened, that if Prop B passed, we'd see a tax increase. Well, Prop B failed for a lot of reasons, and yet here we are with a nearly 14% property tax rate increase on the table. Let's be clear, the city's touting 15 new firefighter positions. That's a good thing. But in reality, those positions are to staff a new fire station. Those additional positions do nothing to change the fact that 73% of our current fire apparatus are staffed below the national minimum standard. That's not changing with this. And it's worth noting as well that Parks and Rec is getting more new positions than either police or fire. Mr. Tankersley just spoke on the promise of data centers being the magical tax revenue cash cow that's going to keep our property taxes low. It's shocking that we're not seeing that. Despite the city having an ordinance, section 16.190, or dash 190, that says the city shall, not may, shall, invoice those responsible for a hazmat incident in order to recover costs. 2024, the SABE data center had a battery storage system fire that caused city fire department equipment to sustain a quarter million dollars in damage. According to the response from my open records request, SABE was never invoiced for nor paid that or any other amount to reimburse the city. The city's failure to heed their own ordinance in invoicing SABE and having the taxpayers eat that quarter million dollars in damage is tantamount to a gift of taxpayer funds and is not responsible fiscal management. At Old Settlers Park, where some $230 million in general obligation bonds passed by the few voters who voted in 2023, apparently just isn't enough to finish those projects. Between 2026 and 2027, City Council plans to issue another $42.3 million in certificates of obligation to fund additional work at Old Settlers Park. Those certificates of obligation are just like bonds. Taxpayers will be paying that debt service for the next 20 years. Except with certificates of obligation, the voters have no say. Those decisions are made by a simple majority of city council. Round Rock's already around a half billion dollars in debt, and that figure keeps going up. And debt repayment is a big component of why we're seeing a property tax rate on the table. I think a lot of citizens would like to know is when will enough actually be enough?

Thank you, Gary. All right. Anybody else wishing to speak? All right. Seeing no public hearings closed, I entertain a motion to adopt the ordinance. So moved.

I move. Oh, I'm sorry. I move that the property tax rate be increased by the adoption of the tax rate of 0.423000, which is effectively a 9.8% increase in the tax rate.

I have a second. Second. I have a motion made by the Mayor Pro Tem, second by Council Member Ortega. Any other discussion? And please, public counsel.

Mayor Pro Tem Montgomery. Yes. Council Member Lee. Yes. Council Member Flores.

Yes.

Council Member Fleming. Yes. Council Member Ortega. Yes. Council Member Stephens. Yes. Mayor Morgan.

Yes. All right. Council comments regarding items of community interest. Council Member Lee.

Good night, Round Rock.

Council Member Flores. Good night, Round Rock. Council Member Fleming.

Good night, Round Rock.

Council Member Ortega. Good night, Round Rock. Council Member Stevens.

Good night, Round Rock.

Mayor Pro Tem.

Good night, Round Rock.

And I'll say good night. We're adjourned at 7.58.