City Council - Regular Meeting

I will call this meeting, the regular meeting of the San Marcos City Council to order. Today is July 7th, 2026. The time is 6.12. Apologies for the delay. Mr. Vino, would you please call the roll? Ms. Rodriguez? Here. Mr. Basel?

Here.

Ms. Garza?

She's online and I can see her. Mayor Houston? Here. Mr. Scott?

Here.

Mr. Mendoza? Here.

Here.

Thank you, Mr. Gonzalez. We have a quorum present.

Okay, our invocation this evening is being given by Pastor Rick Robertson of New Zion in San Marcos.

Thank you, Your Honor. Let's begin if we all bow our heads. Father, we ask that you grant this council conviction. This is a city that has not been afraid to stand on its own ground to make hard and even unprecedented decisions about what kind of place it wants to be for the generations coming behind us. We're asking that you give these leaders the steadiness to weigh what is popular against what is right and the humility to know that they won't always get it perfect. where they must protect this community's resources and its future, give them the backbone. Where they must show mercy, give them the tenderness. And we lift up those in this city who serve on the front lines and feel stretched thin, the ones answering the calls, guarding our streets, and responding when the sirens sound. Where there are gaps, Lord, we're asking that you provide where there's exhaustion, restore, strengthen the hands of every first responder and every public servant. who gives more than the public will ever see. And God, we remember tonight the ones who have no voice at this podium. Hear them out. The neighbor who's struggling quietly, the family that's new to the city and still finding their footing, even the animals in our shelters waiting for someone to take them home. Let this be a city that only for what is, not just for what it builds, but also for how it cares. So bless this mayor, this council, and the staff and everybody that's serving with them. Let every word spoken here be seasoned with respect. Every decision made here be rooted in service. And every person who walks out of this chamber tonight leave knowing that the work of the people was done with honor. We ask all of these things in your holy name. Amen.

Amen. Thank you. Thank you. Next is pledges of allegiance to the United States and Texas.

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.

Next on our program is a citizen comment period. The City Council hears citizens' comments at regular meetings, work sessions, and workshops. There is a process to sign up. For those of you, if you're online, when it's almost your turn, you're going to see a pop-up question, and you will need to respond to that in order to speak and turn on your video when it's your turn. If you speak now about a public hearing topic on tonight's agenda, I ask that you not repeat exactly the same comments during the public hearing on that topic. When it's your turn to speak, State your name for the record, you'll have three minutes. When you begin speaking, you'll see the timer's in green. When it gets to yellow, you've only got 20 seconds left and there'll be a little ping sound and when your time to speak is up, the timer will be red and a bell will ring. If you hear a popping sound, step back a little from the microphone. The mayor and council will endeavor to ensure that meetings are conducted in a courteous manner and in an atmosphere free of defamation, intimidation, personal insults, profanity, or threats of violence. If you do any of those, you'll hear the gavel, and I will ask you to leave the council chambers. This is your warning. Our speakers tonight, we have nine. I'll call the first five names. They'll be speaking in this order. Joe Castillo, Crispy Polanco, Melinda Graymon, Lucia Diaz, and Veronica Reyes Ibarra. Is Joe Castillo here? There he is.

Mayor, council members, thank you for the opportunity to speak this evening. My name is Joe Castillo, and I'm here on behalf of Hayes Helping Hands, formerly Nosotros Gente, a nonprofit that has served San Marcos families for nearly 30 years. I want to arrest the HSB Funding recommendations, specifically the recommendation of $0 for our community assistance program. This program is the backbone of our ability to help residents with rent, utilities, medical needs, and funeral assistance, the most urgent and time-sensitive requests we receive. We continue to receive multiple requests every week from families who are struggling to stay housed, keep the lights on, or cover essential medical costs. Without city support, we will be significantly limited in the number of clients we can continue to assist We're still waiting to hear whether Hays County will increase their funding beyond the current 5,000, but even with that support, the need far exceeds our resources. We appreciate HSAB's recommendation to increase funding for our Shoe and Coats program, and we are grateful for that recognition. However, that program, while important, cannot be used to help families facing eviction, utility shutoffs, or emergency medical expenses. Increasing one program while limiting funding for the other leaves a critical gap in community support. For that reason, I'm respectfully asking the council to combine our two funding requests and allocate between $15,000 and $20,000 total. This combined approach will allow us to continue providing shoes and coats for children and maintain essential emergency assistance for families in crisis. Any reduction in funding for our community assistance program doesn't just affect us. It places a greater financial strain on the agencies that refer clients to us, including churches, schools, and other nonprofits that are already stretched thin. We work closely with these partners, and when our resources disappear, the burden shifts directly onto them. Hays Open Hands has always operated with efficiency, accountability, and deep commitment in serving San Marcos families. With your support, we can continue meeting the real immediate needs of our community, and thank you for your consideration. Now, another thing to note is our organization has no paid staff. So all the funds that we get are spent on the program. And then the other thing to keep in mind, too, is that while we haven't had a whole lot of fundraising since the pandemic, we've been using reserves and funds that we get from the city and the county and donations from the community to actually fund our requests. So hopefully you can reconsider our request to increase our funding, combining the two programs. And thank you for your time. Thank you.

Our next speaker is Crispy Polanco.

Um, yeah, crispy Polanco, um, nothing really to address on the agenda for me tonight. Um, just something I've been wanting to talk about for a while now, just haven't had a chance, but, um, after this Friday, tonight's kind of perfect. Uh, last Friday I was up in Austin at the Capitol, spent the afternoon there out in the sun. Probably got some sexy new tan lines around my eyes. A buddy of mine organized a rally to call on Ken Paxton to drop out of his case, challenging Section 504 of the Rehabilitation Act. And we finally got some media attention, just Kview and CBS Austin, but I mean, that's a lot more than what the case previously got. and some elected officials like Representative Donna Howard and Senator Sarah Eckert, and the GOP candidate for the US House against Greg Kassar, which was interesting. But I'm aware that the city is coming across some sort of deadline about accessibility. about making images and stuff with all the text on the websites and stuff, and captions on videos. I can't speak to the captions. And I haven't noticed any problems on the website myself, but it's not like I go looking for that, because honestly, I'd rather read my nutrition science textbook, and that's a boring book. But I'm not here to browbeat anybody either, because I mean, Instagram is a billion dollar company, and they can't even get accessibility right. But I do want to just let you guys know that it's not hard. Not being flippant, just like when I add images to Facebook and Twitter and everything, it's a couple of buttons to press to add alternative text to images. Um, so the most it might take is time and really all I want to do is just offer my help. If you want somebody to, if you make any changes and you want somebody to test it out to make sure it works, let me know. And I'm sure if you reach out to Texas workforce, our soul, or even the office of disability services at Texas state, they might be able to send some people your way to test things out as well. Um, that's really all I got tonight. And speaking of nutrition science, I got homework to do. So see you later.

Thank you, Chris. All right. Our next speaker is Melinda. Okay. Thank you.

I don't know how formal I should be or not formal, but I appreciate your time this evening. I just really wanted to address item number.

State your name, please.

My name is Melinda Grauman. Thank you. Sorry. I just really wanted to address item 22 on the agenda. I've been in that part of the country since 1997, and I have this huge subdivision being approved. I would like to say I'm against it across from me because they're able to come in and put all these homes in And at the end of the day, what's gonna happen to me is the road's gonna be widened, the front of my property will be taken, which moves it all closer to my house. So I would just like to, I know I'm one voice of many, but I wanted to state my opinion that I'm opposed to it because I feel like people with million dollars can come in and rob the little guys. So that's really all I wanted to say this evening, so I appreciate your time.

Our next speaker is Lucia Diaz.

Hello everybody, my name is Lucia Diaz. I used to be a city employee, so you guys are very beneficial for us. But I'm also here for item number 22 with Miss Melinda there, who's my neighbor. We have a little community right across where these 2,000 or 3,000 houses are going up, right across the street from us on 1978 and 123. I was very fortunate, and I'm the one that calls everybody in the neighborhood to tell them, hey guys, we gotta go, but we spoke with Miss Julia Cleary, who was very helpful with us yesterday, and we signed up to speak, but I know that progress is inevitable for everybody, and I know housing is in demand, but the thing is that There's people that, I just wanna say, just today, and I just met with Ms. Cleary yesterday, we met with her yesterday, but we got a letter from somebody in Austin who already wants to buy our property. Why, because they already know what's going on. And we received this letter, which I had never received a letter like that. But I couldn't understand, the map in the back is so crazy looking. I didn't know where I was, I couldn't find myself on the map. So we had to come in. But our thing is that we're here to listen today, to find out what's coming about. We didn't know there was a cemetery over there on that side. We didn't know there would be the buffer line. We didn't know we only had 400 feet. We didn't know all this other stuff, but so we're here to learn. You may hear from us again, but we're here to learn, and we deeply appreciate each and every one of you guys, okay? So we may have some more questions, but I read the details on how to go about it, so I'll do it the right way, okay? Thank you so much.

Next will be Veronica Reyes Ibarra, but after her will be Jessica Kane, Kylie Contreras, Bill Miller, and Sam Young.

Good afternoon. My name is Veronica Reyes Ibarra, and good evening, mayor and council members, and I appreciate all of your attention. I have the honor of representing the residents of Rancho Vista and Redwood. And my journey in community advocacy actually started in 2019 when I got a knock on my door by Dr. Rachel Singer and her students, who were conducting a study of the soil in my neighborhood. The study showed some devastating things. It showed that myself and some other residents were infected with a deadly parasite called Strongyloides and this was due to failing septic systems in the area. The solution has been straightforward and that's been replacing septic systems and moving towards wastewater infrastructure. For the past seven years, I had dedicated myself to organizing the community, meeting with local leaders and asking for help. I've been turned away time and time again, and even met with some of you here. Only to be told that nothing could be done by the city because although we have a San Marcos address, we are in Guadalupe County. However, when every door seemed closed, we found partnership with Water Finance Exchange. And with their guidance, we formed a nonprofit. We are now the Redwood Vista Water Supply Corporation, bringing together Redwood and Rancho Vista. And together, we applied for the Closing America's Wastewater Access Gap, also known as CAWAG, and this is a federal initiative. We were selected to receive technical assistance through the program and are now working with the Eastern Research Group. The EPA has contracted this technical assistance provider to do a feasibility study and find a solution for our community. But the solution is straightforward. It is connecting to the new wastewater treatment facility that is being built minutes from our community. So my community has done the work. We've organized, we have built partnerships, and we have secured federal support. Now we need the city of San Marcos to meet us at the table. We need their support because in reality we are running out of time. This treatment facility has its plans. It's moving forward and it's a great thing for the city of San Marcos, but for the neighbors, for my community, just minutes away, it would be life changing and also life saving. So I ask that you put this on your personal agendas, look into these conversations that are being had, and support us, support this community. And I thank you for the support that we've gotten this far. But until we get connected to this new wastewater treatment facility, it's really not enough.

Thank you. Our next speaker is Jessica Cain.

Thank you Mayor Houston and city council members. I'm Jessica Kane and I serve as the Director of Neighborhood Engagement at Southside Community Center. Today you are receiving recommendations from the Human Services Advisory Board about funding allocations. First I'd like to thank the members of the board who have spent many hours reading applications, listening to presentations, and doing the heartbreaking work of distributing limited funding to a slew of worthwhile organizations and programs. I also thank this council for allocating this funding. This year Southside requested $250,000 total across all three different programs. We went into this process knowing full well that we would not receive our requested amount, one-third of the total human services funding. However, these requests were honest about our need, as were those of our community partners. These requests aim simply to keep these organizations functioning at their current levels. But the reality is that the need is already beyond our current capacity. Here's a few examples from Southside. In the first half of this year, we received $266,000 in eviction prevention applications, but only had funding and case management support to provide $48,000, less than 20% of that requested. In 2025, we served 16,000 meals, but we're on track for 20,000 this year, a 25% increase in need that we are attempting to meet with a 0% increase in funding. Our shelter and Sunrise Village wait lists include more than 250 individuals. When we don't have capacity to meet certain needs, we rely on our community partners. like HCWC, BR3T, Hays Helping Hands, Home Center, St. Vincent de Paul, Community Action, and the Salvation Army. When they are also underfunded, our neighbors continue to have unmet food, housing, and mental or physical health care needs. Only 36.8% of total housing assistant requests have been fulfilled by the board recommendations. While many feeding programs are recommended to receive full funding, those supporting children, youth, and seniors in other ways are not. In a city with more than 70% renters, we cannot let 80% of assistant needs go unmet. In a city where more than one quarter of residents live in poverty, food and other supportive services must be abundant. I bring these concerns today not to ask for changes to the board recommendations or undercut the work that they have done with the resources available to them. Rather, I ask that city leadership work to develop a plan of action to bring more funding to these organizations in the city that are providing essential services to residents. As you continue your budget work, I encourage you to consider additional support to these organizations. We know that the budget is tight, but less than a million dollars more could fully fund every human services request, making a major difference in the lives of our most vulnerable neighbors. Thank you for your time.

Our next speaker is Kylie Contreras.

Thank you, Mayor Houston and city council members. My name is Kylie Contreras. I'm a case manager with BR3T, or Blanco River Regional Recovery Team. I'm here to speak to the growing need for housing stability services in San Marcos, a need that has outgrown what current HSAB funding alone can meet. This year's HSAB cycle was highly competitive. Applicants requested $1.7 million in total with a $750,000 budget. HSAB isn't meant to cover a program's full cost. We understand that. It is a supplement, and it's how the city supports human services work through local nonprofits rather than running these programs itself. I wanna be clear, I'm not asking y'all to change this year's recommendations. I know how limited that funding is and how many good organizations are already stretched thin by it. Instead, I'm here to ask you to think ahead to next year's budget about the scale of need this community is facing. BR3T started as a disaster organization. We took on housing stability work in 2020 as evictions and income loss spread during the pandemic. A large part of this work was funded by TDHCA pandemic dollars, a funding that ended September in 2025, though the need did not end with that. Recent civil court data shows that in Hays County, 59.9% of renters are rent-burdened, spending more than 30% of their income on housing alone. For a rent-burdened household, that often means going without healthcare, food, or other basic needs just to make rents. Eviction filings in Hays County are now running roughly double pre-pandemic rates. From May 2022 until that funding ended in September of 2025, BR3T's funding let us offer short-term hotel stays to families losing their housing, and in the first nine months of 2025 alone, a snapshot of today's need, not a pandemic-era spike, we housed 140 households for a combined 6,316 hotel nights. Today, there's nowhere in this community to place somebody while a case manager works them to find a permanent affordable housing option. And I know our partner organizations are feeling the same pressure. When BR3T does not have funding available for a client, we normally turn to our community partners. But when those partners are also underfunded, there's often no one left to refer that client to. This leaves residents with unmet housing and utility needs, which is not a sustainable place to leave them. The need for rental and utility assistance in San Marcos has outgrown what the current HSAP funding can cover. And as you build next year's budget, I ask you to keep these numbers and these residents in mind and look for additional ways to fund housing stability and case management work in our community. Thank you for your time.

Our next speaker is Bill Miller.

Hi, good afternoon. I'm bill Miller. Um, first I want to thank the city council members who voted in favor of the city wide ban on high use water developments and data centers last month. This is a huge step for our city. We're leading the charge and curbing this destructive and resource consuming pandemic sweeping across the nation and others are following suit. That being said, we must remain vigilant in our values of conserving what we have use and sell. We must not turn around and sell everything that we are trying to preserve and protect to facilities and companies outside of our fine city. The wolves are knocking on the door and are willing to do anything to make their millions while future generations of Sand Martians will suffer. Please remember, when these predatory companies are done and have gotten what they want, they will leave and not give us a second thought. Speaking of predatory companies, I want to Also address the ongoing issue of allowing companies to come into our city, build student-only housing, and then turn around and sell the property to the college. I understand that the city is in a deficit and we need to produce incoming revenue for upcoming and ongoing projects. But this cannot be the answer. We're just setting up future generations for failure. Last month in this very room, I listened to a proposal of one such building. It is very concerning. that even though the company did not meet more than a few city requirements, that the proposal was approved by all but two of the council members here. On top of that, when they sell the property to the college in 12 years, the city will lose the future revenue for that property. This trend must end. We should only be approving companies with a willingness to build actual multi-family housing, allowing the city to collect revenue from those facilities for the future, and providing new and usable housing for our residents. We should not be allowing these predatory companies to come in and have their way with no regard for the city or its permanent residents. Lastly, I want to speak on Texas State University. I understand that students spend money here, and that brings in a good amount of revenue for the city. On the flip side of that, those students that go to the college also require the support of emergency services. While the school does have their own police force, they do not pay for any sort of ambulatory or fire services. The burden is on the city. During the school year, we are understaffed in these areas. This is due to very large numbers of students, and that number rises every year while the city services can't grow. I'm going to cut it really short. If we team with the college instead, we can make it work. Texas A&M gives College Station, they started at $750,000 a year, and they're gonna go up to $150,000, or 1.5 million.

Our next speaker is Sam Young.

Thank you, Mayor, Council. My name is Sam Young. After hearing months of discussion, I understand the opposition to data centers. And the vote to ban all data centers at the June 16 meeting was one of the fastest votes y'all have ever taken. A few more like that and all these meetings will be over by 8 PM. And after watching the time spent on the land development code, I think that 99.9% of changes should be done by the staff with council approval. Rewriting the code from the DS was not an efficient way, lots of confusion. Staff deal with the public every day and have ideas to manage the code. Anything out of the ordinary should come to the council anyway. While data centers are out, new technology that brings jobs and tax dollars to San Marcos should be encouraged. Based on previous speakers, understand San Marcos is not a wealthy city. Budgets are always tight, and 2027 is no different. The city staff has worked hard to tighten their belt. Having to look for cuts each year is not a way to encourage and keep good people. Hopefully the proposed 2028 budget deficit will be helped by HEB, Buc-ee's, and Carfax opening. After that, what can San Marcos do to attract money to the city's coffers? We will all know about the 2027 budget after the July 25 Pax Row certification. Budget time always seems to bring calls to cut the spending for first responders, especially the police. At a recent citizens meeting, Chief Standridge was asked about sometimes lack of sufficient police officers in Sector 4. His response was that the force is short-staffed and the downtown area needs more officers on busy nights. Any extra officers needed downtown must come from other sectors. Many downtown communities downtown's customers would be university students. And talks with the university police revealed they were very short-staffed, and talks are underway to find a way for university police to help provide more coverage for downtown. Now this is not gonna be the same thing, but it's a personal story of helping others. At one point in my life, I taught high school and drove a school bus. For one trip out of town, we arrived at the rival city, and the band gathered outside. but they were being harassed by students from the other school. That school did not do anything to control their students. Our band director came to, we teach our bus drivers to protect our students, we did. Now the university can help in policing their students as necessary. It should not be entirely up to our police department. Good policing requires money for sworn officers and back office plus training. Another reason San Marcos needs more economic resources. Thank you.

And that was our last speaker. And so now we are to our consent agenda, items one through 20, which can be approved by one vote. If any council member wants to have discussion on it, they can pull that, in which case we will consider those after the public hearing section of our agenda. Council, anybody have anything to pull? Number nine. Okay, anyone else? Okay, I would entertain a motion to approve one through eight. So moved. And 10 through 20. Motion by Ms. Rodriguez, seconded by Mr. Peselk. Are we push button voting tonight?

Not today, ma'am.

Okay.

Ms. Rodriguez.

Please show me it is a yes for everything with the exception of 13.

Thank you. Mr. Peselk.

Yeah, I'm a yes on all of it.

Ms. Garza?

Ms. Garza?

Oh, sorry. I thought I had unmuted myself. A yes on everything except number 13.

Number 15? Okay.

Was it 15?

13.

13?

Okay, 13. Thank you.

All right. Mayor Hewson?

Yes.

Mr. Scott? Aye. Mr. Mendoza? Aye.

Yes.

And Mr. Gonzalez?

Yes.

Okay, the motion passes 7-0 with Council Members Rodriguez and Ms. Garza. Voting no on number 13.

Okay, so we will return to item 9 after our public hearings, in which case we will start with item 21 now.

Multi-public hearing regarding consider approval of ordinance 2026-26 amending sections 34.805 and 78.103 of the San Marcos City Code and the city's fee schedule to establish payment processing fees for electronic payment of short-term rental permits, fees, and hotel occupancy taxes, providing for the repeal of any conflicting provisions, providing a savings clause, and declare an effective date and consider approval of ordinance 2026-26 on the first of two readings.

Presentation.

Good evening, Council. Ismael Garcia, Assistant Finance Director. The item before you is a proposal to amend two sections of the city code, the short-term rental permit fee and the hotel tax reporting payment, and then the city fee schedule to establish a payment processing fee. Currently, the process is... I'm sorry, I'm having trouble here. Currently the process is that the city is absorbing the processing fees for when hotels come in and pay their hotel tax and also their permit for the short-term rental. That is costing the city approximately about 40,000 annually. Recently we contracted with Azabar for compliance of reporting of hotel tax and taking in the payments of hotel tax. And then we've also added the short-term rental permitting to make sure that we are capturing all units that are doing the short-term rental. And for that purpose, the processing fees that we are proposing is the 3% for credit card transactions and in a flat $2 for anyone paying on check via the web portal that Azevar is gonna be implementing for the city. The impact for us would be a savings of approximately 40,000 a year. And that would conclude the presentation.

Okay, thank you. I will open the public hearing. On this item, is there anyone wishing to speak far against or just about this item? Now would be the time. Mr. Vigneault, did we have anybody sign up for this one? I don't have anybody. Okay. Then I will close the public hearing.

Motion to approve. I'll second.

Motion by Ms. Rodriguez, seconded by Mr. Peselk. Any questions, comments? Thank you, Mr. Garcia. We're good.

Mr. Vino, we will vote. Mr. Macek.

Aye.

Ms. Garza.

Aye.

Thank you. Mayor Heason. Aye. Mr. Scott. Aye. Mr. Mendoza. Aye. Mr. Gonzalez. Aye. Ms. Rodriguez. Aye. Motion passes 7-0. Item 22. Receive a staff presentation, hold a public hearing to receive comments for or against resolution 2026-115R, proving a development agreement with JLCB 710 Investments LLC, providing standards for the development of approximately 643 acres of land, including approximately 25 acre tract owned by the city for a new water reclamation facility, generally located northeast of the intersection of State Highway 123 farm to market 1978 authorized city manager her designee to execute the development agreement on behalf of the city and declare an effective date and consider approval of resolution 2026-115R.

Presentation. Meeting the mayor and council, Terry Floyd, director of planning and development services Yeah, I'll have, I'll go ahead and let Hayden advance slides. I won't try to go through all that. I don't want him behind me, mostly. But anyway, the item in front of you is a development agreement as mentioned for Sedona South. And this approximately, this development's approximately 643 acres, again, located near State Highway 123 and FM 1978. Important point here, this project is located in Guadalupe County. I mean, you can take a look here on the map, you can see some of the surrounding uses, residential, commercial, and some vacant slash agricultural uses in Sedona North, which is just obviously to the north, and Cottonwood Creek neighborhood to the north as well that are under construction and developing. Under this development agreement, the developer is proposing a predominantly single family used with some commercial and light industrial multifamily along 123, so about 530 acres of that single family with about 50 acres of open space, which we'll talk about here in a moment, and about 47 acres of light industrial, commercial, and multifamily combined. And we'll talk just a little bit about a few additional provisions in the development agreement as we go forward. Additionally, as part of this agreement, this was donated to the city by the developer, a separate wastewater, funding agreement and we'll talk just a little bit about that too. Next slide please. So some of the surrounding zoning, that that is zoned, that's in the city limits, of course a lot of this is in the county and as pointed out earlier, this development's Guadalupe County and some of it's in Hays, but the areas that do have zoning in the city limits are character district three, commercial, some single family, some future development, and of course that that's not any colors is outside the city limits with no zoning. Next slide please. So when looking at the comprehensive plan, in the event that this wasn't the city limits, we look at an existing preferred scenario of low intensity, and in our analysis, that's of course a located area of stability. Doesn't mean that these areas should or will not change, and this is per our comprehensive plan or the SMTX plan. It does mean that any changes or zoning requests or public improvements should be planned and implemented, and the character of the area remains. Next slide, please. So in looking at the concept plan, and this is kind of a brief rundown, mentioned earlier that there are 47 acres of commercial, industrial, and multifamily as part of our agreement that's outlined in this concept plan. And important point here is no more than 50% of that multifamily commercial or industrial shall be multifamily. So no more than about 23 acres of that could be multifamily. The rest will be designated for industrial commercial uses. Additionally, looking at the concept plan, and we'll talk a little bit more about this, but the areas you see in pink are primarily the single family. That's the roughly 530 acres of future single family development. There were municipal, more mud agreements, municipal utility district agreements. that were previously approved by council or approved the ordinances consenting to the creation of those in 2024. Initially on the map, you'll see some green. Those are the open areas for park. The brown is the multifamily commercial industrial. You'll see a smaller green dot there on the right-hand side of the screen. That's a proposed private park. that will be maintained by the HOA. And the yellow is the cemetery that's there. Just a point here that's really not in the presentation, but in the agreement. As part of the agreement, access to that cemetery will be provided. Additionally, there will be three parking spaces as part of that for anyone who may be visiting the cemetery in the future. So that's part of this agreement and something that's being proposed by the developer. Of course, on the far right-hand side, you can see the acreage we have for the treatment plant that's proposed for the site. Next slide, please. So some of the terms and the allowed uses in this concept plan, again, I think it's important to remember that this is in the county. So these DA terms are kind of our our terms and so forth that the developer has worked with us. And I do want to point out the work of Council Member Mendoza, Council Member Gonzales, and Council Member Scott has served on the subcommittee for this over the last couple of years in developing this DA. But again, the residential uses you can see there, very common uses we'd see in most residential churches, childcare facilities, of course, single family, any of our police, CMS stations, parkland, some limited home occupations, family home care, and limited community homes. The multifamily side, it does include the multifamily that we talked about earlier, but additionally, the apartment residents at no more than 24 units per acre. So there are some restrictions that are being proposed as part of this that restricts some of how large those multifamily could be. Then we talk about the public and institutional uses. Again, the major utilities, and we talked a little bit about that with the treatment. that's now owned by the city, and that property's been conveyed to the city. Next slide, please. Some of the industrial uses that are allowed as part of our development agreement, or any of the uses, the industrial uses that are defined in our development code, there are some exclusions in this, so there are some uses that are not allowed, industrial uses as part of that, as part of this development agreement. Those include wrecking in junkyards, storage in flammable materials, We'll talk a little bit about another suggestion that was made by our Planning and Zoning Commission regarding another restriction of use for waste services. For commercial uses, any uses involving, that are allowed in this development agreement, in part or in whole sale of merchandise, materials, services, there are some exclusions on which commercial uses can be provided in this development agreement, and those include adult-oriented businesses, pawn shops, crematoriums, anything that would storage of flammable materials except for gas stations and truck stops. So again, some provisions within this development agreement. Next slide, please. So processes, as far as the processing of this, we're really looking at the review of the site plan and the plats because this is in the county, so there are some reviews the city will have. They're gonna use our current code processes for planning. Also, the watershed will be reviewed as part of this. and an adopted interlocal agreement we have with Guadalupe County. All the parcels greater than five acres will be reviewed by Guadalupe County. Anything other than that, we are part of that review process. There are no building permits, though, that will be required, because again, this is in the county, it's part of this DA.

And Mr. Floyd, when you say in the county, that really means it's not inside the city limits and under our jurisdiction, because we're all in the county.

Yeah, I'm sorry. Thank you. Using a term we use too much. I know, we do too. It's in our ETJ. It is outside the city limits.

Outside the city limits. Thank you, sir.

Outside the city limits and outside of the jurisdiction of the city for those areas. And the roadway maintenance plan will be approved by Guadalupe County prior to planning. Annexation and zoning. Of course, in terms of this development agreement, no annexation is proposed except for the city-owned water and wastewater treatment plant. It can be annexed in the future. That's a provision at the city's discretion. Major utilities obviously are allowed by right. The remainder of the site will remain in the ETJ and Guadalupe County standards will also apply. As far as modified uses, land uses that are defined in the development agreement per the concept plan, that's really what we'll hold. We don't have the authority to regulate that land use in the ETJ. Next slide, please. So some of the terms and some of the waivers that are in this, some of the development waivers. Current code requires that all lots are 40 feet wide or less are accessed from an alley as part of this agreement. The request is from the developers to remove that requirement. Second waiver is a dead end straight length cannot exceed 400 feet in our current development standards. Their request is to increase that to 500 feet. And then additionally, another request is regarding minimum lot and width frontages. The minimum's 50 feet in the ETJ. The developers are requesting a minimum of 40 feet as part of this development agreement. Next slide, please. Some cut and fill standards are also being requested here and that the code requires that any cut and fill on a tract of land may not exceed four feet. The request from the developers for that to be 12 feet. I think I mentioned on the message board, this is not an uncommon request we see. often as a waiver, and so that's what this developer's asking for here. Additionally, there was some discussion, some waiver of two-tiered residential blocks, so the code requires that residential blocks have a sufficient width to protect two tiers of the residential lots, unless there's a greenway provided, the request is here to remove that requirement. Next slide, please. Additionally, The code requires the inclusion of the thoroughfare plan, and what you see here on the slide is a proposed roadway that's in our thoroughfare plan. As part of this, the request is that those roadways are reconfigured on Lovelady Lane and additionally on the Rattler Road extension to be reconfigured to what you see on the right, and that's what the request has been from the waiver on the thoroughfare plan. Next slide, please. Additionally, talking about sidewalks, in 2018 there was a requirement for our transportation master plan of the section you see there to the far left, which is our boulevard section with the 12 foot shared path on one side. As part of this development agreement, the developer's proposing to build sidewalks, and that's kind of in the red you can see on your right hand side, for sidewalks along the northern boundary. that will be installed as part of the Sedona North project. So they are building the sidewalks in a 10 foot sidewalk trail. It's kind of hard to read here in the window description. That's also as part of the open space area and a six foot sidewalk trail around the western side. Next slide, please. In regards to parks and open space as part of this development agreement, As mentioned earlier, there's about 58 acres of parkland. That you see to the far left is parkland that actually is going to be open in public parkland, but it will be maintained privately as part of this agreement. Additionally, you can see a park that's an HOA maintained HOA park that's about three acres that's proposed, as you can see in some additional open spaces that are in yellow, smaller areas, and I mentioned earlier the cemetery that's there as well. Next slide, please. Parkland dedication, the code does require that the parkland dedication or fee is provided. The request is that this is a privately maintained park, as I pointed out earlier, to be provided for the parks and open space plan, so they are providing that. and the trail is within the greenway that connects FM 1978 and State Highway 123, and the existing cemetery, as I mentioned earlier, does have access and on-street parking, along with some perimeter fencing that's being provided for in this development agreement and some informational signage. Next slide, please. So the recommendation is recommended approval of this development agreement. This agreement was, again, pointed out, was recommended by Council Members Gonzales, Mendoza, and Scotts, part of our Sedona South Committee. And this agreement was presented for informational purposes to the PNZ on June 9th. Mentioned earlier that the Planning and Zoning Commission was not required to take action on this development agreement, but they did note, one of our commissioners, Commissioner Agnew, recommended that the council add Waste related services is a prohibited use in the agreement. Our understanding is the developer's not opposed to that. So if that wanted to be added by council's amendment, that could be added. So with that, that concludes my presentation. Happy to answer any questions. And also Ms. Julia Cleary, our senior planner, is here to answer any technical questions I may not be able to answer.

All right, thank you. I will open the public hearing on item 22. And we have... Melinda Grayman, Lucia Diaz, and Ryan Harden are signed up to speak. Melinda Grayman, you're first.

Hello, my name is Melinda Grayman. My first question to the people that made this presentation is when is that south portion going to be built? When is that construction starting? That would have

fact be the greatest do we know that mr floyd did we stop the public hearing if if we're waiting on an answer hold on the timing like the the timer i mean

It was because the timer was still counting down, Mayor. Oh, okay, yeah. It started over now.

And I'm going to make a comment. Normally, citizen comment is not for a question and answer. I mean, of course, the council can indulge, but just an FYI.

I thought of something factual real quick, but it may be something that we can ask later.

All right. And procedurally speaking, the address, and if you're not comfortable with giving your address, the only reason I ask is because y'all are mentioning your home and I was trying to get an idea.

Well, it's a public hearing and they're supposed to be giving their address, but you can give us your neighborhood.

Well, I don't really have a neighborhood cause I live on 45 acres by myself, but my address is 5 1 8 5 FM 1 9 78. Okay. Yeah. 1 9 7 8. I'm right across that big Brown square. That's going to be commercial. So my house is right across the street from that. If I can't ask any more questions, then I will not address them.

Well, if you'd like to ask your questions, we can, to her point. Yeah, ask them. I'm going to write them down, and then I can ask staff afterwards.

Okay. I'd like to know in that far corner if they can give us any indication of what that affects me directly, what would be built in that area versus the strip along 123. Okay. Okay. That's it, thank you for your time.

All right, our next speaker is Lucia Diaz. And it's noted we do need your address, or at least your street, neighborhood.

You got it. Lucia Diaz, one more time. 4965 FM 1978. I've been a long, over 20, 25, almost 30 years living there. But thank you for all this information. I've written down some things, but it's still gonna be a little bit of a quagmire as far as that goes, because there's a lot of questions that we have with our neighborhood. But again, I know the process now. Again, I wanna thank Ms. McCleary over here, Ms. Cleary. But thank you all for your time. I'll be back.

And is Ryan Hardin here?

Yes, ma'am. Yeah, I just wanted to make it clear real quick. I wasn't trying to cut out the first speaker. I just didn't want, like, the question and answer to absorb part of her speaking time. And then also that folks can also email questions. But I just want to make clear that public hearing, they can ask questions. It's just, you know.

But they can ask questions. We just need to hold on the answer.

Right.

Okay, is Ryan Harden here?

Okay.

Is there anyone else in the room who wishes to speak far against or about item 22? Going once, twice. That concludes the public hearing, and I await a motion on this project in order to begin discussion.

Motion to approve with Commissioner Agnew's recommendation.

I have an amendment for that. All right.

And I'll second for discussion.

So we have a motion by Mr. Gonzalez, seconded by Mr. Peselk, and... let's go ahead and go with, uh, uh, my amendment that is based on Mr Agnew suggestion and someone's got it on the screen here. And basically it's to the allowed, um, uses go from one section to another and the waste related was in the middle. And so I've, I've bracketed it so that these are okay. These are okay, but it does not include the one that has waste related services. So we will see it on the screen here at some point in time. But that will be my motion so that waste-related services is not included.

Second.

Maybe we'll wait for that one, and we'll go ahead and ask questions, and we'll wait for that to come up if anybody has anything. I don't have any questions.

I mean, I guess we could. if we have answers for our citizens' questions.

Sure, and it may be easier for me to bring up, and I know Hayden's working on getting the amendment up on the slide, but bring up the slide with the concept plan that was in the presentation to answer that question. But I believe if it's on the west side, it would be Marsden-Wilta family and Park to answer the residents' question.

But would you have information on how quickly any section of this is going to be built? I don't know.

I don't believe we have a timeline.

The developer is here, so if you guys have a response to that, but in the absence of a specific timeline, the phasing of this development will be decided as part of the preliminary plat. And so typically with the preliminary plat, we require that a phasing plan is included. That will be then, once it's approved, that phasing plan will be published on our interactive plats viewer, which is on the website. I'm happy to send you an email whenever that's published if you'd like. But at the moment, we don't have a specific timeline of when that development is going to be moving forward, specifically for the commercial component. Typically, the commercial components of mixed-use developments out in the ETJ or outside the city center usually come a little bit later. But we do not have a timeline at this particular moment in time.

Hold on. If you want to speak, go to the microphone, give your name and who you're with, please.

Yes. The landowner developer and your name Gentry, Nathan Gentry.

Thank you.

Yep. Um, so this it'll be built over many, many years, kind of in phases, the utilities kind of start on the north. And so we'll be working south. Uh, nothing's slated to start for at least another year. Um, and it will be built over time. That helps that be largely market driven. right, as the demand for homes come about. We don't have builders on board yet. That'll come later. They will drive a lot of that schedule, if that makes sense.

Okay, thank you.

I have a question for Ms. Rodriguez. Actually, if you don't mind approaching the podium real quick again.

Yeah, you, sir.

I know in the planning and zoning, y'all expressed no opposition. If I'm mischaracterizing your position, please let me know. But y'all didn't express opposition for the prohibition on waste-related services.

Right. Yeah, yeah.

How do y'all feel about car washes? Because I can tell you how I feel about them. But that is a permissible use under this. And so would y'all be interested in prohibiting that use as well?

We'd have to talk about that one. I will take it under consideration.

Okay.

We certainly don't have a problem with the first one. We're not sure.

Sure. And just the rationale and that just off the top of my head, you know, when you really look at these developments on the periphery of town, whether they're in the city, whether or not, as you know, massive infrastructure. And so water is a big thing. We have a ton of car washes here. And so that's sort of where I'm coming from is do we want to do anything in addition to that? So if it's something to consider, I'm, I'm interested in hearing an eventual response.

If it matters, we're in Crystal Clear's water CCN.

We all share the same in some way.

Yeah, same resource. I'd be interested in the consideration. Thank you.

Thank you. There may be more questions. And Mr. Purcell.

I have nothing. I think Matthew seconded you earlier, just FYI.

I haven't made the amendment yet because it's not on the screen yet.

Oh, nope.

That's not it. There it is. Okay. I'm proposing this amendment. The waste services is 5175. And so I've got that what's allowed is 5171 through 5174 and pick up after 75 with 5176 through 5177. And that's my motion.

Second.

Thank you, Mr. Gonzalez. Are there any questions on that one? No, ma'am. Okay. Mr. Vino, let's vote.

Ms. Garza.

Aye.

Thank you. Mayor Heason. Aye. Mr. Scott. Aye. Mr. Mendoza. Aye. Mr. Gonzalez? Aye. Mr. Rodriguez? Aye. Mr. Pesel? Aye. Okay, motion passes seven to zero.

Okay, and Mr. Floyd, would you explain a bit about being in the city and not in the city, and can this be built without the city's approval?

Short answer is could it be built without our approval if it was just outside the city limits in the ETJ? The answer is yes. Of course, as pointed out, this is not in our service areas for water or electric. And of course, any provisions that would be there would be anything in the ETJ, any of those provisions. In the event that this property wasn't in the ETJ, there wouldn't even be those provisions. Correct. So this is a regulating plan for those things.

And I know Sam may, uh, and it's a municipal utility district or I think it's two, two. Okay. And a brief explanation of what a municipal utility district is by, by either of you.

I can, I can let Sam explain it quicker and faster.

I'm sorry. I was going to go to the other issue. I guess there needs clarification. Could they not, uh, because there's a new statute, it's not that new anymore, allows people to opt out of the ETJ. So that's, through this agreement, that would prevent that, is that correct?

Yes, that would be the governing document, correct.

And if it's not in the ETJ, I think that means there would be no oversight by the city, is that correct? I thought that's important to clarify.

Correct. Okay, is this land in the ETJ?

Yes. Yes.

They have not requested to be excluded.

No.

Okay. Good to know. What's either one of you explained about municipal utility districts?

Well, let's say I'm take, take a brief crack at it.

Well, I'm sorry. What was your question again?

What is it for the general public and for, for, for us exactly? What does it's going to be a mud?

Yeah. A municipal utility district is something that legislature has has authorized that essentially allows the, it's almost like the creation of a city. It has a governing body. They manage it like a city. They take care of all the services for the city, but it's primarily for the primary reason they were created, which is initially to provide for the utilities. It's a way to provide, raises so you can have assessments by the district to pay for the cost of utility infrastructure. Uh, the normal system or that we're accustomed to here is if a developer wants to, uh, say develop in the city, they would tie into our utilities and they would have to pay all fees, uh, for the extension of those utilities. Uh, But through municipal utility district, they can levy assessments to cover those expenses, among other things. But it also, you know, they won't be subject to the normal regulations that they would have in the city limits.

Right. Our city attorney. Just one question for staff. I asked this question on the message board about proximity. the treatment plant to the residential. And I do want to take a moment to thank a developer for the partnership when it comes to the treatment. Related to my amendment. You're still on the amendment. I thought we disposed of it.

Oh no, we vote, we vote on it. My back's hurting again.

It's okay. My only question is when I asked about the homes abutting the plant, the response by staff was the city would need to install landscaping, is that not a requirement or something that we would just put ourselves to do anyway, considering the proximity?

Yes, and I know some of those questions, yeah, and we would do that as an additional buffer, and I know the treatment plan, I'll speak way, way outside of my purview, but I know there are some different utility provisions and so forth that Marks may want to speak to regarding some of those questions about odor and so forth that the treatment plant has to do anyway on that.

Marcus Nizer, Assistant Director of Capital Improvements. We're proceeding with the design and we are requesting approval from Council for construction of the first part of the plant. And part of that design is going to be, um, more of an architectural feature on the fencing that abuts the neighborhoods or the neighbors. And also we have a berm to kind of break up the sight line using topography. Um, and we also are going to have landscaping there to be a good neighbor. So that's all working into the design process.

And the architectural fencing that we're talking, are we talking mortar walls? Are we talking, I know those are cost prohibitive, but I guess is it too preliminary?

It's preliminary. Yeah. We haven't chose a type of fence, but they are things we are considering. We are considering those types of fences.

Okay. Okay. Thank you.

Thank you.

Anyone else? Anyone online? Are y'all ready to vote? Mr. Pena.

Mary Houston. Aye. Mr. Scott. Aye. Mr. Mendoza.

Aye.

Mr. Gonzalez. Aye. Mr. Rodriguez. Aye. Mr. Wiesel.

Aye.

And Ms. Garza. Aye. Thank you. Motion passes 7-0. Okay.

So we're on to item 23.

Multi-public hearing regarding considered approval of resolution 2026-116R, providing no objection to the submission of an application for low-income housing tax credits to the Texas Department of Housing and Community Affairs for the Riverstone Multifamily housing project case number LIHTC-2019-01A, located at 2005 Crystal River Parkway, formerly 1430 Wonder World Drive, approving findings related to the application, imposing conditions for such non-objection, providing authorizations for execution or submission of documents related to the application, declaring effective date, and consider approval of resolution 2026-116R. Presentation.

Good evening again, Mayor and Council. Terry Floyd, Director of Planning and Development Services. The item before you here is a resolution of no objection, and I do want to mention that the following item is a companion item to this, which is a cooperation. agreement that we'll talk a little bit about more in a second. And so there'll be a secondary presentation that's shorter, but they are together, they do run together. So with that, this site and this resolution is for the Riverstone Apartments, which you may be familiar with, is approximately 15 acres, it's southeast of the intersection between Crystal River Parkway and Wonder World Drive. It's currently constructed. and it is located within the city limits. And the comprehensive plan designations for this are neighborhood high and medium intensity. The project does have 12 buildings on it currently, 336 units. This is kind of where talking a little bit about the history of this project's important. So in 2019 there was a resolution of no objection that was that was approved by the city council and with that resolution of no objection came a property tax, no property tax exemption wasn't exempt from property taxes. This item in front of you is to amend this resolution of no objection due to the applicant's request to partner with the Texas Housing Foundation, which is a tax exempt entity. So we don't do this a whole lot. Normally you see the resolution of no objection on a new project that has low income housing tax credits. So this is the first one of these we've seen like this. Next slide please. Just a little bit about this, if you look at the we mentioned the 2019 resolution of no objection. You can see the unit mix there on the left. 100% of that unit count was in the 51 to 61% AMI, and so that's annual medium household income. What's being proposed as part of this resolution of no objection and then will be further codified in the cooperation agreement that allows for that, that's our next item, is a proposed change in this. And I do wanna mention that Council Member Mendoza, Council Member Rodriguez, Council Member Scott were part of Workforce Housing Subcommittee that worked on this. And I really thank them for their work because we were going down some new territory. And so with that, what's being proposed is a change in this. The zero to 30% of these, 30% AMI, now 51 of the units, and the developer's proposing that as part of this agreement, or this resolution of objection, I'm sorry, and that 285 would remain in the 51 to 60% AMI range. So there is some provisions there. Next slide, please. This property also is being proposed, and this is where we get into a little further with cooperation agreement. It's being proposed and the developer and the foundation are proposing a pilot agreement. So mentioned earlier that if this property were to become Texas Housing Foundation property and sold, it would become tax exempt from property taxes. So what's being proposed by the developer is a pilot agreement, payment in lieu of taxes. We see these occasionally. with this many times, my understanding, and I apologize, I'm still on month seven, but I believe in the past those have been authorized to be looked at and negotiated after the approval of a RONO, or a resolution of no objection. In this case, this is being proposed up front. Initially, you can see here, I wanted to talk a little bit about that. The developer's proposing $100,000 a year payment in lieu of taxes with a 2% increase annually. We can take a look here at what does that mean from the tax revenue standpoint. You can see that we look at the cumulative annual years and all in this property would pay over the next 20 years let's say about $7.8 million. And it'll make a little more sense when we go to the next slide. They do currently in year one you can see pay just shy of $300,000 a year. One of the impetus that we understand for the potential sale of this property is that the property taxes have become nearly I believe tripled is what the developers told us over the last few years and has made it very difficult financially feasible for them. proposing this, but currently they pay about $293,000 a year in taxes. If you take a 3% increase over 20 years, that translates to something like over 500,000 they would pay in year 20, cumulatively about 7.8 million that we would lose in this. Next slide, please. So the pilot agreement amounts mentioned that it was being proposed at $100,000 a year with a 2% increase. What that translates to in 20 years is around $2.5 million. So we don't get the full amount of 7.8 million that it would have paid being not property tax exempt, but the pilot agreement does allow for a lease recoup of 2.4 million or so over the next 20 years. So next slide, please. Here's just some additional project information. None of this is changing. This is currently what's in the project today. Talk a little bit about the site layout. You can take a little bit, gonna take a look here at some of the different, the unit mix and what it is, one bedroom, two bedroom, three bedroom, and four bedrooms. That gets to the 336 unit count. So they do have a mix of different bedroom types currently at the facility. Next slide, please. Some of the amenities, I mentioned those. Those amenities, you can see a whole lot of them that are currently provided. And initially, and I am glad Julie is here because she's worked on this case as well and has a lot of expertise in low income housing tax credit. These amenities are part of their agreement with the state as well that they are provided. And that's what was initially provided in the initial recommendation with these amenities. And so these are all currently there. You can see some of the resident support services, including the food pantry, some of the notary services, and some of the different things they have for the residents and their support services. So those amenities are still in place, projected to stay. Next slide, please. You can take a little bit of, We have up here a couple of maps that show the site and some of the different features of it. You can see its thoroughfare plan and so forth, and some of the environmental features, of course, not included in the floodplain or anything. Next slide, please. One important component here that's looked at in part of the resolution of no objection in these tax credit projects is distance to services. And so this gives an idea of what the residents and how far they are from some of the services. You can see the Santa Rosa Hospital is within the half mile buffer. Sam's Club. that's also nearby, so these services are within a reasonable travel distance, maybe walking distance even, of the current facility. Again, about 1.3 miles from Santa Rosa and just shy of a mile from Sam's Club. Next slide, please. Workforce housing policy, our old criteria in 2018. This is just as a reference, this is what would have been our criteria in evaluating this back at the original resolution of objection 2019, that it has to meet five of the eight criteria below. and one of those is no exemption from local property taxes. Now today our criteria allows for a consideration of that if they are proposing that, and there's additional criteria we'll talk about shortly as well. But you can see some of those old criteria, projects mixed income, and provides at least 20% market rate units. Next slide, please. So our criteria today, and we talked a little bit about this, the met and what's not met, and this is the basis of of some of our staff recommendation. We'll go through some criteria and we'll talk about those here in a moment. One thing I do want to point out, 1A and 1B on your slide here are different than what's in your packet. We made an error. We just wanted to show that the units that are in our criteria to be met are actually being met. We had a typo, it made it seem like they weren't meeting that criteria, and we were suggesting that they were, but they are. So those criteria include that the project's providing at least 15% to households that are below 30% of the AMI. That is what's being provided. Additionally, that six of the units, or 12%, which are affordable, so six of those 51 units are ADA compliant, and they are, and there's actually more than that. that are in this unit. So I just wanted to point that out in case you saw the discrepancy in the packet. That was topical error on our part. Of course, they are working through and working through some of the additional criteria here. They do meet that the project includes 1C, that the project meets 132 bedroom units, 39% 24 bedroom units. So 35% of those units are not age restricted. And they include a minimum of three bedrooms. That's being met. The current project doesn't, And when we're looking at criteria 1D, the current project doesn't reference commitments in the LURA. An amendment to the LURA, which is the agreement with the state, will be required. The developer's committed to amending their LURA to include these provisions as needed. 1E is when considering the recommendation of support that we give preference to projects that utilize a local entity for tax exemptions. This is being met. We talk a little bit about the Texas Housing Act The foundation is based in Marble Falls. They're not in San Marcos, but Hayes County is one of the participating entities in the Texas Housing Foundation. And the Hayes County Commissioner's Court did approve the participation in June of 2023. Next slide, please. Additionally, we look at some of the other criteria and we see that some of those are met. Some that are not met is the project, if you look at number four, the project's not proposed to develop under a legacy district city's current zoning map. Property is zoned MF24, which is a legacy zoning district, so that wasn't met. And then additionally, the project's to be located within a quarter mile walking distance of an existing or proposed bus stop. This project is just outside of that at .27, so it didn't meet that criteria as well. And then additionally, the project is not renovating or redeveloping, so they didn't meet criterion seven as well. Next slide, please. And we can look again at some of the additional criteria meeting the needs of local community. Staff analyzed that those were met. They utilized... local support services, those being met, 8C being met, and then 8D, that this is being partially met, because this original application and the recorded lure is included in your application packet, an amendment will be required, again, as pointed out, to meet this criteria, and again, with our discussions with the developer, they're willing to do that. Next slide, please. So again, we have additional considerations, some analysis looking at compliance with NFPA standards, some of our analysis here. Number three is for senior housing projects. Obviously it's not applicable here, so this is not strictly that, nor is number four applicable, nor is number five applicable in our different, in our different analysis. Number two does talk about the tax exemption and some of the things that it should include, an estimate of tax revenues, which they have provided, and a description of the future plans for placing the property back on the tax roll. And again, the applicants indicated that they're willing to provide this pilot program for the life, and that's actually for the life of the project, for the life of the project in so long as it remains tax exempt. The pilot is in effect. Next slide, please. So additionally, we can look at some additional language from the Texas Department of Housing Community Affairs that could be required in the resolution. The TDHCA requires that resolution is obtained from local developments locating municipalities, sorry, that have more than twice the state average of units per capital supported by the housing tax credits or private activity bonds and then 20% housing tax credit per household resolution. And also the resolution is required by the TDHCA for those developments in the census tract where more than 20% of all the households are tax credit units. Next slide, please. So the recommendation. The Workforce Housing Committee, as mentioned earlier, provided a neutral recommendation for this. Staff does recommend approval of the amended resolution of no objection, given that those criteria, the five of the eight criteria that have been established for low-income housing criteria have been met. And so with that, Mayor, that concludes my presentation. I believe the developer has representatives here as well, along with Julia Clear to help answer any questions you may have.

In that case, I'll open the public hearing. And I've got two people signed up, and then I will ask for others if they wish to speak. Our first speaker is Jake Brown.

Good evening, Mayor and Council. Jake Brown, LDG Development. I think Terry did a really good job of breaking down with the presentation. I'm just here to answer any questions as you guys go through it. And I think Allison also signed up to speak here on behalf of.

Allison Smith is the other person who signed up to speak. Okay.

Good evening. I'm Allison Smith. I'm with the Texas Housing Foundation. Thank you for the opportunity to be here tonight. Before I begin, I do want to first thank particularly Miss Cleary. She was frankly amazing to work with, very thorough. I work with cities all across the state, and this was one of the most transparent and clear-cut cities to work with. So I really appreciate your efforts in that way. Tonight, I'm asking you to consider this cooperation agreement with the Texas Housing Foundation. It will preserve and strengthen affordable housing at the Riverstone Apartments. As you may know, affordable housing only remains affordable if the property itself remains financially sustainable. Riverstone is facing financial challenges, and this cooperation agreement provides a path to stabilize the property while ensuring it continues to serve the residents that depend upon it. This isn't simply about preserving what's already there. If approved, the agreement will actually increase affordability by providing deeper income targeting than currently exists. In other words, the property will be able to serve households with even greater housing needs while remaining a long-term affordable housing resource for the San Marcos community. We believe this is a true partnership, one that protects an existing affordable housing asset, strengthening its long-term viability, and advances this city's housing goals. Thank you for your time and consideration, and if you have any questions about my organization, I'm happy to answer those for you.

Okay, and I need your address.

My home address is?

I need an address. It's a public hearing, and I'll need Mr. Brown to come back and give his address if he didn't already.

It's 4616 County Road 252, Bertram, Texas, 78605.

Thank you. Mr. Brown, if you could give us your address, please.

It's 6300 La Calma Drive, Austin, Texas, 78752. All right.

And now I will open the floor for others who wish to speak far against or about this item. If you will give your name and your address when you begin speaking and you'll have three minutes.

My name is Ryan Thomason. I am on the board of directors of the capital area housing finance corporation and I represent San Marcos for about 15 years now. Um, I'm going to address a few things. One, the reason the planning director said we have not seen this before is because Capital Area doesn't do this. When we go into a project, the rules don't change. One reason that Texas Housing Foundation is seeking the partnership request is because Capital Area said, no, we are not going to participate. There's no ill will at all towards LDG. We've done other projects with them, including the one that we came before council on, I think about three meetings ago on Redwood. It was kind of a quirky public hearing with no action, if you recall. This one, LDG came to us, Probably second half of last year. I don't remember exactly It's a market conditions deal. I get it. I feel for him. I really do. I'm in a similar pinch and You know said we need to partner on this capital area issued the bonds at the original initiation and capital area acted as the GC and I'm going to translate that and when a tax exempt entity acts as the general contractor, it means you don't pay sales tax on materials. So anyways, I came back and I guess it was about, I don't remember exactly, but around five years ago, plus or minus, I stepped in as the rep and said, we cannot do any more off the tax rolls deals. We just simply can't do it. The threshold for the general fund and the budget just isn't there. Anybody that wants to come in with workforce housing, happy to entertain it, we need it, but you gotta pay the taxes. And then when they came back, this was kind of at the pinnacle of rogue HFCs from out of town, Cameron, Pecos, et cetera, had taken down I think two or three complexes in town, plus Texas State University had bought two very large complexes from American campus communities. So I was approached on this, and our board is very, very tight. When you represent a region, you're kind of the pitcher and the catcher for that region. We respect each other a lot. So anyways, I was approached with this, and I said, hey, unfortunately, not only has our situation changed in San Marcos, but we've gone from zero tolerance to about negative 100 million on the tax rolls. So I'm sorry, I wish we could participate in it. I get the market conditions have changed, but my position as a San Marcos rep is we simply cannot partner in this project. My three minutes are ending.

Looking for our next speaker. If you'll state your name and your address, please.

Thank you, Mayor Houston, members of the City Council, Miguel Artando. 200 Patricia Drive. Tonight, I'm just here to raise concerns as a fellow policymaker in the city of San Marcos. As a San Marcos CISD school board trustee, An affirmative vote tonight, moving forward with removing this from the tax rolls will result in, I believe your document says, about $495,000 a year of a loss for San Marcos CISD. As I'm sure many of you are cognizant of, all of our financial budgets are strained in this current economic climate, and we continue to do more with less, similar to the city of San Marcos. And I'll just be honest with you. $500,000 loss in our general fund budget would be catastrophic. I mean, that represents over 8,500 meals for our kids. It represents the entire capital outlay for communities and schools in our district on a yearly basis. And we're debating giving raises to staff or not, keeping salaries and benefits stagnant. We've actually had to move the cost of healthcare back to the employees. So most of our employees are seeing a loss in paycheck, even with a 2% increase. This is nothing against Texas housing foundation. This is nothing against affordable housing within our boundaries. You're talking to somebody who sees it day in and day out with our ISD families who experienced housing insecurity, homelessness, and who on many occasions has advocated for more workforce housing and affordable housing in the city of San Marcos. I don't perceive a vote against this tonight as being anti-affordable housing. It's just being realistic with the economic climate that we are all dealing with. And, you know, I look forward to the joint committee of city council, university, county, and the ISD of meeting because these are the kind of issues that I think we can address collectively in tandem by working together. But tonight, I ask you to just reflect on what arguably could be the very real unintended consequences for a fellow governmental entity that educates our community's children. So I'll give you a minute back and thank you for your service.

Is there anyone else who wishes to speak far against or about this topic? Going once, twice. I will close the public hearing and I await a motion to deny. Motion to deny. I heard from Mr. Gonzalez, is there a second?

Second.

Oh, that's for Mr. Mendoza. That's why I couldn't tell where it was coming from. OK. I've got some things to say and some questions to ask, but.

You can go ahead.

OK. One of the things that was stated was something about taxes went up 3x. Perhaps Mr. Brown, you're the one to ask about this. I pulled your numbers from the Hays CAD and other than going from not finished to finished, I'm not seeing that. Can you help me with that?

I can help you with that, yes ma'am. i think and i just looked at city but i'm assuming school well i know where to go from there yeah i think really what the information was trying to say is what was originally projected like when we closed on the construction loan in 2020 what the projected property taxes were going to be infinitely higher in reality than what we projected them to be and so you know we based that on historical numbers and comparable properties at the time but you know with Property tax is its evaluation game, and so you never really know for sure. And so, you know, the reality came in several years down the road, and they were much higher than we expected, coupled with the fact that the rental rate market softened in San Marcos, and it just kind of became the perfect storm of terrible things. And so, you know, not trying to make a long story short, but, you know, come time to convert on the loan from construction phase to permanent phase, the lender basically said, hey, look, you know, these property taxes are not even close to what we thought they were going to be. You know, you guys are gonna have to come up with $14 million to pay this loan down. I said, well, we don't have $14 million. We need to explore other opportunities. And so as Ryan mentioned, that was about the time that we approached capital area and said, here's the situation. This is what we'd like to do to preserve the affordable housing. Um, they obviously politely declined. And so then we explored other options. and then ultimately landed with the folks at Texas Housing Foundation as a potential opportunity to save it. So I hear the feedback. It's not lost on me. I do this all over the state. The property tax conversation, particularly around affordable housing, is a really, really difficult one. It's a conversation I have a lot. Frankly, it's not enjoyable. But in the case of Riverstone, the reality is here is if the property is not salvaged in some way financially, it's going to be foreclosed upon and the affordability is going to get wiped out. And I don't mean that to be in a threatening manner. It's more so just a statement of fact.

So what did you mean on I get foreclosed upon and you said something about affordability would be wiped out? Can you explain that to me, please?

Yes, ma'am. So basically what will happen in this scenario is if we're not able to find a way to preserve the economics of the development, in this case, find a way to alleviate the property tax situation. either in the form of an exemption or a pilot or some combination of the two, we'll be faced with a situation where we have to pay down approximately $14 million of a loan to make the economics right, so to speak. we don't have the $14 million to pay down the loan. So when that doesn't happen, the lender will call default on the loan, they'll take ownership of the property, it'll be sold on the free market, and all the affordability component, all of the restrictions with respect to income and rental rates and the tax credits, all of that'll be eliminated. The affordability component will no longer exist.

So even though it was built under those rules that if it defaults and is bought by someone else, they do not have to follow with the event of foreclosure.

Yes.

Okay. I have another question for you. And that is the example that we were given, um, went out 20 years of the difference in property taxes and, and the pilot. Um, I guess maybe I need to ask Mr. Floyd this. Was that 20 years just in his example, or were you looking at asking for a limit of 20 years on the pilot?

Just an example, just to save you some brain power of having to read 100 years or whatever it may be.

The 20 was pretty explanatory.

I figured, yeah. So Mr. Floyd, I think you even mentioned in his presentation a moment ago, if approved, the pilot component of it, would carry on for the life of the property tax exemption. So as long as the property tax exemption is in place, the pilot would be in place.

And it's, it's a hundred thousand plus the 2%.

That's right.

Increased each year. Um, okay. And what is your occupancy?

Uh, 82.7% I believe.

Okay. And, um, if this were to pass, and now we've got a different criteria for 15% of your units, would anybody be kicked out because they wouldn't qualify?

No, so that's, no ma'am, that's not how it works. I'll give you two different examples here. First is the real world example. So right now we're 82% occupied, right? So what is that? 58 units are vacant right now. So what we're proposing is that 15% of the units, 51 units would be converted to 30% of the area median income.

Which could be that 51 of the 58.

Exactly. I mean, fortunately or unfortunately, depending on how you look at it, there's more than 51 units vacant right now. So if approved, we could immediately say, hey, those are 30% AMI units. Now, in an event where and this is not the case and it's not gonna be the case tomorrow or anything like that, but let's just assume the property's 100% occupied and we still have a committed to providing 15% of the units, 51 units at 30% AMI. As those leases expire for certain units or people don't renew, whatever it may be, we'll just tag those units as 30% AMI over the course of time. If we're full, we immediately have to kick 51 people out to comply.

I would hope not, but then again, there's compliance. There is. So I just wanted to hear we're not kicking people out.

Yes, ma'am. We're not kicking people out.

Okay. Thank you.

You're welcome.

I had a follow-up question to your first question about property tax expectations. So tax rates have not tripled. So, I mean, I know it's an oversimplification, but essentially property taxes is property value times tax rate. So since the tax rate hasn't tripled, is your property value three times what y'all expected?

Cause if it were, well, I guess, I guess the Hayes appraisal district thinks so. I mean, I think really, I mean, the reality is, is, you know, we underwrote probably about $400,000 in total property taxes at the original construction loan closing in 2020. Uh, I think we're at, close to $1.1 million total annual property taxes in the most latest assessment.

To all three entities?

All the cumulative total taxing jurisdictions, yes, ma'am. Theoretically, if this was a, A convenience store or a gas station, it's a little more cut and dry on the valuation. When it comes to low-income housing tax credit property, again, we do this all over there. I do this all over the state. Every appraisal district values low-income housing tax credit developments differently. Different people have different calculations, whether it's income approach or cost approach, how the tax credits are factored in, what's the tax break. There's just a lot of nuance that goes into it. You know, at the time, this was our first property in Hayes County. And so, you know, we're basing it on historicals of other low income housing tax credit properties within the city and within the county. And then also other experiences and other taxing jurists or other appraisal districts across the state. And so for better or worse, there's a little bit of a guessing game that comes with it. obviously we guessed wrong. You know, that's not necessarily y'all's fault or y'all's problem, but it's just the reality.

I find it difficult to believe that y'all guessed y'all's property was going to only be worth or valued at roughly $13 million and now it's being valued at $39. That's a really big bad guess.

Yeah, I agree. It is a really big bad guess. And I'll tell you too, I mean, the reality is that this stuff is vetted 10 times over by lenders and investors. And so if they thought differently and thought we were crazy, they would have told us and said, no, we're not doing this. But everybody at the time with the information that we had and what we understood to be reality believed that it was an accurate projection. I mean, realistically speaking, it doesn't make any sense for us to lie to ourselves about what we think the property tax projection's gonna be. We just set ourselves up for failure. We wouldn't go into a development in San Marcos or anywhere for that matter, So we'll just pick a blind number and say it's gonna be a dollar. We messed up, but it was certainly not for a lack of effort, a lack of calculation on our part.

Okay, I do have another question. Yes, ma'am. It's my understanding there's a requirement that there's a letter needed from the San Marcos Housing Authority?

Yes, so I believe it's item 24 on your agenda tonight contemplates the cooperation agreement with the Texas Housing Foundation. Okay. State statute in addition to a cooperation agreement with the city also obligates a cooperation agreement with the local housing authority if one exists. In this instance, that would be the San Marcos Housing Authority.

And my question is, has that come to fruition yet?

It has not come to fruition. We presented to their board of directors, I believe at the end of May, and the feedback from them was we're just gonna defer to the city and see what they do and then we'll go from there. So they decided to table it and then bring it back at a future date after this item was presented to city council.

Well, if that's a requirement for this, I'm gonna wait on them.

Okay.

Okay.

Well, Mayor, on that point. Yeah. That point was involving the San Marcos Housing Authority. So the statute also requires declaring a need for the county housing authority to exercise its powers within the municipality. I have not been convinced that there's a need that Texas Housing Foundation come in.

To clarify, there's not a requirement that the San Marcos Housing Authority approve a cooperation for the city council to approve a cooperation agreement, but nothing is binding. There's no ability for us to work in your jurisdiction without both. They're done separately, but we need both to operate in San Marcos. to answer your question about, or your comment, regarding the need for us to work in San Marcos. When we were first approached about this deal, I made a few calls. My first call was to the county commissioner, who ultimately provided a letter of support for this transaction. that oversees this precinct. My next was to Capital Areas President Andrea Shields to inquire as to why they were not interested in participating in this deal. I wasn't interested in getting involved in something that was messy or, anyway, something I didn't want our organization involved in. At the time, HFCs, I'm sure all of you know, were in a very politically difficult position. I will say that Capital Area has always, in my experience, acted with integrity. They've never done deals that I believe are on the edge or unscrupulous. So I think they just, in my conversation with Andre, I understood it to be they just wanted to lay low and not do these deals because it was politically sensitive. And it still is. My next call was to the Housing Authority, and I did actually have a good bit of trouble getting through to the Housing Authority. And I later understood that there was quite a bit of turnover in the Housing Authority staff, the director level. that they were not, the feedback that I got was that they were not able to undertake any large deals in this manner with the turnover in staff, and that's why we were contacted. That's the feedback I received from the Housing Authority at that time.

Okay, Mr. Brown, were payment in lieu of taxes pilots considered for the school district or county?

Do you want to answer that?

Okay, either way.

So I did reach out to the superintendent as well as, again, the county commissioner and the housing authority to inquire about their thoughts on this project. The superintendent did provide feedback that he was concerned about the property tax exemption. Understandably, my response to him was basically, I totally get it. He inquired about a pilot to the school district. I told him that until we knew what the final dollar amount was with the city, if approved, the pilot, which is proposed today to be 100,000, We don't know what is left over to provide in pilots to the school district or to the housing authority, in fact. We are not opposed to those conversations. We're happy to have a discussion with the superintendent as well as the housing authority about making a pilot agreement with them as well. But we need to know the starting point, which is with the city, whose approval we need. So I'm happy to have those conversations with them.

Okay, so you're offering us a pilot and you need approval from us. That's correct. You don't need approval from the others.

I don't need approval from the superintendent, but I understand that that is an important decision that you are considering. The loss in taxes to the school district is important. I understand that. That's part of your consideration. I need to know what your pilot is before I can offer a pilot to the school. I do need a cooperation agreement with the housing authority, and I have expressed to them that I'm willing to have that conversation regarding a financial... incentive to them as well. I have not gotten a call back.

Is that per the law or is that just a preference that y'all have regarding needing the letter from the housing law?

It's required that I receive a cooperate. We are not an HFC. I want to clarify the, the, the, what you know about HFCs and the, the legislation that happened in the last session regarding fixing the issues there. We operate under a different section of the code. We operate under 392. We have always been required to get cooperation agreements to work in any jurisdiction that we go into. If it has a housing authority, we are required to get a cooperation agreement with them as well as the city or county or wherever the project will be.

When was the Texas Housing Foundation created? 20 years ago. 20, and when did y'all start covering Hays County?

Hays County joined our board in 2023.

Okay, so very recently.

Yeah, it was approved by the county commissioners and they appoint my board member, Dave Edwards is his name.

Okay. Were you aware of Capital Area Housing Finance Corporation at that time?

Capital Area, my previous CEO was, served on their board since 1987. So I'm very aware.

Okay.

Yeah.

Thank you. Mayor, um, council member does have the question.

I just looked up and I was going to check Ms. Garza and Mr. Mendoza to see if any hands were up. Mr. Mendoza.

Thank you very much. I just wanted to bring something up to the attention. As far as the criteria, I know they had mentioned that it is within a certain distance to a grocery store, and they mentioned that grocery store being Sam's Club. I don't think that's fair because Sam's Club is not like your everyday grocery store. You can go to HEB, Randall's. This is a membership area, and not everybody can afford that $50 to $100 membership. So I would just really push That for future references, we don't really consider like that or a Costco, something that does put financial restrictions on somebody just to be able to go to the grocery store. So I just wanted to point that out. Thank you.

Well, and you have to buy eight cans of corn, not just one at a time. So, yeah, it makes it rough to be a grocery store. Mr. Rodriguez, do you have your hand up?

I didn't mayor. Um, I think the, as y'all can see the, the committee, we talked about this, what, two meetings and it was, it was deep conversation that we had with staff. I do want to give a shout out to Ms. Cleary and Mr. Floyd, always a pleasure working with them. Um, this was a tough one, uh, for us, I think as a committee, and I don't want to mischaracterize our conversations. I think, we all looked at the change in terms of units and in terms of affordability with favor. I think though the continued conversation was the what brought us here to that discussion and how these things typically, as it's already been mentioned, happen usually before versus not where we are now, where the property is already built, people are living in it and so on and so forth. Um, I can tell you, it's also incredibly unfortunate, uh, because I know people who live in these apartments and to the point earlier, there are very few apartments within our city that are affordable. Um, and what this will mean should the council decide to deny it for the people already living there and it's a tough position to be put in, and I appreciate all of the additional information in terms of context, but at face value, it does look like, and I'll just use the word, a bailout, and that's hard for any council to approve. It's hard to say that you're taking property tax away from not just us, but obviously the partnering agencies such as the district and so on and so forth, and so, yeah, I mean, that's sort of an explanation on the neutral recommendation, and if my colleagues wanna correct anything I said, please, but just to kind of give y'all who weren't present in those conversations some context to the recommendation. This is hard. It is incredibly hard because as many people may know, we don't have many opportunities as a municipality to make housing affordable compared to other states. And so we're left with these almost catch 22 options, which are incredibly frustrating considering the need in our community. We have a very poor community. And so yes, Mary, it is an incredibly different or difficult dilemma.

But you said something about it's hard to find affordable housing. I don't even know how many hundreds of units we have of the low-income housing tax credit. Matter of fact, Mr. Floyd noted that we're probably, and I think we are going to have to do the letter, we know we have higher than the whatever set, not a limit, but a percent is. And we've been doing that for several years now.

We've got a lot. And we also know that the figures, the AMI figures that we're all going off of are not indicative of the population in which we serve in terms of true affordability. And so, yeah.

So if I may, you know, I hear all of the comments and certainly appreciate them and, um, had similar conversations over my career on the same topic. What, would it take to approve something like this? Would it be worthwhile if I requested you guys to table this and we come back in a month and we say, hey, look, we hear what you're saying. We recognize the loss of property tax revenue across all of the jurisdictions. Let us go talk and have those meaningful conversations with the ISD. you know, let's have more of a conversation with the city. Let's talk to the county, let's talk to all the taxing jurisdictions and see, um, you know, obviously we can't pay the full tax bill that currently exists. Otherwise we wouldn't be here, but maybe there's something that we can do, um, to where everybody that's involved and has a seat at the taxing table walks away happy. Um, and maybe not, but I, I just don't, I don't want to see this. go to waste, and I think I'd at least like to be afforded the opportunity to do it if the council would be willing to table the item or defer it or whatever the proper nomenclature is.

We'll see what it is.

Well, my question to that would be, do you have time? Because prior to our presentation, they were going to foreclose six days ago because y'all had until July 1st.

Yeah, so that's the fun thing is after this, they get to get up in the morning and go explain to the lender whatever the decision is, and based on the read, it doesn't look like a real great one, at least not for me. I don't know. I think that's part of the reason I'm asking is because reading the room, it does not look like we're headed in a trajectory for approval. And so at least the opportunity for tabling the item, us to have those conversations with the lender, potentially other taxing jurisdictions, whoever it may be.

Well, I had that on my list of things to possibly talk about. So let me go to Ms. Garza because she's had her hand up for a bit. And then we can talk about possible postponement.

Ms. Garza. My questions have been answered. Sorry, we're not putting my hand down.

Okay. All right. Anybody interested in postponement?

I mean, I'm always interested in more discussion. Like I said, I think given that people currently live there and what this means for them, I think would be why I would be leaning towards a postponement. If we find out that continued discussion leads us to the same place in terms of a council, then at least we said that we at least tried. I think it's out of good faith.

That's kind of where I am. If I can, one other comment. I just want to be clear. This is not a... money making exercise for us in the sense where it's like we get the property tax exemption and all of a sudden we make all this money. It's really, if we hit the property tax exemption, we at least get to a break-even point and keep the property afloat. I heard the comment of bailout and I can totally see why it would come across that way, but I do wanna be clear, this is not like if we get this exemption, oh my gosh, we're gonna come into millions of dollars and everything's gonna be great. It really is something where it's just like we're asking for this and recognize how massive of an ask it is just to get back to a break-even point just to keep the thing moving. and keep serving those residents. So to the extent the council would consider a postponement, I would welcome it with open arms.

Okay. Hang on there. Yes, ma'am. I'll go to Ms. Garza and then Mr. Mendoza.

I guess my question is when we – because I know Mr. Mendoza brought up the checklist, right, and that perhaps Sam's Club doesn't – really capture that proximity to like grocery stores. I'm wondering what types of, I guess, internal checks do you all have to ensure that the other criteria are being met, in particular the ones regarding the, where is it, like the different community like social service type of events and whatnot. Because if I'm being real that there's community conversation often around these types of development where our neighbors say that, you know, they promote those types of resident support services and amenities on brochures, but then they don't come to fruition. And so I didn't have time to do a deep dive. I do have people that are like my family. and close friends who live in that complex, but they also aren't the demographic that would, one, pay attention or two, attend those type of events. So like, it's been difficult to kind of get a sense of like the community perspective on that. So I'm wondering what type of, what can y'all say from the complex side? Like, how do you all measure whether that's actually happening?

Well, I can tell you first and foremost that we're obligated to do it under our financing commitments with the state, and then also there's a land use restriction agreement that exists on the property that memorializes and obligates us to do those things. So, you know, that said, you know, all of the things that we offer, whether they're, you know, social events such as a Christmas party or a Thanksgiving party or something of that nature or a a notary service or after school care, whatever it may be, if we've committed to it for the purposes of financing and the purposes of the land use restriction agreement, we're doing it. Now that said, just because we offer it, if people don't want to participate in it, we certainly can't make them do that. And I'm not saying that to allude to that we're not doing it or anything of that nature, but offering it in participation sometimes don't go hand in hand. But I can assure you that everything that's offered at the property, or that we've obligated ourselves to offer at the property we're offering.

I do want to add, the state comes and inspects the property, and they look at sign-in sheets for any resident services that are required to be offered in the LORA. As well, I have staff that I require go and inspect the property records as well, that resident services are being provided as required by the LORA and MET. So we look for sign-in sheets from actual residents.

Okay. Did that address everything that you needed, Ms. Garza? Kind of.

Yeah, I've always had, and I've said this before, I've always had like an issue with the whole checks and balances of it all, like the whole, yeah, where Pinky promised we're doing this because the state kind of sort of comes around and maybe looks at sign-in sheets. That's just like, in theory, just like my perspective on the whole situation, not unique to this complex. Again, a lot of people that I know and care about have positive reviews. So, yeah. I appreciate the context and the information. I do know y'all work with the San Marcos Youth Council. I've had friends that have said that they go out there and table with y'all's events and I think like also different medical providers like a local dentist that did like some community education and whatnot. So yeah, thank you.

Okay, I'm going to go to Mr. Mendoza, and I've just looked at the list of requirements for whenever y'all started. I don't see on this list a bus or a van to go to grocery stores. Did we not require that of you? Because I think we've required it of everybody since.

Yeah, we had that at our sister property up the street, Redwood, but at the time, I think given the proximity that it was to the transit stop, even though it's two hundredths of a mile outside of the .25, we just relied on that one.

Okay, all right, thank you. Yes, ma'am. Mr. Mendoza?

Thank you, Mayor. So let's say we postpone this. The owner of the property, would you be willing to go back and inform the county? I know you said that you had received a letter of approval from our commissioners there on the county level, but would you be willing to go and speak to them and let them know what our concerns were to see if they are still on the same page?

Definitely, I mean, I think just kind of reading the room today that that would be part of the exercise right is a common further conversation with With city staff and City Council to the extent that you guys are willing to have it with the commissioners court the school board You know any any of the representatives from any of the taxing jurisdictions? And so the short answer your question is yes, we would do that.

I

Okay, so thank you and then I wanted to go ahead. I'm going to try to wrap this up when you're finished.

Yes, ma'am. I did want to bring up to the mayor's point. If we do postpone this, would you be willing to go ahead and add into. your clause here that you will be providing, again, because a realistic grocery store is not in that same proximity. Would you be willing to offer transportation to some of our neighbors in need?

I'm not willing to commit to it right here. Just candidly, it's a pretty big financial commitment, but I will commit to you to looking at it and seeing what options there are and what we can do. I'm not opposed to it. Okay, that's fair.

But if you're providing it at one that's not too far away.

It's kind of read my mind, yeah.

But I realize you would need to check on it. Yeah, I mean, it's just money, so, you know. Council, are you all thinking postponed? Oh, go ahead, Mr. Scott.

Oh, are you willing to bring financials to this meeting that we have to verify? Verify that I'm not lying to you? Losing money, yeah.

They're ugly, but I don't know that I would want to put them in a public forum, to be honest with you. Let me think about that and talk about that. That's a heck of a commitment standing here on the mic. If it's just me, I'd say, sure, we can go grab coffee and we can thumb through them, but broadcasting that stuff on the public record. could be a little bit different story.

But we have to broadcast it on our record, then we're losing the money.

It's not lost on me, so I think there's a little give and take there. I think we can figure something out.

Okay.

So may I answer your question? No, I'm not thinking postponement for a multitude of reasons. Okay. But also, as evident from our last meeting, we do have the ability to reconsider things. So... I think there's just a lot of what ifs and hopes and dreams that we're going to go and get agreements with every taxing entity, and you're going to get your banks to give you another, you know, more time to do so. If by somehow you do pull off that miracle, then you can come back to us if we denied it today, and we can always reconsider it. But I'm against kicking the can down the road.

So my only comment. I'm sorry.

Mr. Brown, we'll let you know.

Yes, ma'am. I think before we have more of this dialogue, we don't need to have the dialogue if there's no motion to postpone in the first place. So we either need a motion I would suggest and a second, and then we could debate whether it's given everybody 30 seconds.

I didn't want to do something that was going to immediately fail. Um, but I will tell you that if you don't come back with, Hey, we're going to pay the property tax. I, a higher pilot is not going to help me or, 10,000 to the school district is not going to make a difference.

So we got to be, it would fall. We would need to move the needle. Okay.

I'm not hearing any interest in postponement. No, no, no. Okay. I guess we will go ahead and vote. Mr. Vino. Okay.

And this is to deny it right there.

Yes. The motion was to deny, uh, by Mr. Gonzalez seconded by Mr. Mendoza. Okay.

Mr. Scott.

Um,

Aye.

Okay, Mr. Mendoza?

Aye.

Mr. Gonzalez? Aye. Ms. Rodriguez? Aye. Mr. Basel? Aye. Ms. Garza?

Aye.

And Mayor Hewson? Aye. Motion passes 7-0.

Okay, so Mr. Aguirre, is item 24 no longer in play?

As a practical matter, it's not, but it's on here either... they can withdraw the request or as a formality, I think it should be.

I'll tell you what, we're going to take a seven minute break and I'll ask you that again. Whenever I, whenever we get back and we'll see what people have thought about it. It is eight 12. I'm going to give you till eight 20. I'm give you eight minutes. We have returned from our break, and we are to item 24. Mr. Gary, we need Ms. Trevino to read it, correct? Yes, ma'am. Okay.

receive a staff presentation, consider approval of Resolution 2026-117R, a proven cooperation agreement with Texas Housing Foundation, pursuant to section 392.059 of the Texas Local Government Code, in connection with the Riverstone Multifamily Apartment Development at 2005 Crystal River Parkway, providing for the annual payment in lieu of property taxes to the city in the amount of $100,000 per year, with annual increases of 2% authorized city manager her designee to execute the cooperation agreement, I'll be at the city and declare an effective date and consider approval of resolution 2026-117R. Okay.

And my question on this one, is this relevant due to the failure of the previous item?

I think it just is a, I'd like to find out if the applicants, for the record, are saying they're withdrawing that request. But if not, I'd say we need to just make it official and dispose of it.

If you want to talk, we need you on record, please, sir. Okay, so we have it on record that the applicant has withdrawn.

Withdrawn the request, thank you.

Which means thank you, sir. And we can go on to item 25.

receive a staff presentation, hold a public hearing, and consider approval of Resolution 2026-118R, omitting the terms of the River Bridge Ranch Public Improvement District by reducing the PID boundaries and increasing the estimated cost for public improvements from $10 million to $60 million in accordance with Chapter 372 of the Texas Local Government Code and declare an effective date, and consider approval of Resolution 2026-118R. Presentation.

Good evening, Mayor and City Council. My name is Helen Ramirez. I'm the Director of Economic and Local Business Development. I'm here with staff, our Assistant Director of Finance, Ismael Garcia. We have Bart Fowler. I think he'll be online. He's our Bond Council. WE ALSO HAVE TERRY FLOYD, DIRECTOR OF PLANNING AND DEVELOPMENT. SAM WAS ALSO PART. OUR CITY ATTORNEY WAS PART OF REVIEWING THIS. WE HAVE OUR CONSULTANT PID ADMINISTRATOR, P3 WORKS, ANDREA BARNES AS WELL. AND TO GIVE SOME BACKGROUND ON THIS, WE HAVE THOUGHT THAT WE WOULD, BECAUSE THE NEXT THREE ITEMS ARE ALL INTERRELATED, I WOULD BE GIVING ONE PRESENTATION FOR ALL THREE VERSUS REPEATING THE PRESENTATION THREE TIMES. But no further ado, this was a PID that was created in 2020.

Hold on just a second. If we're going to do these together, do I need to get Mr. Vino to go ahead and read the next two items? And then I'll let Ms. Ramirez continue with her presentation. That would be good.

I think you did that last meeting, didn't you? And that seemed to work really well. Yeah. Why not take care of that?

My apologies for not doing this before you started. Okay.

Number 26, consider approval of Resolution 2026-119R, Approving and Financing and Reimbursement Agreement for the NAR Homes of Texas Land and Construction, LTD, a Texas Limited Partnership in connection with the River Bridge Ranch Public Improvement District. Authority and city manager are designated to execute said documents on behalf of the city and declare an effective date. Consider approval of Resolution 2026-120R, determining cost of the proposed public improvements in the River Bridge Ranch Public Improvement District, approving a proposed assessment rule for improvement area number one, and making related findings and determination with respect to an increase in the estimated cost of authorized improvements from $10 million to $60 million in accordance with Chapter 372 of the Texas Local Government Code, authorizing City Manager Herdesigny to execute said documents on behalf of the City and declare an effective date.

And you did 26 and 27. Yes. Thank you. Mr. Mayor's please continue. My apologies.

Oh, no, no, no need to apologize. Mayor. Can we go back to the presentation please? Okay. Um, the original PID for river bridge ranch was created in 2020 as part, part of a settlement agreement. It included $10 million of authorized public improvements, which mostly was related to infrastructure. The developer changed from Mayan at San Marcos River to Lennar Homes. Lennar is petitioning for an amendment due to inflation and other additional costs associated with infrastructure, mainly water, wastewater, roads. This was post-COVID versus 2022. That was prior to COVID. It is also, in December 2025, the City Council approved Resolution 2025-23R, accepting the petition and holding a public hearing. In January of this year, the Council held a public hearing on the requested Pitt amendments, and also it remains open, the public hearing, to this date. Next slide. The River Bridge Ranch project includes 1,351 single family lots. They're varying price points and sizes from a width of 35 feet to 45 and 50 foot wide lots. The estimated sales price is a range between $260,000 to $390,000. And also it is anticipated it would have an assessed value of $437 million with a $2.5 million annual tax revenue to the city. Next slide. The Pitt Amendment proposes a reduction in the number of acreage from 563 acres to 329, and that is mainly due to the removal of land retained by the original owner that was part of this initial settlement agreement of area north of FM 110. And also, a second point of this amendment is also the increased public improvement costs from 10 million to 60 million for those sewage, drainage, water, and wastewater improvements. Next slide. Here's the boundary. So in the Aqua, you can see the initial original boundary and the amended boundary, you can see that in yellow. Next slide. With regard to zoning, it is within the CD3 character district, which is primarily intended for single family and two family homes. And what is proposed is within the single family or one family household. Next slide. A breakdown of the public improvements totaling 46.363 is streets, drainage, water, and wastewater with engineering contingency funding. There's a cost to issuing bonds at an estimate of 6.73 million for a total estimated cost of 53.36 million. The assessments will cover an estimated of 40 million worth of improvements and Lennar will cover the remaining 13.36 million. Next slide. We did as a city require a lien to value of three to one prior to issuance which means that the Appraisal of the property on the ground must be three times the amount of the bonds being issued, and that's to be conservative. So for example, if you're to issue 10 million in bonds, it would require an assessed value of 30 million. So we would require an assessment, an appraisal to ensure that that trusts but verify the numbers. It is repaid with the PIT assessments. So the city has no financial obligation for the repayment of the bonds that is on the assessments. Therefore, it does not affect our city bonds capacity and should not affect the city's credit rating if structured properly. And that's why we have the consultants and the team reviewing this closely. It's issued in the city's name. However, and just as a caveat, our bond council likes to remind us of this, that any failed project may impact the management component of the city's bond rating. Next slide. So when we look at PID tax rate comparison, they're looking at 75 cents, which is an average assessment of 2,432. We have other PIDs within the city, such as La Cima, Trace, Whisper, and Whisper South. If you look at the PID average equivalent tax rate in the region, this would be below what Kyle, Drippen Springs, and Buda average assessment is. It is a little bit over what Austin tax rate is for PIDs. Next slide. In part of this process, the city council did create a PID committee to really review the community benefits of this project. Some of the initial community benefits included the dedication of, and I want to do, I'll start with the bullet points with an asterisk are those bullet points that are available as a community benefit because of the PID. Therefore, if the PIN is not approved, that community benefit would not be offered. And the development would just be another single family detached master plan community. So I think it's very important to note that the asterisk allows for the community benefit to be added due to the PID. So initially the dedication was 5.5 acres of land for a fire station with a cost participation about equivalent to 2.5%. And that was about under $2 million for the cost of a fire station. It also included voluntary compliance with specific sections of our 2025 development codes such as shade trees, cyroscaping options, drought resistance, to really ensure that the master plan community preserve water and conserve water in a way that meets our values. It also included a bus shelter, which is not only the dedication of land for the bus shelter, but also the construction at the intersection of Staples Road, which is FM 621 and FM 110. The city right now is working on a transit master plan So we'd also work through the plan to ensure that this is the best location and a great amenity for that neighborhood. Next slide. Other community benefits included enclosed 2,000 square foot amenity center, or we would call it a community center, which HVAC that would be made available with the public through a shared agreement between the Homeowners Association and the City of San Marcos. So therefore, we would have The public would be able to use that facility, which is not common. You rarely see that in the PID or master plan community. It would also include larger trees at the entryway of the amenity center. And Lennar would buy down the interest rate for financing the home. So as we know that interest rates are high, about 6.5% right now. They would reduce that down to 3.75, thereby reducing the homeowner's mortgage payment. So if you have a weighted average of $325,000 home, that would decrease the mortgage payment by $336 after applying the rate buy-down. Next slide. The PID Committee held a meeting on February 26th of 2026 of this year, and they really challenged staff to further enhance the community benefits. And so we went back with the developer and talked every benefit through thoroughly. Then after that, we met with the city council in executive session in June 16th of this year and to deliberate on some of the possible development incentives. Next slide. In those conversations, there was a request by the city to increase the amount of proceeds that would go into the construction of the fire station. And so initially we talked about 2.5% of the proceeds, I mean, about 2.5%, we went all the way up to 10% of the net proceeds. with a not-to-exceed of $5 million. So in the initial agreement that we looked at, we were looking at possibly under $2 million, but we were able to negotiate an enhancement of up to $5 million. That fire station can be built 15 years from when they have $5 million. So it's really important to identify, and if you look at the track changes, it specifically says that they need to include the $5 million, and if, for example, if the 10% doesn't get you to $5 million, they would have a true-up after that. So no matter what, we would get our $5 million, and that was a very important part of the negotiation. Next slide. There was no updates here other than they would still comply with the landscaping and xyroscaping requirements, and still comply with the bus shelter. Next slide. Here, the enhancement was that the Mending Center, we wanted a timeframe for when it would be built. I've seen situations where the Mending Center does not get built, and not by this developer, but by other developers, so we wanted to verify and make sure that our agreements had a timeframe so the Mending Center will be complete before homes are closed in phase three of the district. If the amenity center is not completed by phase three, the homes in phase three cannot be sold. So that's tying a community benefit to the construction and sale of homes in the phase of development. Next slide. And then we also asked for larger trees at the entryway. We wanted to better define what is a larger tree. So we worked with the planning department and we specifically talked about a minimum of six shade trees around the entryway of the amenity center in addition to the street tree and landscape requirements required by the development code at the time of construction. And we talked about the species being in the city's preferred plant list. and specific minimum caliber of five inches measured at six inches from the root of the collar of the tree of planting. So we really specifically wanted a very nice entryway versus what would just be required by code. Because any PID requires administrative costs or administrative time from a city attorney, a PID administrator, staff, we did also include a $40,000 city administrative fee with an escalator of 2% so that we would be compensated for the time working on the development of this PID. Next slide. And again, Lennar would still buy down the interest for the financing of the home as initially proposed. Next slide. And that concludes my presentation. I think this is a public hearing. And if you have any questions, we do have a whole team. And we also have the developer here, Lennar Homes, that is available to answer questions. Thank you.

And this presentation is good for all three items, correct?

Yes, mayor.

Okay. Then I will continue the public hearing from, I believe it was January 20th, uh, of this year. And I will ask if any, there's anyone here wishing to speak far against or about this item. Now would be the time to step to the podium going once, twice, three times. And looking for a motion to approve.

Motion to approve.

OK, we've got a motion from Ms. Rodriguez, seconded from Mr. Purcell.

And just to clarify, I think we're, like last time, we're going to do each item separately. Exactly. So this motion will be just for this first item and then?

Well, we may cross over, but I know we have to have three motions and three votes.

I just want to clarify we're on the same page. Great.

Mr. Scott, please say that clearly into your microphone.

I was talking to you to let you know until I'm ready.

Go right ahead.

Okay, yeah, 25 and 27 have the same wording in there, $10 million to $60 million. Is that two separate accounts of it or is that?

One that is, that is the increase from 10 million that was originally in the original proposal and it's gone up to 60 million.

Right. And it says that on 25 and it says that on 27, that's correct. They're, they're not separate requests.

It's just, it's sort of repeating, but it's only that one time, 10 to 60 million. That's not two separate items. Okay. Thank you.

Always good to clarify when we're talking about that kind of money.

Okay.

OK, other thoughts, concerns on this item? Mr. Peselk.

So ultimately, the PID and those dollars get back to the end user, meaning the person buying the home, correct? And is there an average amount? How does that show up on the bill? And I know financing options can change kind of that narrative, too. And then the second question behind that is if they go to sell their home, do they have to pay that off before they can sell their home?

I have our pit administrator here, Andrea Barnes.

Thank you.

Good evening, Mayor and Council. I'm Andrea Barnes with P3 Works. And to answer your question, Council Member, the 35-foot lot would have an average annual installment of $1,369. And the 45-foot lot would be just over $2,200. And I didn't bring my glasses with me. I think the 50-foot is $2,800. And to answer your question, a homeowner is entitled under the statute to prepay in full or make partial prepayments at any time they so choose during the life of the PID. When they decide to sell their home, the lien that is placed on the property when the assessment is approved, It goes with the land. It runs with the land. So it would transfer from the original homeowner to the person that purchased the home from them.

Okay. And that typically runs, what, about 15 years or something?

30 years.

Oh, for the life of the homeowner.

Yes, sir. Oh, yes, and Helen's right. Each purchaser, when they purchase the home, they have to sign a buyer disclosure that says that they understand there is a pit assessment on the property, and there's also attached to that buyer disclosure the annual installment schedule that shows them how much their annual payment is anticipated to be as a result of the pit assessment.

Really just brought it for the sake of conversation, so appreciate it. Thank you so much. Yes, sir.

Any other questions?

Mr. Scott? You said something about the amenity center not being built until after the second phase has been completed, right?

It needs to be CO'd or completed prior to any sale of the homes on phase three, in phase three. So if you built all the homes in phase three, none of them could be sold.

Oh, okay. Okay.

Until the amenity center was also built. Okay. And so they would all be approved.

Sounds good. Thank you, sir.

Yes. And that amenity center or a community center, uh, will be great there because that gives us a place on the rare occasion where we need it in order to have a community meeting. in this area, plus I'm sure those who live there will enjoy having a community center building available to them. Other questions? That's all Mr. Scott had, so we'll go ahead and vote on item 25.

Mr. Mendoza.

Aye.

Thank you. Mr. Gonzalez? Sorry, aye. Ms. Rodriguez? Aye. Mr. Baselk?

Aye.

Ms. Garza? Aye. Mayor Houston? Aye. And Mr. Scott? Aye. Motion passes seven to zero.

Okay, so Ms., Trevino has already read item 26. This is the financing and reimbursement agreement and I believe this is where I have an amendment and it has to do with the fire station. It was originally worded as to provide adequate fire service to the project and I'm suggesting that we insert in the vicinity of the project because the fire station will certainly serve more than just the homes in this area, and I can't find it in the agreement now. It's now under fire station agreement, and it's in here twice, so I'm gonna make that my motion.

Thank you, Mr. Pasella.

Yes, sir?

I don't know if we had a specific motion just for this item for approval, so you're moving for approval with this change?

Good plan, yes, I will. No, I'm not gonna do that. I'm gonna look for a motion on item 26. So moved. Thank you. Motion by Mr. Gonzalez, seconded by?

Second.

Anybody? Ms. Rodriguez. Okay, now I'm going, thank you. I'm going to make my motion for the amendment.

Second.

Thank you, Mr. Peselk. That one's still good. And if there are no questions, we'll vote on this one, which does occur twice in this section under fire station agreement. Okay, Mr. Vina.

Mr. Gonzalez. Mr. Rodriguez? Aye. Mr. Bissell? Aye. Ms. Garza? OK, I'll come back. Mayor Hewson? Aye. Mr. Scott? Aye. And Mr. Mendoza?

Aye.

Motion passes 6-0 with one absent.

Anything else? If not, let's vote on item 26.

Mr. Rodriguez? Aye. Mr. Bissell? Aye. Ms. Garza? Mayor Hewson? Aye. Mr. Scott? Aye. Mr. Mendoza?

Aye.

And Mr. Gonzalez? Aye. Motion passes 6-0.

And now we're on to item 27, which has already been read into the record. Are there any questions on that? Second. I need a motion to approve. We've got that one from Mr. Scott. Seconded by Ms. Rodriguez. Questions? No, ma'am. We'll vote, Mr. Pena.

Mr. Macell. Aye. Ms. Garza. Aye. Mary Hewson. Aye. Mr. Scott. Aye. Mr. Mendoza. Aye. Mr. Gonzalez. Aye. And Ms. Rodriguez. Aye. Motion passes 6-0.

Okay, and that concludes the public hearing portion of our... Thank you to all the staff that was involved in that. Yes, thank you. Clearly that was a lot of work in line negotiations, so thank you. Thanks to the developer. We're now to item nine, which was pulled from the consent agenda.

I put my mic on. Consider approval of Resolution 2026-104R, approving a First Amendment to Commercial Aviation Ground Lease with 2080 Airport Drive, LLC, a First Amendment to Airport Redevelopment Lease Agreement for Commercial Use, the Skies Vaughan Investments, LLC, and an Assignment and Assumption of Ground Lease. Leases from 2080 Airport Drive, LLC, to Barry Aviation, Inc., authorizing City Manager, her designee, to execute said instruments on behalf of the City and declare an effective date.

I'll motion to approve for the sake of discussion. Second.

We've got a motion from Ms. Rodriguez, seconded from Mr. Scott. Ms. Rodriguez.

Yes, ma'am. I just have a question for the applicant. Should be quick.

Hi, Stanley French. I live in San Marcos.

Nice to meet you, Mr. Finch. Real quick question. I saw on the presentation, um, the, uh, I think it was some of the work that y'all do alongside government services. And so I just wanted a little bit more clarification on that specifically, um, any potential collaborations with the department of public safety or immigration? Just wanting to know if that's something in terms of government services that's included under that umbrella.

We don't do anything with immigration. All of our, Contracts with the federal government are outside the United States.

Okay.

The only thing we do at DPS is sell them aircraft parts.

Okay.

And we do some aircraft maintenance services for them.

All right. Thank you. That was all my question.

Anything else on item nine? If not, Mr. Vino, we will vote. And I keep reaching for the button.

Hi.

Ms. Garza? Aye. Thank you. Mayor Hewson? Aye. Mr. Scott? Aye. Mr. Mendoza? Aye. Mr. Gonzalez? Aye. Mr. Rodriguez? Aye. Motion passes 7-0.

Okay, on to item 28. 13. 13 get pulled?

No. We're through with the consent agenda.

Yeah. Consider approval of ordinance 2026-27 on the first of two readings appointing William Henry as a presiding municipal court judge for the San Marcos Municipal Court of Record to fill the vacancy ending October 31, 2026 and continuing for a two-year term thereafter, including procedural provisions and provide an effective date.

Motion to approve.

I have a motion from Mr. Gonzalez, seconded by Mr. Scott. I'm looking for one thing in here. Mr. Gary, this is just for the appointment, correct?

Yes, Mayor, just the appointment.

Okay, nothing else?

That's it. And just to clarify, unlike some of our other appointees where we have contracts, it's something unique about municipal court judges. It's not a contract. It's an appointment to the position.

Okay, so this one we're not talking about salary, benefits, anything else, just the appointment?

That's correct.

All right, thank you. We have a motion and a second. Any questions, concerns, thoughts? Oh, we just lost somebody. Okay. If not, we will vote.

Ms. Garza. Aye. Mayor Houston. Aye. Mr. Scott. Aye. Mr. Mendoza.

Aye.

Mr. Gonzalez. Aye. Mr. Rodriguez. Aye. Mr. Baselk. Aye. Okay, motion passes 6-0 with one absent.

All righty, on to item 29.

Consider approval of resolution 2026 dash one 21 are approving a change in service to the agreement with burns and McDonald engineering company Inc authorizing the next phase of design build services for the FM 1978 water reclamation facility problem project in the estimated amount of $42 million authorized city manager, her designee to execute the change in service and to finalize any non-material revisions on behalf of the city and declare an effective date.

Looking for a motion. Second. Motion from Mr. Scott, seconded by Mr. Peselk. Are there any questions, concerns, thoughts? Mr. Nizer is here ready to answer anything we might ask. If not, not seeing any questions, means presentation's good, or the information in the packet's good. Ms. Trevino, let's vote.

Erin Hewson.

Aye.

Mr. Scott. Aye. Mr. Mendoza. Aye. Mr. Gonzalez? Aye. Mr. Rodriguez? Aye. Mr. Bissell? Aye. Ms. Garza? Aye.

Aye.

Motion passes seven to zero.

On to item 30.

Consider approval of resolution 2026-122R, approving a contribution in aid of construction agreement with Blue Bonnet Electric Cooperative Inc. for Blue Bonnet to install overhead electric distribution facilities for the FM 1978 water reclamation facility project in the amount of $2,550,000, authorizing the city manager, her designee, to negotiate final terms of and execute the agreement on behalf of the city and declare an effective date.

Motion to approve. Motion by Ms. Rodriguez, seconded by Mr. Peselk. Any questions? Wolva?

Mr. Scott? Aye. Mr. Mendoza? Aye. Mr. Gonzalez? Aye. Ms. Rodriguez? Aye. Mr. Peselk? Aye. Ms. Garza?

Aye.

Mary Hewson?

Aye.

Motion passes 7-0. Item 31. Receive a staff presentation providing one, comments received and staff recommendations for the action plan allocating $774,306 in community development block grant, entitlement funding for program year 2026, 2027, and two, recommendations from Human Services Advisory Board on the allocation of $750,000 in Human Services grant funding for fiscal year 2026-2027. Discuss allocations for CDBG and HSAB grants and provide direction to staff.

Looking for a motion to get this on the table.

Motion by Mr.

The cell seconded by Mr. Scott presentation.

All right. I am Carol Griffith housing and community development manager. Uh, city council requested the ability to discuss CDBG or community development block grant and human services advisory board grants or HSAB at the same time. So this slide shows how the agenda items will flow. So in the first agenda item this evening that I'm presenting, I'll present to you the recommendations for both CDBG and HSAB. Then staff is requesting direction on the CDBG allocations. In the next agenda item, because the CDBG annual action plan must be submitted to HUD by August 14th, we're asking you to go ahead and consider adopting the action plan, which would then finalize the amounts and projects to be funded by CDBG. The HSAB amounts cannot be finalized until after the city's budget is approved on September 15th, roughly, and so city council will have an agenda item for HSAB funding on September 15th. Next slide. The action plan is the document that states which programs and projects will receive this funding and how much. Each year the city follows the public review process shown on this screen. On March 3rd, the city council received a staff presentation and held a public hearing to receive comments on community needs and possible uses of CDBG funding. After that, a staff committee met to create recommended funding allocations for programs and projects from the applications received. April 7th, a second public hearing was held to receive comments more specifically on the proposed projects and allocations. Then city council provided direction to staff to post those projects and allocations as presented for the 30-day comment period. After the April 7th agenda had already been published, HUD informed the city of the final grant amount, which is $774,306. The staff committee had anticipated this and so the action plan that was published showed the committee's recommendation on how the additional funds could be spread among the projects that city council had reviewed. In May, during the comment period, Mission ABLE withdrew their CDBG funding request. So another change, staff committee reconvened and moved the funding that had been recommended for them to other home repair projects. So this evening I am presenting the final proposed allocation of the funding among the projects and programs that city council and the public have reviewed over time. Next slide. Public input on potential uses of CDBG and other funding, city funding, was requested in town hall meetings, a stakeholder workshop, public hearings, and the 30-day comment period. No comments were received on the specific programs and projects that are recommended for CDBG funding. Comments received were about funding needs in general. The comments centered on the importance of access to housing and support for social services, including mental health services. In addition, participants, for example, in the town hall requested additional resources for people who are unhoused and the agencies that serve them. During the 30-day comment period, a staff member also provided additional information and we've updated the text to reflect information about ongoing city and non-profit efforts for the community. Next slide. This table shows the applications received in rank order of average score within each category. Public services, projects, and of course administration. Each program was scored by the individual staff committee members who also made a funding recommendation, and then we held a discussion meeting that was to determine the recommendation to council. So first we'll look at public services. The first section shows the nine applications for public services programs. As you know, only 15% of the grant can be spent in this category, which this year is $116,145. Most members of the CDBG Staff Review Committee wanted to fund all the programs that applied for funding, so the funding is split into eight parts, which makes the allocation each small compared to their request. BCL of Texas requested $100,000 for a new rental assistance program, with $85,000 going to rental assistance, but the committee preferred the ability to support multiple existing programs instead of funding a new one. So they recommended zero on that one. For projects, CDBG had four applications related to home repair and one for a park improvement. Combined community action applied for $220,000 but the committee recommended 85,000 because CDBG funding has to be spent relatively quickly and staff had some concern about their ability to administer the 220,000 in work with their current staffing levels. It is recommended that Habitat's home repair programs receive full funding at $137,500, and that is a home repair program, not the typical house building that you hear about. Dunbar Park Lighting, which was requested by Destination Services, is also recommended for full funding at $75,000. The Dunbar Park project would add lighting to a walking path, and then over time, plaques would be installed on top of the lighting bollards using arts funding to celebrate people who were leaders in the Dunbar neighborhood. So using CDBG funding for this enables the installation of the lighting and the electrical cords and everything all at once, much more cost effective. The committee recommends that the remainder of funding, $205,000, go to the city's home repair program, and that the allowed 20% of the total amount be allocated to pay for the staff, of course, who administer the grant. After I review the HSAB recommendations for social services, I'll come back to this slide to ask for your direction on the CDBG allocations. Next slide. This year, the Human Services Advisory Board reviewed 40 applications to allocate 750,000. Total amount requested was 1.7 million. Each board member scored each program and created a draft recommendation of funding. Then at two discussion meetings, the board discussed each application, weighing the cost and benefits to Sand Market's residents against the need described in the applications. This board this year had a diversity of opinions about these programs and a robust discussion with lots of laughter actually, it was fun, and coming together on the recommended funding allocations. Next slide. So HSAB programs are shown on the next seven slides, ranked by average score from high to low. This is the top six. As you can see, the top six received almost the requested amount, they almost all did. Hays County Food Bank and Hays Caldwell Women's Center have received the highest total HSAB funding recommendation. Hayes-Caldwell Women's Center is also recommended to receive a small amount of funding from CDBG. So I'm going to try to keep you up to date on both of those grants during this presentation. Combined Community Action is recommended to receive funding for Meals on Wheels from HSAB and then their Energy Efficient Home Improvements Program from CDBG. Next slide. Southside Community Center is recommended to receive funding for two out of their three HSAB applications, and this slide shows the first one. The next four received part of their request and also received partial funding from CDBG. The Senior Center was recommended for almost all the funding requested, as you can tell on that last one. Next slide. And just a reminder, these are shown in rank order by scoring. So this slide shows the second program requested by Southside. Let's see, the board recommended that Prevent-A-Litter or PALS, Any Baby Can, and Bobcat Pride receive 100% of HSAB funding requested, and Home Center to receive just under that amount. Next slide. Here you see programs that ranked relatively high and which are recommended for a substantial portion of what they requested. Community Action of Central Texas tenant-based rental assistance program was not recommended for funding. The board discussed that they felt this program had smaller scale than the other housing assistance programs out there. Their other HSAB application received funding. Next slide. On this slide, it shows Centro Esperanza, Scheib Center and San Marcos Youth Service Bureau. They were all recommended to receive support for their facilities. So these all ask for either repair or rent or operational costs. Hill Country Mental Health stated in their application that 150,000 was the minimum amount they could accept to run this program. And the board preferred to spread the funding around to more agencies rather than fund some with the high amounts that were requested. And as you can see, the board also almost fully funded Hayes County Child Protective Board. Next slide. So of course the next two slides show the programs that received the lowest rankings. Southside Community Center, Hayes Helping Hands, and Central Esperanza are each recommended to receive HSAB funding for other programs, just not the ones you see here. Rough Draft is recommended to receive HSAB funding for the first time for their program to make mental health support accessible through art. The board believed that $5,000 was a reasonable amount for that program. The board also partially funded Cinecor's substance abuse programs. Next slide. Finally, other than the ACCESS summer camp program on this slide, the programs shown here are not only ranked the lowest, but also had requests for the high amounts, and that's part of why they were ranked lowest. The board noted that all these programs are fantastic. Of course, they really are. But these are the ones that requested particularly high amounts, and they also had in their application a high minimum that would be acceptable to run their program. So although the access program, oh, so they were not recommended for funding. That's the reasoning. Although the access program ranked low, the board members believe that supporting youth in science and technology is important and that it is beneficial to St. Marcus families to provide a low-cost education activity to youth in the summer. So after some discussion, they went with that. Central Texas Food Bank is recommended for a small amount of funding through CDBG. you'll notice that the board talked about Hays County Food Bank and Central Texas at the same time and put all the eggs in one basket with Hays County Food Bank. Next slide. So now we're switching again. Now that you've seen the recommendations for both CDBG and HSAB, this is back to that CDBG slide. Staff is requesting direction on CDBG funding, and then that direction will roll into the next agenda item for approval. This is just a staff direction. And so our question is, does the city council concur with the recommended funding shown here?

No.

Oh, this is, I could go ahead and do the last slide. Next step, we can go back to the other one. Next steps are gonna be this evening, you reviewed the CDBG and HSAB recommended allocations. You're providing direction on CDBG. Then your next item, considering adopting the CDBG Annual Action Plan, which would finalize the CDBG allocations. And then September 15th, we'll bring back the HSAB allocations for direction and approval at that time. So now if we could go back to that table. I know, I just got confused. But anyway, the question stands. Do you concur?

All right. Mr. Gonzalez, you'll be first.

So the only recommendation I would have is to reduce home centers, pathways to home veterans disabled by $8,295 and increase costs of Central Texas veterans by the same amount with the intent to do the opposite in September for HSEB money.

Can you say all that a little louder and a little slower, please? Sure.

So basically, we reduced home center to zero in CDBG money. So move that $8,295 to CASA of Central Texas, increasing them from $23,000 to $31,295 with the intent to do the opposite in September. So at that point, reduce CASA's HSAB money from... $30,000 to $21,705 and increase the money going to Home Center from $25,000 to $33,295. Essentially giving all of Home Center's money, the same dollar amount, but all from HSAB and eliminating the need to do federal reporting. Veterans. not get rid of it, but instead of giving them a little bit from two different parts, give it to them all from one part and reduce the amount of work they need to do to get that money by a significant amount.

One less application for you to process and monitor.

I guess my question is, did Home Center express that their CDBG process was a barrier to them or you're just like assuming?

I mean, regardless of whether it's a barrier, it's less work for our staff as well and not only one less application to process, but one less application to monitor and follow along for.

And it's easier for home center also because our regulations are a lot less, I hate to say onerous, but we're talking about federal stuff. So, uh, I can see you wanting to split it that way. So it'll be easier on home center to comply.

Right. And the only reason I picked CASA is because, From what I was able to see, Home Center and CASA are the only ones that, not only is the organization getting money from both pots, but they're getting money for the same project from both pots.

Is that correct? Yes. The same project from both pots of money?

Mm-hmm.

Oh. I generally would not think that's a good idea.

To get money?

Going with what you said, just do it all from one and do it all from over here.

But so was that a motion? Did he get a second before we get in?

Um, that was, he said, I want to, but I'm going to say that was a motion to amend and Mr. Scott, if you're going to second it, I need you to say that in your microphone, please. It is now an official motion.

Yeah, I, I'm kind of on the same page as Ms. Garza just feels presumptuous, um, to assume. I, I know that I've spoken with home center in the past in terms of applying for CDBG. and at one time or another, yes, this was something that was of concern to them, but when they made, it's my understanding that when they made the decision to decide to apply for this funding, they knew full and well what that meant in terms of reporting. So I just feel that without your saying you didn't have a conversation with them, I just feel it's incredibly presumptuous. I understand the intent, but for me personally, I'm not interested in the move around.

Right. Question for you, Ms. Griffith. Which one of these will, I'm going to say get their checks, which ones of these would start seeing funds sooner, the CDBG or the HSAB? Because that's got to wait. This is coming out next year's budget, correct?

Correct. So CDBG is funded by Congress every year, which is really fun. And so they have to pass the budget. So this year we didn't see it until January. whereas HSAB is going to be with our budget, which starts in October. And we usually.

So the answer to that is CDBG, they can see that Once we process it and you start processing them because the money's already there.

Well, so CDBG, what I was trying to say is we don't have approval to spend the money until Congress approves it.

And so I thought you said they approved it in January.

They did, but it's supposed to be in October. And so I'm saying that CDBG had, you were asking like, which one do they see sooner? It's HSAB because they actually see the money. like the money's available in October for HSAB. It's not available until Congress says for CDBG.

Oh, I thought this was from last budget, okay.

Well, it was, of course, but we predict it could be the same. And then they can charge expenses back to October once the fiscal year budget is finally approved for CDBG, but they don't see it funded.

Well, that's iffy because they don't know for 100% sure that they're going to get reimbursed if they start.

Yeah, they literally are not allowed to think that they're gonna get the funding. We can't see any expenses until after it's approved, and then they can go back and say, well, can we transfer these expenses from October to this funding?

So the answer to the when white people see CDBG money is we just, nobody knows.

Yeah, and we'll get it to them as soon as federal government has it to us, but yeah.

I thought when we got the letter that had the exact amount, that meant the money's budgeted and waiting for us.

That's the estimated allocation basically. And so it's not final until Congress actually approves the budget with CDBG in it.

That's for joy for joy.

Real reality. Yeah.

Yeah.

Every year.

Yeah. Okay. That answered that. Did that make any difference?

Um, no. Cause I kind of already knew that. So best case scenario, both funds are available by October 1st, but HACP money is guaranteed to be available by October 1st. So at no point will CDBG money be available before HACP money.

Yeah, correct. So that would give home center funding sooner.

Either at the same time or sooner, but at no way later.

Right, right. So it would be better.

I don't know.

I'm just going at the timing.

I'm not talking about, um, I just, I feel like the, the premise of this motion is assuming that everything that is recommended, including this potential change for HSA B is almost predetermined and guaranteed. But as somebody who sat there two of those already, there are many changes that we can make as a council and have before. So, it's not even a guarantee either so you know i'll be a no yes yes i just think without a conversation with the organization to presume it's weird it's yeah it's just not good taste it's not good practice ms garza i'm going to be a no because and i'm just going to say this and some folks might disagree and this might ruffle some people's feathers but i do feel that home center has been

not treated with as much respect as I would like. Like, I feel like historically, they have been singled out when it comes to this type of funding, even though the committee has recommended funding for them. And I just, I think it's, again, like, I'm not saying this is Mr. Gonzalez's intention. I think that his intentions are rooted in um like the best interest of the organization but i'm just not interested in even pushing forth the perception that perhaps this is another situation where we're like singling out the home center um and again that's just my perception um so i'm a no I think that unless the organization has expressed concerns that it's very paternalistic of us to assume that they can't handle their business.

Right. Yeah, I would be a no because the organization is unaware of this, although it might give them money sooner. But I'm going to say that except for the uncertainty of the government funding and when it might arrive, is to not see people on both lists and have them have to do compliance with both organizations, us and another. And I thought doing these together, we were gonna kinda sort it out. You know, the bigger organizations that can do the federal stuff here and do the other, the smaller ones, the local ones, the one that's easier. to do all of that. So this is surprising to me and not where I was going when I, for 30 years, tried to say, can we do these at the same time?

We do have alternatives in the background, depending on which way the council goes. So this was our initial take on what you wanted to see. I have done some analysis on if you want to mix the funding, but that's just...

I don't know that I want to mess with it at this point, but I wish it wasn't this way. And that's just me speaking.

So for next year we can look at it.

Yeah. Um, and maybe mayor, we can have a potential future work sessions. So staff may be a little bit clearer on, you know, what we mean.

I think we should before these applications go out for next year. Right. It would be good. Okay.

Yeah, definitely. And I'd even be interested in what, which I don't know what the process would be, but to, um, state that HRCB money will not be available for the same projects that CDBG money is available for.

Well, I thought that was kind of understood, but it turns out not so.

So let's vote on your... And it's not only a small organization that didn't understand that because, again... Let me interject on that one.

When I got here, I changed it because I realized that one organization in particular was dipping in both pots and the others thought they couldn't. And so I was like, if it's good for one, it's good for all. And so I let them know, you know, like, you can choose.

Yeah, if it's different projects, I can... I can get closer to it, but generally not. I just hate for one organization to have to be doing two sets of compliance things. Just, you know, pick one. Okay. Let me get a vote on Mr. Gonzalez's amendment. Ms. Trevino?

Mr. Mendoza? Mr. Gonzalez?

I mean, yes, I guess I made the motion.

Okay. Mr. Rodriguez? No. Mr. Basel?

No.

Ms. Garza? No.

No.

Mayor Hewson?

No.

Mr. Scott? No. Okay, the motion fails with five nos and one yes and one absence.

Okay. I would like to make one minute. No, never mind. That's on HSIB. Never mind. Mayor, I do have a quick question for Mr. Griffiths. You go right ahead.

When y'all were weighing your decision about the transitional housing for the Hays County, uh, mental health court, I see that they're asked as the 18 y'all decided on the five in terms of the funding sources that are available to them. How much does the county put into that, um, for them to come to additional, to seek additional sources of funding?

So, uh, when we were having our discussion as the staff committee, we had only the information in the application, which was perhaps not enough. So after the fact, in preparation for this meeting, I contacted Hays County and asked that question. How much are y'all putting in? And it's actually quite substantial. So they have a budget just for the mental health court of $424,000 from county funds, and then they have quite a bit of grants in the hundreds of thousands to support the different specialty courts. So for example, The Substance Abuse Mental Health Services, they have a grant from, it looks like Hill Country, MHDD, something like that. No, it's not from them. Sorry, anyway, they do have a grant, half a million. And so there are several large pots of money like that that support this mental health court. What they don't have is funding that would cover transitional housing.

Okay.

So the other things are covering things like mental health services and the functioning of the court and so forth, but not, uh, not the transitional housing.

Yeah. So the re the purpose of, and I appreciate the due diligence, Ms. Griffith, cause I know I didn't put that in the message board. So thank you for doing that ahead of time. The purpose of the question was kind of trying to see maybe putting to my colleagues, this question, the five out of the 18,000, it just begs the question whether or not that's sufficient to really make a difference. And so, I actually was going to bring up the home center. I do not like typically touching recommended allocations, but maybe just seeing how my colleagues feel about this potential amendment, which would be to take the 5,000 that's currently allocated to put towards home center to bring their recommendation for a total to 13,295. That's your motion to amend? Yes, ma'am.

I'll second it.

Thank you, yeah, so just a brief, our city, I'm really happy to serve on the Homelessness Committee with Mayor Hewson and Ms. Garza, and one of the things that I've learned in that committee is the collaborations in which we as a city have with certain organizations in our city. Um, obviously all of these included. Um, but the work that the home center does for people who are veterans, um, and are not receiving the needs that they, they need to be met through the VA. This is a critical, critical, um, program. And so, um, their ask was 30 K. Obviously this does not fulfill the ask, uh, gets them to a little close than half. Um, but considering, uh, the, the question I asked about sort of how the mental health court is funded. Um, that kind of makes me a little, a little bit more at ease to make this amendment. So we'll see how the discussion goes, but that's just something for y'all to consider.

Okay. So that's your motion. I need a second. I believe Ms. Garza, did she, I didn't hear.

Yes. Yes.

Okay. Um, I'm going to disclose that I'm on the mental health court advisory board. We don't talk about this. We talk about things in general and mostly the graduation. It's always a celebratory event when they graduate from the program.

Just so you all know. I appreciate you mentioning that, Mayor, because I do want to. It's a wonderful, from what I've heard, a wonderful program. And I hope this doesn't give the public the sentiment that I don't think that. It's just, you know, the balancing of needs is difficult.

Yes, it is. Okay, so that's Ms. Garza's motion. I'm sorry, Ms. Rodriguez's motion, seconded by Ms. Garza. Are we ready to vote?