Hawk Cove City Council Regular session 9/16/2025
0:00:01 Speaker: This regular City Council meeting
0:00:03 Speaker: Tuesday, September
0:00:04 Speaker: 16th,
0:00:05 Speaker: 2025,
0:00:07 Speaker: it's now concession at
0:00:08 Speaker: 632 p .m.
0:00:12 Speaker: Victor Daugherty,
0:00:15 Speaker: Jimmy Taylor,
0:00:16 Speaker: here. Brandy Vahl is not present. Mark Viette, here. And Sherry Logan, not present. So we have three council members, which is a quorum, so we can continue. Would you like to say the invocation, sir? Thank
0:00:41 Speaker: you so much for this wonderful day Lord. Please watch over each and every one of us. Please be with everyone who needs you. And please be with Charles Kirk's family. Lord, let those kids know that you have your hands on them. Lord, keep your hand on this community.
0:01:01 City Attorney: Let us keep moving forward until USDA.
0:01:03 Speaker: In Jesus Christ most holy name we pray. Amen. man.
0:01:11 Speaker: Stand for the pledge of allegiance.
0:01:21 Speaker: To
0:01:22 Speaker: the
0:01:23 Speaker: flag of
0:01:24 Speaker: the United
0:01:24 Speaker: States of America,
0:01:26 Speaker: and to the Republic for which it stands,
0:01:29 Speaker: one nation under
0:01:31 Speaker: God,
0:01:32 Speaker: indivisible,
0:01:33 Speaker: with liberty
0:01:34 Speaker: and justice
0:01:34 Speaker: for all. Thank you all.
0:01:38 Speaker: Do we
0:01:41 Speaker: have public comments?
0:01:46 Speaker: No public comments.
0:01:50 Speaker: We have no more business down, so we run go to new business
0:01:54 Speaker: and
0:01:55 Speaker: that's received
0:01:55 Speaker: the water waste report,
0:01:57 Speaker: fire report, no action. We have those in our hands.
0:02:11 Speaker: Any questions about those.
0:02:15 Speaker: Moving
0:02:19 Speaker: to
0:02:27 Speaker: item B, receive USDA S .A .U. update.
0:02:33 Speaker: No action item. The only update I have on
0:02:37 Speaker: the USDA because there was no meeting this morning is a email I received
0:02:44 Speaker: from the city attorney
0:02:45 Speaker: that
0:02:49 Speaker: I I'd like
0:02:49 Speaker: to read in this time, because I believe this is public information, is it not?
0:02:56 Speaker: This email says, Good afternoon, Ms. Spence.
0:02:59 Speaker: This email is to update you on the status of the matters with a special assets unit to which as you know, the USDA has transferred the
0:03:07 Speaker: city of Hopco's debt
0:03:08 Speaker: account. This afternoon, I spoke with special asset assets units, Clyde Payne,
0:03:14 Speaker: all matters discussed in this conversation are
0:03:16 Speaker: included in this email in the order in which they occurred in that conversation,
0:03:22 Speaker: I informed Mr. Paine that the council did not pass a proposed tax rate sufficient to cover the
0:03:27 Speaker: US cities USDA debt,
0:03:30 Speaker: or at
0:03:30 Speaker: all at
0:03:31 Speaker: last night special minute session. Mr. Paine responded that due to the volume of FOIA requests that
0:03:37 Speaker: they're,
0:03:38 Speaker: they're coming into the
0:03:40 Speaker: SAU,
0:03:41 Speaker: the inability to document phone calls relating to the city
0:03:44 Speaker: popcode USDA debt, all
0:03:47 Speaker: communications from now on will be email. He concluded our conversation with a statement that upon receiving the email, stating the city did not pass a proposed tax rate, the SAU will issue a letter of man to the city. Mr. Payne statement was given a tone of finality. Therefore, thank him for his time. And we said goodbye. On the conversation I formed
0:04:16 Speaker: the city behind
0:04:16 Speaker: Council, Mr. Miller of this content, he could offer are no
0:04:19 Speaker: resolution, sincerely, Ryan Hodges.
0:04:29 Speaker: I did.
0:04:31 Speaker: I need to answer this,
0:04:33 Speaker: because out of the overwhelm I
0:04:35 Speaker: wrote to the USDA into the city,
0:04:38 Speaker: out of overwhelming concern and urge them for the name now received from this
0:04:41 Speaker: Hodges to on Thursday, September 11,
0:04:44 Speaker: 2025, and concerns with
0:04:45 Speaker: this content, the statement about the
0:04:47 Speaker: city property tax,
0:04:48 Speaker: not being sufficient to cover the USDA
0:04:50 Speaker: debt
0:04:51 Speaker: is a bit objective as
0:04:53 Speaker: the mayor's revised budget,
0:04:54 Speaker: which is rejected
0:04:55 Speaker: by the city
0:04:55 Speaker: secretary without legal posting, based on the present point seven seven tax rate does indeed allow for the USDA payment. If this budget tax were to be passed, the city would indeed have USDA payment
0:05:08 Speaker: included with great concerns. Thank you Mayor Spence.
0:05:13 Speaker: And that's all the updates I have because I heard anything
0:05:15 Speaker: else from
0:05:16 Speaker: them. And that's all
0:05:18 Speaker: the
0:05:19 Speaker: communications
0:05:20 Speaker: that I know the
0:05:26 Speaker: city administrator. Do you have anything
0:05:28 Speaker: there?
0:05:32 Speaker: Go back to your public
0:05:35 Speaker: works
0:05:35 Speaker: for
0:05:37 Speaker: one second. I want it.
0:05:39 Speaker: No,
0:05:40 Speaker: you're fine.
0:05:41 Speaker: You're fine. If there's something that we need to
0:05:43 Speaker: be aware
0:05:43 Speaker: of.
0:05:44 Speaker: I had about
0:05:46 Speaker: the council before that one of the one of the latter meetings that we have had about what we were looking at for the cost
0:05:54 Speaker: of the blower.
0:05:56 Speaker: Yeah.
0:05:57 Speaker: And for the installation number where I got these numbers from is what it calls last time. Okay, because that was wanted to install and we're still looking for number three. So the blower itself is not $2 ,888 and 73 cents.
0:06:15 Speaker: And the labor down here.
0:06:17 Speaker: That's for labor and
0:06:18 Speaker: by the installation
0:06:19 Speaker: was $1 ,915 for 36 cents. This is on, I just wrote it on the back of the fire, I'm sorry.
0:06:30 Speaker: Yeah, so everybody else can. Not if you guys want to.
0:06:36 Speaker: You get it written down.
0:06:37 Speaker: Can't say it in writing.
0:06:40 Speaker: Same time.
0:06:42 Speaker: I'm sorry for going backwards, it just
0:06:43 Speaker: went really fast. That's okay, I didn't realize you had anything.
0:06:55 Speaker: Here's the numbers. Yeah, that's
0:06:56 Speaker: what it called last time.
0:06:59 Speaker: So the city has not purchased that blower, is that correct?
0:07:02 Speaker: Right,
0:07:03 Speaker: that's a $19 ,888 and 73 cents.
0:07:09 Speaker: $20 ,000. Did you need these numbers? We don't
0:07:12 Speaker: want them. Anybody else?
0:07:17 Speaker: Okay.
0:07:18 Speaker: That's all I have on that. Okay. Do you have anything on USDA? The only thing I know is what you just
0:07:27 City Attorney: read.
0:07:28 Speaker: Mm -hmm. Um,
0:07:29 Speaker: we, as of yet, the city has not received a demand letter.
0:07:35 Speaker: That could mean a multitude of things. So until we actually see something, I can't really weigh in on it because I don't have a clue what it's going to say. Okay.
0:07:47 Speaker: Sorry, I'm just checking. It doesn't have
0:07:50 Speaker: a light. Or I couldn't see the light.
0:07:55 Speaker: I will check.
0:08:09 Speaker: If
0:08:14 Speaker: I had anything else, I would have ordered you to see me for
0:08:20 Speaker: sure,
0:08:21 Speaker: okay, no problem.
0:08:24 Speaker: vice versa, I hope.
0:08:26 Speaker: Yes, ma 'am.
0:08:29 Speaker: Okay, then moving on to I don't
0:08:31 Speaker: see receive USDA as a you update from the city attorney.
0:08:37 Speaker: Thank you. I have had some communications with personnel over at the USDA. Initially, I was asking them whether there was going to be a meeting today particularly in view of Mr. Payne having said that all communications will be in writing but also during those communications trying to get a hold of Mr. Payne get a response from him his what I believe is his supervisor, Ms. Brandy, participated in the email conversation and she basically said that there were a couple of people that would not be able to attend the meeting this morning, which is what I communicated to them,
0:09:31 City Attorney: and not having heard anything from Mr. Payne, I assume, and it's probably never a good idea to assume especially the things like AI and people who are a little unreliable never assume anything. However in those conversations I learned that the city's June and July, no, July and August auto withdrawal had not been pulled by the SAU for the $1 ,800 a month that the city has been paying all along. I think that would include September 15th? It may, I don't know that yet.
0:10:18 Speaker: That's the $1 ,800 now?
0:10:22 Speaker: It's an
0:10:23 City Attorney: auto withdrawal that the SAU takes every in addition to the February and August payments. So I addressed that with Ms. Brandy and she was kind enough to tell me that the USDA and SAU probably also but particularly USDA has been going through a financial restructuring from one platform, accounting platform, to another. And that's an experience that the City of Hough Oak has been going through for a couple years. So I believe it's likely that SAU USDA probably are not going to have these issues ironed out right shortly. But I did write here and let her know that the August payment for the the large sum that comes out in August also was made and that was made on August 15 and she wrote back and said that she appreciated having the information that she would refer it to Mr. Payne and Mr. Payne is supposed to get with their financial group and let them know that they're restructuring from one accounting platform to another apparently has missed pulling those funds so I will continue to stay on that.
0:12:01 Speaker: Could you please tell us that amount?
0:12:03 Speaker: Just for the record of that
0:12:04 Speaker: August 15th payment?
0:12:07 Speaker: August 15th payment? Yes. twenty four thousand four hundred and twenty dollars. So it
0:12:20 Speaker: appears
0:12:22 City Attorney: that none of those three payments are showing on their records. Okay.
0:12:30 City Attorney: In addition, in connection with the debt, I've been engaged in a fair amount of research and been discussing the financial issues with some others and repeatedly I really need to advise the council that section 1501 chapter 1501 of the Texas Government Code not the local government code, the government code,
0:13:07 City Attorney: not only requires that the city adopt a tax rate that's sufficient to generate the amount of tax that's necessary to credit or pay any deficiency owed in the sinking fund and to pay the interest in the fiscal year for that loan, but also it is necessary that when determining the tax rate for the city that the city must also fund all of the administration that is necessary and needed to make those those payments viable to process the payments to be aware of the situation and that would include pretty much everybody in city hall so as you consider the tax rate one of the issues is that at the tax rate that was being discussed at the last meeting that will not provide that administrative infrastructure to adequately this is on the agenda your and this is my time. So I, you know, I'm really good about trying not to interrupt anybody so that all of the information necessary comes out. I will be grateful to have the same respect. So what I was saying,
0:14:39 Speaker: it is
0:14:41 Speaker: USDA
0:14:42 City Attorney: because the tax rate specifically affects the bond and its repayment. and
0:14:51 Speaker: it
0:14:51 Speaker: also now
0:14:52 City Attorney: you're interrupting me will you forgive me for interrupting you while you're
0:15:00 Speaker: interrupting she's a mayor
0:15:03 City Attorney: I don't care if it is respected courtesy once in Texas
0:15:07 Speaker: nobody asked you to
0:15:08 City Attorney: be here and you are part of the discussion at the moment.
0:15:16 City Attorney: You want respect to give it.
0:15:19 Speaker: You want to bring these facts in here but you do not want input on your facts. You can
0:15:25 City Attorney: have all the input if you will be so courteous. A necessary part of funding the USDA debt includes the infrastructure and personnel that are necessary to process the USDA debt and that means keeping the city running as it is presently running. So if you will all please remember that when you're considering setting a tax rate that would be to the benefit of the city and also supportive of your roles as council people. You do have a fiduciary duty. It's my obligation to tell you these things and this is the only venue in which I can do that. So please remember that the staff, the administration, the tax rate needs to compensate them at the same rate that their contracts are currently required for the city or y 'all will be putting not only the city but individual council members in legal jeopardy
0:16:38 Speaker: okay are you done
0:16:42 Speaker: thank you ma 'am yes
0:16:44 Speaker: it is in
0:16:45 Speaker: Texas code that you
0:16:46 Speaker: must
0:16:47 Speaker: must
0:16:48 Speaker: set your tax right on your budget.
0:16:50 Speaker: You must pass a budget first. Yes,
0:16:55 Speaker: you have to have a tax rate before you can do a budget. Go
0:17:00 Speaker: back and read the code. Go back and read the code. It is in the code.
0:17:04 Speaker: It is the budget is
0:17:05 Speaker: always going. You
0:17:06 Speaker: can't make a budget without a tax rate. Please stop yelling. then you stop yelling.
0:17:12 Speaker: I'm not yelling.
0:17:14 Speaker: You were her.
0:17:15 Speaker: Well, oh my god.
0:17:17 Speaker: No. No. That
0:17:18 Speaker: is backwards. It is Texas.
0:17:20 Speaker: Oh. Off agenda. Your Honor, may I assist the council with that? No,
0:17:25 Speaker: ma 'am. No,
0:17:26 Speaker: ma 'am.
0:17:26 Speaker: That is my obligation. It's my duty. And actually, it's my right as an officer of the city. the tax rate must. First off, first off, you get a proposed
0:17:39 Speaker: budget. I've been on
0:17:40 Speaker: council for four years.
0:17:42 City Attorney: I've read it. Alright, Miss Tiffany, if you'll excuse me, please. The budget, the proposed budget comes first. The proposed tax rate comes next. There are hearings that are supposed to occur and publications that are supposed to occur from those proposed items thereafter the city must choose the tax rate and budget now typically those are done in the same council meeting but they must be done and it doesn't matter whether the council meeting addresses one first or the other they both must occur in the same council meeting. Now as to which one of them must come first, you can't have a tax rate without a budget and you can't have a budget without a tax rate.
0:18:45 Speaker: In Texas
0:18:46 Speaker: municipal government the council typically reviews the proposed budget first as the adoption of a budget is prerequisite for leveling
0:18:55 Speaker: property taxes.
0:19:02 Speaker: Taxes can be done at the same meeting
0:19:05 Speaker: as the budget, but the budget must be adopted
0:19:09 Speaker: before
0:19:09 Speaker: a property
0:19:10 Speaker: tax rate can be levied.
0:19:13 Speaker: Thank you. All right.
0:19:21 City Attorney: Mayor, may I ask a question? You were going to provide me with a statute from the last meeting. I have not received it.
0:19:34 Speaker: Which statute? What
0:19:35 Speaker: are you referring
0:19:36 City Attorney: to? The one that you were relying on during the last meeting. It's probably in the recording if there wasn't a recording from that meeting.
0:19:45 Speaker: I will go back to check my recording and see what statute that was.
0:19:48 City Attorney: I'll be grateful to receive it at your earliest convenience, please.
0:19:59 Speaker: There is no action on this. So we move on to item B, receive August 25th financials. No action. Thank you. Brandy's back here and
0:20:50 Speaker: They're already putting me Yeah.
0:20:58 Speaker: Mark was just stacking them up. This is also not an actionable actionable
0:21:15 Speaker: item on the agenda.
0:21:18 Speaker: Information for also information and public has ever brought to these paper
0:21:24 Speaker: forms as
0:21:24 Speaker: well.
0:21:34 Speaker: There is
0:21:39 Speaker: no executive session.
0:21:44 Speaker: Anybody have announcements?
0:21:53 Speaker: No announcements.
0:21:55 Speaker: Can I get a motion to adjourn? I'll give you a motion to have a motion. Can I get a second?
0:22:03 Speaker: I have a motion in a second, all those if I ever rejoined in this meeting.
0:22:08 Speaker: And what time is this meeting to turn at?
0:22:11 Speaker: 654. We need one more.
0:22:14 Speaker: I said
0:22:15 Speaker: I Oh, I'm sorry. I did. I didn't need that. I
0:22:18 Speaker: want to go home.
0:22:21 Speaker: Okay. All right.