City Council Meeting Agendas & Information - Special Meeting

up on him after 35 years.

You like a county though. very much. power back. Come on back. All right. Order at 6:30 p.m.

of the United States of America and to the stands and justice for all the flag one indivisible. All right.

Okay. So, tonight um sign up to talk. All right. So tonight public hearing on the proposed 2526 budget 2C consider approval of the resolution city of Texas adopting an investment policy in 2D discuss and consider direction to staff regarding the city's financial reporting practices. All right you're up Mike.

Thank you. We'll wait for my slides to catch up with me. And there we are. Uh members of council and the public and assembled.

Welcome. This is our public hearing for the budget and the tax rate. I will combine actually the presentation for both of those into one presentation. It will go fairly quick. We've got time for some questions if you have them, but that really isn't our intent tonight. was to hear from the public and so there may be public members watching at home on live stream. So certainly we would entertain any questions that they might have in the coming days over any of these matters. Uh next slide please. So I would say pie chart but really it's more like an egg chart from this vantage point. overview of our general fund revenues. I tend to focus on the general fund because truly that's where about 85% of our money is at and and that's where we concentrate. So again, the next couple of slides will have a lot to do with the uh with the general fund. Uh you see the the pie chart as it is and you see the percentages. The overall number for general fund revenues projected for next year is $10.47 million. That's typical. That division that you see up there on that pie chart is mostly in line with other taxes, other Texas cities mentioned the word tax. We are in fact a little heavy on sales tax. So typically what you see in Texas cities and if you go to TML you'll you'll have them tell you this. You'll see 50% property tax and 25% sales tax. It's been that way probably for three decades. Um funny thing I just came from Oklahoma managing up there. We did not have a property tax in Oklahoma. So we did it all with sales tax. It made for a unique environment. Uh the other category people always ask well there's other up there 6%. Uh so the other includes conference center credit card fees interest income ISD. Some of those that don't really fit nicely into one revenue category. So it's not very large. It's actually a fairly small number for for most cities. Next slide

please. Uh the flip side. General fund expenditures. Our biggest three categories public safety capital and nondep departmental. So that uh non-dep departmental includes the singing hills refund dollar amount which is a large amount and other things. Again a lot of that is information technology and contracts for information technology services. Those sorts of things don't fit into any of these categories. Biggest expense as it is everywhere is public safety. uh no matter where you're at in Texas, that public safety is gonna and that's actually pretty much on target. That's going to be a third of your budget or close to that number. Next slide, please. You've seen these numbers before, so I'm repeating them really just for the the folks at home. Um our sales tax, if if the budget is adopted as proposed through our three work sessions, the sales tax will increase 523,800. property tax will increase exactly $500,000. Our new expenditures, I won't labor, elaborate on these. You have seen these before. I did want to highlight on the 2% cola, 3% merit. The cola across all city departments is 104,000. Um I've got the merit increase at 78,000. the police department. We had also wanted to do an extra 5% for competition sake and that was also $78,000 and and then also we've got three additional assistants and maintenance labor part-time PD admin code compliance specialist the maintenance labor and the code compliance specialist base salary around 45,000 and 28,000 in benefits. So that are those positions for consideration. Next slide, please. Talk a little bit about our our tax rate. Our tax rate will increase. We're utilizing the dimminimous rate as directed by

council and the state allows for that. That will yield a tax rate increase of 0029991 for $100 of assessed valuation. The figures, it's important to look at this. The figures you see here in front of you take into account homestead exemptions. So you might see something different in the truth in taxation documentation. The numbers may look a little different. When we ran the numbers this afternoon, Sharon and I, and these numbers that you see right there, incorporate the homestead exemption. I think a high number of people in the city, I hope they're taking advantage of that, and I certainly have in the past and and that's what these are calculated based on. Next slide. Total tax rate. I think it's important to look at this in the context of what percentage we are of the total tax bill. And as that lower sentence depicts, we are 13% of a total tax bill for the average resident of Bovery. And you have a breakout dependent on whether you're ESD4 or ESD5. Looks like ESD 4 is a little bit higher there. No, I'm reading that wrong. ESD5 may be a little bit higher and that's because of the various tax rates with those organizations that they adopt independent of the city. So again for the viewers at home this just tells you how little of your total tax bill goes towards city services. Next slide please. And this is just a recap and progression of our key dates going forward. Uh what we have yet to do is in red at the bottom. So, we're here tonight doing the public hearing and we'll have to do it all over again on September 9th with the same information more or less. Um, that evening of adoption, we have to go through the public hearings again. Uh, that's September 9th. And then we adopt

the budget that evening or an October one start to fiscal year 2026. It never ends. It's an ongoing cycle. After the budget adoption comes the audit and then after the audit, it seems like we're back into budget preparation in February, March, April, May, and back at it again. Um, coming attractions, I I coming into the budget process late this year for myself, looking at the budget process. I will work with council early next year prior to the budget session. I've got some ideas on how I want to change the process. Um, it's a budget process I've used now for my last three cities and I think it works really well and I would like to integrate some of that. But again, I'm not going to do that without your consent. Uh, you may think that the process we have works great and you're happy with it and if that's your feedback at the appropriate time, I'm fine with that, but I think there's a better way to do it. I'm not saying what we have done is wrong or incorrect. It's not. Obviously, we're in good shape financially and it's worked well, but I think there's a way to be a little more transparent and I think there's a way to organize it just a little bit better and I'd like to try that next year. So, I'm not prepared to discuss that right now, but I have some ideas is all I'm saying. Um, I had nothing further for the public hearing. Mayor, I think you've got to step through some formalities here uh to get us past these agenda items.

Correct. So, um, do we have any public comments? And this covers 2A and 2B. No public comments. We'll close that at 6:39. Is anybody watching the YouTube feed right now? I think there were two people. Is there any comments coming through on the like chat or anything like that? No, sir.

All right. So, uh, we'll close that at 6:39 p.m. All right. Um, so how how are we doing this? We're going to vote on Mayor, there's there's no vote on 2A or 2B. All we're doing for those items is is formally opening up uh the public hearing, okay? And then calling for public speakers. There are none here. And then we formally close the public hearing. You'll have to do that once for the budget and you'll have to do that once for the tax rate and then we can move on after that to item 2C.

Okay. So, we closed the one for the tax rate. So, do we have anything on the 20 on the public hearing on the proposed 2526 budget? No comments on that. And we'll close that one at 6:40. All right. Um, all right. We'll move on to 2C. Consider approval of a resolution of the city of Bali, Texas, adopting an investment policy. It's all going to Bitcoin, right? I'm sorry. Bitcoin. What? We're gonna throw it all into Bitcoin. Well, no.

Sure. If you want to follow my investment strategies right now. You're braver than I am. I just got a little bit of play money that I I'm watching back. Only bit only invest what you can afford to lose, right? Absolutely. Okay. So, mayor, council, I know we presented this um the last council meeting. Um there were some typos and some spacing and things. I think there was some conversion from PDF to Word and things. So, I've gone through I've read through it. I checked it. Were there any other items that you saw that you had questions about or you want to discuss?

Not here. I had a question related to financial reporting, but I think we can discuss that

no comments comments. No. No, let's get cleaned up. And just for just some information, I went through the local government code. Um it is title 10. Um all kinds of subchapters and there main chapter is 2256 and I compared it with our investment policy and procedures and we're we're spot on. So um everything it's requiring us I'm sorry I did the same thing. Yeah. So everything that it's requiring us to do um at the state level is what we're doing here at our um municipal level.

I I would add there have been no substantive changes to the public funds uh investment act since 2019. So and most of the changes prior to 2019 had to do with who needs to attend public fund investment act training. So we are required certain staff members are required to undergo 10 hours of training every two years as a matter of state law. And again that pool over the years has expanded out. So I'll be taking my training in October and it'll be offered online. So I won't have to drive anywhere. I'll just sit in the office and and go through five hours a day. Um it it it's one of those state laws that rarely changes but we stay on top of it. They do a good job. It's offered through the University of North Texas. They do a very good job of getting cities up to speed when the laws do change. And I've talked way more than I need to.

Yeah. And I was say I I finished that um certification. I think it was March or April of this year downtown in San Antonio. Canal council review this? I'm sorry. Did legal counsel review this? Uh we offered it to legal counsel. We've not heard it. So, I kind of ask the lawyer specifically if he had any recommendations, but he was offered the document several days ago to review. I I won't speak for whether he has provided comment on it. That's a question for the attorney, but you want to table a proper legal review?

I mean, there there hasn't been much changed. It's just the areas that have changed need to be looked at. That's why I defer to yourself and yourself. The areas that have changed are such substance that it would require legal review there. No, there were no changes to it other than grammatical errors, spelling, uh, verb tense, things like that other than that's and and alignment of the document and the margins. The same one we used last year too, right? Yes, it's exact same we used last year in I think 2000 2019 was when this one initially came in when they made changes for the training requirements and it's been um used ever since.

Am I correct that there's supposed to be a list of approved brokers um in connection? Well, there isn't really a list of approved brokers, but there's a guideline of what they have to do. Um no, no. I my and I apologize that I don't have these notes in front of me, but my recollection in reading through that is that council is supposed to review and approve a list of of of brokers in connection with this policy. Um is there is that list up to date? Well, the only two that we have are Texas Class and Logic are the only two um investment um funds that we participate in. So I I think if we used a brokerage house Yeah. We don't need to use a brokerage house and we don't

No. Um if we used a brokerage house, we would certainly come back to council for approval on that. That that would be at council's discretion. And I did this in my last city where we actually had a list of 12 brokers. My recollection is that the act requires that if you're going to use it and I just didn't know if we had such a thing. Yeah, we're we don't use brokers. We're just using the class and the logic.

So, if we came back and we decide that we wanted to use brokers and and that's a possibility at some point down the road, maybe once we get our feet grounded, um, but the logic pool and the class pool tend to be paying pretty good right now and a broker would take a cut of that. I didn't I didn't see anything wrong with it. I mean, Sharon and Mike and Francesca legally reviewed it. If we get gig for some compliance issue with it, what regulating entity would give us citation? That's a good question. I've never heard of a citation being issued by any regulating authority like the AG, the Texas state AG that come in. I think the state controller

controller because we have to um I've never heard of a controller or anyone actually even reviewing these documents and that's going back 30 years. I'm just looking at for liability aspect for compliance. So, I just want to know who we would have to answer to if this wasn't buttoned up, laced up properly. Well, I know the auditor reviews our investments and our reports, investment reports to make sure we are in compliance. Okay. And if we're not in compliance, that would be something she would report to you. Yes. So, is that your review, your review, as well as the auditor? The auditor reviews it every year. Why don't I'd rather we not be in to look at it.

I guess none of it's in Bitcoin. It's in Bitcoin. Um the the section I was thinking of is the selection of banks and dealers. Um our policy says at least every 5 years a depository shall be selected through the city's banking services procurement process. I don't know when the last time we former did that. That will be internal automation next.

Fabulous. And then uh item C in that same section says list of qualified brokers. The city council will annually adopt by resolution a list of authorized brokers. I'm assuming if we elect not to use brokers at all, the shall in that sentence doesn't cause us any issues. Are we obligated to adopt that list if we're not brokers? That's maybe nitpicking, but that's what I was referring to. I'm okay with this. Maybe we're not brokers. I a hypothetic along with that. What what could possibly happen, you know? Yeah. Oh, no. Exactly. Yeah,

if we were to utilize brokers, I would just based on experience, if nothing more than that, I would bring that back to council for your approval. I think our areas of exposure are way worse than in this. Yeah,

so do we have a motion? Make a motion we adopt the uh policy as presented. Second.

Second. Do we have a second? Oh, I'm sorry. I didn't hear you, Jason. Um, all right. Um, want to vote on this? All in favor say I unanimous that resolution passes. Thank you.

Thank you Sharon. All right. Moving on to D. Um discuss and consider direction to staff regarding the city's financial reporting practices. I'm guessing I just need to ask what it is that you're um needing me to report to you. And with that in mind, I don't know if you've gotten the packet for the night. You had a chance to look at it. No, I just got it this afternoon.

Okay. So in here, um, Mr. Castro brought in a sample from previous cities of how he presented the financials. So I don't know if you've had a chance to look at it. If you haven't, I can give you a copy and you can kind of we can walk through it tonight. See if this tells you what your I also have the expense and revenue and the balance sheet reports if you want those as well. This report kind of consolidates those two reports. I have them if you need them. on the first page I have is the current months the current month interest that we've earned. I think that was a concern

last month. So this is for the month of August but the reports are actually in the month of July. Yeah. It gives us a snapshot of the health of the general fund. See it right here. Percent balance remaining. And how often would you report each council meeting? I'll bring it to you.

And then weekly report that I don't know if you guys look at it. Now, are your are your codes your your coding structure is that still the same? Is that just a basic uh like municipal county code structure?

Like, so if you were to pick it up at any Texas city, is it pretty much the same county code? They they it varies depending on what the accounting department how they depending on how they like to identify their funds, how they like to identify their expense. Generally in accounting, you've got your assets, your liabilities, your expenses. Expenses are usually fives, you know, your assets are ones, things like that. So, you kind of keep it in that general um format. But each city in in our case, we have the 100. The first three digits are are fund. the second two digits that's the department and in the third the or the third group of digits I think they're five it's can be if it's a revenue it's a liability if it's an expense

okay and that first number kind of you kind of point you in the right direction yeah because all fours are revenues fives are expenses so so the real determinant of that is one of two factors who's your fountain or your audience and two what software you use with a heavy preference for software So depending on whether you're using Enode or some other brand, I think 80% of cities in Texas use encode. I can walk into any encode city in Texas, right? And know immediately where to look for data, right? Yeah.

And so how this works our coding it we basically focusing on um detail by department. So that's why you've got the fund then the department so that we can go in each department and tell each department we can quickly identify what belongs to what should be allocated in each department. Right. Okay. Good. So Sharon deal about the credit card statements is that somebody is actually saying how to code it and where it goes to. Yes. And it's actually broke down not just store name actually what we bought.

Yeah. So on this credit card statements when they bring me and we we put out a credit card policy that each person who has a credit card has signed and on the statement they write the code of the account and then they give me the receipts and then that I take each receipt I read each receipt and make sure and that's what I put in the def in the description on the general ledger of what they purchased with that receipt and then I put I put the vendor on there. Historically, they were just putting it all as Visa and I changed that to where it's every store that they go to. I create a vendor ID for that store and that way I can identify every expense exactly what it is without any questions. And what had happened the night um with the credit card with the Christmas decorations, the code was 222, which is also a revenue. And as I understood it for the conference center, it was all of the expenses were going to be um washed out with a revenue. And so when I put it to 222, that's a revenue account. Um the four free 222 and then there's 54 222 which is the expense. So the 54 had been left off. So I thought it was um a wash with the revenue. So that's why and I reclassed. So that's was a misunderstanding on my part.

Okay. And so I'm understand we have no more expenses at the we have no more expenses that we're have to worry about up there. Right. Correct. I guess one of my other questions the the so we talked earlier on about the purchase ordering system and lack of having that. So I guess it showing any encumbrances right that that we have for a particular I guess that would be my only thing I don't see in here to see where we've already spent it but haven't painted you know but

yes and the only obligation that we have large project is the playground the road um all of the road repairs and that u all of those contracts have been paid in full for this Are we looking at doing a purchase order? Yes, Mr. Castro has a a system in mind. Once we get switched over to Enode, okay, we're going to bring that in. They offer purchase order as well. So, just as a general comment about these reports, I think they're they're they're great and they're clear. I'm not persuaded that they're sufficiently comprehensive for my liking.

Okay. Um, I don't know what it codes capabilities are. Um, so a couple of thoughts. Is it possible to create a dashboard of some sort that would allow us to drill deeper into these numbers if we chose to? If you go to that link that I have on my weekly report, um, where's the No, no, I understand that. I was thinking with all the details there. Yeah. for every all the transactions.

So I'm thinking I'm thinking along two tracks both for council's purpose but also for public transparency. Um these reports are public information, right? Anybody I don't think you want to stop. That's not where I'm going, guys. Um is it so two questions. Is it possible for us to create um some kind of a dashboard for public consumption where people can see our taxpayers can see on an ongoing basis how we're spending the money? That's I have a report. Can I show you?

Sure. Um this is a report that shows for the month of July everything that we paid besides payroll, but we wouldn't put this on out to the public. So Francesca, you talk about something similar like the HOAs do. Yeah. Something like that. People could Yes. maximum transparency where people could sort of see this month, this month we spent, you know, a dashboard view, some sort of a dashboard view of city financial operations

and and we don't need necessarily to make a decision tonight. I'm I'm asking the question. I would over the long term I would like to see our financial reporting tied to in some way um our comprehensive plan projections just as an example are we spending money towards the things we said are important if not why not where can we

that's a wish list I'll be honest let some just raw honesty here if we want to do that we need a bigger financial staff we need more than just sharing doing that you need that you need the software you need to convert to encode encode doesn't have that capability inherent so it would be a third party vendor that would provide well that's why I was asking the question I didn't know what encode's capability it doesn't have you have to extract it and go and it would be another thing to do This packet is going to be at every regular council meeting.

This this would be at every council meeting and this would get posted on our website.

So you'd be able to go to the finance department page landing page and see on their financial reports and investment reports going back through time. Really, really helpful. In fact, when we produced this for this evening, I I went back to Murphy, Texas and went back to 2022 and found their reports and gave that to Sharon because it's still posted there. And so most cities, if you go around websites for various cities, you'll not find a more transparent city, New York, Texas in terms of what they produce. Murphy, Texas and Jersey Village, Texas both have this. And so the larger cities, I think if you go to New Mountains, um, Round Rock is in the lead on this. Austin is in the lead on this. I mean, they have everything you're asking. They do that and we can get there, but it comes at a cost.

And please understand me. I'm asking the question. I'm not making a recommendation. Okay? I don't know what the software we're using. I don't know what its full capabilities are. I I I'm always going to hear on the side of more transparency rather than less. So what I'm trying to get to is I we've experienced some challenges in our financial reporting. Would you say is fair in the last year and we've worked hard to get ahead of that. I'd like to capitalize on that and make sure that we're putting as much information as we can reasonably without creating additional administrative burden. Um,

well, I can tell you some of the cities that I've been visiting, their websites, um, a lot of them will post their check registers. They're everything's there. I wrote a check for this and this is what it was for and how much it was for. And this is when we wrote it. I I like the idea of a dashboard because I'm a big dashboard fan. We We've got to take some baby steps here before we get there. We got to get purchasing the question. Yeah, we we we've got a ways to go before we can get there. And um I think that's a good aspirational. I like the idea. I agree with you. I mean, I think this is worlds of difference what we've seen in the past.

Franchesca, thanks for bringing that up because people that are tuned in and watching, they understand now that they do have an the website and to get to the documents that provide them the information they need to know. Yes, there is. This is the direction we're headed. Yeah. And again, I want it to be predictable and I want it to be something that, you know, when you guys receive the financials within two days, you know, it's on the website.

Well, it's getting that foundation like Kro said, you know, just getting that foundation and we start getting better and better, then you know, we work possibly to that transparency. What I' ideally what I would be looking for is software that interfaces with encode and encode is like I said 80% of the cities in Texas look for third party software that does that and where it's just a couple of mouse clicks away and I won't say in real time but close to real time you got that kind of a setup going well and now we're talking about what site upgrades too which is a whole other conversation. Yeah. It's a great idea.

Well, the other thing to keep in mind, too, is the books are balanced. You know, a year and a half ago, they weren't. I think the last reconciliation was from 2022 when I came here. I started in 20 October 2023. I started doing reconciliations in March of 2024. I don't want to hear too much from financial reporting. I don't think this is the avenue to go and rehash maybe what we've done in the past. It's important to make Yeah. I just But I'm saying the information is now available and I can get it to you however however you want and and we can dig into the details in the week report that we get. Absolutely. Okay. And I think this is great. Yes.

And I have it in Excel format and PDF format. So because the report itself is like 56 pages. So that that's why I put the Excel format on and the detail will still have the the account codes on it. Absolutely. reference and there's definition or descriptions in there on all it's basically a general ledger. It's all the details in there of I try to be as detailed as I possibly can so that it's clear there's no confusion. Let's live with this for a while and see um I'm hearing you're in agreement with this. Yeah. Okay. Okay. Thank you.

Yeah. Thank you. Well done. Okay. So, discuss and consider this direction step financial reporting practices. Um, you have any other comments on that? Okay, we are done.

The highway isn't closed. I can get home before midnight. I know the door I see.