The Early City Council will hold a special called meeting at 6 p.m. Monday, Aug. 17 at Early City Hall for a public hearing on the 2020 proposed tax rate. A budget workshop will also take place. The agenda is as follows:

A. Call to order, Invocation, Pledge of Allegiance

B. Citizen’s comments.

C. PUBLIC HEARING – 2020 PROPOSED TAX RATE

D. Matters of New Business

1. Consider approval to enter into agreement with Warrick Engineering & Associates, LLC for engineering services on Bluebonnet Drive remedial drainage plan. By: Tony Aaron

E. Executive Session in accordance with the provisions of Chapter 551, Texas Government Code, Section 551.074 Personnel Matters, regarding City Administrator employment agreement.

F. Reconvene into Open Session and consider action, if any, on items discussed in executive session.

G. Budget Workshop

H. Announcements

I. Adjourn

***

Early City Administrator Tony Aaron recently released the proposed 2020-21 budget for the City of Early.

The details and full budget will be available for review on the City of Early website or at the Early City Hall located at 960 Early Blvd. Early, Texas 76802 between 8 a.m. to 5 p.m. Monday through Friday. This budget may be amended over the next few weeks, but will not be finalized until Aug. 24.

The City of Early will host a public hearing on the proposed tax rate at 6 p.m. Monday, Aug. 17 and a public hearing on the proposed budget at 6 p.m. Monday, Aug. 24 at the Early City Hall.

The budget and the tax rate are scheduled to be adopted after the final public hearing on Aug. 24.

Aaron’s budget letter is as follows:

This budget letter is to present to you the proposed 2020-2021 Annual Budget for the Fiscal Year beginning October 1, 2020, and ending September 30, 2021.

This budget is a reflection of the council’s programs, goals and policies to continue providing quality services to the citizens of Early. This budget will act as a guide for our efforts to not only provide basic services but to increase the quality of those services while also providing the citizens with programs and projects that address quality of life within our community. It is always a challenge to provide capital improvements within our available resources. This budget is a reflection of a combination of efforts by administration, city departments, and citizen input with the great guidance of the City Council of Early to minimize the overall cost and maximize the impact of the public funds entrusted to us.

This proposed budget includes financial information regarding the General Fund, Municipal Development Fund, Convention and Visitors Bureau Fund, Water Fund, Sewer Fund, Sanitation Fund, and numerous other special funds. The proposed budget for the Fiscal Year 2020-2021 has a total estimated revenue of $8,776,620 or a 22.852% increase in revenue over 2019-2020 revenue projections. This type of increase is very unusual and is related to overall increase in our sales tax collection as well as a large one time audit collection. The increase is in no way a result of increases in property taxes or utility rates. The total expenditures budgeted for the 2020-2021 budget year is $7,608,840, or a 13.785% increase over last year. Most of this increase in spending can be attributed to Public Safety. For the first time in the history of Early’s incorporation, the City of Early will be hiring three full-time firefighters. We will be supplementing those full-time positions with part-time firefighters and our Early Volunteer Fire Department volunteers. In addition to this, we are entering into an agreement between Brown County, the City of Brownwood, and the City of Bangs to share the operational cost of dispatch as well as upgrade the countywide public safety communication system. In addition to all new infrastructure, the City of Early will be providing its Police and Fire Departments with the latest in public safety communication radios. The total projected ending fund balance of all funds is

$1,157,243.

The Brown County Appraisal District has certified total appraised taxable value within the City of Early at $246,351,700, which is an increase of $18,261,872 in total taxable value. New property value resulting from the new and recent development and construction that has occurred in the residential and commercial markets of Early, Texas represents $5,992,340 of this growth.

The current tax rate that was adopted last year is 0.5410. The No New Revenue Tax Rate for this budget year is calculated at 0.5151. The No New Revenue Tax Rate is the tax rate which will result in the same amount of tax revenue collected based on any increase or decrease in property tax value (excluding new values).

The Voter Approval Rate for this budget year is calculated at 0.5521. If a unit — other than a district — adopts a tax rate higher than the calculated Voter Approval Rate, the City Council is required to call an election at the next general election to seek voter approval for that tax rate and budget.

Over the last five years, the Mayor and City Council have done a great job of managing the needs of the public for infrastructure, parks and recreation, and public safety with maintaining the second-lowest tax rate within Brown County. With increased revenue from sales tax and new development in Early, Texas the Mayor and City Council have been able to once again lower its tax rate by adopting the tax rate 0.5310. The reduction represents a 1.848% decrease in the rate. With the adoption of this rate, the City of Early will receive additional property tax revenue in the amount of $32,721 over the No New Revenue Rate. All of this additional revenue and additional funds reallocated from other departments will go towards hiring full-time firefighters. As we move into next year, I will continually look for opportunities to build a budget around a reduction in property tax as long as the basic needs of our citizens can be met.

The 0.5310 rate includes a debt service (l&S) tax rate of 0.1425 cents generating $293.256 and maintenance and operations (M&O) tax rate of 0.3885 cents generating $799,508.

Additionally, we will collect $179.752 from our 65+ freeze adjusted tax for a total collection of property tax of an estimated $1,272,516.

The average home in Early, Texas is appraised at $134,719. By applying this rate to the property tax formula, the average homeowner in Early will pay $715 in city taxes a year. (0.5310 X $134,719 / 100 = $715 per year)

The City of Early has a 1.5% sales tax rate and the Early Municipal Development District has a .5% sales tax rate. This revenue is used to provide for additional needs such as streets, parks, police, fire, and other operational needs. Sales tax revenue significantly reduces the burden of property tax to our citizens. Our local sales tax has designated ½ of 1 percent specifically as property tax relief. As our sales tax grows the more relief this ½ of 1 percent of local sales tax provides in the area of property tax. Due to the continuation of growth in our local sales tax, the council was able to reduce the tax rate again. Without the sales tax that the City of Early received annually the property tax rate would need to increase by 0.5800 cents per hundred dollars evaluation and the City of Early would need to impose a tax rate of 1.1106 in order to provide the same services that are currently provided. It is for this reason that sales tax revenue is vitally important to the city and requires us to take a proactive approach to retain and grow our sales tax revenue base.

In our efforts to continue the growth in our sales tax collections the City of Early entered into an agreement with Solaris Oilfield Infrastructure in the first quarter of this budget. This agreement in December of 2019, facilitated Solaris to move its leasing office officially to the City of Early. Projected sale tax revenue from this agreement at the average of Solaris’ annual financial performance will essentially double the total amount of sales tax collected within the entire city. Under their retracted operations due to the slowdown in the oilfield Solaris remains at the top of the list of our sales tax contributors. The 2019/2020 sales tax collections are estimated to be $3,689,179. This collection represents a 146.33% increase to our fiscal sales tax collections over the year prior. A large one time collection represents an estimated $1.6 million of this total collection value. A conservative projection for sales tax collection for both the City of Early and the Early MOD in 2020/2021 is estimated to be $1,500,000 or a 0.1563% change over 2018/2019 budget collections. This projection is very conservative, but with the volatility and uncertainty in the oilfield, and its impact on Solaris it is prudent to make this budget projection to set our expenditures by. Any collections of these projects will be available as a fund balance.

Much of the focus for the General Fund budget in 2020-2021 is in the area of Public Safety.

Over the last 18 months various members of Brown County, Brownwood, Bangs, and Early have met and discussed the public safety communication system and dispatch operations. In the evaluation of the communication system, it was determined that the entirety of the network needs to be updated. In well over 20 if not 30 years, there have been repairs and or minor upgrades to the system, but never has there been a comprehensive overhaul to the system.

Although the City of Brownwood has provided dispatch services for the City of Early as well as other entities since 2001, no detailed agreement exists between the City of Brownwood and the City of Early for Brownwood to provide dispatch services. The City of Early has paid approximately $30,000 per year in dispatch fees as determined by the population over the last 20 years. This however represents a small dollar amount as it relates to the number of calls for service generated by the City of Early emergency services.

Working through both the communication equipment and dispatch services, all the stakeholders have a proposed budget and operating agreement that will be presented to their perspective governing bodies for consideration for approval. The City of Early is budgeting to for an estimated amount of $300,000 in the upcoming budget year to fill this equipment need.

Of this amount, there will be $150,000 in shared emergency communication equipment. This will cover its portion of tower upgrades, dispatch equipment, and radios, and redundancies built-in for dispatch at several locations. Additionally, $150,000 will purchase new mobile and portable radios for the Early Police and Fire Departments.

On the operations side of dispatch, the total operations of dispatch will be divided up between all the entities that use dispatch based on the number of calls for services they generated. This amount will be determined annually. For the 2020-2021 budget year, this amount is budgeted to be $100,000.

We are taking a big step in the Fire Department this year. For the first time in Early’s history, we will employ three full-time and three full-time equivalent firefighter positions. Early will remain a combination paid and volunteer fire department, but we will have 3 professional firefighters on during the day and two on at night. Providing 24/7 365 days coverage. We remain highly dependent on our Volunteer Fire Department and need to retain and recruit new volunteers. To help with this goal we are starting a paid response for our volunteer core. The Fire Chief along with your Administrator will work out a policy and protocol for this paid response to ensure that responses are made when needed and an excessive response does not happen when our paid staff can cover the incident. Other than these personnel increases, we are budgeting to replace the cab and chassis for one of our wildland brush fire trucks. The skid firefighting tank, pump, and attack hoses were recently purchased and will be transferred to the new cab and chassis.

Additional General fund items include replacing two patrol cars and some additional equipment for the Police Department; administratively we will be hiring a new position to serve as an Executive Assistant and Media Coordinator for the City and the Early MDD; our Parks and Recreation will begin construction on the ADA parking and sidewalks for our Ball Park complex; In the Streets Department, we will continue with our street chip seal program, replace street signs in our commercial corridor with community pride style signs, reconstruction drainage and of Terraha Dr., and the engineering of the drainage and street repairs to Autumn Dr.

The Early Convention and Visitors Bureau (CVB) has struggled this year with the impact of the Covid-19 outbreak. Although there have been numerous cancelations of events and facility rentals, the overall loss of revenue has been covered by equal or greater cuts to our expenditures. The 2020 Showcase was canceled for this September due to both the health and financial risks of having the event in the height of the virus outbreak.

In the 2020-2021 budget year, the focus of our CVB will be to market Brown County/Early through promoting events and local entertainment activities that encourage hotel stays and increase sales tax production. The strategies used to accomplish this will be through small grants, advertising, and marketing of other events and locations using hotel occupancy tax. Some of these events are annual events that will be reoccurring while others are new opportunities. We will also seek for new events to sponsor that promote the hotel industry. Due to the uncertainty of large events, this budget does not account for having Showcase 2021.

There are however funds allocated for a summer concert series should health and safety concerns not be a factor.

We fully expect the Early Visitors and Event Center (EVEC) to become operational as soon as possible and have plans to promote more activities at this location. With that, the budget allows for the hiring of one part-time person or local intern to help with marketing and the operations of the EVEC.

The Early Municipal Development District (EMDD) has submitted a budget that continues its mission of assisting and encouraging growth in jobs, sales tax revenue, and community growth. Over the last year, the EMDD has provided grants and loans that have helped many new and expanding businesses. As the economic development arm of the City of Early, the EMDD, is in a position to continue to increase its efforts to develop our thriving local economy. Having reached a point of financial strength this last year, they purchased two commercial properties. Part of the purchase price was made in cash while the remaining was made through the issuance of debt. Over the next year, plans will be put into place on the development of both of these properties to aid in the ongoing effort to increase our sales tax collections. We will be working with developers, engineering firms and our stakeholders to identify the best uses for these pieces of property.

The Brown County Water Improvement District has increased the wholesale water rate by 3.77% from $1.6646 per 1000 gallon to $1.7209 per 1000 gallon. This budget does not propose passing that increase on to the citizens of Early. This increase is expected to cost the City of Early an estimated $10,000 to $15,000 over the course of this next budget year. There is no recommendation to increase any water, sewer, or sanitation rates to our customers for the budget year 2020-2021. If these increases continue in the coming years, we will reach a point where we can no longer avoid passing the increase on to our customers in the form of a rate increase without cuts to our operations. Water projects will include a continued effort to replace aging automated water meters by 100 to 200 meters per year. We will continue working towards the demolition of the decommissioned water treatment plant located on Hillcrest. When completed, we will develop a plan to turn this location in a public park with public fishing holes.

The Sewer Fund will operate under normal conditions with no major projects budgeted out of the sewer fund for this next year. We are expected to receive plans from engineering for the Crescent Neighborhood Sewer Rehabilitation project. This project is funded out of TWDB funds remaining from the 2015 issuance for the construction of our Waste Water Treatment Plant.

Funds remaining are just above $870,000 of which the majority of it is expected to be used for this project.

We are continuing to operate the Waste Water Treat Facility and agricultural fields under normal circumstances with no issues. In 2019/2020 we will finish the year with showing a

$20,000 profit. With our revenue in excess of $45,000 and expenditures just under $25,000. IN this upcoming year I have stayed conservative in revenue estimates by projecting just $40,000. I have budgeted $42,500 in operational expenses and $29,000 for equipment and site improvements such as fencing, storage container, and field improvements. This will be the first full growing year that we should experience a decent yield of hay. The budget projections are within a couple thousand dollars of the breakeven point. However, I fully anticipate exceeding my revenue projects and staying below the expenditures. At peak estimated hay production we should produce 1200 to 1500 bails and gross between $60K and $75K annually.

The Sanitation Department is operating efficiently by providing a quality service with the lowest possible cost to our citizens. The contract with the City of Blanket will begin its 4th year. This arrangement has proven to be successful for both the City of Blanket and the City of Early. Because of this agreement, we were able to purchase a new residential sanitation truck two years ago and a new commercial truck this 2019-2020 budget year. There were no increases to the landfill rate from the City of Brownwood this year.

This last year provided many challenges in local government. Covid-19 and the continued changing guidelines and policy changes added to it those challenges. There was no situation more challenging than determining whom were essential employees to the continued operations of the city and who were not. Ultimately it became clear that all of our employees are not only essential but necessary. Providing a stable operation for our city services was critical. Local government must set an example to its citizens by operating safety, but most importantly in proving to them that they can depend on the services a local government provides. Our staff and employees have shown a strong work ethic during this time. There have been health concerns, but those concerns have been managed appropriately and our employees have continued to be the dependable employees we know them to be. Revenue decreases and financial uncertainty have been at the front of everyone’s mind.

With our continued efforts to increase positive development, diversify our sales tax revenue, and manage our budgets by being fiscally conservative, the City of Early has successfully weathered the financial storm as a result of the economic impact of the Coronavirus. Not only did we maintain the revenue projections, we out performed them. On the expenditures side of the equation, our managers controlled their budgets and expenditures. They managed this crisis by continuing to provide quality services most cost-effectively.

In 2020-2021, there is a 2% cost of living raise included in the budget as well as a change to the vacation policy, which will allow an employee that has accrued over 160 hours of vacation time the option to sell back up to 40 hours to the city per fiscal year so long as their total vacation does not fall below 160 hours.

I expect to have highly dependable and extremely qualified employees to provide services to our citizens. I look for stability in employees, but not complacency. I expected them to be continually growing professionally, and always looking for opportunities to be better servants to our community. To meet these high expectations, I strongly believe that investing in employees with good salaries and the highest level of technical training is the only way to accomplish our mission and provide high-quality service to our citizens. It is clear that this is a priority for the Mayor and the City Council as well.

This budget has been a culmination of many hours of discussion with staff, council, committees, and citizens. I believe that it is a true reflection of the goals and policies of the City Council, and a guide to meet the needs and expectations of our citizens all within the constraints of anticipated revenues.

This budget as, proposed and adopted, is the first step to establishing funds that have limited dependence on reserves and will limit expenditures within the constraints of revenues collected. In the future, as opportunities present themselves to operate more efficiently we will seek to reduce rates while continuing to provide the same or improved services. We will always explore and present those opportunities to the City Council for your consideration.

I would like to thank all the collaborative efforts of the city staff, committees, and elected officials in the development of this budget and document. It is a great feeling to be a part of such a wonderful community like Early, Texas.