Carrollton City Council Regular Worksession and Meeting – March 4, 2025

The Carrollton City Council met for a regular worksession at 6:15 PM and a regular meeting at 7:00 PM on Tuesday, March 4, 2025. Mayor Pro Tem Richard Fleming presided in the absence of Mayor Steve Babick. The council received presentations on the city’s Annual Comprehensive Financial Report (ACFR) for fiscal year 2024 and a multi-year budget and financial forecast. They approved consent items, including a $1,650,000 network hardware purchase and a mutual boundary adjustment with Plano and Hebron. Public hearings were held on six zoning requests: one for metal product manufacturing, one for a large outdoor pottery display, three for short-term rentals (STRs), and one for a bed and breakfast. Two items were approved, three were denied, and one was approved after a divided vote. The meeting closed with a public forum on school redistricting and the city’s complaint system, followed by adjournment at 9:20 PM.

Consent Calendar

• Approved minutes of the February 4, 2025 regular meeting.
• Authorized the City Manager to enter into an agreement with Freeit Data Solutions, through Texas DIR Purchasing Cooperative, for network hardware not to exceed $1,650,000.
• Took final action on a mutual boundary adjustment with the City of Plano and the Town of Hebron along Charles Street (case PLANX 2025-036). The adjustment involves only public right-of-way to clarify emergency response and roadway maintenance responsibilities; no private property is affected.
• Adopted a resolution acknowledging receipt of the Annual Comprehensive Financial Report for fiscal year ending September 30, 2024. All consent items were approved unanimously.

Public Comments & Testimony

Public Forum (Non-Agenda Items)

• Kate Huey (2311 Green Meadow Drive) opposed planned redistricting and closure of McCoy Elementary in Carrollton-Farmers Branch ISD. She stated that many homes were purchased specifically for that school, representing millions of dollars in property value tied to the school, and urged council to use their influence to halt the closure (vote scheduled two days later).
• An anonymous speaker criticized the city’s online complaint system for environmental services, alleging that anonymous complaints are “weaponized” against neighbors and waste city resources. The speaker requested a process change to require identification.

Public Hearings on Agenda Items

• Item 16 (2706 Brookshire Drive STR): Over a dozen residents spoke in opposition during the public hearing, citing concerns about property values, safety for children, parking violations, trash, and an absentee owner who did not attend either meeting. Speakers emphasized the neighborhood’s long-term single-family character and asked council to deny the permit.
• Item 17 (1841 Arundel Drive B&B): One neighboring resident spoke in opposition, noting unpermitted construction that converted the home into multiple units, damage to his property, and non-occupancy by the owner despite deed requirements.
• Other items (12, 13, 14, 15) had no public speakers from the audience; written comments were noted by the clerk.

Worksession: Annual Comprehensive Financial Report (Fiscal Year 2024)

Diana Vaughn, Chief Financial Officer, presented the ACFR. Key points:

• Unmodified (clean) audit opinion received; 34th consecutive year with a Certificate of Achievement.
• Unrestricted net position increased for both governmental and business-type activities.
• Liquidity remains strong: current ratio of 15.83 (governmental) and 8.1 (business-type).
• Sales tax revenue in FY2024 was 2.5% lower than FY2023, the first decline in recent years. The city conservatively budgets assuming a potential loss of $4.6 million per year due to ongoing Comptroller rule changes.
• Health care costs remain the most expensive benefit; cost per member was approximately $16,000 in 2024.
• Net pension liability decreased; funded ratio improved to 95.77% (from 91% in 2023).
• OPEB (retiree health insurance) unfunded liability increased to $5.1 million, but is expected to decline over time.
• Debt as a percentage of taxable value decreased to just over 1%; per capita debt increased to $1,591 but is lower than inflation-adjusted historical levels.
• Capital investment in governmental assets increased to $366 million; business-type assets decreased by $3 million largely due to unspent debt proceeds.
• The city maintains adequate cash reserves, but future challenges include the property tax revenue cap from Senate Bill 2019, the end of one-time federal funding, and potential state mandates.

Worksession: Multi-Year Budget and Financial Forecast

Melissa Everett, Finance Director, presented a five-year projection for the General Fund and Utility Operating Fund. Highlights:

• General Fund: FY2025 shows a small surplus due to better-than-budgeted sales tax and investment income, offset by prior year property tax shortfalls. FY2026 ad valorem taxes assumed to increase 5%, then 3.5% in 2027-2028 and 3% in 2029. Sales tax kept flat due to litigation uncertainty. Franchise fees declining (telecom consolidation).
• Inflation: Pegged at 2.5%.
• Employee costs: 2% general increase built in; health insurance costs projected to rise 5% annually.
• Utility Fund: Potential rate increases up to 7% next year; electricity costs expected to jump 70% in FY2028 when a favorable contract expires.
• Capital considerations: $2 million per year set aside for fire station capital improvements; anticipated cost overruns for Frankfort and Hebron road projects; Shepard (SCADA) system upgrade at $2 million.
• Financial threats: State legislation (e.g., requiring 60% vote for debt, restricting tax increment financing, potential federal elimination of tax-exempt municipal bonds) and ongoing sales tax rule changes. The council did not give specific direction but received the forecast.

Mayor and Council Reports

Councilmembers provided updates on community events, including the successful TexFest (very high attendance), the State of the City event, and the annual Austin legislative trip. They also reported on storm recovery from overnight windstorms: peak power outages affected 13,000 customers, streets were clear, and most city facilities were open except the golf course and tennis center. Councilmembers attended various recognition ceremonies and community meetings.

Key Outcomes

Items Approved

• Item 12 – SDG Springs (1416 Westway Circle): Special Use Permit (SUP) for fabricated metal product manufacturing. Staff and Planning & Zoning recommended approval. No public opposition. Approved unanimously.
• Item 13 – Just Pots Pottery (2121 Sandy Lake Road): Amendment to Planned Development 141 to allow 127,075 square feet of outdoor display (normally limited to 5% of building floor area). Staff recommended denial due to excessive display in a highly visible location; Planning & Zoning recommended approval. After debate, the council approved 4-3. Proponents cited destination retail and job creation; opponents cited land use incompatibility.
• Item 14 – 3925 Brazos Drive STR: SUP for short-term rental in a single-family home. Staff recommended approval; opposition was 6.47% (below 20% threshold). The applicant, a nearby resident, described his management plan. Approved 6-1.

Items Denied

• Item 15 – 1016 Thomas Place STR: SUP for short-term rental in a townhome. Staff recommended approval, but written opposition from property owners within 200 feet exceeded 20% (23.26%). The HOA owning adjacent green space opposed. The motion to approve failed 3-4 (needed 6 votes due to supermajority requirement). Denied.
• Item 16 – 2706 Brookshire Drive STR: SUP for short-term rental in a single-family home. Staff recommended approval, but opposition reached 46%. The applicant requested a second continuance but council proceeded. Numerous residents testified against. The council voted unanimously to deny the motion (motion to approve failed). Denied.
• Item 17 – 1841 Arundel Drive Bed and Breakfast: SUP for a bed and breakfast. Staff and Planning & Zoning recommended denial due to significant code violations (unpermitted electrical, plumbing, structural work). The applicant did not attend. The motion to approve failed 6-1. Denied.

Other Actions

• The council acknowledged receipt of the ACFR without formal discussion.
• No formal direction was given on the multi-year budget forecast; staff will incorporate council feedback and proceed with preliminary budget preparation.
• The council voted to proceed with Item 16 despite the applicant’s continuance request.