City Council - Regular Meeting

Good evening everyone. Welcome to our council meeting for Tuesday, May the 5th. Miss Hilbert, will you please call roll? Yes, sir. Councilman Deagarza, I am president. Councilman KD here. Councilwoman Butler, present. Councilwoman Scott, here. Mayor Pro Tim Young here. Councilman Lrren here. And Mayor Crocker here. If you would please rise, join me for the pledges followed by a moment of silence.

To the flag of the United States of America to the standy forgiance to the Texas one and indivisible. Thank you. Please be seated. [clears throat]

All right. Welcome everyone. We've got a full house tonight. So, we will jump right into the business of the evening and we'll start with announcements and reminders. Mr. Garza, do what do you have for us this evening? Good evening, mayor and council. I just have a couple of announcements for you this evening. On behalf of public works, the city of Victoria will conduct its annual chlorine conversion starting on May 15th and will switch back to its usual chloromine disinfection on June 1st. This is an elevated form of chlorine treatment that takes place once per year for preventative maintenance. Dialysis patients may need to change their pre-treatment schemes for their diialysis machines. Anyone conditioning water for fish or aquariums may need to change their pre-treatment processes as well. Residents likely would not notice any difference in their water, although some changes in taste and odor are possible. Consuming water does not carry any health risks. The city's water system is currently maintaining high water quality with no signs of nitrification. You may recall that was an issue last year. And the fact that we're implementing this sooner than normal, in addition, not as long as normal. Normally would be the whole month of June. Now we're simply doing it for the second half of May. speaks to the proactive measures that staff has uh taken to help maintain the health of the water system. Some of those steps taken over the past year include installation of automatic flushers for more frequent frequent and regular flushing, use of tank mixers to stir or mix water, preventing growth of bacteria, more frequent chlorine testing with levels throughout the system being tested multiple times per day. These measures have now led us to again not necessitate to do a 30-day chlorine conversion, solely a 15-day chlorine conversion. For more information, contact public works at 361-485-3380 or contact the surface water treatment plant at 361-4853416. And lastly, on behalf of the communications department, a new episode of the City of Victoria's Town Talk podcast will premiere at lunchtime

tomorrow, May 6th, featuring Victoria ISD Superintendent Sheila Colaso. Residents are encouraged to tune in to learn more about what's ahead for our public schools. And that's what I have for this evening. All right. Thank you, Mr. Garza. [clears throat] We'll jump then to item B2, which are our public and employee recognitions, of which we have quite a few this evening. So, we'll start out with the first one. Uh, National Nurses Week and National Hospital Week proclamation. Miss Hillberg.

Yes, sir. Whereas Citizens Medical Center, DAR Healthc Care System, and PAM Health join the American Nurses Association in celebrating National Nurses Week May 6 through 12th, 2026 under the theme, the power of nurses, recognizing the profound impact of our dedicated and compassionate nurses. [clears throat] Whereas we are called to honor and uplift uplift the dedication, resilience, and excellence of the nursing workforce serving patients and families across our community and to express our gratitude with a collective and heartfelt thank you. And whereas National Hospital Week observed May 10th through 16, 2026 is an annual celebration dedicated to recognize and honoring the vital role our hospitals play in providing highquality, compassionate care to Victoria and the surrounding communities. And whereas both National Nurses Week and National Hospital Week serve as a tribute to the remarkable individuals whose dedication, skill, and compassion define our local hospitals. And whereas Citizens Medical Center, Detail DAR Healthc Care System, and Pam Health stand as pillars of strength, healing, and hope for the Crossroads region, delivering exceptional health care through its devoted physicians, nurses, staff, and volunteers. [clears throat] Whereas the teams at the three hospitals consistently go above and beyond to serve patients with dignity and excellence, embracing innovation and collaboration to improve health outcomes and enhance the quality of life for our community. And whereas during times of crisis and calm alike, the caring health care professionals serving at our local hospitals exemplify what it means to be a heart of the health care, rising to every challenge, providing comfort and expertise, and showing unwavering commitment to their mission. Now therefore, I, Dwayne Crocker, mayor of the city of Victoria, Texas, do hereby recognize May 6th through 12th, 2026 as National Nurses Week, and proclaim the week of May 10th through 16th, 2026 as

National Hospital Week in Victoria, Texas, and encourage all citizens to join me in recognizing and celebrating the dedicated teams at Citizens Health, Citizens Medical Center, DAR Healthcare System, and Pam Health, along with the healthcare workers across our community for their outstanding contributions to our health and well-being. [applause] Mayor, city council, uh on behalf of all of us, all of our organizations and all the healthcare workers in this area that are dedicated to serving the patients and doing that in a quality manner and making sure they're getting excellent outcomes. We thank you for your recognition of them. It's a great honor for us and we appreciate it very much. So, thank you. Thank you, Mike. [applause]

Um, I'll echo a lot of that. So, thank you all for recognizing our healthcare staff. Um, what they do day in and day out to serve this community. Um, to go above and beyond to sacrifice things with their families. Um, it it means a lot to them. So, thank you for this celebration. Um, thank you. Thank you. [applause] welldeserved recognition for all three hospitals and thank y'all for the excellent care provided to our community. We appreciate it. All right, moving on then. Uh our next proclamation is for National Travel and Tourism Week. M Miss Hilbert,

whereas travel and tourism provide significant cultural benefits for the city of Victoria. And whereas meetings, events, leisure, and travel for sports events are all key components to Victoria's economy. And whereas many of Victoria's hospitality and tourism businesses are characterized by their welcoming South Texas charm, forming the foundation that makes Victoria a unique and memorable destination. And whereas visitors relish the many tourism offerings in Victoria, including the Museum of the Coastal Bin, the Nave Museum, the Texas Zoo, Riverside Park, the Children's Discovery Museum, the Leo J. Welder Center for the Performing Arts, and a vibrant collection of historic homes, [clears throat] churches, and cultural sites. And whereas the rich heritage of the city of Victoria enhances its reputation as distinctive and memorable travel destination, drawing families, educators, and leisure enthusiast enthusiasts to experience the creativity and wonder that reflects our community. And whereas we acknowledge that all travel, whether related to leisure, business, or sports, is beneficial. And whereas welcoming visitors from near and far always has been and always will be the enduring commitment of the travel industry and of Victoria. And now therefore, I Dwayne Crocker, mayor of Victoria, Texas, do hereby proclaim Victoria as tourism friendly community and urge all citizens to join the city council, city staff, and me in recognizing the positive effect travel has on the nation, Texas, and Victoria's economic prosperity and image.

[applause]

Thank you very much, mayor and council. Uh, first of all, I want to sincerely thank you all, city council and city leadership for your support of all that we do to help others disco discover Victoria. Uh, this proclamation is one of our steps to be declared a tourism friendly Texas community by the state of Texas office of economic development and tourism. As you may or may not know, we are already a film friendly and a music friendly certified community. And I also want to take an opportunity to thank all of our tourism partners. Those are our hotels, our uh attractions, uh, arts and cultural nonprofits, historic preservation, re restaurant, retail, event organizers who work tirelessly to provide exciting things for us to do in Victoria because without them, our job would be much, much more difficult. So, thank you all for your support and uh, thank you to all of our tourism partners for all that they do.

[applause] Thank you, Joel. Then finally, our uh last proclamation of the evening um is public service recognition week. Miss Hilberg,

whereas the people of the city of Victoria are served every day by public servants at every level in the executive, legislative, and judicial branches of government. And these unsung heroes do the work that keeps our community working. And whereas public employees take not only jobs but oaths to perform their jobs to the best of their ability. And whereas public servants including military reserve personnel, police officers, firefighters, corrections officers, doctors, nurses, healthc care professionals, [clears throat] and others risk their lives each day in service to the people of the city of Victoria. And whereas public servants including teachers, social workers, administrators, computer technicians, laborers, and countless other occupations day in and day out provide the efficiency provide with efficiency and integrity the diverse services demanded of their government by the people of the city of Victoria. And whereas without these public servants at every level, continuity would be impossible in a democracy that regularly changes its leaders and elected officials. And now therefore, I, as Dwayne Crocker, mayor of the city of Victoria, Texas, do hereby proclaim the week of May 3rd through 9th, 2026 as public service recognition week in Victoria, Texas, and encourage citizens to recognize the accomplishments and contributions of all the hardworking and deserving public employees of the city of Victoria, Texas. [applause] Well, thank you, mayor, and thank you, council, for your support of not only myself and the executive team, but uh but also for the over 650 employees that work for our organization. Uh we're truly blessed to work with a council that is truly supportive and understanding of our needs and the importance of being an employer of choice, the importance of investing in employee compensation and benefits and facilities and so on so forth. We're truly blessed and so thank you for your support and I hope that you're able to join us for our appreciation lunch on

Friday. That's always a great time as we get to just interact uh with employees from across different departments. As April read uh this week is truly intended to recognize folks from all departments. I always like to point out the fact that uh our employees make up functional areas that normally don't go as highly noticed. Right? Everybody knows police officers, firefighters, maybe even some public works folks, but we have unsung heroes and we talk about that every year. The folks working at our surface water treatment plants or wastewater treatment plants or that come out at 3 in the morning to ensure that we maintain water pressure. There's just so many things that go on behind the scenes that um I take as a compliment that they're taking for granted because that means that we're doing a great job in ensuring that the quality of life remains intact. And so thank you for the support in doing that. [applause]

Thank you, Mr. Garza. And certainly we appreciate the diligence and professionalism of our employees and u happy to give this recognition this week. So well earned. All right. The last listed item then under public and employee recognitions is is mine actually. And I see my name on there. So, um, this [clears throat] is recognition of my 2025 2026 mayor's youth council. Uh, some of you may know the youth council is, uh, comprised of, uh, young men, young ladies who are juniors and seniors, uh, in [clears throat] our local high schools and here in Victoria. And we started in the fall as they applied over the summer. Uh we started in the fall with a series of meetings around different uh aspects of the city, different aspects of local government. Um we toured the service water treatment facility. We uh went to the public safety headquarters. We met with the police department. We were at the fire station and the alarm went off and they said, "Sorry, we have to go." So we saw parts of fire station one. Um but also um there's a volunteerism component to this and so um this team helped out a couple of KVB events uh helped out at Tahasfest volunteering and so uh really through that process I hope learned a lot about the city a lot about governance um we met with Michael Cloud's office um he gives a very nice uh video and kind of talked about how um learn more about how federal level and local level work together. And so, uh, it was a really good group. We had a big group this year. I think 23 is 24, I'm sorry, 24. And so, uh, we wanted to recognize each of them tonight with a letter of recommendation from myself for completion of the course and also with a, uh, certificate. So, they are here and I'm going to go hand those out. Uh, Kesha, will you please, uh, take care of calling them up individually?

[clears throat] Yes. Uh, excuse my voice for sure. And for the students, I'm calling you in alphabetical order. So if you kind of know your last name is in the back, then you can make that work. Okay. Um so first I have Stevie Corales who is a senior this year. So [clears throat] um one thing that we've done this for the first time this year is we're giving out graduation cords to our seniors who completed all their stuff.

[applause] And [clears throat] then this one snuck in, but Maline Crocker, [applause]

Brilan Espinosa, Bray's not here. Okay, she didn't make it. Um, Kate Fron. [applause]

Next we have Paige Fulgum who is also a senior. [applause] And then we have Haley Gonzalez. Haley, did you [applause]

And then I have [clears throat] two Holds here. I have Emily Heinald and Marin Heinald. [applause] There we go. [clears throat] And Mandep Jane [applause] And then we have Sophie Costella. [applause] And my next one that snuck in, Abby Leonard. [applause] Oh, I missed Sophie and Abby are also seniors. I missed that. My apologies. Miles Mueller. [applause] I have Kristen Neetto who's also a senior [applause] and Ansley Nunees who's also a senior. [applause] Arya Patel, who's also a senior, [applause]

Billy Thally, [applause] [clears throat] excuse me, Sierra Thomas, who is our president this year and is a senior going to Baylor University. [applause] Thank you. I need something. [clears throat] Then we have Daniela Varela who is a junior and our president-elect. So, she'll be our president next year. [applause] of Satie Welder [applause] and then Ellie West who's a senior. [applause] Lexi Williams who's also a senior. [applause] And then Olivia Young, who is also a senior. [applause] And last but not least, I have Haley Yur, who's a junior with us. Haley, I don't think made it. Haley, yeah, she couldn't make it. Um, I do want to say that this group [clears throat] is full of kids going to every school you can think of and it's really really cool to see the stuff that they're doing. Thank you. And and now we go get pizza. So, [laughter] [applause] no, congrats to to [cheering] all of you. It was been a great year and we will look forward to another youth council next year. And I'm sorry I'm missing out on the pizza, but you guys

enjoy. All right, [clears throat] we'll go ahead and move on down. Uh well, actually, Mr. Garza, do you have any other public and employee recognitions? No, sir. All right, we've had quite a few this evening. Are there any items from council tonight? I have one. Yes, ma'am. Um I would like to request that we talk about um the streets in Fox Creek, specifically the west end of Seab Biscuit and Secretariat. Um, I'd like to just put it on an agenda item in the future and that way when we see it on the agenda, we'll all remember to go drive that street before we come and talk about it.

Okay. Any other items from council? All right. We will move on then to citizens communication. I have one card. I think Mr. Vondere is currently blocked, however, from being able to get up here. [laughter] I wouldn't do that to you, sir. Mr. Vonog, come on up.

Good evening, Mayor and City Council. Uh, Michael Vandro. I live at 21107 North Bin, Jordan. U, they had a keep Victoria Beautiful just recently on Saturday. appreciate. I didn't go to it because I'm trying to bring my A1C down and they keep bringing all these donuts and I I didn't want to be tempted, you know, but they do have some diet donuts high in fiber and stuff like that. Walmart I can bring, you know, for the city council or them or whatever, you know. And uh thanks for the nurses. It's a nurses week. Um they brought my A1C down one point in 90 days. So thanks for them and the registered dieticians. They had a free meal at Citizens where they had wild salmon and um brown rice and um broccoli and uh a diet cupcake with 0% sugar for the icing. So I I appreciate that, you know. And um anyway, on 2207 North uh Jack Street, uh the homeowner leaves the gate open and if he shuts it, there's a gap for dogs. and dogs are still coming out and stuff. And they're famous for uh KAVU25 addressing this. And there was pictures uh on KAVU25 filming animal uh care services getting these big old dogs and big nets. And you know, several months later, he still hasn't taken care of it. And there's a pile of trash practically to the U ceiling. and code enforcement cited him, but they don't have enough rank to like carry it through. I guess the legal department would have to sue him or something to take care of it, but he don't want to take care of the dogs. He don't want to take care of the trash and he could care less. And it's [clears throat] a danger to the neighbors. You know, right now there's loose dogs running all over the place

and no one's doing anything. Kabu 25 did help animal care services uh last year. And you know, I guess he figured since Mark's gone, he's in the clear, but we got another director, so I don't think they're going to let him get away with it, but I do wish someone could take care of it. And there's also illegal dumping. They're dumping sofas over at uh the dumpster at Christ Kitchen and Advanced Auto Sales, Advanced Auto Parts. They dumped a big old um love seat, you know, at the dump dumpster. And I wish people uh would stop doing that. But I do appreciate the nurses. There's about a team of 12 registered dieticians and registered nurses helping me to get my A1C down. So, I'm I'm going to try to get it down one more notch. So, I appreciate everything. Have a good evening. Appreciate it.

Thank you, Mr. Vunder. Good luck to you. All right, that will close out citizens communication. Uh we have no items with public hearing. So we'll jump to our consent agenda. [clears throat] Miss Hillberg.

Yes, sir. Item D1 is the adoption of minutes of the regular meeting held on April 21st, 2026. Item D2 is an ordinance admitting chapter 14, occupational licenses, taxes, and regulations of the city of Victoria city code of ordinances and adding article 11, short-term rentals. This item is on second and third reading. Item D3 is a resolution approving a utility reimbursement agreement with Victoria Exchange Development LP in the amount not to exceed 500,000. Item D4 is a resolution designating the city manager as the authorized official for the FY2027 Motor Vehicle Crime Prevention Authority grant designating Sergeant Robert Rogers as the program director and designating assistant city manager Gilbert P. Rana Jr. CPA as the financial officer. Item D5 is a resolution approving an interlocal cooperation contract with the University of Texas Rio Grand Valley for regional security operations center services. Item D6 [clears throat] is a resolution approving the City of Victoria investment policy and list of qualified brokers.

Thank you, Miss Hilbert. Do I have a motion on the consent agenda? Motion to approve consent agenda as read. [clears throat] I'll second. All right, I've got a motion and a second. All in favor say I. I. Any opposed? and consent agenda passes as read. So we will jump to our action items and we have one item this evening item E1. Item E1 is a resolution awarding the 2026 street improvement project to Clark Construction of Texas Incorporated in the amount of 1,472,54342. Mr. Shiblick, welcome.

Good evening. Uh this 2026 street improvement project came about because our residential street project for 20 fiscal year 2026 came in under budget as did our thoroughfare project. Um and we took those excess funds put them together and came up with this project. Uh we had about a million and a half dollars as our budget. our project areas under our base bid. We've bid out Edinburg Street from 1100 Edinberg to Navo, Highland Hills subdivision, phases one and two, Dwet subdivision, Mia Thompson, Bennett, Walter and Ali roads, Tradewind Terrace, Milan Place and Avent Guard edition. We had also a couple of alternate bids, John and Brown Streets off of Juan Lynn and Wayside Terrace. One bid was received from Clark Construction of Texas. Their base bid came in at1,835,538.70. Being that this was over budget, staff began negotiations with Clark Construction to reduce both the scope and the cost of the project. We were able to uh negotiate a savings of $362,99528. In doing that, uh we had to remove Tradewinds Terrace from the project, Milan Place and Avant Guard. Also, we did not award any either of the alternates um Wayside Terrace or John and Brown Streets. Engineering staff recommends that the contract be awarded to Clark Construction of Texas from the the negotiated amount of 1 million472,54342.

This project will be completed within 270 days. Tradewinds Terrace, Milan Place, and Aventat Guard which were pulled from this project. We anticipate adding them in our fiscal year 27 uh bid program as additive alternates. Um Edinburg Street we will be re-evaluating after the award to determine whether uh to keep this in a project or uh replace it with a different street. Any questions? Any questions from Mr. Shook? [clears throat] And I understand that the funding for this, if I'm not mistaken, came from savings on other projects. Is that correct?

Yes, sir. Okay. Yes. All right. Very good. Any questions? Seeing none, then I will um accept any motions with respect to item E1. Motion. Motion to approve item E1. Okay. Second. We've got a motion to second. Is there any discussion of item E1? See none. All in favor say I. I. Any opposed? And item E1 passes. Thank you, Mr. Ship. So, we will jump now to our city manager reports. Mr. Garza, I know you have a couple for us this evening. They're pretty meaty in in substance.

Yeah, absolutely. So, we have an overview of our fiscal year 2025 audit and then of course I will be providing an overview of city county agreements. And so, to kick off our first topic, I'm going to turn it over to Wesley. Well, good evening, mayor and councel. This is a report on the completion of the audit of the city's financial statements for the year ending Febru September 30th, 2025. Harrison Waldup and Uhic performed the audit. A copy's been posted to our website and delivered to the appropriate agencies. This was done in April to comply with all filing requirements. I have Melissa Terry, who's a partner with HWU, here to give us an overview of the audit process and the report.

Good evening. Welcome.

Thank you'all. Um, mayor, council, thank y'all for having me here again. My name is Melissa Terry. I'm a CPA and a partner with the firm Harrison Walter Bernie Heric. Uh, as Wesley stated, I'm here to present the audit results for the city's financial audit uh, ending September 30th of 2025. Um, so this evening, just to um, there you go. I will do a brief introduction of the audit team. Uh, give you the audit results uh, for the audit. um any other required communications uh briefly go over financial highlights and then take any questions that y'all may have. Um so um the audit engagement team consisted of myself and uh the audit supervisor Elizabeth Venordan and other support staff. Uh Elizabeth and I work predominantly um in governmental accounting and auditing. um we re we receive the required uh CPE hours every year. In addition, our firm uh has to undergo a peer review every three years. Uh the last peer review that we received was uh in 2023. [snorts] Uh we're up for another peer review in for this year 2026. A peer review is an overview of our firm's quality control standards as well as uh our the firm's quality controls, the um audit process that we do. Um there's like a big sample that they do of our audit engagements and then also look at the product that we produce to make sure that it adheres to the uh required standards. Um and we've had no findings on those audits.

As mentioned, we were uh we issued our engagement or our audit opinion letters in April of 2026. The city received an unmodified opinion or a clean opinion, which is the same form of opinion the city's received in the past on those financial statements. Uh there were no findings in internal controls over financial reporting. Um and also um just to make note that the city once again completed an annual comprehensive financial report and this is a uh a tough task. Uh I looked today just to let y'all know that report we don't uh there's no more printing of it as it's just posted on the website. Uh but it is it remains it's at it's 275 pages long. So there's a lot in there that the city produces that is not required. Uh but is is uh good information. Uh there's a couple sections in there uh that are good information for um citizens and uh individuals across the US to read to know what is happening, what's going on in the city of Victoria. um that is the city um submitted the uh the report to the GFOA uh in order to for the uh to get the certificate of achievement for excellence in financial reporting and the city has received this certificate for 41 consecutive years and y'all should be commended on that achievement. other required uh communications and uh procedures that we were having we had to perform. Uh since the city uh expended greater than $1 million in federal awards, uh we were required to perform a single audit. Um so that single audit is uh entails procedures performed to test

compliance with the OM um uniform guidance requirements. Uh the opinion letter um was a clean opinion. Uh there were no instances of non-compliance or nor deficiencies in general control over compliance noted. Uh finally to conclude the audit discussions and to communicate with you at the conclusion of the audit and uh as we do with the engagement letter at the beginning of the audit, we are required to communicate key audit matters. Um including those key audit matters are we have to make note of any significant audit difficulties uh which were none. Any independent issues identified um which there were none. Um if we had to uh obtain second opinions from other accountants uh which were none. um in any uh uncorrected misstatements or material audit adjustments. Also, the city was required to adopt uh Gazsby statement 101 uh which uh was for compensated absences for the current year. Um, every year there's always something the the um government accounting standards board issues just like if you're familiar with um um for-profit uh audits there they have to abide by fazby in governments as Gazsby. that the Gazsby 101 uh was was required to be adopted by the city and it required a restatement of the city's financial statements for fiscal year ending 93024. This added additional liability abilities to the city's financials which included an estimate of the future use of PTO. Um the the the purpose of this is just to better align uh all

government entities to make sure that they're all reporting um the leave liability uh the same across all um entities. So, one of the most more most important questions you may all receive is uh how did the city's financial uh how how did they perform in and as a result of the the activities in 2025? And a great place to uh look for that answer is in the management's discussion and analysis. The MDNA which is referred to is found on pages 4 through 22 of the big report. Uh the management's discussion analysis provides an overview of the city's financial activities. It presents financial highlights and other economic data to assess the financial condition of the city and it helps readers understand governmental accounting and how it's applied to each fund. um instead of reading the 275 pages, you can really just look at that management discussion and analysis. There's a lot of good financial information, comparative information uh from the whole uh report. Uh and it does um look into the future into 2026 and beyond so the readers know what is up and coming for the city's uh h uh financial activities. So in the next few slides I will hit the highlights on three major funds of the city. Uh this particular s slide has a a a graph of the fund balances and net positions for the general fund, water fund and the environmental services funds. Um again this is uh this depicts the fund balance and net position which is different from the working capital uh which is shown in the city's budget

documents. uh the difference between working capital and fund balance in net position is just how capital outlay in long-term debt is accounted for. Okay. So, general fund fund balance increased uh for fiscal year 2025 uh by $3.8 million uh mainly due to the revenues coming in over budget. The water funds net position decreased 268,000 due to an increase in um expenses primarily in personnel and the environmental services fund net uh net position decrease 138,000 uh mainly due to increase in operating expenses. So this slide uh just reports on the general funds fund balance. The total general funds fund balance for 9 at 9:30 2025 was 28.5 million. Uh that was compared to a $24.8 million a total fund balance at 93024 in the uh in the total fund balance. Uh it in it includes about 700,000 for carried over uh purchase orders into 2026. So that those funds were committed uh for those uh POS and so that left an uncommitted amount of 27.8 million and historically those excess funds are used uh to pay for one-time expenditures for the city.

I'll also point out just as a reminder, sorry, that we do have [clears throat] a policy that requires us to maintain 25% And so just keep that in mind as we go through these that there's also very intentional process or decisions that are made to maintain these at a healthy level. So I don't think we can just use all that money I guess. So [clears throat] yeah.

Yeah. uh net position of the water fund at 93025 was 98 million and as I showed on a previous slide the working capital uh for the water fund was 13 million so it's a big uh difference again um it's a difference how capital outlay and long-term debt is accounted for uh net position of the environmental services fund at 93025 was 7 million compared to a working capital of 11 million

I do want to interject something there real quick that this decrease increase in the working capital for the water fund or the utility fund was planned. So that wasn't something that caught anybody by surprise. We intentionally have been uh using up some of the working capital that has been just saved up over time in order to fund our CIP. We haven't uh adjusted utility rates since 2019. And so there really hasn't been a need to because we had this working capital that was accumulating. However, as we look to embark on implementing recommendations from several master plans, right? Whether that be the INI study, right, where we're still needing to address some infiltration issues, whether that be the water study that's looking at how we can be more resilient to expand and diversify our water source, right? And then of course, we also just have aging infrastructure. And so as those three things continue to stay at the forefront, um I forgot the uh some of the some of the other modernization efforts. But as those things become more at the forefront over the next few years, we're going to have to have a conversation with you about utility rates because we can't just depend on this working capital forever because it'll just run out or it'll get close to our 25% reserve and then us not have any funds. And so again, this was a very intentionally designed and planned to fund our CIP and moving forward, we'll necessitate a conversation. So thank you.

So moving on, uh this is a this slide shows a bar graph depicting three-year comparisons of the major revenue uh sources for the city being property tax, sales tax, franchise, water, sewer revenues, and solid waste revenues. Um, first on the property tax, this is just the general fund or the maintenance and operation taxes. Just to point that out, uh, the FY25 uh, property tax revenues were at 24 uh, 20.3 million compared to prior years at 19 and uh, 18.6 million. Sales tax revenues for fiscal year 25 were at 21 million compared to prior years of slightly less than 20 million at 19 million and then 20 20.4 4 million in 2023. Franchise tax revenues for fiscal [clears throat] year 25 were 6.1 million compared to prior years at 5.8 and six. And then water fund operating revenues fiscal year 25 26.4 million compared to a similar amount for fiscal year 24. And then environmental services uh fund operating revenues were 6.2 and also compared to a similar amount for fiscal year 24.

Uhhuh. Just a a reminder on the water and sewer revenues. We did have a credit that was um given out in July due to the water boil notice which did contribute to that decrease. Got it.

So the uh final slide is a uh bar graphs depicting the three-year comparisons of operating expenditures and expenses uh for those three uh major funds. general fund FY25 expenditures were at 59.3 million compared to prior year of 53.4 million. Water funds FY25 expenses were at 25.7 compared to FY24 at 24.5 and [snorts] environmental services fund FY25 expenses were at 6.4 compared to a similar amount for uh FY24. Um, uh, that's my short, uh, overview of the city's financial audit. I thank you for having me here this evening. And I want to thank, um, u Wesley and all his staff and the rest of the city staff for their cooperation and assistance during the audit is a a long lengthy process and a lot of work as I mentioned earlier in order to complete this audit. Um, it takes it takes a um an army to do it. So, I appreciate y'all's time this evening and open to any questions y'all may have now or uh anytime in the future.

Questions for Miss Terry? [snorts] No. All right. Well, thank you all. We appreciate the services you guys provide for the city. I know it is a daunting task to go through this every year and we certainly appreciate and appreciate your time this evening. Thank you. Okay. Thank you'all. All right. And again, that audit is posted on the city's website if anybody wants to take a deeper dive into that. It is available. Um, 300. Our second city manager report. I'll just open [clears throat] this briefly uh if I can, Mr. Garza. Absolutely.

You guys may recent as well. [laughter] You guys uh may recall uh and this goes back to uh the meeting we had um where the agenda item was about the repair of the library roof. Uh there were some questions that came out of that whole process and looking at that when we approved that um that repair. Um, I requested that staff come back to us and kind of give us an overview of that city and county contract. Uh, and and really we have several uh several contracts that I think we'll touch on. Um, and for some of us, it may be a bit of a refresher. For some folks, it may be new information. Uh, particularly the public because this isn't something that's, you know, typically out there. Um, but I think it's important that we all understand kind of what that working agreement is and what the cooperation agreement uh with the county is. The purpose of this overview is really just to give us some factual background and factual information. Um, if we have questions about it, we can ask at the time. So, this isn't posted as an action item and we're not making any decisions tonight on anything related to any of these contracts. It's more just seeking information about what that uh contractual relationship looks like. So, I know Mr. Garza has uh put in some time on this as has Miss Lacy and Mr. Rea back there. And so, uh with that, Mr. Garza, I'll turn over to you and let you walk us through uh what I know is a lot.

Sure. [laughter] Yeah. Yeah. No, absolutely. Thank you. Uh, I also want to echo gratitude to uh Allison, but specifically to Gilbert. Um, I kid you not, literally just the day after it felt like that you made that request. You know, a few months ago, Gilbert had already uh over the weekend gone and pulled all sorts of books from the archives and, [clears throat] you know, had I don't know, a whole book rack in his office going through all of the different details. And so Gilbert, thank you for the research and the and and the intentionality there. I I think it was a very educational uh process even for myself quite frankly. You know, I learned quite a bit just through this research of things that I didn't realize. And granted, I've only been this month seven years by the way. Uh and so I I think it really helps us to understand where we've been in order to have a conversation about where we want to go. And I think what I'll share with you today explains a lot about why we are where we are right now with an agreement. As the mayor alluded to, there are actually several agreements where either the county pro the county renders a service or we render a service. And so just really briefly, uh some of these are long-term arrangements, some of them are very short-term. So, for example, we recently entered into a very shortterm agreement to be part of the plan review and inspection services of the new county health facility that's going up by the airport. Now, this is kind of a one-off, but they basically hiring us in order to provide that service. We of course have a cost sharing agreement with emergency management where we split the cost of the emergency management office 50%. That is reconciled at the completion of every fiscal year with actual figures. We have a public safety radio system agreement where we provide and the county pays us to have access to our radio towers and our communication

system. We also have a contract with the county, specifically the airport where they pay us as a wholesale customer for water. And so all of the businesses that are located within the footprint of Victoria airport don't actually have an account with us. the airport management handles how they assess and charge for water um on site. We also have an agreement where April's team serves as a local registar and per that agreement there is a uh we pay I'm sorry they pay us. No, we pay them. Nobody pays. I thought somebody paid. No, not that one.

Not that one. All right. Sorry, it's confusing. So, in any case, all right, nobody pays anybody for that one. Noted. And then of course, we have the fire and the EMS service contract, which I'll go a little bit more into detail, as well as a library servicecentric contract. And then on the right hand side we have the services that the county provides that we pay them to provide us. So for example, we of course hire them to run our elections. We of course pay for that 50% for emergency management. We pay them to collect our taxes. We pay them to house our house our inmates that RPD sends over. Um and then of course we have the animal control services that we don't directly pay for and the public health services that they provide that we directly don't pay for as well. And I forgot to mention that we provide library services to all county residents without a direct payment to us for that. And I'm going to hit on that difference of actually paying versus not throughout the course of this presentation because the lack of a direct payment I think contributes to a little bit of the confusion and the ambiguity about what that relationship ought to be. And that's exactly what one of the problem statements is on the slide in that there is no clear methodology in determining what is this appropriate funding mechanism specifically for fire EMS library county health department and animal control. There is no consistent approach to payment for services. You know again we don't pay the county for animal control. They don't pay us directly for library. Uh we of course have a contract where they where uh they pay us for fire and EMS but it's not consistent. Uh there's also no consistent approach to the advisory role setup. The county has the ability to appoint advisory board members to a library to the library operation which we run, but we don't have the ability to appoint advisory board members to the animal control operation that they run. And so there isn't this consistent reciprocal approach to uh having official voice at the table. And then there's some uncertainties that have

kind of just unfortunately brewed up over the last few months. One of them stemming from a November 2025 decision that the county commissioners made to create an emergency services task force to evaluate and develop recommendations for providing emergency services to the unincorporated areas of the county. This was a very intentional decision on their part to set up this task force to help them explore whether hiring us for fire and EMS was was something that was um I guess worthwhile. And then uh around the same time we were struggling with how do we go about addressing a library roof situation. But for a few years now we've also been tackling the question how are we going to implement recommendations from the library master plan that was approved a few years ago. The current library is 33,000 ft. The library master plan recommended doubling that to 66,000 square ft with some recommendations for some pretty significant physical enhancements to the existing facility, but we don't own this facility. And I think rightfully so, you know, our we we don't want to invest in a facility that we don't outright own. And that was sort of a a nice to have improvement. However, we came across a situation where there was a needed improvement which was the roof. And in that scenario, the county decided to not participate in the cost share of that roof replacement, which of course also has caused, you know, questions and concern about, well, what does this relationship really look like? And to the mayor's point, that's what prompted the request for today's presentation. Any questions at this point? Okay. So, the relationship with the county and the with these different departments actually goes back to 1969. And this is just a really high level overview of what that relationship looked like between 1969 and 1991. I'm not going to go into details between these years. I will from 1991 to present, but this gives you a sense just within that time

period of just how different uh the arrangements were. There's a fixed amount for fire service for the county. there's a split of budgets for health services for an for uh library services that there was definitely a different methodology at that time. And what's interesting and something that I personally learned that didn't realize was that the city of Victoria actually ran an animal service or animal control department previous to 1994. And so during this time period from 1969 to 1991, the city ran the animal control department and the county actually paid us a fixed amount to provide animal control services. Um [clears throat] so from 1992 to 1998 uh there was a very specific structure of this arrangement and as you can already kind of tell by the way that this slide is is represented it's evolved through through from 1992 to present and I'm going to walk you through each of those while also showing you a very highlevel summary of the financial element of it just so you could get a picture of what that financial transaction or lack thereof had been back and forth. And so 1992, we had separate contracts for fire and EMS. Um, as council member Lagora may recall, we had separate departments for fire and EMS. Those did not consolidate until 1994. And so those were separate contracts. There was a separate contract for library services where the city and the county split the expense of the library 50/50. And as I mentioned, animal control prior to 1994 was operated by the by the city and then after 1994, it was transferred

to the county. What I also learned through this process was that when that transfer happened, the city of Victoria actually transferred all assets to the county. So the city transferred the facilities, all equipment, everything associated with the animal control operation that the city had been running for decades were just transferred to the county. And then ultimately the city was paying 80% of that animal control budget and the county was paying 20%. And then we also had a split for the public health department of 58 to 42%. And one thing that I'll note is that there's a lot of percentages that are thrown out throughout the course of this presentation. I wish there was very clear understanding as to how these percentages were come up. They how they came up with those percentages. But unfortunately, we don't have, you know, that level of detail. We can obviously make some assumptions, right? 50/50, that's easy. We just decided, let's just split the cost. But a percentage like 5842 as an example, you know, there's just not a lot of not a lot of information that that validates why that would be the case. To give you a sense of how this relationship during that time period worked, I'm going to again show you just some financial figures here. So, prior to 1994, we had those separate contracts. These are figures that the county would pay us as the city. Then it was consolidated going into 1995 through 1997. That's somewhat pretty straightforward. They were fixed amounts. The library service is 50/50. Pretty straightforward. That gives you a sense of how much money the county was paying the city during those years. for animal control. As I mentioned, up until 1994, the city was running it. So, the county was paying us $25,000 and then when it switched and we transferred all assets to the county, the city

started to pay for 80% of that budget, which equated to that 130 to eventually close to $200,000. And then there's that 5842 split. The numbers in red are funds that we paid to the county and the numbers in black throughout the presentation are figures that the county paid us for that particular service or split with us for that particular service. Um, [snorts] one of the things to note about this arrangement is that you can see how there was a lot of agreements because each of these was basically its own agreement, its own agreement that necessitated its own reconciliation. And so, uh, I can see how at that time both staff from the city and the county probably felt a little overwhelmed with the implementation of all of these different agreements. I'll stop there. Any questions on that time frame? Does this flow work? Okay. Yeah. Counciloman Butler, did you have a question? Okay. So, we assume that because of the complexity of managing all of these different contracts that that led to the conversation around let's take a different approach from 1999 to 2007. Gilbert Gilbert's exercise of pulling all of these books. Uh we included some pictures of some of the books that he found because we didn't want his effort to go to waste. So [clears throat] thank you Gilbert. But this was really helpful because it did also help us find uh a time frame where there was this collaboration between the city and the

county. There was literally a city county city council county commissioners meeting. There was committees that were created to look at how can we take these you know six seven different contracts and just make it more efficient. And so that ultimately led to what we refer to as an equalization payment agreement, which attempted to take all of those different services and basically funnel them into one agreement. And so all of the services that were funneled into that agreement are included on the left hand side of this slide. And they include many of the ones that that we've that we're talking about today. Excuse me. but also was very intentional with including like 911 dispatch, county fire marshall services. The county didn't always have um fire marshall services and so obviously the that inclusion of that has also ebbed and flowed throughout the years, but ultimately the premise was in theory simple. Let's put all of these elements into one contract and then let's reconcile all of it together. And on the right hand side is a real life example of what one reconciliation looked like for the year 2000. And I'm going to walk you through it. So at the very top, we start with the cost of the city to run the fire department, which is roughly $7 million. Then the cost of the city to run the library, which at the time was 1.5. The cost for dispatch associated with county call volume, that was 161. So the city was spending $8.5 million towards that. Then as we worked our way down, we deducted revenues. And so um any revenues associated with the ambulance service or the library services were deducted from that from that expense to then lead to a net operating expense of 7.7 million. And that's what the city was spending to

provide those services. Then as you continued, the county of course had their end of the bargain. And so they had $2.1 million going towards their operation of the county health department, which at the time included animal control. Recall that animal control for the longest time was a division of the health department and only recently became its own department. And so that ultimately once you deduct some revenues also leads to a net county operational expense of 1.4 million. Then there then there was this combined net expense of 9.1 million which basically just added those two numbers and this contract said hey the population outside the city limits is roughly 28%. The county ought to pay 28% of that 9.1

which Yes ma'am. Oh I'm just gawing. [snorts] Huh? I'm just gawing. Yes. Yes. Thank you. choking. Do you need some water, sir? I may need EMS, sir.

Yeah. [laughter] All right. So, under that formula, the county would be responsible for $2.5 million, which is again roughly that 28% of that 9.1. However, the county then would receive a credit for the 1.4 that they already spent on their operations. And then there's a credit for paying the 50% of the library. And then ultimately in that particular year after the reconciliation, the county owed us $457,000, which again in theory was supposed to be that roughly 28% of the total expense of all of that. But as you can see, it actually is not that simple because the library still had its own arrangement with the 50/50 split. Hence why that's listed at the very bottom. Right. So there were still there it was definitely a step in the right direction to consolidate agreements and consolidate reconciliations. Absolutely it was. But it still did it still left some things um unclear and uncertain. This is another way to view what the financial contributions from the county looked like during that time frame, which also helped answer another question that nobody really kind of knew, which was how did we end up with 14 1.5% for the arrangement that we have now? And so our best guess is that that 14.5% came from this realization that once you did the math, the county was basically paying for 16.8% of the cost and then so on so forth. On average, it's basically 15.9%.

which is not any anywhere near that 28% that I previously kind of mentioned that in theory, right, they would have been responsible for. So, the math wasn't mathing um the way that maybe was intended. Who knows? But the point is that at the end of the day, what was coming out of pocket from the county on average was 15.9%. And the reason quite frankly why it wasn't mathing is because you weren't looking at certain things in isolation. Grouping them all together while in practice might have been easier to implement really kind of doesn't give you the nuances or includes the nuances of the differences within each of those operations. But a step in the right direction nonetheless. But remember that 15.9%. So then after 2007 you know parties got together and said hey we got to find a better way. So the arrangement became this which is very similar to what it looks like today which was this idea that and the found in the minutes a quote that make simpler the accounting cost between the two and to provide more predictability and anticipated cost. And so this is when it became the county does this, the city does why. And so under this arrangement, the county assumes 100% responsibility for health department, animal control, their own fire marshall, um an airport is referenced several times. And then we assume the library and fire and EMS with the service contract that assesses that 14 1.5%. And as we know, that 14.5% doesn't apply to large capital improvements like our new fire stations or remodels or the acquisition of land. It does apply to when we buy new

equipment and apparatuses, but not for those larger um expenses. And in this particular case, we also pulled out not reconciling that ambulance revenue so that we could still collect that revenue that is generated out in the county. And so this is what that arrangement ended up looking like. And so once you do the math and you pull out the figures them the county paying 14.5% uh this is that picture. One thing to note which is what's in red is our expenses that didn't have any reimbursement of any kind which is okay. I'm simply illustrating it just to show you some of the expenses that we incurred during those same years for new fire stations or expansions or things of that sort. And the thing that I'll note is that now under this agreement it's 14.5%. Previously was 15.9. So, this is where things start to trend towards a lower percentage for the county, which as staff and I discussed is 100% on us, the city, for agreeing to these arrangements, but the facts are there. The county was paying out of pocket roughly 16%. Then the city agreed to an agreement that dropped that to basically 14 and a half. And one of the things that we talk about quite a bit is the correlation between call volume for the fire department specifically and the budget and what that would equate to. And so I wanted to show you and I have a few slides here throughout that kind of illustrate what is that delta. So in this particular case the average was 23% of call volume was out

in the county. And so what you see here is what the county paid equivalent to that 14.5%. And the lighter shade blue is what they would have paid had that payment been equivalent to that 23% call volume. And then the difference and so you could see how that difference in 2008 was 1.7. Then it drops down to roughly 690,000 430 670 so on so forth. And that that call volume percentage is an average over this time period.

Correct? Yeah. Yeah. Okay. Yeah. Simply just showing averages to illustrate, you know, a point. Um the other point that I'd like to make is that I think it is very easy for us as the city to look at something like this and think, gosh, the county might not be paying their quote unquote fair share. And I've heard that term quite a bit through different conversations, you know, with some of you with some of you or even with some or even with the judge or county commissioners. And because this arrangement doesn't include very specific figures for all of the services that are going back and forth, again, it makes it very difficult to truly gauge what that fair share is. Because in this instance, even though they, for example, didn't pay us that extra 1.7 or that extra 690,000, there isn't a direct expenditure out that we're sending them for animal control, as an example. So, it's difficult to compare uh services when only one of them, being this one, has some true financial data to pull up. Okay. Any questions on that time frame? Okay. So then in 2013, the city agreed to get away from 14.5% and go down to a flat rate. And the flat rates are listed here. and they happened through different amendments. I assume that as these different amendments were coming to an end, they uh were just not renewed. I mentioned to the mayor this morning that I remember um shortly around the time that I arrived, you know, there

being conversations about from the county and myself about a desire to reconsider a flat rate. Obviously, that didn't happen and we're now under a 14.5% because of the verbiage that was included in the in these amendments which is listed here at the bottom that in the absence of any other amendment or in the absence of things sort of just falling apart for whatever reason we would revert back to the 14 1.5%. which we eventually did. But it's important to note what happened during this time frame of 2013 to 2019 because what ended up happening was that the county's contribution ended up going even lower. It ended up actually resulting in roughly 12%. Or an average of 12.4. And so at the bottom, I've highlighted this historical trajectory because it shows how from 1999 to 2007, the county was cutting us a check for the equivalent of roughly 16%. Then we agreed to drop it to 14.5. Then we agreed to drop it to 12.4. I don't know why those arrangements were made. I can only speak to the facts. But I can assure you that had I been city manager at the time, this wouldn't I would have pushed very hard on this because it doesn't make any sense that the percentage go lower when our expenses are only getting higher. And I'll show you a graph a little later [snorts] that clearly illustrates that trend. This during that same time frame shows you what the payment would have been had it been 14.5%. So on the left hand side, had we never agreed to that flat rate

that again resulted in basically a 12% payment on their part, this is what it would have been. So again, if it would have been 14.5%, the county would have paid an extra $300,000 in 2013 and it basically kind of goes down a little bit after that. But again, it gives you a sense of how much money we did not receive from the county during those years because of our agreeing to a flat rate versus staying with a percentage rate. And on the right hand side once again shows what that call volume would have looked like during this time frame. the percentage of the a the percentage of the call volume actually went down from 23% to 20%. But nonetheless again it illustrates that had there been a uh agreement that the cost to provide fire and EMS be equivalent to cost of service this is what the payment would have been. Any questions on that time frame? Okay. So, as I've already alluded to, it ended up reverting back to the 14.5% which is the model that exists today. And this gives you a sense of the figures that are equivalent to that 14.5%. Again, throughout we've included the expenses that we know we've had for fire department. But again, what's missing from all of this is that in the absence of there being specific agreement for payment for service for the others, I don't have that data to know. All we know, for example, is that on average, I shouldn't say that that the range of the budget for the animal control division or department over the past 10 years has gone from anywhere from half a million to up to a million. It kind of

fluctuates. Just to give you a sense of that, And this again [clears throat] just shows what the payment would have been had we applied the 20% call volume during this time period. Any questions on that? Okay. So, in addition to what I've already gone over in terms of what's included in the current contract, here are just a couple of other bullets that we pulled out from the contract. Where I really want to focus on is the third one, which is that the city may charge fees and cost to persons who receive services outside city limits on the same basis to persons are charged inside city limits. And for us, that could be actually more than just ambulance billing, but for the most part, it's been solely ambulance billing. um because we do receive that revenue when we provide that service out in the county which isn't calculated. If I were to go back. Whoops. The topic makes me nervous. So here for example, this calculation um doesn't and you can correct me if I'm wrong, Gilbert, doesn't take into account the revenue that we receive from the county. So we know that out in the county we receive I think it's north of $300,000 now in ambulance billing. The last time we ran the number was a couple years ago. And so again, if you overlaid that $300,000, you know, throughout these different years of money that we're generating by responding in the county that otherwise

we wouldn't have, right, it kind of shortens some of that gap. And that's built at the exact same rate.

I actually I I think we actually have outside resident rates for ambulance, don't we? Or is it all the same? It's outside, right? Yeah, they're higher for outside city limits. They're high They're higher for non-residents. Uh, oops. I'm trying to get back to I'll get there. Okay. Uh we of course know that there's mentions to library in the current contract. Uh we've of course have discussed how per the contract we're responsible for the operation. The contract's very clear that that includes personnel which makes sense. Of course the county retains ownership of the property and improvements. This part I quite frankly don't understand because as I've pointed out in 1994 when the county [clears throat] took over sole operation of animal control the city transferred all of those assets to the county but whenever it was decided for the city to take on the library that wasn't reciprocated and we don't have an answer as to why it wasn't.

Do we know what the value of those assets were? 700,000 back then back then 700,000.

Got it. I'm not going to repeat that one on the mic. So, uh, we also know that in the current contract there's verbiage to major capital expenses exceeding 100,000 will be discussed with the county, which of course is what we attempted to do with the library roof, but it's not in the contract that requires a county to do that. It basically just suggests that we can talk to them about it. Um, of course there's a jointly appointed library advisory board where the county appoints four individuals and then city does four and then there's a joint appointee. And like I mentioned earlier, that isn't a reciprocated um approach. Um, going the other way. Now, there are some boards with the health department that you do appoint, but they aren't specific to animal care services or animal control. And then where we are in terms of the term and just expiration and timeline of the agreements is that currently any party wishing to terminate uh before October 1st 2028 must notify the other before May 1st 2027 or of course people can just mutually agree. Right? This is the one slide that illustrates our increased expenditures specifically for fire and EMS and shows you a little bit of the trends of the percentage that the county has paid us. And so at the very bottom left it shows a 10.6% that the count that the the separate approach was taking. And so I mentioned that when that reconciliation or that equalization program went into the effect was a step in the right direction. It absolutely was because that ultimately led to the county paying us almost 16%. So it did lead to the

county paying us more money when that agreement went into effect. But then I track how it then went down to 14.5% as I mentioned before and then it went down to 12.4% in effect when we agreed to flat rate and now it's to 14 1.5%. But during this time frame, the budget for the fire department, and granted this is a while ago, um in 1992 was 4 million and now is 21 million for the fire department. And you could see how that 14.5% just in the last 10 years has increased by over a million dollars. Any questions on this slide? Okay. And then if I keep going, we did decide to overlay here just with that uh volume of calls out in the county. And as I mentioned, it's hovering around 20% currently. And so I go back to some of the problem statements right where we started that there's just no clear approach to how things get funding get funded. There's no clear consistent approach to this payment for service and I do believe that the absence of that creates ambiguity and confusion and I think feeds sentiments um because there's just no way to [clears throat] reconcile information or to determine what's the value of this versus that. Um, I've mentioned, of course, I'm not going to repeat this, but um, I wanted to bring this back up because I do want to talk about or share with you, I should say, a recommended approach moving forward, not to solicit any feedback tonight, but just to get everybody's brains thinking about what

might be a better way. And as you can see in the history of this relationship dating back to 1969, there's been plenty of moments where the city or the county or both have decided, hey, there's got to be a better way. And there's probably never going to be a perfect way, but certainly based off of everything that I've shared and everything that just has transpired over the last few months, there probably ought to be some consideration to just re-evaluate how this is drawn up. And what I'm proposing is that we basically take certain elements of previous agreements and combine them with the current one that we have now to bring some clarity. And so I'm suggesting that we explore maintaining the foundation of the existing services which of course are fire, EMS, animal control, and library. And we revert to a financial reconciliation of each to secure clarity and lessen ambiguity on respective services being provided by either party. So that it can be very clear what our responsibility is for hiring the county to provide animal care services. Very clear what the responsibility is for the county to receive fire and EMS. Very clear for the county to provide payment for the library services we provide to county residents. Right? Just to make it more clear. And in addition to making it clear, let's be consistent with that methodology across the board. you know, if we're going to base it off of a call volume, you know, on the fire department or utilization or whatever we come up with, maybe it makes sense to approach it the same with animal control as an example. Uh, and then I think it's important to have this mutual consistent approach to advisory functions, right? I mean, we hear quite a bit from residents about concerns related to animals and we don't really have any kind of formal way to bring up concerns, thoughts, ideas, you know, etc. And so I think it makes sense that if the county is going to hire us to provide library services to county residents and in turn them have a seat at the table in an advisory capacity, I

think it makes sense that that be reciprocated. And as we hire them more formally for animal care services, we have a seat at the table in an advisory capacity. Any questions on the very high level approach to it? Okay. That it does leave one element kind of unressed [clears throat] which I think necessitates an individual direction or decision or approach which is related to the library building itself. I mentioned that in 1994 when the city transferred those assets to the county to take over animal excuse me yeah animal control we transferred those assets and it wasn't reciprocated with the library. So one approach would be that in light of this this information that we've learned and in light of the historical u decision that was made in 1994 is to simply request that in return that similar to how we transferred those assets to the county in 1994 they do the same with the library. Um or of course we propose buying the library. And I think it's worth reminding you that we've actually attempted to buy the library on two occasions. So, we attempted to buy the library in September of 2024. At the time, we had done an appraisal of the library. So did the county. So, conversations were getting pretty serious. We made an offer to buy the library for $3 million and it was not accepted. We then attempted to buy the library once again just as recent as this past year because of the roof issues and because us wanting to just say, "Hey, if we're going to invest all of this money into the roof, it makes sense that we buy it." And once again, there was no seemingly desire to sell us the library building. And so then that leaves us a third option, which of course is to relocate the library to a different location. Um, and of course within that there are a few options. We can purchase land, construct a new building, or find an existing piece of property with a

building that needs to be renovated and we renovate it and renovate it or through the movement of our own internal um shifts and staffing and renovations and remodels, you know, we consider refurbishing an existing city building to serve as a library. And so again, I'm not seeking any specific um direction or guidance on that, but I think it's important that on this topic specifically that it be known of the history of the transfer of assets and how they haven't been reciprocated. I think it's important to be known that we've attempted to buy the library on two occasions and have not been successful. I think it's important to note that we ended up spending roughly $800,000 on the roof because the county did not agree to split the cost of the roof with us. And so I think it's just important to provide the information that I think is leading us to have to um explore relocating the library to a different location. But ultimately only you can provide that policy decision or direction. But again, not asking for it now. Just something for you to think about. And with that, I'm happy to answer any other questions or Gilbert or Allison, happy to answer any questions you might have on any of it.

Any questions for Mr. Garza? I don't have a question. I have so much more of a of a comment. Um, it's kind of a fundamental one. Uh the services that the county provides to county residents um I believe should be provided equally to all county residents. Um the fact that the city is providing funding for some of those. So it's almost like city residents get double taxed to provide those services. And I have a fundamental issue in some of these contracts because of that.

Well, and I think that's why the lack of clarity, right, I think leads to the ambiguity about that specific topic, right? Um that specific topic has come up, you know, in several different conversations and it's certainly a um a viewpoint. Um, but I think one thing we ought to just ask ourselves rhetorically speaking is does the county have to provide animal control services just fundamentally, right? Um, and if they did, do they have to provide them to inside city limit residents? And there are certainly some things in state law that would that they would be required to administer, but there quite frankly is no legal requirement that they enforce our local ordinances that you approve that you adopt. That is not anything that they have to do. And so when I make the comment that it's not very clear on what we're compensating them for is because I don't think we've gone through the or nobody has gone through the exercise of trying to figure out okay what element of animal control is sort of foundational and a baseline that to your point they ought to just fund and provide to every county resident versus which element of it is enforcing our ordinances and that in theory we're hiring them to enforce our ordinances.

Yeah. there's a there's a a value. Correct. And and and in the absence of that value, right, like it's hard to really kind of capture what's the value being provided, right? Um just to clarify one one thing you said about the county doesn't have to enforce our ordinances. That's in the absence of an agreement to do so. Correct. Right. So just just to clarify, you know, they do have to enforce under the current under the current contract. Yes. Right. But but absence that agreement is what you referred to that they wouldn't have to. And just I just want to clarify.

No, it's an important distinction for sure. Absolutely. Yes. And just to finish a thought, you know, we don't have to provide library services to county residents free of charge, but we do now. you know, we don't have to provide fire and EMS services out in the county regardless of whether we're getting paid for them for it or not, right? And so there's a lot of things that are going both ways, you know, of either entity being able to say, well, I don't have to do that, you know? Um, and that's kind of getting into the sentiment and and some of the uh different viewpoints of it. But again, I think the lack of clarity that clearly defines what the values of each of these are, I think creates opportunities for just different viewpoints being what drives it versus it being a factual financial driven formula. And certainly from my standpoint, I mean, you know, if [clears throat] you the more we the more we dug into some of the history and you know, you were sharing that with me kind of as we went along and found out some information uh the more confusing uh the adopted structure became to me because I didn't really have a basis for this is why this number's here. This is why we don't do this on an actual data driven basis. we just kind of, you know, use a number that was agreed to, not having the history of how those numbers came about. There may have been something else going on in that particular time span. There may have been something going on in that environment that's no longer here. I can't answer that question. What I can answer is I know what's happening right now. You know, I I know what those numbers are now. I know what that relationship is. I'm 100% of a mindset that our citizens of both the city and the county are best served when the city

and county are working together and shared services and have an agreement like this in place. Um, you know, the the citizens that live in Victoria County or in the city of Victoria are Victoria County residents. No doubt about it. And so to the extent that that the city and the county can share services and have this kind of agreement, I think is is is, you know, we should applaud that. We should support that. And I think that because I think that works the best for our constitu our constituents. The reality is that it's a business arrangement, but and just like any business arrangement, there has to be equity, right? I mean if if any business arrangement is going to benefit both parties and it becomes hey this is something that's good for all of us it's good for our constituents um even in the private sector it's good for my stockholders okay that arrangement has to have equity and it has to what what party A is getting out of it and what party B is getting out of it has to be supported by what they're also putting into it and so from that standpoint I think what what I saw on the current contract is that the bones of it are good, right? The overall structure I think I think it's important um for our citizens that that this contract is in place, but there needs to be I think some clarification as Mr. Garza pointed out. There needs to be some more specific provisions and language that really deals with issues uh about how this is how this is going to be done and doesn't leave it to well we'll figure that out when we get there because as we saw when we got there there was it was a kind of an agreement

to agree if we may agree and we may not and obviously you know uh when we approached the county and I'm speaking specifically as to the the library. Um, we did not agree because they said, "Well, we don't have to do that under the contract and so we're not going to." Well, that's probably a flaw in the contract to be honest with you. And if there's a flaw in the contract, then we need to address it. if there's a flaw in the contract that um the percentage of calls based on reality based on numbers we know that we can verify that those percentage of calls don't match the actual expenses related to those calls then that's something that needs to be addressed. I wholeheartedly think that there there are some amendments to this that there there is a path forward that will benefit the citizens and that the city and county both can move forward and benefit the citizens. But I think as we currently sit um under this contract based on the facts we know based on the call out based on the expenses based on all of those those items I think it's very clear that this does not meet the criteria as it's currently um put together of an equitable contract. And so from that standpoint, you know, in my mind I'd like to see at least some discussions about hey what how do we address some of these issues? How do we make this contract better? How do we how do we bring this more into line with what's actually happening happening rather than what was happening back in however long ago when nobody, you know, nobody at this table on this das and nobody at the county dis was was really around to say that's where that number came from. We kind of took some guesses based on percentages. So that's my thought on it. Welcome any other comment. you put it nicely. Um, basically I've always thought the county took advantage of the people who

lived inside the city limits. And they do. They're not paying a fair price for EMS. The library is for everybody. Why not just give us the library? We'll fix it up for everybody. I I don't get it. They do EMS for people who live outside the county. They don't they don't pay a fair price. They don't do it for most of the people who are county residents actually live in the city and pay most of the taxes. Yes, these agreements need to be changed. There's no equity. It's they're totally out of whack. But it seems to me that the county is always the bottom line number is all they care about. They don't care about the people. We've been paying for EMS service for people out in the county for years and they're happy with it. Now, when it starts to become an issue, they want to look for an alternative. That's fine. There is no equity. They're taking advantage of the people. I pay county taxes. Everybody up here pays county taxes and they're not treating us fairly. And yes, we somehow we need to these agreements need to change. I don't understand why they can't give us the library. We want to fix up the library for everybody. Tell me why. because it's an asset they can hold on to to negotiate a better deal on other contracts where people in the county treat everybody fairly. It'll never be fairly. They they take care of the roads outside. We pay road and bridge tax. That's not even brought up. these these contracts, we need to either get out of them or redo them so they're much fairer because it's not fair to the citizens that all of us represent.

I hear what you're saying. I will say this, too. Speaking of fairness, um I don't think it's fair to say, well, the county is taking advantage of people when they're actually doing what's in the contract. They're abiding by the agreement that the city entered into and the city signed off on this at some point. If they're ability to say that the contract tear up the contract. If you're going to speak over me, it's going to be very difficult. Go ahead.

Okay. If they're actually abiding by what's in the contract, okay, I don't think it's fair to say, well, they don't care about the people and they're taking advantage of us. They are abiding by what's in the contract. And if you don't like what's in the contract, then the way you fix that is you change the contract. And I think that's what we're suggesting. I'm not suggesting that the county is doing anything nefarious. I'm not cons saying that they don't care about their constituents. I'm not saying that they're trying to stick it to the county. They're merely following the contract that was agreed to. And if the city feels like it's in a bad position and it agreed to a contract that it now regrets, maybe that's where we are. It's the same way as uh you know blaming Bill Bich because he exploits a loophole in the rule. He didn't write the rules. He just says this is what they are. Right? What the county is doing is they're saying this is the contract and this is what we're following. Now, having said that, I go back to what I said. It's not an equitable contract. So, the way we fix that is we readress some of the provisions in this contract.

I understand they're following the contract and you're absolutely right. They're following the contract. But if the contract isn't fair to the people that pay the taxes, then then they're not treating the people fairly. They need to renegotiate the contract. That's my point. I agree with you. They're following the contract. Fine. They pass road and bridge tax and everybody pays road and bridge tax. That doesn't mean that it's fair to everybody that lives in the county and that they're treating everybody fairly. Yes, they're doing a contract.

That's not what that's not what we're all about. We're supposed to be trying to help everybody and make everything better for everybody in the city. They should be trying to make everything better for everybody in the county. and they're not treating whether they're following the contract or not, they're not treating people inside the city fairly. Well, if they're following the contract and the city agreed to it, then um I don't agree to it.

Well, at some point, somebody in the city sat up here and raised their hand and said, "I agree to this." And so at this point to say, well, the countyy's doing this and county's doing that when they're doing what was agreed to by our predecessors is some is somewhat not fair to them. Having said that, I think this is a topic that needs a lot of discussion going forward. I think we're all going to have discussions uh with Mr. Garza and think about better ways to improve this and there needs to be discussions with the county. Whether that happens at the executive level, whether we go back to um prior methodologies, which uh I think I saw in there that there were committees that were appointed uh by the two uh two governing bodies and those committees kind of got together and met. whatever it is. Um, you know, I think I think we reached the point where the data and the structure no longer match and we need to address it.

To that point, I ask I I agree with you as far as the equitable content of the agreement. Do we believe that there is a way to measure equity as far as services provided by animal care versus this? Like is there a do you believe that there's an amount that can be identified so that we can you mean specific to animal control?

I'm using that as an example. any of the any of library services, animal services, fire and EMS would clearly have the data. But in those other situations, is there a way to measure data that we as a city would be able to access that and maybe assign a monetary amount a monetary amount for those services so that when we approach the table, everything is equitable. I do think there is a way to get there.

Okay. But I think how we get there is through engaging conversations with them to hopefully agree on that methodology. But yes, I think there is methodology that could be agreed upon that is defendable, that is clear, that is backed by whether it be budgets or whatever else. At the end of the day, consensus it is reached because communication has already happened. And so that communication is going to be key in this between the city and the county. And so, you know, um, going forward, I think if we can get communication [clears throat] and we can share information that we have, they'll share information that they have, we can reach a consensus on this. And I'm I'm confident that we can we can get to the point that that we have a very good picture of what all is involved on both sides of the equation. All right. Okay.

Anything else? Well, all right. I want to end with one thought. Yes, it's okay.

Um I I think it's important for me to end with an acknowledgement of the quality of the service that our fire department provides not only to our residents in inside the city limits but outside as well as our library. I think sometimes when this topic comes up, it's very easy to try and uh compare or to explore options or this and that, but at the end of the day, the service that our men and women provide both with the fire department and the library that we provide to county residents is top-notch. And if we were to put try to put some kind of value around that, I would say that we would be at the high end of that value. Um, and so I just think that again it's important to call a spade a spade. The service that we provide for fire and for library services top-notch. It's award-winning. It's very ahead of of its of its time and very ahead for a community of our size. And of course, fire leadership and library leadership deserve a lot of credit for that. Um, but that can't get lost in this whole conversation. Um, that we do offer an amazing product. And I just want to throw in when you say fire, I know you include uh EMS service in that as well. Um

Yes. And because you specifically use the word fire, uh I want to make sure that um that everybody that's listening to this knows that you're talking about top-notch quality that we provide um in both areas of emergency service. I'm probably getting into the weeds. It's okay, Jim. [laughter] All right, Mr. Garza, do you have anything else under uh city manager reports this evening? No, sir. And I understand we do not have an executive session. Is that correct? Correct. All right. Well, with that, then we are out at 6:47. [clears throat]