New Mount Pleasant council members aim to balance city budget

Published 5:40 am Thursday, May 9, 2024

Update: Three newly elected Mount Pleasant City Council members will be sworn in during a special meeting Monday at 6 p.m.MOUNT PLEASANT — One of the last meetings for some members of the Mount Pleasant City Council was canceled Tuesday night because three members were absent.

The cancellation of the meeting came three days after Mount Pleasant voters elected three new council members, the latest chapter in a months-long series of municipal controversies in the Titus County town.

Mayor Pro Tem Tim Dale and Place 5 Councilman Henry Chappell II — who lost their reelection bids Saturday — did not attend Tuesday’s meeting. Place 2 Councilwoman Sherri Spruill also was absent.

Meanwhile, two of three newly elected council members told the News-Journal they intend to balance the city’s budget once they take office — a top concern facing the city, which is expected to have a budget deficit of $1.3 million or more in the coming fiscal year.

Kelly Redfearn was elected to the Place 4 seat on the council, besting Dale by a vote of 750 to 455, according to unofficial election results. Carl Hinton was chosen to serve as Place 5 Councilman, defeating Chappell by a vote of 771 to 426.

In the race for the Place 3 seat, voters chose Jonathan Hageman over Seth Alexander by a vote of 682 to 513. The incumbent, Galen Adams, did not run for reelection.

A room full of Mount Pleasant residents learned from Mayor Tracy Craig that the Tuesday meeting was canceled because of a lack of a quorum.

However, even if the meeting had taken place, the council would have tabled the items on the agenda until the May 21 meeting to allow the new council members to handle them, City Manager Ed Thatcher told the News-Journal.

“We weren’t going to do anything but set the date to canvas [the election] and swear people in,” Thatcher said.

Thatcher said he knew in advance that Dale and Chappell couldn’t attend Tuesday’s meeting because they had other obligations. He said he learned shortly before the meeting that Spruill couldn’t attend, but he didn’t know why she was absent.

Although the council might have intended to set a swearing-in date for new members during Tuesday’s meeting, City Secretary Candias Webster told residents that the city hadn’t received certified election results from the Titus County Elections Administrator’s Office, so the swearing-in couldn’t be scheduled at that time.

City officials later received the results and scheduled a special meeting for Monday at 6 p.m. at City Hall to swear in the new members.

Months of controversy

Saturday’s election came amid concerns about the city’s financial status, a Texas Rangers investigation into mileage reimbursements received by members of the council and other issues.

The city’s anticipated $1.3 million budget deficit stems from the severing of a fire protection services agreement between Mount Pleasant and Titus County. The Mount Pleasant Fire Department has provided firefighting services throughout Titus County for decades, working alongside volunteer fire departments to battle blazes and respond to wrecks.

The Titus County Commissioners Court voted to end that agreement in late 2023, saying the cost of the city’s services was too high. The contract between the county and city required the county to pay half the cost of any new firefighting equipment the city purchases, and Titus County Judge Kent Cooper said he believed the contract didn’t guarantee that city firefighters would respond to emergencies within the county.

Titus County leaders plan to have the county’s own fire department in operation by October.

Mount Pleasant leaders are preparing to lay off employees to account for the loss of revenue from the firefighting contract and planning to make other spending adjustments.

In March, the News-Journal reported that the Texas Rangers were investigating roughly $40,000 in mileage and travel reimbursements some council members received beginning in 2021.

Adams, Chappell, Craig and Spruill were compensated for driving hundreds of miles per month for city business, but their reimbursement request forms listed few details about where they’d driven. Adams and Chappell sometimes submitted nearly identical reimbursement forms, according to city records.

In March, the council voted to issue roughly $33 million in new municipal bonds to pay for water and sewer system upgrades, a new fire engine, road improvements and more. The city already had more than $91 million in outstanding bonds, which were issued to fund other municipal projects.

Mount Pleasant has the second-highest level of bond debt of any city its size in Texas — second to Buda, a suburb of Austin — according to the Texas Bond Review Board.

S&P Global Ratings, a credit rating agency, on March 6 downgraded the city’s credit rating outlook from “stable” to “negative,” meaning the city’s credit rating could be dropped if the city doesn’t improve its budget and restore its financial reserves in 2024 and 2025.

The credit rating agency said a one-in-three chance exists that it will drop the city’s existing rating of A+, which is lower than the best possible rating of AAA.

The credit rating agency highlighted the loss of the county firefighting contract revenue, the “erroneous assumptions” of the city’s former financial director regarding salaries and budget deficits as reasons for the negative outlook.

The council also faced pushback from community members in February and March over a proposed $280 million real estate development project. Local real estate developer Jon Anderson had asked the council to consider issuing up to $40 million in Public Improvement District bonds to finance the construction of roads, utilities and other public infrastructure within his proposed Anderson Towne Crossing mixed-use development, which would be one of the largest projects of its kind in the area.

A development agreement between Anderson and the city that would have authorized those bonds drew the ire of some residents, who said they were concerned about a $1.1 million federal tax lien against Anderson that didn’t surface until the council was set to approve the agreement. Residents also said the bonds — which would place additional fees on property within the development — would leave debt attached to the property that would dissuade future investments if Anderson’s development fell through.

Residents also objected to Anderson’s use of funding from the federal government’s EB-5 Immigrant Investor Program for the project. The program offers foreign citizens a faster path to U.S. citizenship by investing in commercial enterprises. Some residents said they believed the program would allow people supported by the Chinese Communist Party to have a way into the country, a claim Anderson refuted.

Anderson withdrew the development agreement from the council’s consideration. The project will move forward using funds from the EB-5 program and other sources, he said.

Financial fixes are focus

Newly elected council members Hageman and Redfearn told the News-Journal on Tuesday that restoring the city’s financial status is one of the first goals they’ll pursue once they take office.

Citing the loss of revenue from the county firefighting contract, Hageman said city officials should tighten spending and consider restructuring the city’s bond debt. Hageman also said he wants to work with Titus County leaders to revive the firefighting agreement.

“The timeline is short to get this to happen, and so it’s going to be a heavy lift, but one that I’m willing to do to work with the county to ensure that the population as a whole — meaning the county and the city — is well-covered,” Hageman said. “Because even if they did split off, we’re still going to have to work together.”

Redfearn said one of her first objectives will be to “start getting rid of the drama” at City Hall.

Salaries for city employees, the increase in the number of employees in recent years and other city expenditures “blows my mind,” she said. The city budget has increased from roughly $12 million in fiscal year 2019-20 to more than $16.6 million in 2023-24.

Amid high inflation and other economic turbulence facing the nation today, Americans are having to tighten their spending, Redfearn said.

“The price of everything has gone up,” she said. “So, why would a city blow all the money?”

Hinton, the third newly elected council member, declined to speak with the News-Journal.

The presentation of the city’s 2023 financial audit was one of the items on the agenda for Tuesday’s meeting. The council also was set to consider a resolution offering severance pay for city employees whether they leave voluntarily or are terminated.

Thatcher said the resolution stems from the reductions in force the city will make because of the loss of the firefighting revenue from Titus County.

The council’s May 21 meeting is set for 6:30 p.m.