City Council - Regular Meeting

Do we have anybody here for a prayer or a pledge? Well, let's all rise. Who wants to do the prayer? If it's not, can we go ahead and open with a prayer anyway? I still want to start with a prayer.

We really need a prayer.

All right, everybody, please close your eyes. Gracious Heavenly Father, we thank you for the ability to come here today. We thank you for the grace of God that what you have provided us as we live here. We thank you for the people, the policy. We thank you for our servants that are throughout the world who help us on a global... pattern, we look at what we do as a nation, and we hope that goes forward, and we looked at, you know, as a region, then we come down to San Angelo, and we sit there, and we look at it, and we go to scripture, and we say, who's going to lead, and we go to Isaiah 6, 8, and we think, you know, thin me, Lord, we are the ones that are going to go out there and represent the people, we will carry your wish, we will carry your, you know, order, we will carry your thoughts, and hopefully those will go out among the people, and we will help Use the wisdom of Solomon and move forward and provide the best decision we can for the greatest amount of the people. And we do it in your son's name, Jesus. In Jesus' name we pray. Amen. That was rough, but we got through it. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all. Honor the Texas flag. I pledge allegiance to thee, Texas, one state, under God, one and indivisible. I will not sing the national anthem, okay? Just, there we go. All right, public comment. Members of the public may raise issues or concerns not listed on the regular agenda during this time. To participate, please sign in with the city clerk prior to the beginning of the meeting. Speakers will be called in the order they signed in. When speaking, citizens must speak from the podium, address all comments to the dais, begin by stating your name and address or single member district number, and limit your remarks to three minutes or less. Heather, we'll start public comment.

Jamal Schoenberg.

Jamal.

Jamal Shumpert, SMD3. Thank you for praying for us, Tom. I appreciated that. My public comment today was about a meeting the school board had in which they blamed you guys for not having enough police to staff their schools. We passed a bond. The school passed a bond. We did, too, and that didn't seem to be an issue. I kind of knew we were short-staffed, But given that we don't even have enough to put in our schools, I think that building you're supposed to build or reconstruct that's on the capital improvement plan for the police needs to happen. And that housing academy needs to also happen. key components of your entire city, the school, the hospital, and you guys. For us not to be able to staff them with sworn police officers is a disgrace. And I'm a public educator certified by the state of Texas. This is unacceptable in a town where you say it's $7 billion worth of money running around here, and we can't staff our police? I think we got our priorities mixed up and we need to step back on some of this expanding and some of this growth and development and focus more on people. As you'll see later on this agenda, there's an issue in which we're not focusing on people and we don't even have to stress people. But I can't talk about it right now. We'll talk about it later. But like I said, that not being able to staff your police officers in that type of school won't help them keep their their teachers. They're going to have to put regular people with guns who make mistakes. Imagine you got chaos going. That teacher has never been in the situation a police officer's been into. They're going to panic. So we need to reshift our priorities and at least be able to staff our school with police officers. Thank you.

Thank you, Jamal. Next.

That concludes general public comment.

That concludes public comment. We'll move into the consent agenda. We'll start with you down there, Tommy.

Joe. Harry. Nothing. Patrick. Nothing. Karen. Nothing. Mary.

Nothing. Nobody's going to pull an item. I'll look for a motion. I have a first from Patrick, and I have a second from Harry Thomas. Any public comment on item A? Jamal Schoenberg. Jamal. Patrick's good. We'll take a vote. Excuse me. Jamal's good. those in favor say aye any opposed consent agenda item a passes 7-0 we'll move into the regular agenda comments regarding items on the regular agenda may be made by the public when each item is discussed as outlined above to participate please sign in with the city clerk prior to the beginning of the meeting speakers will be called in order they signed in comments are limited to less than three minutes applicants proponents and appellants are exempt from the time limit above and instead must limit the remarks to less than five minutes we'll go into item a First reading and public hearing of an ordinance establishing a right-of-way infrastructure fee by amending Appendix A fee schedule, article A8, utility-related fees, section A8.001, reserved, by replacing such reserved section with section A8.001, right-of-way infrastructure fee, providing for severability and providing for an effective date. Presentation made by Operations Director Patrick Frerich.

Mr. Mayor, if I may, I would suggest that we go ahead and read into the record item B. There may be some discussion points between both items, and that way we can have that discussion, but they'll need to be voted on separately.

Absolutely. We'll include item B. First reading of public hearing of an ordinance approving and adopting the budget for the first fiscal year beginning October 1st, 2026 and ending September 30th, 2027. This budget will raise more total property taxes than last year's budget by $962,035, which is a 1.64% increase. Of that amount, $773,890 is tax revenue to be raised from new property added to the tax roll. Presentation made by Finance Director Jonathan Flores.

Good morning, Mayor and Council. This morning, I think Jonathan and I are going to tag team these topics this morning. I think Jonathan's going to start out with his presentation, and then we'll follow up with a little bit of information on the right-of-way fee and go into detail on it. So with that, we'll turn it over to Jonathan.

Good morning, Mayor, Council. I'm going to skip through these slides if we're starting with the budget. Or did we want to start with right-of-way fee?

Mr. Mayor, if we could start with the right-of-way fee, please, and then we can jump in. Yeah, we're prepared to discuss the right-of-way fee first.

All right. Good start this morning. Let's go ahead and start with the right-of-way infrastructure fee and talk about this a little bit. I want to give you a little bit of background and history on it, and then I will try to turn it over again next to our consultants, Kimley Horn, who are here today, to give you a little bit of background and history on how they came up and the methodologies behind how the fee was determined, what inputs went into that, and ultimately how they came to what is what we're proposing to you all today. So this right-of-way infrastructure fee has been before council numerous times in the past in some form or fashion. It really started in about 2018, was brought forth again in 2020, was all ready to move forward basically in 2020 until COVID hit, and then Obviously, COVID disrupted everything in the world, flipped it completely upside down. And with that, there was some additional fundings that kind of offset the need at that time to move this thing forward. We talked about it briefly again in 2023, and we're back again now in 2026 with the need to recover our cost of the street and bridge and our traffic operations and our right-of-way infrastructure maintenance program. So, yeah. That's a little bit of history of how we got here today. Again, there's been a couple different reiterations. The one that we're proposing today is ultimately taking feedback from Each of those was primarily the feedback from 2023, plugging it into what we have today, as well as a little bit of feedback that we got from the strategic planning workshop earlier this year, and ultimately bringing it forward. So with that, I will introduce our two consultants, Jeff Whitaker and Mason from Kimley Horn. We have been engaged with them since 2018 working on this. They've been part of the process. They've done this for several municipalities throughout the state of Texas. So they're very well versed in it. That's what led us to select them as our experts, if you will, moving forward. Obviously, the City of San Angelo had never done this. They've done it for several municipalities. So we wanted to tap into that knowledge, tap into that expertise, and make sure that we were pulling forward a plan that was both solid, tested, and functional in this sense. So that's what they helped us develop. I'll let them come up and again go through kind of their slides and give you a little bit of background on how this thing was developed and then we'll talk a little bit more and answer any questions that you have.

Good morning, Council. Mason Shofat, Kimberly Horn, and happy to be here today. So I just really wanted to quickly go, what is the right-of-way infrastructure fee, and why are we here today to propose all this? Really, it is a monthly or annual fee tied to the proportional transportation demand to pay for the maintenance and operations within the right-of-way. Really, the core principle that we're working with here is that the transportation demand is driven through proportional share, not the property value. So based off of how much traffic and how much demand you're putting onto the system, that is the equivalent fee that we're trying to get with the right away infrastructure fee. A lot of other municipalities have adopted this. As Patrick was mentioning, it's really wanting to make an equitable program that uses that demand as the way to calculate the right of way infrastructure. If there are any questions during the presentation, feel free to ask. Why we should consider a fee? So a couple of reasons. Really, it's just a funding mechanism to provide the predictability for the roadway and maintenance and operations. To have a specific budget that the city knows won't change and will be consistent. There's a lot of competing annual priorities, as we see within the budget every year. And that can vary what's actually given to roads and to the maintenance and operations. stable and dedicated stream of income for the city to use on the right-of-way infrastructure needs. How it's collected. Typically, they're collected through the regular local utility or water bill, either on a monthly or annual basis. A lot of other cities within Texas have adopted such fees, so a lot of them label them street maintenance fees. Others also include drainage fees, so we're including Abilene and Killeen. Waco, Sulphur Springs, Taylor, Copperas Cove, Bryan, and Fort Worth is currently proposing and in the same process right now for their street user fee as well. But again, typically added to the local water utility bill on that annual or monthly basis. Our methodology really can be broken out into four different steps. So first step, we have to define the annual maintenance cost. So what's that number that we're trying to hit with this fee structure? How much does it cost to truly Maintain the right-of-way, maintain the roads, all the infrastructure that goes within that. Again, on the next step, we have to calculate the trip factors. So what is that demand that each parcel, each land use within the city has on the demand within the city, on the infrastructure? Sorry. We have to then convert that and classify the land use. So what land use is it? How much demand is it actually making? And what's that intensity that they have? And then we have to assign the group trip rates and assign the fees. So what is that group structure? What's the fee for that trip rate and the demand you have on the system? And what type of land use you have as well? That first step is establishing the annual maintenance target. So that $10.5 million that is the annual maintenance budget that we have discussed with city staff and are truly the need to recover a lot of that fee that needs to be maintained to maintain the roads and have the operations within the budget. So again, when you define that 10.5 million, we needed to calculate all the demand throughout the system, how much demand is actually happening for each parcel, for each land use type within the city, how much traffic is actually happening on the roads today. We had to set a residential fee and a non-residential fee tier, so we'll go through those here in just a minute, and really just align that fee structure with that $10.5 million annual maintenance budget in mind. So as we show the annual fee tiers or the monthly fee tiers, we'll get to that $10.5 million using that. So our step two is really converting what is that demand that each parcel has. So we go through and our first step is we have to calculate the trip factor. So we have an example of how that would happen for a 5,000 square foot sit down restaurant in the city. This is what their demand would be on the system. We have to convert that using the PM trip rate. So again, we're using the IT trip generation manual, the 12th edition. That is the national, sorry, the national standard for trips and pass by rates that are used by engineering consultants and municipalities throughout the country and is the standard for the demand that each parcel and land use has on the network. From there you calculate the trip factor based on the intensity that you have. So how much square footage do you have? How many dwelling units are in that property? What type of land use they have and what's that intensity? Again, this is just a an example. If you had a 5000 square foot sit down restaurant, we do a pass by reduction, so pass by. Ultimately, we're not trying to double count trips within the city. If you're going home and you're stopping by the grocery store on the way home, we're not counting that grocery store trip or counting that trip as a trip on the way home, so not trying to double count trips. So we're getting that pass by rate there that is also defined by IT. Then, yeah, again, we calculate that trip rate there at the end. So a 5,000 square foot sit-down restaurant would be 11.35 trips in the PM peak. From there, we have to determine the land use. So determine the demand. Now we have to determine what type of land use is on that parcel and what fee should it be charged. So again, the parcel data is we got that from Tom Green County Appraisal District. It provides the living area. You know all the data that comes from the appraisal district. Truly to know what type of land use it is, the size and the developable area. From there we really had to review it and classify it. So there's a lot of good data that the appraisal district does provide. It provides you what type of land use it is, but then we had to classify those even further into the ITE trip land uses. So we started, IT has over 100 different land uses that you can classify parcels in, and we condensed the list, working with city staff, to 49 different land uses. So being able to make it more administratable, but also providing the opportunity that there are a lot of land uses that the city has. You know, a gas station and a grocery store and residential and non-residential uses alike have their own specific land use and demand on the system. So again, then we have to assign the intensity. So dwelling units, schools use students or per thousand square feet or fueling positions for gas stations. From there, we have to link the account to the utility accounts of the water bill. So using that parcel data, linking those to the water bill as well, using the account ID. to make sure that we have the correct properties connected to the correct land uses. And then from there is calculating your trip rate and your trip factors from that information. There's a lot of unique properties and different types of properties within the city. So for residential, we have single family and multifamily. Those are really the two categories that we have, and they're used by per dwelling unit. So every single family and multifamily land use within the city is charged per dwelling unit. When we look at the non-residential side, again, there's a lot of different intensities. We have square footage, rooms, beds, students. Some are even based off of how many acres they have on the property. And those are all, again, used by IT in that list that we came up with. The trip rates that we'll talk about here on the next slide are divided up into nine tiers for the non-residential side. So those will be categorized into those buckets based off of their trip rate. So there are some special considerations that we have talked about with the city staff and that have a lot, certain properties have a lot of water meters, more than one. So a couple of them are Baptist Memorial, the airport, the Air Force Base, Ranger Aviation, Shannon Medical, Sunset Mall, and WWF Coast Steel. Had a lot of different land uses and water meters, so we consolidated those into one to make it more consistent, easy to administrate, and to charge just one meter instead of multiple meters getting charged on owners that have multiple water meters throughout the state. As of right now, the airport and the Air Force Base are proposed to be charged on an annual basis instead of a monthly basis. And then for schools as well, we looked at a rate for per student basis instead of by each parcel. So the schools would be charged by their enrollment and how many students are enrolled on their property. So here's the fee schedule. Again, we talked about the residential side. So to get to that $10.5 million, we worked with the non-residential tiers here on the right and the residential on the left to come up with that $10.5 million, finding a balance with what is reasonable but still being able to get to that $10.5 million annual maintenance and operations budget. So for residential, single family and multifamily are both proposed at $15 per dwelling unit per month. And then on the non-residential side, based off of your trip rate, based off that example I showed, your intensity and what type of land use you are, a trip rate is calculated and they are assigned based off of these nine buckets. So for example, if you're in C1, you have between zero and two. TRIPS IN THE PM PEAK HOUR, AND IT'S $25, AND THAT RAMPS UP INTO CATEGORY C-9 OVER 250 PM TRIPS. So just to give you a proportion of how many non-residential parcels are being fallen within each of these categories, C1 is about 35% of all the parcels of non-residential land uses in the city are in C1. And C1 through C3 in total are about 55% of all the land uses are residential. And we're talking about the higher land uses that do get charged in C8 or C9. C9 has about three, only three parcels are assigned there currently. And there are only five in C8. So most of them are in the lower end and do not get to those higher tiers. You know, your more big box and higher traffic generators are in those higher tiers. So the majority are in the lower tiers. So just another couple of examples. So if you had a single-family or a multi-family unit, if you had one of them, you'd get charged $15 monthly. Let's say you had a 100-room hotel. That categorizes into category 6, which is $250. A general office building, about 50,000 square feet, is $250 as well in C6. A 100,000-square-foot shopping center is in C8, and that's at $500. And a sit-down restaurant of 5,000 square feet is in Category C-5, and that's 100 feet. Just kind of a couple of examples to get to that $10.5 million fee schedule. This is what a couple of those land uses would be. And finally, really the takeaways of the proposed right-of-way infrastructure fee is, number one, it's a dedicated fee. It creates a stable funding source to maintain the right-of-way. the operations and the management that comes with that it's proportional it uses the pm trip rate demand by land use and intensity it uses that basis of a national standard through it it uses the property appraisal district data to determine that intensity so what is your square footage how many units do you actually have on that property and uses that it standard as well again and finally it's administratable it uses those 49 condensed land use categories to be able to assign which ones go in which it's a link to your water account and then the residential per unit rates and the nine non-residential tiers are easier buckets to be able to determine where you're at so if you are trying to determine where your fee is. It's fairly easy to determine which bucket you're going into based off of the data we have, and then making those adjustments is just between buckets as well. Provide any opportunities for questions.

I think we'll have lots of questions. It's Mason, correct?

Yes, Mason. Yes.

Okay. This is a, I mean, it's a very significant decision for us. I mean, it's, it's $15 and then there's a commercial part of it, but it's, it's $180 a year. And trust me, if, if you provided, um, or sent me an email and public comment, whatever it was, trust me, I've got them. I read them all, worked them over the weekend. Um, There are things that we look at in this situation. So we look at $15, and the residential part is what I am, so there will be some things on the commercial side, too, that I wonder how you do the calculation. But I want to start with Shane. What have we spent on, you know, we look at street maintenance. Everybody that's outside the city limits that comes into the city limits uses our streets. We get that. We don't have any way without a toll tag of getting compensation for the wear and tear on that street. We understand that. And people live outside the city limits for a reason. And we understand that, too. In researching a lot of these emails that came to me, I found a lot of these people weren't aware. And I think, Tina, I'll ask you to cover this a little bit about asking for their homestead exemptions or things like that. But, I mean, Shane, what have we spent on certificates of obligation? I mean, streets, let's say, per year with our regular funding that we do our seal coat with. What's that run?

Yeah, we can kind of go back to 2015 and even before that, before we kind of started our existing program to take a more proactive approach. We can go back and look at our history, and we really did neglect our streets for years and years with underfunding it, basically, to fund other council priorities. And so we saw to the point, you know, some of the streets, whether it was MLK, it was Bell Street, it was a lot of these streets, College Hills, Southwest, and how bad a lot of these streets got around town. And so, again, a lot due to lack of maintenance. I think in 2014, 2015, when we actually started the food growth study to come in and do an assessment of all of our streets here in town, AT THAT POINT IN TIME, STREET AND BRIDGE ONLY HAD $625,000 A YEAR TO MAINTAIN ALL STREETS AND ALL ALLEYS IN TOWN. AND OF COURSE, THAT WAS, WE WERE, YOU KNOW, IF YOU TRIED TO PUT THAT IN A SEAL COAT SCHEDULE AT THAT POINT IN TIME, WE WOULD HAVE BEEN SEAL COATING EACH STREET, YOU KNOW, ONCE EVERY 25 OR 30 YEARS. Well, the life of a street, if it's not maintained, is typically only 20 to 25 years out here in West Texas. So you can see that we weren't, you know, we were building a brand new street and not seal coating it before it was already, you know, past its useful life. And so when we did that study, that's when council, you know, came to us and actually found the funding and we actually went out there and the council at that time, I mean, it was a, It was tough. I mean, they had to scrape and find and kind of rearrange kind of some of the things that we were doing as a city to create the seal coat program. And that's when, at that point in time, city council gave us $4 million to initiate our seal coat program. And at that point in time, That was enough funding at that point in time to be able for us to sealcoat every street on an eight-year cycle, in which seven to eight years is the ideal cycle for us to be maintaining our streets, to make sure that we extend the life of the street and we really push that curve out on the deterioration curve. which was a huge step. And so we've been working with that program. We've got through the first eight years. We've started now on the second eight-year cycle. Of course, right now, our biggest issue is that funding has become an issue, and it has been for the last three or four years, as to where that, you know, we have seen inflation just... spiked since COVID. And so with that, we have not been able to keep up and keep on that eight-year rotation. We keep making the areas smaller and smaller and smaller every year as we're going through this cycle. And so we're not able to keep up with our proactive maintenance. We're regressing into a more reactive maintenance program.

So including the construction of new streets, we spent $20 million every other year.

The initial bond or the initial initiative that was led was $80 million over 10 years for the bond program. And so that's where we started. We were able to, in our last letting that we did, which is our last letting out of the $80 million bond, Tina and her team in finance were able to find us an additional $2 million worth of capacity. So that last issue we did, because it was basically what we did was 18 million over uh every other year instead of dividing it per year and so um but she was able to find us a couple extra million so the last letting was a 20 20 million dollar let so

So that includes new construction too, correct?

That is. It's basically $4 million a year for street maintenance, and that's where we've been steady at since 2016. Actually, it took us two years to get there, so it was 2016 they gave us a bump, and then 2017 we got up to the $4 million. Off the top of your head, how much was Bell Street on that?

$22 million. Martin Luther King, Chadburn.

Yeah, Martin Luther King was about $11 or $12 million. North Chadburn, we were $10 million. Well, I just need everybody to understand.

There's a cost to the services people expect us to provide. And the number one thing, I'd say the number two thing, everybody's public safety is number one. Number two is infrastructure and streets. And I hear more complaints about our streets than anything else that comes across email is, please fix our streets. So we sit down as a municipality and we try to figure out a way to get us past that headwind or benchmark or bump in the road, whatever that is. We discussed this for many years. This is, you know, street and bridge, and when do we bring this thing forward? Is it a time for it? And what this one brings forth that the others did not, everybody participates in this one, all right? And I don't know if we were going there, and, Mason, you talked about every water meter is a participant, all right? Correct, yeah. So non-profits participate. even the city. I mean, there's accountability in this all the way, and I expect there to be accountability if this goes through and we look at it as how we spent these dollars, all right? Because this is probably the most important thing we've looked at since I've been mayor, is how we're going to do this and move forward. And we need transparency in how this is going to be spent. I had somebody asking about the MPO. It's a really different part. MPO is not involved on this. They're more of a federal type budget and planning. But I just wanted everybody to understand that. Now, Tina, I want to flip it over to you a little bit and ask you about what are we doing with our taxes? I mean, we provide some savings to people that are 65 and older, and there's some things that we take care of our citizens, and I want you to cover some of those for me this morning. You know what I'm asking.

Yeah, so every citizen that owns a home and lives in it can apply to the appraisal district for a homestead exemption. For the city, that's 20% off of your taxable value. I believe it's 20% for the county as well. And then the school district is a flat $140,000 now. There's also the over 65 homestead exemption, so you can apply to the appraisal district in the year that you turn 65. and your property tax will freeze at that amount where it's at in that taxable year for the remainder of the time that you live in.

So once you hit a 65-year-old claim, I mean 65 years of age, and you've got that on your deed, from that point on, you are no new revenue for the city of San Angelo.

Yeah, your taxable value will not increase.

I emailed with several people this weekend and didn't understand that their city taxes, once they hit 65, are locked in at that dollar amount.

It's important to point out you do have to apply for it. Absolutely. We want to make sure people are educated and aware that that's available, and that is the savings that the city offers. The same for the school district. It'll freeze at 65 as well.

Right. So it amazed me how many people weren't aware of that. And I was like, well, in the heat of our argument and discussion over email, maybe we found you some golden light here that's worth thousands instead of $1,580 a month. And we did on several of those. I just want to encourage the population. They need to look at that also as we move forward. So with that, I'm going to open it up to the dais with questions. And Ms. Mary, we'll start with you if you've got any questions.

Yes.

Jeff, would you want to talk a little more about that?

Good morning. The there's the Texas local government code, which has enabling legislation. There's not enabling legislation, but the city has police authority and authority to operate the city. So that'd be an attorney question to your attorney. But there is similar enabling legislation for stormwater and water and wastewater. We mirrored our program. That's an important thing is all the analysis that Mason presented is mirrored after the enabling legislation for both water, wastewater rates and stormwater rates.

Well, there's two towns that are in litigation right now for this very fee. So what's going to separate that? Even the defense, being able to defend yourself is going to cost a lot of money. But how is that? illegal and ours legal.

Ms. Coffey, so I think some of the questions you're asking may be more appropriate for an executive session because you're asking attorney advice here, but the cases that I know of that are in litigation, I mean, it hasn't been... determined yet, at least as for one, and I'm not sure what other one you're referring to.

One is Austin, the other is El Paso. Okay.

El Paso's methodology and the way they did their fee is starkly different from how we're proposing ours, so I wouldn't say that's an apples to apples comparison. The city of Austin, I mean, that was just filed in March, and it's pending, and so we don't know the outcome of that yet.

Well, it still costs a lot of money to defend yourself on it. Now, we're looking for $10.5 million, and this would take over our shortfall in our budget. And I know that municipalities can't pass a deficit budget. Could we accomplish the same goals of paying for that shortfall at half this? And the other question would be, if we're short, say, 4, 4.5, make it an even 5 million is what we're short. So does that mean we're going to get $5 million ahead and then not have to do it the next year? Or is this, I mean, that's a lot of money. And especially when you look at, it's unproportional or disproportional, whatever word that is. $15 a month for a house that's on a smaller home, say, on the north side of town, you know, 1,000 square feet, that one pays $15, as does the million-dollar home in Buffalo or either Buffalo Heights, the Bluffs, all of that. That's hard to quantify for these people. It depends on which house you're in, but that is a lot to overcome.

Jeff, if I may. Miss Coffey, as we're looking at this, we're not trying to overcome a shortfall. We are trying to secure funding for this program. And so it's not, we're not trying to overcome a shortfall from the budget per se. We're trying to identify what it's taking to manage our street program, and we're trying to cover those costs to manage the street program. And so this is a bigger conversation than just general budget conversations.

So it's just a coincidence that that happened.

Yeah, we're trying to take this program, and we're trying to isolate it from all of the pressures that we're seeing from whether that's the state legislature and the cap and what they're going to do to us in the next session or probably do to us in the next session. And so we're trying to isolate the pressures to continue this program moving forward, to which the first thing, and we all know the first thing we cut, because we've done this before, the first thing we cut are streets. Anytime we see hard economic issues or pressures because of something that has come down to us from an unfunded mandate or whatever that is, the first thing we always cut are streets. That's the easiest thing for us to cut. And so by creating this program, it isolates that from those pressures that we see from outside sources. So that's what we're trying to do here. And then also when we talk about the size of the house, that's what, and we can let Jeff and Mason explain this away too, or not explain it away, but explain this, is that in their methodology, It's not about the size of the house you live in or necessarily the size of the property that it sits on, per se. It's about its use and its demand. Just because you have a 1,000-square-foot home doesn't mean that you can't have a family of four with four cars in it. And a million-dollar house over here may only have two people, and they may only use one car. So it's not about the size of the property or what it costs. It's about the demand that it causes on the system. Again, it is not about proportionality or about how much it costs. It is about how much demand it places on our system.

I am just reflecting and asking the questions that we have been asked. It makes sense. The citizens don't really care. What it is called is $15. That is it. And we can dance it up all we want with use and all of that. And I see their point. So can all these streets and everything, $10.5 million, will that get them all taken care of? Or how long, I guess, because of that, how many years are we going to have to endure the fee?

$10.5 million will do what we are doing today. It's not going to enhance our program. It's going to do exactly what we're doing today. And if we don't continue, I mean, and if the fee doesn't increase or we don't supplement supplement this fee in some way, we are going to continue the rate of decline that we are currently seeing. We are not adding two. We are not increasing the amount of money that we are using on street maintenance and traffic operations maintenance. We are just doing what we are doing today with the $10.5 million. We are not increasing it. we're going to have, even when we move into the future, and again, I wish we all had a crystal ball and we knew what our finances were going to look like a year from now or five years from now or ten years from now, and what economic development is going to do or not do to us, because that would make our life a whole lot easier up here. But again, we're trying to prepare ourselves to be able to, again, keep maintaining our streets at a certain level without having to basically cut the program or gut the program. And so we're going to, as we're moving forward, we will be reanalyzing this every year to see where we are. I mean, this is going to be every year when we come to budget, we're going to be going through all our expenses, all of our lists, all of council's direction to where they want the street program to be and we will be, again, providing suggestions to council whether you want the fee to go up, you want the fee to go down. I mean, if we see great economic development moving forward, at that point in time, we can look at either reducing the fee or completely doing away with the fee at that point.

So this is a result of kicking the can down the road? for many years, and I'm not assigning blame. I'm just the vessel that the citizens are flowing through with the questions.

Again, I went back in some of our history, and again, it was a lot of kicking the can down the road because at that point in time, the streets were in good shape. They had other priorities, and so they directed those funds elsewhere.

It's the perfect storm of inflation and

not being able to you know just kind of putting a band-aid on the road and it just so happens that it's it hit now yes ma'am it hit now and so and again we've been working diligently for the past 10 years to try to bring our streets you know their conditions score up over time and we have council has put a lot of time money and effort into this and again we want to make sure that we continue I mean all of the miles of streets in the 80 plus million dollars that we have put into our infrastructure, we want to make sure that we maintain that. And again, by separating this out and again relieving it from the pressures of we see against our general fund on a regular basis, it allows us to maintain the street program. And so that's what this is all about. It's about maintaining our streets and our street program and basically incorporating everything that's within our right-of-way to make sure that we can maintain it. And it's not just streets. I mean, this is for ADA access. This is for, you know, our signalized intersections, our signs, all of those things that are out there that regulate how we operate within our infrastructure.

Well, and it's another... Looking at it from many different angles, they're basing it on, you know, why am I at a 1,000-square-foot house? Why am I paying this amount and everybody else is paying the same, but they can afford it, I can't kind of thing. And so it's based on the street usage. Now, I have a warehouse. It's in the city limits, but it's vacant for the most part. So... Even though, I mean, it's a one-way street really in there. So I'm going to be hit with that, with that fee, even though it's vacant, there's really nobody on that road.

Yes, ma'am, you will. And like I said, this fee will be assessed to everyone that has a property or a water meter within the city that generates a trip. Now, yours is one of those that it's not being used currently as a warehouse or a storage facility. So again, it may fall in a little different class. We're not sure exactly what it would be. And again, not knowing all the details of your property, your size, and And classification and all of those things, it's hard to sit here and say exactly where it's going to fall within that.

Okay. Well, I appreciate that. I didn't expect to go into that deep into the weeds. Thank you, though, for helping me. With this going through the utilities and on the water bill, aren't the citizens, if they can't pay that, is that going to cut their water off? I mean, we've got a lot of older citizens here that may be I know that we require a special line at my home for medical reasons. The nursing homes and what have you, if they're not able to pay this, or let's say they don't pay it, that's their retaliation for it. Wouldn't that signal a disconnect notice?

Again, we're still working through that with the ordinance, but again, that is one method of collections. Now, too, I do want to bring up, and of course I think Patrick's probably going to talk about some of this, is we actually talk about the ordinance itself and highlight some of the ordinance itself. But one of the things that we are looking to doing For those that are having a hard time paying and all of that, one of the things that we have had in place for several years on the water side of things is that we work with the Consul Valley Community Action Agency and we currently give them about $50,000 a year for them to administer to help those that can't pay their bill or they're having a hard time paying their utility bill to give them assistance in paying that bill and being able to catch up. And our proposal with this project is to um as we start off because they already have a vetted process they already have they're already in place it's vetted and they and they do this that's what they do for a living every day um and so what we're proposing within this process is that we would not only one increase that amount from fifty thousand to a hundred thousand for the water utilities that we would also put $100,000 of funding from this fund to that to help with assistance.

Okay, but you're not going to cut somebody off?

Well, I mean, we would hope that they would seek the utility assistance to help them with that utility bill to get it paid.

So we are in a place, we're prepared to address that. That's the thing, too. You know, a lot of these questions come up, and it's like, well, I guess we'll figure it out and handle it. And... People are getting better at asking the questions, and they can nail you to the wall on that. Yes, ma'am.

And, again, I think this is a good place to start. With that utility assistance program, if we need to modify it or we need to come back to council and we need to look at doing some alternative ways, I know there are other ways to do it. The city of Abilene does it a little different than what we're proposing here. But again, as you look at that, that's, you know, that's increased staff time for the city, city staff, you know, and again, we want to make sure that we are utilizing these funds as best we can on the roadways and not necessarily increasing staff or staff burden on the city side. You know, we already have an existing vetted program that actually is working. And so we want to try that first. And, again, if there are issues with it, we need to modify that or we need to change it in some way. We will definitely be, you know, reevaluating that, and we can bring that back to city council.

Shane, thank you. I think for right now that's all the questions that... in District 6 have brought forward to me. So thank you for a very detailed, but a very thorough and easy to understand method. So I thank you for that.

All right. Thank you, Mary. Karen?

I think Mary has brought up most of the concerns we're hearing from the community, and thank you for that, Mary, and also Shane, thank you. And thank you for pointing out that failure to IMPLEMENT SOME SORT OF COST management system for the road maintenance will result in a lower quality of services, I guess is the basic way to say it. So having mentioned that, I think my only remaining concern for this body to deliberate from my point of view is what would it cost the city to litigate opposition to this Let's say a big nonprofit decides to file suit against the city. Can we really afford that? Do we think that's a possibility? Should we discuss that?

I get that, and we've all had that same question, but municipal government rules, if that becomes into a tax litigation legal process, answer that one, Brandon. That almost is something that you, any type of question regarded, if anybody was going to sue and we were going to discuss that, would almost have to be in an executive session.

Yeah, it probably wouldn't need to be in an executive session. The very simplest answer is it is so hard to estimate the cost of that. I mean, it just all depends.

I understand that it is not necessarily for a public discussion in detail, but this has also been brought to us by groups, by individuals as a possibility. And so for that reason, I offer it to the conversation.

And it was a good question. We've had that one.

Patrick? Good morning, gentlemen. I'll try to ask kind of my questions for y'all. I have others, but I'd like to let them answer theirs and let everybody else have a chance to ask them. Going back to the kind of master meter scenario y'all talked about, how are y'all going to classify those when it's a big organization, they have multiple meters, and you kind of said you're going to put it under one. Are you going to take all the different classifications and just put it on one meter, or are you going to classify it differently as a multi-use type facility?

Yeah, currently it's, yeah, all aggregated to one meter. But yeah, bringing all those land uses into one category and then assigning them that way just to have their demand and their proportional share, I guess, per se to that one meter instead of having just multiple bills going out. That's really the goal is just to eliminate the administration part of it. But yeah, it would just be assigning it all those land uses together into one.

So it's going to take all those land uses or is it going to be a different?

have its own category I can jump in here real quick too and We want to make sure when we're talking about multiple meters, we're talking about multiple meters on a single property. And so Shannon main campus, for instance, you saw Shannon listed up there. They have multiple water meters, but it's the same function. So we're taking that hospital function and only assigning it to one meter, but we're lumping all those meters so that they're accommodated in the system as a single. That's why it's called a special use. But separate properties of Shannon will be built separately. So Goodfellow was listed as a special use. So you have airmen, you have civilian, you have multiple types of traffic coming into that. So that's why it's a special use because we have to consider that differently. The airport is another one. You have airport global, but you also have tenants of the airport. So those tenants of the airport need to be lumped into the airport cost, and then the cost can then be spread out through the lease agreements of the airport. That's why it's a special use. So when we talk about multiple meters, we talk about multiple meters on a single property, not multiple meters from a global sense. Each individual parcel will be paying their own respective trip based on their generation of that property.

Gotcha. I'll clarify that. Okay. On the manual, so the only one I found online was a ninth edition. Is that a manual that we can find online so businesses can start to look at what tier they would fit in?

Unfortunately, ITE, has a login for that manual. But I mean, I think as part of this process, we will be publishing the rates that we use so that they will be able to see the rates on this list that we're using for those 49 land uses so they can see what we're actually using for the calculation. I think that would be available online for this city, I would assume. And there's other resources if you look at other... Similar cities like Killeen, if you look at now, they have a street, and it's going to be very similar. Some other cities have similar, but what we use in this will be available at a point online so that people can check what their rates are and what categories are. But unfortunately, they do lock that down. So you can find old editions, find the newest edition, because IT, that's one of their revenue generators. They make you have a login to get it unless someone else pulls it in. Gotcha.

On that, we talked about the other cities. Did you all model any of it off of other cities, or was it based off of here's what Senator Zill needs, now let's see how we can spread it out equitably, correctly?

Well, it's kind of a little bit of both. From the needs standpoint, that $10.5 million, that's completely San Angelo's needs. That's looking at what they need. When we looked at how to develop the rate structure, there's several methodologies that cities use, and we sat with staff and looked at administration, looked at your land use, and said, what makes the most sense? So it's a little bit of a hybrid of a few cities, but it was really looking at what other cities have done in this category that have it in Texas and seeing what makes sense to be able to administer and also be able to distribute that fee in a in a proportional way. So a little bit of both. I'd say the need side was completely essential based. The actual calculation side was based on some of the best practices around the state.

Gotcha. And on that proportional, and I understand the overgeneralization of a house creates this kind of trip factor. But a 1,000 square foot house and a 3,000 square foot house, 99% of the time are going to be a vastly different trip factor. So why was that not considered in some way?

So the best practices is by dwelling unit, and one of the reasons is by dwelling unit, and this is going to sound counterintuitive. It's the bigger houses, the 3,000 or 4,000 square feet house, generate typically less than like a 2,000 square foot house, so the curve kind of goes like that. So it's counterintuitive. You think about some of the folks that might own a larger home. They may be retired. They generate less trips. while kind of the more starter homes are taking all the trips everywhere so it's become industry best practices to do an average of those and so that's why we went that route but you know which you'll see if you actually pull the data from it and actually start looking at square footage the curve can actually get lower on a higher square footage house and on a 2200 average house is actually the peak of the amount of trips because that's usually your full family with multiple cars, et cetera, et cetera. So that's one of the reasons we went that approach to just use the industry standard.

Okay. Mr. Mayor, if I may, and Council Member Keeley, one of the items that we also discussed internally related to this was administratively we wouldn't be able to, based on our staffing, be able to administer a program being able to determine that this house has four cars, this one has two people, That would be something that would be counterintuitive to the program, and we would not be able to administer it. So on top of that data that's within the manual, also administratively, that was seen as a burden to be able to administer the program as well. So I just wanted to point that out.

No, and I understand that. Yeah, it's too tough to find out because you could have six college kids living in a 1,000-square-foot house that are using a lot, right, versus an elderly woman that uses it once a week. So I get that.

That's a general question that we get in a lot of cities, that same question. I could confidently say I think every state example in Texas handles it dwelling unit-wise in a similar fashion. So that's just.

Yeah, to your credit, I couldn't find one that split up that way. But that was just my question originally. I kind of asked Patrick, you know, it was like, why don't we look at it that way? But yeah, like I say, I couldn't find any others that did have it split up. So that is a question I wanted to ask, though. And then this is kind of a mix, so if y'all can answer it, great. If not, we can move on and then come back to it with somebody else later. When we were looking at that fee and when y'all were working on it, did we look at the general fund supplementing it instead of trying to put all the $10 million just on this fee? Or was that y'all just said, here's your fee that we're shooting for to get where we're at, and so is that kind of all you looked at?

I'm going to pass it to the finance guy.

We're asking you a question that we should answer.

Good morning. So the basis for the $10.5 million was what it takes to operate the current SILCO program in street and bridge traffic departments at their current levels. It is going to require a little bit more in this first year for us to help start the program off. We're contributing about $1.5 million out of the general fund. into the new right-of-way infrastructure fund to help get it started, get it up and running so we can start building a little bit of a fund balance, as well as do the work that the fee's in place to do as well. So the general fund, at least for the first year, for sure is going to be contributing a little bit into the fund.

Do you think that's part of it because we weren't going to start this until January, so we have that three-month gap?

Part of that is January. One of the other things that we wanted to make sure that we secured is the additional $100,000 that we're going to contribute to the low income. So that was an item that we made sure was in the fund for next year. So that's a piece, as well as the ability to begin part of the equipment replacement for next year. Gotcha. Yes, sir.

Perfect. Guys, thank you all. I'll let them ask you all questions.

Hearing.

Well, we've talked a little bit about The people on fixed income and I feel that a number of phone calls emails over the weekend on $15. So I just want to make sure that we're we've got this program with community action. Council so that we can make that and I want to make sure that we've got that out on the city's website. If we pass this thing today, Citizens were concerned that they may have to go without groceries or medicine or something, and I thought, well, we've got a way to handle this. So the other thing is, and Jonathan, you may want to come back up on this one. I'm sure Sheena could have answered this, but you're the finance manager, so I want to talk about it. If we decide we're going to pass this thing, this money goes into a restricted fund. Is that correct?

Yes, sir. Yeah, it'll go into its own special revenue fund that's specifically restricted to right-of-way maintenance.

All right. and want to make sure that citizens understand that. So we may be repeated a few times over this morning and over the next few councils, but it is a restricted fund. So citizens that are watching understand that.

Yes, sir.

Thank you.

Mr. Mayor, if I may add to that, and we'll talk a little bit about the ordinance after this presentation, but what is in the ordinance as well is an annual review of the fee in front of council, as Shane alluded to, as part of the budget process. So the cost to operate the street and bridge program as well as the funding of the fee will be reviewed annually. So there will be transparency to where that funding is going.

All right. I want to kind of piggyback off what Harry said on the availability of help to lower income people that might be struggling. It's a challenging situation because we have that. We have elderly. as well as just challenged individuals. We also have faced a higher income, I mean, a higher inflation. My wife and I bought a house in 2013. It's doubled in price or value since then. In construction, I mean, building a new house has doubled since then. And that's when we started this program. 13, 14, got it going, the seal coat program and whatnot. So our backs are kind of against the wall and challenged. We're between a rock and a hard place. It's not something we want to do, putting an added fee on citizens. But I also think this is the best way to achieve keeping the program going, as well as we're not going to raise our taxes, which we haven't done in how many years. still provide a good quality product to the citizens, as well as it's not a tax, it's a fee, so everyone helps with the burden. So that's all I have.

Shane, Patrick, this might be for both of you guys. Patrick, I think when we talked about this several times before, I think we talked about it last council meeting, and then Shane alluded to it this morning. I don't want to put words in anybody's mouth, but I don't know how else to ask the question. It sounded like from what you said, Shane, this program simply kicks the can down the road.

That is correct. And like you said, Shane alluded to it earlier, but I kind of wanted to punch it home a little more straightforward, if you don't mind my frankness. This continues the steady decline that our street maintenance program has been on since 2015. We've done substantial progress in rehabbing our street. Say that again? This maintains the steady decline due to inflationary factors, so on and so forth that our street maintenance program has been on in the last few years. So in 2015, y'all gave us a slug of money, and we were able to do a lot of proactive maintenance. We were able to rehab streets. We were able to get this Hillcoat program going. We were able to enhance our services to proactively maintain our street program. Over the last several years, five, six years, we have seen those inflationary impacts actually start reducing our capacity to maintain our streets. we were able to accomplish our eight-year goal in Sealcoat. I've had to cut. Last year I cut my Sealcoat program that I did in 2016 in half. This year I'm cutting it in half again. So I'm doing half of the half that I should have done two years ago this coming year, if that puts it in perspective. So my eight-year cycle has now moved to a 12-year cycle is threatening to go to a 14-year cycle. So we are steadily declining. So this 10 and 1 half does not enhance our program. It simply maintains what we are doing today with the opportunity to continue that maintaining that status quo, if you will, regardless of the pressures of the state that the state's putting down on us. As you know, the state's affecting our general fund dollars, which is supporting that today. If we can alleviate that pressure, we can at least maintain and proactively maintain to the best of our ability our street and our right-of-way infrastructure program that we have today. That's our goal for being here today is we want to make sure that we don't further kick this can down the road, that we don't put it in a further detriment in the future for future councils to deal with, that we proactively take steps today to protect this asset, this investment that we've made over the last 10 years moving forward.

Another way, Councilman, is that the system maintenance account for Street and Bridge is the same today as it was in 2015. We have not increased the system maintenance budget in Street and Bridge since 2016. If we pass this today, we're not gaining anything.

We're not gaining, but we're going to mitigate our loss.

is what we're going to do.

This is trying to insulate us from outside factors is trying to insulate the program from outside factors is what this is.

And further decline.

And further decline, correct. Again, because if we see outside pressures next year, if council decides not to go this direction and we see additional outside pressures that we continue to see from the state legislature every time they go in session, and of course in January we're going into session again, and there's a lot of talk out there that we're talking about taking the 3.5% cap down to 2.5% or 1.5% or 1%. I've heard all kinds of numbers here lately. But again, you start taking those pressures, and it builds on our ability to do it. And again, like I said, we've seen this in the past. I've been in the city for quite a few years and worked here, and Like I said, anytime we get into tough times where we see outside pressures, the first thing we cut is our street program. Again, this helps insulate that from those outside pressures. Thanks.

If I can, there's been some question about what have we done as a city to make sure that we're keeping our costs down and we're keeping our program where it needs to be. We haven't reduced our cost in the traditional sense as far as we're $1 million today, we're $900,000 tomorrow. We haven't reduced our cost in that. But what I can say is we have increased our responsibility. We have added over 40 lane miles of streets to our program. That includes signs, that includes signal infrastructure, that includes all those things that come along with streets. We've had since 2016, 2017, we've asked for, we started at $500,000 of additional money each year. We grew that to 800,000 based on inflationary need. We're now at a million dollars of assets last year. We've gotten zero over that time. So no additional monetary resources and no additional manpower resources. So we have reduced our activity and our cost by taking on more responsibility with less resources to do so. That's what this program is going to help us prevent is that continual gap, that continual spread of that. So have we reduced and wrote a check back to the general fund? No, because we can't. But we've added responsibility by not in, have not added any additional monetary resources despite the ask annually year over year for that. So hopefully that kind of clarifies that we are doing more with less just to maintain our street infrastructure and our right of way infrastructure as it is today.

Get the mic on. Any additional questions that weren't asked? So Patrick, as we look at this, as we wrap up this one, I want to thank the people from Kimberly Horne for coming here and discussing and give us a little bit of the framework of how they picked it. This brings into the map participation by all. Correct. You know, not only do we have residential, you know, participation, we've got commercial participation. We even have it as expected from city. So, you know, Tom Green County, city of San Angeles, city actually pays in this. Goodfellow, Shannon, ASU, churches, this thing is everybody participates. That is correct. Yes, sir. All right.

Okay.

Go with that. Phillip, you got a couple words you want to throw in?

Just quickly, we do have a presentation related to what's in the ordinance. It would be beneficial to go over that, and Patrick will lead that discussion for us. All right, go ahead, Patrick.

But naturally along with this decision-making process is how do we implement it, how do we regulate it, and then kind of by what terms is it produced? So an ordinance follows suit with this. How is that fee assessed and exactly what is that fee is? So that is what the right-of-way infrastructure fee ordinance actually is. It's a whole bunch of stuff, but I've narrowed it down to several slides that kind of hit the high points of the ordinance. So I'm just going to systematically walk through these just short of trying to read them to you so that you can very clear, hopefully are very clear by the end of this, that we've addressed all the, all the big concerns of it. We know how we're going to implement it. We know how we're going to enforce it and we know how it's going to be applied moving forward. So it is located in Appendix A of the fee schedule. It's the same place that our water rates and our sewer rates, our stormwater, solid waste rates, everything, all of our fees are located in this Appendix A, so it is gonna be there. The first thing that the ordinance does is it defines the fees establishment. It defines that it's paid by the utility customers for benefited properties within the city limits. That's important to make sure that that's in there. And then it's deemed reasonable and necessary in amounts to provide adequate funds to construct, operate and maintain the transportation system. Again, it's very important that this is it's known that this is a cost recovery mechanism. not a revenue generation mechanism. This thing is simply covering the cost of maintaining our right-of-way infrastructure. That transportation system, it's all-encompassing. Basically, it's everything within the right-of-way that any user of the transportation, whether that's a driver, a walker, a biker, a wheelchair, if wheelchair is a word, any user that goes from point A to point B is using our transportation system and all the opportunities that go with that sign, signal, striping, curbing, all the above is included in that transportation system. So we want to make sure that this fee can go and can do work against all of those individual structures. Again, the ordinance dictates that it does cover the annual cost of the transportation system, the maintenance of that, and that is going to be reviewed every year in the budget process. And it defines the fees application to the residential, multifamily and non-residential properties. And as a mayor, um, indicated earlier, this is across all benefited properties. Every property in the city of San Angelo is a benefited property of these maintenance activities. And it's not necessarily for the roadway in front of your house, but the transportation system as a whole. The ordinance goes then into talking about the billing structure. How is this thing billed? It's billed through the utility bill. It identifies who's responsible for paying the bill. It authorizes an effective date, if y'all approve today, of October, today and the next meeting, of October 1st, 2026, but the implementation date is gonna be January 1st of 2027. We need a few months to get all the billing structure set up, to get our proper notification, to get, to allow people to become aware of it, of the fee, and how it's going to be on the bill, and to make any adjustments necessary. So there will be a three-month implementation on that to January 1, 2027. Late charges are applicable, as they are today in the ordinance. So that's 15% of the new charges, not necessarily the total delinquent bill, but the new charges for the past month that are delinquent. That was a policy that was put forth in council three or four years ago, I believe. It changed from the flat rate of 25% above across the entire balance to this 15% of new charges. So we're simply piggybacking off of that directive. And then unpaid bills can be recovered by any means of law. So whether that's through liens or disconnects or whatever the case may be, we're keeping it that we have a way to enforce this. Because an ordinance without the capability of enforcement is non-effective, right? As Jonathan said and verified, the ordinance is putting this into a dedicated fund, so this can only be used for the maintenance of that transportation system. It cannot be used for any purposes outside of that transportation system. Now, I want to make sure that we also also state that it's not only the transportation system, but it's also the appurtenant activities that go along with that, like the billing process and stuff like that. It will support some of that. Obviously, there's a workload that comes along with that. There's a cost to put it on that bill. So this fee will help supplement those costs as well, or can help supplement those costs as well. The annual adjustments. So let's talk about how this thing looks looked at annually. It is going to be a part of the budget process. So in the in the typical budget process that starts in March, this will be an item on there. We'll evaluate it through the enterprise discussion, just like we do on stormwater, airport water, wastewater. it's going to be, we will have a right-of-way conditions manual that we are setting up. So basically it's going to set our standard for all the infrastructures that are within the right-of-way and how we compare to that standard today, what that deficiency is, or overabundance is, and how we need to adjust this fee in order to accommodate it or to meet that condition, that standard. That standard will be a policy, a manual that's reviewed with council, that council is aware of, and they'll know exactly where we stand today, where we expect to be, and that expectation is going to be set, not only by staff recommendation and by council adoption. So it's going to be your standard. If your standard is lower, obviously, then we'll accommodate that. So we can do whatever that council wants us to do, given the resources that you'll allow us to have. But this conditions manual gives us that opportunity to assess this every year to a set standard council over council, year over year. I think that's very important to note. And then the fee, instead of just going up on a flat rate or going down on a flat rate, is going to be adjusted on the need-based every year. Again, it may be adjusted if found deficient, which means the fee could go up annually, or if it's overburdened, it could be reduced. So, again, every year we have the ability to adjust this fee based on the need, the demand, in accordance with that row conditions manual and where we're at in infrastructure. Yes, sir.

How much are you still short this 10 1⁄2? How much are you still short for this one year? How much did Tina bring in?

We are... Again, if you'll remember back when we first started talking about this fee, I had actually proposed a $16 million fund in order to adequately take care of and maintain our infrastructure today with what our standard is, what we as staff would expect. So if I'm going to answer that question in a global sense, I'm going to say $5.5 million short annually.

Okay. Sorry for the interruption.

Obviously, we need to make sure that there's a good process in place for people to appeal their fee. This is a big deal, right? I mean, there's 30,000 residential customers. There's a little over 3,000 non-residential. There's going to be a few mistakes. And so we want to make sure that the citizens and those utility owners those utility payers have an opportunity to sit down with staff and say, I don't feel like this is correct. Let's take a look at it and let's make an adjustment if necessary. And so we will have that in place and it is dictated by ordinance. So it starts with the customer service reps. It will go to myself, the director of operations, and then ultimately to the city manager if we can't come to an agreement on what that is. Primarily, this is going to be for non-residential customers. The residential is pretty set. That one's easy to assess. But for non-residential, there is some decision-making process that goes along with those 49 categories. So we want to be able to sit down with those individual property owners or the individual tenants and say, what do you do? Where's the best category for this to fit? And then let's apply that fee there. We do want to make sure that we cap refunds at 90 days for this. So we want to make sure that there's a finite definitive point that we can go back and refund or have to go back and refund. What we've kind of found in our stormwater program is, We don't have that defined today. And in some cases, we're going all the way back to 2010 and applying refunds. So that hurts the fund tremendously when you come back 16 years later and provide a refund. We want to make sure that in this particular case that we give some accommodation for that back three months moving forward. And it also makes sure that our utility payees are making sure that they're staying on top of their bill and evaluating that. Land use table adjustments, these adjustments can be made. Obviously, 49 categories across 3,200 different businesses in town, we may miss one. We may have one that just doesn't fall in the 49 categories, or we may have several that don't fall in the 49 categories, and we need to adjust that table. So we wanted to make sure that we had a method to adjust that table if we needed to. It is going to be codified by resolution by council, which means it can be adjusted by council, but it's not in this ordinance, but it's by resolution, which means it only takes one reading instead of two to make an adjustment, which means we get to move faster is basically what that means. So instead of it taking a month to adjust, we can adjust it within the next council meeting and make those and kind of move more closely to the speed of business. Again, like Shane indicated, the low income and the financially burdened accommodation, this isn't necessarily an ordinance in this ordinance, but it's going to be in our budget ordinance. So you're going to have the opportunity every year to assess that line item within this row infrastructure fund and say, I want to add more. It's not being utilized. I want to decrease that a little bit. Whatever the case may be or we want to reassess how we do that all together So if we put it in ordinance, we would be changing this ordinance every year. I didn't want to do that So we wanted to put it in the budget ordinance where it's still an adopted number by council. It's just Budgeted annually in the fund allows that flexibility and And I think it's also important to note that currently we have no exceptions in the ordinance. There is a placeholder in the ordinance if we ever need to add it. But at this time, we've evaluated everything based on the feedback that council has given us in the past. They wanted every benefited property to pay their share. And so we've taken that guidance and we're pushing for or proposing an ordinance that has no exceptions at this time in there. With that, that is the bulk of the high points of the ordinance. There's obviously a bunch of little language that goes along with each one of those, but that's the high points. I'm happy to answer any questions or firm up anything that council may have, but ultimately what we would recommend is the adoption of this ordinance and the right-of-way infrastructure fee.

So at this point, I'll open it. Does the dais have any more questions for Patrick?

I do.

All right, Mary.

If we were to adopt the $16.5 million, because it's going to take us $10 million just to get back to zero, is what it sounds like. So if we did the $16 million, will that then get us over the hump? How much more money would we need the next year if we were to get all caught up and everything's

So the $16 million would be an annual amount that I would need to maintain a comprehensive street right-of-way maintenance program. That included everything we needed to do, including our debt service for rehabilitation, including our alley maintenance programs, including our signal replacement capital, our CIP signal replacements. There was a whole list that I presented earlier. That would be an annual amount in order to maintain those systems. Again, the $10.5 million pulled it back because the $16.5 million was obviously a much higher billing rate for both residential and non-residential side. The feedback we got from council at that time was they weren't comfortable with that rate, so let's pull it back down to the need. And the need is the $10.5 million that we're at today.

We're still just putting a Band-Aid on it at 10 million.

We're proactively protecting any future impacts that could come down from the state is what we're doing today. But we are going to be able to maintain our system as we have it today, you are correct.

But 16 million would fix it. Right?

It would put it in a place that staff is comfortable managing at this point.

And then the next year, wouldn't that $10 million come back into play? Because if that's what's going to get us to the baseline, once we fix it at $16 million.

No, $16 would be the baseline annually in order to adequately maintain and comprehensively maintain our right-of-way infrastructure.

So the $10 million is just good money after bad?

We're deficient today compared to what we would like to do and what we need to do. We're at 10 and a half, so we're already deficient today. We're just going to continue that need, that bare bones need, to make sure that we're meeting our status quo we're at today with this. And then we'll reassess moving next year, and the following year, and the following year, as hopefully we get more economic development. Our conditions, our economic environment could change dramatically over the coming years that could potentially affect where this fee falls from a dollar standpoint. And so we want the ability to make sure that we can proactively manage and assess this on an annual basis. But no, there's not a one time give me over the hump number there. That number is $456 million if you want that number. And that number was in 2015, so let's add a few hundred million to that.

Let's leave that one off the table.

I mean, I'm ready to go there if y'all want to go there.

That gets me. I'm sure there's more questions as we go, but I won't hog the mic this time.

Karen?

Just curious, what percentage of the $10.5 million is rendered by the residential user?

So if you look at the chart, and I don't have it up here today, but if you remember from our prior, it is almost a 50-50 split between non-residential and residential customers. Now, keep in mind that 50-50 is a monetary split, but you have a little over 30,000 residential customers and a little over 3,000 non-residential customers. What's hurting us in the city of San Angelo's characteristics and our demographics is the the low amount of commercial entities that we have in the city. If you look at our sister cities and our comparable cities, and Phillip talks about this in his town hall meetings very, very well. I can't do as good of a job as him. It's the disparity there that is pushing that residential rate to the $15 that it's at today. There are other sister cities that if you did your research, it looks at a much lower residential rate. It's because they have a much, much higher commercial entity base than the city of San Angelo has today. That's why economic development is so important as a city globally to make sure that we're bolstering that and we're supporting that in order to get that disparity a little closer to one another.

Patrick.

Going back to the $80 million slug of money from 2015, where is that a recurring debt? Where does that come from? Is there a way to raise that to get it to where we're back on an eight-year cycle?

Are you talking about the 10-year street program that we did, the $80 million? That ended up being $84 million. It was $16 million a year every other year for the first four cycles, and then in the final year we had additional capacity and we issued $20 million. that final year, so for a total of $84 million. We do have a little bit of a placeholder for debt in case we had a big project that city council wanted to do, but right now we're pretty much at capacity on our debt service side of the tax rate.

So that $80 million, we can't go back to that will.

Until those bonds expire in 20 years.

Either until those bonds expire or we increase the tax rate on the debt service side of the tax rate.

With the assistance program, basically, and maybe this may have to happen next year. There may not be enough time this year. Is it where we could... So Abilene was brought up. Abilene has a low-income... So basically, they apply for it like we would have them apply through CVCA, and then they can just automatically set their rate at that. Is there something that we can do with that so, A, they're not having to apply all the time, and, B, when we do find those people that need it, we can just go ahead and set it so they don't have that continual hardship?

I'll jump in there and take that. Councilmember Keeley, I think that's something we can definitely look at as the process matures. Through this process, as we did talk about, we added that $150,000 extra towards the funding there. I think that gives us the ability to put a barometer out there to see how much assistance is going to be needed. To be honest, I think if we did have an application process for the low income that were to use all of the funds or want a different rate, we would have to find a different mechanism because I'm assuming the nonprofit would not want to administer all of those applications, and we would have to bring that internally. And so there would be some logistics associated with that, and that would probably be part of our annual review in the next year if this does pass.

Let's see here. You've kind of already talked about it. You have, so we, you know, you talk about anything with my budget at home, if I have another expense and I got to find somewhere to take it from, right, if I don't make more money. So you have already done that as far as the streets department. Y'all have already had to you have no more money, so you're like, well, this needs done. We have to find a different way to do it. Right. We've talked about some of the, Phillip talked about in his meeting, some of the robotics that y'all have implemented, stuff like that, to be able to do more, move other people to other rotations.

That is correct.

So there's really nowhere else y'all can cut.

I mean, we've utilized technology. We've utilized our GPS program to make sure that we are maximizing the utilization of our equipment all the way down to eliminating pieces of equipment. So we make sure that our equipment replacement budget is impacted as little as possible, make sure that we're not maintaining vehicles that we don't necessarily need. So our utilization rates has gone up because of that. So we're proactively managing those components. We're looking at ways to do you know, our program faster, more efficient, and less costly, spray patcher. We're moving those resources around to make sure we're accommodating other deficiencies and needs of service within that department. So I won't ever tell you that I'm going to reduce staff or reduce because of a technological advance that we take advantage of, but I'm going to go do more. And so by doing more, I'm essentially reducing the ask from a monetary standpoint on that. We are proactively managing that. We're looking at better ways, more efficient ways to do our operation because we know that we have that deficiency between that $10.5 and that $16 million that we want to take care of. So we've got to try to eat away at that as best we can.

In your estimation, do you think the number one gripe you get from us is streets and signs and along those lines?

I would say that I hear about it on a regular basis, yes, sir.

I think you've answered most of my questions. Some of it's going to have to be reviewed over next year's budget. This program, so kind of from what I'm hearing is, it is an annual basis. So this is not, we're putting it in now and it is set in stone for the next 10 years. It's going to be reviewed every year and council has the ability to look at it and say, yes, it worked great or no, it caused undue hardship.

That is correct. And again, that's to make sure that this is truly a cost recovery mechanism and not a revenue generation mechanism.

Do you have a breakdown on your estimated costs or percentage-wise of that $10 million and where it goes?

I don't have that where I could present it today, but I do have a breakdown of how we utilize those funds today and how I would have utilized them if we had the $16 million. So I do have that breakdown between personnel, O&M, capital equipment, and capital replacement.

Patrick, thank you. I know this has been a lot on your staff, so thank you all for doing what you can.

Yes, sir. We appreciate y'all's consideration.

I'm comfortable with this. After all we've talked about and all the years we've talked about this, the one question I may have for you is how many people are you shorting, street and bridge?

So we have not added staff for our street maintenance program since I've been a director of operations. Since Shane brought me on board back in 2012, I know we haven't added any staff. We've added staff for specific projects. So if you'll remember the sidewalk crew that had dedicated funding that we reallocated, we did add staff there, but it was a temporary staff, a temporary movement with a finite end. We've added a trenching crew, a trench repair crew, back in 2017 to alleviate a contracted service that wasn't performing well. So we did add staff there. But we have not ever added staff for General Street maintenance applications for that program since I've been in the operations department. Again, our responsibility has grown over that time by new development, new streets, new signs, new responsibilities, and we haven't been able to necessarily increase our resources equitably with that increased demand.

Thank you. You said you added the utility crew in 2017? A trench repair crew, yes, sir. Okay. Has diesel prices gone up since then? Because they have to drive a tractor, correct? Use a backhoe?

Well, yes, sir. So, I mean, all of that does, right? Asphalt, fuel, diesel, all of that is impacted.

I mean, the backhoe gone up since then.

That is, yes.

Again, we've had a lot of inflation even since 2017. Probably the wages of those employees has gone up since 2017. COVID was horrible on inflation. Things went up overnight. Right. Construction materials.

I joke with our fleet maintenance manager all the time right now because fleet is where I came from before I moved into operation. And I said, I was buying a backhoe for $50,000. I don't know about this new guy, but he's buying them for $200,000. I don't know what's happening.

And I just want to bring that up to reiterate that, again, We're kind of kicking the can down the road, but again, we're in between a rock and a hard place, and we have to do something to help supplement that because we've had so much increase in cost over the last 10, 15 years.

And again, that is why we... want to take a proactive approach to maintaining our streets, right? It's a lot cheaper and a lot easier to make sure that we are seal coating our streets moving forward than it is to let them go all the way until it takes a mill and overlay. So seal coating a street for a little over $3.10 per square yard versus a mill and overlay at $65 a square yard, I think anybody can do that math, right? And so we want to make sure that Our objective of being proactive in our street maintenance activities can be sustained through this, and that's all we're asking for today.

I have one last remark, if I may. Go ahead. It will surprise no one what I'm about to say, but with the advent of the comprehensive plan, the fact that we are underway discussing a strategic plan and we have asked repeatedly for a better CIP planning process, While I will not say that this is premature, I want to remind everyone listening, including my colleagues, the people in the room, that you are about to have a big chance, especially with the comprehensive plan, to have a say about these things. And so please participate when you are invited to do so.

Tina, I've got a question. If we were, and this has come up several times, I was waiting to hear the end of it. If we were to pursue this in a tax increase, what percentage would we have to increase our rate to recoup this?

Well, we'd have to increase the rate by a little over 13 cents.

Right, and if we increase that as a tax, that would instantly let a lot of the people that we are going to participate escape, correct? So like all the nonprofits, the people that don't pay taxes, that do have a water meter and use infrastructure, would not be able or wouldn't be in on the taxes, correct? That's correct. Right, so with that, I just want to say, None of us want to be here. We've kicked this can down the road a while. If there was a fair and equitable way to get everybody, I mean, if you had a toll tag, there's things that would help us recuperate our funds. But at this point, I look at this as what are we going to be able to do with this for the next two, three, four years? And we will want some transparency. I think you've shown us we're going to be able to look at it. We're going to be able to judge it. We're going to be able to measure it. And if we don't need it or there finds a way that there's some economic development, hopefully that comes in that lets us move away from dependency on this, those things are always a possibility. So I like the fact that that's on a table. Are there any more comments from the dice?

So Tina, going to our expenses just in general, if this were to be voted down, That falls back on the general budget. He would probably have to cut it. What else would we have to cut if this program was not implemented?

Jonathan's going to get to that when we go through the budget item. He has some slides that will address that, and he has some notes on that as well. But like Shane said, where we always fall to first is the street maintenance account, the system maintenance account, because it's easy to cut, and that's why we're in the place we are right now. Thank you.

Thank you very much. All right, with that, if there's no more questions from the dais, as always on an item like this, I will be the first one to make the motion to approve the adoption of the ordinance infrastructure. I'll make a first on that.

Second.

I have a second from Harry Thomas. So they have to have this to roll into the budget to assume that the numbers are going to show as they counted on this as an approval. So you'll actually get two, is that correct, Brandon?

Yes, we need two separate motions, but are we considering public comment right now?

Yeah, we're going to, but I think Patrick was going, if you wanted to hear the next present, the budget presentation.

Yeah, if we want to hear the next presentation for the budget, I think that's just fine.

Does it depend, is it dependent upon the approval of this?

Yeah, it is. Yes.

And so if this doesn't go through, that budget presentation is?

I mean, I think there's alternatives ready to be presented if it doesn't go through. Okay.

So what do you want to do? Mayor, what I would suggest is that we have the right-of-way fee in front of us and we have public comment that's queued up, that we can have that comment. As you stated, the budget that is going to be presented is based off of this fee being included. We would essentially have an alternative that we would present within that budget, and we would request to have a motion to not include the fee if it's not passed.

All right, so let's go to public comment on the right-of-way fee.

Eugene Hall.

Eugene.

Eugene Hall, District 3. And I think it is a very large increase. $15 is a lot of money. And some of the people that are out of budget can't get help. They're right at a bad edge to where getting help, they can't get it. You just apply for it and know you make too much money. And, well, we sure do need help on our streets because that's one of the things that I am going to come back about is the filthy streets that we have in San Angelo. They're in very bad shape. The debris and gravel is not safe. And we have a lot out there. And that chip seal job that's going on is not going well. They're leaving a lot of debris behind and not cleaning up after themselves. And I've called and called and not gotten very well much results. That's all I have. Thank you. Thank you, Mr. Hall.

And thank you all for what you all do.

Second.

Cristobal Garcia.

I'm Cristobal Garcia. Don't know what district I'm in, but I'm up here off Armstrong Street. Every morning I get up at four in the morning and I was able, I go to work taking Bell Street. So I've seen all the construction on Bell Street. They did a very good job. Them guys were working at night. Due to the heat, I seem to work on Martin Luther King off Howard Street, excellent work. But this SEAL job that they're doing, horrible. I know it's not the city of San Angelo doing it because I see other, the names on the trucks don't say San Angelo. Horrible job. They need, whoever's, the companies that y'all have doing it, they scrap them. Get somebody that can do it better. I mean, it's an ugly job. If there's a car on the road, they'll just go around it. IT'S HORRIBLE. YOU DRIVE THROUGH IT. I HAVE TAR ON MY VEHICLES. I MEAN, IT'S A COMPLETE HORRIBLE JOB. THE $15 A MONTH, I WOULD LIKE IF Y'ALL WOULD PUT A CAP IF Y'ALL COULD RECOMMEND THAT A CAP, BECAUSE NEXT YEAR, WHAT, IT STILL MAY BE 15, BUT I'M 56. AT 60, I DON'T WANT TO BE HAVING A $30 FEE FOR THIS. Y'ALL NEED TO PUT A CAP ON IT. I'M WILLING TO PAY 15 NOW BECAUSE I KNOW THE ROADS ARE BAD. BUT LIKE I SAID, FIVE YEARS FROM NOW, I DON'T KNOW HOW THIS INFLATION, HOW EVERYTHING IS GOING TO BE. I DON'T WANT TO BE PAYING MORE THAN $15 EXTRA A MONTH FOR THIS. So see if y'all can put a cap on it. Let me think. I had a whole bunch of stuff to say on that, but I think that's it. Y'all need to put a cap. I still don't know legally how this is going to be if somebody wants to come sue you because I was in El Paso. It's a mess up there. I don't want San Angelo to go through that mess, but you are going to have to look at that. Somebody may want to do something about this fee because it's like I get my cable bill. Man, I got an extra fee for what? I understand this is a water utility and trash. If the trash decides, hey, we need more money, there's more money we have to pay for the trash. Something happens to the water, and now I've got this extra fee. I DON'T THINK THERE SHOULD BE ANY MORE FEES ADDED ON TO THIS UTILITY BILL, PERIOD. I'M GETTING A BILL. MY AUNT HAS BEEN PAYING $90-SOMETHING A MONTH. SHE GOES, HEY, MY BILL IS $98 NOW. WHY? WELL, YOU KNOW, DIDN'T YOU GET THE LETTER A FEW DAYS, A MONTH AGO? We need not to be raising this water bill. Just to have my, I was doing construction on my house. I wasn't even there. It was $95 a month.

Mr. Gates, thank you so much for your words.

Chantel Lindsay.

Ms. Lindsay. Let's go to the next one.

Dale Carnes.

Mr. Carnes. Go to the next one.

Taylor Ledbetter.

Mr. Ledbetter. Let's go to the next one.

Ben Payne.

Mr. Payne. Okay, let's go to number eight.

H.R. Wardlaw.

Mr. Wardlaw, I know he's here. Thank you. Go to number nine.

Coco Simpson.

Coco? Good morning.

Coco Simpson, SMD1. I feel physically sick listening to this for the last hour. I understand. I understand a lot of it. I don't know why streets and bridges the first one that gets cut. The job of the city is to provide safety and to provide roads. So fire, police, roads. That's your job. So why aren't we cutting parks? Why aren't we cutting public works? Why aren't we cutting other public services? Your officer got an extra $300,000 this year. Y'all know what you paid these guys? $400,000 for this crap. And that is... That is, it makes $2.5 million that y'all have paid Kim Lee Horn since 2024. $2.5 million. I chat GPT trying to find how much y'all paid in contractors over the last year, and I can't quite get a number because it kind of changes. But we had this discussion at the last meeting when y'all paid $50,000 to redevelop a park. You know, like the priorities of the city in general, not just y'all, but all the employees of the city are so backwards. If we ran our households like y'all run the city, we would all be broke. We would all be in Chapter 11 bankruptcy. You can't keep doing this. The city is, what, $176 million in debt. We spend $13 million servicing debt for the city. Y'all added another $4.5 million the other day. Like, it's nothing, you know? So let me tell you all about my water bill at my office. My water bill reads zero every month. I pay $30.17 for a sewer base fee. I pay $31.92 for a water base fee. And I pay $7.80 for a stormwater base fee. So now we're going to add another $25 to my commercial business. So I'm up to... What is that? $75 for less than, for zero usage on my business. You own rental properties. You own rental properties. All of y'all, I'm assuming most of y'all own rental properties also. So now you're going to add another $15 to your people who are probably struggling to pay rent at this point. We had a lady last night at the tea party, single senior. fixed income, she barely can pay her water bill as it is. And this gentleman is correct. Most of these people just missed the mark. If they can get help, they're already getting help. Like y'all paying the action committee doesn't help a whole lot. But while we're at it, it's going to be $17 next year or $19. And at some point y'all are going to hook these flock cameras up and you're just going to be tracking us so that you can track our mileage and just get us on a dollar per dollar basis. Like this is a slippery slope to hell. This is a bad idea. I understand that you're trying to get the people who, who escaped paying taxes. I get that. And I applaud you for trying to get them. I'm grateful that Shannon is not going to get off the hook on this one. then I can almost guarantee y'all are going to pass this. But it's going to be detrimental. This is going to hurt really bad. I will also say the water fund balance is sitting at $56.4 million. There is money in the city budget to pay for these things. Y'all just don't do it. I was up till over midnight last night and up at 5 o'clock again this morning digging through budget numbers. And it's... It's wild what's going on in that budget. ChatGPT can be your friend, too. There is some good that comes from that. And I would suggest that y'all start looking at it. But this is crazy how things are running. And for this last hour listening to this, I really feel sick. I don't even know what else to say. Good luck. Thank you.

Thanks. Dennis Higgins. Dennis.

Good morning, ladies and gentlemen. First off, I'd like to say I appreciate your dedication to public service. I know this is not the most lucrative job anyone could ever have, but I got a few comments regarding this right-of-way fee. I am opposed to it. While the water meter, you know, tacking on the water bill is probably the most efficient way that the city could afford to collect it. It is still, I believe, disproportional. You have numerous places of business barely on the edge of the city or outside the city limits that run heavy commercial traffic through this town. I don't know about the feasibility of your toll suggestion for trucking firms. We've added the Amazon plant out there, and now they use vans and stuff. We have more traffic. Now, I retired a year and a half ago, I do not make that daily commute to Goodfellow and back to my house 16 miles a day anymore. So I'm thinking I use the roads less. I get out twice a week. We do the shopping. I still wonder about where they come up with this rate manual to determine a business is going to have, you know, a certain, you know, additional fee placed on more than my $15. So right now I am on a fixed income. And I know where this goes in the state of this country and inflation. This is not going to hold fast. So for the next couple of years, I imagine that cost is going to have to go up. So I'm opposed to it in principle, but it seems how we're going to use user fees. The state of Texas collects fees and also additionally funds the state park system. So if I choose to use that state park system, I have to buy a pass. One of the budget items I'd like this council to consider is the same way to fund our park system in the budget is the user fee system for those people who actually will use that service that you are offering. I think that's the day and age in which we're here. So anyway, I ask you to reconsider if the camel's nose is definitely under the tent, then I'm going to say, let's knock it down to $5. additional money and then I encourage the City Council going forward with its budget plan to look at other absolute line items that could be cut now I've already mentioned the user fees I don't know if the public safety aspect is the be-all end-all okay I am grateful for their service as well and I would say that other line items ought to be considered such as what I addressed with Mr. Hebert a couple weeks ago at our town hall meeting And that would be to find a way to find excess city land that can be sold into private hands, put on the tax rolls, and use those other resources wisely.

Thank you, ladies and gentlemen, for your time. Thank you very much. Very good words, Dennis. Next.

La Lanthe.

Good morning. My name is Lolly McClellan Thee and I'm in single member district two. I'd like to speak against this right-of-way fee. Let me start out by saying that money is fungible and I've never known of a government account to stay strictly for that use. I think Social Security started out that way. We know where that is today. So I did some rough math, and I translated the money that you expect to get from this right-of-way fee and put it into the formula so I could see, well, if that money was in place, what would the tax rate be? And thank you, Ms. Dierske. She confirmed what I was saying, even with my rough math. You've got a voter approval rate at .8143. Well, this money translated into a tax rate is in the nines, the .9s. So that is over the voter approval rate. So I feel like if you really believe that this money is needed, that you need to not hide it behind the word fee. You need to put this in front of the voters and make your case and have us vote on it. A tax by any other name is still a tax, whether you call it a fee or, anyway, it's the same thing. It's still a tax. It's money out of taxpayers' pockets. And someone mentioned earlier the lawsuits. There is a lawsuit in El Paso, a recent lawsuit. It was filed by a taxpayer in August of 2024 for this very reason, for a right-of-way fee. And it was ruled illegal and unconstitutional tax by the district court. And that was upheld on appeal in just June of this year. So it has been ruled as an unconstitutional tax. And you can't tell me that some of our nonprofits around here wouldn't contest this, and their pockets are a lot deeper than yours, than our pockets are. And also, I will add in this lawsuit that the taxpayer was awarded attorney's fees. So thank you.

Thank you, Lylee. Next.

Anna Bartosh.

Good morning, Council. Anna Bartosh, single member District 1. Just to quote one of our founding fathers, Thomas Jefferson, if it doesn't pick my pocket or break my bones, I'm okay with it. Well, since this does pick my pocket, I am not okay with it. We are already one of the highest taxed cities in Texas and have been for many years. People are on fixed income, as we've already heard, have difficulty paying their property taxes, sewer and water bills. There are two considerations that we need to think about for this right-of-way fee. First of all, that has been brought up before by other people today. Is it legal, as Ms. Coffey indicated? The requested Attorney General's opinion concerning the legality of this new fee needs to be received by the city attorney from the Attorney General's office. So we need to be looking into that and talk to the Attorney General of Texas and get a ruling on it. Also, determination of the annual revenue to be received by the city for leases and property taxes from Skybox and other data centers located within the city limits, if any. Also, in addition to that, I have some questions about Shannon. And there, I know they said something about, the people back there said something about square footage. But Shannon has several multi-story buildings. And there is a lot of park, a lot of people come in and out, a lot of traffic. So that's a lot of wear and tear on the roadway. Okay. Then they said something about meter usage. We will... i guess assess according to water usage on the meter well i have gone to the doctor's office many times and not once i mean i don't use They don't use water when I'm at the doctor's office. I don't even see them wash their hands when they come in the room. So there's never any water usage when I've gone to the doctor's office. And unfortunately, as I get older, it's more frequent. So I kind of question the water usage for Shannon and the meter thing or water. I had heard they are being charged the multi-story buildings only on the square footage of the bottom floor. Well, I go upstairs a lot to see a physician. So why not all of the floors? Because all of the parking out there is for all of the floors. And that's where we aren't here on the road. So that needs to be revisited, I think. Thank you very much.

Thank you, Anna.

Jamal Schoenberg?

Jamal?

Jamal Shumpert, SMD3. Mayor, I was wondering, like Ms. Simpson said, there's $56 million in your water fund. That could delay what you're talking about, where we don't have to charge everybody $15. You can actually charge us less on the water rates and then use that $15 there. That's a zero sum game. And you can get your mission accomplished. But I know what that extra $9 million a year is for. It's for your capital improvement projects, right? For the sewer plant and the water plant. But it's also for pipe extensions. Like on April 7th, when you donated our funds to a company, that's the type of stuff people don't want with the street infrastructure world. right away fund they don't they want to be sure that you can't just give it away and donate it uh since there's such a need just like you did with the water rates y'all raised our water bills but you gave away the funds um That seems to be an issue with you guys. Not doing the right thing with the money. And why is it called a right-of-way? Right-of-way is a little different. It could be non-existent roads, which means you could be expanding. We have a street infrastructure fund, Fund 533, but it hasn't even broken a million dollars in the last two years. So I'm so curious as to where's the need the real need for this because we have the money and where's all of what you've been saying the problems because patrick came up here for 1.5 million dollars we could have got 16 ftes who also could have helped with this there are several several of these issues to where i think this was put on the agenda so that when one two and i guess I don't think Ms. Smith is leaving, but when those two leave, you won't have the votes. This wouldn't even see light of day. I'm understanding how these governments is working, especially San Angelo, and it's not working for the people at all. It's actually, I mean, you're undercutting us pretty bad. Another issue over here is why haven't we collected our money? from, you know, planning and development services, because this is the economic development issue, streets. Well, right-of-ways. Street infrastructure is economic development as well, but the right-of-way is more of an expansion, and the infrastructure is more of maintenance. And you presented to us conceptually that this would be something like maintenance and not expansion. So maybe we should change the name instead of right-of-way in college. street infrastructure and just used 533. Thank you, Jamal. Thank you.

Next.

That's all for the right-of-way.

All right. So that's going to conclude public comment on the right-of-way fee. So do we have to take this vote as one or individually? How do we do it? Okay. So we've got a first. I made a first, Harry Thomas made a second. We'll take a vote. All those in favor say aye. Aye. All those opposed?

Nay. By hand, let me see the nays.

Item passes 4-3. Now we'll move into B. Do I need to reread that or we just go straight into B since I've already read it once? All right. It's all up to you, Jonathan.

Thank you. Good morning. I am bringing the first public hearing and introduction of an ordinance adopting the next year's budget. The next couple slides, these are going over the total budget of all funds, specifically operating revenues on this slide. The general fund accounts for about 39% of those revenues. The general fund also including the street infrastructure fund and equipment replacement as well. One of the items that I do want to point out, the special revenues there at 9%, that does include a right-of-way fee fund for the new right-of-way proposal. That would bring in about $8.8 million, and in total, our revenues total about $257 million. As far as expenditures, the budget proposal contains 41% of the expenditure budget is personnel, 40% is operations and maintenance, 10% in capital, and 9% in transfers out. And then just zeroing in on the general fund, just for us to have context of what the general fund is going to bring in for next year, total revenue is currently budgeted at $104 million. This includes a flat tax rate for next year, a 3% increase in sales tax, as well as a review of user fees like planning and permits.

Jonathan, let me hold you right there. What do we usually budget sales tax at?

Historically, we usually budget sales tax at projected year-end So right now we're projecting a little bit higher than 3% and and this fiscal year at 3% and so normally we take that budget and Budget it for next year's or that year-to-date actual and we budget for next year We have don't have complete confidence that all of that growth isn't cyclical and we want to make sure we're a little bit conservative Which is why we have an increase of 3% Okay And then on the expenditure side, we are budgeting for $104 million of expenditures, and I'll go into a little bit more detail, but I did want to mention that we did move $1.9 million of equipment replacement into a new rolling debt fund, so those dollars will be allocated elsewhere. Just to touch base on property tax and sales tax of where we're at again We didn't want to bring up the exemption impacts in total between homestead over 65 freeze and the new business personal property exemption that the state passed this past legislative session We are losing about seven point six million dollars or Citizens are saving that money seven point six million dollars in total between those three items and And again, we did want to just encourage citizens and the public, if you are eligible for the over 65 freeze, if you are eligible for a homestead, please reach out to the appraisal district so you can get those benefits. Those are put in place to help the tax burden on the citizens. For property tax, again, we are currently leaving the rate flat. That was the proposed budget that was, the proposed tax rate that was budgeted. So that's gonna stay flat at .7947 for this next year. I did kind of want to show historically how property tax rate has been. So over several years, even going back to 2014, the tax rate was at 0.776. In 2019, the state passed Senate Bill two, which limited our ability to raise or have growth in our property tax to three and a half percent. And so you'll see starting in 2023, we start seeing our tax rate dip as property values grew. More than that 3.5% cap, our tax rate then decreased. I believe in 2024 specifically, we saw an increase in our total taxable value of about 13%. And so you'll see our tax rate dip down all the way down to that 70.7042 per $100 valuation. Subsequent years, we were able to capture some of that tax rate back. In 2025, it increased to 7544. And then in 2026, this current fiscal year, the tax rate was set at 7947. I do want to make a note that that does include a three and a half increase for the bond election. If we did not have that bond election, if that bond election had not passed for the Coliseum bond, our tax rate would have been at the 7604. We did want to bring this up. We've presented this at several of the town halls and we think it's good information just on property tax comparisons to some of our sister cities as well as other comparable cities as well. So we have four other cities listed in this chart, Midland, Abilene, Wichita Falls, and Bryan, and kind of just showing their population values as well as their taxable values and their proposed rates. One of the things we'd like to point out is for a lot of our sister cities, they tend to have a bigger taxable value base. A lot of our sister cities have a bigger commercial base as well. You know, our commercial base is split 70-30, 70 residential, 30% commercial. And so right now our taxable value is at $8.3 million and our rate is set to $7,947. If you look at Wichita Falls, Similar population, they're at $8.3 billion as well. Their tax rate is currently being proposed at 6779, so they're a little bit lower on their property tax. Bryan, who's a smaller community than us, but has a bigger taxable base at $11 billion, their tax rate is set at 6.24, and they're generating about $69 million. So they're generating about $3 million more than us with a lower tax rate because their tax base is so big. One of the other comparisons that we'd like to make is about sales tax. I mentioned on the slide earlier that Wichita Falls was, they had a smaller tax rate. Well, Wichita Falls also brings in about $5 million more in sales tax, at least up until August. And one of the other things I'd like to point out is These percentages at the top are the percentage increases in sales tax for the year over the previous year. Abilene, Midland, Odessa, or Abilene, Midland, and Wichita Falls are seeing close to double-digit increases. Midland has dipped a little bit below recently. And then on the very right, the state average is at 6.4. Our average is only at 4%. So we're seeing a little bit less economic growth in the city when it comes to sales tax as well. For the general fund by itself, property tax makes up about 49% of the total budget. 25% is sales tax. And then we have other charges for services at 12%. Other taxes like franchise fees, mixed beverage taxes make up 7%. And then the others made up mainly of interest and indirect costs as well as transfers in. On the expenditure side of the equation, 65% of the budget does go to public safety. This budget does include comp and class adjustments as well as an increase to the fire pension, which is why that percentage is increased a little bit higher than what we've seen previously. previous discussions. Government admin is at 15%, others at 10%, public services are at 6%, and public works is at 4%. I do want to mention also that public works has decreased out of the general fund, of course, with the implementation of the right-of-way fee. Those costs are currently being budgeted in the new right-of-way infrastructure fund. So just for the budget as a whole, again, there's no property tax increase for this year. We did conduct a fee review for a lot of our user fees. We are not planning on going up on our water fees or our sewer fees. And then one of the other things that we did is we are implementing a rolling debt funding, which again freed up about $1.9 million in the general fund. One of the things this budget does is it funds the fire pension. If you remember discussing, the Texas State Pension Review Board did list the fire pension as a concern. That wasn't unique to us. They had some standards change, but we wanted to take care of it, and this budget takes care of that. It allocates a one-time allocation of $1.2 million to the fire pension and also increases the firefighters contribution by 4.9%. The other thing that's built into this budget across all the funds is a comp and class market rate adjustment or a 2% COLA. That 2% COLA is there for employees who are not getting a market rate adjustment or their market rate adjustment doesn't reach that 2%. They'll be getting at least a 2% cost of living increase. This funds health insurance. If you remember, we brought to you a $4 million budget amendment in the middle of this fiscal year. This helps us fund that health insurance for next year so we don't have to come back with a budget amendment, especially a budget amendment that large. We are including an additional three positions to development services. There's one combination inspector that we'll be adding plus two development services support for developers. This should help the speed of business when it comes to our development process. We're also including additional medical supply funding for the animal shelter. And like we spoke about recently with the right-of-way fee, with that initially passing, this does avoid decreases in street maintenance due to legislation as well as inflation pressures. My slide is not turned in here. I have one last slide to go over, just to kind of discuss some of the cost controls that we are implementing in the budget this year. So every year, departments come to us and have requests. We call it our TIR process, or target increase process. And so city manager's office reviews this. We had about $3.1 million in department requests that are not funded in this budget. just either due to it's not the right time or it's not the right strategy. We decided to leave at least $3.1 million built out, not included in the budget. We also are deferring payment on our PD technology contract of about $1.2 million. This allows us to skip this initial payment in this next fiscal year and then continue the payments after that. So we're always looking for ways to spread out these payments or free up money in the budget in any given year. One of the things that we implemented prior to this budget was a hiring freeze. Currently, our vacancy rate is about 12%. If that vacancy rate were to hold, which in the hiring freeze environment, it actually should go up, but at least at 12%, we should realize about an additional savings of $436,000. And this is good because it helps us plan for some of those unforeseen costs.

Right, but that's also a shortage of headcount, correct?

Yes, sir. Yes, sir.

And so we take that burden and put it on other employees?

Yes, sir.

Okay. Keep going.

The other thing that we looked at was with the health plan in general, the formulary exclusion that we made in the middle of the summer saved us about $416,000 when it comes to health plan costs. One of the other things that we're also looking, two other things that we're looking at implementing in the next fiscal year is a review of training expenses. Whenever we send an employee to training or whenever they get training, Required training, we're having that reviewed by city's manager's office, so we're reviewing those costs to see what training's needed, if we can bundle some of this training. And then same thing with software and hardware. One of the things that's being implemented is the IT review board. They'll be taking a look at all software purchases, beginning with the software purchases that we'll be making with this budget. And so they'll be reviewing the software, seeing is there a more cost-effective way? Do we have a software that already handles this? Can we leverage a different opportunity when it comes to the problem that the software's trying to solve? That way we're not spending a ton of money and time on implementations when we could have been using a different solution. So that is the current budget as it's proposed, which again does include a right-of-way fee increase. And I'd be, I can take any questions.

And maybe Tina and Shane. How many are we short on head count? Do we have a, do you have a number?

I don't know if I have a number. I know that 12% was updated yesterday.

We have approximately 1,000 employees, just under 1,900 some, and so 12% of that would be about 120. 120 people were short.

Okay, we'll open it up to the diocese. Kimberly, you can show hands. I'd like to make you make the trip. Getting your steps in?

I do just want to note that of those positions, none of them are included in fire and PD. So those are simply civilian positions that are vacant.

So if you had to add an extra fire and PD?

I don't believe fire is short any positions. And I actually think PD might be over a few over their budget to authorize positions. Gotcha.

All right. Thank you, Kimberly. We'll start down the dais if there's any questions for Jonathan. Mary?

Patrick? Jonathan, on that payment deferral, so is that going to have to be added to our next year's budget?

Yes, sir. Yeah, well, we will need to include it in next year's budget, and so it'll be a part of our forecast for this year as an item for us to fund for next year. So we are planning on... on that already, but currently right now it's not built into next year's budget.

Is it a one-time fee or is it going to be 2.4 next year?

No, sir. The PD contract in particular includes items like body cameras, things like that. So there's an equipment portion to it, and then there's also a software portion to it, software maintenance portion to it for the services that that company provides.

So will it be that times two for next year?

No, sir. That is the contract that we're looking at entering into. We'd lock in those rates. It'd be $1.2 million over the next... So we'd skip a payment next year, and then over the next four years, it'd be that $1.2 every year. Okay. Thank you.

It's actually more than four years that it's the $1.2. I think the total amount of the contract was $8.8 million?

$8.8 million.

So I think it's that amount over six years, I believe. Six years. Okay.

Councilmember Keeley, one thing I did want to add is that we did have a meeting with the police department last week with the city manager's office, and there is an opportunity to potentially utilize some grant funding for this as well. And so we wanted to ensure that we threw everything we could as related to our budget and other funding sources to make sure that we could handle this.

Real quick, Mayor, if you don't mind. On the unfunded, do you happen to know what maybe the largest unfunded request was?

There was two requests, one for an additional 20 additional firefighters for an additional fire station, and then there was also a request from PD for an additional nine public safety officers. Both of those are not built into the budget, but that makes up at least half of that $3.1 million.

Public safety officers, same as school resource officers?

Is that different? They are different.

Okay. In the current budget, do we have... the grant rider in there.

In the current budget, we do have a grant rider for police and fire. They'd be specifically working on public safety grants. Okay, good.

Thank you.

Okay, so at this point, how do we proceed at this one? Are we going to do this, take a motion and then go for the vote? Okay. As this is the budget, I will make the first motion to approve item B under the regular agenda. I have a second from Harry Thomas. Public comment?

Joshua Kemp.

Mr. Kemp.

Good morning. Joshua Kemp, San Angelo Firefighters Association president, also a resident of SMD1, Mr. Hebert. Good morning, mayor, council, and city manager. First off, I want to discuss with the budget what I wanted to discuss was the class and comp study. And what I want to do is start off with thanking, first, HR, thank you very much, HR, for spearheading the class and comp study, all the work that they did. I know it was countless hours. I know they spent countless hours with us alone. And then the next, I wanted to thank the finance department and our class and comp study consultants for providing the cost analysis for the for the different variations that we were proceeded through to find a solution to our salary deficit that the fire department had. Thank you, city manager. I know you came in short notice here and kind of just took over, ran with it, ran with the things that we have been discussing. Thank you to the city managers, assistant city managers for pretending to support our role in the discussions that we've been having with the classic comp study. And then finally, thank you to council for even allowing this to happen. Thank you to the citizens of San Angelo for continuing to let you guys know that that was something that's important to not only them, but to all of us at the city. So thank you for that. The San Angelo Firefighters Association, we have been requesting for a payment plan or a class and comp study type thing for over 10 years, for a long, long time. So this was a long time coming. I want to thank Mason Matthews, the previous president, and now vice president of the association for continuing to push that agenda for our Firefighters Association. I think that was very important. Now I've got a few more minutes.

I just wanted to address a couple of topics.

I wanted to address just a couple of topics. I guess, you know, let me just go to the second one. The first one we'll skip over, but that pay is not the only motivating factor and not even potentially a primary factor for everybody. That is, I do agree. That is true. And so does my association. We do agree. So does the fire department. The fire department in the last year alone, we have implemented the swift water rescue team. That's huge. That gives us at the fire department some self-actualization, just some job, some... Giving us some self-actualization. Well, I just wanted to conclude with saying thank you to everybody for what you all have done, and I hope that we do get this passed. Thank you. Thank you, Mr. Kemp.

Coco Simpson.

Coco.

I just have a handful, just a couple of questions. So of that, in the budget for the right-of-way stuff, how it splits up in the budget is $3.5 million for personnel. So my question is, how much of that is new personnel? How much of that is transferred from somewhere else? Second question is, It puts $5.5 million in M&O. So how much of that specifically is going to be spent on streets, sidewalks, paving, and right-of-way infrastructure? Lastly, there's only $200,000 allocated to capital improvement of that $10 million. So of that $10 million that they said that we are behind, really only $5.5 million of that actually goes to doing street work. So I just wanted some clarification on that. Also, in 2022, y'all did start a street infrastructure fund. So is that going to be eliminated or is that still there? Because that is a tax-based fund that y'all have set up. So that's what I got. Thanks.

Next.

Jamal Schumper.

I believe Jamal has left.

Okay, that concludes public comment then.

All right, we have concluded public comment on that, so we'll take this one individually across the board.

No, you do not have to take it individually. I can't take it like a normal motion.

We'll do that one. Okay, we'll do this one as a normal motion. All right, we've got a first from Tom, a second from Harry Thomas. We'll take a vote. All those in favor of passing the budget today say aye. Aye. Opposed? None opposed. Budget passes 7-0. With that, this meeting comes to a close at 1055 p.m. I'll take a motion.