City Council - workshop

At this point, if you would please silence your cell phones, and if you so choose, please stand and remain standing for the prayer and the Pledge of Allegiance. Loving God, we give you thanks for this day, and we give you thanks for this city. and for the difference it makes for so many people. I give you thanks for this council and our administration and all our directors who've been working hard, and all the employees that work hard and sometimes really hard over the weekends. And Lord, we ask that you guide and direct our meetings today, and we ask all this in Jesus' name. Amen. I pledge al

Council member Williams and council member Sherwood absent All right, and now mr. City manager, I'll turn the meeting over to you Yes, sir.

Questions, comments? Thank you. Yes, Councilman Williams.

Thanks for that. On the magnolia pine, what... Being that it costs more, what's the thought process behind combining those?

Councilman Turner, then Councilman Durio. How much has fuel increased? Do you have a percentage or a rough estimate? Yes. Like kind of what we were compared to where we are currently?

Yeah, so just that alone, we're looking at an increase, a yearly increase of almost $50,000 in fuel, correct? And you said it was projected to be how much this year, $500,000? About $508,000.

Yes, most of the folks that ride the bus, this is like their only means of transportation. These new routes, I want them to have as little impact on the people that use it as possible. I don't, they shouldn't be able, I don't want them to not be able to go to the doctor or not be able to go shopping. And also we got to inform them of the new routes. So is that correct?

Okay, I just want to... Like I said, these folks, it's their only way. A lot of them, that's the only transportation that they have. So we don't want to push anybody away or not give them what they're used to, you know, give them a way to get around. So as long as we put that information out and it's not really going to affect the riders, then I'm good with that.

Okay. And we still have the students being able to ride free in the summertime when school's out?

Right. Councilman Hilliard? Thank you, Councilman.

Yeah, well, thank you. And again, I'm going to ask, where are we on the RAP program for the buses, the selling the buses? Are we moving forward? Because that could be a really big offset.

So if they do, what are we looking at as far as revenue?

And another question, have we thought about raising the bus fares?

But you can decrease the amount of federal funding.

Yes, Councilman Crenshaw. All right. TINA CAN WE PLEASE PUT UP THE EXCEL SPREADSHEET THAT WAS PROVIDED TO ME WHEN I REQUESTED SOME BUDGET DOCUMENTS FROM TRANSIT. THERE'S AN ASSET PURCHASE FOR 2026 FOR OVER $3 MILLION. I'M ASSUMING THAT'S BUSES. CORRECT. WHEN DID THIS COUNCIL APPROVE $3 MILLION IN BUSES?

So I guess what I'm trying to figure out here is that it looks like we're fairly consistent every year with around a $6 million, $6.5 million budget, but all of a sudden for 2026, we're at 9.9 million. So let's just say 10 million. So we go from 6.5 million to 10 million this year, and it appears that it's just these asset purchase. Okay. So I want to then go back to where did the 1.3 million come from that we were told in a previous budget session that the city was over budget for 2026 and instead of the 4.5 million we were projected, we're now over budget 6.3 million, and that the reason why

So I just don't understand that. Of the 9.9 million, if we got revenues, why are we having to transfer 1.3 million out of the general fund to cover what you just said if we got 9.9 million in revenue to fully cover the budget?

Yeah. Chris, can you help with that? Well, I mean, I think it's because if I'm confused, I'm just going to guess people at home are confused.

Yeah. Tina, can we put up the budget document I was sent?

While that's good news, I wish we could have led with that. You know, because here I am trying to figure out Our fund balance for 2027 is projected to be below the 20%. And, you know, without cutting services, without, you know, hiring freeze and all these things, trying to figure out and make the numbers work so we get back above that 20%. You know, now Eureka, we have 800,000. So that's great. I still don't know. That 800,000 winner was going, and now it's back, so I guess that's good. Can we get the Excel up?

It's safe to say our budget shortfall for 2026 is now projected to be, it was 6.3, I think, the last number we saw. So 800 off of that, we're now at 5.5.

All right. Moving in the right direction, it looks like. Am I not going to get that Excel up there?

The one that was sent? The Excel spreadsheet I emailed you? That's not it. It was like it had it broken down.

I got a question while we wait. Chris, what I would like to know, I know we said 1.3 million in prior years. The three.

Okay. And later in this presentation, or later today, we're going to find out the details about what the $550,000 that increased 2026 from the $1.9 million to the $2.4 million, we're going to find out what that $500,000 was? Correct. Okay. Well, I'll reserve my further questions about that until later in the presentation.

Thank you, Councilman Crenshaw. Anybody else right now? Thank you, Demi.

What's the participation in the literacy program? Like, what's the participation?

Thank you. Any other questions? Councilman Hilliard.

So do we want to be the cheapest place in town?

Now, do we have a count? Like, which libraries are used the most? Would it be Miller?

Well have we have we looked at reducing the hours at the slower libraries?

I realize that change is hard, but sometimes change is necessary. So if we've got libraries that are being used twice or three times as much as others, it would make sense to close the other ones down early rather than pay the electric and the water and the salaries or the pay at these libraries that aren't being used. And people will conform to whatever we do. It'll be hard at first, but people will conform.

Or they can drive to the libraries that are open later.

Councilman Duryea. So if we do that, we're going to hear what I hear from my constituents all the time. I bet that library in the West is still open. That's how they're going to take it. If we have one library over there on Darling Road that's open more hours than the Johns or the Willard, That's my phone going to be blowing up because of that. And that's where they're going to take it because I hear that every day. I bet it's not happening in the West End. I bet it's not happening in the West End. So we're going to just have to be fair. And I don't think it would be a good idea to have differ

Councilman Turner? Yeah, I don't think the councilman and I was being disingenuous. He's looking at it from an efficiency standpoint. I do understand that, but I do also understand we've got to figure out a way to try to make it as equitable as possible without interruptions across the city because I do know I kind of grew up over there in the North End area, and I know a lot of people do walk to that library from Maida and Plymouth Village Apartments. So I just would be optimistic of just the efficiency to be across the board, even though I do understand that this is financially draining on u

I know I'd like to say, I know we have a poverty rate at 20%. So I think it's recognizing that we do have a literacy problem here in our community is something that's turning the blind eye to doesn't really help raise up our community to be more effective. So I hate, I hate to see cuts like this, but I understand these are things that can be looked at. And, uh, but, you know, I also think the people that need that, uh, literacy training, you know, if there's limited places to go.

Is this something that we've ever partnered with BISD on?

Yes, Councilman. I'll agree. I mean, the literacy is very important. I would hate to see a reduction in anything to do with literacy. We have a problem with that here, and so I have to agree. It'll make our city better. I would hate to see this type of cuts when it comes to that.

Councilman Turner? So we couldn't... Positions that are unfilled, are we talking about cutting positions that people are in?

Yeah, I can't support cutting the current employee salary, so I just want that on the record. I don't support that.

I don't believe so. Do you have any more?

We certainly don't want to see that happen. No, sir.

Yes, sir. I didn't see anything about the terror historical library.

Now we'll move into fiscal year 2027 draft budget, projected budget.

Councilman Turner? Just, I know you said the debt we went out for, we're speaking in reference to the bond. So people who are following us, I want to make sure they totally understand where we're going and why.

And Mr. Manager, there was something important to me because that's something that the voters decided to do. And I want to clarify that that's the way it took place versus council doing it. I think that's an important topic to actually highlight that's implemented.

Since voters approve that, does that mean that we will increase our .659 to cover the cost of the GO?

But the voters technically approved that expenditure and the increase in our debt rate in order to satisfy that. So what of the increase in the debt rate is just that GO that we could increase the total tax rate to say this was voter approved?

Okay. And what is that dollar wise increasing our property taxes?

And what would just that number increase our total tax rate to?

AND IS THAT WITHIN THE VOTER APPROVED RATE OR WHATEVER WE CALL THAT? YES. SO IT WOULD NOT REQUIRE It's kind of confusing. It's because we told people if you vote in favor of these propositions, it's going to increase your property taxes. But in reality, it wasn't automatic. It's now requiring us to come along and increase the total tax rate in order to make up for those expenses, correct? That's right. which to me it seems like it would have been easier if this would have just been automatic.

But it gives us the flexibility of if we were in a different situation and we had a lot of extra revenue, we wouldn't have to. But we probably wouldn't have went out on the GEO to begin with. So you're right. The mere fact, it was put out that it will increase your property taxes by this for that reason. We had anticipated going up that amount.

So what I think would help with us would be if we had an additional line here under current rate that would say voter approved geo increase or whatever you want to call it with a .0163 or whatever it was. That way we can let people know, yes, your property taxes are increasing, but it's because Prop A passed and voters agreed to do that. It's not necessarily the council that just came along and decided, Well, we want more money to spend, so we've decided to increase your tax rate. Does that make sense?

I always ask questions that are the next slide.

Right, but it's not reflected so far in what we're talking about, and I just think that that's very important because I'm not in favor of increasing the tax rate at all, but if voters approve it, obviously we don't have any choice.

So just for the record, because we need to understand, if we're looking back at 17, 18, 19, 20, 21 years,

22. That's what, one, two, three, four, five, six years we paid more. And currently we reduced it. And I know people aren't in favor of raising taxes, but the norm over the last 10 years in line with normalcy, right, six years with, you know, generally, we've been paying 0.71, right? Okay. So I just want to be clear on that.

Over the past 10 years, typically, generally, it's been higher than it is now. And is there a real reason that you can give us that we reduced it? Why did we do that? Because when you take things away, it's hard to explain why. or you give an incentive, it's hard to explain. It's hard to justify going backward. Why? Why did we do it? For the record, do we have any answers?

I got a question. If I could stop you right there. Can you repeat that? It's okay to reduce the rate when? When you can afford it. Okay. I just want to get clarification on that. When you can afford it.

So were those reductions likely to have something to do with values going up as well? I mean, surely property values have gone up since 2017.

So the rate might go down, but the actual reflected what's coming out of somebody's pocket might not have changed.

So I'm sorry, I just I want to revisit this a little bit because we reduced it because we could afford to reduce it. And now that we're looking at these numbers, expenses have also gone up as well, right, from whatever we had going on prior to. the expenses that we spend or the cost of things to do business prior to this, when we paid more, expenses have gone up. Yes?

There can also be other taxes that are included in their property tax bill, such as emergency services districts and mud districts and things like that that are additional funding for services, and ours are all lumped together. We also have a port tax, and, you know, I guarantee you Odessa doesn't have a port tax, but Harlingen may. But anyway, you know... We don't know with those lower rates or those higher rates if there's additional service and taxing entities within those.

Yeah, I'm just saying that this is just the city taxes, and there may be additional taxing entities within those municipalities that allow them to have a lower rate. So I just wanted to clarify that.

Can I get some clarity? Are we going to have a slide? Because obviously one of the big things that gets us here is our reserve fund and what these tax increases would do, where it would anticipate putting our revenue fund.

Okay. Yes, sir. And when did we get this voter approval, right? How old is this voter approval?

If we were to go to voters and ask for an increase, it would require that if we went up to the .76, right? If we went over it.

So I have a question. This may be more of a charade question. So with this being said, I know we discussed people have asked why we don't have EDCs and things to this magnitude. And we were at a tax rate where you couldn't have one. Does this still apply currently just out of curiosity?

And I'm glad you answered that because the last thing I want to do is people to see, we've said multiple times we can't because we're at the max tax rate. And we see on this slide today, it's the difference between sales tax and what we're talking about right now. So I'm glad. I just wanted to clarify that.

I think it's also important to add that voters... rejected and turned down an EDC, and that's not something that we came up with or doesn't mean that we don't want an EDC, but voters made that decision many moons ago, and we have to respect it.

Yeah, we asked about that all the time, so I'm glad we were able to address it because voters did reject it when it came up.

Is it later in a slide that we do the .675963 total tax rate, which would reflect our current adopted rate plus what voters approved for the infrastructure bond?

Well, I would ask that we add that because, you know, I'm not trying to... You know, I just only thing in my mind that would make sense would be the current adopted rate plus what voters approved.

Councilman Hilliard. So I have a question. So have we looked at... The unbilled money from the water department, from the water usage, I know we have 47,000, but I'm guessing that anywhere from 10 to probably 12,000 people are not being charged. Is this being figured in here? Because, I mean, it could possibly be $10, $12 million in water, also solid waste. We haven't done an increase. Have we looked at that? Have we looked at... landfill increases you know before we start going to the taxpayers we've got to be able to live within our means and so there's a lot of discrepancies that we could g

That money's not going towards this, our water bill and sewer bills, or anything unbilled. That would affect our enterprise funds there. It wouldn't affect these numbers here.

So they don't go into the general fund and aren't used for?

And so this is based on 97% collection. Where were we? I remember you all provided a number of where you thought we were currently on that. It was lower, wasn't it? The prior was 93.

And you feel comfortable being able to hit that 97?

Okay. And the city's not, for clarification purposes, we're not responsible for the collection. That's not our 97% rate collection. Correct. That is.

I just want to be clear because people may think that we're collecting the 97%. That's not our burden.

Are we waiting for another slide that's going to have the total budget numbers? Yes, sir. Okay.

Just for clarification, what percent are we supposed to have or did we agree to have? 20%. 20%. 20%. Correct.

Right. But does that include things like the 2% COLA?

Okay, and that already includes the savings from a hiring freeze?

right now with all those things at the current tax rate it would be 17% general fund fund balance so at the current tax rate it's not taken into account the increase from prop a because the numbers that we this is not taking that into account this is at the current tax rate I just want to

Not us raising it up to the previous slide point to something.

Increase the rate to compensate for the additional INS the debt service it would have to come out of the O&M Which means we would need to reduce the O&M or to cover that I'm just I won't I just want to clarify that that is not us taking the increase and Adding it to the text which the voters already approved because they approved prop a this is us keeping it current at what it is now and

However, Karma, we have the ability to go back and capture that point to whatever the number is, because that should, if we don't increase it, but we could because voters approved this, the other.

Okay, but on another note, I got one more thing before we move on to the next slide. The state requires what percent to have in the fund balance? There's no requirement. There's no rule.

How long has it been that? When did we set that? Did we set that recently, or has it always been that, or what's the metric on that?

Why are, and this is a question about this slide. You'll be happy to hear. Why are industrial payments going down a million dollars in 2027? Because if anything on this chart, that should be going up.

That was my question I've been asking about because if abatement drops off the book, that means the revenue should go up, not go down. We're talking about on the third. I know, but I've been asking this.

Wow. Yeah, but I get it, but for some years we've been saying when these abatements fall off the books in 2027, more revenue will come to the city. Yeah. That's what I've been told multiple times.

Right. Well, that's unfortunate. What is that million? Where did that come from? The million that we're losing from 26 to 27.

Yeah. But I can do that. That's important. And we are sending bills to all these people. Correct.

I thought it was gradually going up so that we got more revenue towards the end of the contract.

So if I'm understanding correctly, what you're saying is after we... after that it drops off in 27, then it will increase? Is that what you're saying? Because it has a final, A clause or year, whatever it is, at 27, it'll drop off, but also it's decreasing. But after that point, it will go up. I think that's what people are trying to hear. Oh, right. I got you. All of them. That hadn't happened yet. That hadn't happened yet. But basically, going from 80% to 70% is what we're saying is it's dropping off, but it's also being decreased because of the change in whatever it is. The next agreement or whatever could... potentially be better for us, but it's 27 that we're looking at that this is transpiring.

But see, Mr. Manager, and I know this is not on you, but in 2021 when I first got on council, I was told in 2027 we would see increases because of this revenue fall off the books. And this is on the record. I can go back and find it.

And so NatGas, their abatement dropped off this year, and that was an additional $3 million in revenue for the city. So what you're telling me is there are no, and I'm not talking about the other one, the IDAs, I'm talking about abatements. There are no abatements dropping off in 2027? Because I was under the impression that there was at least one.

Okay. Is there another slide? Mm-hmm. with the numbers, because I'm trying to figure out what, if we apply the rate that was approved by voters on Prop A of the .1675963, what our fund balance would be.

All right. On this on this last slide charges for services also has decreased exponentially why why is that what what services did we do a reduction, I mean why are we seeing a reduction in. Charge for services. It went from 7 million 384 and you're projected 27 is 6 million 9. 63 what what's going to change to reduce that.

One thing about it, like our health department, we've lost a lot of fees because of state law. So I would assume that it would fall under some of the fees that went away.

They have not stopped playing. Sorry, we got distracted.

Oh, you're fine. Well, and my question is just how much Because I saw the decreases in freezes and travel and all the things, but there's been a lot of talk about increases on industry or what in any of this as far as IDAs or abatements or whatever. Is industry going to be additionally responsible for any taxes or this or that or whatever? Because there's been a big talk about industry helping pull us out of this situation or they're going to this and that and magical. I didn't see any of that. Is there something that we're supposed to...

I just, for clarity, because people keep insinuating that there's a... magic pill to this, and there's not, and it takes time. So just for the record and for people to hear that we're discussing, oh, well, we need to make this one do that or that one do this or this or that, and all of that doesn't happen out of thin air.

Right. And I know we're ready to break for lunch, but can I get the ending fund balance percentage if we do the point? Okay. Okay. Assuming it's going to be 18%. It may be. And then I'd also like to know, if it's not on a future slide, what we would need to cut that negative $6.1 million we're projecting for 2027, assuming we get the rate of the .765, what we need to cut that $6.1 million in order to get to a 20% fund balance.

Okay, so in order to, assuming it's going to be 18%, in order to get to 20%, we would be basically 3.6 million we're going to have to cut?

She said that you have to cut expenses $1.8 million to get the fund balance up 1%. So assuming the .675 whatever rate that voters approved on Prop A gets us to an 18% fund balance, we would have to cut $3.6 million from the 2027 budget to keep the fund balance at our own approved 20%. Okay. And have you finished the numbers?

YES. MR. MANAGER, I THINK IT'S IMPORTANT WE KIND OF TALK THROUGH SOME OF THE PAST, YOU KNOW, FUND BALANCES. CAN YOU SPEAK TO WHAT HAPPENS WHEN WE HAVE STORMS? I want to be transparent about how the fund balance got to that $51 million range and how many storms happened and what happened to the sales tax after those storms. I don't want people to think it just decreased. No, those storms, I know what it done. So I want you to speak to that.

And my follow-up is, you know, every council is different. Just because one council chose to do something one way doesn't necessarily mean it has to be the standard for every council. But I just want to make it clear to this council, my colleagues, it's up to us as a group how we want to move forward. And maybe there's some things we may need to workshop and talk about because, you know, You know, when I first came on, we were actually coming off a big storm that jumped the fund balance. So, of course, you want to take care of public safety. You want to do the cost of living rates for everybod

And it's different. It's important to know how you operate when you have money in the bank and how you operate when you don't have money in the bank. Because when you don't have money in the bank, then that changes the way that you do things. However, I think it's also important to, I heard yesterday that we're responsible for public safety contracts increases and all of these things, whether we have the money or not. And that matters when 50% or 60% or 65% of the budget is going to one place. So when we talk about numbers, we've got to talk about them realistically because that matters.

Well, and all these are very good conversations. I know what we're looking for now, and we got an hour to a council meeting, and they're going to need direction before we break, is at what tax rate. And I know from my stand, and I've certainly heard Councilman Crenshaw's has been Very clear on that, and I appreciate that. And I certainly, I know for me, looking at if we went to 71, our 20% rule to go to the 71 cents, which would be an increase above our voter, what was approved on by that. And that would allow us, you know, then we're going to be looking at it in March to see where we're at, b

Yeah, I... I lean towards the current adopted with the addition of the bond, which I believe was the .675963. I don't come to that lightly. I think that we can make the books look good by going up and I don't know that people ever say, you know, if I give my government more money, I believe them to be more efficient with it now than they were in the past. And so I think, you know, you take these tough times, which they are, and you go, you know, what – is needed, what isn't, and you use it to get lean. And, you know, and then when things get better and the books look better, then you can do so

And Mr. Mayor, you were correct earlier. You know where I stand, and I agree with Councilman Mike Williams. I think we stick with the current rate. We can talk all we want about it's only going to what the mayor is proposing at 71 cents per $100 valuation is only $150 a year increase on a $300,000 house, but What we don't take into account is that property values are going to increase, and so the tax bills are going to go up significantly. We saw this year land values in Beaumont by the tax assessor, or by JCAD, increase significantly, which led to a lot of frustrated voters. And so those incr

I'm more concerned. I'm not as concerned with keeping taxes the same or increasing taxes. I'm concerned about the plan. Is the plan that we have right now going to get us to 20%? Without raising taxes and do we have places that we have planned currently right now for 26 and 27 that gets us to 20%. Gets us to 20% without raising taxes.

So this is my issue. When we talk about cost of living increases, wages, expenses, overtime, you know, increasing public safety while hiring freezes in places where you've got vacancies. What does this look like impacting citizens to make further cuts when the price of things are still going up? I struggle with being somewhere between not raising taxes and being realistic about spending. And so my question is, what does these further cuts look like as to citizen services and what we provide and what this looks like on the back of our current employees and hiring freezes and in cuts? And you've

I want to just stay on because we need to get there so that we can get to our next meeting too. So I do want you... So I know you may not be finished yet.

Well, you need to give them some direct... They're looking at... So that if I'm saying this correctly, they're going to be presenting a budget to us based on an amount that they believe we will approve. So that's why they're wanting to know how much we want to go up on taxes, if any, so that they can prepare that budget that we're going to have to end up voting on. So... this is our chance to give them some very specific direction on where we would like to see the tax rate be. So that's what they're asking for, if I'm not mistaken.

All right. First thing is, me personally, I'm more concerned about, we say we want to have a 20% because we said that's what our policies were, but I need to feel confident and comfortable to know what we need to have 20% for. What is it going for? What are you using it for? What would be the need? I can't just blankly rubber stamp it without knowing the specifics. That's something I'm not interested in. My second thing is we're at roughly... Roughly 20%, again, like I urged this council to strongly consider if you want to maybe meet in the middle at a 19% threshold versus a 20% threshold, and

I second. I think that maybe we need to look at 18 to 19%.

We're not going to vote today. So just for the record, but thank you. Okay. Especially if we only required to do 16.5, you know. And we're not required to do that. We're not required, but Chris said we need at least two and a half months, so 16.5. Councilman Hilliard.

I'm a big opponent. I don't agree with tax and spend. I think that we're overtaxed. And I'm going to agree with Councilman Williams, Councilman Crenshaw. I think we should keep the current adopted rate. We should learn to live within our means. I think there's a lot of things as far as how we collect our money. Those type of things need to be looked at. I mean, we just don't want to raise taxes and go business as usual because we're going to be in this place again. So in another three years, we'll be looking at upping the tax rate again because we haven't learned our lesson from the last time.

But you do understand raising rates on water and sewer have no impact on this.

It does. No, it doesn't. It does not. So when we have to buy a new pump truck, it doesn't come out of our budget?

It depends on which department it is, but water and sewer run through the enterprise funds. That is business that we do. The rest of the services that we're doing, our parks and all that, that is part of what your property tax and sales tax do.

I want to make sure the enterprise fund can run.

Thank you, Councilman Hilliard. Councilman Durio.

Could we raise rates? To me, that's the same as raising taxes. Somebody still has to pay. The citizens still going to have to pay for those services. And if they're going to have to pay more if we raise the rate. And as far as what cuts are necessary, all of them are because we already are short staffed. Right now, there is a house on Marie Street that council approved for demolition two years ago. And short staff, I know contractors do it, but it's still sitting there and it caught fire. It's still sitting there. So we already, the hiring freeze, we're already losing employees, you know, beca

And the no new revenue rate is point six eight three nine seven six City manager I have a question for you Do you have a recommendation on this? Do you have a recommendation?

This is a problem that has to be fixed. And as I said before, that's why we're up here to make these hard decisions. And everything we do, no matter how we vote up here, somebody gonna be mad at us and upset. And I said before, I didn't say you had to have courage to raise taxes. I said, you have to have courage to be on council to make these hard decisions. So you know which way I'm going?

Thank you. Thank you, Amy. You're very welcome. So have you all gotten clear enough instruction? Thank you. It's clear as mud. Yeah. All right. With that, we're at council member comments. No, we're not. We got something else? Yeah, we're good. I think that's council discussion and direction to staff before. We good? All right. Would anybody like any comments before we break for lunch before our 1.30 meeting?