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HomeMy WebLinkAboutMIN 08.23.2011 CC-Wf the Y rust 23, 2011 The City Council of the City of Georgetown, Texas, met in Regular Session on the above date with Mayor George Garver presiding. Council Present: Council Absent: Patty Eason, Danny Meigs, Bill Sattler, Pat All Council Present Berryman, Tommy Gonzalez, Troy Hellmann, Rachael Jonrowe Staff Present: Paul E. Brandenburg, City Manager; Jessica Brettle, City Secretary; Bridget Chapman, Acting City Attorney, Micki Rundell, Chief Financial Officer; Laurie Brewer, Deputy City Manager; Mark Thomas, Economic Development Director; Robyn Rye, Records Coordinator; Mike Peters, Information Technology Director; Glenn Dishong, Utility Director, Shelly Hargroce, Main Street Manager A Public Hearing on the proposed 2011/12 Annual Budget -- Micki Rundell, Chief Financial Officer and Paul E. Brandenburg, City Manager Mayor called the meeting at 4:01 PM. Berryman absent. Rundell thanked the Council and said this is a requirement for the budget adoption process. She said this is over the 2011/2012 budget and she went through a brief overview of what the budget includes. She said the total budget is $179.1 million, which is higher than the 2011 amended budget of $209.1 million. She spoke about the budget in the general fund and in the capital improvements, purchased power budget and Georgetown Utility Systems budget. She showed Council a graph of all of the revenues for the City, which also includes the utility. She said the biggest component is the utility revenue. She also showed the Council a graph of the budget expenses and where the funds go each year. She described to Council the general fund revenue sources. She said this budget is in policy compliance and added this means the funds are presented within Fiscal and Budgetary Policy compliance. She summarized the policy for the Council. She spoke about the contingency reserves for the City and said they are $15.44 million, which equals 75 days of City-wide operating expenses. She said it increased slightly from last year due to operational increases in the utilities. She spoke about the general capital projects in the budget, including the public safety facility design, the river trails expansion, public safety vehicles and equipment and the Williams Drive widening additional costs. She summarized the capital improvements in the utilities. She spoke about the projected 2011/12 debt and noted the debt could be as much as $6.1 million. She said a lot of this debt could be delayed based on the timing of projects as well as additional revenue that may come in from the water utility. She spoke about the utility rates and fees and noted there are no utility rate adjustments planned for this budget year. She said there are some potential rate adjustment for the following year and she described those proposed adjustments for the Council. She said the City is not going to see any garbage or recycling rate adjustments. She said they are proposing a $1.00 rate adjustment to the stormwater drainage fee. City Council Meeting Minutes/ Page 1 of 4 Pages Rundell reviewed the proposed tax rate for the Council. She said the certified assessed valuation of the area has increased to $4.318 billion at a growth rate of about 8.5%. She showed Council a graph demonstrating the tax rate as compared to the assessed valuation. She said the city assessed valuation per capita has remained steady. She said the proposed tax rate is 0.38750, which is a 5% increase over the effective rate. She described the elements that went into the proposed tax increase. She said the frozen properties effect the way the tax rate and assessed valuations are calculated. She showed Council a comparison of rate components between last year and this year. She said the actual tax rate is about 8.7% higher than it was last year. She described the components of the tax rate and how, this year, a substantial amount of the tax rate is due to debt service. She showed Council a graph demonstrating how the property tax is the lowest in the area. She also showed Council a graph of the combined total monthly utility and tax expenses. There was much discussion regarding how Georgetown is a very cost effective place to live. She spoke about the next steps in the budget process. Gonzalez said he has been challenged to look at the budget to see where we are at and he asked if there is anything that has been left unturned that would help minimize the tax increase. He spoke about the reserves and if there is a statute or law that requires the City to keep that amount of days. Rundell said those days are set by Council under the fiscal and budgetary policy. She said, however, there is no statutory requirements. She said the recommended practice for contingency reserves is 75 days. She said, if the City were to reduce that amount, the extra money would have to come from another fund. Gonzalez asked and Rundell said the reserve fund is in CDs across the state and added the City uses those for cash flow purposes. Berryman arrived at the dais. Rundell said the contingency reserve monies are used for the bond reimbursement program. Gonzalez said he would like to see what would happen if the City were to reduce the reserves by 5 or 8 days and the pros and cons of that. Rundell said, in order to keep the tax rate down, the City would have to reduce the contingency to between 80 and 82 days. She said, once that money is gone, it's gone and this would only be a one time fix. There was much discussion regarding this option. Brandenburg said, to get the tax rate back to where it is now, it would take an extra $900,000. He said the City would have to cut down on services to the community. Gonzalez said, at this point, it may not be 8 cents but he would like to explore even a small cut to the reserves and just find a way to be a little leaner. He spoke about the City maintaining its bond rating. Rundell said the question comes back to the bond rating and added the message reducing the contingency reserve sends to the bond rating agencies is that we are unwilling to raise taxes to pay back bonds. She said, if the City loses a bond rating, it could be substantial dollars in the cost of the facility. She said this is not something we can play fast and loose with because, in this market, it is something they are looking at with a lot of scrutiny. She said the City spoke about it but noted it is a signal that could preclude the from getting a bond rating increases. Gonzalez said if we could cut even a day or two from the reserves, it would be better than nothing. He said he wants to leave no stone unturned. Rundell said staff could do that, but noted the staff has already looked into all of that. Rundell said she would do anything Council would like. Gonzalez said he would just like to see an example of how to save and what services may need to be cut in order to accomplish those goals. Gonzalez said, if no other Council members are interested in this, he will step aside. Sattler said he would like to see this option. He said he thinks there should be some shared issues here and added he would like to see what a couple of days off would be. Meigs said no one likes to talk about raising taxes, especially in tough economic times. Meigs asked and Rundell confirmed this is all about the emergency funds. Meigs asked if there is a policy that determines what is an emergency fund. Rundell read the definition of emergency funds from the current policy. Meigs said he would like to urge caution regarding voting down the reserves when there are bonds out there that have been positively approved by the voters. He said an idea may seem smart in the short term but may be dangerous in the long term. Eason said she agrees with Meigs and spoke about some of the history of the City where we had to pay millions of debt down because the City was using accounts to draw down the tax rate. She said she is not interested in having a short view that, in the long run, would mean a major crisis for the City. Eason asked and Rundell described the WTTB (What it Takes to Balance) issue and how the City used to take money out of the utility funds to pay down debt. She said the Council changed that policy in 2000 to say that they don't want to do that anymore. She said they developed Scenario H, which was a plan to eliminate the WTTB. She noted that started back in the early 90s when the Council did not want to keep the effective rate. She continued to describe how the City was able to get away of the "What It Takes to Balance" transfers. Hellmann asked if it is possible to reduce the reserve in the general without effecting the utilities and Rundell said it is not possible. Hellmann asked and Rundell said it would be possible to reduce the contingency reserves only by reducing the amount of days and that would have to be an amendment to the fiscal and budgetary policy. Hellmann asked and Rundell said the gold standard for the contingency reserves in 90 days. Rundell said the problem is that we have been 90 days and to lower it would send a signal to the bond rating agencies City Council Meeting Minutes/ Page 2 of 4 Pages that we are not providing more services. Hellmann asked and Rundell said she has spoken to the financial advisor on this issue and was told the City could do this, but it is not recommended in this environment. Hellmann asked and Rundell said we would not be upgraded but noted she can not say whether or not they would get downgraded. Rundell said the question is; if you don't raise the taxes today, you have to do it tomorrow. Hellmann said this would be just postponing this decision until next year. He said he agrees that we are different because 25% of our tax rate is frozen and added, the lower tax rate can promote growth. There was much discussion. Berryman said she would like to see ourselves do our due diligence and make sure the City has explored all options in terms of the budget. She said instead of saying we are going to cut selected areas, they would like to see staff bring back all potential areas for cutting costs. She said the problem is, as we cut back, how to we do that and where do we do that. She asked if it would be possible to have our financial advisor come and talk to Council. Berryman asked that staff postpone the first reading of the budget. Rundell said the City can not do that and noted the deadline for the tax office to receive the adopted budget and tax rate is September 15, 2011. She noted the second reading of the rate must occur by the September 13, 2011 meeting. Jonrowe asked and Rundell said if the Council pushes off raising the tax rate, it will mean a greater tax increase later. RUndell said there are a lot of people freezing and the people who are not freezing will have to make up the difference. Jonrowe spoke about the future growth of the frozen properties and unfrozen properties in Georgetown. Jonrowe and Rundell spoke about frozen properties as well as the voter approved bonds. Mayor spoke about how getting a higher bond rating would actually save the City more money in the long run. Public Hearing was opened at 4:45 PM No persons were present to speak. Public Hearing was closed at 4:45 PM Gonzalez said the motive is not to leave the tax rate as the same as it is now, but to try to have an even less of an increase by tightening our belts. He said it is an open-ended questions and he noted he has not seen any recommendations from staff. He said he would like to protect the voters who so graciously love the city and approved the bond increases. He said he would like to see all options and noted it does not have to be the same tax rate. He said he wants to make sure Council has turned over every stone to come up with their final decision on the tax rate. Hellmann spoke about the $6.1 million of bonds from this year that may or may not be issued. Rundell] said that will not have an affect on this coming year's tax rate. Hellmann asked and Rundell said the CityCorp abatement has eight more years. Sattler asked and Rundell confirmed the citizens do not vote on CO bonds. Mayor asked and Rundell said there are no more public hearings. Mayor asked and Rundell said the Council will be voting on the budget ordinance, tax rate ordinance and administrative ordinance tonight and then the second reading of those on the first meeting in September. There was a lot of discussion regarding the timeline for the budget ordinances. Mayor asked and Rundell said if Council wants to look at the budget further, the council could adopt the first reading and, between the first and second readings, there can be a special workshop scheduled for discussion. Brandenburg said it would be wise to have a special workshop prior to the second reading. Mayor said it seems Council would like to see some information that would help them know the ramifications of modifications in the budget. Berryman asked that Council not adopt tonight and have a special session next week. There was a lot of discussion regarding timing and when all budget items must be approved and when a special meeting could occur. B Economic Development Workshop with Project Grape -- Mark Thomas, Economic Development Director Thomas reviewed a history of this project. He spoke about other efforts being made to bring companies to the downtown area. He said the other area economic development is interested in is to recruit tech companies and noted those tech companies are looking for a "fun factor" in the City. He said all of this led to the Georgetown Winery Initiative in that having a winery downtown could be another factor that would attract tech companies to the area. He said the vitality of the downtown area is something that companies look for when they are scouting the area. He said people look at Georgetown as a dry community. He spoke about the local option election and how it made Georgetown a "wet" city last November. He recognized Gene Richards, who the City hired for this issue, for securing funding for this project. He said Richards and his department developed a matrix for the companies they are wanting to look for and bring to Georgetown. He spoke about the site visits Grape Creek made in Georgetown and how they wanted to be located in the current visitors center building. He said, over the past six months, they spent time trying to prepare the visitors center for Grape Creek. He described what the proposed project would look like and the timeline being introduced. Thomas introduced Brian Heath with Grape Creek to the Council. Heath greeted the Council and said, when he heard about the opportunity to move to Georgetown, he jumped at the opportunity. He said they were testing the City Council Meeting Minutes/ Page 3 of 4 Pages concept of a Main Street location for a winery. He said he talked to Hargrove and Thomas, both of whom have worked tirelessly on this project. He said Thomas is the most hardworking economic development director he has ever met. He showed Council pictures of the winery and how it will be different and the same in Georgetown. He said they want to take the best of what they know how to do and blend a little Starbucks into it. He noted he wants to create a business that brings in tourists as well as cements locals and encourages them to stay. He said they love the square and, once you get people here, they will love it. Heath spoke about the history of Grape Creek. He said they are purposefully not trying to grow too quickly and noted they are trying to pursue on site distribution. He said their tasting room is nestled on a hili. He showed Council a picture of that room. He said the room feeds into their theme, Tuscany in Texas. He showed Council an interior of the tasting room. He said they focus on making this, not only a Texas wine, but a quality wine. He said they send their wines to competitions outside of Texas as well. He noted they have won over 100 medals over the past two years. He showed Council a picture of their production center. He said they had to hand harvest one block of wines because the heat increased the maturity rate of the wines quickly. He showed Council a picture of their new tank room. He said they do cellar tours and he showed a picture of those cellars to the Council. He said they have looked into doing satellite offices and added they feel there is huge growth potential for wine in Texas. He said, in the Georgetown location, they will be able to leverage their market. He said their website tracker is pretty substantial as well as their email list of over 20,000 people. He added they will use this to market the Georgetown location even prior to the opening. He said they are wanting to create an experience driven environment and an urban winery concept. He noted they would design the space so that people would be exposed to it like a microbrewery. He spoke about the concept of wine on tap. He said he has already met with some other wineries who are interested in moving to Georgetown. He said part of his role is to also recruit two or three other wineries as well. He noted there is an opportunity to really start building on the idea of having a winery in Georgetown. All of the Council members expressed their thanks and excitement about the project coming to Georgetown. Mayor spoke about two items on the Legislative Agenda regarding this issue. C Records Management Update -- Robyn Rye, Records Coordinator This item was postponed until the next Workshop. Recessed to Executive Session under Sections 551.071, 551.072 and 551.087 -- City Council Meeting Minutes/ Page 4 of 4 Pages Returned to Open Session and adjourned -- 6:08 PM .... Adjournment The meeting was adjourned at 06:08 PM, st: ecretary Jessica Brettle