Sep 02, 2025 City Council Regular Meeting

[33) (First Reading) Consider approval of an ordinance amending Chapter 50, Article X of the City's Code of Ordinances to adopt amendments to Section 50-511 Storm Drainage and Flood Risk Mitigation Utility Charges to increase the residential monthly utility charge and to approve the use of the industry standard to determine the commercial customer drainage charge. ]

SO THAT I DON'T ACCIDENTALLY FORGET IT. ALL RIGHT, NEXT UP, WE'RE GOING TO BRING UP AGENDA ITEM NUMBER 33. FIRST READING. CONSIDER APPROVAL OF AN ORDINANCE AMENDING CHAPTER 50, ARTICLE TEN OF THE CITY'S CODE OF ORDINANCES TO ADOPT AMENDMENTS TO SECTIONS 5511, STORM DRAINAGE AND FLOOD RISK MITIGATION UTILITY CHARGES TO INCREASE THE RESIDENTIAL MONTHLY UTILITY CHARGE, AND TO APPROVE THE USE OF THE INDUSTRY STANDARD TO DETERMINE THE COMMERCIAL CUSTOMER DRAINAGE CHARGE. MR. TRIMBLE. GOOD EVENING, MAYOR AND COUNCIL, MIKE TRIMBLE, DIRECTOR OF TRANSPORTATION, PUBLIC WORKS. AND I'M GOING TO QUICKLY TURN IT OVER TO OUR CITY ENGINEER, LEON BARBA, AND OUR CONSULTANT WITH HDR TO WALK YOU THROUGH THE DRAINAGE FEE STUDY THAT WAS PERFORMED. IT HAD BEEN TEN YEARS SINCE WE HAD UPDATED THIS, BASED ON THE ORIGINAL ORDINANCE THAT WAS PASSED IN 2016. AND SO THE STUDY HAS BEEN DONE, AND THEY'LL WALK YOU THROUGH THE PROPOSED CHANGES. GOOD EVENING, MAYOR AND COUNCIL. LEON BARBA, CITY ENGINEER. WITH ME TONIGHT IS GRADY REED. GRADY IS A PROJECT MANAGER FOR HDR. WE HIRED THEM TO DO THIS STUDY ON THE DRAINAGE FEE. ONE OF THE THINGS I WANTED TO HIGHLIGHT BEFORE I TURN IT OVER TO GRADY, I WANTED TO HIGHLIGHT ONE THING FOR YOU ON PAGE TEN OR SHEET TEN OF THE PRESENTATION. THERE'S ABOUT 17 PROJECTS THAT ARE LISTED THERE 17 DRAINAGE PROJECTS. THE WANTED TO MAKE A POINT THAT THOSE PROJECTS WERE PULLED FROM THE 2018 DRAINAGE MASTER PLAN. SO WE'VE STUCK TO THAT PLAN. WE'VE BEEN TRYING TO FIX SOME OF THOSE AND MAKE SOME THOSE IMPROVEMENTS AS TIME HAS GONE ON. AT ONE POINT IN TIME, WE HAD ABOUT 29 PROJECTS, SO SOME OF THOSE WERE TAKEN CARE OF BY THE BOND PROGRAM. THE COUNTY ACTUALLY TOOK CARE OF ONE OF THE ONE OF THE PROJECTS THAT WE HAD OUT THERE, TOO. SO ANYWAY, I'M GONNA GO AHEAD AND TURN IT OVER TO GRADY NOW SO HE CAN EXPLAIN THE PROCESS THAT HE WENT THROUGH TO DETERMINE THE RATES. ON WHAT PAGE WAS THAT? TEN. SHE. TEN. THANK YOU. THANK YOU. AND GOOD EVENING, MAYOR AND COUNCIL. WHAT WE'RE GOING TO DO IS WE'RE JUST GOING TO KIND OF QUICKLY WALK THROUGH THE BACKGROUND OF THE CURRENT DRAINAGE BILLING METHODOLOGY, ALSO PROVIDE SOME INFORMATION AND DISCUSS SOME CHANGES TO THAT THAT ARE MORE CLOSELY FOLLOWS THE INDUSTRY STANDARD, AND THEN DISCUSS OUR RATE MODEL DEVELOPMENT AND THE RESULTS OF THAT OF THAT MODELING. AS LEON SAID, ON NOVEMBER 15TH OF 2016, THE COUNCIL APPROVED AN ORDINANCE BASICALLY CREATING THE STORM DRAINAGE UTILITY AND ESTABLISHING FEES AT THAT TIME, THOSE FEES HAVE NOT BEEN CHANGED, JUST MY UNDERSTANDING SINCE 2016. SO THE STORMWATER RATES HAVE REMAINED UNCHANGED FOR FOR SEVERAL YEARS. AND AS AS WHENEVER THAT WAS SET UP, THE WAY THAT COMMERCIAL CUSTOMERS WERE HANDLED AND THE WAY THAT IT IS CURRENTLY BEING HANDLED IS THAT FOR COMMERCIAL CUSTOMERS, THEIR MONTHLY STORMWATER FEE IS BASED ON A BASE RATE TIMES THE IMPERVIOUS COVER TIMES AN ADJUSTMENT FACTOR. THAT ADJUSTMENT FACTOR IS UNIQUE TO EACH PROPERTY, AND IT IS BASED ON THE PERCENT IMPERVIOUS COVER. AND SO IT'S BASICALLY 1.5424 TIMES THE PERCENT IMPERVIOUS COVER PLUS 5064. AND I JUST SAY ALL THAT TO SAY THAT WHENEVER WE WERE GOING THROUGH THIS STUDY, WE STARTED ASKING QUESTIONS. WELL, WHERE DID THAT 1.5424 COME FROM? AND WHERE DID THE 0.5064 COME FROM? AND THERE'S VERY LITTLE HISTORICAL KNOWLEDGE THAT OF WHERE THOSE ADJUSTMENT FACTORS CAME FROM. THIS WAS BASED ON THE CITY OF AUSTIN AND THE WAY

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THAT THEY ARE HANDLING THEIR CHARGES FOR FOR COMMERCIAL CUSTOMERS, FOR STORMWATER. AND AT THAT TIME, BACK IN 2016, THE RESIDENTIAL CUSTOMERS BACK WERE AND STILL ARE CHARGED A FLAT FEE OF $5 FOR SINGLE FAMILY RESIDENTIAL PROPERTY. SO THE WAY IT IS CURRENTLY SET UP IS EVERY SINGLE FAMILY RESIDENTIAL CUSTOMER PAYS $5, REGARDLESS OF THE IMPERVIOUS COVER THAT'S ON THAT PARCEL. BUT THE THE RATE ACTUALLY FOR COMMERCIAL CUSTOMERS IS THE SAME, BUT THEY ARE CHARGED A DIFFERENT NUMBER OF BILLING UNITS BASED UPON THESE FORMULAS UP HERE. SO WHAT WE ARE PROPOSING IS THAT BASICALLY RESIDENTIAL CUSTOMERS ARE GOING TO BE UNCHANGED, THAT THEY WOULD STILL BE CHARGED A FLAT RATE OR A FLAT FEE FOR EVERY SINGLE FAMILY RESIDENTIAL CUSTOMER. SO THERE'S THERE'S NO DIFFERENTIATION. AGAIN, EVERY SINGLE FAMILY RESIDENTIAL CUSTOMER WOULD PAY THE SAME. BUT INSTEAD OF USING THE CURRENT APPROACH TO COMMERCIAL CUSTOMERS, THAT THEY WOULD MOVE TO WHAT'S CALLED AN EQUIVALENT RESIDENTIAL UNIT OR URRU APPROACH. THAT IS THE INDUSTRY STANDARD. THAT IS THE THE NORM THAT MOST UTILITIES, NOT ONLY IN TEXAS BUT ACROSS THE COUNTRY, USE AND LEVYING STORMWATER CHARGES TO COMMERCIAL CUSTOMERS.

AND WITHIN AN URRU APPROACH, WE'RE STILL USING THE ACTUAL IMPERVIOUS COVER ON THESE COMMERCIAL LOTS TO DETERMINE THE NUMBER OF ER USE. SO BASICALLY WHAT WE DO IS WE DEFINE AN URRU AS THE AVERAGE IMPERVIOUS COVER ON ALL SINGLE FAMILY LOTS WITHIN THE CITY.

AND SO THAT NUMBER WAS 2912. SO WE BASICALLY THEN DEFINED THAT AS AS ONE URRU. AND THEN FROM THAT IF THERE ARE, SAY, A COMMERCIAL CUSTOMER HAS 10,000FT■!S OF IMPERVIOUS COVER, THEN WE BASICALLY TAKE 10,000FTE DEFINING AS ONE, AND THAT WOULD BECOME THE NUMBER OF BILLING UNITS FOR FOR THESE COMMERCIAL CUSTOMERS, EVEN IF IT'S TWO STORY BUILDING, EVEN IF IT IS A TWO STORY BUILDING, BECAUSE ALL WE ARE CONCERNED ABOUT IS IMPERVIOUS COVER. SO IF IT'S A TWO STORY BUILDING, WE JUST CARE ABOUT THE BUILDING FOOTPRINT, NOT THE ACTUAL SQUARE FOOTAGE WITHIN THAT. SO YOU'RE SAYING YOU'RE CALCULATING SQUARE FOOTAGE BASED ON THE THE EXTERNAL WALLS? ESSENTIALLY NOT. IF THERE'S MULTIPLE FLOORS. THAT IS CORRECT. IT'S NOT ADDING A SECOND FLOOR SQUARE FOOTAGE TO THE CALCULATION. THAT IS CORRECT. AND IT TAKES ALSO INTO CONSIDERATION NOT ONLY BUILDING FOOTPRINT BUT PARKING LOTS, SIDEWALKS, THOSE TYPES OF THOSE TYPES OF THINGS AS WELL. AGAIN, THIS CONCEPT OF APPROACH, IT IS THE INDUSTRY STANDARD AS RECOMMENDED BY EPA AND TEXAS. ABOUT 65% OF ALL STORMWATER STORMWATER UTILITIES UTILIZE THIS METHOD, AND MANY CITIES THAT WE ARE BENCHMARKING CALL TO ALSO USE THE CITY ARE ALSO USING THIS METHODOLOGY. AUSTIN IS IS THE OUTLIER IN THAT THEY USE THE PREVIOUS METHODOLOGY THAT THE CITY OF KYLE WAS REAL QUICK. YOU'RE TALKING ABOUT SIDEWALKS, IMPERVIOUS COVER, THE DRIVEWAYS, THE PARKING LOTS, EVERYTHING WE ARE DOING, THE SQUARE FOOTAGE OF THE ROOF. CORRECT? THAT IS CORRECT. OKAY. JUST MAKING SURE IT'S ROOFTOP. OKAY. ROOFTOP, ITS ROOFTOP. AND THEN ANY OTHER GENERALLY PAVED SURFACE. OKAY.

JUST MAKING SURE WE'RE DOING ROOFTOP BECAUSE THE DRAINAGE ALL COMES TO THE IMPERVIOUS COVER AS WELL. FROM THERE, FROM THE GUTTERS. JUST MAKING SURE. THANK YOU. YES. SO AGAIN, THIS IS KIND OF GOES GOES THROUGH WHAT I WAS DESCRIBING EARLIER. SO SO THE WAY THAT THIS WOULD WORK FOR COMMERCIAL CUSTOMERS. SO ANYTHING THAT'S NOT SINGLE FAMILY RESIDENTIAL. SO THIS INCLUDES APARTMENT COMPLEXES AND BIG BOX RETAIL STORES, STRIP CENTERS, THOSE TYPES OF THINGS. AND THIS EXAMPLE, YOU KNOW, WE HAVE AN OFFICE BUILDING. THE AREA IN RED WOULD BE WOULD BE THE ROOFTOP. AND THEN LET'S SAY ALL THE AREA IN GREEN IS PAVEMENT. IT'S A PARKING LOT, WHATEVER THAT IS. AND LET'S SAY THAT ALL TOTALS 30,000FT■!S. SO IN THIS EXAMPLE, IF IF WE WERE TO GO THROUGH AND DETERMINE AN ER AND WE WOULD DETERMINE THAT AS 3000FT■!S, THN THIS PARTICULAR CUSTOMER WOULD BE BILLED TEN ERAS. SO THAT'S THEIR NUMBER OF BILLING UNITS.

AND THEN THAT GETS MULTIPLIED BY THE BILLING RATE TO DETERMINE THEIR TOTAL STORMWATER UTILITY BILL. SO AS, AS THAT WAS THAT WAS ONE PART OF THIS STUDY WAS JUST KIND OF EXAMINE THE WAY THE CITY IS CURRENTLY LIVING STORMWATER CHARGES AND THEN MAKE RECOMMENDATIONS FOR ANY CHANGES THAT WE WANT TO SEE AS PART OF THAT. THE SECOND PART WAS TO LOOK AT, OKAY, WE HAVEN'T ADJUSTED OUR STORMWATER RATE AND SINCE 2016. SO LET'S LOOK

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AT THAT AS WELL. AND DO WE NEED TO MAKE ANY ADJUSTMENTS TO THE CURRENT STORMWATER RATE. SO TO DO THAT WE WE DEVELOPED A DRAINAGE RATE MODEL. SOME SIGNIFICANT SIGNIFICANT ASSUMPTIONS THAT WE WERE USING AS PART OF THIS. WE'RE STARTING OUT WITH AN ESTIMATED FUND BALANCE OF ABOUT $1.6 MILLION. THAT IS SLIGHTLY HIGHER THAN WHAT WE WOULD RECOMMEND FOR A FOR A RESERVE, IF YOU WILL, FOR STORMWATER UTILITIES, THAT'S NORMALLY ABOUT THREE MONTHS OF OF CASH ON HAND. SO WHAT WE'RE DOING WITH THAT IS WE'RE BASICALLY USING THAT EXCESS FUND BALANCE, IF YOU WILL, TO LIMIT EARLY RATE INCREASES AND BASICALLY PULL THAT FUND BALANCE DOWN OVER TIME. WE ARE ALSO ASSUMING THAT BOTH RESIDENTIAL AND COMMERCIAL CUSTOMERS ARE GOING TO GROW AT A RATE OF ABOUT 5% PER YEAR. THAT IS GENERALLY PRETTY CONSISTENT WITH MOST OF THE CITY'S PLANNING DOCUMENTS. SO FOR THIS UPCOMING FISCAL YEAR 2026, WE'RE ASSUMING ABOUT 16,500 YEARS FOR RESIDENTIAL. AND SO THAT IS 16,500 SINGLE FAMILY RESIDENTIAL HOMES ON THE COMMERCIAL SIDE, ABOUT 12,300 ER USE. AND AGAIN, THAT DOESN'T MEAN THAT YOU HAVE 12,300 COMMERCIAL CUSTOMERS. THAT JUST MEANS ER SO, SO AGAIN, USING THE TOTAL SQUARE FOOTAGE, IMPERVIOUS SQUARE FOOTAGE, THOSE CUSTOMERS DIVIDED BY OUR DEFINITION OF ONE EQUIVALENT RESIDENTIAL UNIT. OUR EXPENSES EXCEPT PERSONNEL COSTS THAT WE'RE LOOKING FORWARD. WE'RE LOOKING AT TEN YEARS IN THIS RATE MODEL. WE'RE FORECASTING THOSE TO INCREASE AT 3% A YEAR FROM THE 2026 BUDGET. AND WE DO ALSO INCLUDE NEW PERSONNEL ARE INCLUDED BASED ON THE STAFFING PLAN THAT THE CITY PROVIDED. AND SO THAT ROUGHLY KIND OF DOUBLES THE DRAINAGE, FULL TIME EQUIVALENTS OR STAFFING OVER A FIVE YEAR PERIOD. WE DID AS WE'RE LOOKING AT THE CIP, WE DID HAVE FUTURE DEBT ISSUES IN THERE, AND WE ALL OF THOSE WERE MODELED AS BASICALLY THE CITY WOULD MAKE ONE HALF OF A DEBT PAYMENT, AND THE YEAR IN WHICH THE DEBT IS ISSUED MAKE A FULL PAYMENT IN THE SECOND YEAR. SO THIS IS THE CIP THAT WAS USED IN ORDER TO DEVELOP THE, THE THE TOTAL EXPENSES ASSOCIATED WITH STORMWATER UTILITY. AGAIN, AS LEON SAID, THAT THIS IS BASED ON THE 20 2018, I BELIEVE, STORMWATER MASTER PLAN THAT WAS DONE AT THAT TIME. AND SO WE DID GO BACK THROUGH AND WE EXAMINED EACH ONE OF THOSE PROJECTS, DETERMINED IF THE PROJECT WAS STILL RELEVANT, IF IT'S SOMETHING THAT WE STILL NEEDED TO INCLUDE IN THE CIP OR NOT INCLUDE, DID WE NEED TO INCLUDE ANY ANY ADDITIONAL PROJECTS, AS WELL AS GOING IN AND UPDATING THE COST FOR ALL OF THOSE PROJECTS, SINCE THOSE COSTS WERE GENERALLY DATED? OBVIOUSLY, BEING ORIGINALLY DEVELOPED IN 2018. SO SOMETIMES WE'VE JUST MOVED THOSE COSTS FORWARD THROUGH A RATE OF INFLATION. OTHER TIMES WE WE TOOK A DIFFERENT APPROACH. IF THERE WERE DIFFERENT DESIGN STANDARDS OR THINGS LIKE THAT, THAT THOSE PROJECTS WERE GOING TO HAVE TO BE DESIGNED TO MEET. MOST OF THESE PROJECTS ARE DEBT FUNDED. CERTAINLY THOSE IN IN THE EARLY YEARS. AND THEN AS WE GET IN THE LATTER YEARS, THERE ARE SOME PROJECTS THAT WE ARE CASH FUNDING, SOME SOME SMALLER PROJECTS. MOST OF THESE PROJECTS ARE KIND OF FRONT LOADED, IF YOU WILL, THROUGH THE FIRST FIVE, SIX YEARS OR SO OF THIS PLAN. AND THEN AFTER THAT TIME WE HAVE FEWER STORMWATER PROJECTS. SO UNDER THIS, UNDER THIS STUDY, THE THE RATE RECOMMENDATION WOULD BE THAT THE URRU RATE CHANGE FROM ITS CURRENT $5 PER MONTH TO $6 PER MONTH. SO $1 A MONTH INCREASE IS WHAT SINGLE FAMILY RESIDENTIAL CUSTOMERS WOULD SEE. THE AVERAGE COMMERCIAL BILL IS CURRENTLY AT $237.12 PER MONTH.

AND AGAIN, THAT'S ACROSS ALL OF YOUR COMMERCIAL PROPERTIES. THAT BILL BASED ON THESE CHANGES WOULD ACTUALLY DECREASE TO $168.40. I WILL SAY THAT THAT'S NOT NECESSARILY BECAUSE WE'RE LOWERING THE RATES FOR COMMERCIAL CUSTOMERS AND INCREASING THE RATES FOR RESIDENTIAL CUSTOMERS. IT'S SIMPLY THAT WE ARE TRYING TO CHANGE THE CITY'S BILLING STRUCTURE, IF YOU WILL, RATE STRUCTURE FOR COMMERCIAL CUSTOMERS FROM WHAT IT IS TO THE INDUSTRY STANDARD. AND SO THAT KIND OF RESULTS IN A ONE TIME REALLOCATION, IF YOU WILL, AMONGST COST BETWEEN THE STORMWATER WITHIN THE STORMWATER UTILITY, BETWEEN RESIDENTS AND AND COMMERCIAL CUSTOMERS. THE OTHER THING THAT WE WERE REALLY TRYING TO DO IS WE WERE TRYING TO KEEP THE REVENUE IN THIS FIRST YEAR RELATIVELY THE SAME FOR THE FOR THE STORMWATER UTILITIES. SO WE WEREN'T NECESSARILY GOING IN AND LOOKING AT REVENUE INCREASES. IF YOU REMEMBER, I MENTIONED THAT WHEN WE LOOKED AT THE FUND BALANCE, THAT WE

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HAD EXCESS FUND BALANCE IN THE STORMWATER UTILITY. AND SO INSTEAD OF THIS ONE YEAR TRYING TO GO IN AND INCREASE RATES MORE TO GENERATE ADDITIONAL REVENUE, WE'RE BASICALLY TRYING TO KEEP THE REVENUE THE SAME FOR THE UTILITY LIMIT RATE INCREASES AS MUCH AS POSSIBLE, AND USE THAT FUND BALANCE INSTEAD TO PAY FOR SOME OF THE INCREASED EXPENSES ASSOCIATED WITH NOT ONLY THE O&M COSTS, BUT THE DEBT SERVICE AS WELL. IF WE LOOK AT OTHER CITIES THAT WE TYPICALLY BENCHMARK KYLE TO, AGAIN, THE PROPOSED RATE IS $5. THAT WOULD INCREASE TO $6. THAT PUTS YOU PRETTY MUCH ON THE BOTTOM OF THE OF THE LIST FOR FOR STORMWATER UTILITIES IN THIS AREA. THERE ARE FOUR CITIES THAT WE DID SURVEY THAT DO NOT HAVE A UTILITY DRAINAGE FEE. SO THEY'RE PAYING THROUGH STORMWATER SERVICES THROUGH THE THROUGH THE GENERAL FUND. THIS JUST KIND OF SUMS UP HOW WE PREDICT THINGS MOVING FORWARD. THE BLUE BARS AT THE BOTTOM ARE ARE OWNING O&M EXPENSES OR OPERATIONS AND MAINTENANCE EXPENSES. YOU CAN SEE AGAIN, IN THE FIRST FEW YEARS, THOSE ARE GOING UP A LITTLE BIT MORE THAN THAN JUST A GENERAL RATE OF INFLATION. AND THAT'S DUE TO THE INCREASED STAFFING THAT WE'VE THAT WE'VE INCLUDED IN OUR PROJECTIONS AND OTHER. THE OTHER NOTICEABLE THING IS THE THE RED PART IS THE DEBT SERVICE. SO AS THESE NEW PROJECTS COME ONLINE THAT WE HAVE ASSUMED TO BE TO BE DEBT FUNDED, WE CAN SEE HOW THAT IS GROWING A LITTLE BIT QUICKER OVER THE SHORT TERM, BECAUSE THAT'S WHERE MOST OF OUR PROJECTS ARE LOCATED. AND THEN ONCE WE GET OUT IN THESE OUTER YEARS, OUR EXPENSES KIND OF BECOME A LITTLE BIT MORE, A LITTLE BIT MORE STABLE. RIGHT NOW WE ARE WE DO HAVE JUST JUST MODELED FUTURE, FUTURE RATE EXPENSES FOR THE NEXT FOUR YEARS. AND THEN AFTER THAT, WE DON'T HAVE ANY MORE RATE INCREASES PLANNED OR MODELED HERE. IT IS RECOMMENDED, HOWEVER, THOUGH, THAT THE CITY DO REVISIT RATES ON AN ANNUAL BASIS JUST BECAUSE, AS WE KNOW, THE CAPITAL IMPROVEMENT PLAN CHANGES. YOUR BUDGETS CHANGE, GROWTH CHANGES. THERE'S A LOT OF THINGS THAT WE NEED TO LOOK AT, AND SO THAT CAN RESULT IN PERHAPS NOT HAVING TO HAVE AS HIGH OF A RATE INCREASE IN FUTURE YEARS MOVING FORWARD. SO THIS JUST SHOWS THE OPERATING RESERVES. AND I'VE KIND OF TALKED A LOT ABOUT THIS BEFORE, KIND OF WHERE THE CITY SITS. THE RED LINE IS KIND OF OUR GOAL THAT WE DON'T WANT TO FALL BELOW. AND SO AGAIN, WE'RE BASICALLY SPENDING DOWN THE FUND BALANCE, IF YOU WILL, IN THESE FIRST FEW YEARS, TO TO KIND OF TRY TO LIMIT RATE INCREASES AS MUCH AS POSSIBLE.

THE YEARS WHERE WE REALLY ARE THE MOST CRITICAL YEARS OF 2028 AND 2030, AND THAT'S JUST BECAUSE WE HAVE A HIGH WE HAVE A LOT MORE PROJECTS BEING BEING FUNDED AND THEN THE OUTER YEARS.

THIS SHOWS OUR FUND BALANCE GOING BACK UP. WE'RE NOT. AGAIN, I JUST WANT TO POINT OUT THAT WE'RE NOT ASSUMING ANY FUTURE RATE INCREASES IN THOSE OUTER YEARS, BUT WE DO HAVE A 5% GROWTH RATE. SO YOUR REVENUES ARE JUST GOING UP 5%, WHICH IS AT THAT POINT IS FASTER THAN YOUR COSTS ARE GOING UP. SO IT JUST SHOWS THAT FUND BALANCE GROWING. IF THERE WERE OTHER PROJECTS THAT COME ABOUT AS THIS GETS REVISITED THAT WOULD PULL OUR OUR ACTUAL OPERATING RESERVES CLOSER TO THE TO THE TARGET. SO THAT'S THAT'S KIND OF THE PRESENTATION. AGAIN, JUST IN QUICK SUMMARY, THE THINGS THAT WE ARE RECOMMENDING IS AN INCREASE TO THE TO THE STORMWATER RATE OF $5 PER YEAR TO $6 PER YEAR. SO AGAIN, SO FOR ALL SINGLE FAMILY RESIDENTIAL CUSTOMERS, THEY WOULD JUST SEE A $1 A MONTH INCREASE. AND WE ARE ALSO RECOMMENDING A CHANGE IN THE BILLING METHODOLOGY FOR COMMERCIAL CUSTOMERS FROM THE CURRENT METHODOLOGY, WHICH IS THAT THAT FORMULA TO THE INDUSTRY STANDARD, WHICH IS THE URRU APPROACH. ONCE, IF THAT CHANGE IS MADE, THEN COMMERCIAL CUSTOMERS WOULD PAY THE SAME RATE AS RESIDENTIAL CUSTOMERS. IT WOULD BE $6 PER ER, BUT THEY WOULD HAVE A DIFFERING NUMBER OF ERAS DEPENDING UPON THE ACTUAL IMPERVIOUS COVER ON THAT PARCEL. ALL RIGHT, COUNCILMEMBER HARRIS, WHEN WE'RE TALKING ABOUT FINANCING THROUGH DEBT, ARE WE TALKING ABOUT TWO YEAR GEO BONDS? WE ARE ASSUMING A 20 YEAR THAT EACH DEBT ISSUE WOULD BE FOR A 20 YEAR TERM. 20 YEAR. YES, MA'AM. OKAY. AND GENERAL OBLIGATION BONDS GENERALLY. YES, MA'AM. DOES ANYBODY HAVE ANY ADDITIONAL THOUGHTS OR COMMENTS, COUNCILMEMBER TOBIAS OKAY, I'M

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LOOKING AT YOUR YOUR SLIDE 13 SIR. SO WE'RE GOING TO GO FROM $6 CORRECTLY IF APPROVED. SO YOU'RE GOING TO GO FOR 5 TO 6. AND THEN YOU GO. AND THEN YOU'RE PREDICTING FUTURE REVENUE RATES. WOULD THIS BE LIKE THE RATE INCREASE 25%. IT WOULD GO UP 25% FROM THE $6.

YES OKAY. SO THAT WOULD BE 750. AND THEN YOU GO TO 2028 AND THAT'LL BE $9.15 THERE. AND THEN YOU GO TO THE 15% INCREASE. MAYBE MY MATH IS OFF 915. SO BY THE TIME YOU GET TO 2030 YOU'LL BE AT $10.94. CORRECT. FROM THAT, FROM THAT $6. THAT SOUNDS CORRECT. OKAY. SO IT'S GOING TO GO UP LIKE EVERY TWO YEARS. WE'RE ON THE 2027. IT'S GOING TO GO UP $1.50. THEN $1.65 AND DOWN 37. SO BY THE TIME WE GET UP TO 2030 WE'LL BE AT CLOSE TO ABOUT $10, $11 FOR, FOR THE FOR THE FEES. WHICH IS KIND OF STILL NOT WHERE AUSTIN AND SAN MARCOS IS, BUT THAT'S JUST A BALLPARK FIGURE. WHEN I WAS JUST DOING MY NUMBERS ON HOW MUCH THE RATES ARE GOING TO GO UP IN THE NEXT, IT IS IMPORTANT TO NOTE THAT WHENEVER WE'RE COMPARING WHERE YOU ARE NOW VERSUS THESE OTHER CITIES, THAT OVER THAT SAME TIME FRAME, MOST OF THESE OTHER CITIES WILL ALSO BE ENACTING RATE INCREASES AS THEY GO AS WELL. OKAY. AND AGAIN, JUST THE OTHER COMMENT THAT I WOULD HAVE ON THAT IS RIGHT NOW THOSE ARE JUST PROJECTED RATE INCREASES PROJECTED. YES. WE WOULD ALWAYS HOPE THAT THEY WOULD BE LESS THAN THAN WHAT WE'RE LOOKING AT.

OKAY. IT'S JUST KIND OF I'M JUST GOING BY THE FIGURES THAT YOU GAVE, SIR AND JUST DOING THE MATH, BECAUSE AGAIN, WHEN PEOPLE ARE CONCERNED ABOUT RATE RATE INCREASES, YOU KNOW, WATER TAXES, FOOD, EVERYTHING, I'LL JUST KIND OF GIVING A SUMMARY OF, OF WHAT WE'RE LOOKING AT FOR THE RESIDENTS TO KIND OF GAUGE IF WE'RE GOING BY SOME OF THESE REVENUE, FUTURE REVENUES INCREASES BY THE 25, 22 AND 15. AND FOR. FOR WHERE WE'RE LOOKING AT. OKAY. THANK YOU. I DO ALSO JUST WANT TO EMPHASIZE TOO, ONE OF THE THINGS THAT GRADY MENTIONED, WHICH IS WE'RE GOING TO BE DOING AN ANNUAL EVALUATION. AND SO I MEAN, TO TO HIS POINT, YOU KNOW, THESE ARE MODELS, THESE ARE PROJECTIONS. BUT WE'LL DO THAT EVALUATION EACH YEAR BASED ON HOW OUR CIP IS CHANGING, HOW MANY PROJECTS WE'RE DOING. AT SOME POINT, WE'RE GOING TO HAVE TO UPDATE THE DRAINAGE MASTER PLAN TO TO GET THOSE NEXT SET OF PROJECTS AND JUST SEE WHAT THAT LOOKS LIKE. BUT THEN WE'LL DO ALL OF THAT EVALUATION AND SEE WHAT WE ACTUALLY NEED.

OPERATING COSTS WILL BE TAKING A LOOK AT THAT AS WELL. AND OBVIOUSLY TRYING TO BE VERY EFFICIENT WITH WITH DOLLARS IN THAT REGARD AS WELL. BUT WE'LL BE DOING THAT EVALUATION EVERY YEAR BEFORE WE BRING ANYTHING BACK AS PART OF THOSE ANNUAL RATE ADJUSTMENTS. THANK.

COUNCILMEMBER ZUNIGA. YES, I HAD A QUICK QUESTION. SO IS THE IS THE DOLLAR INCREASE GOING TO PAY FOR MORE STRANGE, MORE STORM DRAINAGE THAT WE NEED AS WE GROW? OR IS IT BEING USED PRIMARILY TO PAY FOR THE OPERATIONS OF WHAT WE ALREADY HAVE IN STORM DRAINAGE COSTS? SO WHERE IS THE WHY? IS THE INCREASE NECESSARY? I GUESS JUST WHAT IS THE SUMMARIZE IT? WHY IS THE INCREASE NECESSARY? SO THIS IS GOING TO SOUND LIKE I'M DODGING YOUR QUESTION AND I PROMISE THAT I'M NOT. BUT THE ANSWER IS IT'S BOTH THE OPERATIONS AND MAINTENANCE.

MAINTENANCE EXPENSES FOR THE UTILITY ARE GOING UP. WE HAVE ASSUMED A RATE OF INFLATION ON THOSE. BUT AGAIN, THEY'RE ALSO INCREASED STAFFING. SO AS THOSE COSTS GO UP, YOU HAVE TO BRING IN ADDITIONAL REVENUE. AND IN THE FIRST YEAR THAT IS PRIMARILY WHAT THAT RATE INCREASE IS FOR. IN LATTER YEARS, AS ESPECIALLY IN THOSE FIRST FIVE YEARS, AS WE'RE ASSUMING THESE PROJECTS GET FUNDED AND WE'RE INCREASING THE DEBT LOAD ON THE UTILITY, THEN A LITTLE BIT MORE OF THOSE INCREASES IS ALSO, AT THAT TIME, GOING TO FUND THE CAPITAL IMPROVEMENT PROJECTS FOR THE FOR THE STORMWATER UTILITY. AND I GUESS YOU'RE TRYING TO. MAKE THE, THE, THE, THE USERS WITH MORE IMPERVIOUS COVER PAY MORE. THAT'S THAT WHAT THE CALCULATION IS TRYING TO DO HERE? THAT IS CORRECT. ON THE COMMERCIAL SIDE, ALL ALL SINGLE FAMILY RESIDENTS WOULD AGAIN PAY THE SAME. IT DOESN'T MATTER IF IT'S IF IT'S A SMALL HOUSE OR A LARGE HOUSE. BUT FOR THE COMMERCIAL CUSTOMERS, YES, THE MORE IMPERVIOUS COVER, THAT

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COMMERCIAL THAT THAT COMMERCIAL CUSTOMER HAS ON A ON THAT PARCEL, THEY WOULD PAY SIGNIFICANTLY MORE. SO, FOR EXAMPLE, IF YOU HAD A, IF YOU HAD A COMMERCIAL CUSTOMER THAT HAD 1900FT■!S OF IMPERVIOUS COV, SAY IT'S A SMALL, YOU KNOW, A SMALL BUSINESS OR SOMETHING LIKE THAT, THEY WOULD JUST PAY ONE URYU SO THEY WOULD PAY THE $6 A MONTH. IF YOU HAVE A COSTCO OR WALMART OR H-E-B, YOU KNOW THEY MAY BE 100,000 150,000FT■!S OF IMPERVIOUS COVE, WHATEVER THEY HAPPEN TO BE. AND SO THEY'RE GOING TO OBVIOUSLY PAY MUCH, MUCH, MUCH, MUCH, MUCH MORE. OKAY. YEAH. I JUST WANTED FOR THE RESIDENTS TO GET, I GUESS, TO CLEAR EXPLANATION OF WHAT THE DOLLAR INCREASE WAS FOR. SO A COUPLE THINGS. THIS WOULD BE ONE OF THE LAST YOU ENJOY WHILE YOU GOT IT, BECAUSE I'M NOT GOING TO BE ABLE TO DO THIS TOO MUCH LATER. BUT THIS THAT NOVEMBER OF 2016 WAS THE WE HAD AS MANY FOLKS WHO CAME HERE TO PROTEST THE $5 FEE BECAUSE IT WENT FROM 0 TO 5, AS ARE HERE TONIGHT UPSET ABOUT THE THEIR THE WATER BILL INCREASES AND THE REASON THAT THE THE STORMWATER FEE FLOOD CAME TO BE WAS BECAUSE WE HAD TWO HISTORIC BACK TO BACK FLOODS IN THE CITY OF KYLE, AND IT BECAME VERY APPARENT THAT OUR WE WERE GETTING BY NOT CHARGING ANYONE FOR STORMWATER MAINTENANCE. BUT THE BILL CAME DUE IN THE FORM OF FLOODED DRAIN, DRAINAGE WAYS, TREES AND AND VARIOUS JUST THE AMOUNT OF FLOODING THAT WAS BECAUSE OF, OR AT LEAST AIDED BY THE FACT THAT OUR STORMWATER SYSTEM WAS NOT PROPERLY MAINTAINED WAS JUST VERY, VERY APPARENT. AND SO THAT WAS A VERY DIFFICULT DECISION TO INCREASE THE RATE FROM ZERO. AND IT WAS PROPOSED INITIALLY AT THREE AND FIVE.

AND WE HAD A BIG, LONG DEBATE ABOUT WHAT PROJECTS WE WANTED TO FUND. BECAUSE THE THING IS, WHEN IT COMES TO THESE DECISIONS, THE WE THERE'S TWO SIDES. WE LIKE TO DISCUSS THAT.

THERE'S ONLY PRETEND THERE'S ONLY ONE SIDE, THERE'S NOT, THERE'S TWO. SO THE INCREASE FEE COMES WITH INCREASED PROJECTS. IF YOU DON'T WANT TO INCREASE THE FEE, YOU CAN'T DO THE PROJECTS. AND YOU THINK, WELL, WHAT IS THE LONG TERM RAMIFICATION FOR THAT IN THE CITY OF KYLE FOR, YOU KNOW, AS THE CITY WAS GROWING, WE WERE NOT INVESTING IN OUR STORMWATER DRAINAGE MAINTENANCE. AND THE BILL CAME DUE. IT COST A LOT OF MONEY THROUGHOUT THE CITY, NOT JUST TO THE CITY ITSELF, BUT ALSO TO RESIDENCES THAT HAD DRAINED, WERE DRAINAGE SYSTEMS WERE BACKED UP. LAKE KYLE, FOR EXAMPLE, WAS UNDER SIZED AS A DETENTION POND. AND SO WE HAD TO ALLOW WATER TO WATER WAS NOT ABLE TO BE COLLECTED AS IT WAS COLLECTED FAST. IT CAUSED BASICALLY A BACKUP WHICH ONE OF THE PROJECTS, YOU KNOW, ALONG WITH OTHERS, YOU KNOW, WERE FUNDED TO INCREASE THAT DRAINAGE. AND SO AS TO THE YOU YOU SAID SOMETHING EARLIER ABOUT YOU DON'T KNOW HOW THE CALCULATION CAME TO BE. WELL, AT THE TIME I WAS ON THE COMMERCIAL SIDE, I OWNED PROPERTY, SO ON I-35. AND SO IT WAS A DIFFERENT CALCULATION FOR ME. SO IT WAS GOOD FOR ME TO BE ABLE TO LOOK AT IT FROM BOTH SIDES. BUT WE WANTED TO BE ABLE TO FUND CERTAIN NUMBER OF PROJECTS, AND WE DID NOT WANT TO GO ABOVE $5. WE FELT LIKE GOING FROM 0 TO 5 WAS HUGE. AND SO IN ORDER TO GET THE PROJECTS FUNDED THAT NEEDED TO BE FUNDED, WE INCREASED IT ON THE COMMERCIAL SIDE TO PROVIDE TAX RELIEF TO THE RESIDENTS OR INCREASE MITIGATION. I GUESS YOU SHOULD SAY SO. IT IS KIND OF INTERESTING TO SEE THAT WE'RE TALKING ABOUT TWO DIFFERENT THINGS HERE. ONE IS AN INCREASE IN THE BASE, THE BASE FEE, AND THEN A REDUCTION IN THE COMMERCIAL. AND SO THAT'S REALLY SORT OF THE PHILOSOPHICAL QUESTION I THINK THAT COUNCIL NEEDS TO CONSIDER IS DO YOU WANT TO ADJUST BACK TO THE WAY THAT IT WAS OR TO TO THIS NEW FORMAT, UNDERSTANDING THAT ESSENTIALLY WE'RE HAVING TO INCREASE IT ON RESIDENTIAL HOMES IN ORDER TO COLLECT THE SAME AMOUNT OF REVENUE, BECAUSE WE'RE REDUCING IT, YOU KNOW, REDUCING THE AMOUNT OF REVENUE WE COLLECT ON THE COMMERCIAL SIDE. AND THERE ARE ARGUMENTS TO BE MADE THERE. AND THEN THE OTHER THING I'LL SAY ABOUT THE INCREASES IS, YOU KNOW, BACK WHEN THE FLOODS HAPPENED, THE I MEAN, THIS COUNCIL WAS EXTREMELY FOCUSED ON THOSE PARTICULAR PROJECTS. THEY WERE JUST A FEW OF THEM. WE WERE SMALLER TOWN BACK THEN, BUT RIGHT NOW I WOULD SAY WE PROBABLY THIS COUNCIL IS NOT EVEN AWARE NECESSARILY OF WHAT PROJECTS THAT YOU ALL ARE PROPOSING TO IMPLEMENT OVER THE NEXT FEW YEARS. AND SO THERE'S A, YOU KNOW, KIND OF A QUESTION THAT WE NEED TO BE ASKING OURSELVES AS FAR AS WHETHER OR NOT THESE PROJECTS ARE IMPORTANT AND WHAT IMPACT THEY WILL HAVE ON OUR OVERALL STORM SYSTEM. I DO UNDERSTAND THE IDEA OF SPENDING MONEY FOR A MASTER PLAN. WE'VE INVESTED IN A LOT OF MASTER PLANS, BUT ANNUAL REVIEWS AND MASTER PLANS LEAD TO INCREASED COSTS. THEY ALSO IN THEORY. LEAD TO INCREASED SERVICE IN THE FORM

[01:50:08]

OF BETTER MAINTAINED AND DESIGNED STORMWATER INFRASTRUCTURE. BUT I JUST HAVEN'T SEEN THAT CONNECTION. BUT I THINK IN PART THAT'S BECAUSE SINCE 2016 AND SINCE WE MADE THAT INITIAL INVESTMENT, PUT THIS ENTERPRISE FUND TOGETHER, WE HAVEN'T REALLY HAD STORMWATER ISSUES SINCE THEN. BUT, YOU KNOW, THE BILL COMES DUE IF YOU MAKE THE DECISION THE WRONG WAY. SO I'M NOT SURE IF Y'ALL WANT TO SPEAK JUST BRIEFLY ABOUT WHAT THESE PROPOSED FUTURE INCREASES ARE. WHILE THE COUNCIL CONSIDERS, DO YOU THINK THAT THE PROPORTION IS CORRECT THE WAY THAT WE HAVE BEEN? AND, YOU KNOW, WHILE WE'RE IN THE MIDDLE OF INCREASING OUR WATER RATES AND OUR TAX RATES, DO WE WANT TO INCREASE THE STORMWATER RATE ON RESIDENTIAL HOMES AT THE SAME TIME? AND THEN IF NOT, HOW ARE YOU GOING TO HOW ARE WE GOING TO ADJUST FOR THE VARIOUS SITUATIONS, YOU KNOW, THE VARIOUS BUDGET. SO. DO YOU. CAN YOU SPEAK JUST ON THE FUTURE PROJECTS? BECAUSE COUNCIL MEMBER TOBIAS IS CORRECT, THIS IS THE BEGINNING, BUT IT'S CLEAR THAT YOU ARE INTENDING TO INCREASE THIS FEE. YOU KNOW, IT'S BEEN $5 FOR TEN YEARS, BUT IT'S ABOUT TO DOUBLE AGAIN. SO I'M JUST TRYING TO GET A SENSE AT LEAST OF WHY. YEAH. SO SO I CANNOT SPEAK SPECIFICALLY TO THOSE PROJECTS. I'M NOT AN ENGINEER. AND UNFORTUNATELY OUR ENGINEER, PAUL MORALES, COULD NOT BE HERE TONIGHT BECAUSE HE HAD A PRIOR ENGAGEMENT. FAMILY ENGAGEMENT. IF I DON'T KNOW IF LEON CAN SPEAK TO THOSE, I HAVE SOME KNOWLEDGE OF SOME OF THE PROJECTS. IF YOU WANTED TO SPECIFICALLY ASK ABOUT ONE OF THOSE PROJECTS BACK ON TEN. AND WE PREPARED THIS LIST AND THE WAY WE PRESENTED, WE LOOKED AT IT. WE LOOKED AT LOW WATER CROSSINGS. WE ALSO LOOKED AT PEOPLE THAT HAD BEEN FLOODED OR THAT HAD THE POTENTIAL THAT WERE IN THE HUNDRED YEAR FLOODPLAIN. THAT'S HOW WE LOOKED AT THESE PROJECTS. GOOD EXAMPLE IS FOUR OAKS AND HITCHING POST. VERY FIRST ONE THERE. YOU'LL SEE IT'S $2.7 MILLION BUDGET. CORRECT ME IF I'M WRONG, BUT EVERY YEAR WE HAD BEEN GETTING SETTING ASIDE $500,000 FOR DRAINAGE PROJECTS AND $500,000 IN. TODAY'S MONEY DOESN'T GO VERY FAR. AS YOU CAN SEE WITH THAT FIRST ITEM, 2.7 MILLION. WE HAVE THE CULVERT THERE AT SLEDGE THAT OVERLOADS EVERY TIME WE GET A DECENT RAIN. IT HASN'T RAINED A WHOLE LOT, GRANTED, BUT THAT THING WOULD USUALLY GO UNDER DURING A FLOOD EVENT. ALSO, WE HAVE SOME FOLKS THAT ARE FLOODING UP IN THE FOUR OAKS SUBDIVISION, AND EVERY TIME THEY GET QUITE A BIT OF RAIN, I GET A CALL BECAUSE THEY'VE GOTTEN THE WATER IN THEIR HOUSE. AGAIN, IF YOU WANT TO GO TO THE GOFORTH ROAD LOW WATER CROSSING, THAT WAS WASN'T REALLY HIGH ON OUR LIST OF PROJECTS WHEN WE FIRST DID THAT BACK IN 2018. BUT RECENTLY WE WENT AND LOOKED AT A COUPLE OF CULVERTS THAT ARE THERE. ONE OF THEM'S NOT TOO BAD OF SHAPE, THE OTHER ONE IS IN PRETTY BAD SHAPE. WE'RE GOING TO HAVE TO HAVE A REHAB DONE ON THAT PARTICULAR CULVERT. SO THE THOUGHT WAS LET'S GO AHEAD AND GET THIS ONE. IT WAS ON OUR LIST. LET'S GO AHEAD AND UPGRADE THIS CULVERT AND GET IT TO MEET THE 100 YEAR EVENT OR 25 YEAR EVENT ON THAT SECTION OF GOFORTH. AND AGAIN, THE PRICE IS ABOUT 700,000, EVEN CLASSES, 500,000. SO AGAIN, THESE THESE COST QUITE A BIT OF MONEY. I DON'T KNOW IF THERE'S ANY OTHER PROJECTS THAT YOU WANTED TO TALK ABOUT OR LOOK AT IT. I WILL TELL YOU, FOR EXAMPLE, IN THE LIVE OAK DRAINAGE, WE'RE ACTUALLY WORKING WITH THE DEVELOPER OF THAT TOWNHOME PROJECT THERE, ALONG WITH THE CHURCHES ENGINEER, TO RESOLVE SOME DRAINAGE ISSUES THERE. AND WE'RE WE'VE BEEN IN CONSTANT COMMUNICATION WITH THEM. WE'RE GOING TO COME UP WITH A PLAN TO RESOLVE SOME OF THE ISSUES THE CHURCH HAS HAD WITH DRAINAGE, AND ALSO WORK WITH THE DEVELOPER TO HELP PROVIDE SOME OF THAT, SHARE SOME OF THAT COST. SO ANYBODY HAVE ANY QUESTIONS OR COMMENTS? JUST WHO HASN'T GONE I HAVEN'T GONE COUNCILMEMBER. YEAH, I JUST WANTED TO TALK ABOUT SO LEON, WHAT I'M LOOKING AT RIGHT HERE, IT'S A LOT OF PROJECTS FOR RESIDENTIAL IS WHAT WE'RE LOOKING AT. SO THAT'S PROBABLY WHY THE DOLLAR INCREASE ON THE RESIDENTIAL BECAUSE WE'RE LOOKING AT FOUR OAKS, GO FORTH LIVE OAK STREET, BEEBE ROAD COULD BE RESIDENTIAL COMMERCIAL AS WELL. BUT IN CREEK. SO ROLAND'S GOING TO BE RESIDENTIAL. SO IT'S GOING TO BE A LOT OF RESIDENTIAL THAT WE'RE LOOKING AT IMPROVING THE DRAINAGE FOR. BECAUSE THESE ARE HOMES THAT HAVE BEEN FLOODING. SO. IS THIS THE BIGGEST PART OF THE FLOODING THAT WE FOUND THROUGHOUT THE CITY, OR WE DID WE DO A BIGGER SEARCH FOR IT? THESE WERE THE PROJECTS THAT WERE DEVELOPED IN 2018, AND THE HALF AN ASSOCIATES DID THE FIRST STUDY. THEY COMMENTED THAT THEY'D NEVER HAD THIS MANY PROJECTS COME UP ON ANY OF THEIR PREVIOUS PROJECTS THEY'VE WORKED ON. THEY THOUGHT IT WAS EXTREMELY HIGH NUMBER. THESE WERE ALL WE HAD. STAFF LOOK AT THIS PUBLIC WORKS ENGINEERING. WE ALL SAID, THESE ARE THE PLACES WHERE WE KNOW WE WERE FLOODED. 2013, 2015. THESE ARE THE AREAS WHERE WE WERE HIT THE HARDEST. THESE AREAS. WE WANT YOU TO INCLUDE SOME OF THESE. WE ALSO ASKED THEM TO INCLUDE

[01:55:03]

THE ETJ. AND THERE'S ABOUT FIVE PROJECTS THAT ARE IN THAT MASTER PLAN WE DID NOT INCLUDE IN THIS LIST. THEY'RE NOT INCLUDED. WE'RE JUST LOOKING AT THE ONES THAT ARE WITHIN THE CITY LIMITS. BUT ANYWHERE THERE WAS, FOR EXAMPLE, ON LIVE OAK, THERE'S A HOUSE THAT DOES FLOOD.

THEY'VE BEEN FLOODING. I DON'T KNOW HOW MANY TIMES THEY'VE FLOODED THERE. SO THAT'S ONE SOLUTION. WE'RE TRYING TO TRYING TO FIX THAT PARTICULAR PROBLEM ALONG WITH THE CHURCH.

THEY GET QUITE A BIT OF WATER ON A HEAVY RAIN. I NO, THERE'S 200 GONZALEZ STREET. WE'VE BEEN HAVING SOME FLOODING ISSUES THERE AS WELL. I'D LIKE TO TAKE A LOOK AT THAT. BUT YEAH I'M SEEING WE'RE WE'RE LOOKING AT INVESTING IN AND I CAN SEE WHY THE DOLLAR INCREASE FOR THE RESIDENTS BECAUSE IT'S MAINLY RESIDENTIAL AND COMMERCIAL. I'D REALLY BE PUSHING ON THE COMMERCIAL SIDE TO MAKE SURE THEY'RE PAYING THEIR SHARE, BUT IT'S MORE RESIDENTIAL THAN ANYTHING ELSE. THANK YOU. COUNCIL MEMBER. THANK YOU. CENTER STREET DRAINAGE IMPROVEMENT. THAT'S GOING TO BE PART OF THAT PROJECT TO HELP THAT. OKAY. COUNCILMAN HARRIS, FOR COMMERCIAL, OUR STORMWATER DRAINAGE FEES INCLUDED IN OUR FEE STRUCTURE FOR DEVELOPMENT.

THEY WILL BE BILLED. I'M NOT SURE IF I CAN ANSWER THAT QUESTION. YEAH, THEY WOULD JUST BE THEY WOULD JUST BE PART OF THE UTILITY BILL. WE DON'T HAVE A DEVELOPMENT FEE THAT RELATES TO STORMWATER DRAINAGE. WE'VE GOT A BUNCH OF DEVELOPMENT FEES. YEAH. SO SO LIKE ON FOR EXAMPLE, LIKE ON WATER AND WASTEWATER. YOU HAVE IMPACT FEES, RIGHT? THERE ARE NO THE CITY OF KYLE CURRENTLY DOES NOT HAVE A STORMWATER IMPACT FEE THERE. THERE ALWAYS COULD BE OTHER FEES THAT ARE NEGOTIATED AS PART OF THE DEVELOPMENT PROCESS. BUT TO MY KNOWLEDGE, THERE ARE NO NO EXEMPTIONS FOR SOLELY FOR STORMWATER. WE MIGHT WANT TO CONSIDER DOING THAT. I'M LOOKING AT, FOR INSTANCE, THE TOLL BROTHERS DEVELOPMENT AND THINKING ABOUT HOW MUCH RUNOFF WE'RE GOING TO GET FROM THAT BOTH INTO THE BLANCO AND AND INTO OTHER NEIGHBORHOODS, PERHAPS SINCE THEY'VE CLEARED COMPLETELY CLEAR CUT THE THE GROWTH IN THAT WHOLE AREA. SO WE MIGHT WANT TO CONSIDER DOING THAT IN THE FUTURE. THAT MIGHT HELP WITH SOME OF THIS AS WELL.

AND, AND THE THE OTHER CLARIFYING REMARK THAT I WILL MAKE JUST BECAUSE I, I HAVEN'T POINTED THIS OUT AND IT'S A LITTLE BIT DIFFERENT FROM THE WATER AND WASTEWATER UTILITY, IS THAT STORMWATER FEES ARE TYPICALLY ONLY LEVIED WITHIN THE CITY LIMITS. SO THEY TYPICALLY ARE NOT BEING LEVIED ON CUSTOMERS OUTSIDE THE CITY LIMITS. BY LAW, YOU CAN LEVY STORMWATER FEES TO CUSTOMERS OUTSIDE THE CITY LIMITS, BUT THE CITY HAS TO BE PROVIDING A DIRECT DRAINAGE BENEFIT TO THEIR CODE BENEFITED PROPERTIES. YOU HAVE TO HAVE PARTICULAR ONE IS IN THE CITY LIMITS, BUT YES. COUNCILMEMBER HEISER, BRIAN IS WE'RE REWRITING THE DEVELOPMENT CODE RIGHT NOW. IS THAT SOMETHING THAT WE CAN LOOK AT GOING IN THE CODE? AND I GUESS I SHOULD HAVE PREEMPTED THE THE QUESTION WITH, IS THERE SOMETHING THAT WE MIGHT BE MISSING AS TO WHY IT'S NOT A BUILT IN FEE? NOW, GIVEN THE WEALTH OF THINGS THAT WE CHARGE FEES FOR SURE, WE CAN CERTAINLY TAKE A LOOK AT IT. I THINK, GENERALLY SPEAKING, WHEN YOU'RE DOING A DEVELOPMENT, THE OUTFLOWS OF WATER FROM THAT DEVELOPMENT AND CURRENT CONDITIONS HAVE TO MATCH WHATEVER THE NEW DEVELOPMENT CONDITIONS ARE. SO THAT'S PART OF THE ENGINEERING THAT'S DONE WITH THAT, WHICH IS PROBABLY WHY THAT FEE IS NOT IMPOSED.

BUT LET US TAKE A LOOK AT IT AND SEE IF THERE'S ANY EXAMPLES OF THAT. I'M NOT AWARE OF ONE, BUT THERE MIGHT BE SOMETHING OUT THERE. I HAVEN'T SEEN IT. ALL RIGHT. ANY ADDITIONAL COMMENTS? CUSTOMER MCKINNEY YEAH, MY MY INITIAL THOUGHT WHEN I WAS LOOKING AT THE THE THE RATE INCREASE AND THE DECREASE FOR COMMERCIAL WAS THAT, YOU KNOW, WE'RE WE'RE SUBSIDIZING OUR COMMERCIAL WITH OUR RESIDENTIAL FEES. AND I HAD A REALLY HARD TIME WITH THAT. I DO UNDERSTAND NOW AFTER THE PRESENTATION THAT IT'S KIND OF MORE OF A, AN EQUITABLE SYSTEM OF ASSIGNING THE, THE COST TO IT, BUT I STILL JUST HAVE A HARD TIME. IT'S, IT'S TOUGH BECAUSE WHEN WE WHEN WE SET THE FEES, WE WE ACTUALLY MADE IT INEQUITABLE TOWARDS COMMERCIALS IN FAVOR OF THE RESIDENTIAL. BUT AS HAS BEEN NOTED, IT IS THE RESIDENTIAL THAT PROVIDES THE MAJORITY OF THE FLOOD WATER STORMWATER IMPACT. SO IT'S IT'S IT'S A GOOD POINT BOTH WAYS.

YEAH. THAT'S GOING TO BE MY COMMENT AS WELL. I MEAN, YOU WOULD ASSUME THAT THE COMMERCIAL WOULD BE THE ONES THAT WOULD HAVE THE LARGEST DRAIN OFF. LIKE, YOU KNOW, YOU HEAR ABOUT THESE, YOU KNOW, BIG DEVELOPMENTS, BUT IT'S THE INDIVIDUAL RESIDENTS THAT GET HIT THE MOST IN BACKYARDS AND SO FORTH. I DEAL A LOT WITH THAT OVER THERE IN SOUTH LAKE RANCH. THOSE PEOPLE GET FLOODED OUT ALL THE TIME, BUT IT'S NOT BECAUSE OF A BUSINESS, IT'S

[02:00:05]

JUST BECAUSE OF THE AREA. WELL, I THINK THE BIGGER QUESTION, OUTSIDE OF JUST MAYBE RESTRUCTURING IS, YOU KNOW, WHETHER OR NOT WE WANT TO HAVE STAFF CONTINUE TO MOVE FORWARD WITH THESE PROJECTS BECAUSE AS THE, YOU KNOW, FOLKS ARE GOING TO UNDERSTAND, WITH THESE BUDGET ITEM, WE HAVE TO VOTE ON THAT'S WE'RE WE'RE VOTING ON AN ITEM BASED ON PROJECTS THAT THE VOTERS APPROVED THREE YEARS AGO. AND HERE WE ARE HAVING CONVERSATIONS ABOUT BUDGETS WHERE WE ARE APPROVING PROJECTS TO COME THAT WILL HAVE INCREASED FEES, AND THE PROJECTS HAVE A SPECIFIC PURPOSE. BUT AT THE TIME THAT THE BILL COMES DUE, THAT PURPOSE MAY OR MAY NOT BE CLEAR TO THOSE WHO YOU KNOW, WILL OR WILL NOT LIKE THE FACT THAT THEIR FEES WENT UP. SO THE YOU KNOW, THE $1 NOW IS REALLY JUST A READJUSTMENT. IT'S NOT ACTUALLY AN INCREASE IN REVENUE, BUT THE PROPOSAL IS TO INCREASE REVENUE IN THE FUTURE. AND I WOULD ADVISE COUNCIL TO SAY SOMETHING IF YOU WANT TO TRY TO PUSH THE PROJECTS FURTHER OUT OR REDUCE SOME OF THE PROJECTS, OR ELIMINATE SOME OF THE PROJECTS, OR GIVE A CAP AND SAY, BECAUSE THERE IS THERE IS AN ARGUMENT TO BE MADE, WE HAVE A CAP. THERE'S, YOU KNOW, EVERY EVERY DECISION HAS A TRADE OFF BOTH WAYS. JUST LIKE ON THE TAX RATE, WE, WE WE DON'T HAVE $294 MILLION WORTH OF ROAD PROJECTS. WE HAVE WE HAD MORE. IT STARTED OUT OVER 400 MILLION. BUT WE BROUGHT IT DOWN BECAUSE WE WANTED TO BE WE WANTED TO PROPOSE SOMETHING WE THOUGHT THAT THE VOTERS WOULD APPROVE BECAUSE THEY'RE THE ONES WHO PAY FOR IT. SO ANYBODY HAVE ANY THOUGHTS ON THAT, OR ARE WE GOOD WITH THE PROJECTS THAT ARE BEING PROPOSED HERE? COUNCILOR HARRIS SO WE'RE LOOKING AT 20, 26, 10 MILLION IN NEW BOND. YES, THAT'S CORRECT. THAT'S THE PROPOSAL. AND WE FEEL GOOD ABOUT THE PROJECTS IN 2026 GOING FORWARD. WHAT I WOULD RECOMMEND IS THAT WE DO UPDATE THAT DRAINAGE MASTER PLAN AND COME BACK AND HAVE A DIFFERENT DISCUSSION ABOUT PROJECTS MOVING 27 TO 35. THAT'S A LONG PERIOD OF TIME. IT'S BEEN ALMOST 7 OR 8 YEARS SINCE THAT THAT STUDY WAS DONE. I DO THINK IT'S TIME TO DO THAT AGAIN. BUT FOR 26, THESE ARE ALL PROJECTS THAT WE KNOW ARE NEEDED. THERE IS A LEGITIMATE QUESTION THE MAYOR'S RAISED. IF YOU WANT TO SPREAD THAT OUT OVER A LONGER PERIOD OF TIME, THAT'S CERTAINLY SOMETHING WE CAN DO IF DIRECTED. SO THE. 10 MILLION IS IN THE CURRENT BUDGET? YES, MA'AM. SO THAT WOULD BE PROPOSED TO BE ISSUED AND PAID FOR AS PART OF THESE FEES.

THAT'S CORRECT. THAT'S ALREADY BUDGETED IN THE BUDGET. THE PROPOSED BUDGET. YES, MA'AM.

YES, MA'AM. AND IF WE DON'T ADOPT THESE NEW RATES, WE DO NOT HAVE THE MONEY TO FUND ALL OF THESE. IS THAT CORRECT? THAT'S THAT'S CORRECT. OKAY. WELL, THE THE RATES THAT WE'RE ADOPTING DON'T INCREASE OUR REVENUES. THE ACTUAL RATE INCREASE WILL BE NEXT YEAR, CORRECT OR. NO. THAT'S WHAT I THOUGHT THAT IS THAT IS CORRECT. FOR 2026. WE'RE BASICALLY TRYING TO HOLD YOUR REVENUE THE SAME. AGAIN. WE'RE BASICALLY WHAT WE'RE DOING IN 2026 IS REALLOCATING WHERE THAT REVENUE IS COMING FROM, BETWEEN SINGLE FAMILY RESIDENTIAL AND COMMERCIAL. HOW DO YOU HOW DO YOU HAVE PROJECTS TO BE FUNDED? HOW DO YOU FUND $10 MILLION WORTH OF PROJECTS IN 2026, WHEN THE RATES ARE GOING TO BE FLAT IN THE 2025 2026 BUDGET THAT WE'RE ABOUT TO VOTE, YOUR YOUR FUND BALANCE IS CURRENTLY ABOVE THE THE REQUIRED MINIMUM OR THE RECOMMENDED MINIMUM OF THREE MONTHS WORTH OF WORTH OF RESERVES. SO INSTEAD OF INCREASING YOUR REVENUE AND GENERATING ADDITIONAL INCOME, WE'RE BASICALLY TAKING THAT FUND BALANCE. YOU WOULD BE RUNNING A DEFICIT. ANYTIME THAT THIS DASHED LINE IS BELOW THE BARS, THE UTILITY WOULD BE RUNNING A RUNNING A DEFICIT, SPENDING MORE MONEY THAN IT'S BRINGING IN. SO WE'RE BUT WE DON'T HAVE $10 MILLION IN THE FUND. NO, YOU'RE, YOU'RE YOU'RE ISSUING DEBT FOR THAT. SO IT'S YOUR YOUR ANNUAL PAYMENTS ARE NOT GOING TO BE $10 MILLION.

THEY'RE GOING TO BE AMORTIZED OVER A 20 YEAR PERIOD. THE DEBT ISSUANCE COMES AFTER A PROJECT IS APPROVED, DESIGNED AND READY FOR CONSTRUCTION. WE'RE TRYING TO TRYING TO BE NOT THE ONES WHO ARE BASICALLY, OH, WE APPROVED THIS AND NOW WE HAVE TO RAISE THE RATES BECAUSE IT'S TOO LATE. LIKE FOR US TO MAKE AN AFFIRMATIVE DECISION ON THAT SO WE UNDERSTAND WHAT WE'RE DOING. YEAH. SO IF YOU WERE TO ISSUE $10 MILLION IN DEBT, SAY, THIS YEAR, YOU WOULD MORE THAN LIKELY HAVE TO INCREASE RATES AT SOME POINT IN THE FUTURE, IN THE NEAR FUTURE, TO SERVICE THAT INCREASED DEBT SERVICE, BECAUSE THAT IS GOING TO CAUSE YOUR EXPENSES TO TO GO UP. WELL,

[02:05:05]

AND THERE'S ALSO FUTURE PROJECTS THAT ARE IN THIS PRO FORMA AS WELL. THOSE PROJECTS COULD BE DELAYED OR POSTPONED OR ELIMINATED AS WELL. BUT I THINK GRADY'S CORRECT. I MEAN, THERE THERE ARE COSTS THAT WE'RE ASSUMING FOR ISSUING THIS DEBT THAT ARE GOING TO BE PAID IN FUTURE YEARS, AND SOME OF THE RATE INCREASES ARE GOING TO BE NECESSARY TO PAY FOR THAT.

SO. IT'S ALL KIND OF IN THAT MODEL. IF THOSE ARE PROJECTS THAT YOU'RE NOT INTERESTED IN DOING, WE NEED TO KNOW SO WE COULD ADJUST THE FIGURES FOR IT. SO BRIAN, MORE BACK. SO I GUESS WHERE I'M HAVING AN ISSUE WITH IT IS THAT WE'RE DROPPING THE COMMERCIAL SIDE AND THEN RAISING A DOLLAR THERE. I THINK I'D BE MORE COMFORTABLE WITH JUST KEEPING THE COMMERCIAL WHERE IT'S AT AND RAISING THE DOLLAR, BECAUSE THEN IT'S GOING TO HELP ALLEVIATE SOME OF THAT DEBT LATER ON IN THE FUTURE OFF THE RESIDENTS. BUT IF WE'RE DROPPING THE COMMERCIAL SIDE DOWN, RAISING THE RESIDENTS JUST TO BE FLAT, I MEAN, I HAVE A HARD TIME EXPLAINING THAT TO THE RESIDENTS. I'M RAISING YOU A DOLLAR, BUT I'M TAKING THEM DOWN. I THINK I'D BE MORE IT'D BE MORE ADVANTAGEOUS FOR US TO KEEP THE COMMERCIAL WHERE IT'S AT RIGHT NOW, TELL RESIDENTS WE'RE RAISING A DOLLAR BECAUSE WE'VE GOT THESE PROJECTS GOING ON, AND I THINK THEY COULD THEY WOULD UNDERSTAND IT BETTER. BUT I'M JUST HAVING A HARD TIME SEEING WHY WE'RE DROPPING THE COMMERCIAL SIDE WHEN WE'RE GOING TO HAVE THESE INCREASES LATER. ONE IDEA WOULD BE TO LEAVE THE FEE THE SAME, THE $5 THE SAME, BUT TO ADJUST TO THE EQUITABLE RATE STRUCTURE, WHICH MEANS THAT WE WOULD ACTUALLY HAVE A REDUCTION THIS YEAR IN THE AMOUNT OF REVENUE THAT WE RAISE. BUT AS LONG AS WE CAN MAINTAIN THE FUND BALANCE RESERVES THAT ARE REQUIRED, I THINK THAT THAT WOULD BE SOMETHING LIKE $300,000 WITH THE UNDERSTANDING THAT THESE PROJECTS MOVE FORWARD, THEN WE BRING IT ALL UP AT THE SAME TIME. THAT'S HE COUNCILMEMBER IS CORRECT. WE'RE CONFLATING TWO DIFFERENT THINGS. ONE IS AN EQUITY STRUCTURE, AND ONE IS A TOTAL AMOUNT THAT EACH PERSON OR BUSINESS IS PAYING IN ORDER TO FUND PROJECTS. SO RIGHT NOW IT LOOKS LIKE WE'RE RAISING RESIDENTIAL AND LOWERING COMMERCIAL. SO IT'S LIKE WE'RE RAISING OUR FEES NOW WHEN REALLY WHAT WE'RE DOING IS PROPOSING TO RAISE THEM NEXT YEAR. SO IT LOOKS LIKE WE'RE RAISING THEM THIS YEAR, BUT WE'RE ACTUALLY RAISING THEM NEXT YEAR. SO IF WE COULD FIND A WAY TO KEEP THE RATE THE SAME, BASE RATE THE SAME, BUT MAKE THE SYSTEM EQUITABLE, THEN IF THE COUNCIL APPROVES THE BUDGET MOVING FORWARD, WE KNOW THERE'S GOING TO BE DEBT ISSUANCES. THEN YOU CAN RAISE IT ALL TOGETHER NEXT YEAR IN ORDER TO COVER THAT DEBT SERVICE. AND AND THAT THAT WOULD BE AN OPTION THAT WOULD LIKELY MEAN HIGHER RATE INCREASES NEXT YEAR BECAUSE YOU'RE YOU'RE FALLING BEHIND THIS YEAR. THAT IS THE CHALLENGE. COUNCILMEMBER MCKINNEY, YOU'RE NOT GOING TO BE HERE. SO. NO, ACTUALLY, I WAS BRAINSTORMING HERE. AND I THINK, YOU KNOW, COUNCILMEMBER RIZZO KIND OF BEAT ME TO IT. I DON'T THINK ANY OF THE RESIDENTS ARE REALLY GOING TO COMPLAIN ABOUT THE $1. BUT THEN WHEN YOU SEE THAT THE COMMERCIAL AMOUNT IS DROPPING, AND I DON'T THINK ANY OF US ARE WILLING TO TAKE A CHANCE ON POSTPONING STORMWATER PROJECTS, I MEAN, THAT BECOMES A SAFETY ISSUE. YOU KNOW, WE'RE TALKING ABOUT FLOODING ISSUES HERE. I'D BE IN FAVOR OF DOING THE $1 INCREASE ON THE RESIDENTS AND THEN LEAVING COMMERCIAL AS IT IS. SO FAR AS I'M AWARE, NONE OF THE COMMERCIAL LEAVE THE COMMERCIAL FOR ANY KIND OF. THEY HAVE NOT HELP OR HAD ISSUES WITH PAYING THEIR STORMWATER BILLS OR ANYTHING ALONG THOSE LINES. THEY DO NOT.

THEY DO NOT COME. THEY DO NOT VOTE. THAT IS CORRECT. BUT THAT'S ALSO STILL SOMETHING TO CONSIDER. YOU KNOW, WE WE RAISE IMPACT FEES FROM 5000 TO 12,000 TO 20,000 SO THAT THOSE THOSE FEES ARE HAPPENING. BUT THE THE QUESTION IS THE CALCULATION THE WAY WE CURRENTLY DO DO IT, YOU'RE SAYING ISN'T WORKING OR IS IT FINE AND YOU'RE JUST PROPOSING A DIFFERENT STRUCTURE.

IT'S IT'S FINE. THERE'S THERE'S NOTHING I DON'T THINK THAT IT VIOLATES STATE STATUTE IN ANY, IN ANY MANNER, BUT IT IS CERTAINLY NOT THE INDUSTRY NORM WITHIN TEXAS OR WITHIN THE THE REST OF THE COUNTRY. AND SO THAT'S JUST WHAT WE WERE LOOKING AT FOR THE COMMERCIAL CUSTOMERS IS WHAT IF WE CHANGED THE WAY THAT WE'RE BILLING THEM AND MADE IT THE INDUSTRY STANDARD? BECAUSE MY UNDERSTANDING IS THAT IF WE CHANGE, LET'S SAY AND I'LL BE HONEST, I DON'T NECESSARILY REMEMBER WHAT THE COMMERCIAL RATE IS. I THINK IT'S LIKE 0.21 CENTS PER SQUARE FOOT OR SOMETHING LIKE THAT. MY UNDERSTANDING IS THAT IF THAT RATE CHANGES, THEN THESE CONSTANTS, THE 1.5424 AND 0.5064 WOULD ALSO NEED TO BE

[02:10:04]

UPDATED. AND SO IT'S JUST TRYING TO GO BACK AND RESEARCH. HOW ARE THOSE NUMBERS ORIGINALLY DEVELOPED. AND IF WE CHANGE THAT COMMERCIAL RATE EITHER THIS YEAR OR IN THE FUTURE, HOW DO WE DO THAT CORRECTLY? BY UPDATING SOME OF THESE CONSTANTS THAT ARE ALSO TIED INTO WHATEVER THEIR THEIR RATE IS. SO BASICALLY WHAT WE WERE TRYING TO DO IS MAKE IT A LITTLE BIT LESS COMPLICATED ON THE COMMERCIAL SIDE BY BY USING THE INDUSTRY NORM. WELL, I THINK I WOULD SUGGEST WE LEAVE IT EXACTLY AS IS BECAUSE WE ARE TACKLING OTHER ISSUES TONIGHT AND UNDERSTAND THAT NEXT YEAR, IF WE APPROVE THIS BUDGET, THIS, THIS DAIS WILL BE THE ONES THAT WILL HAVE TO DECIDE WHETHER WE WANT TO MOVE FORWARD WITH THOSE PROJECTS. BUT JUST TO UNDERSTAND, ALSO, IF YOU APPROVE THE BUDGET AND THESE PROJECTS MOVE FORWARD, THEY COME TO US FOR DEBT ISSUANCE. WE'VE ALREADY SPENT MONEY, AND THE DEBT ISSUANCE IS OFTENTIMES A REIMBURSEMENT OR AN ALREADY DESIGNED PROJECT. AND SO THIS IS A IT'S JUST GOOD TO BE PROACTIVE AND AFFIRMATIVE IN YOUR MIND ABOUT WHAT YOU'RE DOING. AND IF WE LEAVE EVERYTHING AS IS. THE OTHER THING IS IF YOU'RE MAKING THE INCREASE NEXT YEAR, POTENTIALLY YOU CAN READJUST IT AT THAT TIME. SO I'D LIKE TO MAKE A MOTION FOR OPTION TWO SECOND.

ALL RIGHT. MOTION IS MADE BY COUNCIL MEMBER ZUNIGA, SECONDED BY MAYOR PRO TEM, THAT WE DO NOT APPROVE THE INCREASE IN DRAINAGE CHARGES OR USE THE INDUSTRY STANDARD TO DETERMINE THE COMMERCIAL CUSTOMER DRAINAGE RATES. IS THERE DISCUSSION ON THAT MOTION? YEAH, I JUST DOES THIS MEAN THAT WE'RE NOT GOING TO BE ABLE TO STAY ON PACE WITH THOSE PROJECTS? NO, THE REVENUE I BELIEVE, WILL BE THE SAME NEXT YEAR. IT'S JUST THE THE INCREASE IN RATES IS REALLY JUST FOR THE RESIDENTIAL. CORRECT. IF YOU DON'T MIND GOING BACK TO THAT SLIDE THAT SHOWED THE REVENUES OF THE YOU CAN SEE THAT THERE. YEP. YEAH.

SO IT IS ROUGHLY THE SAME THIS PROPORTIONS WHO PAYS AND HOW IS THAT CALCULATED. THAT'S THE ISSUE TECHNICALLY WE WE CHOSE THE OPTION THAT KEEPS THAT PUTS MORE MONEY IN THE BANK THIS YEAR. BUT IRONICALLY NEXT YEAR. BUT YES, FOR THE PROJECTS FOR NEXT YEAR, JUST FOR PURPOSES OF THE MINUTES, THAT IS A MOTION TO DENY THE ORDINANCE. DID I SAY THAT CORRECTLY? HE READ IT OFF THE YOU READ THE OPTION CORRECTLY. IT'S JUST IT'S ALSO AFFIRMATIVELY OR EFFECTIVELY A MOTION TO DENY THE ORDINANCE. THAT'S RIGHT. BUT SO AN I VOTE IS A VOTE TO DENY. CORRECT. ALL RIGHT. ANY FURTHER DISCUSSION? ALL THOSE IN FAVOR SAY AYE. AYE. ALL OPPOSED. NAY. ALL RIGHT.

MOTION CARRIES 6 TO 1. THANK YOU FOR PRESENTATION AND THANK YOU FOR THE CHART. IT'S GREAT TO SEE WHAT PROJECTS WE GOT COMING DOWN THE PIPE. APPRECIATE YOU ALL FOR YOUR

[34) Conduct a public hearing to obtain comments on the City of Kyle's proposed budget for Fiscal Year 2025-26 totaling $603,537,633 for all city funds including rate increase for water and wastewater service rates, increase for drainage fees, increase for solid waste service rates, all other fees and charges for various city services as provided for in the fee schedule, capital improvement plan expenditures, and the addition of 24.0 new full-time positions. See all related backup material on Item No. 36. (RELATED AGENDA ITEM 1 OF 5)]

TIME. THANK YOU. ALL RIGHT. NEXT UP IS AGENDA ITEM 34. CONDUCT A PUBLIC HEARING TO OBTAIN COMMENTS ON THE CITY OF COUNCIL PROPOSED BUDGET FOR FISCAL YEAR 2025 2026, TOTALING $603,537,633 FOR ALL CITY FUNDS, INCLUDING RATE INCREASE FOR WATER AND WASTEWATER SERVICE RATES, INCREASE FOR DRAINAGE FEES, INCREASE FOR SOLID WASTE SERVICE RATES, ALL OTHER FEES AND CHARGES FOR VARIOUS CITY SERVICES AS PROVIDED FOR IN THE FEE SCHEDULE, CAPITAL IMPROVEMENT PLAN EXPENDITURES AND THE ADDITION OF 24 NEW FULL TIME POSITIONS. SEE ALL RELATED BACKUP MATERIAL ON ITEM NUMBER 36. THIS ITEM IS A PUBLIC HEARING, BUT DOES HAVE A PRESENTATION. YES, SIR. MR. MOHIT. SO MAYOR AND MAYOR PRO TEM COUNCIL MEMBERS. FOR THE RECORD, I'M PERVEZ MOHI, CITY'S DIRECTOR OF FINANCE. I JUST HAVE A BRIEF PRESENTATION. SO THIS IS THE FIRST OF TWO PUBLIC HEARINGS SCHEDULED ON THE CITY'S PROPOSED BUDGET FOR FISCAL YEAR 2526, THE SECOND PUBLIC HEARING ON THE CITY'S PROPOSED PROPOSED BUDGET IS SCHEDULED TO BE HELD AT 7 P.M. ON SEPTEMBER 16TH AT CITY HALL, 100 WEST CENTER STREET. ON TODAY'S MEETING AGENDA COUNCIL'S MEETING AGENDA, THE CITY COUNCIL IS SCHEDULED TO CONSIDER ON FIRST READING, ADOPTING THE CITY'S BUDGET FOR FISCAL YEAR 2526. HERE ARE A FEW HIGHLIGHTS OF THE PROPOSED BUDGET THAT'S INCLUDED IN THE CITY MANAGER'S BUDGET THAT WAS PRESENTED TO YOU ON JULY 26TH. THE TOTAL BUDGET IS $603.5 MILLION FOR ALL CITY FUNDS.

THIS INCLUDES WATER, WASTEWATER, GENERAL FUND, DRAINAGE FUND, AND THE REST OF ALL THE OTHER FUNDS THAT THE CITY HAS. $460.4 MILLION IN PLANNED CIP SPENDING IN FISCAL YEAR 2526. THESE ARE ALL STREET, ROAD, WATER, WASTEWATER, DRAINAGE PARKS. ALL THOSE PROJECTS, THE FIVE YEAR CIP SPENDING PLAN THAT'S IN THIS BUDGET IS $1.3 BILLION. THERE ARE 24 NEW POSITIONS

[02:15:09]

PROPOSED, FOR A TOTAL OF 470 POSITIONS. PROPOSED PROPERTY TAX RATE OF 0.5957 PER $100 OF TAXABLE ASSESSED VALUATION RATE INCREASE FOR WATER AND WASTEWATER SERVICE IN FY 2526.

VARIES FOR INSIDE CITY CUSTOMERS AND OUTSIDE CITY CUSTOMER CLASSES. THERE WAS AN INCREASE IN STORM DRAINAGE FEES FOR 2526, BUT COUNCIL JUST VOTED TO REMOVE THAT. THERE IS A 2.5% INCREASE IN SOLID WASTE SERVICE RATES PER CONTRACTS WITH TEXAS DISPOSAL, AND THEN ALL THE DETAILS ARE INCLUDED IN THE BUDGET DOCUMENT. A COMPLETE COPY OF THE CITY'S PROPOSED BUDGET FOR FISCAL YEAR 2526, INCLUDING ALL ASSOCIATED DOCUMENTS, ARE AVAILABLE ON THE CITY'S WEBSITE. AND MAYOR, THAT CONCLUDES MY PRESENTATION. ALL RIGHT. THIS ITEM IS NOT A DISCUSSION. IT'S A PUBLIC HEARING. SO IF THERE ARE NO OBJECTIONS, I'M GOING TO OPEN THE PUBLIC HEARING NOW. ALL RIGHT. IS THERE ANYONE WHO WISHES TO COME FORWARD AND SPEAK ON THE BUDGET? PLEASE STATE YOUR NAME FOR THE RECORD. THANK YOU. MAYOR, COUNCIL KENNETH ROCHA, HOMETOWN. KYLE, I KNOW I'VE TALKED ALREADY TODAY A COUPLE TIMES, BUT I STAND HERE AS A NEIGHBOR WHO'S NO STRANGER TO THE REALLY THE DAILY GRIND OF MAKING LOCAL GOVERNMENT WORK. I GET IT, WE HAVE MULTIPLE SIDES TO THE STORY. I THINK MAYOR SAID THAT TODAY. FOR ME PERSONALLY, IT'S IMPORTANT THAT WE JUST DO OUR DUE DILIGENCE AND DUE DILIGENCE MEANS TRANSPARENCY. YET THIS DEBT AND OUR RISING WATER AND WASTEWATER RATES ALL EXPOSE A DISCONNECT BETWEEN VOTERS AND CITY HALL. THIS PROPOSED BUDGET AND CITY'S DEBT PICTURE PAINTS A CONCERNING PORTRAIT OF OBLIGATIONS STACKING UP. YOU'RE ASKING ME TO SHOULDER AN ADDITIONAL $650 THIS YEAR, CONSIDERING ALL THE POSSIBLE TAX AND UTILITY INCREASES WE WE WILL INHERIT BY ADOPTING THIS PROPOSED BUDGET, WE FACE A CRITICAL MOMENT TO BALANCE PROGRESS WITH ACCOUNTABILITY. THIS ISN'T ABOUT HALTING GROWTH. IT'S ABOUT GROWING WISELY. I ENCOURAGE THOSE OF YOU HERE NOW ON COUNCIL AND FUTURE CANDIDATES TO UNDERSTAND THAT LEADERSHIP MEANS ENGAGING TAXPAYERS HONESTLY, HONORING VOTER INTENT, AND PROTECTING OUR LONG TERM FINANCIAL HEALTH, WHICH I SPOKE TO EARLIER. THAT'S NOT JUST GOOD POLICY. IT REALLY IS THE LEADERSHIP OUR COMMUNITY DESERVES. MY MESSAGE IS THE SAME AS I HAD BACK IN JUNE FOLLOWING BUDGET WORKSHOPS SEEK OPERATIONAL COST SAVINGS THROUGH DELAYING NON-CRITICAL HIRES, DEFERRING NON-ESSENTIAL PROJECTS, LEVERAGING OTHER REVENUES AND PHASING BOND ISSUANCE. EVEN THE DISCUSSION THAT WE HAD EARLIER, THE PREVIOUS AGENDA ITEM OR TODAY, NO ALTERNATIVES. IT WAS STAFF RECOMMENDATION SAYING, HEY, THIS IS THE WAY. IF IT WASN'T FOR EACH OF YOU DOING YOUR DUE DILIGENCE, AN ALTERNATIVE MAY NOT HAVE COME UP. I KNOW THERE WERE OPTIONS ONE, TWO AND THREE, RIGHT? BUT EVEN A DIVE DEEPER INTO THE THE METHODOLOGY OR THE STANDARD, THERE'S TIERS THAT ARE AVAILABLE FOR AN INDIVIDUAL HOME THAT YOU COULD IMPLEMENT.

SO THESE DISCUSSIONS CAN HAPPEN DURING THOSE WORKSHOPS. SO THEN WHEN WE GET TO THIS POINT, WE KNOW THAT THAT DECISION HAS BEEN VETTED. I APPRECIATE THE TIME, EFFORT AND ENERGY THAT'S GONE INTO AT LEAST GIVING US AN OPPORTUNITY TO PRESENT. OUR POSITION HERE AS A COMMUNITY. I LOOK FORWARD TO THE DECISION THAT YOU'LL THAT YOU'LL BE MAKING, AND I'LL SEE YOU ON THE NEXT AGENDA ITEM. THANK YOU. IS THERE ANYONE ELSE WHO WISHES TO COME FORWARD AND SPEAK ON THE BUDGET? PLEASE STATE YOUR NAME FOR THE RECORD. THANK YOU. VIC ALLEN OF. THANK YOU FOR THE HELP THAT I'VE GOTTEN TO WORK OUT THE DETAILS OF THE PRESENTATION THAT I'VE HAD THIS EVENING, BUT WHAT I'VE FOUND IN THE PROCESS WAS RELATIVELY SOMEWHAT DISTURBING BECAUSE BECAUSE I WAS AN IT MAJOR AND I LOOKED AT THIS DATA, AND THIS DATA IS WRITTEN IN HOW MANY USER BLOCKS AND HOW MANY BILLS ARE GENERATED. WHY WASN'T THIS DATA GENERATED AND WHERE'S THE GALLONAGE GOING RATHER THAN HOW MANY BILLS ARE GENERATED? I MET WITH PEREZ AND HE TOLD ME HOW

[02:20:05]

THIS HOW TO INTERPRET THIS, AND THAT'S HOW I CAME UP WITH WITH ALL THE DATA OF WHERE THE WHERE ALL THE GALLONAGE WENT. WHY AM I DOING THIS? AND WHY DOESN'T THE CITY HAVE, YOU KNOW, DIRECT, YOU KNOW, IT PLATFORMS IN PLACE TO COME UP WITH THIS INFORMATION. SO SO WE DON'T HAVE 4 OR 5, 6000 PEOPLE THAT ARE OVER THE 12,000 GALLON A MONTH LIMIT. AND WHY ISN'T THE CITY WATER DEPARTMENT DOING SOMETHING ABOUT IT? I WENT TO SPEAK TO MY SUPERINTENDENT. I SAID, DO YOU KNOW YOU'RE RUNNING YOUR METER EVERY DAY? HE HAD NO IDEA BECAUSE THE INSTALLER CAME, HOOKED HIM UP AND JUST TURNED IT ON. SO? SO IT'S YEAH, MY ABOUT IT. YEAH, BUT SOME THINGS CAN BE DONE AND I'M NOT SURE THAT ANYTHING'S BEING DONE. AND THAT'S MY FRUSTRATION. SO. SO I JUST HOPE THAT THERE'S IMPROVEMENTS MADE IN THE WATER DEPARTMENT. I TALKED TO MR. MURPHY A COUPLE OF WEEKS AGO ABOUT SOME OF THE NEW THINGS THAT HE HAD TALKED ABOUT, BUT BUT THESE TYPE OF DATA SETS WHERE YOU'VE GOT 52 PEOPLE IN THE IN CITY, 52 BILLS IN THE IN CITY AND 88, 83 BILLS IN THE OUTSIDE OF THE CITY. MARK. YOU KNOW, THESE SHOULD BE DAILY FLAGS THAT COME UP IN THE IT DEPARTMENT. WHO ARE THESE PEOPLE? WHERE'S THIS, YOU KNOW, 3 OR 4000. YOU KNOW, IF THEY'RE IF THEY REPEAT 2 OR 3 DAYS IN A ROW, WHY ISN'T SOMEONE OUT THERE TALKING TO THE PROPERTY MANAGER? SO THAT'S JUST MY $0.02. IT'S JUST I THINK IT CAN BE MANAGED MORE EFFECTIVELY. AND I HOPE THAT YOU GET THERE. THANK YOU. PLEASE STATE YOUR NAME FOR THE RECORD. THANK YOU. STEPHANIE MCDONNELL. BACK AGAIN. I WANTED TO TALK TO YOU ABOUT WHAT WE JUST HEARD IN PRESENTATIONS AND HOW IT AFFECTS THE BUDGET. YOUR BUDGET AFFECTS OUR BUDGET. WE HEARD THE PRESENTATION RECOGNIZING HUNGER ACTION MONTH. COUNCIL MEMBER RIZZO'S ESPECIALLY FAMILIAR WITH THE FOOD BANK AND THE PEOPLE THAT ARE USING THAT AND JUST THE SITUATIONS THEY'RE IN. ALL OF YOU JUST HEARD THAT. IT'S AN ASTOUNDING FIGURE THAT WAS GIVEN WITH THE PERCENTAGE OF RESIDENTS THAT ARE SERVED AND THE PERCENTAGE OF RESIDENTS ONE STEP AWAY FROM NEEDING TO UTILIZE THAT FOOD BANK. SEARCH YOUR CONSCIENCE. STOP THIS MADNESS. GO BACK TO THE DRAWING BOARD CONCERNING THE BUDGET. TOE POSITIVE CHANGES FOR OUR CITY.

IT'S JUST REALLY THERE ARE GOING TO BE PEOPLE THAT ARE GOING TO BE DIRELY AFFECTED BY THE DECISIONS YOU'RE MAKING UP HERE, AND WE'VE BEEN SOUNDING THE ALARM ON WATER. PEOPLE DO NOT EVEN HAVE A CLUE WHAT'S GOING TO HAPPEN WITH THE WASTEWATER. WAIT TILL THAT HITS.

THESE PEOPLE ARE GOING TO THERE'S GOING TO BE PEOPLE THAT ARE GOING TO BE IN REALLY BAD SHAPE. THINK ABOUT THAT. THANK YOU. ALL RIGHT. THANK YOU. IS THERE ANYONE ELSE WHO WISHES TO COME FORWARD? PLEASE STATE YOUR NAME FOR THE RECORD. THANK YOU. YES, SIR. DEREK VAN PROUD, GRADUATE OF TEXAS STATE FINANCE MANAGEMENT. AND IT'S BEEN A WHOLE LOT OF TIME IN WHAT USED TO BE DEREK HALL TO COME UP WITH A FORMULA. THE ONLY WAY TO BALANCE THE BUDGET IS TO INCREASE INCOME OR DECREASE EXPENSES. THAT'S IT. THAT'S THAT'S LITERALLY IT. AND AS WE TALK ABOUT BALANCING THE BUDGET, THE PUSH FOR THE 77% WITH THE WATER INCREASE THAT, THAT THAT'S, THAT'S, THAT'S THAT'S OVER THE TOP. AND SO THE THOUGHT WOULD BE AS YOU TRY TO BALANCE AND WE WE UNDERSTAND THE DIFFICULTY THERE IS IN BALANCING A BUDGET. BUT IN DOING SO TO CONSIDER THAT THERE ARE SOME WHO FEEL VERY BURDENED BY THE POTENTIAL OF A 77% WATER INCREASE. THAT'S REALLY ALL THERE IS TO SAY ABOUT THAT PIECE OF IT. THANK YOU, THANK YOU. PLEASE STATE YOUR NAME FOR THE RECORD. MY NAME IS YVONNE FLORES KALE. SO I JUST WANT TO POINT OUT A FEW THINGS. FIRST AND FOREMOST, I WOULD LIKE TO KNOW HOW MANY EVALUATIONS ARE IN THE CURRENT BUDGET. WE ALL JUST SAW A PRESENTATION REGARDING EVALUATIONS THAT WOULD BE NEEDED FOR THE STORM WATER DRAINAGE. AND IF YOU GUYS PLAN ON DOING THAT, I'M WONDERING IF YOU'RE GOING TO PUT IT OFF ANOTHER YEAR OR IF THERE'S SOMETHING IN THE BUDGET FOR THAT. ALSO, I WANT TO REMIND YOU THAT THIS INCREASE IN THE RATE THAT YOU GUYS IN OUR TAX RATE IS ALLOWABLE BY THE BOND VOTE OF 2020 AND 2022. HOWEVER, AS A REMINDER, NOT ALL BONDS HAVE BEEN CALLED. MY QUESTION TO YOU GUYS IS HOW MUCH DO WE STILL HAVE? UNCALLED FOR THE 2020 PARKS BOND? HOW MUCH DO WE HAVE UNCALLED FOR THE 2022 BOND? WHAT WILL OUR TAXES LOOK LIKE WHEN WE ARE FULLY BONDED OUT? THIS DOESN'T INCLUDE ANY FUTURE BONDS. SO MY MY ASK TO YOU GUYS IS TO CONSIDER WHAT OUR OVERALL DEBT, WHETHER THAT BE BOND OR CIP, WHAT DOES THAT LOOK LIKE AND WHAT IS THAT GOING TO LOOK LIKE IN THE FUTURE? IF WE'RE

[02:25:01]

INCREASING UP TO 27% RATE THIS YEAR, WHAT IS IT GOING TO BE NEXT YEAR AND WHAT IS IT GOING TO BE TO THE YEAR AFTER THAT? WHEN WE CONTINUE TO INCREASE OUR EXPENSES? SO I HOPE YOU GUYS TAKE THAT INTO CONSIDERATION. ALL RIGHT. THANK YOU. IS THERE ANYONE ELSE? ALL

[35) Conduct a public hearing to obtain comments on the proposal to adopt the City of Kyle's ad valorem tax rate (property tax rate) at $0.5957 per $100 of taxable assessed valuation for Tax Year 2025 (Fiscal Year 2025-26). See all related backup material on Item No. 37. (RELATED AGENDA ITEM 2 OF 5)]

RIGHT. SEEING NONE I'M GOING TO CLOSE THE PUBLIC HEARING. PUBLIC HEARING IS NOW CLOSED.

NEXT UP IS AGENDA ITEM 35. CONDUCT A PUBLIC HEARING TO OBTAIN COMMENTS ON THE PROPOSAL TO ADOPT THE CITY OF KYLE'S AD VALOREM TAX RATE AT 59 $0.57 PER $100 OF TAXABLE ASSESSED VALUE FOR TAX YEAR 2025, FISCAL YEAR 2526. SEE ALL RELATED BACKUP MATERIAL RELATED ITEM AGENDAS TWO OF FIVE. DOES ANYBODY WISH TO COME FORWARD AND SPEAK ON THE PROPOSED TAX RATE? DO YOU WANT TO PRESENT FIRST? YES, SIR. YES. ALL RIGHT. ONE SECOND. GO AHEAD. SORRY, I HAVE A CADENCE WITH PUBLIC HEARINGS. I FORGET ABOUT THE PRESENTATION. GO AHEAD. SO ONCE AGAIN, FOR THE RECORD, I'M PERVEZ MAJID, CITY'S DIRECTOR OF FINANCE. HERE AGAIN, THIS IS THE FIRST OF TWO PUBLIC HEARINGS SCHEDULED ON THE CITY'S PROPOSED AD VALOREM TAX RATE, OR PROPERTY TAX RATE, FOR TAX YEAR 2025. THE SECOND PUBLIC HEARING ON THE CITY'S PROPOSED PROPERTY TAX RATE IS SCHEDULED TO BE HELD AT 7 P.M. ON SEPTEMBER 16TH AT CITY HALL, 100 WEST CENTER STREET, ON TODAY'S COUNCIL MEETING AGENDA, THE CITY COUNCIL IS SCHEDULED TO CONSIDER A PROPOSAL TO SET THE CITY'S AD VALOREM TAX RATE, OR PROPERTY TAX RATE, FOR TAX YEAR 2025 OR FISCAL YEAR 20 2526 AT 0.59 $0.05 $0.07 PER $100 OF TAXABLE ASSESSED VALUATION. THE CITY'S AD VALOREM TAX RATES OR PROPERTY TAX RATES FOR TAX YEAR 25, ARE AS FOLLOWS. NO NEW REVENUE TAX RATE IS AT CALCULATED AT 0.488509 PER $100 VOTER APPROVAL TAX RATE, AS CALCULATED, IS 0.595715 PER $100, AND THE CITY'S PROPOSED TAX RATE IS 0.5957 PER 100 $100 OF TAXABLE ASSESSED VALUATION. THE PROPOSED TAX RATE OF 59.57 PER 100 IS AN INCREASE OF 0.1264 PER $100, OR 26.93%, AS COMPARED FROM THE CITY'S CURRENT ADOPTED TAX RATE OF 0.4693 PER $100. THE CITY'S PROPOSED TAX RATE OF 5957 PER $100 IS HIGHER THAN THE NO REVENUE TAX RATE OF 0.488509 PER $100. THIS IS AN INCREASE OF 0.107191 PER $100 OF TAXABLE ASSESSED VALUATION, OR 21.94% FROM THE NO NEW REVENUE TAX RATE. LASTLY, THE PROPOSED TAX RATE OF 59.57 PER $100. IS LOWER THAN THE VOTER APPROVAL TAX RATE OF 0.595715 PER $100 FOR TAX YEAR 2025 OR FISCAL YEAR 2526. HERE'S A COMPARISON OF WHAT THE IMPACT IS OF THE PROPOSED TAX RATE ON AN AVERAGE HOME VALUE IN KYLE, TEXAS, WITHIN CITY LIMITS AND THE AVERAGE ANNUAL PROPERTY TAX BILL. SO ON THIS CHART, WE'RE SHOWING THE AVERAGE HOME VALUE FOR 26 AS COMPARED TO 25. THE PROPERTY TAX RATE, THE PROPOSED TAX RATE AS COMPARED TO THE ADOPTED TAX RATE, WHAT THE PROPERTY TAX LEVY WOULD BE. AND THEN THE HOMESTEAD REDUCTION THAT THE CITY OF KYLE ALLOWS. SO FOR 2026, THE AVERAGE HOME

[02:30:05]

VALUE IN KYLE, BASED ON THE CERTIFIED TAX ROLL IS $315,422, WHICH IS A DECREASE OF $9,305 AS COMPARED TO 2025. THE AVERAGE HOME VALUE IN KYLE WAS REDUCED IN 26. IF YOU WERE TO USE THE PROPOSED TAX RATE OF 5957 AND APPLY IT TO THE AVERAGE HOME VALUE OF 315,422, THE PROPERTY TAX LEVY IS $1,878.97. BEFORE THE HOMESTEAD REDUCTION. HOMESTEAD REDUCTION ON THAT SAME HOUSE ON THE AVERAGE VALUED HOME IS $238.28. BASED ON THE PROPOSED TAX RATE OF 0.5957. SO THE AVERAGE TAX BILL ON AN AVERAGE VALUED HOME FOR NEXT YEAR. THE BILLS THAT WILL GO OUT IN OCTOBER, THE AVERAGE BILL WILL BE $1,640.69 FOR THE CITY OF KYLE'S PORTION OF PROPERTY TAX. AS YOU KNOW, THERE ARE OTHER JURISDICTIONS IN OUR TAX BILL ACC, THE HAYS COUNTY, THE CONSERVATION DISTRICT ESD'S. SO THE TOTAL ESTIMATED TAX BILL ON AN AVERAGE HOME, IF THE PROPOSED TAX RATE OF 5957 IS ADOPTED BY COUNCIL, WILL BE AN INCREASE OF $304.47. THE PROPOSED TAX RATE OF 5957 PER $100 FOR TAX YEAR 2025 WILL RAISE MORE REVENUES FROM PROPERTY TAXES THAN IN THE PRIOR TAX YEAR. DURING TODAY'S COUNCIL MEETING, THE CITY COUNCIL IS POSTED TO VOTE ON THE PROPERTY TAX RATE OF 5957 PER $100 OF TAXABLE ASSESSED VALUATION FOR TAX YEAR 2025. ON FIRST READING OF THE TAX RATE ORDINANCE, A COMPLETE COPY OF THE 2025 TAX RATE CALCULATION WORKSHEET IS ATTACHED TO THIS AGENDA ITEM. IN ADDITION, A COMPLETE COPY OF THE CITY'S PROPOSED BUDGET FOR FISCAL YEAR 2526, INCLUDING PROPERTY TAX RATE CALCULATIONS AND ALL ASSOCIATED DOCUMENTS THAT ARE AVAILABLE ON CITY'S WEBSITE AND MAYOR AND COUNCIL. WITH THAT, THAT CONCLUDES MY PRESENTATION. ALL RIGHT. THANK YOU. IF THERE ARE NO OBJECTIONS, NOW I'M GOING TO OPEN THE PUBLIC HEARING. ALL RIGHT. SEEING NONE.

PUBLIC HEARING IS NOW OPEN. IS THERE ANYONE WHO WISHES TO COME FORWARD AND SPEAK ON THE TAX RATE? PLEASE STATE YOUR NAME FOR THE RECORD. HELLO. KENNETH ROCHA, HOMETOWN. KYLE. SO I RISE IN OPPOSITION TO THE PROPOSED AD VALOREM TAX RATE. THAT'S A HARD WORD. I THINK IT'S BEEN SAID TODAY FOR THE AVERAGE HOMEOWNER, THIS MEANS ABOUT $155 MORE EVERY MONTH. IF YOU INCLUDE TAXES HERE, COUNTY TAXES, SCHOOL DISTRICT, ESD, FIRE, COMMUNITY COLLEGE, AND RISING UTILITY FEES, THAT'S ABOUT $1,863 A YEAR OF INCREASE. THAT'S NOT ABSTRACT. IT'S MY GROCERIES. IT'S MY MORTGAGE. IT'S GAS. GETTING TO WORK. AND WITH THE POPULATION GROWTH AT ABOUT 8% ANNUALLY, I THINK THAT'S THE AVERAGE. AND TAX LEVIES EXPLODING TO APPROXIMATELY 32%. IT IS EVIDENT THAT WE DON'T HAVE A REVENUE PROBLEM. WE HAVE A SPENDING PROBLEM. BUDGETS ARE ABOUT PRIORITIES. AND I URGE YOU TO REJECT THIS RATE AND SHOW DISCIPLINE, BECAUSE WITHOUT IT, YOU'RE LEAVING ME HOLDING THE BAG. THANKS. THANK YOU. IS THERE ANYONE ELSE WHO WISHES TO COME FORWARD AND SPEAK ON THE TAX RATE? ALL RIGHT. SEEING NONE, I'M GOING TO CLOSE THE PUBLIC HEARING. PUBLIC HEARING IS NOW CLOSED.

[36) (First Reading) Consider approval of an ordinance adopting the annual budget totaling $603,537,633 and as amended by City Council, for all city funds for the ensuing fiscal year beginning October 1, 2025 and ending September 30, 2026; appropriating revenue and expenditure amounts thereof for all city funds, authorizing rate increase for water and wastewater service rates, increase in storm drainage fees, increase for solid waste service charges, all other fees and charges for various city services as provided for in the fee schedule, capital improvement plan expenditures, addition of 24.0 new full-time positions, and for the carryover of encumbrances, all associated schedules and documents; and repealing all ordinances in conflict herewith; and providing for an effective date. A copy of the proposed budget is available for public inspection at: https://www.cityofkyle.com/media/72286. (RELATED AGENDA ITEM 3 OF 5 & ROLL CALL VOTE REQUESTED)]

ALL RIGHT. NEXT UP IS AGENDA ITEM 36. FIRST READING. CONSIDER APPROVAL OF AN ORDINANCE ADOPTING THE ANNUAL BUDGET TOTALING $603,537,633 AND AS AMENDED BY CITY COUNCIL FOR ALL CITY FUNDS FOR THE ENSUING FISCAL YEAR BEGINNING OCTOBER 1ST, 2025 AND ENDING SEPTEMBER 30TH, 2026. APPROPRIATING REVENUE AND EXPENDITURE AMOUNTS THEREOF FOR ALL CITY FUNDS. AUTHORIZING RATE INCREASE FOR WATER AND WASTEWATER SERVICE RATES.

INCREASE IN STORM DRAINAGE FEES. INCREASE FOR SOLID WASTE SERVICE CHARGES. ALL OTHER FEES

[02:35:04]

AND CHARGES FOR VARIOUS CITY SERVICES AS PROVIDED FOR IN THE FEE SCHEDULE. CAPITAL IMPROVEMENT PLAN EXPENDITURES. ADDITION OF 24 NEW FULL TIME EQUIVALENT POSITIONS, AND FOR THE CARRYOVER OF ENCUMBRANCES, ALL ASSOCIATED SCHEDULES AND DOCUMENTS, AND REPEALING ALL ORDINANCES AND CONFLICT HEREWITH AND PROVIDING FOR AN EFFECTIVE DATE. A COPY OF THE PROPOSED BUDGET IS AVAILABLE FOR PUBLIC INSPECTION AT CITY OF. QUALCOMM. 72286. RELATED AGENDA ITEM THREE OF FIVE FIVE AND ROLL CALL VOTE REQUESTED. MR. MOHIT MAYOR AND COUNCIL.

FOR THE RECORD, I'M PERVEZ MAHI, CITY'S DIRECTOR OF FINANCE. SO UNDER THIS AGENDA ITEM, THE CITY COUNCIL IS POSTED TO CONSIDER ON FIRST READING THE BUDGET ORDINANCE TO ADOPT THE CITY'S OPERATING AND CAPITAL BUDGET FOR FISCAL YEAR 2526. THE FIRST OF TWO PUBLIC HEARINGS SCHEDULED ON THE CITY'S PROPOSED BUDGET FOR FISCAL YEAR 2526 WAS HELD EARLIER TODAY ON THIS COUNCIL MEETING AGENDA. VERY BRIEFLY, THE HIGHLIGHTS OF THE PROPOSED BUDGET FOR FISCAL YEAR 2526 INCLUDES 603.5 MILLION TOTAL PROPOSED BUDGET FOR ALL CITY FUNDS, 460.4 MILLION IN PLANNED CIP SPENDING FOR FISCAL YEAR 2526, $1.3 BILLION IN FIVE YEAR CIP SPENDING PLAN, 24 NEW POSITIONS. PROPOSED PROPERTY TAX RATE OF 5957 PER $100. RATE INCREASE FOR WATER AND WASTEWATER SERVICES IN 2526. VARIES FOR INSIDE CITY AND OUTSIDE CITY CUSTOMER CLASSES. COST OF SERVICE STUDY DETAILS HAVE BEEN PROVIDED ON THE CITY'S WEB PAGE. THERE ARE NO STORM DRAINAGE FEE INCREASES ANYMORE IN THE PROPOSED BUDGET.

2.5% INCREASE IN SOLID WASTE SERVICE RATES PER CONTRACT. TERMS WITH TEXAS DISPOSAL. AND THEN, OF COURSE, ALL THE DETAILED BUDGET DOCUMENTS ARE AVAILABLE ON THE CITY'S WEB PAGE. SPECIAL NOTES FOR COUNCIL FOR TONIGHT. BEFORE YOU MOVE ON, THE MAIN MOTION DURING THE EARLIER COUNCIL MEETINGS AND BUDGET WORKSHOP DISCUSSIONS, COUNCIL HAD INQUIRED ABOUT TWO ITEMS AS TO WHAT AMOUNT WAS INCLUDED IN THE PROPOSED BUDGET. ONE WAS FOR HAYS COUNTY FOOD BANK AND THE OTHER ONE WAS FOR HAYS CALDWELL WOMEN'S CENTER. $15,000 IS INCLUDED IN THE BUDGET FOR HAYS COUNTY FOOD BANK, AND IF COUNCIL WISHES TO ADJUST THIS AMOUNT, A MOTION TO AMEND THE PROPOSED BUDGET BY THAT SPECIFIC AMOUNT IS RECOMMENDED, THEN, FOR THE HAYS CALDWELL WOMEN'S CENTER. THE PROPOSED BUDGET INCLUDES $15,000. HERE AGAIN, TO ADJUST THIS AMOUNT, A MOTION TO AMEND THE PROPOSED BUDGET BY A SPECIFIC AMOUNT IS RECOMMENDED BY STAFF. AND THEN FINALLY FOR THE MAIN MOTION, MAYOR AND COUNCIL A ROLL CALL VOTE IS REQUESTED. AND THAT CONCLUDES MY PRESENTATION. ALL RIGHT. THANK YOU. DOES ANYBODY HAVE ANY PARTICULAR ITEMS THAT THEY WISH TO ZERO IN ON WITH THE BUDGET? I THINK THIS IS OUR FOURTH MEETING ON IT. THIRD MEETING ON IT. SO WE'VE WE'VE BEEN HERE FOR A WHILE. SO.

CUSTOMER TOBIAS. YES. IF I COULD JUST GET A CLARIFICATION ON THE 2.5% INCREASE ON THE SOLID WASTE CONTRACT. SO THE CITY OF KYLE HAS A CONTRACT WITH TEXAS DISPOSAL SYSTEMS FOR PROVIDING SOLID WASTE SERVICES, WHICH INCLUDES TRASH PICKUP. RECYCLE. AND IN THAT AGREEMENT, THERE'S A DEFINED COST ADJUSTMENT FOR TDS THAT THE CITY HAS AGREED TO FOR NEXT FISCAL YEAR. THE CONTRACT REQUIRES THAT THE CITY ADJUST THEIR RATES BY 2.5%, SO THE TRASH RATES WILL GO UP BY 2.5% BASED ON THAT CONTRACT THAT WE ENTERED INTO WITH TDS. ALL RIGHT. ANYONE ELSE? COUNCILMEMBER ZUNIGA, COUNCIL MEMBERS, IN LIGHT OF A LOT OF OF WHAT WE'VE HEARD TONIGHT, YOU KNOW, OUR RESIDENTS WILL BE STRUGGLING THIS YEAR WITH A LOT OF INCREASING FEES AND RATES IN OUR BUDGET. SO I THINK THAT WE COULD DO A LITTLE BIT BETTER PLANNING AND MAYBE SUPPORT THE WOMEN'S SHELTER AND FOOD BANK BY $20,000 EACH. SO THAT'S

[02:40:05]

GOING UP FROM 15 TO EXTRA FIVE, BECAUSE AS WE HEARD, THERE'S A LOT MORE INFLATION TACKLING THE DOLLARS. SO DID YOU SAY TO INCREASE, INCREASE, INCREASE THEM TO 22, 22 2015. EACH ONE IS 15. DOES ANYBODY HAVE ANY THOUGHTS ON THAT PROPOSAL. JUST. I MEAN, I'M PERFECTLY OKAY WITH IT. AS LONG AS WE GOT ROOM IN THE BUDGET TO BRING IT UP, I'D BE OKAY WITH IT. I KNOW BOTH COULD REALLY BENEFIT FROM IT. I JUST I WILL POINT OUT I, PERVEZ, HAS BEEN AROUND LONG ENOUGH TO HEAR WHEN I WAS THE MEAN GUY AND VOTED AGAINST THE INITIAL PROPOSALS THAT WERE FOR THIS, BECAUSE THAT EVERYTHING HAS A TRADE OFF. SO WE'RE TAKING MONEY FROM TAXPAYERS IN ORDER TO PROVIDE IT TO A NONPROFIT. AND SO IT WAS BROUGHT UP ABOUT THE EARLIER SHE'S NOT IN HERE TO HEAR THAT, BUT ABOUT HOW THAT ORGANIZATION IS HAS INCREASED DEMANDS. AND HERE WE ARE USING TAXPAYER DOLLARS TO SUPPORT IT. AND SO THERE'S AN IRONY TO THAT. AND THERE'S ALSO, YOU KNOW, A TRADE OFF. SO I AM HAPPY TO SUPPORT THAT. NOW I'VE COME AROUND TO THOSE PARTICULAR ORGANIZATIONS. I DO THINK THEY BOTH SERVE EXTREMELY BROAD AND VERY IMPORTANT COMMUNITY NEEDS THAT THAT OUR PARTNERSHIP HELPS. AND THEN ALSO OTHER JURISDICTIONS HAVE HELPED TO SUPPORT THEM AS WELL. THEY'VE BEEN THERE, BUT BOTH AND THE FOOD BANK IN PARTICULAR HAVE BEEN THERE JUST MIGHTILY IN THE IN THE MIDST OF OUR MOST PRESSING TIMES AND HELPING US TO SERVE FOOD, TO NOT JUST THE UNHOUSED, BUT TO LITERALLY THOUSANDS WHO HAD LOST THEIR JOBS. AND SO IT'S AN IMPORTANT RESOURCE THAT I'M HAPPY TO SUPPORT THAT AS WELL. ARE YOU COMFORTABLE WITH THE NUMBER THAT WAS PROPOSED? I WOULD LIKE TO POINT OUT THAT THAT IS A $10,000 DECREASE FROM WHAT THE HAYS CALDWELL WOMEN'S CENTER GOT LAST YEAR. IS THAT WHAT YOU WANT TO DO? WELL, I WANT TO MAKE SURE WE'RE CLEAR IN THE CURRENT BUDGET, IT'S $15,000.

THIS IS AN ADDITIONAL 15 TO TAKE IT TO 30. IS THAT CORRECT? PROPOSED. NO. WE HAVE A TOTAL OF 15,015 TOTAL OKAY. FOR EACH. BUT LAST YEAR IT WAS 30. IT WAS 15 INITIALLY AND THEN CAME BACK AND ASKED FOR ANOTHER 15. RIGHT. BUT THEN IT WASN'T PROPOSED IT BACK AT THE ORIGINAL AMOUNT.

CORRECT? YES. SO WE'RE PROPOSING TO INCREASE IT. AND THEN DO WE WANT THIS TO BE THE NEW STANDARD OR, OR WE WANT TO MAKE IS WE WANT TO GIVE DIRECTION HERE IN THE MIDDLE OF THIS TO SAY THIS IS WHERE WE WANT THE NEXT YEAR'S PROPOSAL. SO BRIAN CAN HAVE THAT CLEAR DIRECTION. I MEAN, IF THERE'S SUPPORT FOR IT, I'D RATHER JUST DO THE 30 THAT WE HAD TALKED ABOUT A COUPLE OF MONTHS AGO WHEN WE HAD VOTED, I THINK SEVEN ZERO TO INCREASE IT TO BY $15,000. WHY DO WE DECREASE IT? IT WASN'T DECREASED. IT WAS JUST THE ORIGINAL BUDGET ALLOTMENT WAS THE ORIGINAL ASK WAS 15 K OKAY. BUT THEN I CAME BACK AND ASKED FOR 15,000 MORE FOR EACH ONE A COUPLE OF MONTHS AGO, MAYBE EARLIER IN THE YEAR. JUST JUST FOR HWC. YEAH. AND WE APPROVED THAT. BUT THEN IT IT JUST WASN'T SOLIDIFIED IN THE BUDGET AT THAT 30 K RATE. THAT WASN'T PART OF THE MOTION. SO I MEAN THAT'S MY BAD FOR NOT DOING THAT BACK IN BACK THEN.

BUT THAT'S WHY WE'RE BACK AT 15. AND I THINK TO BE FAIR, TAKING OF 20 AND TAKING IT TO THE FOOD BANK, IT WOULD DISTRIBUTE IT EVENLY AND THAT WOULD BE THAT TEN THERE THE NEW STANDARD.

OKAY, OKAY. EVERYTHING HERE REQUIRES MOTION. SECOND AND VOTE IN ORDER TO MAKE AN AMENDMENT. SO SO BUT IT IS IN THE BUDGET FOR THAT ADDITIONAL 5000 NOT CURRENTLY IN THE BUDGET. BOTH BOTH ORGANIZATIONS ARE BUDGETED FOR 15,000 TO GO FOR EACH UP BY FIVE TO BE 20,000. WE'LL HAVE TO MAKE A MOTION TO ADD 5000 IN THE BUDGET FOR BOTH. MAYOR, I'D LIKE TO MAKE A MOTION TO INCREASE THE 2020 BUDGET FOR HAYS COUNTY FOOD BANK AND HAYS CALDWELL WOMEN'S CENTER TO $30,000 EACH, RESPECTIVELY. WHAT SECOND? ALL RIGHT. MOTION BY MAYOR PRO TEM, SECONDED BY COUNCIL MEMBER MCKINNEY, THAT WE INCREASE THE AMOUNT BY 15,000 EACH TO HAVE A TOTAL OF 30,000 FOR BOTH THE FOOD BANK AND THE WOMEN'S CENTER? IS THERE A DISCUSSION ON THAT MOTION? SO A TOTAL OF 60. PEREZ. DO WE HAVE ROOM FOR THAT IN THE BUDGET, OR ARE WE GOING TO HAVE TO TAKE FROM SOMETHING. WE HAVE SOME ROOM IN THE FUND BALANCE.

THIS WOULD COME OUT FROM THE ESTIMATED FUND BALANCE OF THE GENERAL FUND. DOES ANYBODY GET

[02:45:05]

THEIR SPEAKER ON? COULD THEY TURN THEM OFF? PLEASE GET A LOT OF FEEDBACK. WE'RE NOT TALKING.

PLEASE TURN OFF YOUR SPEAKERS. WHAT DO YOU CALL IT? PEREZ. LOOK, HONESTLY, I THINK IT'S A GREAT MOTION. THESE ARE. I DON'T LOOK AT THEM AS CHARITY. I LOOK AT THESE PEOPLE THAT ARE COMING IN AND PROVIDING THE SERVICE WHEN IT COMES TO THE BATTERED WOMEN IN OUR IN OUR COMMUNITY, THAT'S REALLY IMPORTANT TO MAKE SURE THAT THEY HAVE A SAFE PLACE TO GO. I MEAN, IT'S IT'S IMPORTANT. AND SEEING THE INCREASE IN THE LINES IS REALLY GIVING ME SOME CONCERNS, ESPECIALLY WITH LESS FEDERAL FUNDING AVAILABLE. A LOT OF THOSE PROGRAMS ARE BEING CUT AT THE FEDERAL LEVEL. SO I KNOW THAT THE FOOD BANKS AROUND THE COUNTRY ARE GOING TO BE STRUGGLING. SO I THINK IT'S IMPORTANT TO FUND THESE PLACES BECAUSE THEY PROVIDE A SERVICE FOR OUR COMMUNITY. ALL RIGHT. ANY ADDITIONAL DISCUSSION? ALL THOSE IN FAVOR SAY AYE. AYE.

ALL OPPOSED. ALL RIGHT. MOTION CARRIES 7 TO 0. MAYOR. NO, WE DON'T NEED TO AVOID ANY CONFUSION. THE CURRENT PROPOSED BUDGET INCLUDES IN THE FEE SCHEDULE, THE INCREASED STORM DRAINAGE RATE. I WOULD REQUEST A MOTION TO REMOVE THAT. OKAY. CAN YOU GIVE ME THE MOTION LANGUAGE ON THAT? ALL RIGHT. I'D LIKE TO MAKE A MOTION TO AMEND THE PROPOSED BUDGET TO REFLECT THE ACTION THAT COUNCIL TOOK EARLIER TO LEAVE OUR STORMWATER FEES AND THE PROCESS OF CALCULATING THOSE FEES. THE SAME SECOND MOTION BY MAYOR, SECONDED BY COUNCILMEMBER HARRIS. IS THERE A DISCUSSION ON THE MOTION? ALL THOSE IN FAVOR SAY AYE. AYE. ALL OPPOSED.

MOTION CARRIES FIVE 7 TO 0. ALL RIGHT. ANY ANY OTHER ITEMS? ANY OTHER REQUESTS? THE ONLY THING I JUST HAD A COUPLE COMMENTS THAT I WANTED TO MAKE ON THE BUDGET. AND IT HAS TO DO A LOT WITH, YOU KNOW, JUST THE COMMENTARY THAT I HEARD TONIGHT AND I, YOU KNOW, THE QUESTION IS, DOES THE CITY COUNCIL, IS THE CITY COUNCIL FAILING BY INCREASING THE TAX RATE AND INCREASING THE BUDGET? AND IF YOU ASKED THREE AND A HALF OUT OF TEN PEOPLE, THE ANSWER WOULD BE YES, BECAUSE WE PROPOSED $300 MILLION IN ROAD BOND PROJECTS IN 2022, YOU KNOW, AND AT THE SAME YEAR, IN THE SAME MONTH, WE PROPOSED 65,000 IN REDUCTION IN PROPERTY TAXES IN THE FORM OF A HOMESTEAD EXEMPTION. THAT WAS ALSO A UNANIMOUS VOTE OF COUNCIL. THAT WAS ALSO THAT WAS VERY PLEASANTLY RECEIVED. BUT THE TRUTH IS, IF YOU ASK THE VOTERS, WHAT IS MORE IMPORTANT TO THEM, WHAT IS THE MOST IMPORTANT THING TO THEM THAT THEY WANT US TO SPEND OUR MONEY ON AND TO SPEND IT NOW THEY WILL SAY TO IMPROVE OUR ROAD INFRASTRUCTURE AND THE THE VOTERS WILL REFLECTED THAT. THAT WAS THE EASY VOTE. THIS IS THE HARD VOTE. THIS IS THE VOTE THAT CONSUMMATES THAT. AND IT IS IT IS TO BE NOTED THAT THE TAX RATE COULD HAVE BEEN LOWER, EXCEPT FOR THE FACT THAT THE CITY COUNCIL CHOSE TO DEFIES 4 MILLION EXTRA DOLLARS IN DEBT IN ORDER TO BUILD UP THE CAPACITY NEEDED TO PROVIDE ALL $294 MILLION IN ROAD BONDS WITHOUT INCREASING THE TAX RATE ABOVE THE VOTER APPROVED RATE.

AND SO WHEN YOU PUT ALL OF THOSE THINGS TOGETHER, YOU KNOW, I, I WOULD SAY I WHAT I WOULD SAY IS, WHEN IT COMES TO WHEN I ASK AND TALK TO THE AVERAGE RESIDENT, NOT JUST THE PEOPLE HERE, BUT THE AVERAGE RESIDENT, WHAT IS THE MOST IMPORTANT THING TO THEM? 100 TO 1 WILL SAY, FIX OUR ROADS, 100 TO 1, ONE OUT OF 100 WILL SAY CITY TAXES ARE TOO HIGH. AND THAT IS JUST THE TRUTH. THAT'S THE NATURE OF THE REALITY OF THE POLITICAL ENVIRONMENT THAT WE FACE. AND SO THAT'S THE PROPOSAL THAT WE MADE VERY TRANSPARENTLY TO THE VOTERS.

AND THE VOTERS APPROVED THAT OVERWHELMINGLY BY A 2 TO 1 MARGIN. AND SO THIS VOTE AND THIS BUDGET DOES REFLECT THE COMMITMENT THAT WE MADE AND THE AGREEMENT THAT WE SIGNED, NOT UP HERE BY OURSELVES, BUT WITH THE VOTERS. 2022 WAS A MASSIVE ELECTION. 15,000 PEOPLE VOTED.

SOMETHING LIKE THAT, MAYBE A LITTLE LESS, I'M NOT SURE. BUT IT WAS A LOT. A LOT OF PEOPLE VOTED. A LOT OF KYLE RESIDENTS HAD A SAY IN WHETHER OR NOT THEY WANTED US TO GO INTO MORE DEBT IN ORDER TO FIX THE ROADS THAT HAVE BEEN NEGLECTED. AND THE THING THE THING IS, HISTORICALLY, THE WAY THAT THE WAY THAT THIS WORKS, AND I'VE BEEN AROUND LONG ENOUGH TO SEE IT, THERE'S ALWAYS A TRAIL. THERE'S A DECISION THAT'S MADE BY A COUNCIL THAT FEELS GOOD.

AND THEN IN THE FUTURE, THE FUTURE COUNCIL HAS A VERY HARD DECISION TO MAKE IN ORDER TO RECTIFY THAT EASY DECISION. AND THAT'S WHAT TOOK PLACE RIGHT BEFORE I WAS ON COUNCIL, WHEN THE VOTERS APPROVED IN 2013 A ROAD BOND PACKAGE. AND AT THE TIME ROADS WERE MUCH CHEAPER AND THE PROPOSAL WAS SMALLER, BUT THERE WAS STILL A LARGE TAX RATE INCREASE PROPOSED AND THE

[02:50:06]

THEY DECIDED TO BUILD IT WAS OVERWHELMINGLY APPROVED. BUT THE CITY COUNCIL, EVEN THOUGH IT WAS APPROVED, SAID, WE'RE GOING TO DESIGN AND BUILD THESE ROADS ONE AT A TIME. AND AS A RESULT, WHEN I WAS ELECTED, WE HAD BASICALLY DONE ONE ROAD AND WE HAD 7 OR 8 MORE THAT THE VOTERS HAD BEEN BEGGING US AT A VERY LARGE RATE, JUST AS INTENSE AS WHAT WE HAVE HERE TONIGHT TO FIX. AND WE ENDED UP BEING FAR BEHIND ON THOSE PROJECTS. WE STILL HAD TO RAISE TAXES, BUT AT THE SAME TIME, THE THE WE WENT OVER BUDGET BECAUSE WE WAITED SO LONG THAT THE COST OF THE ROADS WENT UP. AND AS A RESULT, LEEMAN ROAD ON THE EAST SIDE HAS ONE LESS LANE THAN IT WAS SUPPOSED TO HAVE. THAT'S THE CONSEQUENCE. EVERYTHING YOU DO IN LOCAL GOVERNMENT HAS A TRADE OFF, SO THREE AND A HALF OUT OF TEN PEOPLE HAVE A RIGHT TO SAY THAT'S NOT WHAT I VOTED FOR. THAT'S NOT WHAT I WANT YOU TO DO. I WILL NOT VOTE FOR YOU IN THE UPCOMING ELECTION IF IT'S THE MOST IMPORTANT ISSUE TO THEM. BUT SIX AND A HALF OUT OF TEN WOULD SAY, ACCORDING TO THE BEST POLL THAT WE EVER TOOK ON SUCH A MATTER, THAT THEY WANT US TO CONTINUE TO MOVE FORWARD. AND SO WHILE I'VE BEEN AN ADVOCATE FOR FISCAL RESTRAINT FOR A VERY LONG TIME, YOU KNOW, I TOOK A VOTE TO SEND THIS TO THE VOTERS AND ENTERED INTO A CONTRACT WITH THEM. AND THEY SAID, OVERWHELMINGLY, FIX OUR ROADS. AND SO I DO. I ALSO AT THE SAME TIME TALK TO THE COUNCIL FOR A VERY LONG TIME ABOUT IF WE DO THIS, IF THE VOTERS SAY YES, THE BILL DOESN'T COME DUE THIS YEAR, IT DOESN'T COME DUE NEXT YEAR, IT COMES TO DO IN THE FOLLOWING YEAR AFTER THAT. AND WE ARE HERE AT THAT POINT. BUT THERE'S SOMETHING TO BE PROUD OF. THIS IS THE SIDE OF THE VOTE. THAT'S HARD BECAUSE WE'RE TALKING ABOUT A BUDGET AND WE'RE TALKING ABOUT AN INCREASED TAX RATE. ON THE OTHER SIDE OF THAT, WE HAVE DEVELOPED 20 SOMETHING MILES OF ROAD IMPROVEMENTS, AND I DON'T KNOW HOW MANY OF ACTUAL ROAD RECONSTRUCTION AND NEW AND NEW PATHWAYS IN THE CITY, PROJECTS THAT ARE BREAKING GROUND AND ARE GOING TO MAKE A HUGE IMPACT ON THE RESIDENTS LIVES, NEW PATHWAYS, SMOOTHER ROADS. I WOULD BE VERY HAPPY TO NOT SEE REPORTS OF BUSSES FALLING INTO POTHOLES ANYWHERE NEAR THE CITY OF KYLE, OR NO SHOULDERS, NO MEDIANS, NO SIDEWALKS, TREACHEROUS CONDITIONS, GETTING TO SCHOOL, THOSE KIND OF SITUATIONS. YOU KNOW, THERE'S A THERE'S A TRADE OFF WHERE THE THE BUDGET THAT WE ARE VOTING FOR HERE IS NOT ONLY AN INCREASE IN SERVICES OR COSTS, BUT IT IS ALSO AN INCREASE IN SERVICES MEASURABLY, DEMONSTRATIVELY. SO I THANK YOU FOR LETTING ME SAY THAT THIS IS MY EIGHTH BUDGET TO VOTE FOR. I VOTED FOR ALL OF THEM. AND SO WHATEVER IS, YOU KNOW, COMES I'M, YOU KNOW, I'VE, I'VE PUT MY PUT MY VOTE ON EVERY SINGLE ONE. I STAND BEHIND THEM. THE FIRST VOTE, THE FIRST BUDGET WAS $78 MILLION. SO WE'VE COME A LONG WAY BETWEEN THAT VOTE AND THIS ONE. BUT THE CITY'S NEEDS HAVE ALSO COME A LONG WAY.

SO ANYWAY, THAT'S MY THAT'S MY TALK ON THE BUDGET. I'M HAPPY TO VOTE FOR IT. I'M HAPPY TO MAKE A MOTION. IF ANYBODY DOESN'T HAVE ANYTHING MORE, THEY WANT TO SAY, YEAH, I JUST WANT TO SAY ONE THING. AND I KIND OF ALLUDED TO THIS AT THE LAST MEETING, BUT THE THE ITEMS, THE BUDGET INCREASE REQUESTS FOR THE DRONE PROGRAM IS, IS SOMETHING THAT I DO NOT SUPPORT UNTIL WE HAVE A FUNCTIONAL POLICY AROUND DATA RETENTION IN PLACE, WHICH WE ARE WORKING ON.

SO I KNOW THAT IT IS COMING. I WOULD JUST PREFER THAT WE DIDN'T VOTE TO INCREASE THE THE BUDGET FOR THOSE ITEMS UNTIL WE ACTUALLY HAVE THAT POLICY DONE, IS THE BUDGET INCREASE THAT'S PROPOSED BASED ON THE GRANT FUNDING WE INTEND TO RECEIVE. FOR ONE. SO WE HAVE TWO DRONES THAT ARE PROPOSED. ONE IS GRANT FUNDED AND ONE IS FUNDED OUT OF THIS, THIS BUDGET. RIGHT. BUT BUT THAT WAS IN THE ORIGINAL PROPOSAL, THE ONE THE GRANT FUNDING ADDED. ANOTHER SECOND ONE. YES. BUT DID THAT CHANGE IN THIS BUDGET. WE GET THAT IN AS THE ORIGINAL BUDGET HAS $150,000 FOR THE FIRST DRONE. THE GRANT FUNDING WILL NEED TO BE APPROPRIATED. SO IF WE ARE GOING TO REMOVE THE DRONE PROGRAM OR PUT IT ON SUSPENSE, THEN THERE OUGHT TO BE. I WOULD RECOMMEND A MOTION TO SET ASIDE $150,000 IN GENERAL FUND AND THE GRANT FUND SET ASIDE FOR WHATEVER DURATION YOU WANT THE CHIEF TO COME BACK, OR THE CITY MANAGER TO COME BACK WITH A POLICY. BUT IF THE CHIEF WISHES TO BRING FORWARD THE PURCHASE OF THE DRONES, WE STILL VOTE ON

[02:55:02]

IT AT THAT POINT IN TIME. YES, YES, YES. BUT THE BUDGET, THE BUDGET INCLUDES THE FUNDING FOR BOTH. YES. I BELIEVE THAT WAS THE QUESTION YOU HAD. IT HAS BOTH THE GRANT FUNDED AND THE GENERAL FUND FUNDED. SO HOW DID THAT CHANGE? BECAUSE THE FIRST BUDGET THAT WAS PROPOSED FROM THAT POINT, I THOUGHT IT COULDN'T CHANGE WITHOUT AN AMENDMENT. SO THE GRANT APPLICATION COUNCIL AUTHORIZED AT THAT TIME, WHEN THE CHIEF WAS APPLYING FOR IT, HE WAS GRANTED FULL AUTHORIZATION TO ACCEPT WHEN THAT GRANT WAS APPROVED. BUT THAT CHANGED OUR BUDGET. THE APPROPRIATION. NO. SO THE CURRENT PROPOSED BUDGET, AS IT IS NOW THAT YOU'RE ABOUT TO VOTE ON, HAS ONLY $150,000 IN GENERAL FUND DOLLARS FOR ONE DRONE. THE GRANT FUNDED DRONE IS NOT IN THE PROPOSED BUDGET BECAUSE WE DID NOT KNOW AT THE TIME WHEN THE BUDGET WAS PUT TOGETHER. OKAY, SO THAT'S I HEAR Y'ALL SAYING TO EXACTLY OPPOSITE THINGS. YEAH, I THINK MAYBE I'VE CONFUSED IT, BUT THE THE ITEM WOULD NEED TO COME BACK FOR THE 150,000 FOR THE GRANTS. IS THAT CORRECT? YES. WE'LL HAVE TO AMEND THE BUDGET. OKAY. SO SO THAT MEANS THAT THIS BUDGET DOES NOT INCLUDE THE INCREASE IS WHAT I'M IS WHAT I'M HEARING IS THE 50,000 FOR FOR GENERAL FUND FUNDING. THAT'S IN THE BUDGET NOT THE GRANT. THE ONE DRONE IS IN THE BUDGET. SO IF THIS THIS BUDGET IS APPROVED AS IS, YOU ARE APPROVING ONE DRONE FOR THE PD DEPARTMENT THAT IS FUNDED FROM GENERAL FUND. OKAY. COUNCILOR HARRIS, WELL, TO ADDRESS COUNCIL MEMBER HEISER'S QUESTION, I BELIEVE THAT OUR MOTION ON THE DRONES WAS THAT THEY WOULD NOT BE PURCHASED UNTIL THE GUIDELINES WERE APPROVED, THAT THAT THE PURCHASE WAS ON HOLD, BUT I DON'T YOU DON'T THINK THAT'S I DON'T THINK THAT'S WHAT HAPPENED. NO, I DON'T THINK THAT'S WHAT HAPPENED. MAYOR, IF I COULD. YEAH. I'M NOT GOOD WITH HOLDING OFF ON THIS. I THINK WHAT WE SHOULD DO IS MOVE FORWARD WITH THE DRONES, BUT MAKE SURE THAT THEY'RE NOT OPERATIONAL UNTIL WE HAVE THE GUIDELINES. SET THE PARAMETERS.

SO WHEN WE HAVE THAT COME IN, BECAUSE I'M WORRIED ABOUT THE FUNDING GOING AWAY AND THEN NOT BEING ABLE TO BUY THE DRONES LATER. SO AND THEN COST INCREASES I MEAN SO I'M THINKING ABOUT PUBLIC SAFETY AND THAT'S SOMETHING THAT'S GOING TO ALWAYS TRUMP WITH ME IS PUBLIC SAFETY MAKING SURE THAT WE ARE KEEPING OUR COMMUNITY SAFE, KEEPING OUR OFFICERS SAFE IS IMPORTANT AS WELL. SO I WOULD BE OKAY WITH MOVING FORWARD WITH THE DRONES, BUT MAKING SURE WE DON'T THE DRONES AREN'T OPERATIONAL UNTIL WE HAVE A POLICY BEHIND THEM, MAKING SURE THAT WE ARE COMFORTABLE WITH THE POLICY AS WELL. SO MAYOR AND COUNCIL, I WOULD RECOMMEND THAT THERE BE A BUDGET AMENDMENT TO INCLUDE THE SECOND DRONE, WHICH IS GRANT FUNDED, BUT WITH THE DIRECTION THAT THE PURCHASES WILL BE ON HOLD UNTIL THE POLICY IS APPROVED BY COUNCIL. AND IF I COULD JUST ADD A LITTLE FURTHER CLARIFICATION, WE DID GET THAT DIRECTION ABOUT THE DATA POLICY THAT IS IN PROCESS. WE EXPECT TO BE ABLE TO BRING BACK A DISCUSSION ON THAT IN OCTOBER. SO COUNCIL WILL HAVE THAT DISCUSSION. AND IF THAT'S THE DIRECTION, AS PERVEZ MENTIONED, TO PROCEED BUT NOT PURCHASE UNTIL THAT DATA POLICY IS IN PLACE. AND WE WE CERTAINLY CAN DO THAT. THOSE WOULD BE PROCUREMENT ITEMS THAT WOULD HAVE TO COME BACK TO THE COUNCIL FOR APPROVAL ANYWAY. COUNCILMEMBER ZUNIGA YEAH, I JUST HAVE TO AGREE WITH COUNCIL MEMBER RIZZO. I WOULDN'T. I THINK THAT HAVING DRONE TECHNOLOGY, IT IS INNOVATION FOR OUR DEPARTMENT, AND I WOULDN'T WANT TO COMPROMISE PUBLIC SAFETY. SO THAT DECISION SHOULD BE MADE BY LIKE THE RECOMMENDATION BY OUR PD. YOU KNOW, IF THEY'VE REQUESTED THAT IN THEIR BUDGET, THEY LOOKED AT IT. AND WE NEED TO FIND WAYS TO, YOU KNOW, REDUCE CRIME AND LOOK AT HAZARDS. AND THOSE DRONES GIVE EYES IN THE SKY OF, YOU KNOW, THINGS THAT WE NEED TO FIND. SO I'M I WOULD SUPPORT PUTTING THAT IN THE BUDGET. NO ONE'S DISPUTING THE THE GOOD IT COULD DO FOR PUBLIC SAFETY. THAT'S NEVER BEEN IN QUESTION.

WHAT'S IN QUESTION IS, IS THE DATA POLICIES THAT SURROUND THE THESE TECHNOLOGIES THAT YOU'RE TALKING ABOUT. AND WHAT YOU JUST SAID IS, IS, IS THE SAME OUTCOME AS WHAT COUNCIL MEMBER RIZZO SAID. YOU JUST CHOSE TO SAY IT DIFFERENTLY. WELL, SO YOU DON'T REALLY YOU DON'T REALLY KNOW WHAT THE DATA POLICY IS AND HOW IT'S STORED. YEAH, WELL, IF HE'S SAYING, LET'S FUND THE BUDGET, BUT LET'S NOT USE THEM UNTIL WE HAVE A POLICY IN PLACE. AND YOU'RE SAYING LET'S AND I'M SAYING LET'S NOT FUND IT. AND THEN WHEN WE GET THE POLICY, THEN WE CAN CHOOSE TO FUND IT IF WE WANT. WHAT. HOW. I WOULDN'T ANY DIFFERENT. I WOULD NOT WANT TO PURCHASE SOMETHING THAT I'M NOT GOING TO USE. SO IF THEY'RE PURCHASED THEN THEY

[03:00:03]

NEED TO BE UTILIZED. THAT'S A TAXPAYER DOLLARS FOR WERE SPENT FOR. UNDERSTOOD. WELL, THIS IS A BUDGET CONVERSATION. I UNDERSTAND THAT THERE'S DISAGREEMENT ON THAT PARTICULAR ITEM, BUT IT IS A VERY SMALL PERCENTAGE OF THE OVERALL BUDGET. AND SO WE CAN MAKE A MOTION AND A VOTE TO REMOVE IT AND SEE HOW THE CHIPS FALL, AND THEN DECIDE WHETHER OR NOT THAT PARTICULAR ITEM IS WORTH VOTING AGAINST. THE OVERALL BUDGET, WHICH IS VOTING AGAINST EVERYTHING. AND SO THAT HAS HAPPENED BEFORE ON THIS COUNCIL, WHERE THERE HAVE BEEN STATEMENTS MADE ONCE IT WAS OVER $50,000, TWO PEOPLE SAID THEY WEREN'T GOING TO SUPPORT THE BUDGET, OVER $50,000. AND SO WE ULTIMATELY HAD TO DECIDE WHETHER WE WERE WILLING TO ALLOW FOR A DIVIDED VOTE ON THE BUDGET. AND SO THERE'S DIFFERENT WAYS TO HANDLE THAT.

I PREFER FOR US TO HAVE A UNANIMOUS VOTE ON THE BUDGET, BUT I UNDERSTAND IF HERE AT THE END WE WANT TO VOTE AGAINST IT BASED ON VERY SMALL ITEM, THAT WE WILL GET TO VOTE AGAIN ON LATER. IS THERE ANY FURTHER DISCUSSION, OR WOULD YOU LIKE TO MAKE A MOTION TO REMOVE THAT ITEM SO THAT YOU CAN AT LEAST TAKE ONE VOTE ON THAT ONE, AND THEN VOTE ON THE BUDGET AS A WHOLE? NO, I MEAN, I'M GOING TO VOTE TO APPROVE THE BUDGET. I JUST WANT TO BE ON THE RECORD.

I DON'T I DON'T HAVE THE SUPPORT TO TO TABLE THIS. SO I'VE READ THE ROOM FOR MULTIPLE MULTIPLE MEETINGS NOW. AND I'M NOT JUST GOING TO MAKE YOU GUYS VOTE TO BE PERFORMATIVE. I'VE SAID I'VE SPOKEN MY PIECE ON THE OTHER SIDE. I WOULD VERY MUCH LIKE TO SEE THAT PROGRAM COME FORWARD SO THAT I GET A CHANCE TO VOTE ON IT BEFORE I LEAVE. LOOK, HONESTLY, I SHARE YOUR CONCERNS. I'M REALLY WORRIED ABOUT, YOU KNOW, BEING SURVEILLED ALL THE TIME. AND, YOU KNOW, IT'S FUNNY BEING SURVEILLED, YOU KNOW, BUT, YOU KNOW, I BECAUSE I FEEL IT SOMETIMES. BUT, YOU KNOW, THE BIGGEST THING IS THAT I REALLY I REALLY WANT TO MAKE SURE THAT WE HAVE A POLICY IN PLACE THAT'S GOING TO MAKE OUR DRONE PROGRAM PROBABLY THE STAPLE FOR CENTRAL TEXAS, RIGHT? MAYBE FOR THE REGION, IF WE CAN PUT A POLICY TOGETHER THAT WILL PROTECT OUR CITIZENS, EVERYDAY CITIZENS, BUT YET STILL HELP OUR LAW ENFORCEMENT, THAT WILL BE THE TESTAMENT FOR US. BUT WE CAN'T GET THERE UNLESS WE IMPLEMENT THAT POLICY. HOW DO WE CRAFT THAT POLICY? I'M HOPING THAT WE'RE WORKING ON THAT REALLY DILIGENTLY AND BRINGING IT FORWARD. I THINK WE'VE LED THE THE REGION IN A LOT OF THINGS OVER. 314 THE EMERGENCY MANAGEMENT COMMAND CENTER, WE'RE DOING A LOT OF THINGS HERE IN THE CITY THAT ARE SHOWING THE REGION THAT WE'RE LEADING EDGE. AND I THINK WITH OUR POLICY, WE CAN DO THAT AS WELL. WE CAN BE LEADING EDGE AND MAYBE BE THE MODEL FOR EVERYBODY ELSE AROUND US, BUT IT'S GOING TO TAKE US ALL WORKING TOGETHER TO GET THAT POLICY RIGHT AND MAKING SURE WE GET A LOT OF PUBLIC INPUT. SO THAT'S WHAT'S GOING TO BE IMPORTANT. THANK YOU. ALL RIGHT.

ANYONE ELSE ANY FURTHER THOUGHTS. SOMEONE NEEDS TO MAKE THE IF YOU GUYS ARE GOING TO FUND THE GRANT YOU HAVE, SOMEONE NEEDS TO MAKE THAT BUDGET AMENDMENT. WE WE APPROVED THE GRANT. THAT ITEM CAN COME BACK WITH THE DRONE PROGRAM. WE DON'T NEED TO TAKE A SEPARATE VOTE ON THE DRONE PROGRAM. WE CAN BRING BACK THE APPROPRIATION. WE CAN ALL COME, COME BACK. SO ANY FURTHER DISCUSSION? ALL RIGHT. I'D LIKE TO MAKE A MOTION TO APPROVE.

SECOND MOTION BY MAYOR, SECONDED BY COUNCILMEMBER MCKINNEY, THAT WE APPROVE THE BUDGET ON FIRST READING. IS THERE DISCUSSION ON THAT MOTION ROLL CALL VOTE? RESO I MCKINNEY, I ZUNIGA. YES. MITCHELL. YES, SIR. YES, TOBIAS. YES, MA'AM. HARRIS. YES. MOTION CARRIES 7 TO 0. ALL RIGHT. NEXT UP IS AGENDA ITEM NUMBER 38. FIRST READING. CONSIDER APPROVAL OF AN ORDINANCE RATIFYING THE PROPERTY TAX INCREASES OR INCREASE REFLECTED IN THE BUDGET FOR FISCAL YEAR 2025 2026. THAT WILL REQUIRE RAISING MORE REVENUE FROM PROPERTY TAXES THAN IN THE PRIOR FISCAL YEAR. MR. MOHIT, YOU WANT TO GO THROUGH IT AGAIN? YES. THERE ARE CERTAIN STATEMENTS I HAVE TO PUT ON RECORD. SO THE. GUYS, THIS IS THE WRONG ONE. ARE WE DOING 37? YEAH 37. YEP 38. I'M SORRY I JUMPED. OH ALL RIGHT. WHAT DID I SAY IN MY MOTION.

BECAUSE I WAS WRITING THE AMENDMENTS. SO WHEN I, WHEN I MOTIONED I LOOKED DOWN. SO I MOTIONED TO APPROVE I THINK I SAID JUST THE BUDGET. YES. CORRECT. THAT'S CORRECT. ALL RIGHT. SO I JUST READ THE WRONG ITEM 37. TO 37. ALL RIGHT. I'M GOING TO I'M GOING TO I'M SORRY

[37) (First Reading) Consider approval of an ordinance of the City of Kyle adopting the ad valorem tax rate (property tax rate) of $0.5957 per $100 of taxable assessed valuation for Tax Year 2025 (Fiscal Year 2025-26), which consists of a maintenance and operations (M&O) tax rate of $0.3212 per $100 of taxable assessed valuation and an interest and sinking fund tax rate of $0.2745 per $100 of taxable assessed valuation, each of which is separately approved; providing for the levy of ad valorem taxes for use and support of the municipal government of the City of Kyle for the Fiscal Year beginning October 1, 2025 and ending September 30, 2026; providing for apportioning each tax levy for specific purposes; and providing when ad valorem taxes shall become due and when same shall become delinquent if not paid. (RELATED AGENDA ITEM 4 OF 5 & ROLL CALL VOTE REQUESTED - 5 VOTES REQUIRED)]

[03:05:08]

IN ADDITION, A COMPLETE COPY OF THE PROPOSED BUDGET, INCLUDING PROPERTY TAX RATE CALCULATIONS

[03:10:01]

AND ALL ASSOCIATED DOCUMENTS, ARE AVAILABLE ON THE CITY'S WEB PAGE. THE STATE LAW REQUIRES THAT THE MOTION TO ADOPT THE PROPERTY TAX RATE MUST BE MADE IN A FORM, AS PRESCRIBED IN THE TEXAS TAX CODE. THE SPECIFIC WORDING FOR THE MOTION TO ADOPT THE TAX RATE HAS BEEN PLACED IN FRONT OF YOU. SO WHICHEVER ONE OF YOU WOULD LIKE TO MAKE THAT MOTION, MUST READ THOSE EXACT WORDS INTO THE RECORD. AND THEN FINALLY THE SPECIAL NOTES FOR COUNCIL. THE TAX RATE MUST BE ADOPTED BY FIVE. AFFIRMATIVE VOTE OF CITY COUNCIL. AND ON THE MAIN MOTION, WE REQUEST THAT A ROLL CALL VOTE BE MADE WITH THAT. THAT CONCLUDES MY PRESENTATION. ALL RIGHT. THANK YOU. ANY DISCUSSION ON THE TAX RATE? ALL RIGHT. I MOVE THAT THE PROPERTY TAX RATE BE INCREASED BY THE ADOPTION OF A TAX RATE OF 59, $0.57 PER $100, WHICH IS EFFECTIVELY A 21.94% INCREASE IN THE TAX RATE. SECOND MOTION BY MAYOR, SECOND BY MAYOR PRO TEM. IS THERE DISCUSSION ON THE MOTION? ROLL CALL. VOTE. MITCHELL. YES, SIR. YES. RIZZO. YES. HARRIS. YES.

TOBIAS. YES. MCKINNEY. YES. ZUNIGA. YES. ALL RIGHT. MOTION CARRIES 7 TO 0. OUR NEXT UP IS ON. WAS THE LANGUAGE READ? YES, SIR. PROPERLY. OKAY. ALL RIGHT. NEXT I WANT TO MAKE SURE IS

[38) (First Reading) Consider approval of an ordinance ratifying the property tax increase reflected in the budget for Fiscal Year 2025-26 that will require raising more revenue from property taxes than in the prior fiscal year. (RELATED AGENDA ITEM 5 OF 5 & ROLL CALL VOTE IS REQUESTED)]

AGENDA ITEM NUMBER 38. FIRST READING. CONSIDER APPROVAL OF AN ORDINANCE RATIFYING THE PROPERTY TAX INCREASE REFLECTED IN THE BUDGET FOR FISCAL YEAR 2526. THAT WILL REQUIRE RAISING MORE REVENUE FROM PROPERTY TAXES THAN IN THE PRIOR FISCAL YEAR. IT FEELS LIKE THE SAME VOTE. SO, MAYOR AND COUNCIL, THIS IS THE LAST BUDGET AND TAX RATE. RELATED ITEM 505. SO THE FISCAL YEAR 2526 BUDGET WILL REQUIRE RAISING MORE REVENUE FROM PROPERTY TAXES THAN IN THE PRIOR BUDGET FOR FISCAL YEAR 2425, THE TEXAS LOCAL GOVERNMENT CODE PROVIDES THAT WHEN ADOPTION OF A BUDGET REQUIRES RAISING MORE REVENUE FROM PROPERTY TAXES THAN IN THE PREVIOUS YEAR, A SEPARATE VOTE OF THE CITY COUNCIL MUST BE TAKEN TO RATIFY THE PROPERTY TAX INCREASE REFLECTED IN THE BUDGET. SO THE BUDGET VOTE THAT YOU ALL MADE AND THE TAX RATE THAT VOTE THAT Y'ALL MADE, YOU HAVE TO RATIFY THOSE. THE CITY COUNCIL VOTE UNDER THIS SUBSECTION IS IN ADDITION TO AND SEPARATE FROM THE VOTE TO ADOPT THE BUDGET OR A VOTE TO SET THE TAX RATE. DOES THIS REQUIRE SPECIFIC AGENDA, LANGUAGE OR MOTIONS? NO, SIR.

IS THERE ANY ANYTHING ELSE THAT YOU WERE REQUIRED TO VOTE OR REQUIRED TO SAY ROLL CALL? VOTE IS ALWAYS REQUESTED. MOTION TO APPROVE. SECOND MOTION BY MAYOR. SECOND BY COUNCILMEMBER RIZZO.

IS THERE DISCUSSION ON THE MOTION? ROLL CALL. VOTE. ZUNIGA. YES. HARRIS. YES. HEISER. YES.

TOBIAS. YES, MA'AM. MCKINNEY. YES. RIZZO. YES. MITCHELL. YES. ALL RIGHT. IT IS 1025. WE'RE GOING TO DO TEN MINUTE BREAK. WE'LL RECONVENE AT 1035 FOR STAFF ALL RIGHT, LET'S GET BACK TO IT. OKAY. YEAH, I'LL SEND YOU A CALENDAR INVITE. WE'LL JUST DO A TEAMS EXCEPT. FINE. YEAH. ALL RIGHT. WE ARE GOING TO BRING BACK UP. EXCUSE ME. AGENDA ITEM NUMBER 30. CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE CITY MANAGER. I'M SORRY. I'M

[VII) Items Pulled from Consent Agenda]

GOING TO CALL THIS MEETING BACK TO ORDER. WE'RE GOING TO CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND EXECUTE A CONTRACT WITH CRAFTSMAN, COMMERCIAL PLAYGROUNDS AND WATER PARKS FOR SPLASH PAD REPAIRS AT VERDE PARK IN AMOUNT OF $286,500, PLUS A 5% CONSTRUCTION CONTINGENCY FOR A TOTAL CONTRACT AMOUNT NOT TO EXCEED $300,825. EXCUSE ME. THROUGH THE BOARD PURCHASING COOPERATIVE PROGRAM, THIS IS MR. LEVY'S ITEM. MR. ZUNIGA, YOU PULLED THE ITEM. YOU HAVE THE FLOOR. HI, ROSIE. DAVID, I JUST HAVE A THREE PART QUESTION. I DON'T THINK I NEED TO GO. I LOOKED AT THE IMAGES THAT LOOKED LIKE WATER WAS DOWN THERE. SO WE'RE GOING TO REPLACE THE CORE PARTS, WHICH IS GOING TO SAVE US A LOT OF MONEY. IS IT GOING TO FUNCTION THE SAME. AND THEN WHERE ARE WE IN THE INSURANCE CLAIM? I GUESS FROM THE ORIGINAL MANUFACTURER.

THAT'S KIND OF THE FIRST TWO. AND THEN THE THIRD QUESTION IS DO WE HAVE LIKE A RISK ANALYSIS

[03:15:06]

OF A LOT OF THESE CRITICAL COMPONENTS AT THE SPLASH PADS HEROES MEMORIAL, WHERE WHERE THESE PARTS COULD FAIL AND COST US MONEY. SO DO WE HAVE SOME SORT OF RISK ANALYSIS OF MOST CRITICAL PARK FEATURES MOVING FORWARD? SO THOSE THREE PART QUESTIONS. GOOD EVENING, HONORABLE MAYOR AND COUNCIL. I WORK BACKWARDS FROM QUESTION NUMBER THREE FROM OTHER FOR OTHER FACILITIES. WE HAVE ONGOING ASSESSMENTS OF AND ANALYSIS OF VARIOUS PARTS THAT GO WITH THAT. BUT ON A FULL ON RISK ANALYSIS, WE DON'T HAVE THAT FOR THE OTHERS. WE HAVE AN IDEA OF OF WHAT OUR VULNERABILITIES ARE. AND WE WE KEEP A CLOSE PULSE ON THOSE.

BUT AS FAR AS A FORMAL ANALYSIS, NO. FOR THE SECOND QUESTION FOR THE INSURANCE, WE DID GET NOTICE TODAY THAT IT WILL NOT BE COVERED UNDER THE INSURANCE, UNFORTUNATELY, BUT IT'S 20% OF THE COST. AND WE HAVE IDENTIFIED A FISCAL YEAR SAVINGS TO FULLY FUND THE PROJECT, WHICH IS GOOD NEWS. AND ON THE FIRST ONE, EVERYTHING WILL BE FULLY OPERATIONAL AT SURFACE LEVEL WITH THESE REPAIRS. AND ACTUALLY IT'LL BE MORE EFFICIENT FOR STAFF TO MAINTAIN MOVING FORWARD. THERE'S A LOT OF OVERDESIGN WITH THE INITIAL ONE. IT'S LIKE BUYING A FERRARI AND NEVER, YOU KNOW, BEING ABLE TO GET IT OUT OF THIRD GEAR. IT WE'RE WE'RE ABLE TO WE'RE ABLE TO ADEQUATELY SERVICE ALL THREE WATER COMPONENTS. AND THEN I GUESS WHEN YOU DO THE ROUTINE CHECKS OF PARK AREAS, WAS WAS IT NOT CAPTURED LIKE THAT? SOMETHING WAS OCCURRING DAMAGING THE. NO. IT WOULD HAVE BEEN DIFFICULT TO DETECT THAT WITH THIS NEW TECHNOLOGY. IT'S GOING TO SEND THE MOMENT SOMETHING FAILS OR SHOWS VULNERABILITY. ANYTHING'S OUT OF SORTS. IT WILL IMMEDIATELY PUSH NOTIFICATION TO OUR TEAM MEMBERS, AND IT'S A LOT EASIER TO WORK ON BECAUSE THIS ISN'T A PROPRIETARY RETROFIT. OKAY, THOSE ARE THE QUESTIONS I HAVE IF NO ONE ELSE HAS. MR. HARRIS. THANK YOU. DAVID. YES, SIR. SO THE INSURANCE WAS FILED AGAINST OUR INSURANCE POLICY? IT WAS. WE FILED IT WITH HTML. YES, MA'AM. OKAY. HAS THERE BEEN ANY ACTION AGAINST THE ORIGINAL CONTRACTOR ON THAT? I MEAN, IS THERE ANY POSSIBILITY OF THAT? IT WAS A THE COMPONENTS THAT FAILED WERE OUT OF THEIR WARRANTY PERIOD. IT WAS THE SYSTEM WAS VERY SOPHISTICATED BY AND LARGE, BUT THE OVERRIDE FEATURE WAS THE MOST CRITICAL POINT. IT WASN'T IT WASN'T A SOPHISTICATED AS REMAINDER THE SYSTEM. AND THAT'S THE FIRST COMPONENT THAT FAILED. THE SECOND WAS THE THE PUMP OVERRIDE. SO THEY THEY WERE ORIGINALLY INSTALLED PROPERLY. SO THERE'S NOTHING TO CUT BACK.

AS FAR AS WE COULD TELL, THEY WERE INSTALLED PROPERLY. THANK YOU. YES, MA'AM. ALL RIGHT. ANY FURTHER QUESTIONS? MOTIONS? MAYOR, I'D LIKE TO MAKE A MOTION TO APPROVE AGENDA ITEM 32ND. AND THANK YOU FOR FINDING THAT COST EFFECTIVE METHOD. IT'S BEEN MOTION BY COUNCILMEMBER ZUNIGA, SECONDED BY COUNCILMEMBER RIZZO TO APPROVE ITEM 33. DISCUSSION ON THE MOTION. ALL THOSE IN FAVOR SAY AYE. AYE. ALL OPPOSED. MOTION CARRIES 7 TO 0. IS ONE OF THESE NEXT TWO MORE CRITICAL THAN THE OTHER. BRIAN. I'M SORRY, ON 39 OR 40. IS THAT THE QUESTION IF YOU HAD TO PICK 140 IS SOMETHING. WE'RE GOING TO HAVE SEVERAL ACTION ITEMS FOR

[40) Receive a report, hold a discussion, and provide staff feedback on Administrative Services Policy Updates for Fiscal Year 2026.]

YOU ON THE NEXT AGENDA. SO YES, I THINK WE SHOULD DO ITEM 41ST. WE'RE GOING TO BRING UP AGENDA ITEM 41 RECEIVER REPORT, HOLD DISCUSSION, PROVIDE STAFF FEEDBACK ON ADMINISTRATIVE SERVICES POLICY UPDATES FOR FISCAL YEAR 2026. MISS TRUELOVE, YOU HAVE BEEN NOMINATED. I WILL DO MY BEST TO INTRODUCE THE ITEM. WE'RE HERE TONIGHT TO GIVE YOU A PREVIEW OF SEVERAL POLICIES AND OPERATIONAL ITEMS THAT ARE GOING TO BE COMING FORWARD ON THE SEPTEMBER 16TH COUNCIL AGENDA. ON THE 16TH, WE WILL HAVE APPROVAL OF THE CITY OF KYLE. CORE VALUES, ADOPTION OF A NEW POLICY HANDBOOK AND ADOPTION OF AN EMPLOYEE ENGAGEMENT PLAN. WE WILL ALSO HAVE OUR UPDATED PROCUREMENT POLICY AND AN UPDATED UTILITY BILLING ORDINANCE. I'M GOING TO ASK THE NEW DIRECTOR OF TALENT AND CULTURE, JULIE BEGGS, TO GO THROUGH THE AIR. RELATED ITEMS, AND THEN ASSISTANT DIRECTOR JOSHUA CONNELLY WILL COVER THE PROCUREMENT ITEMS. THANK YOU.

MAYOR COUNCIL. MY NAME IS JULIE BEGGS. I SERVE AS THE DIRECTOR OF TALENT AND CULTURE, AND I WANT TO SHARE A COUPLE OF THINGS THAT YOU WILL SEE ON THE 16TH WITH FULL BACKUP. THE FIRST IS ADOPTION AND REQUEST TO ADOPT THE CORE VALUES FOR THE CITY OF KYLE. THIS IS AN EXERCISE WE WENT THROUGH THIS YEAR AFTER REALIZING THAT THE CURRENT CORE VALUES HAVE BEEN IN PLACE FOR ALMOST A DECADE, MANY OF OUR EMPLOYEES DID NOT FEEL ASSOCIATED WITH THEM. THEY DIDN'T CONNECT WITH THEM AND ASK IF WE COULD REVIEW THEM. SO WE WENT THROUGH A VERY COMPREHENSIVE INTERNAL PROCESS DEVELOPING CORE VALUES, MAKING FINAL RECOMMENDATIONS, AND THEN

[03:20:03]

DOING A CITYWIDE INTERNAL VOTE WITH ALL OF OUR EMPLOYEES. SO THEY GOT TO CHOOSE AND SELECT THOSE THAT RESONATE WITH THEM AND THEIR WORK. WE THEN TOOK THAT TO A LEADERSHIP TEAM MEETING AND HAD OUR DIRECTORS LOOK AT THAT AND VOTE, AND WE'VE COME UP WITH A REALLY NICE WORKING LIST THAT I WILL BE HAPPY TO REPORT TO YOU THAT YOUR EMPLOYEES ENGAGE WITH, AND ALSO A VERY PROUD TO REPRESENT FOR THE COMMUNITY THEY SERVE. THESE INCLUDE VISIONARY LEADERSHIP, INTEGRITY, ACCOUNTABLE ABILITY, TRANSPARENCY AND TEAMWORK. AND AGAIN, YOU'LL SEE WE'VE WORKED WITH OUR PARTNERS IN COMMUNICATIONS TO HELP US DEVELOP SOME BRAND STANDARDS AROUND THESE. AND THE LOOK AND FEEL THAT YOU WILL SEE THAT ROLL OUT IN FY 2026. THE OTHER ITEM THAT YOU WILL SEE ON THE 16TH, HISTORICALLY, WE HAVE BROUGHT TO OUR ELECTED BODY AN EMPLOYEE POLICY HANDBOOK. THIS IS A MANUAL THAT HAS A REFERENCE GUIDE FOR OUR EMPLOYEES SO THAT WE HAVE THEY CAN LOOK HERE AND FIND REFERENCES AND MATERIALS SO THEY KNOW EXACTLY WHAT OUR POSITION IS AS A CITY. THIS YEAR, WE'VE MADE A RECOMMENDATION THAT WE WANT TO ENSURE THAT OUR ELECTED OFFICIALS SEE EVERY FEDERAL AND STATE STATUTE THAT WOULD APPLY TO OUR TO US ORGANIZATIONALLY.

SO WE HAVE STRIPPED THAT OUT INTO A POLICY MANUAL THAT YOU WILL REVIEW AND ADOPT AND WE WILL ADHERE TO AS THE CITY. BUT WE ALSO HAVE NOTICED THAT THERE'S SOME THINGS IN OUR CURRENT POLICY MANUAL THAT ARE NOT STATUTES, THEY'RE JUST OPERATIONAL PROCEDURES THAT AS AN ORGANIZATION AND AS A MUNICIPALITY, WE HAVE CHOSEN TO OFFER AS BENEFITS OR OPERATING PROCESSES FOR OUR WORKFORCE. SO THOSE WE'VE RECOMMENDED AND HOPE YOU WILL SUPPORT THAT. WE WILL HAVE A SECONDARY AND A COMPLEMENTARY PIECE TO THE POLICY MANUAL THAT YOU WILL REVIEW AND CONSIDER FOR ADOPTION, AND THAT WILL BE UNDER THE PURVIEW OF OUR CITY MANAGER AS ADMINISTRATIVE DIRECTIVES. AND SO THOSE THINGS MIGHT INCLUDE A BILINGUAL STIPEND PAY, FOR EXAMPLE. AND WE MAY NEED TO AS WE BENCHMARK WITH OTHER CITIES, WE'RE LOOKING AT WHAT OTHER CITIES ARE OFFERING IN THOSE TERMS OF BENEFITS SO THAT WE CAN AGAIN REMAIN A PREMIER EMPLOYER IN THIS AREA. SO THAT'S THE DISTINCTION. ANOTHER DISTINCTION MIGHT BE ON OUR ACCRUALS FOR VACATION AND SICK. WELL, THAT'S NOT A STATE STATUTE TO BE MANDATED. IT'S SOMETHING THAT WE WATCH TO MAKE SURE THAT WE ARE CONSISTENT WITH OTHER BENCHMARK CITIES AROUND US. AS IT TURNED OUT, WHEN WE WERE GOING THROUGH MEET AND CONFER THIS YEAR, WE REALIZED THAT OUR CIVILIAN EMPLOYEES ARE MUCH LOWER THAN OUR SWORN. AND SO WE WANT TO TRUE THAT UP WITH MINIMUM HOURS THAT CAN BE EARNED FOR THOSE EMPLOYEES THAT MAY NOT HAVE FIVE OR MORE YEARS OF SERVICE. SO YOU WILL SEE THOSE COMING THROUGH AS WELL. THE CITY MANAGER HAS DIRECTED THEY MAKE SURE THAT THESE ADMINISTRATIVE DIRECTORS ARE VETTED, THEY'RE CLEARED, THEY'RE REVIEWED. AND SO WE'VE COMMITTED TO THAT TO HIM AS WELL. AND THEN FINALLY, ONE OF THE THE BIG DISCUSSIONS THAT COME UP THIS YEAR WITH OUR INTERNAL EMPLOYEE ENGAGEMENT COMMITTEE, THIS IS A COMMITTEE COMPRISED OF FULL TIME EMPLOYEES REPRESENTING EACH DEPARTMENT THAT THE CITY HOUSES. AND WE COME TOGETHER AT LEAST ONCE A MONTH TO DISCUSS EMPLOYEE MATTERS. ONE OF THE HOT TOPICS THIS YEAR HAS BEEN EMPLOYEE RECOGNITION. AND SO YOU WILL SEE ON THE 16TH A PLAN THAT HAS BEEN DESIGNED BY YOUR EMPLOYEES THAT HIGHLIGHTS FIVE AREAS, THAT IS, THE EMPLOYEE OF THE QUARTER AND THE EMPLOYEE OF THE YEAR THAT WE WOULD LIKE TO SEE INSTITUTED FOR THE ORGANIZATION. AND THOSE ARE DIRECTLY RELATED BACK TO THE CORE VALUES. SO THESE ARE EMPLOYEES THAT ARE DEMONSTRATING THOSE CORE VALUES AND ARE VOTED ON UPON THEIR PEERS. SECONDLY, EMPLOYEES REALLY WANT THE OPPORTUNITY TO RECOGNIZE THEIR OWN PEERS. SO WE DON'T HAVE SOMETHING IN PLACE RIGHT NOW THAT WOULD ALLOW THEM TO GO OUTSIDE OF THEIR DEPARTMENT OR IN THEIR DIVISION. IT'S REALLY BEEN MORE STRUCTURED FROM A SUPERVISORY PERSPECTIVE. SO WE'RE EXPLORING THOSE PROGRAM LOGISTICS NOW. THE THIRD IS TO HAVE CITYWIDE CELEBRATIONS. SO REALLY LIKE THE IDEA OF COMING TOGETHER FOR A THANKSGIVING LUNCHEON AND ANOTHER EVENT EITHER IN THE WINTER OR THE SPRING. THAT TEAM IS DEVELOPING THOSE RECOMMENDATIONS NOW AND THEN FINALLY KEEPING ALIGNED WITH OUR NATIONAL PUBLIC SERVICE RECOGNITION RECOGNITION WEEK.

THAT'S THE FIRST WEEK IN MAY EACH YEAR. THIS YEAR WE LAUNCHED A BIG EVENT, ONE FOR FINANCIAL LITERACY, SO THAT WE WOULD PROVIDE INFORMATION TO OUR EMPLOYEES ON HOW THEY CAN USE THEIR MONEY TO EARN MORE FOR THEM AND INCLUDED. FINALLY, WE WRAPPED UP THE END OF THE WEEK WITH A PANCAKE BREAKFAST AT THE PSC, WHICH WAS HIGHLY ATTENDED AND VERY WELL RECEIVED.

SO THAT WILL ALSO BE IN THE RECOGNITION PLAN THAT YOU'LL SEE ON THE 16TH. SO WITH THAT, IF THERE'S NO QUESTIONS FOR ME, I WILL TURN TO MY COLLEAGUE JOSHUA CONNELLY. HAPPY TO ANSWER ANY QUESTIONS YOU MAY HAVE. YES, SIR. JUST REAL QUICK, ON THE 180 DAYS, THAT'S EVERY LEVEL, STARTING FROM THE LOWER TIER EMPLOYEE TO THE TO THE EXECUTIVE LEVEL. THE 120 HOURS.

WAS IT 120? I'M SORRY. THOSE ARE. THAT'S 120 HOURS. THAT'S OKAY. THAT'S OKAY. SO RIGHT NOW CIVILIAN EMPLOYEES ARE EARNING 80 HOURS A YEAR. AND IT'S JUST REALLY LOW IN THIS REGION. SO THIS WILL BE A MINIMUM DEPENDING ON YOUR TENURE AND YOUR LONGEVITY WITH THE CITY.

THAT NUMBER COULD INCREASE NO MORE THAN A MAXIMUM OF 200 HOURS PER YEAR. AND THAT'S WITH 20 YEARS OF SERVICE. OKAY. AND I LOVE THIS. ONE REASON WHY IS I'M A BIG FAN OF OUR EMPLOYEES

[03:25:01]

MAKING SURE THEY HAVE TIME, QUALITY TIME WITH THEIR FAMILIES. THAT KEEPS YOUR EMPLOYEES HAPPY. IT KEEPS, YOU KNOW, FOR MENTAL HEALTH. IT'S JUST IMPORTANT TO HAVE THAT TIME OFF. I KNOW I HAVE, I THINK I'M AT FIVE WEEKS A WEEK A YEAR RIGHT NOW WITH MY COMPANY, AND THAT'S PROBABLY GOING TO INCREASE AS I'M TRANSITIONING TO MY NEW ROLE.

BUT IT'S IMPORTANT TO HAVE THOSE DAYS OFF. I MEAN, YOU KNOW, BECAUSE YOU WORK, YOU WORK, YOU WORK, AND TO BE ABLE TO TAKE OFF TIME WITH YOUR FAMILY, IT REMINDS YOU OF WHY YOU'RE WORKING LIKE THAT AND WHY YOU WANT TO EXCEL AND WANT TO BE A BETTER EMPLOYEE. RIGHT.

SO IT'S GREAT. SO THANK YOU FOR LOOKING INTO THIS AND INCREASING THOSE DAYS. IT REALLY MAKES ME A LOT OF HAPPY TO SEE OUR EMPLOYEES BEING TAKEN CARE OF. SO THANK YOU.

THANK YOU JOSHUA. THANK YOU JULIE. GOOD OR GOOD EVENING CITY COUNCIL. MY NAME IS JOSHUA CROWLEY. I'M THE ASSISTANT DIRECTOR FOR FINANCE. AND I'M GOING TO TALK TO YOU A LITTLE BIT ABOUT SOME ORGANIZATIONAL STRUCTURAL CHANGES THAT YOU GUYS HAVE UNDERTAKEN IN THE PAST YEAR. SO I'M GOING TO START WITH KIND OF CAVEATING THAT 2025 WAS THE YEAR OF BUILDING. WE DIDN'T HAVE A CENTRALIZED PROCUREMENT DIVISION. WE DIDN'T HAVE A CENTRALIZED COMMUNICATION PORTAL, AND WE DIDN'T HAVE REALLY ANY STRUCTURAL MANUALS BEHIND THE CARD UTILIZATION. I MEAN, THERE WERE THERE WERE SOME EXISTING DOCUMENTS, BUT NONE OF IT WAS LOOKED AT FROM AN ORGANIZATIONAL STANDPOINT. AND SO WE'VE WE'VE DONE A LOT IN THE LAST YEAR AND THIS NEXT YEAR WE HAVE SOME REALLY EXCITING THINGS COMING UP. BUT I KIND OF WANT TO HIGHLIGHT A FEW OF THOSE. SO THE FIRST THING I'D LIKE TO TALK ABOUT IS THE PROCUREMENT PORTAL. I KNOW MANY OF YOU HAVE ALREADY GONE OUT TO OUR CITY WEBSITE, BUT IF YOU WENT TO CITY OF PURCHASING, YOU COULD GO OUT AND VIEW OUR NEW OPENGOV WEB PORTAL. THIS IS A GREAT COMMUNICATION OR A GREAT PROCUREMENT PLATFORM FOR A DEPARTMENT THAT ALLOWS US TO GET OUR BIDS AND JOBS OUT TO AS MANY INDIVIDUALS AS POSSIBLE. THIS IS PROBABLY SOME OF THE REASON WE'RE SEEING INCREASED COMPETITION ON OUR BIDS, AND HOPEFULLY WE'LL CONTINUE TO DRIVE PRICES LOWER. IT ALSO ALLOWS FOR A CENTRAL MANAGEMENT OF THE PROCUREMENT FROM CRADLE TO GRAVE, INCLUDING CONTRACT MANAGEMENT. AND THAT'S A FEATURE THAT WILL BE UNVEILING IN 2026. SO WE'RE VERY EXCITED TO SEE WHERE THIS THING GOES NEXT. I WANT TO TALK A LITTLE BIT ABOUT THE P-CARD CHANGES THAT THE EMPLOYEES HAVE GONE THROUGH, AND THEN I'LL TALK BRIEFLY ABOUT HOW WE'D LIKE TO TRY TO BRING SOME OF THESE CHANGES TO THE CITY COUNCIL POLICY AS WELL. BUT INTERNALLY, FOR CITY EMPLOYEES, WE'VE TOTALLY OVERHAULED THE WAY THAT WE HANDLE THE PROCUREMENT CARDS OR PURCHASE CARDS. WE NOW HAVE MUCH TIGHTER CONTROLS. WE'RE UTILIZING THE WELLS FARGO EXPENSE MANAGEMENT SYSTEM. IT'S CALLED EXPENSIFY, AND IT ALLOWS EMPLOYEES TO REAL TIME MANAGE THEIR RECEIPTS SO THAT WE DON'T HAVE THAT, THAT, THAT LAG OR THAT THAT ABILITY TO LOSE THOSE RECEIPTS. AND IT ALSO MAKES CODING AND TRANSACTION TRACKING JUST SO MUCH MORE EASY. AND THIS ACTUALLY WILL DIRECTLY INTERFACE WITH OUR FINANCIAL MANAGEMENT SYSTEM. SO THIS IS DATA THAT WE'RE GOING TO BE BRINGING INTO OUR FINANCIAL MANAGEMENT SYSTEM SO THAT WE CAN TRACK IT ACROSS ACROSS THE BOARD. WE'VE ALSO IMPLEMENTED SOME SOME STRICT PURCHASING THRESHOLDS, YOU KNOW, JUST TO ALIGN WITH STATE LAWS SO THAT WE'RE ENSURING THAT EVERY PURCHASE THAT WE MAKE ON THESE CARDS IS COMPLIANT WITH THOSE RULES AND REGULATIONS. AND WE'VE ALSO NEGOTIATED AN INCREDIBLY STRONG REBATE, ACTUALLY STRONGER THAN THE LAST TWO CITIES THAT I'VE WORKED FOR. AND WE'RE GETTING BETWEEN 195 AND 210 BASIS POINTS BACK ON ALL THE PURCHASES WE MAKE ON OUR CARDS. SO GETTING ALMOST 2% BACK FOR FOR EVERYTHING WE PURCHASE IS, IS IS PRETTY GOOD IN THE MUNICIPAL WORLD. THESE CHANGES IN THIS NEW EXPENSE MANAGER WE THINK IS IS IS VERY USEFUL FOR EVERYONE WE KNOW.

CURRENTLY THE COUNCIL HAS THEIR OWN P CARD POLICY, AND SO WE WOULD LIKE TO BRING BACK SOME UPDATES TO THAT POLICY. JUST BECAUSE YOUR CURRENT POLICY IS VERY PRESCRIPTIVE IN HOW YOU DO THINGS, WE'D LIKE TO MODIFY THAT SO THAT WE COULD UTILIZE THE NEW SYSTEM SO THAT YOU ALL COULD HAVE ACCESS TO THIS, OR AT LEAST THROUGH THE CITY SECRETARY'S OFFICE, HAVE ACCESS TO THIS SO THAT YOU GUYS CAN ITEMIZE AND UPLOAD YOUR RECEIPTS, JUST LIKE THE REST OF STAFF. WE HOPE TO BE BRINGING THESE BACK TO YOU IN EARLY 2026 WHEN THE SYSTEM IS IN FULL, FULL PRODUCTION. AND OF COURSE, TRAINING WILL BE PROVIDED AT THAT TIME AND IT'LL STILL BE, WHAT DO YOU CALL IT? VERY TRANSPARENT. CORRECT. WE'LL STILL BE PUTTING EVERYTHING OUT MONTHLY. ABSOLUTELY. WE'D STILL GENERATE ALL THE REPORTS THAT CURRENTLY EXIST. WE'RE NOT PROPOSING TO REMOVE ANY OF THAT. WE'RE JUST TRYING TO CHANGE THE PROCESS IN WHICH YOU GUYS SUBMIT THINGS TO MAKE IT EASIER FOR YOU. I KNOW IT CAN BE A, YOU KNOW, A BIG PAIN. AS SOMEBODY WHO HAS DEALT WITH P CARDS FOR ABOUT EIGHT YEARS, THERMAL PAPER IS NOT VERY FRIENDLY. YEAH, IT GOES BACK IN YOUR POCKET, YOU KNOW, OR IT GETS WET AND IT'S REALLY DIFFICULT TO DEAL WITH. AND SO COLLECTING THOSE RECEIPTS AT THE END OF THE MONTH CAN BE VERY DIFFICULT. SO THIS WILL ALLOW PEOPLE TO DO IT REAL TIME AS THEY'RE MAKING THEIR

[03:30:04]

EXPENSES BY UPLOADING IT VIA THE APP. AND THEN WE WON'T HAVE TO WORRY ABOUT HOLDING ON TO THOSE PAPER RECEIPTS. WE'LL HAVE DIGITAL COPIES OF ALL OF THOSE. THAT'S GREAT. ACTUALLY MAKES IT MORE TRANSPARENT THAN IN REAL TIME. THAT'S GREAT. THANK YOU. EXACTLY. THE OTHER CHANGE I'M HERE TO TALK TO YOU ABOUT IS SOMETHING THAT YOU GUYS ARE GOING TO BE VOTING ON IN THE VERY NEAR FUTURE, BUT HB 4747 PASSED AND EFFECTIVE YESTERDAY. THIS BILL CHANGES THE COMPETITIVE THRESHOLD ACROSS MUNICIPALITIES FROM $50,000 TO $100,000. THAT IS SOMETHING THAT HADN'T BEEN UPDATED SINCE 1999. AND SO WHEN WE BUILT OUR PURCHASING POLICY, WE BUILT IT IN AS A STAPLE. SO WE'RE NOT BRINGING BACK REMARKABLE CHANGES IN OUR POLICY, BUT WE WOULD LIKE TO UPDATE THAT TO ALIGN WITH THE NEW STATE LAWS. AND WE FEEL LIKE THIS IS GOING TO HELP EVERYONE BECAUSE IT'S GOING TO IT'S GOING TO MEAN THAT THAT YOU GUYS GET TO FOCUS ON THE BIG PICTURE AND NOT SOME OF THE MENIAL ITEMS THAT THAT HAVE TO FLOW THROUGH. SO ACTION ON SEPTEMBER 16TH, WE'RE GOING TO BE BRINGING BACK AN APPROVAL TO TRY TO ALIGN BRIAN'S BASICALLY DELEGATED AUTHORITY FROM YOU WITH THE STATE LAW. AND WE'RE ALSO GOING TO BRING BACK THAT UPDATED PROCUREMENT POLICY, WHICH IS GOING TO ALSO REFLECT THOSE THRESHOLD CHANGES. THIS IS NOT GOING TO CHANGE ANY OF THE CONTROLS WE HAVE IN PLACE.

WE'RE NOT LOOSENING ANY OF THOSE. ALL OF THOSE STRONG CONTROLS ARE IN PLACE. AND WE PLAN TO CONTINUE ENSURING THAT THAT REPORT, THAT OF CONTRACTS APPROVED BY THE MANAGER, ENDS UP ON OUR WEBSITE AS IT IS TODAY. AND LAST, I'D LIKE TO TALK ABOUT THE UTILITY BILLING ORDINANCE. SO. WE'VE HEARD A LOT OF FEEDBACK THAT THE UTILITY BILLING ORDINANCE IS PROBABLY DATED. IT WAS LAST BUILT IN 2007 WHEN KYLE WAS A MUCH SMALLER CITY. AND SO AS ITS POPULATION HAS GROWN AND OUR SERVICE HAS EXPANDED, WE NEED TO MODIFY THAT ORDINANCE TO TRY TO MAKE IT MORE FRIENDLY TO BOTH OUR RESIDENTS AND FOR STAFF'S ABILITY TO ENFORCE CERTAIN THINGS. RIGHT NOW, THERE ARE A LOT OF NUANCES TO HOW WE OPERATE THAT ARE NOT WRITTEN IN STONE, AND SO WE WOULD LIKE TO CARVE THOSE OUT IN AN UPDATED POLICY WITH YOU ALL TO MAKE SURE WE CAN CLARIFY RESPONSIBILITIES ON BOTH SIDES OF THE LINES THERE. WE ALSO HAVE A FUTURE PLAN TO TRY TO WORK WITH OTHER ORGANIZATIONS IN OUR AREA ON THE UTILITY BILL TO TO COMBINE THAT SO THAT CALLING OPERATION ONE BILL. BUT BASICALLY WE WANT TO WORK WITH OUR REGIONAL WATER PROVIDERS AND CUT DOWN ON THE NUMBER OF BILLS WE HAVE GOING TO EACH ONE OF OUR RESIDENTS AND HOPEFULLY HAVE THEM BILL FOR ALL THE SERVICES IN THAT AREA. ARE YOU SUGGESTING THAT THEY COLLECT FOR US OR THAT WE COLLECT FOR THEM, THAT BOTH ARE ON THE TABLE? WE'RE GOING TO HAVE THAT DISCUSSION. IT WILL COME BACK FOR YOUR VOTE. IT'S NOT SOMETHING WE'RE GOING TO DO ON OUR OWN. OKAY? I MEAN, I WOULD JUST SAY THAT IF THERE'S A CHOICE WE COLLECT FOR THEM WOULD BE PREFERRED. I UNDERSTAND THAT IT'S MORE MONEY, BUT WE'RE BETTER AT COLLECTIONS THAN PROBABLY THEY ARE. I'M THINKING OF OUR TDS CONTRACT AND HOW WE COLLECT THE TRASH SERVICES AND ON THEIR BEHALF PRIMARILY. THAT'S PROVEN TO BE VERY BENEFICIAL TO US TO DO THAT. IT'S PRIMARILY AROUND SEWER SERVICES. IT'S VERY DIFFICULT BECAUSE SOMEBODY CAN START WATER SERVICE IN AN AREA THAT WE DON'T KNOW THAT THEY HAVE. WE PROVIDE SEWER, AND IF WE DON'T GET A NOTIFICATION FOR THEM STARTING TRASH SERVICE, WE ACTUALLY DON'T KNOW ANYBODY'S HOOKED UP TO OUR, OUR SEWER LINE. AND SO THERE CAN BE A LAG OR A DISCREPANCY. AND SO IT ACTUALLY PROBABLY WOULD BENEFIT US EITHER WAY, BUT WE WOULD BE ABLE TO PERFORM THAT ANALYSIS AND BRING THAT BACK FOR YOU. WELL, I GUESS I'M JUST SAYING IF WE ALLOW FOR ALL THESE OTHER JURISDICTIONS TO COLLECT MONEY, THAT WHERE WE'RE WHERE THEY HAVE TO GIVE US A CUT OF THAT, THERE'S JUST A LOSS OF CONTROL THERE. AND SO IF WE'RE GOING TO DO THAT, WE NEED TO HAVE SOME PRETTY TIGHT BOUNDARIES AROUND THAT. AND MY PREFERENCE, I DON'T THINK I'LL BE HERE, BUT AT LEAST FOR THE COUNCIL TO CONSIDER, WOULD BE NOT GIVING THAT UP AND OFFERING TO TAKE ON THAT ADMINISTRATIVE SERVICE. AND WHAT WE GET IN RETURN FOR THAT IS CONTROL. AND WE GET TO COLLECT THE MONEY, AND WE ARE MORE RESPONSIBLE THAN, YOU KNOW, HALF A DOZEN SMALL WATER PROVIDERS. WE ARE A LARGE CITY. SO JUST MY THOUGHTS ON IT. WELL, IN ADDITION TO THAT, IT'S MORE ACCOUNTABILITY, MORE ACCOUNTABILITY. WE KNOW WHAT THEY'RE BILLING AND WHAT THEY'RE COLLECTING. AND IF THEY ARE JUST DOING THEIR OWN BILLINGS, WE REALLY DON'T KNOW THAT. YEAH, I THINK THAT'S WHERE MY CONCERN IS THAT, YOU KNOW, ARE WE REALLY GETTING OUR FULL, YOU KNOW, ALLOCATION OF THAT OR ARE THEY, YOU KNOW, SOMEHOW, YOU KNOW, MANIPULATING THE NUMBERS. THAT SCARES ME WHEN I'M ALLOWING SOMEONE ELSE

[03:35:02]

TO DO THAT. THAT'S KIND OF WORRISOME. I THINK OUR STAFF WOULD PROBABLY BE BETTER AT COLLECTING THE DOLLARS IN. SO JUST THAT WOULD BE A LITTLE. ALL RIGHT. YEAH, WE'LL, WE'LL WE'LL DEFINITELY, YOU KNOW, PUT TOGETHER A FULL ANALYSIS AND BRING THAT BACK, ANALYZE IT AND COME BACK AND GIVE YOU RECOMMENDATIONS OF HOW TO PROCEED. AND SO WITH THAT, YOU KNOW, THAT BASICALLY COVERS EVERYTHING THAT YOU GUYS WILL BE SEEING ON THE 16TH. THE CORE VALUES, THE PERSONNEL POLICY, EMPLOYEE RECOGNITION PLAN, PROCUREMENT POLICY UPDATE, ALIGNING THE THRESHOLD WITH THE NEW STATE LAW, AND THEN AN UPDATED UTILITY BILLING ORDINANCE. I STAND BY FOR ANY OTHER QUESTIONS YOU MIGHT HAVE. ALL RIGHT. REALLY EXCITED ABOUT THE EMPLOYEES COMING OUT AND GIVING THEIR FEEDBACK ON THE CORE VALUES. THAT WAS PRETTY AMAZING TO GET THE INPUT FROM EVERYONE. AND YEAH, I GUESS TEN YEARS FOR ME, BECAUSE I'M AN OLD GUY, IT'S NOTHING. IT'S JUST WHEN YOU SAID A DECADE, I WAS LIKE, WELL, THAT'S NOTHING, RIGHT? BUT I GUESS IT IS QUITE A BIT OF TIME. AND WE'VE HAD A LOT OF, YOU KNOW, EMPLOYEES TRANSITION AND IN AND OUT OF THE CITY. SO IT'S GREAT TO SEE IT UPDATED AND THAT GOOD JOB OF GETTING ALL THE FEEDBACK FROM THE EMPLOYEES. I KNOW IT'S NOT AN EASY TASK. SO THANK YOU. AND THEN ALSO THE 120 DAYS THAT'S THAT'S ALSO MAKING SURE THAT OUR EMPLOYEES ARE TAKEN CARE OF.

AND I THINK IT'S A MENTAL THING. IT DEFINITELY MAKES A BETTER EMPLOYEE. SO THANK YOU. ALL RIGHT. ANYONE ELSE. YEAH, I'LL SAY THAT. YOU KNOW, I WASN'T HERE WHEN WE ADOPTED THE OUR CORE VALUES. THEY WERE ADOPTED RIGHT BEFORE I GOT HERE, BUT I, I LIKE ABSORBED THEM. SO THOSE THOSE CORE VALUES THAT WE'RE GETTING RID OF ARE THAT'S FROM MY GENERATION. AND THEY ARE VERY NEAR AND DEAR TO MY HEART FOR A LOT OF REASONS. BUT I THINK WHAT YOU SAID IS VERY IMPORTANT, JULIE, THAT IT'S, IT'S NOT ABOUT IT'S, IT'S IT'S ABOUT GETTING THE BUY IN. RIGHT.

AND SO THE STAFF NEEDS TO BE ABLE TO, AS THE TRANSITION HAPPENS, TO BELIEVE IN THEM THE WAY I BELIEVED IN THE OLD ONES. AND SO I'M HAPPY TO SEE THEM MOVE ON, EVEN IF I'M SAD TO SEE THEM. I'M HAPPY TO SEE YOU ALL MOVE FORWARD COLLECTIVELY AS A GROUP, EVEN IF I'M SAD TO SEE THE OLD ONES LEAVE. I MEAN, IT HAD THE GREATEST ACRONYM OF ALL TIME. I MEAN, THAT'S IT'S I'M JUST SAYING THERE'S SOME GREAT THINGS ABOUT IT, BUT IT'S VERY CLEVER. SO I THOUGHT THAT WAS CLEVER. IT'S VERY CLEVER. SO MAYBE THE YOUR POSTERS ABOVE ANNETTE'S DESK, IF THOSE ARE STILL THERE AND YOU'RE GOING TO THROW THEM AWAY OR SOMETHING, MAYBE JUST SET THEM IN MY OFFICE AND I'LL GET SOME TISSUES AND THINK ABOUT. WHAT I'M LEAVING BEHIND.

COUNCILMEMBER HEIZER YEAH, THE UTILITY BILLING ASSISTANCE PROGRAM THAT WE PASSED A WHILE BACK BUT HAVEN'T ACTUALLY EXECUTED YET. IS THAT SOMETHING THAT NEEDS TO BE RE-UPPED ALONG WITH THIS ORDINANCE, THIS ORDINANCE CHANGE OR UPDATE? WE ARE BUILDING SOME LANGUAGE INTO THE ORDINANCE THAT BASICALLY GIVES US AUTHORITY. IF WE WERE TO ESTABLISH A PROGRAM TO WORK CLOSELY WITH THE THIRD PARTY AGENCY OR THOSE KINDS OF THINGS, SO WE HOPEFULLY WON'T HAVE TO COME BACK TO AMEND THE POLICY AGAIN, AND THAT IS SOMETHING THAT WE'RE ACTIVELY TRYING TO WORK TOWARDS. YOU KNOW, WE'VE APPROACHED A NUMBER OF AGENCIES TO TRY TO FIND PARTNERS. SO IF YOU GUYS KNOW OF ANY, PLEASE LET US KNOW. ACM ALSO HAS COUNCILMEMBER MAYOR PRO TEM HEIZER. APART FROM THE UPDATES TO THE POLICY, WE ARE ACTIVELY REBUILDING THAT PROGRAM AND BRINGING IT BACK TO COUNCIL IN THE NEXT MONTH FOR EVALUATION. IT'S WHAT WE WENT OUT FOR. IT DIDN'T COMPLETELY FIT WHAT WE WERE TRYING TO DO. SO WE'RE GOING TO RETOOL IT, PROBABLY BRING IT IN-HOUSE AND THEN BRING IT BACK TO COUNCIL SO THAT STAFF CAN EXECUTE IT AND DRIVE IT FORWARD. ALL RIGHT. WELL I LOOK FORWARD TO THAT UPDATE. THANK YOU VERY MUCH FOR YOUR HARD WORK. I LIKE I LIKE TO SAY THAT I'M GLAD YOU'RE BRINGING IT IN-HOUSE. I THINK IT WILL HAVE BETTER OVERSIGHT. SO I'M GLAD YOU ALL ARE CONSIDERING THAT. ALL RIGHT.

ANYONE ELSE ANYTHING TO ADD? ALL RIGHT. WE'LL LOOK FORWARD TO SEEING THAT COME BACK. ALL RIGHT. WE'RE GOING TO DO THE OTHER ONE SINCE THAT ONE WENT QUICKLY. BUT WE'RE GOING TO

[39) Receive a report, hold a discussion, and provide staff feedback on Communications Department activities including updates on the new Kyle TX News website, City of Kyle website, annual report, social media strategy and refreshed templates.]

WE'RE GOING TO WAIT ON THE CHRISTMAS. ALL RIGHT. NEXT UP IS AGENDA ITEM 39. RECEIVE REPORT ALL DISCUSSION. PROVIDE STAFF FEEDBACK ON COMMUNICATION DEPARTMENT'S ACTIVITIES, INCLUDING UPDATES ON THE NEW TEXAS NEWS WEBSITE, CITY OF KYLE WEBSITE, ANNUAL REPORT, SOCIAL MEDIA STRATEGY AND REFRESHED TEMPLATES. MISS KLEPPER. HEY, GOOD EVENING MAYOR AND COUNCIL, LINDA KLEPPER I AM THE CHIEF COMMUNICATIONS OFFICER FOR THE CITY OF KYLE. I AM HERE THIS EVENING JUST TO RUN THROUGH A DISCUSSION AND PROVIDE SOME OVERVIEW OF SOME NEW INITIATIVES AND SOME ACTIVITIES THAT THE COMMUNICATIONS DEPARTMENT HAS BEEN WORKING ON. I RECENTLY JOINED THE TEAM FOUR MONTHS AGO, AND SO SOME OF

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