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Council OKs renewable energy program

Wednesday, March 3, 2021

The San Marcos City Council approved the implementation of a voluntary renewable energy program for local utility customers during its meeting Tuesday night. 

The San Marcos Electric Utility Division will now be able to implement a voluntary program allowing its customers to guarantee they are receiving 100% renewable energy in their homes. 

The program through the Electric Reliability Council of Texas market allows SMEU to purchase renewable energy credits, purchased at a fixed rate for one year. Customers can opt in to the program for a small fee and keep their rate for one year. 

As customers’ annual renewal comes up, they will be notified of any price changes and have the opportunity to opt back in or out. The price difference in the example given to San Marcos City Council was a $5 per month increase. 

In other business, the city is looking into providing legal language for business owners who wish to require masks in their establishments following Gov. Greg Abbott’s announcement  Tuesday ending the mask mandate in Texas. It will not be required for businesses to post said language, but rather should serve as support for those who wish to post signs requiring masks. 

The councilmembers also voted to approve an agreement with Lone Star Paving for Street Overlay services on an as needed basis in an estimated annual cost of $1.67 million with two additional annual renewals for a total contract amount of $5 million. 

Several councilmembers were concerned about potential damage by machinery to trees hanging over streets and wanted to explore adding penalties to the contract.

“I agree with Mr. Gleason,” Councilmember Melissa Derrick said. “If we can build in a penalty if they do not clear the trees and raze and scorch them instead, because the pride of San Marcos is the river and our beautiful trees and that’s what makes it so gorgeous to live here.”

A delay in the contract to add such penalty, however, would have risked rebidding the contract, which would be subject to increased costs of oil and asphalt. 

As a result, the councilmembers approved the contract 4-3, with councilmembers Maxfield Baker, Alyssa Garza and Shane Scott voting no. 

Mayor Jane Hughson articulated her vote of approval was in confidence that city staff would get ahead of any issues by trimming trees that might be hanging low over roadways. 

The councilmembers also approved an amendment to the chapter 380 Economic Development Incentive agreement with Best Buy, LLC that provided certain incentives to locate and operate an internet sales operations center in the city. The amendment will conform the agreement to changes in state law regarding the sourcing of sales taxes on internet sales.

The previous agreement allowed the City of San Marcos to keep 25% of the sales tax revenue received from sales made on Best Buy, according to the Comptroller’s rule that sales tax goes to the point of sale, in this case it was San Marcos. 

In May of 2020, the Texas Comptroller's office changed the rule so that the sales tax would go to the municipality at the point of purchase effective Oct. 1, 2021, giving cities time to allow jurisdictions with Chapter 380 agreements to absorb revenue impact. According to the agreement, the city receives all sales tax and pays Best Buy 75% of it. The city was able to hold the sales tax revenue until the Chapter 380 agreement could be updated. 

The city projected its own portion, 25% of the sales tax revenue would be, $3.4 million in fiscal year 21 as a result of the Chapter 380 agreement.  Best Buy, LLC agreed to ensure the city receives the full $3.4 Million in anticipated revenue so as to avoid adverse impacts to the adopted fiscal year budget as a result of the change in tax revenue.    

This amendment allows the city to pay the remaining funds owed to Best Buy, LLC, minus the amount they are covering to meet our estimated revenue projections from this revenue source and also allows the Chapter 380 agreement to be reinstated, if the law or legal interpretations change to allow for sourcing of sales tax to occur at the point of sale again sometime in the future. 

San Marcos Record

(512) 392-2458
P.O. Box 1109, San Marcos, TX 78666