MINUTES REGULAR CALLED: MEETING HEATH CITY COUNCIL TUESDAY, MAY28, 2024 at 6:30 PM  ATTENDING: JEREMIAH MCCLURE, MAYOR  PAUL RUFFO, MAYOR PROTEM SCOTT DODSON RYAN MOORMAN BRENTI WEAVER RICH KRAUSE  ABSENT: SHARON CALDWELL  Mayor Jeremiah McClure called to order the Regular meeting at 6:30 p.m. Mayor Pro Tem Paul Ruffo  delivered the Invocation and led the Pledge of Allegiance. No one signed up to speak ati the open forum.  2. Public Comment 3. Consent. Agenda  3.a Action Regarding the Minutes of the May1 14, 2024 Regular Meeting. 3.b Action Authorizing the Purchase of New Dump' Truck. 2024 MINUTES ANDTHE PURCHASE OF Al NEW: DUMPT TRUCK.  MOTION: APPROVE CONSENT AGENDA, ITEMS 4.a REGARDING THE MAY 14,  MOTION MADE: SECONDED: APPROVED: ABSENT:  RUFFO MOORMAN CALDWELL, KRAUSE  PASSED UNANIMOUSLY BYTHOSE PRESENT  4.a Discussion Regarding an update on the Alternate Water Source Study, Water Conservation efforts for the City, and the Maintenance Study and Repairs ofWater City Engineer Richard Dormier stated that the City submitted a request to NTMWD to become a direct customer for potable water. The NTMWD Water Committee reviewed the request at its meeting on March 17, 2024. The Committee provided very little public deliberation on the request and then broke into an executive session. No discussion occurred after the executive session concluded. Verbal feedback from staff indicated the request was not within the conservation guidelines NTMWD is planning for and we reduced our request to their guidelines. That request is under consideration at this time. RCH Water Supply Corp reached out to us and asked if we were interested in purchasing water from them. They are a customer of NTMWD and will build their infrastructure at a take point near Lake Tawakoni. They will provide information and costs for us to consider as an additional option. The growth projections to determine the amount of water needed are based on the population projections in the current Comprehensive Plan. The maximum day water requested is based on NTMWD limitations on daily water use of 205 gallons per capita per day, on average, and a set peaking factor of 2.2 over average use. City staff will continue working with NTMWD on becoming a direct customer. The study cannot be completed until true costs are provided by NTMWD and other possible providers. The city has requested a meeting with NTMWD for further clarification of where we are and to ensure that future growth is included in the calculations. Dormier also announced that the maintenance study/manual is complete and the QR codes referencing the various maintenance items are being prepared by Heath I.T. sO that the Public Works department can Director of Public Works Bryan Creed provided an update regarding Water Conservation efforts stating that the City has contracted with Hydropro to install their new AMI (fixed base) metering  Pump Station in Rockwall.  access manuals using a smartphone at the pump station.  City Council Minutes- - May. 28,2024  Page 1of6    system by Master Meter. The sub-contractor (Putt Brothers) has begun installation of the new system, going door to door and installing the first phase of the program which consists of over 3,000 accounts being brought online in the coming weeks. The enhanced capabilities of the real- time meter reading and monitoring capabilities will allow the public and the staff to better monitor and understand water use and promote conservation. There are approximately 600 meters left in phase I. Phase II will begin in October. Creed also stated that the second pump has been refurbished and the parts are ordered to replace the 200 HP motor and pump with a new 300 HP 4.b Case No. CUP-2024-01: Conduct a Public Hearing and act on a request for a Conditional Use Permit as required by Heath Code of Ordinances, S: 159.21(B)(4)to allow a detached residential garage and a Variance to S 159.21(B)04)) to allowa a maximum size of 1,200 square footage on property zoned (SF-43) Single Family Residential District, addressed 483 Terry Lane, and further described as Abstract Assistant City Manager. Aaron Adel stated that on March 5th, the Commission denied the original request and suggested reducing the building size and revising the design to match the architecture of the home. On March 26th, the City Council denied the CUP and agreed with the suggestions of the Planning and Zoning Commission. The applicant returned in April submitting a new design that included a reduction of square footage from 1,600 to 1,200 SF, revised the elevations to add horizontal siding, added painted brick wainscot, increased roof pitch, and added eaves to match the home, and added a covered porch with rough cedar posts, windows, doors, and landscape amendments. On May 7th, the Commission heard the revised plan and recommended approval of the new design based on the unique long and narrow lot configuration. By April 27, 2024, a second Notice of Public Hearing was published in the Dallas Morning News, posted on the city website, and mailed to neighbors within 500 feet. A total of fourteen responses havel been received to date, thirteen in favor and one: in opposition of the request.. All detached garages in the (SF-43) District require a CUP. The request complies with the Comprehensive Plan Future Land Use Map. The requested garage does not conform to $159.21(B)04)d), which limits the maximum size of an accessory structure to 900 SF. The applicant requests a Variance to allow an additional 300 SF. $159.21(B)(2) allows a CUP for accessory buildings that do not conform to the area requirements. The: request conforms to all other accessory structure requirements in $159.21 demonstrated ini the Ordinance Compliance Matrix. Property owner and Applicant, Jevon Lau, 483 Terry Lane stated that based on Commission and City Council recommendations, he met with Staff and came up Mayor McClure opened the public hearing at 7:06 p.m. and no one was present to speak regarding Councilman Weaver stated that he struggles with the appearance and location because itl looks like as shop and fronts directly onto a busy residential street. Weaver recommended that ift thel building were approved the applicant provide additional screening since the building fronts a busy street. Mayor McClure also opposed and stated we have to be mindful of the Ordinance that limits  motor and pump. The replacement scheduled is set for. June 2024.  157, HJ McKenzie Survey, Tract 3. (Rockwall CAD No. 11847).  with a new plan and believes it will work for everyone. HEARING to receive comments regarding the request. this request, Mayor McClure closed the public hearing at 7:071 p.m. Discussion and action regarding the request.  acessorybuildingsi to 900 SF. MOTION MADE: SECONDED:  MOTION: APPROVECONDITIONAL USE: PERMIT.  DODSON MOORMAN DODSON MOORMAN DODSON/MOORMAN, RUFFO MCCLURE, WEAVER  MODIFY MOTION: APPROVE ORDINANCE NO. 240824A REGARDING A CONDITIONAL USE PERMIT PERTHE EXHIBITS PROVIDEDI INTHIS MEETING.  MOTION MADE: SECONDED: For: Opposed:  City Council Minutes - May. 28, 2024  Page 2of6    APPROVED: ABSENT:  PASSED1 THREETOTWO CALDWELL, KRAUSE  4.c Case No. FV-2024-04: Conduct a Public Hearing and act on a Resolution granting a Variance to the Heath Code of Ordinances, $ 157.02(C), that limits fences in the front yard to a maximum height of four feet (4') to permit a five foot (5) ornamental wrought iron fence on property on FM 1140 also known as Smirl Drive, south of Twinview Road, adjacent to Moraine Way, and further described as Lot 1, Zahm Addition, CityofHeath, Rockwall County, Texas. (Rockwall CAD No. 12822. Assistant City Manager. Aaron Adel stated that the applicant has requested that his item be tabled to the June 11, 2024 council meeting because he is out oft town and would like to be present when  the council deliberates and votes on regarding this item. HEARING to receive comments regarding the request.  Mayor McClure opened the public hearing at 7:18 p.m. and no one was] present to speak regarding this request, Mayor McClure stated that the public hearing would continue to the June 11, 2024 MOTIONTO TABLE CASE NO. FV-2024-04 TOJUNE 11, 2024 AND CONTINUE THE  Council Meeting.  PUBLIC HEARINGTO. JUNE: 11, 2024.  MOTION. MADE: SECONDED: APPROVED: ABSENT:  WEAVER RUFFO  PASSED UNANIMOUSLY BYTHOSE! PRESENT  CALDWELL, KRAUSE  4.d Case No. ZTA-2024-01: Conduct a Public Hearing and act on an amendment to the City of Heath, Texas, Code of Ordinances, Chapter 159 "Zoning" to amend Section 159.42 "Definitions," Section 159.43 "Conditional Use Permits; Permit Requirements/"and add a new Section 159-53 Home-Based Business Regulations." City Manager Kevin Lasher stated that the staff has been working on the proposed ordinance since October 2023. The goal was to craft an ordinance that would help Code Enforcement regulate home businesses and that would also ensure that these regulations would not be a detriment to the character and livability of the surrounding residential neighborhood. To comply with regulations, an accessory home occupation must remain subordinate to the residential use, the site must maintain a residential appearance, and the level of business activity must not be high enough to impact the residential character of the neighborhood. At the state level, there is no specific ban on running a business from home in' Texas. Some concerns were expressed by the Committee about the impact of the new SB 929. However, the City. Attorney's office thoroughly reviewed this issue and has confidently stated that they do not believe there is any impact on the proposed home occupations ordinance. SB 929 is designed toj prevent cities from making changes that cause a loss of any existing legally nonconforming use status without first sending more specific notice toj property owners and outlining options for compensation for those losses. It does not aim to ease or facilitate qualification for home-based business status, and it does not specifically address or purport to remove any existing nonconforming use status. As a precautionary measure, the city attorney removed "service" from the definition stating that a home-based business is allowed if no goods are sold on-premises, with minimal restrictions on service-based businesses. A proposed secondary use requirement and floor area restrictions were removed by the Committee from the initial draft. The number of allowed on-site patrons was increased from one to four. Restrictions were added to prohibit on-site sales for artists, milliners, and preparers of food, and to prohibit on-site sales for all home occupations. The number of pupils for tutors or schools and the number of parishioners for clergy also increased from one to four. The provision prohibiting vehicle and tool rentals includes aj prohibition for the sale oft those items as well. Notice of] Public Hearing was published in the Dallas Morning News and posted on the City of Heath website on April 19, 2024. The Planning and Zoning Commission considered  this Ordinance on May7, 2024, and approved unanimously.  City Council Minutes - May28,2024  Page. 3of6    HEARING to receive comments regarding the request. this request, Mayor McClure closed the publicl hearing at 7:391 p.m. Discussion and action regarding the request. increased from one to two customers at ai time.  Mayor McClure opened the public hearing at 7:39 p.m. and no one was present to speak regarding Council discussed the ordinance. Home occupancy was added tot the Home-Base Business definition and the Uses Allowed regarding dressmaker, seamstress, tailor, hairdresser or barber, was MOTION: APPROVE ORDINANCE NO. 240528B WITH TWO CHANGES, MODIFY THE DEFINITION TO HOME-BASED BUSINESS OR HOME OCCUPATION AND INCREASE THE NUMBERS OF CUSTOMERS AT ONE TIME FROM ONE TO TWO  CUSTOMERS. MOTION MADE: SECONDED: APPROVED: ABSENT:  RUFFO DODSON CALDWELL, KRAUSE  PASSED UNANIMOUSLY BYTHOSE: PRESENT  4.e Presentation of the Fiscal Year 2023 Financial Statements and Independent Audit Joe Watson, CPA at BrooksWatson & Co, is the city's external auditing firm, was present and provided an presentation of the City's FY2023 Annual Comprehensive Financial Report (ACFR) for the: fiscal year ended September 30, 2023. The report included independent auditor's findings, financial statements, and management's discussion analysis. The City of Heath reported ai total net position of $99,221,762 by the end of the fiscal year. Ofthis amount, $60,618,610 (net investment in capital assets) has been invested in the Cit/sinfrastructure, buildings, and other assets. The net position for governmental activities was $52,775,486. These activities primarily consist of general government, public safety, public works, and community services, among others. The net position for business-type activities, which include water and sewer services as well as solid waste management, stood at $46,446,276. The city invested heavily in capital assets, including infrastructure and building improvements. The total investment in capital assets was $91,749,205. The City's outstanding long-term debt decreased by $3,194,127 including premiums. The total long-term debt at the close of the fiscal year was $35,348,314 excluding premiums, including self- supporting debt of the proprietary fund which was $17,181,451 excluding premiums. Total revenues for the year were $29,352,301, against expenditures of $27,625,944, resulting in a net change in position of $1,726,357. This indicates that the city had a surplus, allowing for reinvestment in services and maintenance of a healthy financial reserve. The report noted stable economic conditions with growth in assessed property values and increased sales tax revenues. The city also undertook significant capital projects including road improvements and upgrades to public facilities. Watson concluded by stating that the City of Heath's financial position at the end of the fiscal year appears strong, with sufficient resources to cover its liabilities and invest in further community developments. The management discusses maintaining a balanced budget while catering to the needs ofi its growing population, reflecting prudent fiscal management and planning. The City of Heath's financial statements for the fiscal year ended September 30, 2023, received an unmodified opinion from the independent auditors. This type of opinion is the highest level of assurance provided by auditors and indicates that the financial statements present fairly, in all material respects, the financial position and operations of the city in accordance with 4.f Update and Discussion Regarding the Certificate of Obligation Series 2023 Bond. Director of Finance Jay Ayers provided history of how and why these bonds were created by stating that in the budgeting process for FY2024, staff presented major infrastructure needs for the City of Heath. These projects were the need for a new Public Safety building, a Public Works facility, improvements to Towne Center Park, and ai fire ladder truck. On September 12, 2023, a plan of finance was presented to City Council and a Resolution was approved for publication of the notice of intent to issue Certificates of Obligations for those capital needs. On September 19,  Report-Brooks Watson & Co., PLLC.  generalyaccepted accounting principles.  City Council Minutes - May28,2024  Page 4of6    2023, Heath Municipal Benefits Corporation (HMBC) was presented the plan of finance and approved a resolution calling for a public hearing on proposed projects. On December 12, 2023, HMBC approves the Financing and Use Agreement: $3 million contribution towards the Public Safety Building and $473,925 annual contribution to the interest payments for the Towne Center Parki improvements for 20 years. On December 12, 2023, City Council approves the Financing and Use Agreement and the ordinance authorizing the issuance of the Certificates of Obligation. Issuance of Certificates of Obligation, Series 2023 to fund the City's Capital Improvement Program (the "CIP"). Partner with the HMBC to remit to the City $3,000,000 from available funds on hand to pay a portion of the CIP. Partner with the HMBC to remit to the City $473,925 on an annual basis for 20 years to pay a portion of the principal and interest on the proposed debt: Town Center Park $12,250,000, Public Works Facility $6,250,000 and Public Safety Facility $15,000,000 totaling $33,500,000 minus $3,000,000 HMBC cash contribution for a total funded of $30,500,000. The New Money Debt Issuance detail is: Combination Tax & Ltd. Surplus Revenue Certificates of Obligation, Series 2023; Amotzaton/hepayment Period: 20- Years; Repayment Source - City's Debt Service (I&S) Property Tax Rate and Annual Transfers from the HMEBC; Method of Sale - Competitive Open Market Sale; Bond Rating Rating Affirmed at "AA+"1 by Standard & Poor's; Total of five bids received and the low bid provided by 4-8 Update and Discussion Regarding the Fire Flow Capital Improvement Program. Director of Public Works Bryan Creed stated that in 2018, the City of Heath hired Freeman- Millican to prepare a water study to identify areas of the city with deficient fire flow and to prepare a CIP with budgets to make the necessary improvements. The original study was completed in 2020 and contained a five-year CIP. Since that time, projects have been completed in Antigua Bay and Cove Ridge as well as connecting the Rabbit Ridge area with new water lines to complete the transition of that area from RCH WSC to the city of Heath. Currently there are eleven projects identified to complete the program. The 2023 estimated budget for these was $11,500,000.00. On December 12, 2023, Freeman-Millican presented Council with the 11 identified projects to provide a minimum 1500 GPM fire flow to the identified areas. This was a ten-year plan and staff was directed tol begin with Darr Estates and the City Council would review every year to determine which projects would be next. City staff will explore the possibility of completing these projects within a five-year period by combining some of the smaller projects into a single job that can be designed, bid, and constructed simultaneously. Currently Darr Estates design with Freeman-Millican is expected to be complete this fall. 2023 and estimates $11,500,000.00 for all projects. Staff presented a list of projects with fire flow models in this order: Darr Estates, Candelite Park, Twin View, Myers Road, Sunny Estates & Halford, Las Lomas Loop, K&K Subdivision, Moraine, Hilltop Estates, Kyser Springs Road, Dwyer Court & Serenity  BOKI Financial Securities.  Lane. Creed stated that the residents now have a timeline.  5. Council/City Manager Comments  City Manager Lasher stated that Rockwall County has declared State of Emergency for Rockwall County for next seven days. The weather has caused hardship especially to our Field Operations and Public Safety. Lasher thanked the staff for their hard work and commitment. Oncor has confirmed that there are eighty-one properties in Heath that still do not have power. DPS is doing welfare checks on these properties. The City Hall community room will remain open from 8:00 a.m. to 5:00 p.m. for anyone needing a place to cool down or recharge their electronics. The Rockwall County Sheriff office is also open. Regarding brush pickup, Progressive Waste will resume their pickup schedule tomorrow. TxDOT and the City crew will also be cleaning up. The Pump Station is also without power and is working off diesel. This will not affect our water supply. Lasher also announced the first Budget Work Session is scheduled the afternoon of Friday, June 21 along with a ride-a-long day trip with staff and the Council to view areas in the City that need  attention. Mayor McClure thanked all: for their) hard work regarding the weather.  City Council Minutes- - May. 28, 2024  Page 5of6    6. Executive Session  At 8:50 p.m., Mayor McClure recessed the meeting to Executive Session (closed meeting) stating that in accordance with Texas Government Code Chapter 551, Subchapter D, the City Council recessed into Executive Session (closed meeting) to discuss the following: Section 551.071: Consultation with Attorney on a matter in which the duty of the attorney to the governmental body under the' Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with this chapter, regarding: (i) zoning and platting standards, Local Government Code shot clock, and' Trilogy final plat; (ii) Trilogy development in Mclendon-Chisholm city limits and extraterritorial jurisdiction; and (ii) North Texas Municipal Water District easement and tree mitigation; Section 551.071: Consultation with Attorney regarding pending or contemplated litigation or settlement offer regarding: (i) MC Trilogy Texas, LLC V. City of Heath, et al., Cause No. 3:22-CV-02154-D; (i) City of Heath V. Mclendon-Chshom, Cause No. 1-22-1204; and (iri) North Texas Municipal Water District V. City of Heath, Cause No. 1-22-0704; and Section 551.074: Deliberation regarding the appointment, evaluation, reassignment, duties, discipline orc dismissal of a public officer or employee, regarding: () appointments and re-appointments to the Planning and Zoning Commission, Municipal Benefits Corp/Economic Development Board, Park Board, Board of Adjustment, Architectural Review Board and Club Municipal Management In accordance with' Texas Government Code, Chapter 551, Mayor McClure closed Executive Session and reconvened the meeting into open session at 10:19 p.m. stating that no action was taken in the 8.a Discussion and Action Regarding a Resolution Appointing Directors to the Club MOTION TO APPROVE RESOLUTION NO. 240528A TO APPOINT NORMAN GRUNSFELD AND LEON SCHIEBER TO THE CLUB MUNICIPAL MANAGEMENT  District No.1 1.  Executive Session.  Municipal Management District No. 1. DISTRICT: NO.: 1 BOARD OF DIRECTORS.  MOTION MADE: SECONDED: APPROVED: ABSENT:  WEAVER DODSON CALDWELL, KRAUSE  PASSED UNANIMOUSLY BY' THOSE! PRESENT  Mayor McClure adjourned the meeting at 10:21 p.m.  APPROVED:  ATTEST:  Vnll NORMA DUNCAN CITY SECRETARY OFHE  MAYOR  a  59  City Council. Minutes = May. 28, 2024  Page 6of6