By Rachel Madison

More than a year has passed since it was last discussed, but the residency of Council member Kathy Canady is once again being questioned—this time by fellow members of the City Council.

Council member Crystal Mancilla said Oct. 4 it has been brought to her attention by some constituents that Canady’s residence is listed as her business address, the Quick Service Garage at 1100 Loop 332. Because citizens have asked about it, Mancilla said she wanted to have a public conversation with City Attorney Marianella Joseph present.

“This is a time for us to come together and get this out in the open, talk about it and hash it out,” she said.

Joseph said she was asked to guide the conversation regarding the concerns surrounding Canady’s residency.

“This has been brought up to council before and evaluated by the former city attorney, and there are also [Liberty Hill Independent] newspaper articles that have talked about this,” she said. “There was also a grievance filed by a former city employee that was put up to council and council decided the investigation was not to be continued. The reason for this conversation tonight is to ask questions specifically about [Canady’s] residency and for [Canady] to have an opportunity to provide to this new Council information regarding [her] place of living.”

Council votes not to consider ethics complaint – Oct 3, 2020

City rejects Canady eligibility challenge – Sept. 10, 2020

Canady residency in question – Sept. 3, 2020

Canady said nothing has changed since the last time she was asked about her residency, so she wasn’t sure why she was being asked again.

“It has been brought to my attention with constituents that have businesses in the city limits, but don’t live in the city limits, that they would like to have voted,” Mancilla said.

“That’s great, good for them if they have a place to live in their business,” Canady replied.

Mancilla then asked if a business can also be a place of residency. Joseph said she didn’t feel comfortable having a legal position at this point, because she has not evaluated all the facts.

“What I want to do tonight is ask questions,” she said. “We are dealing with two things. One is the zoning for the property where [Canady is] living, and the other is the legal requirements to serve as a council member. Based on a document I’ve seen, I have some questions regarding if you have lived at [your business] before being appointed to the council until today.”

The document Joseph referenced is a loan document signed by Canady on May 29, 2019, for a “Designation of Homestead and Affidavit of Nonhomestead.” On the affidavit, Canady claims 402 S. Boundary Street in Burnet as her homestead property. The address is a triplex near downtown Burnet.

In signing that document, Canady swore that “(She) does not now and does not intend ever to reside on, use in any manner, or claim (her) Nonhomestead Property as a business or residence homestead.” The document also states that “the above-described Homestead Property is designated as the homestead of (her) family,” and “(she) now owns and resides on, uses, claims, and designates (her) Homestead Property as (her) only legal homestead, exempt from forced sale under the Constitution and laws of Texas.”

“I have never lived in Burnet,” Canady said, adding that she’s lived in her garage for the last three years. “[This affidavit] was required by the title company to be signed to close the loan I needed with my investor. It protects my investor. When we started to close, I said I live here (in Liberty Hill), and they said, ‘You can’t live here; you have to say you live somewhere else to dispel the homestead issue.’ I had to close because I had a very short window of time. I was told people do it all the time, and ‘When you walk out of here, you’re done,’ so I did. But I don’t live there, I live here.”

The title company listed on the affidavit is Independence Title in Liberty Hill.

Council member Chris Pezold argued if someone holds public office, then they should be held accountable, adding that the affidavit is fraudulent.

“It blows me away that this notary signed this document,” he said. “This is out there floating around and these people who elected me don’t know what’s going on. But what’s going on is this is favoritism. I have friends here who have businesses and can’t vote.”

“It’s not favoritism,” Canady said. “It’s not fun. It’s what you do when you have to. If they want to live in a small, cramped area of their business, that’s their business and they can vote all they want.”

Canady added that the affidavit is a document that is between her and her investor, but Pezold said that’s not the case.

“It is until you are appointed for office and you’re on the dais making decisions,” he said.

Joseph asked if Canady’s intention has always been to live in Liberty Hill.

“Yes, that’s why everything is in this [Liberty Hill] address,” Canady said. “My voter card, my driver’s license, my mail—everything is in that address.”

Joseph then asked Canady, who was appointed to the Council in July 2019, what her understanding is for the zoning of her garage.

Canady’s response was that in the past, people often lived in their automotive shops to protect their vehicles or lived upstairs above their businesses and added that the entire downtown district was grandfathered in to allow people to live in their businesses because of this.

“I requested a zoning letter from the city engineer because the paper (The Liberty Hill Independent) keeps bugging me, and as soon as somebody decides they want to cause drama, guess who gets picked on?” she said. “I decided to get it in writing, so I paid my $50 and requested the letter and got it.”

City Administrator Lacie Hale said any property owner can request a zoning verification letter. She added that the zoning for Canady’s garage is C2, which has listed uses of both residential and commercial based on the City’s Unified Development Code (UDC).

According to the UDC, the C2 zoning category does allow for both business and residential use, but the property must be designated a business or residence and may not serve as both.

“C2 can be for living or business, not both,” Pezold said. “We don’t have a mixed-use ordinance. If you look at it, it’s clear on that. This should be a disqualifier.”

Mancilla also asked if there was an ordinance that states that someone can’t live in certain types of businesses, such as auto garages. Joseph said she wasn’t familiar with all the ordinances and zoning requirements for the City, and Canady argued that no ordinance like that has been found.

“It was a lie; that’s never been found that there are certain select businesses you can’t live in,” she said.

Joseph said she would investigate this for a definite answer, as well look into what type of permit was grandfathered in for Canady before the UDC was adopted.

“This was an informational and fact driven conversation,” Joseph said. “As we move forward, I hope Kathy will cooperate and provide dates and chronology, and staff will look into zoning. I don’t think we have all the facts. The law is broad in residency requirements and zoning. It’s premature to make a decision. Council should visit this issue again once we have done proper fact finding and provided information, but that’s not tonight.”

The City’s Unified Development Code Section 4.12.02, which is posted on the City website, contains a list of prohibited home occupations including “Automobile or mechanical paint or repair shops.”

Also Monday, the Council:
• Heard a presentation from Ed Horne, owner and developer of Santa Rita Ranch, about the future of wastewater services within the development. Horne said over the next 30 days, he wants to decide on the best way to move forward with wastewater services. The options he discussed with the Council included building a new wastewater treatment plant on the north end of Santa Rita Ranch, which the City holds the permit for; or lifting everything from the subdivision to the south and not building a plant until 2028; or building a 350,000-gallon wastewater facility, which Santa Rita has the permit for, relieving the City of 1,600 living unit equivalents (LUEs). In the interim, Horne asked the Council to approve two pump and haul agreements for two of Santa Rita’s lift stations. The Council unanimously approved those two agreements and consented to work with Horne and Santa Rita Ranch on the best option for the future over the next 30 days.

• Unanimously accepted the donation of a Narcotics K9 Unit and associated training to the Liberty Hill Police Department from local Girl Scout Jillian Hamrick, who is training and donating a K9 for her Gold Award. The dog will be purchased this month, trained over the next several months, and will be ready to join the LHPD in spring 2022. Hale said at that time, a budget amendment will be made to support the cost of the K9. (See the Story)

• Heard an update on the Brownbridge Road project, which was supposed to include restriping and delineators, from City Engineer Curtis Steger. He said because TXDOT is planning on constructing a light at the intersection of Brownbridge and CR 214 sooner than expected, the City would not move forward with its original plan. Construction on the signal will begin Oct. 18 and should be complete six weeks later, he said. Mojo’s is still working with the City on moving its entryways to provide better entry to the shop, he added.

• Approved an amendment to the development agreement between the City and Butler Farms, which is a follow-up to solidify the terms agreed upon with the TIRZ.

• Approved an amendment to the development agreement for C7 II Ranch, which states that a credit may be applied to the impact fees for the entire property by C7 II Ranch, by submitting a request to the city administrator for final approval by City Council.

• Denied a request from LGI Homes to dismiss the amount of fees assessed by the City for the violation of allowing two customers to move into homes without Certificates of Occupancy (COO). LGI paid $37,500 for the first home at 256 Mount Vernon Way, and $13,500 for the second home at 109 Declaration Lane, based on the number of days the COO wasn’t in place. John Aregood, vice president of construction for LGI Homes, publicly apologized for violating the ordinance and asked the Council for mercy. Building Official Elias Carrasco said it wasn’t a good idea to waive the fees because it would “open a can of worms.” The Council agreed and voted 4-1, with DeYoung opposed, to keep the fees in place.

• Accepted a petition for annexation for two properties located on the south side of Highway 29 west of Ronald Reagan Boulevard. The two properties, located next to each other, are 9.3 acres and 11 acres. The proposed project for those properties is a planned unit development. A public hearing on the annexation is set for Oct. 27.

• Heard an update on the finance director position from Hale. So far, two applications have been received. More time will be given to see if additional applications come in, and staff will also look into costs associated with hiring a recruiter to fill the position.

• Agreed to attend quarterly coordination meetings with the Liberty Hill Independent School District to stay in communication about district and city happenings. Besides the council, the city administrator, mayor, police chief, fire chief and EDC director are also invited to those meetings.

• Directed staff to keep Wetzel Park open year-round, even when the splash pad is not operational.

• Discussed how the City will help the Liberty Hill Development Foundation with this year’s Sculpture Festival, set for Oct. 29 at Foundation Park. Communications Director Katie Amsler said the city will provide two portable restrooms, not to exceed $200; snacks for children, not to exceed $500; an LHPD booth; and a “chat with the mayor” table. Amsler said she is also helping the foundation with marketing, graphics, a press release and Facebook notifications for the event. In 2022, Amsler added the City will also take a role in planning a bigger event for the Sculpture Festival in 2022.

• Discussed ways the City could educate the public on how to contact TXDOT to move needed projects up in the queue, such as signals planned for the four-way stop at Loop 332 and RR 1869. Amsler will work on printing signs people can use to scan a QR code and send an email to TXDOT while sitting in traffic.

• Voted unanimously to increase the LHPD’s salaries to market rate, at a cost of approximately $150,000 total for 14 employees. That money will be taken from the $1.3 million still available in the general fund after approving the fiscal year 2022 budget.

• Discussed what the finance department needs to speed up reconciliation of finances and help with day-to-day operations. Interim Finance Director Misti Hancock said three full-time employees, including the finance director and two staff accountants, is sufficient for the department to run smoothly. She added that upgrading the department’s software to the most recent version would also streamline the department’s ability to process reports and increase transparency.

The City Council meeting had one executive session and adjourned at approximately 10:30 p.m. The next meeting of the council will take place Oct. 13 at 6 p.m.