City Council - Special Meeting

Good evening. Time is 5.04. We'll call the City of New Braunfels City Council special meeting to order. Budget work session. Ms. Wilkes, will you please call roll?

Council Member Carter is not present at this time. Mayor Pro Tem Capizzi?

Here.

Council Member Edwards? Here. Council Member Spradley? Here. Council Member Lebowski? Here. Council Member Shaw? Here. And Mayor French? Here.

Please join me in, Council Member Lebowski will give the invocation followed by the pledge and the Texas flag.

Dear Heavenly Father, we come to you today to seek guidance and wisdom and support as we discuss and go over the budget plan. We are grateful for your unwavering love and kindness We are entrusting tonight's gathering to your care. We ask for your wisdom and grace as we address our items. We also pray for the safety of our military personnel, home and abroad, and first responders. May this meeting proceed smoothly and fulfill its purpose, concluding in peace. Grant us the Holy Spirit's guidance to carry us out and do your work. In Jesus Christ's name we pray. Amen.

I honor the Texas flag. I pledge allegiance to the Texas, one state under God, one and indivisible. We'll start with item 1A, presentation and discussion regarding the fiscal year 2027 proposed budget and plan of municipal services and the 2026 no new revenue and voter approval tax rates. Mr. Camerino.

Thank you, Mayor Pro Tem, Mayor and council members and folks in the audience. First of all, I just want to make sure that it's understood that you are not agendized for action tonight. All that you will do is actually announce the dates of the public hearings that are coming up tonight. You will have a presentation only. Also wanted to point out that this really sort of is the kickoff with you all, with the budget process. We have several budget workshops scheduled for next week. In fact, our process started back in March with the team with the kickoff meeting talking about opportunities, challenges that we may face for this upcoming fiscal year. But I also wanted to share with you that there is a lot of information on our website as well. If you go to, we actually have a dedicated webpage to our fiscal year 27 budget. In fact, you can see the entire document on our website as well as a whole host of information, some of it being state required. Like for example, our tax rate calculation we also have on there. We will actually post then each presentation the very next day after it's provided to the council. So this presentation that you received tonight will be posted onto the website tomorrow morning. We also have provided on that webpage all of our previous budget documents going all the way back to fiscal year 2012. So 15 years worth of budget documents. If anyone wants to go back and take a look at those as well. So we've provided a lot of information regarding the fiscal year 2027 budget and previous ones as well. I wanna start out with, first of all, thanking you all for giving us the opportunity to present the five-year forecast at the retreat that we had in mid-July. That five-year forecast has been very helpful to really understand our revenue and expenditure projections, not just for the next year, but looking at a five-year window, and it helps us to not only project those, but also plan for commitments that we know are coming our way. So I think that five-year forecast has been very helpful, but you all, also provided us your feedback on what your priorities are for this fiscal year 27 budget and I will tell you that I very much appreciate that and I think you will see those priorities reflected in the proposed budget. I also want to thank the team that has put a lot of work into this proposed budget. As I mentioned, the process kicked off in March with a presentation, and then they had to fill out a bunch of forms. I should have brought it with me, the proposed budget book that has not only all the revenue and expenditure projections in it, but then all of the requests that come our way. And there's a lot of work that goes into those requests, because not only they're requesting things, but they're also having to prioritize those things. And so I want to thank the team for doing that. I want to thank the finance department and the budget team for working with each department and compiling all the information that we need to be able to present this proposed budget to you. And also, just kind of looking back for me, this is my last budget. It's been 30 years. 30 budgets. 14 as city manager, 18 here with the city of New Braunfels. And I will tell you, each one of those has been challenging in its own way, some a little less challenging than others, but certainly it has been very rewarding. very rewarding career to be in public service, and so I certainly appreciate the opportunity to do that. Tonight is an overview of a over $300 million budget. We're not gonna go into a whole lot of detail tonight. That's what the budget workshops are for. We will actually drill down into more information in each one of those sessions, and I'll go through the schedule with you at the very tail end of the budget presentation. But again, it's an overview. I've got 60 slides, so I'm gonna try to go as quickly as possible. You were able to get out of here early last night, and so I wanna try to keep you late tonight. So what I wanna do, oh, here it is. What I want to do is start with the city manager budget priorities. And frankly, these are the same priorities that you saw at the retreat in mid-July. And frankly, these have been the budget priorities that I've had since I've become city manager here back in 2013. And I'll just go through a couple of these with you. One, prioritize initiatives that support the strategic plan. The importance of that document, it is a guiding document that helps us to then Allocate resources to address the objectives and the performance measures and the initiatives that are included in that document. Balance recurring capacity. for compensation and departmental position request. What I mean by recurring capacity is any new revenue that we project for the next fiscal year, then how do we allocate those towards compensation and positions? When I became city manager in 2013, one of the major priorities that I set and still is today is for people in pay. One, to ensure that we're paying our staff, our team competitively so that we can retain the talent of the organization, but also be the organization that folks want to come and work at. And then also to try to include as many positions as we possibly can because there are needs across the entire organization to be able to meet the growing demands on a growing community, right? The service demands of a growing community. And we certainly have been able to do that over time. And I will tell you, I may say this a few more times during the budget process, whether it's tonight or during the budget workshops, but The most important asset that we have in this organization is not the technology, it's not the vehicles, it's not the equipment, it's the people. It's the people that deliver the services every day, that come to work every day committed to serving this community. We are very blessed to have the level of talent that comes to work every day here at the City of New Brunswick. I am blessed to be a part of this team. Also, prioritize one-time investments that enhance operating efficiencies across all departments, and you'll see that in some of the proposed budget items that we've included. Continue to identify opportunities to generate additional non-primary revenue in the general fund. We have done that over time by increasing user fees. We've been able to bolster the contribution from ESD seven. We have a great partnership with Emergency Services District number seven that we provide services to. And so certainly that has been a focus and will continue to also be a focus moving forward. And you'll understand why that should continue to be a priority, particularly as I speak about our property tax revenues, not only for fiscal year 27, but even beyond. Also focusing on the timely and efficient delivery of the 2023 bond program. And then you'll hear about this during this process and looking for creative solutions to be able to balance the city's self insurance fund to minimize the impacts to contributions from the city, but also premiums from our employees. Continue to utilize alternative funding sources and identify partnerships to extend dollars. Again, ESD-7 falls into that. We also have park development fees that we had a discussion about last night, roadway impact fees, AMPO, other grant funding. The New Braunfels Economic Development Corporation, as you all have acted on several initiatives recently, have helped us to move initiatives forward that are not impacting the general fund, so to speak, or tax dollars. Maintain the strength of our financial reserves, ensuring long-term fiscal security and stability. That is key for this city. It's key for any city because your financial reserves then help to set your bond rating, which we have a AA bond rating, in fact, that was recently affirmed with Standard & Poor's. Your bond rating dictates the interest rate that you will be assessed when you issue bonds. The better your bond rating, the lower your interest rate, which saves our taxpayers dollars. Okay, some highlights. The proposed tax rate of 40.89 cents is again being proposed to be held flat, but is also below the no new revenue rate. for the second consecutive year. And I have a couple of slides that we're gonna actually dig into property taxes a little bit tonight, but in a lot more detail on Monday as well. We have experienced the lowest property value growth in the last 15 years since fiscal year 2011. The growth that we have experienced in our property taxes for fiscal year 27 is really driven entirely by new value because existing taxable value have actually decreased from fiscal year 26. And I have a slide to reflect that. 12.1 million in strategic initiatives that align to the strategic plan. A 2.5% cost of living for all employees and step increases for eligible sworn personnel. That actually equals about $2.2 million in funding commitment there. And unfortunately, this is the first health insurance contribution of premium increases that we have had to propose in nine years. again, to ensure the solvency of the city's self-insurance fund. Being able to go that long without increasing premiums, I think, is kind of unheard of, particularly as I speak to other city managers and other communities that have not had that kind of success, that kind of benefit. But unfortunately, the rising cost of health care last fiscal year and continuing to this fiscal year puts us in a position where we just can't do it this coming fiscal year. 19 positions added across all funds that equates to about 17 and a half full-time equivalent positions because some of those are part-time positions. And then we are continuing funding for 12 firefighters that following the expiration of some federal grant funding, however, We have been able to increase ambulance revenues as well as working very closely with our partner at ESD 7 for some additional contributions to operation and maintenance that those have been able to cover most of the cost of those 12 firefighters. So I really want to thank our leadership team and the fire department leadership team working very closely to be able to cover that. And then as again, as I mentioned, fund balance reserve targets maintained in the general fund. That is very important that we continue to maintain or meet the policies that have been set out for fund balance reserves in the general fund. And I have a slide to actually go through that with you as well. On the proposed tax rate, again, the tax rate is proposed to stay flat at 40.89 cents, same rate as in fiscal year 26. Both components of our tax rate, and our tax rate is made up, as you can see on the right-hand side, is made up of two components. one being the maintenance and operations portion of the rate, that's 21.50 cents, and then the interest and sinking portion, which provides funding for debt service, for bond funding, or any sort of debt funding, is 19.39 cents. Those are remaining the same. We also have sufficient capacity in the interest and sinking portion of the tax rate for a $2 million tax note for vehicle replacements, which we do plan to bring to you all for consideration at the August 24th agenda. So a little bit of history on our tax rate. Since fiscal year 2020, the city's property tax rate has actually been reduced by 7.9 cents, and the proposed rate, again, 40.89 cents is below the no new revenue rate and the voter approval rate. Now, what are those? The no new revenue rate is the rate, the total property tax rate that's needed to generate the same amount of property tax revenue as received in the prior year on properties that were on the tax rolls last year and this year, okay? The voter approval rate is the highest rate that could be adopted without triggering an automatic election. Now, you can see in the table below that that the current rate, again, 0.4089, the proposed rate to remain the same, 0.4089. The no new revenue rate is 0.4156 and the voter approval rate at 0.4250. And then the bar graph on the right, you kind of see at least a five year look on history of our total tax rate broken down by, again, O&M and interest in sinking as well. And the no new revenue rate and the voter approval rate, I'll have another slide that speaks more about that because I think that we need to set up a policy discussion for, we need to set up a policy. Should I answer that? Hello? I'll... is I think that we need to have a policy discussion on Monday, particularly when we're going through our property tax rate in more detail about the possibilities of maybe going to the no new revenue rate versus staying at the proposed rate, which is below that no new revenue rate. But I've got some information to go through with you on that. So staff has been tracking the various cities. These are 26 other cities that we benchmark against. This list was actually approved by the city council and we have been watching newspaper articles to see who's proposing their tax rate. So the light blue are those that have actually proposed their tax rate for fiscal year 27. So this will probably change on Monday when we present more information to you on Monday because we're gonna continue to track cities and what they're doing. And of the 14 of the 26, so that's the light blue, 14 of the 26 cities, again, have proposed their tax rate, and 7 of the 14 cities that have proposed their tax rate have actually proposed a tax rate increase, which we found that kind of interesting, and we're going to continue to track that and provide you an updated list on Monday as well. You'll see our tax rate, you'll see actually the plaza down there, the gazebo, and the bandstand, excuse me, you can see that that's where our tax rate is currently when compared to some of our surrounding cities, right? So cities like Schertz, College Station, Seguin, San Antonio, Pflugerville, Austin, Kyle, San Marcos, and those surrounding cities that we're actually below.

Mr. Camerino? Yes, sir. When you come back next week with this slide updated with the new information, Is there a way you could do the 26 adopted along with the 27 in all cities at the same time? See the difference from last year to this year? Yes, I think.

Especially the seven that you mentioned. Yeah, no, that's a good point, is to provide you how much of a property tax rate increase is being proposed when compared to last year. I think that'll be helpful information to you all.

It kind of gives you a regional view of what's going on.

Yes, sir. Yes. Yes.

That's a great suggestion.

Yes, and as a matter of fact, that's a great segue to this. That's a great segue to this slide right here. When we look at the median taxable value of homestead properties in both Comal and Guadalupe County, the median taxable value, and again, this is using the proposed tax rate of .4089. If you apply that tax rate then to the median taxable value, you will see that, I'm sorry, let me back up a little bit. If we use the proposed tax rate, which is below the no new revenue rate, it means that we would actually generate less in property tax revenue for fiscal year 27 than we do or have in fiscal year 26. And why is that? It's because the medium taxable value of a home have actually decreased in both Comal and Guadalupe County When you look at Comal County in 2025, the medium taxable value of a homestead property was $287,080. In 2026, that same property, $281,180. That's the medium taxable value. In Guadalupe County, 2025, $246,910. And in 2026, $237,372. Now, what's the outcome of that? What does that result in? Well, what that means is that if the proposed tax rate is adopted, .4089 or 40.89 cents, whichever you wanna use, then the medium homestead property in Comal County will pay $24 less than they currently pay. And in Guadalupe County, that's $39 than they currently pay. Again, if you look at this bar chart, the very first one here, that's the current, That's a comal current property tax. Well, that's using the 2025 medium values, right? Medium taxable values. And again, under that 40.89 cents would pay $1,172 just in City of New Braunfels taxes. Using that same rate with the 2026 value, then they would pay $1,150. That's where you see the $24 decrease in property taxes paid from 2025 to this year, okay, 2026 to this year. However, if the council were to consider the no new revenue rate, okay, which is above the proposed rate, then the properties in Comel and Guadalupe County would still pay less in property taxes than what they currently pay, and I've got a slide a little bit further into the presentation that'll go into more detail there. total values certified and under protest. And this slide is a little bit different than what you may be used to seeing. And the reason for that is there are a number of factors why we're seeing a decrease in values in existing properties. One of those being that when we get our certified values in late July, those are the values that we use then to project property tax revenues for the next fiscal year and then set the property tax rate, okay? That's towards the end of July. That's by July 25th. We've got to receive those certified values. Well, we then got the final values, which was after we had received the certified values, after the budget was probably adopted. And you can see that there was actually a loss here to here of $169 million dollars. And I'll go through the reasons for that in just a little bit. So we already started with kind of a loss in value going into 2020, fiscal year 26, because of this. Now we have had some growth. The certified values that we received around July 25th, you can see that we have had some growth, not a whole lot of growth though. It's only $74 million of growth. And if you look at the Guadalupe County value, that's only grown by $300,000. And the rest of that, which is $73.6 million, then is the growth in certified values in Comal County. But really, when you think about it, that's not very much growth at all. And again, the growth is attributed to new construction because existing values have decreased, okay? Here are the taxable values when you account for FREEs and TERS adjusted values. Again, 12.6 million, almost 12.7 million in 2025, 2026, almost $13 million. Okay, so what are the factors affecting property values? As I mentioned before, the final tax year 2025 certified tax rule came in at $169 million below the value that was estimated and provided to us during the budget process. So that decrease or that variance was driven by two factors. One is that some of the properties that were under protest at the time that we received the certified values were ultimately resolved at lower taxable values, okay? From July 25th to when we actually got the final certified roll, we had lost a significant amount of value due to protest. And then there were also some additional exemptions that were approved after the certified tax rolls were finalized. And so things such as additional homestead exemptions, disabled veteran exemptions, and other exemptions were approved that also decreased decreased the July 25th values to what that final value was. That accounted for that $169 million. Now, for this fiscal year, fiscal year 27, so the tax year 26, there are three factors to kind of explain why we're experiencing the lowest level of overall growth since the last 15 years. One is market normalization. Although we've been one of the fastest growing cities in Texas and even in the country, Things such as rising interest rates, improving housing inventory, or affordability constraints have actually resulted in less in existing values than in prior years. Also, protests in Comal County, for example, have actually increased by 33% in just the last two years alone. And then there was the implementation of House Bill 9, which was adopted during the last legislative session in 2025. And what that did is increase the business personal property tax exemption from $2,500 to $125,000, removing a significant amount of taxable value from tax rolls across the state, statewide. The impact to us is we lost $182 million in taxable value in this fiscal year, in tax year 26, fiscal year 27. Okay, this is the entire budget. So the fiscal year 26 budget, which we're currently still operating under, the total revenues in the city's budget was 201.8 million. Proposed budget is 226.5 million, so that's a $24.7 million increase, or $12.2 million. And you can see, we provided you sort of the highlights of why the revenue growth is primarily driven by higher sales tax collections. We've been very fortunate there. certainly not property taxes, but certainly higher sales tax collections, franchise fees, charge for services, I mentioned ambulance revenue, I mentioned ESD-7 contributions, and then proceeds from the plan 2026 certificates of obligation. So if you look at the total revenues for the city budget by fund, you can see that the general fund is the largest fund of the city's budget, okay, at $118.5 million. And then you can see the breakdown of the enterprise funds, which accounts for our solid waste, department civic center, golf course, airport, those are our enterprise funds. Special revenue funds are things such as grants and other special revenues that are restricted in use. capital funds, debt service fund, and then internal service funds. When you look at the total city revenues in a pie chart, you can see that property and sales tax revenues are by far the largest source of revenue in the city's budget at $105.5 million, followed by franchisees that actually charge for services at 30 million, and then franchise fees at 15.9 million. You can see the rest of the revenue sources in the city's budget. I mentioned this is a $300 million budget. It's a $305 million budget. So the current fiscal year 26 adopted budget is $277.7 million. What's proposed is $305 million. Just over $27 million increase, 9.8%. And it's primarily driven by compensation increases across all funds. Planned capital project spending for projects that are underway or in design. Inflationary pressures, just much like every city in this state are dealing with inflationary pressures on operating costs, right? Name it. And it costs us more now to have that than it did in the previous years. And of course, higher health insurance costs within the self-insurance fund and the strategic initiatives that we've included. Again, if you look at all of our funds across the city's budget, again, the general fund is the largest fund with $120 million, followed by capital funds. Those capital funds accounts for all the expenditures associated with capital projects, okay? And again, we then break that down. Citywide expenditure, you can see that public safety makes up the biggest portion of the city's budget at $71.5 million, followed by public works at $53 million. And if you recall, your first two priorities, at least during the retreat, were public safety and infrastructure, right? And so certainly you can see that the proposed budget reflects Not only your priorities, but certainly the priorities of the organization as well. Now we're going to drill down into the general fund. Again, it's the largest fund in the city's budget. And this is the fund that accounts for everything from police and fire to public works, which is streets, drainage, library, parks and recreation, internal services, administration, city attorney's office, planning department, IT. So a whole host of departments across the organization is accounted for in the general fund. And so when you compare it to the current fiscal year's budget at 111.9 million, The proposed budget is increasing by 6.6 million or 5.9%. Again, this is the revenue side of it is primarily driven by increase in sales tax collections, franchise taxes and charge for services. And we have actually projected property tax revenues to essentially remain flat in fiscal year 27, okay. And I'm not going to go into a whole lot about these individual revenue sources, but certainly that's what Monday will be for, is we will then drill down into sales tax revenues and the other revenues within the general fund as well. But if you look at sort of some history of the general fund revenue going back to fiscal year 25, you can see that we budgeted an increase from $107.9 million to about almost $112 million. And what we estimate to be is about $115.8 million. So about a $3.8 million increase at the end of fiscal year 26 from where we budgeted. That's a good thing. But again, driven primarily by those things that I just mentioned to you, right? We are projecting an increase in revenue in the general fund for fiscal year 26 when you compare it not only to the budget, but to the fiscal year 26 estimate at the end of fiscal year 26, right? At 118.5 million. So projecting about a $2.7 million increase or about 2.3%. Again, when you look at our revenue sources in the general fund in a pie chart, you will see that sales tax revenues make up the largest source of revenue in the general fund at 34.5%. And that has been the case since I've actually been here all 18 years. Sales tax revenues has always been the largest source of revenue in the general fund. followed by property taxes at 25.5% and 14.1%. When you look at just these three major revenue sources, that makes up 74.1% of the total revenues in the general fund. And then you'll see the breakdown of all the other sources of revenue in the general fund. Okay, I talked about the primary revenue sources, those three being sales tax revenue, property tax revenue, and franchise fees, accounting for 74.1% of the total revenues in the general fund. We actually have an objective in the strategic plan to reduce the reliance on those primary revenue sources. And in fact, we've actually been able to do that. That actually has been trending downward for five consecutive years. And as the graph shows, you can see that, again, we are projecting a growth in sales tax revenue, flat in property tax revenue, and growth in franchise fees. These are the other revenues in the general fund. You can see that in licenses and permits, when you compare it to budget, we're projecting an increase, projecting an increase in charge for services. Again, that accounts for ambulance fees, the ESD-7 contribution, And again, I want to stress to you just how important that partnership and that relationship is with ESD-7 Emergency Services District Number 7. If you recall, they helped to fund a radio tower for us just recently. You all approved that agreement for them to help fund that radio tower for us. That was over $2 million that the city did not have to pay for, but again, because of that great partnership. and we provide those services on a contractual basis to EST7, we've got an outstanding relationship. And I've got to thank not only city staff, the fire department leadership team in really fostering that relationship because they've not only done like the radio tower, but they've also committed to purchasing some equipment, some other equipment, some apparatus for the fire department as well, as well as countless other things that I haven't even mentioned yet. Again, these are the rest of the revenue sources in the general fund. Looking at expenditures, when compared to the fiscal year 26 adopted budget, the proposed budget is proposed to increase by 5.5 million or 4.8%, again, driven mostly by compensation increases, operating expenditures, associated with the Zip Family Sports Park. We had the ribbon cutting and it's open, it's been fantastic. We've gotta now plan for those operating costs for a full fiscal year, right? And then of course, higher employer contributions to the city's self-insurance fund to be able to offset those premium increases for health insurance costs. And then funding those new positions that I mentioned to you in that highlight slide, as well as the initiatives that 12.1 million, I mean the initiatives that I mentioned in the highlight slide as well. And then baseline budget adjustments, obviously with, certainly within police and fire, but certainly in some other departments as well, but those were some larger base budget adjustments that we had to make there. When you look at the total expenditures in the general fund by program area, again, you can see that public safety makes up the largest portion of the expenditures in the general fund. That's 57% of those total expenditures that I just went through with you. You can see the breakdown of quality of life, organizational support, community development and infrastructure. And when you break our expenditures down by category, Like most organizations, the biggest piece of that pie is employee expenditures, right? 76% of the total expenditures in the general fund are employee expenditures. So we're not unlike a lot of other organizations. You can see that operating expenditures are 21%, capital at 1%, and then you can see the breakdown of all the other expenditure categories within the general fund. Reserves and structural balance. This is... Let's first talk about reserves. So let me get there. Okay. The proposed ending fund balance for fiscal year 27 is proposed to be at $34.9 million, which represents 30% of all recurring expenditures, which is the city council's target, and why is that? Because sales tax revenue is the largest source of revenue in the general fund. As the economy goes, so could your sales tax revenue go, and so we've gotta make sure that we account for that, because it could be cyclical in nature. Our financial policy requires a minimum general fund, any fund balance equal to 25% of all expenditures. And so the proposed balance is equal, the proposed fund balance at the end of the fiscal year is equal to 29%. So we have met both targets, not only the council's target, but also our financial policy target. And I've said this before, fund balance or our reserves plays a critical role in our ability to respond to not only emergencies, but also maintaining that AA bond rating that is so important when we issue bonds for projects that have been approved by our community. Structurally balanced, what do I mean by structurally balanced? Well, it's a balanced budget. Now, structurally balanced means that the recurring revenues right here, either meet or exceed the recurring expenditures. We do use fund balance reserves that are over and above our policies to be able to then pay for one-time expenditures, not recurring costs. You don't want to use your savings account to pay for salaries and benefits. The savings account will ultimately run out and the expenditures are still there. So that's why we say it's a structurally balanced budget. There's a bullet point here that I think is really important to make in that any additional commitment, which is certainly within your prerogative during this budget process, any additional commitment made to the proposed budget, in other words, you want more of something will require a corresponding reduction somewhere. We have scrubbed our revenue projections, our expenditure projections, and scrubbed them again, and then scrubbed them again to be able to get to the proposed budget that you had before you. And so because of very little growth, almost no growth in property tax revenues, that makes us more reliant on sales tax revenues, which should make us a little bit more conservative when we budget, okay? I've been accused of being too conservative. I think it's put us in a position to not be in some of the same situations maybe as some of our surrounding cities, right? Unfortunately, our neighbor, the city of San Antonio, $158 million budget deficit. Kyle, Austin, Fort Worth, and there are other cities, and I don't know the details of their situation. I'm not gonna speak to those. I feel for them. I wish they weren't in those situations, right? Folks, we are not in that situation, thank goodness. I'm gonna knock on some wood. We are not in that situation, okay?

Mr. Camerino, have you ever had a budget deficit?

That's a good question.

Make sure you drink some water.

So when I was appointed interim city manager here back in 2013, that was my first budget as city manager and unfortunately we were deficit spending at that time, which required me to fix the problem, required us to fix the problem. We couldn't continue to budget deficit, deficit spend, excuse me, to deficit spend. And so that was a very tough budget. I actually proposed a property tax rate increase. I cut budgets across the organization with the help of our directors to identify those areas that they feel that they could cut. We provided very little in compensation increases. It was a rough budget. And I remember I was interim and I remember a council member asking me, boy, you really don't want this position, do you? And what I said was, look, if you're looking for someone to tell you what you want to hear, that's not me. I'm going to tell you what you need to hear. And that is we are deficit spending. We can't continue to do this. We've got to fix it. So that was my first. But we fixed it, and look where we're at now. We have had tremendous growth in our community, which has afforded us the opportunity to do a whole lot, right? Provide compensation increases, be able to bring on new staff, whether that be in police and fire, public works, parks and recreation, build new parks, build Das Rec, right? And on and on and on, street repairs across our community. It has afforded us the opportunity to do that, okay? Okay, new initiatives. So I'm not gonna read these. These are the five objectives in our strategic plan which serves as a guide for us as we are developing the proposed budget. So using the proposed budget, As a guide, we have been able to incorporate $12.1 million in funded initiatives in both recurring expenditures, so that's $7.4 million, or one-time funding, about $4.7 million. And when you break that out by strategic priority, you'll see that organizational excellence makes up a majority of this 12.1 million and almost 8.2 million, and then the breakdown of the other priorities, community well-being, enhanced connectivity, community identity, okay? 24 of the objectives or performance measures are being supported in the proposed budget. And we've broken those 24 out by the objective within the strategic plan. And you can see the breakdown of that in the pie chart And the reason that we show this is to show you and the community that we are putting that plan to work, that we are using it, and it's not sitting on a shelf just gathering dust. It's a plan that's very important that was put together by a lot of community input, and we certainly need to take a look at it and possibly revise it. It's a living, breathing document, right? Priorities change, and that's okay, and that's okay. But the document that we have now, we are certainly using it as a guide. Okay, I'm gonna go very quickly into these. You can actually find the full list of the initiatives that are included in the proposed budget on pages 274 and 275 of the budget document, but I'm gonna go through some of these with you. A striping crew. In public works, we'll establish an in-house striping crew and also purchase some equipment so that we can then repaint all of the city's striping on an annual basis and reducing our reliance on contracted services. I mean, you drive through town and you see this, particularly in the downtown area or anywhere, really. You say, boy, I wish we could restripe that. We could repaint the striping. We'll then proposing to bring on this dedicated crew, much like we did with the beautification crew, right? That was focused on on trying to maintain those areas that TxDOT maintains only a certain number of times within our community. But we wanted to really focus on the beautification of our community, right? How our community looks, I think, dictates how people feel about our community. And so that's why we brought on that crew. This crew will help us to continue to beautify our community.

I like that initiative because I get calls about that all the time. Why is the city not putting white lines on the road? Yes. We hear the same thing, sir. I think this is one of the things that the city has not really taken strong effort to identify or to go forward with, so I like this a lot. Yeah.

And my question is, would you be able to restripe the ones on highways and

Well, if it's a TxDOT highway, no. We would then ask TxDOT to do those, like for example, Loop 337, I-35, 725, 758, 1101, and those are all TxDOT roadways, so we would still rely on those. These are for city streets, okay? Streetlight maintenance, increasing recurring funding for streetlight maintenance, particularly in this, at least in this next fiscal year, a focus on the Walnut Avenue corridor. Signal time and expansion, it would expand our traffic signal communication software to additional intersections that allows our staff to actually monitor these intersections remotely, and then they can actually respond to these issues remotely and make any adjustments without even having to make an on-site visit. Now, they may still have to if the issue is more complex than what they can address remotely, but they will be able to mostly be able to address these issues remotely and then be able to get the traffic flowing a lot sooner. So it's expanding an existing system that we have. Traffic calming expansion, we've had conversations about traffic calming across our community, right? And so whether that be sort of some traffic calming measures, speed humps are certainly always a part of that conversation and so we want to increase the funding to be able to continue to address those on an annual basis. A vacuum excavator. This vacuum excavator would actually help to improve the safety and efficiency of either repairing or installing street signs across our community, and then also reduce the conflict of actually hitting underground utilities. And so this is, I think, going to be a very useful tool for our public works department. a part-time assistant, admin assistant in the transit fund. Matter of fact, I just sent you all an email today with the July numbers. We did over 6,500 riots just in the month of July. We've already hit 50,000 riots since we launched the system in late November 2025. And so this admin assistant would actually help with customer service demands, community outreach, and regulatory compliance because we do get federal funding, which requires a lot more compliance and reporting Digital library materials expands the library's digital collection to meet the growing demand for e-books, audio books, and other online resources. Community tool shed, this has actually been a very successful program for us as well. And so we want to provide some recurring funding to not only replenish maybe some tools that may not make it back, but certainly continue to expand upon the equipment that we have available to our community.

Mr. Camerino, what happens if the tool doesn't make it back?

We find them, we tase them, we look for the, I'm just kidding with you.

He's practicing for his next job.

I think we do our debt level best to try to get that because we do get information in advance of who they are and where they live and whatnot. I think we've been able to get most of it back, so I think it's very rare that we don't. Do we really want to expand the program? I don't know if we require a deposit. You all know? It's a good question. We'll bring it back to you on Monday. Okay. Code enforcement abatements. And so being able to address nuisance properties and be able to protect the neighborhood quality of life, right? And so that may be demolishing an abandoned home that needs to be abandoned or maybe having to mow areas where a person cannot mow that area. And so certainly want to increase the funding to be able to do that. Cultural district application. So this would actually fund a promotional video that would support the city's application for a cultural district designation. When the council adopted the arts and cultural master plan, one of the initiatives there was to submit an application. Now the video accounts for 50% of the application score and is a critical component of that process. And so we wanted to incorporate that into the proposed budget. Parking fund initiatives. This helps to implement projects that are identified in that downtown parking reinvestment zone plan that was approved by the city council, so we want to continue to provide funding to be able to implement that. Compensation increases. We'll provide you a whole lot more information on Muddy on, because I think it's important that we also remind ourselves about how much we've actually been able to fund in compensation increases over the past few years, because it has been substantial, and we certainly appreciate the support of the city council with those efforts, because as I mentioned before, the folks in this organization is the greatest asset that we have. We've got to make sure that we're paying them competitively so that we retain them and also be the employer of choice as well. What we've been able to incorporate at least so far is a 2.5% cost of living for all employees plus step increases for eligible sworn personnel. That's about a $2.2 million commitment in the general fund. As we talked about in the retreat, about the increase in health insurance costs, and I certainly said this in the budget kickoff meeting that I had back in March with staff, is look, we've been able to go all these years without increasing premiums, but I'm not sure we're gonna be able to go yet another where we're gonna continue to track our cost and our trends, right? And unfortunately, we just are at a point where we have to increase premiums. Not only the city's contribution, but then also the employee's contribution. We'll go into more of that on Monday as well. Fire medical physicals. So provide funding to comply with the state's new requirements for expanded firefighter medical screening. So this is really going to build upon the city's existing annual physical program in the fire department. The e-citation software for police. This implements a new citation management system to improve officer efficiency, data collection, and reporting. And this was actually... across departmental effort where we had PD, municipal court, IT work on identifying the best software system that could be used and so we're ready to move forward with this. In cab cameras for the fire department, installing safety cameras in frontline apparatus to enhance driver safety, reduce risk and improve accountability. Mutual aid deployment vehicle and equipment. So sometimes I will send you emails that some of our fire department staff have been deployed, for example, to help some region of the state of Texas. They've actually been deployed nationally as well. They've gone to help fight fires in California and other parts of the state. We get reimbursed for a portion of that. So we get reimbursed for their salaries and benefits and overtime costs, but we also get reimbursed for the use of the vehicle. So what we're going to do is utilize those reimbursements then to purchase a vehicle and some additional wildland firefighting equipment for firefighters. Facility attendance and parks and recreation, so this would add three part-time positions to support Mission Hill Park, which will open before the end of this year, and then also operations at Zip Family Sports Park. An autonomous field line sprayer, so this was actually a, This is actually an interesting one. I can't wait to see this operate. But this is a field line sprayer that would be used at Zip Family Sports Park that will actually, you set the parameters on this, it would actually paint the lines on fields for you rather than having staff do this. This will allow staff to focus on other maintenance issues at our park systems. Other cities are using it and it's kind of cool. Capital Project Manager to help support the Expanding Capital Improvement Program and grant-funded projects. As you all know, we also manage NBEDC, or Economic Development Corporation's projects, and so we certainly need some more support there. Technology Replacement Fund. Although not sexy, it is probably one of the most necessary things that we have in this organization. We rely heavily on technology across all departments. And so we've included some recurring funding. We've increased some recurring funding to better address long-term technology replacement needs, which has been identified in the strategic plan. Citywide network replacement, so we're going to begin a five-year phased replacement of the city's network infrastructure, again, to maintain reliable technology systems. Impact committee funding. So we have a committee of representatives from every department in the organization, or most of the departments in the organization, that help us to come up with ideas as to how to... value and appreciate our employees, right? So they help us with events. And so we're gonna increase the funding associated with that effort, because we wanna make sure that we are continuing to show appreciation and value of our staff members. Document management system. This implements a new document management system or solution to improve records management retention and operational efficiency. An administrative system in police would provide admin support to improve efficiency and allow sworn personnel to focus on public safety. So this will support our patrol lieutenants and the criminal investigations division and allow those folks to focus on police work, right? and turn those administrative tasks over to an admin assistant. So this will be a non-sworn position. A communications specialist for the communications team to help us continue to support community engagement, public outreach, and the growing number of city events that we host a buyer in the finance department, so this would provide us with the capacity to manage growing purchasing activity, ensure compliance with grant reporting requirements. Our federal, we've received, we continue to receive federal grant funding, which has a whole other level of compliance and reporting, and so our purchasing department is having to manage all of that and certainly need the assistance to be able to do that. So those requirements are really above and beyond traditional bond projects. Administrative assistant in HR to support enhanced employee services and improve department efficiency. Our HR department is the HR department for the entire city, and so if an employee needs something, they'll go to HR. They also provide training across the organization, and so they provide a lot of services to the staff within the organization. A GIS analyst for public safety, so this would add a dedicated GIS analyst to strengthen not only police but fire data analysis reporting and help them make operational decisions based on data. Building valuation study would update the building valuation methodology used to calculate permit fees and improve cost recovery. In ambulance remount, it would extend the life of an existing ambulance through a chassis replacement. This is something that we do. This is not new, but something that we do. So we'll buy a new ambulance. The next thing would be to then do a remount. Then the next thing is you have to then replace it after that remount, after so many years after the remount. And so we have an ambulance that is ready, that is in need of a remount. As I mentioned before in another slide, we will come to you on August the 24th with a $2 million tax note to fund critical vehicle replacements across the organization. Both our police and fire departments are going through an accreditation process. and a part of those processes, they then have to develop a strategic plan, and so both of our chiefs have agreed to do a joint public safety strategic plan for both police and fire, so we've incorporated some funding so that they can actually have a consultant help them do that, so that they don't, it doesn't take away from their day-to-day operational needs, but they're able to have a consultant come in and help them and help their teams develop these strategic plans. As I mentioned before, grant-funded firefighters, we had to take them on 12 firefighter positions. The grant expired, actually the grant expired this fiscal year, it was a 2024 grant. And what it did was it helped us to maintain a four-person staffing on some of the busiest frontline apparatus. But as I mentioned before, because of the efforts of our leadership team at the city manager's office, as well as the fire department leadership team, we work very closely on being able to increase ambulance revenues, but then also increase the contribution from ESD-7 that have helped to cover most of that cost as well. So I really appreciate those efforts. Emergency dispatchers, so we would add two emergency dispatchers to PD to support that growing call volume. Detective and PD to reduce the caseloads on the existing detectives and improve investigative capacity for property and person crimes. Flood Siren Partnership, so we have been having discussions with Comal County about bolstering our flood warning systems, our siren systems, not only in New Braunfels but also in Comal County. As you recall, the state allocated some funding through the Texas Water Development Board to be able to implement flood warning systems across the state of Texas. Well, we along with Comal County are really some of the only cities, not very many cities in the state actually already had systems in place. So what we're gonna be doing is using that funding to be able to bolster the existing system to be able to improve the existing equipment that's on it, add to the equipment that's added, the capabilities that we currently have, and then partner with Comal County on maintenance. We're gonna have the same systems, and so Comal County already has a team, a dedicated team to maintaining their system, and so we will then pay for a part of their operational costs to add a maintenance technician and a vehicle, and then also keep a parts inventory so that they can also maintain our system as well that will enable us then to eliminate the contract services that we have and being able to partner very closely with Comal County and also with Guadalupe County. So when you think about Comal County, New Braunfels, Guadalupe County, then we will have an integrated system throughout this whole area that will provide early warning to our community in the event of a flood. And I cannot tell you how much I appreciate the partnership that we have with Comal County and the willingness to partner with us on this effort and to partner with us on the maintenance of our systems. And so we'll be bringing that to you all soon. But what we have done is incorporated some of the maintenance costs associated with what will be an interlocal agreement with Comal County.

I would like to thank County Judge Hoyt for her leadership over there. And this is a great partnership. But can I ask a question about the police detective?

About what?

The police detective?

Yes, sir.

So we're going to add a police detective? Yes. Is it going to be promote from within and then add a slot from the bottom?

Right, so if you add a position, then they'll test for a detective, right, and then you're right, and then they'll make spots available for. Yeah, that was my question. Yeah, it's a trickle effect. You bet, you bet. But I also want to give some credit to Judge Sherman Krause because the conversation actually started with him and has continued with Judge Hoyt, and she's been tremendous to work with as well, so I really appreciate Comal Kenney. The West End Stormwater Master Plan. So this would actually develop a localized drainage study to identify flooding issues on the west side of our town. So it would evaluate system performance and prioritize future stormwater improvements to reduce street and property flooding in the area. Replace the fitness floor at DOS Rec. We've got 20,000 members at DOS Rec. Very, very successful. I remember the conversations about the need to build a recreation center. We didn't have one, right? We did, it's over in Land O' Park, but we didn't really have a DOS Rec. And as we were looking at the pro forma, for how many members do we think we're gonna have, right? How much revenue do you think we'll be able to generate? What are the expenditures? Are we going to then have to cover some of the costs of that recreation center, because it may not cost recover? And we certainly did not estimate or project the level of membership that we have at DOS Rec. It has been hugely successful, but it gets a lot of use, and so we need to replace the flooring at DOS Rec. Westside Community Center improvements, so that would convert the community room into a multi-purpose exercise space to expand recreational programming and community use in that facility. New positions. As I mentioned, 17 and a half full-time equivalent positions, really 19 in total, because some of those are part-time. But 14.75 full-time equivalents in the general fund, and you'll see the breakdown. Here's the breakdown of the general fund positions here. 5.25 of those going to public safety, and then the remainder of them going to those positions that I've already mentioned to you all. the buyer and finance, admin assistant and HR, communication specialist, the street striping crew, as well as capital projects manager and so forth and so on. And then you'll see the other funds here maintenance work in the airport fund, fleet mechanic in the fleet services fund, and then the part-time admin assistant in the transit fund. But I will tell you, and I think it's important to always remind ourselves about what we've been able to do in the past. Because I think folks tend to forget, and I think it's important that we reflect and appreciate what we've been able to do in the past. Over the past five fiscal years, you've actually added more than 107 full-time positions in this organization. And I think that should be remembered, right? But do we have all the positions we need? No. We still need more positions than what's been proposed here. Unfortunately, we have to live within a budget, and so we try to strike a balance between compensation increases, positions, and other initiatives. But I just wanted to reflect back on what has been accomplished in the past. Okay, well here it is. So over the past five fiscal years, the city's added more than 107 full-time equivalent positions. 61% of those new FTEs were in public safety, and you can see here, public safety right here. And so again, I think it's important that we reflect back, and this goes all the way back to fiscal year 23, that we reflect on what we've been able to accomplish in the past. Are we there yet? No, but we certainly have come a long way.

Mr. Camerino, before we move on, is there a breakdown by line item of how many people are in each of those positions? How many do we have in HR? How many do we have in finance? How many do we have in dispatch? Yeah, you bet. Is that something that's in this book? It's in this really nice, beautiful book.

I'll have Jared. kind of give you the page numbers, but we actually do. Look, we provide a lot of information here, and some of it, and I'll go through a slide with you on some of it that some cities don't incorporate into their budget document, which is unfunded resource request, right? What are those things that departments requested that are not in the proposed budget? But we also do provide you with very detailed information on how many positions and which positions we have in each department as well, okay?

Yes, Council Member Charlotteson, it's actually on page 81 of the proposed budget document. And if you would desire more detail, we're happy to include that into one of the following budget workshops as well.

Thank you.

On her coattails, do you know how many positions were requested organization-wide?

This year, was it 40? It was approximately 40 from general fund departments. Right. Again, happy to provide a more specific figure at the next workshop, but it was 40 from general fund departments, roughly.

And what about the budget number across the departments?

Oh, total?

On the budget, yeah. I mean, when it hits your desk, they're asking to make their organization as smooth as possible. Obviously, we cannot do that. So I'm just curious what that number was.

Yeah, we'll certainly provide you that information. That's a good question, good point there. We'll provide you the information on the requests that have been made and then compare that with what's actually in the proposed budget. But you can actually see the unfunded resource request in the budget book as well. So let me just go quickly through this and then we'll talk about that just a little bit more. So fire hose replacement for public safety, some partial funding to begin a taser replacement, so we'll do that on a phased approach, working very closely with the chief on what that looks like. Additional recurring funding for tree trimming services, some soccer goals for Zip Family Sports Park, some insulation for the Landa Recreation, when I said about recreation, this is what I meant, the Landa Recreation Center, gym roof, HVAC replacement for the main library. So a one-time transfer for facilities maintenance for future improvements to FM 306. The building that MBU is currently in on FM 306, the city actually owns, and so when MBU moves into their new headquarters, then we'll then make some renovation to this building and then move a number of staff, particularly public works staff, fire training staff, into this building. But we'll have to do some renovation to it prior to moving in. But it's actually a very, very good building. Zoom phone migration that will create administrative efficiencies. Truck mounted LED sign for animal welfare officer vehicle. This one's kind of interesting. We pick up probably in excess of 600 dead deer from streets across the community, right? And they do it with animal control or animal welfare staff do that. And so what this is is an LED sign that will direct people away from them while they're picking up these dead deer. So it really does improve their safety while they're doing this. Cash match for pavement rehab at our airport. Two electric airport tow vehicles at the airport. Taxiway striping improvements at the airport. And in the golf course, some remaining funding for a golf course bunker renovation. At the Civic Center, some evening shift pay deferential. We have evening shift pay deferentials in other departments, and so we're implementing that in the Civic Center as well. Replacements of some solid waste vehicles, pressure washer for solid waste, commercial dumpster repair funding in solid waste. Now, here's where I talked about the unfunded requests. And again, I want to make sure that I highlight this, is that not... I've never been in an organization, I've been in five now, that has enough money to fund everything that has been requested. I don't know that an organization like that exists. But what we do is we're very transparent about what is not in the proposed budget, what has been requested but is not in the proposed budget. We incorporate that list into the budget document. You will not find that in every city department, in every city budget document, right? But we're very transparent because we want you to know and the community to know what the organizational needs are for this organization, right? And so what you can see here is we've actually provided you a graph. There's approximately 19 and a half million dollars in unfunded resource requests across general fund departments only. And we've provided you a graph of the total value of these requests by public safety, organizational support, quality of life, and community and development and infrastructure. And again, you can actually see the detail on pages 271 to 273 of the budget book. Okay, some tax rate considerations for 27 and beyond. Again, we've talked about there's a number of unfunded resource requests because those requests just exceed the available revenues, right? And we've heard from some council members about the willingness or the interest to possibly fund more in initiatives than what the current proposed budget has the capacity for. And this is really setting up a conversation for Monday as we discuss the property tax rate and the possibility or the option of adopting a rate that may be a little bit higher than the proposed rate, going to the no new revenue rate, but still then enables property taxpayers within our community to still pay less than what they're currently paying. So a little bit of history, the city's not increased the tax rate since fiscal year 2014. In fact, since 2014 that tax rate's been decreased by about nine cents. I remember it was 2013 and I was interim city manager and the council had elected to go to a bond proposition in 2013. There were several propositions, and if all four propositions passed, we had estimated that we would have to increase the tax rate by a little over eight cents, if I recall. So I was going around making these presentations to say, if you approve all four propositions, factual statement, it could increase your property tax rate by over eight cents. Folks, we've actually decreased it. We didn't have to increase it, we decreased it. Why? growth gave us the opportunity to be able to fund those capital improvements without having to increase the property tax rate and be able to take advantage of that increase in taxable value in our community. And so that growth, again, up until this year has given us the opportunity to make those capital investments across our community to be able to fund additional staff or compensation increases. And again, this is a discussion for, a policy discussion for Monday, but wanna provide you some information in advance of that, and we'll go into more detail on Monday as well. But if the council wanted to consider adopting the no new revenue rate, which is the property tax rate necessary to generate the same revenue this year as we did last year with the existing properties that were on the rolls last year and this year, okay? That would generate an approximate $845,000 in additional general fund revenue. It would require an increase of approximately .67 cents, so it would be here. This is the no new revenue rate. Even if the no new revenue rate were adopted, the owner of that medium value homestead that I showed you all would still pay slightly less in city property taxes than in the current year due to that decrease in the medium taxable value. In fact, in Comal County, so they would still pay $5 less than in the prior year. In Guadalupe County, $23 than in the prior year if the council wanted to consider the no new revenue rate. Again, that's a conversation for Monday. We'll drill down even further into it, but that's just an option, y'all. The budget, though, the budget has been built on the current tax rate.

Can I ask a quick question? Yes, sir. So the budget actually increased this year. You're asking for an increase in the budget this year from last year, correct?

Yes, but it's also been built on the current property tax rate.

Right, but we're increasing the budget on a tax rate that is the same that's less than the no new revenue rate, and you're keeping it the exact same, but at the same time we're spending more.

Yes, and that's because of that, as I mentioned before, an increase in sales tax revenues, right? And then some of the other revenue sources like franchise fees and ambulance revenues, ESD-7 contribution, as well as increases in some of our other revenue items. It's just an option to discuss, because I know that there have been some comments made about wanting to fund more. In fact, we had that conversation last night about the Humane Society, right? I wish I could have given more of a pay increase. But again, built the budget using the current proposed tax rate, which is the same as last year. But again, I want to make sure that you all understand the current budget as proposed is built with the same total property tax rate as we had last year. This is only an option. I think it's incumbent upon us to share that kind of information with you so that you all can consider it. I think what's also interesting is that we will, on Monday, we'll keep, we'll actually bring you an updated list. You remember that bar graph of the 26 other cities that are benchmark cities for us? And of the 14 that I've already proposed their tax rates, seven of those are proposing tax rate increases. So we'll continue to gather that information, provide that information to you on Monday. How much did they propose it, right? Because I think that's also important as well. Almost done here, y'all, almost done. These are the highlights that you've already seen. Again, property tax rate held flat and below the no new revenue rate. Lowest property value growth since fiscal year 2011, 15 years. The growth that we do have is driven entirely by new construction, while existing taxable values decline. Still able to incorporate 12.1 million in strategic initiatives that align to the strategic plan. 2.5% cost of living for all employees plus step increases for eligible sworn personnel. That's in both police and fire, excuse me. Unfortunately, the first health insurance contribution and premium increases in nine years are also incorporated into the budget. 19 total positions, 17 and a half, equals to about 17 and a half full-time equivalents across all funds. Continued funding for those 12 firefighters because of the expiration of the grant, however, covered mostly by those increased revenues in ambulance revenues and ESD-7 contribution. while maintaining our fund balance reserve target in the general fund. Okay, here's the schedule going forward again tonight, just the budget presentation, no action other than to announce the dates of the public hearings, okay, which you have some language on the dice for you. And Jared's gonna cover that item. On August the 17th, on Monday then, we will go into a lot more detail on the tax rate. More detail on the general fund departments and then also on the debt service fund. On Tuesday, the 18th, then, department directors will present to you their budget goals. Some of their budget goals also present some of the information, their metrics or KPIs from NBSTAT. We'll also present to you all on the Hotel Occupancy Tax Fund. The CVB will be here to present their budget. The Chamber, the Convention of Visitors Bureau will be here to present their budget on Tuesday. And then we'll cover those enterprise funds. Again, as I mentioned, solid waste, airport, golf course, civic and convention center. And then we'll, on Wednesday then, we'll then bring back anything that you all may have asked that we weren't able to provide you either on Monday or Tuesday. We'll then bring that information back to you on the 19th, okay? Tax rate and adoption, budget adoption timelines. Again, this evening you will announce the dates and times of the hearings. On Tuesday the 18th, we have put on that agenda for you all to vote. It's a recorded vote on the proposed tax rate, okay? However, if you are not prepared to vote on the proposed tax rate on the 18th, we're going to schedule it for the 19th as well. Okay, so it will give you two opportunities. The recorded vote of the proposed tax rate will then go on the notice of public hearing and tax rate and budget. That will be published on August the 22nd. And on September the 10th would be the first public hearing and first reading of the ordinances to adopt the budget and the tax rate with September the 14th being the second and final reading of those and the ratification of the property tax revenue increase. With that, I can answer any questions or I can turn it over to Jared to go through the very next item with you, but again, Tonight was really an overview of the $300 million budget, and we'll go into a lot more detail in the workshop scheduled for next week as well.

They anticipated change in the legislature with some restrictions potentially coming in the next biennium on property tax relief and caps on certain funding situations for the city. Do you believe that it would be necessitated to look at the, I'm not a fan of increase in tax rate, but due to the things that are going on at the State House, is it something that has to be taken a look at at this time to make sure that we can take care of needs that we may not be able to take care of in two years?

I think it's important for us to have that conversation and take a look at that so that we don't lose opportunities in the future. And I think that may be what some of these cities are doing is to take an advantage of those opportunities now before they lose them.

Second question. How do we design efficient tech replacement as it outdates about every 24 months? Now, your plan has a five-year plan, but we're seeing as technology and AI progresses, that the turnover time between programs and equipment is accelerating, and it's accelerating on the police department, the fire department, here, work, payroll, all of it. What have been the discussions inside about how to be able to finance that economically? When I was on the school district, having to change all the computers in a cycle in the district, we had to start looking at, well, should we lease them or should we buy them or do you get disposables?

I mean, you know. Yeah, our IT director, Tony Gonzalez, has done a good job in setting up a replacement schedule where we're not replacing, for example, all laptops all at once, right? And we're actually replacing them on a yearly basis. But then also the plan that it's been developed is sort of a living, breathing document that could be adjusted. And it's based on sort of critical priorities first, but it can also be adjusted if a need arises, we've got to replace something sooner than what was expected. So it has to be a flexible plan that can adjust based on need.

Last question from me so far. We're proposing roughly 2.5% on COLA. Yes, sir. Inflation rate currently is at 3.5, down from 4.7. Last year, our COLA was around 3-ish, 3.5.

Well, last year, you may remember, and we'll talk about this on Monday as well, we funded the 2025 market compensation study. So everyone's adjustments were based on the results of that market compensation study. Let us come back and give you some more information on the spread and average increase that was for that market study implementation next Monday, if that's okay.

Yeah, because part of those may have been a COLA plus market. Some that were a market would at least receive the COLA, so we'll certainly provide you some information.

Well, you have other adjustments inside for certain positions.

Not in this budget, but we did in last year's budget. Right.

I just want to make sure, you know, the tendency is if we're a point behind last year, or a half point, and we're a point behind this year, And then we get down next year, and then we get hit by the state, and we lose a section. Now we're looking at being another two. We could be four to five percent behind. Yeah. Reasonability for the current staff, not even new staff.

Mm-hmm.

So... I mean, that may need to be a discussion we have to talk about too.

And certainly a consideration, certainly a consideration when you all discuss the no new revenue rate. Our compensation increases to ensure that we are being competitive or keeping up with inflation.

Okay.

All good discussions. Council Member Card.

Thanks, Robert, for your presentation. It's always... informative and I commend you and Jared for your numbers, but the real hard facts here are that we've stayed within this budget number, not raising the rate since 2014. The fact is the inflation rate cumulative increase from 2014 until now is 41%. That affects buying power for everybody. It affects buying power for everybody's household, which goes to income. It affects purchasing power within the city itself, having to have more budgeted for fire trucks, for every police car that we have on the road, every gun that we buy, the ammunition that we buy, the pencils that are used, the computers that are used. So when you suppress that kind of inflation, it's going to catch up with you and you have things like roads that just are not that great. And in my view, and I discussed this in the strategic meeting that we have, we're digging a hole that is gonna be very expensive to get out of. It's gonna be expensive to get out of it, period. But it's gonna be a lot more expensive if we keep digging further in. And by that, I mean kind of curbing how many maintenance folks we have, you know, going to the, just the raw numbers. I know the legal staff said they were already short last year and I don't see a legal person unless I missed it, um, added in this budget. Um, I still maintain that there are stresses stressors on the police department. Um, and on and on. I mean, I can go down to the guys cutting the grass. Now I do believe we need to give a big bill to the state of Texas and I'll be happy to carry it up north and try to get some money out of those folks, but we'll see. But I think that we need not embrace as a city council the idea that it's a good thing not to have an election. If we need to have an election about a tax rate, guess who's not worried about it? I'm not. If that's what needs to happen, if citizens say yes to it, okay. And I'm just not afraid of that. But we need to have real discussions about what the real problems are, that everybody sees whether it's drainage, whether it's streets. I remain concerned about the inventory of projects that we have. And do we need to get, whether it be contract staffing, which I'm not a fan of contract staffing, however, sometimes it's necessary to work out of your holes that you're in. And I don't say that in a degrading way, and I hope that you all don't take that. I commend the city staff. You're working with what I believe is below staffing levels across the board. I mean, I see it as a very stringent level of staffing. Now, I could be wrong, but It's probably not going too far off the mark to say that some departments probably have a little bloat just like they do in every area of business because you have to go back and revise and people don't have a real good habit of doing that. Once they get people, they tend to wanna build their kingdoms, but I don't see any kingdoms in the city of New Braunfels in the staffing area. So I just think some real facts need to come on the table from, and I ask all these folks running their department, What is it that you don't have? What is it that's impeding you from getting your job done and delivering to the folks of New Braunfels? I see code of ordinances as an example as free reign to clean up New Braunfels and get money behind that. And I understand there's receivables and people not wanting to pay them and all that kind of stuff. But there's a lot of room there for revenue. And it also brings satisfaction to other citizens that are tired of how weeds are growing everywhere and people are not maintaining their homes. I mean, I live in a community where I hear it all the time. But I drive around this town and I don't have my head in the sand. It's out there. So, Robert, I do encourage you and Jared and Jordan to basically sit out here and grovel and tell us how poor

your departments are.

I mean, I expect that. And let me make the decision, I don't care. Because I do care about these people. I care about the city and the citizens and I want it upright. I want the whole to be less. So sometimes you have to spend to get there And I think we're being a little dishonest with citizens to say 2014 not having a tax cut is a great thing. It's a fabulous thing, but there's still services that we should be providing. We have to live within our means and do things smart, but there's a lot of things that we need to get done.

Agreed. And no offense, we actually do use contract to augment staff in various capacities, right? I know. Because you're right. You have to be able to. You can't always staff up. And so sometimes you do have to contract some of that work out so that you can get some of that workload done. And frankly, one of the reasons why I even discussed the no new revenue rate tonight was to put that option on the table for you all to discuss. Because, you know, sales tax revenue are what they are, and you can't always depend on them to grow. And so property tax revenue, although the values have certainly declined and we're only relying on new growth, and that may be where the situation is, for not only fiscal year 27 but even beyond. And that may be why some of these cities are looking at property tax rate increases because they may have a decrease in values and may need more revenue to be able to do more things, right? And so having that, we're certainly open to that discussion. I mean, there's also the voter approval rate. right which doesn't trigger an automatic election but that's 42 42.50 cents so that's an increase in property tax rate and so it also depends on how much this community is willing to right willing to and i'm not a i'm not a person that's ever in favor of the tax increase however um the city portion

of everybody's tax bill is less than what they pay in electric all year. So the city portion is actually always overstated as far as people thinking, ooh, you have such a terrible impact on me. in an annual cycle that's just not factual. And I'm here to say it, and everybody wants to talk to me about it, feel free. But the other thing is is that people go off screaming, oh, the answer is to go grow. No, it's not. Because we have 3,116 houses on the market is why house values are dropping. That market needs to compress to make house pricing go back up. So anybody who wants to have that discussion, I'm here for it. So economists, step forward. Thank you.

Yes, ma'am. Thank you.

I just want to say, to Council Member Carter's points about the tax rate, I mean, much of that I agree with you on, too.

You can't spend money if you don't have money.

I do wanna say, too, I appreciate you being, and the team being very fiscally responsible and frugal and wise in being able to achieve the things that everybody's achieved, as you pointed out, too, over the last, since, what, 2014, I think you said, but I do agree. I think it's a conversation that we, need to take seriously and look at. And to your point about something you said earlier, I think earlier you were saying that I believe most of our revenue is pretty much, is more sales tax heavy than it has been in the past due to the decrease in property values, right? And you said it makes... It makes you tend to be more conservative, right?

Well, you should be. If sales tax revenue is your largest source of revenue, then you should be a little bit more conservative and not get overly aggressive in projecting those revenues because if you're too aggressive and you don't hit them and you've made commitments associated with those aggressive projections, then you may get to a point where you're laying off or you're then putting off commitments that you've made or putting things on triggers before you actually move forward on any of those kind of things.

And that's what I was gonna ask you to kind of explain for the general public that might be listening or watching online, why it is that sales tax revenues make you more conservative, because it tends to be more erratic or less dependable, right?

It could be cyclical, you're right. As the economy goes, so might go your sales tax revenue, right?

Yeah, I just wanted it to be for folks.

And inflation also increases, could have an effect of increasing your sales tax revenues because things cost more, but then as inflation decreases, so does your sales tax revenue because now you're assessing the sales tax rate on something that doesn't cost as much as it did maybe a year ago or two years ago. So those are things that you have to keep in mind when you're projecting things such as sales tax revenue is the cyclical nature and the current pressures or environment in your economy and national economy while you're projecting these revenues.

Yeah. So again, great presentation, great job on all of you, the hard work on the budget by everybody from staff. I appreciate it.

We look forward to the discussion next week. Yes, sir.

You have a question? I was just gonna include, we have to be cognizant in the total picture that we're taking up solid waste. We've taken an increase in MPU. We've got potential of talking about a tax increase. How much burden on the middle class can they take to get us points? It is an extremely hard balancing act. At the same time, we're trying to contain growth. which means certain fee structures we were living off are going to reduce. MBU lives off some of those too and what they can do. So it's a juggling act. I mean, I've watched this council get almost decimated. I don't know, 15, 18 years ago, maybe longer, when they talked about increasing the fees at the golf course. I mean, one of the councilmen was literally threatened his life several times. I mean, in fact, he didn't run for council the following year because the hate just on that one. You could have passed a tax rate increase before you could have taken the rates up at the golf course. It was unbelievable. And so this really is a balancing act. You've done a good job balancing to what you've intended from the original thought. But I do think we have to look at, is there something that we really need to take care of before we get shot further down the road? Because that was what was happening 30 years ago. we kept kicking things down the road. Okay, we have, what is it, Gary? I think 661 lane miles of road. In order to maintain just that number, we could take the entire budget to maintain that number. and to get it up to full standards. So I think we really have to see if there's anything that needs to be put on the table that's an absolute necessity that we haven't addressed in the budget because you're a good steward of the dole.

Agreed. I agree that we need to keep the next legislative session in mind because the past ones have not been kind to us. Yes. Okay, all right. All right, thank you.

Just wanna say thank you for keeping the budget and then I love the fact that you're investing in a street marker because last year you also, I think either last year or the year before, you invested on the streets, on street equipment also.

Yes.

And so I really appreciate that because that is also You know, we're keeping that money within the city and not hiring contractors. So thank you. Yes, ma'am.

Mayor, did you have anything before Mr. Camerino walks away?

No, actually, I was trying to find on the PDF document, I don't know what page it is where it shows voter approved rates. You were showing no new, I'm trying to figure out what.

Page three. Is it on page three? Is that the one you're looking for?

Down at the bottom? If you look at the cover page, Mayor, of the budget document, you can actually see the breakdown of the no new revenue rate there and the voter approval rate. And it's also in the presentation that we just went through.

Yeah, that's what I was trying to figure out. What does that mean by voter approved rate? Is that something that the voters approved a rate Of that high? Of a change?

No, Mayor, this is... Just trying to figure out... That's a great question, Mayor, and this is Jared. I wanted to step up and just provide a little bit of clarification. So the voter approval rate is the highest rate that this council can approve without triggering an election, regardless, and that would be on the operations and maintenance side of the rate. So that voter approval rate is the highest rate that you could set without triggering an election back to the voters. The no new revenue rate is simply how much is required from a tax rate perspective to generate the same amount of taxes on the same properties that were on the rolls last year and this year. It excludes new value from that calculation. Does that answer your question, sir?

It does. I'm trying to figure out how much more that would actually bring. I see that the no new revenue would bring 845 more. That's how I'm seeing it. The voter approval rate, how much more revenue would that bring in?

Yes, sir. Mayor, the voter approval rate, if adopted, would generate slightly over $2 million in additional revenue.

Yeah, I just wanted a number in my head. Yes, sir. That was like a big number or a small number. All right. Thank you. Thank you. That's all I got.

All right. Public comment? I think we do public comment all after this.

Yeah, you can do them combined.

Do a combined public comment? Yeah. Okay. So moving on to item B, discuss and consider scheduling the public hearings on the 2025 tax rate and the FY2027 proposed budget and plan of municipal services.

Thank you, Mayor Pro Tem Capizzi. I'll be very brief, but before I go into a little bit of detail about the item this evening, I do want to just bring to the attention in the agenda report posted online, there is a small typo on the second paragraph. That first sentence should state, although the city's proposed fiscal year 27 proposed tax rate, that says fiscal year 26. I want to apologize for that. We'll get that corrected online and clear up any confusion there may have been. So getting to the agenda report, this is the only action that you're taking this evening. Texas State statute requires that the City Council actually set the time and location and date of the public hearings on the budget and the tax rate. That's what's being requested of you. Mayor Pro Tem, Council, if there's any questions, I can ask any, but there's some specific motion language that we have for you there on the dais if there are no questions.

Mayor Pro Tem, I'd like to make a motion. I have a question real quick, I'm sorry.

What was the correction you just made?

It's on the agenda report that's posted online for this item. The second, yeah, the second paragraph, the first sentence says, although the city's proposed fiscal year 26 tax rate, that should say fiscal year proposed fiscal year 27 tax rate. Okay, thank you. Yes, ma'am.

I'd like to make a motion, okay. I'd like to make a motion to set the public hearing for the tax rate and proposed budget to be held at a meeting beginning at 6 p.m. Thursday, September the 10th, 2026, at 550 Landis Street in City Council Trambers, right here.

I second.

We have a motion by Council Member Spradley, a second by Council Member Lebowski. All those in favor, raise your right hand. Motion carries.

Can we still open to public comment or no?

Yeah, you can. We will open it to public comment now at this time. And seeing none. Which one?

You need to read the.

Yeah, okay. The FY2027 proposed budget, along with the 2026 tax rate, will be adopted on Monday, September 14th, 2026, at a meeting beginning at 6 p.m. at 550 Landis Street in the City Council Chambers. And with that, we are adjourned.