Work Session Notes - June 2, 2025
Ma-ia-hoo, ma-ia-haa
We are in the last week of the mayoral election runoff, and I hope you have had a chance to get out and vote. If you have not done so already, you have today and tomorrow until 7:00 PM to vote at an early voting location, or you can vote on Runoff Election Day - Saturday, June 7, from 7:00 AM to 7:00 PM.
Please come out and cast your vote for me to be your next Mayor. Visit my website hedrickforgarland.com to learn more about my priorities. It is such a crucial election for the future of Garland especially considering the following case the City Council will consider at tomorrow’s Regular Meeting.
Item 9c from tomorrow’s Regular Session Agenda is a major city-initiated rezoning of approximately 317 acres of land. Per the agenda’s description, this case will rezone existing areas containing industrial (IN), Community Retail (CR), and various Planned Developments (PD) into Urban Residential (UR) and Urban Business (UB) districts.
(Areas in cyan which will be affected by this rezoning case.)
Urban Districts are described as:
The Urban (U) districts are intended to allow cohesive, orderly, creative, and predominantly vertically oriented mixed-use and mixed-density developments. There are two types of Urban districts: Urban Residential (UR) and Urban Business (UB). UR districts are predominantly residentially oriented districts that may also include a limited number of integrated nonresidential uses that are compatible with, harmonious with, and supportive of, a high-density, urban-style residential neighborhood. UB districts are predominantly business- and shopping-oriented districts that may also include a limited amount of integrated residential uses that are compatible with, and supportive of, a high-density, urban-style business district.
The Urban districts are also intended to establish a distinctive community character in specially selected areas through innovative and mutually-sustaining land uses, urban-style and pedestrian-oriented site design, efficient traffic and pedestrian circulation, innovative and high-quality architectural elements and landscaping concepts, and other similar enhanced design features that will in turn elicit a strong sense of community, civic pride, and of satisfaction with quality of life among those who choose to enjoy the lifestyle created by these districts.
Appropriate flexibility in final design should be given to developers and designers of Urban districts to allow creativity for the opportunities associated with individual sites. The Urban districts can include a mixture of architectural styles ranging from contemporary to traditional. The general intent of these districts is to maximize utilization of land for a mixture of mutually sustainable uses, while also utilizing open spaces to the greatest extent possible in an urban setting for public recreation and leisure purposes. Urban districts are intended to include a diverse mixture of residential housing choices and business/employment opportunities (for example, live-work units) in a symbiotic and urban-style environment that not only accommodates residents’ needs to live, work, learn, and play within a neighborhood setting, but that also builds long-term stability, civic pride and fiscal value for the community in general.
(Proposed new urban zoning designations)
The Plan Commission voted unanimously 9-0 to deny the case. This was largely on the basis that the City of Garland did not do enough to notify the affected landowners and neighbors what the impact of this rezoning would be on their properties. Staff said that they followed all of the mandated State regulations regarding notifications, but failed to hold any public hearings or information meetings on this rezoning. Simply answering phone calls from concerned citizens as they come into the Planning Department are not enough.
I encourage you to watch the Plan Commission hearing from May 12 here: https://garlandtx.new.swagit.com/videos/342617 (Jump down to Item 2g.)
So where do I stand on this item? I think it is generally a good step forward for South Garland to prepare for future economic development in the area. As someone who works in land development, one of the most important aspects of the process is making sure you have your land use entitlements in place first so you can develop your site. If these are already in place, theoretically the process for this desired urban-style development will be much faster.
However, I believe Garland should have started by rezoning the properties it has under control in the area (approximately 50 acres), and later move forward with the other properties. If you watched the Plan Commission hearing, speakers were generally in favor of the changes, but wanted more time to consider the impacts.
Furthermore, staff did not have a specific answer as to how many properties would become legal non-conforming sites–meaning that they can still continue to operate, but may not expand or rebuild in the case of a disaster. Staff only was able to provide a ballpark number of approximately 100-120 properties that would become non-conforming. This legal non-conforming designation essentially acts as a “Sword of Damocles” over these businesses which would prohibit any new growth or expansion of these currently operating entities.
In the end, Garland must continue moving forward by allowing more density, especially along heavy transportation corridors such as IH-635, but we cannot rush into this type of rezoning without carefully considering the impacts to existing businesses. I hope the City Council will table the case to allow for more meetings and time to inform the public.
Now on to the Work Session commentary.
PUBLIC COMMENTS ON WORK SESSION ITEMS
CONSIDER THE CONSENT AGENDA
WRITTEN BRIEFINGS
Bond Refunding - Water and Wastewater Commercial Paper Notes
Council is requested to consider refunding water and wastewater commercial paper notes to long-term debt. Unless otherwise directed by the Council, this item will be scheduled for formal consideration at the June 3, 2025 Regular Meeting.
The City of Garland pays for water and wastewater projects by issuing a variable-rate debt instrument called commercial paper. From time to time, the city will replace these short-term instruments with a long-term fixed rate bond backed by the water and wastewater revenue. This will result in interest savings over the period of the bond.
However, I am concerned that Fitch Ratings has assigned an 'AA' rating to the City of Garland, Texas's $116.6 million in General Obligation (GO) Certificates of Obligation (COs) and revised the city's rating outlook from Stable to Negative. This change reflects concerns about Garland's financial flexibility amid increasing fixed costs and potential revenue pressures.
The 'AA' rating indicates strong credit quality, but the negative outlook suggests potential challenges ahead. Fitch's decision considers factors such as the city's growing debt service obligations and the need for careful financial management to maintain fiscal stability.
The City’s financial resilience, a measure of how the city manages debt, is strong, but the Unemployment & Educational Attainment, while the Revenue Volatility, and Long-Term Liability Burden were “mid-range” and the population trend was defined as “weak” with only 0.5% growth.
Garland's ability to address these concerns will be crucial in determining future rating actions. The city may need to implement strategies to enhance revenue or control expenditures to preserve its financial health.
For more detailed information, you can access the full Fitch Ratings report here:
https://www.fitchratings.com/research/us-public-finance/fitch-rates-garland-tx-116-6mm-go-cos-aa-revises-outlook-to-negative-28-05-2025
Agreement Regarding City Pension Obligation Bonds
Council is requested to consider a resolution approving and authorizing an agreement with the Texas Municipal Retirement System Pertaining to the City of Garland, Texas, General Obligation Pension Bonds. Unless otherwise directed by Council, this item will be scheduled for formal consideration at the June 3, 2025 Regular Meeting.
In 2009, Garland eliminated its 70% Cost-of-Living Adjustment (COLA) due to rising costs during the Great Recession. However, on October 8, 2024, I was happy to approve as part of the City Council a 50% non-retroactive repeating COLA for retirees and beneficiaries under the Texas Municipal Retirement System (TMRS), effective January 1, 2025. This new COLA, enabled by a 2023 change in state law, avoids costly retroactive adjustments and instead calculates increases based only on the CPI from a one-year period.
Approval of this item funds the added benefit, the City is planning to issue approximately $130 million in Pension Obligation Bonds. These proceeds would cover part of the city’s unfunded actuarial accrued liability (UAAL) created by the new COLA. The City has limited capacity to increase operational spending due to state-imposed property tax growth limits, so issuing bonds helps avoid burdening the General Fund.
State law requires the City Council to enter an agreement with TMRS before issuing these bonds. This agreement must define the UAAL amount and when TMRS will accept the bond proceeds. The TMRS Board is scheduled to consider this agreement on June 12, 2025, and Garland City Council is being asked to authorize the agreement.
General Obligation Improvement Bonds
Council is requested to consider the issuance of General Obligation Improvement Bonds to fund 2004 and 2019 Bond Program projects. Unless otherwise directed by the Council, this item will be scheduled for formal consideration at the June 3, 2025 Regular Meeting.
Much like Item 1 above, this item will issue up to $21 million in General Obligation (GO) Improvement Bonds, Series 2025 to fund projects from the 2004 and 2019 Bond Programs, as outlined in the Council-approved 2025 Capital Improvement Program (CIP).
The bonds will be repaid over 20 years and no property tax rate increase will be required to fund this issuance. Final bond terms (interest rate and annual debt service) will depend on market conditions at the time of pricing.
Garland Housing Agency - Annual Performance Update and Administrative Plan
Council is requested to consider approval of the Garland Housing Agency's Annual Performance Update and the Administrative Plan revisions, so that the City of Garland Housing Agency can continue to receive funding from the Department of Housing and Urban Development and provide rental assistance to low-income families. Unless otherwise directed by Council, this item will be scheduled for formal consideration at the July 8, 2025 Regular Meeting.
With this item, the Garland City Council is being asked to approve the Garland Housing Agency’s (GHA) Annual Performance Update and revisions to its Administrative Plan in order to maintain eligibility for federal funding from the U.S. Department of Housing and Urban Development (HUD) under the Housing Choice Voucher Program.
HUD requires housing agencies to submit a 5-Year Plan and an annual performance report to receive funding, and the City of Garland is in the first year of its 2025–2029 Five-Year Plan. The annual report and administrative plan were made available to the public for a 45-day comment period, with a public hearing held on May 13, 2025—no public comments were received. The Administrative Plan outlines policies for administering housing assistance and is updated annually based on HUD and internal policy changes.
Federal Grant Budget Amendments for the 2025-26 Program Year
Council is requested to consider accepting the final 2025-26 program year HUD entitlement allocations (CDBG, HOME, ESG), approve corresponding budget reductions, and authorize the use of existing CDBG Library Outdoor Learning Kiosk Program funds with an expedited Request for Qualification Notice posting for the South Garland Library Outdoor Learning Program design ahead of the anticipated July 8, 2025 adoption. Council considered this at the April 14 and May 5, 2025 Work Sessions. Unless otherwise directed by Council, staff will bring these adjusted amounts forward for formal approval at the July 8, 2025 Regular Meeting.
The City Council is being asked to accept HUD’s final FY 2025–26 program allocations for Community Development Block Grant (CDBG), HOME Investment Partnerships (HOME), and Emergency Solutions Grant (ESG) programs. Final funding amounts were lower than anticipated so all grants were lowered by the appropriate percentage to align with the funding amounts. All CDBG projects reduced by 4%, except Code Compliance salaries, and HOME and ESG programs reduced by 1% and 3% respectively. The South Garland Library Outdoor Learning Program will be funded through existing CDBG Library Kiosk funds for professional design services.
VERBAL BRIEFINGS
Council may ask for discussion, further information, or give direction to staff on an item posted as a verbal briefing.
City Manager Preview of the June 21 City Council Workshop
City Manager, Jud Rex, will provide a preview of some of the materials to be covered at the June 21 City Council workshop.
This item kicks off the budgeting process for the next Fiscal Year. The Council will hold a Pre-Budget Workshop on Saturday, June 21, 2025 to discuss Garland’s Strategic Focus Areas & Financial Outlook, Budget Sustainability, and 2025 Bond Implementation. Prior to the workshop, Council will take a survey to rank its strategic focus areas which is an important tool in aligning council priorities with the budget for the year.
The Council will then hold another Special Budget Work Session on Saturday, August 16, 2025 with presentations from various city departments, and the budget is scheduled to be adopted on September 2 at the Regular Council Meeting.
I highly encourage you to be involved with the budgeting process. Last year, Garland’s budget topped $1 billion (with a “B”!!!). This is your taxpayer dollars at work and you should have a voice on how your money is spent.
ANNOUNCE FUTURE AGENDA ITEMS
A Councilmember, with a second by another member or the Mayor alone, may ask that an item be placed on a future agenda of the City Council or of a committee of the City Council. No substantive discussion of that item will take place at this time.
EXECUTIVE SESSION
Deliberate or discuss:
The City Council will adjourn into executive session pursuant to sections 551.071 and 551.087 of the Texas Government Code to deliberate and discuss the following:
1. Consultation with attorney and attorney/client communication related to requirements of state law and its application to the Garland Development Code (551.071).
This will likely be a discussion of the major zoning case to be decided tomorrow that I discussed above.
2. A potential offer by the City of financial and other incentives to a business prospect and the receipt of commercial or financial information that the City has received from that same business prospect, which the City seeks to have locate within the City in the area of President George Bush Turnpike and Holford Road, and with which the City is conducting economic development negotiations (551.087); and attorney/client communications related to the same (551.071).
This is certainly a discussion of the proposed soccer complex at Holford and PGBT.
With the major rezoning case being considered tomorrow, let’s hear this banger from Euro-boy band O-Zone “Dragostea Din Tei”. I guarantee you will be singing “Ma-ia-hii, ma-ia-huu, Ma-ia-hoo, ma-ia-haa” the rest of the day.