City Council

CITY COUNCIL Monday, July 13, 2026 Council Chamber Special Session 6:00 PM FIRST FLOOR OF CITY HALL 7008 S. RICE AVENUE BELLAIRE, TX 77401 Agenda Mayor Gus E. Pappas Mayor Pro Tem Council Member Council Member Winfred C. Frazier Catherine Lewis Ross Gordon Council Member Council Member Council Member Todd Thurber Brian Witt Jackie Georgiou City of Bellaire Texas Page 1 of 30 Agenda City Council July 13, 2026 SPECIAL SESSION (SPECIAL MEETING AND WORKSHOP) - 6:00 P.M. I. SPECIAL MEETING A. Call to Order and Announcement of a Quorum - Gus E. Pappas, Mayor. B. Public Comment. To address the City Council, please complete a speaker form (located at the entrance to the Council Chamber) and submit it to City Clerk Tracy L. Dutton prior to the time for personal/audience comments. Each speaker shall have a time limit of up to five (5) minutes, with no extension, and with notice after four (4) minutes that one (1) minute is left. In the event of pressing business before the City Council or matters requiring its immediate attention or action, the City Council may, prior to the opening of audience comments, set a different maximum time limit for each speaker by a vote of four (4) members of the City Council. The purpose of this item is to allow the residents of Bellaire and other interested persons an opportunity to address the City Council on agenda issues and on non-agenda issues that are a matter of the jurisdiction of the City Council (i.e., City policy and legislative issues). Non-agenda issues regarding daily operational or administrative matters should be first dealt with at the administrative level by calling City Hall at (713) 662-8222 during business hours. [Note: The Texas Open Meetings Act, Texas Government Code, Chapter 551, prohibits the City Council from fully discussing, debating, or considering subjects for which public notice has not been given on the agenda. Issues that cannot be referred to the City Staff for action may be placed on the agenda of a future City Council Session.] C. Adoption of Ordinance. Ordinance calling a public hearing before the City Council on Monday, August 3, 2026, at 6:00 p.m., on the proposed budget for the City of Bellaire, Texas, for the fiscal year beginning October 1, 2026, and ending September 30, 2027; and directing that all necessary notices be published as required by law - Submitted by Terrence Beaman, Chief Financial Officer. Call Public Hearing for FY 2027 Proposed Budget - Pdf D. Adjourn. II. WORKSHOP (COST ALLOCATION PLAN AND USER FEE STUDY) A. Call to Order and Announcement of a Quorum - Gus E. Pappas, Mayor. B. Presentation and Discussion. Presentation and discussion of the Cost Allocation Plan and User Fee Study and direction to staff regarding next steps - Submitted by Terrence Beaman, Chief Financial Officer. Agenda Statement Report - Pdf City of Bellaire Texas Page 2 of 30 Agenda City Council July 13, 2026 C. Adjourn. In compliance with the Americans with Disabilities Act (ADA), requests for accommodations, interpretive services, or other special arrangements can be provided to assist with your participation at this public meeting. Please contact the City of Bellaire's ADA Coordinator, Annette Goldberg, at (713) 662-8271 or by email at agoldberg@bellairetx.gov at least 48 hours prior to the meeting so that reasonable accommodations can be made. The City Hall and Council Chamber are wheelchair accessible, and accessible parking spaces are available in the City Hall parking lot. City of Bellaire Texas Page 3 of 30 AGENDA STATEMENT City of Bellaire MEETING: City Council - Jul 13 2026 PREPARED BY: Todd Gross DEPARTMENT: Finance ITEM TITLE: Ordinance calling a public hearing before the City Council on Monday, August 3, 2026, at 6:00 p.m., on the proposed budget for the City of Bellaire, Texas, for the fiscal year beginning October 1, 2026, and ending September 30, 2027; and directing that all necessary notices be published as required by law - Submitted by Terrence Beaman, Chief Financial Officer. RECOMMENDATION: Terrence Beaman, Chief Financial Officer, recommends that City Council call a public hearing for the proposed Fiscal Year 2027 Budget. BACKGROUND/SUMMARY: This item requests that City Council call a public hearing to be held on Monday, August 3, 2026, at 6:00 p.m., on the proposed Fiscal Year 2027 Budget and direct that all necessary notices be published as required by law. The public hearing will be held in the Council Chamber, First Floor of City Hall, 7008 South Rice Avenue, Bellaire, Texas 77401-4411. FISCAL IMPACT: None. Page 4 of 30  City of Bellaire ORDINANCE NO. 26-042 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BELLAIRE, TEXAS, CALLING A PUBLIC HEARING BEFORE THE CITY COUNCIL OF THE CITY OF BELLAIRE, TEXAS, ON MONDAY, AUGUST 3, 2026, AT 6:00 P.M., ON THE PROPOSED BUDGET FOR THE CITY OF BELLAIRE, TEXAS, FOR THE FISCAL YEAR BEGINNING OCTOBER 1, 2026, AND ENDING SEPTEMBER 30, 2027; AND DIRECTING THAT ALL NECESSARY NOTICES BE PUBLISHED AS REQUIRED BY LAW. WHEREAS, the City Council of the City of Bellaire, Texas, desires to establish the date, time, and place for a public hearing to receive written and oral comments regarding the proposed budget for the City of Bellaire, Texas, for the fiscal year beginning October 1, 2026, and ending September 30, 2027. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BELLAIRE, TEXAS: 1. THAT the City Council of the City of Bellaire, Texas, hereby calls a public hearing to be held on August 3, 2026, at 6:00 p.m., before the City Council of the City of Bellaire, Texas, for the purpose of receiving written and oral comments regarding the proposed budget for the fiscal year beginning October 1, 2026, and ending September 30, 2027. At the time and place specified, all interested persons shall be afforded an opportunity to be heard concerning the proposed budget. 2. THAT said public hearing will be held in the Council Chamber, First Floor of City Hall, 7008 South Rice Avenue, Bellaire, Texas 77401-4411. 3. THAT the City Clerk of the City of Bellaire, Texas, is hereby directed by the City Council of the City of Bellaire, Texas, to publish a notice of said hearing in a newspaper of general circulation in accordance with the requirements of the Texas Local Government Code and the Charter of the City of Bellaire, Texas. PASSED, APPROVED, and ADOPTED this 13th day of July, 2026. SIGNED: Gus E. Pappas Mayor Ord. No. 26-_____ Page 1 of 2 Page 2 of 4 Page 5 of 30 ATTEST: Tracy L. Dutton, TRMC City Clerk APPROVED AS TO FORM: Alan P. Petrov City Attorney Ord. No. 26-_____ Page 2 of 2 Page 3 of 4 Page 6 of 30  City of Bellaire NOTICE OF PUBLIC HEARING ON THE PROPOSED BUDGET FOR THE CITY OF BELLAIRE, TEXAS FISCAL YEAR 2027 NOTICE IS HEREBY GIVEN that the City Council of the City of Bellaire, Texas (City), by Ordinance No. 26-042, has called a public hearing before the City Council of the City of Bellaire, Texas, to receive written and oral comments regarding the City's proposed budget for the fiscal year beginning October 1, 2026, and ending September 30, 2027 (i.e., FY 2027). The public hearing will be held on Monday, August 3, 2026, at 6:00 p.m., in the Council Chamber, First Floor of City Hall, 7008 South Rice Avenue, Bellaire, Texas 77401-4411. All interested persons are invited to attend and will be afforded an opportunity to comment on the proposed budget. The FY 2027 proposed budget document is based on information available to the City at the time the FY 2027 proposed budget document was filed with the City Clerk’s Office on Tuesday, July 14, 2026. The proposed budget document is available for review in the City Clerk’s Office, First Floor of City Hall, 7008 South Rice Avenue, Bellaire, Texas 77401-4411, Monday through Friday, from 8:00 a.m. until 5:00 p.m., excluding holidays. A copy is also available for review in the Bellaire City Library, 5111 Jessamine Street, Bellaire, Texas 77401, and on the City’s website at www.bellairetx.gov. This budget is estimated to raise more property taxes than last year’s budget by $890,000, an increase of 3.54 percent. Based on the taxable value information currently available from the Harris Central Appraisal District, it is not possible to determine at this time the amount of the additional property tax revenue to be raised from new property added to the tax roll this year. Written comments may be submitted to the City Clerk prior to the public hearing and should be addressed to: Tracy L. Dutton, City Clerk City of Bellaire 7008 South Rice Avenue Bellaire, Texas 77401-4411 Questions regarding participation in the public hearing may be directed to the City Clerk by email at tdutton@bellairetx.gov or by telephone at 713-662-8275. ____________________________ Tracy L. Dutton, TRMC City Clerk City of Bellaire, Texas Page 4 of 4 Page 7 of 30 AGENDA STATEMENT City of Bellaire MEETING: City Council - Jul 13 2026 PREPARED BY: Todd Gross DEPARTMENT: Finance ITEM TITLE: Presentation and discussion of the Cost Allocation Plan and User Fee Study and direction to staff regarding next steps - Submitted by Terrence Beaman, Chief Financial Officer. RECOMMENDATION: Terrence Beaman, Chief Financial Officer, recommends that City Council receive the presentation, discuss the findings and recommendations of the Cost Allocation Plan and User Fee Study, and provide direction to staff regarding future implementation and fee-setting strategies. BACKGROUND/SUMMARY: The City Council will receive a presentation and discuss the findings, methodology, and policy considerations associated with the City's Cost Allocation Plan and User Fee Study. The user fee study will ensure fees are set at the proper levels, and the cost allocation plan study will ensure the annual overhead transfer from the Enterprise Fund to the General Fund is set at the proper level. The purpose of the Cost Allocation Plan study is to provide a fair and defensible methodology and calculation to identify and allocate indirect costs which can be utilized in setting appropriate overhead reimbursement amounts and can be utilized in the complementary User Fee study. The purpose of the User Fee study is to ensure that user fees are equitable, transparent, legally defensible, and appropriately aligned with the cost of providing services, while minimizing the subsidization of fee-supported activities by General Fund revenues. The study also provides a framework for establishing cost recovery goals that balance financial sustainability with community and policy objectives. The presentation will include an overview of the study methodology, key findings, recommended cost recovery targets, and potential implementation strategies. Council discussion and direction will be sought regarding the proposed cost recovery approach and the development of a future fee schedule. Any proposed fee modifications will be presented to the City Council for consideration at a future meeting. FISCAL IMPACT: There is no direct fiscal impact associated with this presentation and discussion. Any future fee adjustments resulting from the study will be presented to the City Council for consideration and may enhance cost recovery, reduce General Fund subsidies, and increase revenues available to support Page 8 of 30 City services. Page 2 of 23 Page 9 of 30  CITY OF BELLAIRE, TX COST ALLOCATION PLAN & USER FEE STUDY July 2026 Page 3 of 23 Page 10 of 30  Page 4 of 23 COST ALLOCATION PLAN & USER FEE STUDY Page 11 of 30 2  STUDY BACKGROUND ▪ Primary objective of a Cost Allocation Plan (CAP) is to: ▪ Develop and document Indirect Cost Rates for use in: Page 5 of 23 ▪ Inter-fund transfers In conjunction ▪ Calculating the fully-burdened cost of delivering public with Cost services ▪ Potential for grant reimbursement of internal services Allocation Plans, User Fee Studies ▪ Primary objective of a User Fee Study is to: approximate the ▪ Determine the “reasonable” full cost of providing services full cost of ▪ Determine the strategic subsidy level, if any, of each studied providing fee various public services. Page 12 of 30 3  4 COST ALLOCATION PLAN Page 6 of 23 Page 13 of 30  COST ALLOCATION PLAN ▪ Cost allocation plans allocate the costs of providing the internal Allocations are calculated using (“indirect”) services which support and enable those areas that Page 7 of 23 methodologies that approximate the amount of provide direct public services. services being provided by the Indirect Service departments to the Direct Service departments. EXAMPLE INDIRECT SERVICES EXAMPLE DIRECT SERVICES For example, HR services are City Clerk Development Services often allocated by number of Full-Time Equivalent (FTE) City Manager’s Office Fire Department employees. That is, if 30% of Communication & Engagement Library the City’s FTE are in the Fire Department, it is reasonable to Facilities Municipal Court assume that 30% of HR time is spent supporting the Fire Finance Department Parks & Recreation Department. Human Resources Police Department Cost Allocations are used for Information Technology Public Works internal accounting purposes Utility Billing and do not affect the City’s budget (with the exception of Page 14 of 30 inter-fund transfers). 5  6 USER FEE STUDY Page 8 of 23 Page 15 of 30  USER FEE BACKGROUND ▪ User Fees help fund Page 9 of 23 programs and services that provide a specific benefit to individuals or groups requesting them, with limited or no benefit to the community as a whole. Page 16 of 30 7  USER FEE STUDY ▪ Primary objective of a User Fee Study is to: ▪ Determine the “reasonable” full cost of providing services Generally, up to Page 10 of 23 ▪ Determine the strategic subsidy level, if any, of each fee 100% of the full ▪ Each fee or service’s cost is calculated individually calculated cost may be ▪ Develop fully burdened hourly rates for personnel recovered. ▪ Salary & Benefit cost divided by productive hours ▪ Layer on direct and indirect overhead as applicable to the Communities position’s department and services provided often elect to strategically ▪ Many user fees can be set at amounts that consider policy subsidize certain objectives in addition to cost of service fees to advance policy goals. Page 17 of 30 8  USER FEE STUDY Willdan uses the following to determine full cost of providing each service: Page 11 of 23 Department Salary & Staffing Productive Budgets & Benefit Structures Hours Cost Data Information Time Current City Staff Estimates per Activity Level Interviews & Program/Fee & Revenues Policies Page 18 of 30 9  USER FEE STUDY | METHODOLOGY COMPONENTS DATA ANALYSIS BUILDING COST LAYERS SET FEES Page 12 of 23 Define Full Cost of Department Interviews Direct Services Services Set Desired Cost Time Estimates Indirect Services Recovery Level Department Overhead Labor Costs Costs City-wide Overhead Costs Page 19 of 30 10  TYPICAL FEE COMPOSITION Page 13 of 23 Central Service • Indirect Costs as Overhead calculated by the CAP • Direct Labor Direct • 3rd Party Costs Costs • Material Costs Department Overhead • Operational Costs • Dept. Admin Functions Page 20 of 30 11  USER FEE POLICY CONSIDERATIONS Example Page 14 of 23 Cost Recovery Who Benefits Method Services Primarily Taxes, Police Patrol Community Some Fees Primarily Code Enforcement Fees and Taxes Community Primarily Primarily Fees, Parks & Individual Some Taxes Recreation Individual Fees Development Fees Page 21 of 30 12  COST RECOVERY MATRIX Full Cost Recovery Page 15 of 23 Development Permit Fees Code Enforcement Fees Community A B Individual Benefit C D Benefit Minor Home Repair (Water Heater, etc) Police Patrol Page 22 of 30 No Cost Recovery 13  USER FEE POLICY CONSIDERATIONS ▪ General standard: individuals or groups who receive specific or profitable Page 16 of 23 benefit from public service should pay full cost of delivering the service ▪ In certain strategic situations, subsidization is an effective public policy tool to: ▪ Encourage participation ▪ Ensure compliance when cost is prohibitive to target industries or residents ▪ Allow access to services ▪ We recommend that City review the fees regularly, and update at least labor cost with every budget cycle Page 23 of 30 14  Page 17 of 23 EXAMPLE USER FEE POLICY QUESTION: EMERGENCY MEDICAL SERVICES BALANCE BILLING Page 24 of 30 15  USER FEE POLICY CONSIDERATIONS | BALANCE BILLING ▪ Balance Billing: The practice of charging patients Page 18 of 23 the difference between the cost of service and the amount paid by insurance. ▪ Currently, Bellaire bills insurance and collects the amount that insurance providers pay for services, regardless of the cost of providing the services. ▪ The difference between cost and amount paid is subsidized by other general fund revenues (property and sales taxes) Page 25 of 30 16  USER FEE POLICY CONSIDERATIONS | BALANCE BILLING ▪ Balance billing is regulated by state law, however the current law regulating these provisions sunsets Page 19 of 23 in 2027. ▪ Not all patients are covered under the state’s existing legislation. ▪ If a balance billing policy is adopted, the City will need to consider: ▪ Units of charge (per run, per mile, per procedure, etc) ▪ Collections/Payment Plan Policy ▪ Setting and maintaining rates ▪ Other related policies Page 26 of 30 17  18 SUMMARY Page 20 of 23 Page 27 of 30  CAP & USER FEE STUDY SUMMARY ▪ The City’s Cost Allocation Plan and User Fee Study will enable the City Page 21 of 23 Council to make fully-informed policy decisions surrounding setting user fees. ▪ Cost Allocation Plan is used for internal accounting purposes and does not require approval by City Council. ▪ On track for presentation to the City Council on specific user fee recommendations by September 14. Page 28 of 30 19  20 QUESTIONS & DISCUSSION Page 22 of 23 Page 29 of 30  Disclosure Willdan Financial Services (“Willdan”) is registered as a "municipal advisor" pursuant to Section 15B of the Securities Exchange Act and rules and regulations adopted by the United States Securities and Exchange Commission ("SEC") and Page 23 of 23 the Municipal Securities Rulemaking Board ("MSRB"). The MSRB has made available on its website (www.msrb.org) a municipal advisory client brochure that describes the protections that may be provided by MSRB rules and how to file a complaint with the appropriate regulatory authority. As part of its SEC registration Willdan is required to disclose to the SEC information regarding criminal actions, regulatory actions, investigations, terminations, judgments, liens, civil judicial actions, customer complaints, arbitrations and civil litigation involving Willdan. Pursuant to MSRB Rule G-42, Willdan is required to disclose any legal or disciplinary event that is material to Client's evaluation of Willdan or the integrity of its management or advisory personnel. Willdan has determined that no such event exists. Copies of Willdan’s filings with the United States Securities and Exchange Commission can currently be found by accessing the SEC's EDGAR system Company Search Page which is currently available at: https://www.sec.gov/edgar/searchedgar/companysearch.html and searching for either Willdan Financial Services or for our CIK number which is 0001782739. For the avoidance of doubt and without limiting the foregoing, in connection with any revenue projections, cash-flow analyses, feasibility studies and/or other analyses Willdan may provide the municipality with respect to financial, economic or other matters relating to a prospective, new or existing issuance of municipal securities of the municipality, (A) any such projections, studies and analyses shall be based upon assumptions, opinions or views (including, without limitation, any assumptions related to revenue growth) established by the municipality, in conjunction with such of its municipal, financial, legal and other advisers as it deems appropriate; and (B) under no circumstances shall Willdan be asked to provide, nor shall it provide, any advice or recommendations or subjective assumptions, opinions or views with respect to the actual or proposed structure, terms, timing, pricing or other similar matters with respect to any municipal Page 30 of 30 financial products or municipal securities issuances, unless formally engaged to provide such information. 21