Hawk Cove City Council Meeting 10/21/2025
0:00:00 Speaker: We're here in work with [name]. Okay. Call to the order of
0:00:07 Speaker: this [name] City Council meeting.
0:00:10 Speaker: Tuesday, October 21, 2025, 6 .30 p .m.
0:00:15 Speaker: Thank you, [name]. Yeah.
0:00:18 Speaker: [name]. Here. [name] is not present at this time. Uh, [name].
0:00:24 Speaker: Yeah. [name] Love. Yeah.
0:00:26 Speaker: We have one. We'll continue.
0:00:39 Speaker: Okay.
0:00:49 Speaker: Thank you for this opportunity that we had to meet together and thank you so much for the weather you provided for us and beautiful, cooler weather and we pray for your guidance and direction and all that we do, in [name] name, Amen.
0:01:07 Speaker: Thank you. Will you all stand for
0:01:09 Speaker: the pledge please? to
0:01:13 Speaker: the
0:01:22 Speaker: flag of the United States of America and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Thank you all.
0:01:45 Speaker: Public [name], do you have? No Mayor. [name] public. Okay.
0:01:49 Speaker: There's no old business, new business,
0:01:51 Speaker: received our water waste public works report and fire report. There is no action on this.
0:02:00 Speaker: Does
0:02:13 Speaker: any of council have any questions on any of these?
0:02:20 Speaker: We've had no breakdowns this month.
0:02:25 Speaker: Did we have no no breakdowns this month?
0:02:29 Speaker: It's unusual, so I thought it asked.
0:02:32 City Attorney: If he didn't list them,
0:02:39 City Attorney: he'll say that's one call out.
0:02:42 Speaker: Yes sir. [name],
0:02:46 Speaker: any questions?
0:02:54 Speaker: We've been on the IOMB
0:02:56 Speaker: received from city attorney USDA
0:02:58 Speaker: special SS unit report
0:03:00 Speaker: PA the agreement report bond status report tax report no
0:03:06 Speaker: action
0:03:07 Speaker: thank
0:03:10 City Attorney: you on the USTA SAU the USDA SAU canceled the September 16th meeting as you might know these are teams meetings they canceled that one at the USDA SAU meeting on September 30th the mayor did not attend that session or the session on October 14th 2025 on September 30th the SAU Mr. [name] asked for the status on the council passing a budget and tax rate that covered the USDA debt obligations. The city's USDA debt obligations include the city's infrastructure necessary to support the city's maintenance and repair obligations related to the sewer system which by definition includes the necessary payroll. I inform Mr. [name] that the council did not pass a valid tax rate on September 10th September 16th or September 19th because the council did not pass a valid tax rate, the city's budget and tax financial structure have defaulted to the fiscal year 2024 -2025 rates which were the same as the rates for the fiscal year 2023 -2024. Those rates are maintenance and operations of 0 .644185 for $100 to value and interest in sinking fund which is primarily for the USDA loan of 0 .129954 for hundred dollars of value for a total tax rate of 0 .775139 for hundred dollars of value. Mrs. [name], the FAU lead, asked whether the City Council had provided any structure for refunding the city's USDA debt and that means the reamortization that everybody voted for back in May and June. I explained to her that the council had not because the City Council composition did not allow the council to take any action to complete the refunding process. In addition, the city could not budget for a debt change that did not yet exist. and since the council had not voted on the debt change,
0:05:41 City Attorney: there was no way to budget for it or tax for it. Mr. [name] then stated his recommendation that the USDA issue a demand letter to the city to begin the debt default and delinquency enforcement process and for the USDA to now refer the city's debt default and delinquency to the Department of Justice for legal action.
0:06:08 City Attorney: That afternoon, the mayor signed the word number 2025 -09 -30 .01 adopting the fiscal year 2025 -2026 property tax rate under Texas Tax Code section 26 .05 B and C, which gave the city the same rates that I've already recited to. On October 6, 2025, the City Council ratified that order. On the PAD agreement, that is basically a pay -on -demand. It covers the city's monthly payment to the USDA of $1 ,800. On September 15, 2025, City Secretary learned that the USDA -SAU had not auto -drafted the monthly $1 ,800 from the city's account for July or August 2025. In communications with Ms. [name], I told her about it right away, the city learned that the USDA -SAU had converted from one payment system to another. The city's a little bit familiar with that having just been going through account transmittals from one system to another. So the city's a little familiar with that. In any case, in communications with her and learning that the USDA -SAU had been converting from one payment system to another, apparently the city's account conversion to their new system resulted in an oversight in auto drafting those two months worth of payments. Now this is happening on September 15th which is the due date for the September payment now three payments.
0:08:06 City Attorney: She informed me that the city's August 15 2025 $24 ,240 payment had posted on September 9th 2025 from August 15th to September 9th for it to get posted. Following communications back and forth with Mrs. [name] on September 18th she confirmed that USDA SAU had not auto -drafted the 1 ,800 monthly payments for July, August, and now at that point September.
0:08:40 City Attorney: Thereafter USDA SAU tried to auto -draft all three payments $5 ,400 in one lump sum on September 29th or 30th. The city's bank strictly following the PAD agreement rejected this attempt as unauthorized. The PAD agreement that the bank follows is $1 ,800 a month.
0:09:05 City Attorney: The problem was resolved between the city and its bank on October 6th, 2025. That took a little bit of running around and chasing the city secretary to be able to learn that plus you've got [name] and [name] at the office that the city offices are closed in any case in an abundance of caution on October 14th the city secretary drew and mailed a check in the amount of $7 ,200 to cover the now for payments for July August September and October however as a result of inability to communicate with Mrs. [name], the USDA SAU auto -drafted the October 15th payment of $1 ,800. So now they've got five months worth of payments. And auto -drafted that October 15th. In result, the city has essentially paid the November 2025 payment in advance. When communications with Mrs. [name] are restored, this matter will be resolved and we'll be figuring out all of the ramifications that occur from the USDA SAU converting from one payment system to another over those months.
0:10:26 City Attorney: On the bond status, because the council composition would not enable the Attorney General's office to approve a refunding, reamortization bond for the city, the city could not complete the refunding process before September 30th, 2025. There is no refunded bond contract. USDA -SAU have offered no alternative potentials other than starting the enforcement process with its demand letter and referring the city's debt default and delinquency to the Federal Department of Justice for legal action against the city. Because the city is unable to refund its USDA debt, it is not eligible to receive grants. Without grants, the roads and other infrastructure needs cannot be addressed or improved. Taxes. As I mentioned, the city's tax rate remains as it was for fiscal year 2023 -24 and fiscal year 2024 -25. While all of that has been happening, inflation has driven costs and expenses including those to maintain and repair the city sewer system higher. Sewer repairs and maintenance continue to suffer from an aging system and from customers damaging it with items materials and products that the system is neither designed nor able to process.
0:12:02 City Attorney: Sometimes this results in a malfunction in the system. The system's operator could correct sewer system issues repairs and maintenance if citizens brought these to the city's attention. Instead of informing the operator citizens continue to complain to TCEQ. TCEQ then continues to respond to these and financially penalize the city for anything it finds that it's not happy with. In result, not only are operations expenses higher, repairs and maintenance expenses are higher, but also because the complaints are not routed to the city or the city operator, the city pays penalties to TCEQ for issues that the operator would be able to resolve. The money for these has to come from somewhere. With the present property tax rate all of these expenses and penalties will be passed on to the city's residents and citizens in the form of higher sewer services bills. The next the next sewer rate study is expected to substantially increase sewer payments to meet these costs. I have seen a $200 a month in excess of $200
0:13:31 Speaker: with the
0:13:33 Speaker: current
0:13:34 City Attorney: property rate property tax rate and not being eligible for grants the city will have no fiscal year 2025 2026 funds to repair roads or meet other infrastructure or operating needs
0:13:57 City Attorney: and that's the report
0:13:58 Speaker: that's concluded yes does
0:14:06 Speaker: anyone on council have any questions
0:14:07 Speaker: a copy of your statement that's
0:14:16 City Attorney: a turning work product if it's not available as a public document
0:14:19 Speaker: that's
0:14:23 Speaker: what you give it a council which is not public.
0:14:26 City Attorney: What is public is the recording.
0:14:47 City Attorney: I'm not going to get engaged in an argument over this but I'm still wondering where are all the FOIA records that you charge the city for. Off -agenda.
0:15:05 City Attorney: I will not be supplying a copy.
0:15:08 Speaker: Okay.
0:15:12 Speaker: Any other questions?
0:15:20 Speaker: Item 8 is executive session. We shall not go into executive session. Item 9 is considered executive session. We all have one. Number 10 is announcements. Anyone have announcements on the council please?
0:15:34 Speaker: No announcements? Any announcements out here? No. Okay. I get a motion to adjourn. I have a motion. Can I get a second? I'll give you a second. I have a motion and a second. All those in favor of
0:15:54 Speaker: This meeting, Hot [name] City
0:15:56 Speaker: regular session and then
0:16:05 Speaker: Tuesday October 21, 2025 at
0:16:09 Speaker: 6 .50 p .m.
0:16:11 Speaker: is adjourned. And we thank you all. Did you say 6 .50? Yes ma 'am, I did. I said 6 .50.
0:16:27 Speaker: Thank you.