We have a budget! We mangled it at the last second, and now we’re stuck with it. Read how we shot ourselves in the foot here.
Here we go!
Hours 0:00 – 3:25: The budget and tax rates. I may have gotten a wee bit cranky about how this went…
Bonus! 3 pm workshops: Very quick updates on the Tenants Right to Organize policy and police car rental policy, and an update to the Airport Master Plan.
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One final note: The last few weeks have obviously been pretty dicey, politically. Clearly the First Amendment protections on political speech are slipping. I don’t yet know what this means for me, and for the blog. For now, I’m taking a wait-and-see approach.
They live in our lovely river, but nowhere else. It could be catastrophic if there was a crash on I-35 over the river, and a bunch of hazardous chemical were spilled into their habitat.
What cities do in this situation is design a Hazmat route. Here’s what we’re proposing:
That’s along FM 150. So you’d cross the San Marcos river well east of the habitats of those critters, if you were driving a truck full of something nasty.
A few notes:
This is only for thru-traffic. If you’re delivering somewhere in San Marcos, you can head there.
This is going to be a long process – it’s gotta go back and forth with TxDOT a few times.
We also have a lot of trains crossing our river! I doubt you can re-route trains quite so easily, but I wonder how environmentalists think about and plan for these risks.
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Items 23-25: The budget and the tax rate
I’m sorry, this item gave me whiplash. This went off the rails. Not the good kind of roller coaster.
We need a fair amount of backstory. The drama on Tuesday unfolded so fast that it will be incoherent, unless I bring you up to speed, first.
I’ll try to keep it zippy!
Background
First thing to know: we have not raised our property tax rate since 2022.
Politicians genuinely hate raising taxes. Politicians like being liked! They like being elected. I don’t know where we got this idea* that they rub their palms together and cackle about bilking tax-payers, but they don’t do this.
Polititians love short-term easy decisions that make tax-payers happy! Raising taxes is the opposite of that.
*It was Reagan.
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The budget process
1. January-February-March-etc: they hold some giant two day workshops. Councilmembers develop their priorities for the next year. More workshops. Very slow grind.
2. May-June: The first tax estimates come in: we’re in a budget crisis. We can squeak by this year, but we’re facing a budget cliff.
Our property taxes are down (because home prices are declining)
Inflation is up.
We are as lean as we can go. We have already cut $100K from departments.
We’ve got some big expenses looming. (Covid money ending.)
The state government is trying to strangle cities.
Here’s the graphic that they showed:
It was a big Come to Jesus Moment. Council went to Jesus. They gave direction that they wanted to go with the Structurally Balanced side of that road.
Bottom line: “Structurally Balanced” means raising the tax rate modestly over multiple years (instead of one big crazy future hike.) All of council agrees with it.
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June: In June, staff comes back with some Structurally Balanced tax estimates:
Here’s what everyone said they wanted:
Ok, great! We’re getting somewhere.
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August: Real numbers come in. (June was just an estimate.)
By law, council has to set their own upper bound, in August. It’s a weird quirk.
So staff lays out these possibilities:
That’s in the afternoon, at the 3 pm workshop.
Matthew and Saul are all willing to go up to the middle column now. The gravity of the budget crisis is evident to everyone.
The Lorenzo changes things up: “I want to go between 64.96¢ and 70.49¢. I want to land on the number that gives a $0 in that last row. Neither a surplus or a deficit forecast for 2027.”
Everyone is intrigued by this idea. He ends up successfully getting everyone on board with this! What careful planning we’re demonstrating!
That night, at the 6 pm meeting, they vote on the tax rate cap:
So we go with the 67.69¢.
This is our max: the final tax rate cannot be higher than 67.69¢.
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Note: In August, they also mentioned something about an EMS study. It was another potential looming cost. This is going to become a very big deal, but it didn’t jump out at me then.
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Last background month! We’re now to September.
September 2nd meeting:
They take the first official vote on the 67.69¢ tax rate:
Now you’re all caught up.
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This current meeting!
Here are the three scenarios we need to have on hand for this conversation:
What would home owners actually have to pay, if we raised rates in these categories?
The “No New Revenue” rate, 62.78¢. (NNR) Your tax bill goes up $0.
Option 1: 64.96¢. The average tax bill goes up $72.46 per year, or $6.03 per month.
Option 2: 67.69¢. The average tax bill goes up $163.21 per year, or $13.60 per month.
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Sidenote: Those amounts are based on an average house worth $347,398 (and $15K homestead exemption).
Most of San Marcos rents! But for those who own homes, home value varies a lot.
Here’s the average home price by neighborhood in San Marcos:
The last column is the monthly increase, under 67.69¢.
That chart has 40 rows. Only the last eight rows exceed the average home value! (Blanco Vista and Kissing Tree are both way bigger than they seem.)
Point being: most neighborhoods would see smaller tax increases under these proposed hikes.
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The public outcry:
<crickets> …. <crickets>
There was none. I mean, I’m sure Council got phone calls. But I’ve watched these meetings for years now – compared to other years, this is nothing.
Two people showed up to talk about the budget during the public hearing. They both made nuanced points about the good parts and bad parts of the budget.
People show up when they’re mad. This ain’t that. This is the wind at Council’s back, pushing them to make the responsible decision.
And then suddenly there is a big curve ball: EMS.
This came up in August, but it was uncertain. Now it’s certain.
So, there’s something called the San Marcos-Hays EMS. This is who you call when you need an ambulance. It used to be a lot bigger. Over time, Wimberly left. Then Buda left. Then Dripping Springs left.
Since the August meeting, it’s now official: Kyle and everyone else is leaving. So it’s just San Marcos. (The cheese stands alone)
This is a big problem! We don’t have a city-run EMS. We’ve got fire fighters who may be trained paramedics, but they can’t take you to the hospital. We don’t have ambulances. We don’t have a facility to store ambulances. We don’t have the infrastructure to run another department. But because this partnership is dissolving, we’re going to have to figure it out.
This is going to cost about $2 million. This will start getting dealt with in November.
Bottom line: those tax rates all need to increase by about 2.4¢ to cover EMS.
Council Discussion
Council asked a lot of questions about the EMS situation. They also were asking about Council priorities – what had to be decided on Tuesday, and what stayed flexible. It was not a very long conversation.
Lorenzo keeps acting squirrelly.
Finally he says: “I don’t like the 67.96¢ anymore. The State legislature didn’t pass those crazy laws after all. We should have more economic development! I want to go back to 64.96¢.”
Well, shit!
A few things:
1. “Economic Development”: I erased a big rant about this. It’s not a magic bullet.
This is like walking out onto the NFL sideline and telling the coach, “Hey, you should try to score more points than the other team! Then you’d win!” City staff really does know about economic development. They are always working on it.
2. The State legislature will definitely do Abbott’s bidding, and Abbott wants those laws. If not 2025, then watch for them in the next session.
3. The 64.96¢ isn’t an option anymore! It doesn’t include EMS!
The City Manager responds with alarm: “Please, please don’t go with 64.96¢. That won’t even cover EMS. We need at least 65.15¢.”
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Listen: The rug just got yanked, suddenly, and nobody is prepared. Nobody has the presence of mind to call a time-out and fix all the numbers.
Confusion reigns.
But look how helpful I am! I made you a chart!
This is what I think city staff would have put on a slide, if anyone had had advance warning.
Here’s my theory: I think Lorenzo intended to go from the 3rd row to the 2nd row. After all, he said “64.96¢”. But since we now have an EMS crisis, he didn’t even cover the first row. The City Manager is asking him to please at least get to 65.15¢ in the first row.
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We’ve suddenly rolled back all the careful planning for the budget cliff. The budget cliff is still coming! We still did all the planning! But instead, we’re about to do this:
I’m especially flabbergasted because Lorenzo himself was the one who promoted the 67.69¢. He literally picked it to leave us with a balanced budget in 2027 – neither deficit, nor surplus.
Saul, Shane, and Matthew were always barely willing to make a difficult vote. So as soon as Lorenzo gives them permission, the coalition for 67.69¢ falls apart.
The vote on 67.69¢:
Yeah.
Let’s have a time lapse:
(Technically, I’m combining two separate votes in that last column. First they vote for 67.69, and it fails. Then separately, they vote for 62.78+EMS. This passes.)
Anyway, that’s the whole saga! We had the wind at our backs, and instead we shot ourselves in the foot. It felt like someone whispered in Lorenzo’s ear at the 11th hour, and the whole thing unraveled.
Honestly, I’m kinda salty about the whole thing. .
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One final note: $2 million for EMS is a bargain. That works out to 2 cents. By law, Emergency services is allowed to charge a special tax of up to 10 cents. That would bring in about $8.5 million.
Nobody is trying to shake down tax payers here. They just want an ambulance to show up when your grandmother has a heart attack.
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Item 4-5: Electric and Water Rates.
The next discussion is even goofier, if you can believe it. (But less destructive.)
Your electric bill comes in two parts:
a base rate ($14.31)
a usage rate. (Based on how much electricity you use.)
Usage rates are going up. (Discussed here before.)
Shane Scott speaks up:”Let’s just cancel the base rate!” He wants everyone’s bill automatically lower by $14.31 every month.
You can practically hear staff’s hearts all plummet through the floor as they try to grapple with this craziness. (Ten minutes ago, we tanked the budget over whether to raise taxes by $6 or $12 a month. And now Shane wants to throw away another $14?!)
The director of utilities tactfully explains that this would blow a $3.4 million hole in our budget. The city manager gently mentions our bond rating and debt service coverage. We could get sued by bond holders.
Shane withdraws his motion.
The vote on electric rates:
A little later, we have the vote on water rates:
So water rates will not change.
Listen: this is totally irresponsible. This is lazy, wishful thinking.
The city is not turning a profit on water. You have to cover the costs of your water utility.
If you want to save people money on their water bill, help them conserve water. Don’t strangle the department that has to fix the pipes and pay for the water rights.
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That’s basically it for the meeting. I know barely anyone cares, but this was super big bullshit.
This came up before here. Now we’re workshopping it.
The basic idea is that tenants should be able to meet up and talk about their landlord, or their living conditions, without fear of getting evicted.
This is the type of behavior that is protected:
Great!
And here’s the type of thing a Landlord is not allowed to do:
Sounds reasonable.
On the other hand, landlords also have some rights:
Seems reasonable.
Finally, you still have to abide by your lease.
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My main question is about Rent-By-the Bedroom. We had a fantastic presentation on these, last year.
RBB complexes skirt rules by avoiding certain legal terms. Tenants don’t sign a “lease”, they sign an “installment contract”. So a lot of laws about tenants and landlords don’t apply to them.
Since that’s their game – swap out magic words to avoid legal status – we need to make very sure that our language is broad enough to include them.
I’m looking at the definitions section from the proposal:
“Dwelling” and “landlord” don’t seem broad enough to include “Installment Contracts”.
(Also: the definition of “Lease” uses the word “Landlord”, and the definition of “Landlord” uses the word “Lease” so things are getting circular here.)
Other than that, this is a great step forward!
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Workshop #2: SMPD Vehicle rental policy:
This has also been in the works – literally for years. Here’s where they’re landing:
Great!
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Workshop #3: Update to the Airport Master Plan:
We have an Airport Master Plan that was approved in 2021.
(Honestly, I’m kind of guessing what they said, based on the slides. I was distracted. Sorry about that!)
This runway is going to get a glow up:
And it sounds like there will some day be a passenger terminal out front:
This will come around for approval during a regular council meeting.
Short meeting this week! It’s budget season. Your taxes are going up, but in the mildest, most responsible way possible.
Let me tell you all the weedy details:
Hours 0:00 – 3:04: Mostly the tax rate and the budget, plus one little rezoning, just north of campus.
That’s all, folks!
(There was a very short, 15 minute workshop on the Capital Improvement Projects for the new budget, but I’ll just point you to the video and the slides, etc, here.)
Some years, citizens get fired up and angry at the budget. This year was the opposite.
Three people spoke on the budget, and they all praised council for increasing funding for the Human Services Advisory Board. (HSAB grants are how the city helps fund all the nonprofits that help kids, people in poverty, vets, the elderly, etc.)
It was pretty short!
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Items 20-24: Welcome to our $371 million dollar budget!
We’re bringing in less money from sales tax and property tax.
Sales tax peaked in 2023 and hasn’t returned. Property taxes have been flat. Actually, they’ve gone down on existing properties, but they’ve been propped up by new builds.
City department budgets were flat two years ago. This past year, they cut $100K collectively. But everything is getting more expensive, so even holding things flat means you have less purchasing power.
The State Legislature is always, always trying to knee-cap cities:
This past session it was House Bill 73 and Senate Bill 10. City staff implied that there were a few others. All of these cap city spending or cap city taxes.
The concept isn’t new – we already have caps on tax hikes. But these new bills are brutal in their severity.
All these bills were still up in the air last Tuesday, when city council met. Since then, the special legislative session ended. As far as I can tell, none of these passed? But Abbott could always call a 3rd session, or these could return in 2027. So this is always looming.
(Can you imagine how relaxing it would be if our state government wasn’t so hellbent on wrecking Texas cities?)
We’ve got three apartment complexes that were purchased by HFCs, and we’re losing about $630K in tax revenue from them. (They’re tied up in lawsuit appeals, so it could still tip our way.)
There are almost $4 million worth of new expenses that are kicking in soon, over the next 1-2 years.
The ones with the checkmarks were funded from federal Covid money, which is expiring next year.
6. Council also has some new priorities, which cost money:
Increasing HSAB funding by $200,000
Increased funding for tenants rights and tenants legal support
Start an office of community support and resource navigation.
Probably more that I’m not remembering
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Because of all this, tax rates are going up.
I mean, we don’t really have a choice, right?
If you own a $365K house, here’s how it affects you:
If you own a smaller house – say $200K assessed value – then you’d pay like so:
Last year: $1,115 per year, or $93 per month. This year: $1,252 per year, or $104 per month.
We always focus on home owners here, because it’s easy to compute their tax costs. But rest assured: landlords cover the cost of property taxes by passing it on to their renters.
My back-of-envelope estimate is that an average renter pays about half as much: $640 per year towards their landlord’s property tax bill, or $53 per month.
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Your utilities are also going up:
This is mostly based on CUAB recommendations. CUAB stands for Citizens Utility Advisory Boards.
Basically, if you don’t raise rates for a few years, you’ll get into a big financial hole. Then your bond ratings tank and it gets more expensive to borrow money, and you’re in even bigger financial trouble. To get out of it, you’d have to shock the community with a giant rate hike in order to right the ship.
So the idea is that it’s better to nudge prices up gently every year, to keep up with inflation. CUAB is the one that has to figure out the new rates. This is that.
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One funny detail: The goal is to stabilize our budget going forward. We could have scrapped by this year, but then we’d be in a big hole next year. The looming expenses will kick in, and we’d have to raise taxes a lot, or cut services significantly, to handle it.
But because we’re being proactive, we actually will have $1.3 million of breathing room in the meantime.
City staff went to all the city departments, and asked about things like deferred maintenance projects or other ongoing needs. Here’s some possible ways to spend the money:
Council will hash this out later.
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Finally: my yearly rant about taxes.
Taxes are good! This is how we can take care of our most vulnerable people. This is how we can solve collective problems, without someone trying to extract as much profit as possible.
We do this in order to prove a point, or something? The feds can’t force us to feed our kids or get medical care when we’re sick, dadgum. )
Look, the United States can easily afford for every person to have a safe home, free healthcare, and access to healthy food and education. This country is extremely wealthy. Collectively, we can afford to lift everyone out of basic poverty. We just choose not to.
Stop electing Republicans who are in the pocket of extremely wealthy Texans.
(End of rant. Thanks for playing along!)
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Back to council. How did the votes go?
The votes on the tax rate and the budget:
Lock step, baby!
The votes on the various utility funds:
That’s the votes on Trash & Recycling rates, Electric Utility rates, and Water and Wastewater rates, respectively.
The votes are dropping like flies! Hang in there, councilmembers! They all passed, though.
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Saul asked some interesting questions about our water supply:
Q: How much water do we sell to other cities? A: We sell to Kyle, to County Line, and we sell reclaimed water to Buda and others.
(I don’t know what “County Line” means, and when I try to google it, I just get a bunch of BBQ joints and maps of counties. ¯\_(ツ)_/¯ )
Q: What happens if they don’t use the water they buy? A: Our contracts are “50% take or pay”. So they have to pay for at least 50% of the water we’re setting aside for them, even if they don’t use it.
Q: Were we ever in danger of not getting our water from Canyon Lake, due to drought? A: Both Canyon and Edwards water have tiered drought restrictions. So we always get some water, but they require us to use less water during a drought. Before the July floods, Canyon Lake was Stage 4, but now they’re Stage 1. Edwards Aquifer has been between Stages 3 – 5 all year long. They’re about to tip into Stage 5 again.
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That’s all of the budget talk for today! The official, final vote will be at the September 16th meeting.
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Item 25: Just one tiny rezoning!
This is 906 Chesnut St:
From the street, it looks like so:
That’s if you’re standing on Chesnut looking back towards LBJ. Vie Lofts is on the right.
The developer wants to rezone it as CD-4. (Basically, they want to tear it down and build small apartments.)
Everyone says okay.
I’m okay letting it go, as long as we take a moment to pour one out for this wallpaper:
I mean:
I’m not made of stone, people.
Also this window treatment:
and maybe this pink trim:
ok, and this built-in cabinetry and paneling:
I take it back! Save this house! It’s too pure for this fallen world.
Honestly, the rest of the meeting was pretty zippy. A few quick items:
postponing the new development by the high school
funding for the new water reclamation facility
funding for CARTS
setting some dates for elections and city council meetings next year.
On CARTS, we pay about $621K, and the federal and state government combined pay about $1.75 million. That’s great! Redistribution of wealth at work.
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One last detail: Executive Session
Finally, Council discussed this land in executive session:
That’s the land that SMCISD is selling. There’s a big petition and movement in the community for the city to purchase the land, so that they can dedicate it towards the Mexican American and Indigenous Heritage and Cultural District.
So I don’t know what happened in Executive Session (obviously), but afterwards Council directed city staff to ask SMCISD about delaying the deadline of the sale, so that the city can get its ducks in a row.
I think it all comes down to timing:
Can the city speed up enough to meet SMCISD’s budget crisis timeline?
Can SMCISD delay long enough to accommodate the city’s due diligence and bureaucracy?
Also Hays county is somewhere in the mix, too. We’ll find out the details eventually!
There is only one topic, but there are over two hours of comments. It’s all data center, baby.
There were 14 speakers in favor. Here are the main arguments made by the people who want us to approve it:
These are all over the place already.
San Marcos needs the tax revenue.
I am the property owner, or I’m going to work in some way on this project, and it sounds great to me
There were 29 speakers opposed. Here are the main arguments made by the people who oppose it:
We’re in a drought, and data centers use a massive amount of water.
Data centers use a massive amount of electricity. Our rates will go up, this is bad for the environment, and the grid can’t handle it.
Don’t sell out the San Marcos river to greedy corporations
Cyrus One is secretive and unwilling to answer basic questions.
Anecdotally, people have stories of odd illnesses from living next to data centers.
There were another few speakers opposed at the 3 pm workshop, and then another 25 at the public hearings. (The vast majority were people speaking more than once, though.)
This will take up the vast majority of the meeting, so we’ll unpack all these points. Stay tuned.
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Items 10-13: But first! we have the quickest little rezoning.
Have you ever been driving south on I35, towards New Braunfels, and noticed these guys?
They make concrete, and they’re here:
The owner wants to zone two little blocks of land, between Heldenfels and I-35:
He wants these to also be Heavy Industrial.
No one is fussed. Everyone says okay.
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Items 14-16: Ok, it’s time for the AI Data Center. This is a doozy.
Background: We are talking about land here:
The property owner wants to zone this land Light Industrial, so that he can sell it to Cyrus One, a data center company.
Let’s talk about data centers
Apparently there are 300+ data centers already in Texas. Of those, 40 are in the Austin and 49 are in San Antonio:
Not counting the one on tonight’s agenda, there are apparently two being developed in Caldwell County and three more in Hays.
Data centers have two big problems: they use a lot of water and they use a lot of electricity. Texas makes this worse, because counties aren’t allowed to regulate use of natural resources. (Virginia Parker, director of the San Marcos River Foundation, said we’re the only state with this particular idiocy.)
So as long as data centers stay outside of cities, there is currently no way to regulate how many get built.
This specific data center
The owner is a guy named Mayberry, and the property has a funny history. (Not funny haha.)
Back in 2022, he asked the city to annex most of this land into San Marcos. He wanted to sell the land to a developer, to build single-family homes out there.
This was always a weird, terrible idea! First, the sprawl would be insane. It’s farm land out there, not close to anything.
Second, there is a massive power plant next door:
Council had endless discussions about whether it was fair to build homes next to an extremely loud, bright, flashing power plant. In the end, they settled on a mandatory disclosure to potential buyers and some fencing.
It’s been three years, and clearly no one wants to build these houses. So Mayberry has moved onto the next idea, which is this Data Center.
But since most of the land has been annexed into San Marcos, he now has to get permission from the city to rezone.
In this one data center, and only this one, we now have a say.
Back in March, Planning and Zoning denied the rezoning. (In fact, this was Jim Garber’s last meeting.) Planning and Zoning had a ton of concerns.
When P&Z votes down a rezoning, it takes a supermajority at Council to overturn them. So tonight, the data center will need 6 votes out of 7, in order to pass.
We’re going to cover these topics next:
Noise and lights
Water
Electricity
Impact on San Marcos, and the Restrictive Covenant
Property taxes
Buckle up!
Noise and lights:
Staff basically says, “Look, plenty of data centers are in residential areas already and everyone seems to be chill with it. Look!”
“Isn’t that so close? See?”
“And also, what if Mayberry had built those homes! Wasn’t that an even worse idea?”
(For the record, Jane, Shane, Mark Gleason, Saul, Alyssa, and Jude Prather voted yes for those homes, in 2022. Max Baker voted no.)
The comparison to the imaginary, nonexistent homes is silly. The homes don’t exist.
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Here’s the real argument the city should have made: this data center is next door to the Hays County Power Plant.
Seriously, the noise, lights, and weird vibes that come from this data center will be dwarfed by what’s already coming from the power plant.
2. Water:
Data centers run hot, and so they use a lot of water to keep the computers from overheating. A traditional, evaporative system uses maybe 550,000 gallons/day?
Technology has gotten better, and now they use a closed loop system. You fill up the building one time, and then it keeps re-using that water for the lifespan of the building. After that, the only water needed is for employee bathrooms and kitchens.
Mayberry says that the initial fill up will require 60K-70K gallons of water per building, and there are 5 buildings. So roughly 400,000 gallons will be needed to fill the buildings, one time.
After that, he says that each building will use about 4-7K gallons of water each day. That’s pretty normal for a business:
3. Electricity:
The electricity is insane.
Mayberry says that each building will use about 75 megawatts of power. So over five buildings, they will use 375 megawatts.
City staff says that all of San Marcos, at peak usage, is about 150 megawatts. Every single one of us, on the worst day in August! That’s insane. On a typical October day, all of San Marcos uses about 25 megawatts. So these data centers really do gobble up a ton of energy.
Two questions come up: – Will this drive up water use, indirectly? – Will this drive up rates?
Both answer are yes, sort of.
Producing electricity requires water. But it’s not using San Marcos water – it would be from any power plant, in the entire state. All the electricity from all of the power plants gets dumped in the grids, and it gets blended around. When you draw electricity, you’re getting a random blend of all those sources.
(Also, not all energy sources require water. Gas, coal, and nuclear all do, but wind and solar don’t.)
The same is true for electric utility rates: all 300 data centers are putting a huge strain on the grid. More power needs to be generated, and that is going to cost money. But that cost is going to get spread across the entire state.
4. Impact on San Marcos and the Restrictive Covenant:
This data center will not use San Marcos water or San Marcos electric. Water would be supplied by Crystal Clear water, and they’d get electricity from Pedernales.
All data centers in central Texas are harming all of central Texas. The bad effects are distributed pretty evenly. We’re all using the same water table and tapping into the same electric grid.
This specific data center does not specifically damage San Marcos or the San Marcos river.
The Restrictive Covenant: A restrictive covenant is a legal contract of all the hoops that the developer is willing to jump through, for the city.
Since getting knocked down at P&Z, Mayberry is trying to do whatever he can to get approved. Here’s his offer:
and
5. Why even do this?! (Property taxes)
Allegedly, it would bring in an enormous amount of money.
To put that in perspective: This past year, we’ve had a budget crisis, and city departments had to make cuts. Total, across all departments, we cut $100,000, and it was a huge strain. $9 million would go a very, very long way.
My two cents
I’m out of step with my readers here, and I apologize. I think we should take the money.
Data centers are run by greedy, irresponsible corporations that do not care about local resources. They will exploit and destroy all the beauty in this state, if they can. Texas desperately needs to regulate this industry and limit the number of data centers that are being built.
And yet!! I think we should hold our nose and let them pay us lots of money. There is so much need in San Marcos, and so much poverty.
Rejecting this does not move the needle on the actual problem. Take the money.
Here is what Council says:
Matthew Mendoza goes first, and he is fired up. He says:
I voted against putting houses by the power plant. Terrible idea.
We didn’t annex SMART/Axis because of local activism, and now they’re building anyway, except unregulated. I get complaints every day from people who live in Pecan Park. Annexation means regulation, and that’s good.
We cannot run this city on tax income from neighborhoods. It’s not sustainable. You all don’t pay enough in taxes for how much it costs to run a city.
We need opportunities in this town. My blood is in the river and soil! Jim Garber was my scout leader!
Jane Hughson goes next:
I have a ton of water cred. I was the first chair on the board of the Edwards Aquifer Authority, senior board member of ARWA, etc.
I’ve got some concerns, but I also am open to negotiation.
Listen up: you think you hate living next to a data center, but you would really hate living next to manufacturing. I’m trying to keep that from happening to you.
The amount of power needed is crazy. I have a lot of questions that we’ll get to.
Saul Gonzales goes next:
No. I’m a hard no. I listen to my constituents, and they know more than me. Everyone knows my reasons why. No.
I’m also a hard no. I’m not going to dismiss the voices of this many people.
…
Let’s pause and talk strategy:
This item needs 6 out of 7 votes to pass. Saul and Amanda are voting no. Therefore it can’t pass.
But everyone pretends like this didn’t just happen! We proceed to have a detailed discussion for the next hour. It was a little weird.
However: the ending is not black and white, so I’m going to force us to walk through all this slowly.
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The nitty-gritty questions
Q: Can the restrictive covenant be changed? A: Yes. This is just a first reading. Staff can bring back changes for second reading.
Q: Is the property owner willing to make the covenant permanent, instead of expiring in 20 years? A: Sure.
Q: How can we enforce the covenant? A: A bunch of different ways:
1. The biggest items are how buildings are built. We withhold occupancy permits until it passes inspection. We have a lot of leverage there.
2. We can require them to submit their monthly water bill to the city, and make it publicly available.
3. We have an (overworked, underfunded) code compliance division who will make the rounds out there and check for things like noise violations.
4. For any other violations, we’d take them to court and get an injunction. Court orders them to stop doing whatever they’re doing.
Q: How do you end up using 4-7K gallons of water in each building, each day? A: That’s pretty standard for a regular office building with a bathroom and kitchen. Nothing major.
Q: If you ever had to drain the closed loop, what would you do with all that water? A: It’s got a ton of awful chemicals in it. It would need to be disposed of as a hazardous waste. That can’t go down the drain.
Q: Can they build their own gas power plant and get around ERCOT? A: Not if they’re in the city limits. They’d need approval from P&Z. If they’re outside the city, yes.
Q: Why does everyone have stories of how this will cause electric rates to rise? A: Electric rates will definitely rise, because of the 300 data centers across Texas. Whenever there are new grid costs, those costs are spread across the entire state. So we’re already facing this. This particular one doesn’t affect us any more than the rest.
Q: Can you use reclaimed water on all your landscaping and stuff? Will you be sustainable? A: Sure.
Q: Can you fill the original big amount of water using reclaimed water? A: Probably not worth it, to run pipe across the street for a one-time use. Q: but could we use a water truck? A: Yes, that would solve the pipe problem. We don’t know if it’s okay for a data center.
Q: Go back over the part about how much water it takes to make electricity. A: It does take water to make electricity, if you’re using non-renewable energy. But not for wind or solar. But all the electricity goes into a big mushpot. So data centers just draw a big blend of energy. It’s not coming from the San Marcos river or anything.
Also, if you’re starting a new power plant, you have to show ERCOT that you’ve purchased the water rights before you connect to the grid. You can’t just start using the Edwards Aquifer for your new power plant.
Q: Remember that KUT article about how we’re running out of water? It was factually incorrect and scared a lot of people. A: I know, right?! That was crazy. It was like the author missed the part of the presentation with the good news. We reached out to them, but they ignored us.
Q: Go back over the electricity usage again. A: Each building uses 75,000 MW of power, and there are 5 buildings. So they use 375K megawatts, altogether. On a typical day in October, San Marcos uses about 25K megawatts, and our peak usage is about 150K megawatts.
HOLY MOLY.
A: But keep in mind, they’re not on San Marcos power. But also keep in mind, the grid costs are shared by all Texans.
Q: How easy would it be for them to go through disannexation from the city, and build here anyway? A: It’s actually pretty hard to disannex. They’d end up having to sue us.
Q: So is Cyrus One backing out of the project? Why are they not here? A: No. They said they are “withdrawing from the zoning case.”
Translation: Cyrus One does not want to deal with San Marcos residents. To be super duper clear, they are 100% assholes who will screw over everyone and anyone. (I’m still okay taking their money.)
The vote
By this point, it’s well past midnight.
It’s finally time to vote:
So it fails! Remember, it takes 6 votes to override P&Z.
Remember an hour ago, when Saul and Amanda both said they were “no” votes? Lo! it hath come! As heralded.
The vote has failed.
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SO IS IT DEAD???
No. This is where it gets murky.
Council dabbles in entertaining the notion to send it back to P&Z. The argument goes like this: “P&Z didn’t see the restricted covenant. Maybe they would have approved it, if they saw the current version! And if they approve it, then council only need 4 votes to pass this, and not 6 votes.”
However, Council cannot just send it back to P&Z. Either Saul or Amanda have to agree to reopen the issue. They both say no.
Amanda, in fact, is quite angry: “You lost a vote. Quit trying to find a workaround.”
(I mean, I’d be furious if I opposed the data center, as well.)
Council does not quit trying to find a workaround! They have a giant conversation about it. In fact, they break out the giant rule book of technicalities, to figure out what’s allowed and what’s not allowed. Will the developer have to wait 6 months or 12 months to re-apply? Or can they waltz in tomorrow with this exact paperwork, and re-apply, and go to P&Z for approval?
Answer: [This answer takes a while. Picture much shuffling of paper, scrutinizing all these detailed scenarios, double-checking what exact words were said. But eventually…] There is no waiting period. They can waltz in tomorrow.
So there you have it.
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Bottom line: This application is dead. But Council left a trail of bread crumbs for the applicant to re-apply to P&Z and get a better outcome.
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Item 19: Upcoming budget details!
We’re beginning budget season. At this meeting, Council sets an upper bound for the property tax rate for next year.
In many ways, this is a continuation of the 3 pm workshop conversation.
Normally there would be a big presentation. But it’s 1:30 am by now. I’m just going to zip through some key details.
Our property taxes are down:
If you add in newly built property, it’s a little better, but you can still see the problem:
Here are the different property tax rates that Staff proposes for Council:
and here’s what that means in terms of your property tax bill, if you’re a home owner:
Council ends up choosing ¢67.69 as their upper bound.
There is a really long discussion of how they got to this number at the 3 pm workshops. So if you’re curious, keep reading.
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Item 20: Changes to the LDC
“LDC” stands for Land Development Code. All year long, staff makes notes about all the little improvements that anyone ever mentions. There are also things they have to change, based on the new laws passed by the legislature.
This is a big, long complicated process that will take months.
Everyone is exhausted, and they don’t go through the details. It’s going to come around a few more times, though, so we’ll unpack it before it passes.
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The meeting was finally over at 3:11 am.
In other words, council members just spent TWELVE HOURS sitting in those chairs, up at the dais. That’s rough!
We get money from property taxes and sales taxes. In San Marcos, we’re split pretty much 50-50 between the two:
Our property tax rate is on the higher side:
but there are some reasons for that. For example, we have a lot of tax-exempt property:
particularly because of the university. You can also see Gary Job Corp on that map.
(I always love it when I-35 is drawn East-West.)
and also because our houses are less expensive on average:
and so we struggle to pull in enough revenue.
So altogether, here’s what an average person pays in property taxes:
Now if you’re a homeowner, your property taxes also include schools, county, and special roads district. So it’s actually significantly higher than that. That’s just the part that goes to the city.
Here’s how we’re doing on property taxes:
Sales tax dropped in 2024, and it sent our budget into a bit of a tailspin. But it’s working its way back up.
Here’s how much the city spends on each person, on average:
hey, that’s a bargain! $4610 worth of services for only $1798. That’s a better ROI than you’ll get from the stock market.
The state legislature is always trying to make everything harder on the cities:
because they are counterproductive twats.
Here’s how it might affect San Marcos:
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Basically, we’re in a bind. Here’s two slides describing how we’re caught between a rock and a hard place:
and
Especially notice those last two bullets. The city is growing and inflation has been a big thing, and yet budgets have gotten leaner. This is not sustainable.
This brings us up to the current scenario. Council has a few choices:
The first one is the “No-New-Revenue” rate. If the property tax rate is 62.78¢, the average home owner will pay the same amount they paid last year.
In this case, we can skate by this year, and we’d be in the hole next year.
The next one is the Long-Term Focused Tax Rate, 64.96¢. This helps us keep up with inflation and growing expenses, over a longer term.
The last one is the Voter-Approval tax rate, 70.47¢. They’d never go for this, but in theory it would bring in a lot of money. Anything above 70.47¢ requires voter approval at the ballot box.
[Note: The (3,000,000) isn’t what it looks like. That’s balanced out by the “Fund balance in excess of 25%” line above.]
So what would we do, if we did the middle column of 64.96¢?
It helps plan for some financial cliffs that are looming.
…
Here’s these three tax rates, again:
The middle column buys us an extra year to plan for the looming financial cliffs. (The rate in the third column ends up lasting until 2028, and then we go to the red.)
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You can probably see why that $9 million from the data center looks so helpful. 😦
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What does Council think?
Matthew: I’m going with the ¢64.96 rate. Saul: Same. ¢64.96
Lorenzo: If we go with the middle rate, will we be up this same creek without a paddle next year? Answer: Somewhat. The state legislature may hamstring us, yes.
Lorenzo: How does tax rates translate into revenue? Answer: Every penny brings in about $800K.
Lorenzo: I want to pick a number that heads off a projected shortfall in 2027. So I think roughly ¢67-68.
Jane: How would we prioritize cuts? Answer: It starts getting into staff, because we’re already so lean. That’s a very hard question.
Alyssa: I don’t know.. I don’t have enough information. I’m willing to lean towards the middle, but I need to know more about how we’d use that extra $1.9 million. Answer: Council can prioritize how we use it. Alyssa: Then I can go with the ¢64.96.
Amanda: The legislative damage is highly likely to pass this session. Originally I was thinking ¢64.96, but I’m open to Lorenzo’s point about the ¢68. I want to take care of our employees, and making sure we’re keeping up there.
Jane: I want to see the impact on the average voter.
Amanda: Is it possible to see the impact on the average renter, as well?
Jane: I’m comfortable with the ¢64.96. And if the state school tax exemption passes in November, I can go a little higher.
They all want to see the impact on the average tax bill. How much would these new rates increase the tax bill?
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They also discuss utility rates and other things. The Citizens Utility Advisory Board is recommending a 4% increase in electric rates.
This is slightly less of an increase than last year. Everyone’s goal is to make slow, smooth, steady increases, because otherwise after a few years, you have to make a giant leap in rate increases. That’s much worse
Commercial rates are a little higher:
Similar for the water/wastewater rates, trash, and community enhancement.
Here’s how all these increases will impact your monthly bill:
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I’m returning to the end of the regular meeting, now. In Item 19, city staff returned with the answers to some of the questions above.
How would these different property tax rates affect someone’s property tax bill?
2. A list of possible things Council could fund with the extra money. (I couldn’t get a clear screenshot of this, though.)
Everyone has to weigh in with their max tax rate. 67.69¢: Alyssa, Matthew, Saul, Jane 68.17¢: Shane, Lorenzo, (but not committing. Just to give wiggle room), Amanda (same)
So! 67.69¢ is the upper bound this year for the tax rate.
Fire up the press! We’re back! This week, we’re talking about the land next to El Centro, an ordinance protecting tenants, and a sketchy SMPD grant for $25K.
Let’s go!
Hours 0:00 – 3:27: the land next to El Centro, the Lions Club, and a $25K grant for SMPD.
Hours 3:27 – 4:14: Should San Marcos have a Tenants Rights to Organize ordinance? (yes.)
I think what’s going on is that the school board wants to sell off the rest of the property:
This block sits within the Mexican American and Indigenous Heritage and Cultural District. (This district was created in 2021, and then never mentioned again. Literally, I searched.)
I don’t think there’s a map of the district anywhere. This is the closest thing I found:
Professor Ana Juarez started up a petition a few weeks ago to get the city to buy the land, so that it doesn’t become developer-bait. It’s got a lot of historical significance:
Over 900 people signed the petition so far! And a bunch of people signed up for citizen comment.
This brings us to Tuesday!
Purchasing this property got put on the agenda for Tuesday’s meeting. But the city put it in Top Secret Executive Session, so it wasn’t discussed publicly. It sounds like this choice riled up a lot of people? and city staff got an earful of complaints about this?
So Ms. Reyes issued this disclaimer: “Hey, we love this property too! But we have to put real estate discussions in Executive session. It’s not some weird scheming thing. Also if we want to move on this, we have to move fast, because it’s time-sensitive.” (I’m paraphrasing.)
So the city is trying to get on board! This is great news. But the school district and the county also have to buy in. If you’re so inclined, you can:
The Lions Club: ten people from a bunch of nonprofits spoke in favor of renewing their lease.
Tenant’s Right to Organize: seven people spoke in favor.
Buying the land next to El Centro: three people in favor
We’ll discuss the Lions Club and the Tenants’ rights items at length.
A few smaller topics:
three people speak against the AI data center proposal. This is supposed to be decided at the August 19th meeting
One candidate for council introduces himself: Brandon Oles. (Another candidate – Chase Norris – also spoke, but not about the election. He spoke on tenants rights, Lions Club, and El Centro.) They’re not running for the same place, though, so they’re not opponents.
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Item 5: The Texas State Boutique Hotel
We saw this back in July. Almost everything is the same, but Amanda mentions a few important wins:
Wages will rise automatically with inflation
If you work 25 hours per week, you’re eligible for medical/dental/vision benefits.
Those are both really great for workers.
The vote:
My two cents: there’s not much downside for the city, but it’s hard to imagine this hotel turning a profit.
Here’s how it works: The city leases the building to the Lions Club, and they’re the only group that can run shuttles and rent tubes for this stretch of the river.
The Lions Club then donates all their profits to organizations around town, and also fundraises for additional money for donations. (Lions Clubs have chapters all over the world, where they fundraise and give money to nonprofits. Ours just happens to run a tubing operation.)
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Tuesday’s question: Should we extend the Lions Club lease at the tube rental for another five years?
Alyssa has a number of questions. Basically, she appreciates the Lions Club’s good work, but her constituents want to better understand the charitable funding decisions. How does the grant selection process work?
Answer: The Lions Club accepts grants all year long. There’s no fixed due date.
Here’s how much our local chapter has given out, over the past five years:
Here’s a list of everyone they’ve funded over the past few years:
Question: What kind of outreach do you do? How do nonprofits find out about your grants? Answer: We reach out to any organization that we’ve worked with in the past, but we don’t have contact information beyond that.
My read on the conversation: I’m guessing that Alyssa hears complaints that grants keep going to the same agencies over and over again. And also: some of those organizations are politically touchy. Why these organizations, and not others?
Answer: these aren’t city grants. This is a city lease of a building to a private organization. City grants require transparency and oversight, but a private organization can give out grants however they want.
My two cents: Let’s not make the perfect the enemy of the good. The Lions Club donates to lots of great nonprofits around town, they partner with river clean-up, and they employ lots of young people. They work hard to make San Marcos better, even if they do things slightly differently than I might.
The vote to renew the Lions Club lease:
great!
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Item 18: $25,000 from the Department of Justice to SMPD
Ok, this is fascinating.
Last year, SMPD teamed up with Hays County, and applied for a grant from the Department of Justice. Together we were awarded $37,516. The plan is to split off $25,500.00 for San Marcos, and then Hays gets the other $12,000.
So that’s why it’s on the agenda tonight – are we okay sorting out this split with Hays County?
Everyone seems okay with this!
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Say, what are we spending this money on, anyway?
Ok, fine. Technology, and yet another camera. (Not a flock camera, though.)
What’s a JAG grant, anyway? Is it specifically about technology? It hadn’t occurred to me to wonder about that, but Amanda went and looked them up:
Indigent defense! Crime prevention and education! Drug treatment, mental health programs, behavioral programs, crisis intervention teams! Out of all those possibilities, we landed on… some new software and a pole camera?
Amanda would like to know if we could change the scope of our funding towards something a little more aligned with council priorities? and Alyssa asks how this happened?
No one has a good answer! So let me help: this grant was written last year, and this would have been totally fine with last year’s council. They liked technology and cameras! Alyssa was the only one on council last year who would have rejected this. Everyone else would have given this a big thumb’s up.
This is a new year, with two new councilmembers, and now we have a coalition of progressive voices up there! It is making a huge difference.
Jane is fine in principle with changing the scope of the grant, but she’s worried that if we have to go back to the federal government, they’ll cancel the grant altogether and we won’t get any money. (That’s a valid concern.)
It goes in circles for a long time. But eventually, they land here: staff is going to see if we can change the scope of the grant. This will come back in September.
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Side note: What about the other half of the grant? How is Hays County spending their $12K? Are they going to fund mental health initiatives and indigent defense? Will they crusade to a more just society?
Answer: They’re buying vests!
okay then. I hope they look dapper.
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Item 22: 100 acres south of McCarty
We’ve seen this property here before, just in July:
Nothing important happened on Tuesday. It’s going to be discussed on September 2nd. I’m really only bringing this up because I saw this news article and this other news article pop up.
I did thumb through the draft proposal, though. Supposedly it will have:
Two big apartment complexes (800 and 400 apartments)
A much smaller number of townhomes (44 townhomes)
84 houses for sale
120 houses for rent
A hotel
“Live Work Play” mystery item
Office/retail/grocery space
Everyone keeps mentioning that there will be an indoor/outdoor recreation portion, so I assume the mystery item will be some sort of Trampoline Roller Skating Splash Pad. Let’s all spread that rumor, anyway.
The San Marxist 