HomeMy WebLinkAboutMIN 04.07.2008 CC-WThe City Council of the City of Georgetown, Texas, met in Regular Session on the
above date with Mayor Gary Nelon presiding.
Council Present: "Council Absent.
Patty Eason, Gabe Sansing, Keith Brainard, Bill All Council present
Sattler, Pat Berryman, Farley Snell, Ben Oliver
Staff Present:
Paul Brandenburg, City Manager; Tom Yantis, Assistant City Manager; Patricia E. Carts, City Attorney;
Sandra D. Lee, City Secretary; Micki Rundell, Director of Finance and Administration; Jennifer Bills,
Housing Coordinator; Kevin Russell, Human Resources Director; Leticia Zavala, Controller; Lorie
Lankford, Chief Accountant; Lisa Haines, Accountant II; Mark Thomas, Economic Development Director;
Cari Miller, CVB Coordinator; Marcy Henry, Administrative Assistant 11; Mark Miller, Transportation
Services Manager
Policy Development/Review orkshop ® Call to order at 04°00 P
A Overview and discussion of the City's Funding and Allocation Methodology -- Micki Rundell, Director Finance &
Administration
Rundell explained the Allocation Methodology, saying there is specific criteria for each allocation that cannot be
changed randomly. She told Council there are four different Internal Service Funds, (1) Fleet ISF for vehicle
replacements and maintenance, except for public safety vehicle replacement; (2) Facilities ISF for maintenance,
unscheduled major repair or expansion, including copier maintenance and replacement; (3) Technology ISF,
including maintenance and capital replacement of equipment; and (4) the Joint Services ISF, including Human
Resources, Accounting and Purchasing functions serving multiple departments allocated at the Fund level.
There were questions and comments from the Council.
B Follow-up discussion regarding options for social service funding and possible action to provide staff direction in
amending the Social Service funding policy included in the City's Fiscal and Budgetary Policy -- Micki Rundell,
Director Finance & Administration
Rundell presented the options for social services funding, including the current policy described as "special
purpose funding" at 1% for social services and an additional 1/8% to provide for children's and youth funding as
determined by City Council guidelines. She said she is aware of some concerns, such as lack of a "cap;"
managing the selection process; and accountability. She reviewed the specific directions from the Council at
the March 24, 2008 Workshop: (1) continue to allow shift of money between social service and children's
programs; (2) explore option of creating a trust; (3) consider funding some social services through utility funds;
and (4) report back to Council. She said tonight's item is her report back to Council, and gave Council some
options, such as creating an "operating trust." She suggested that using utility funds for social services funding
could present potential rate issues due to added subsidy. She noted that all investments are subject to City
Investment Policy and the Public Funds Investment Act.
Snell said he thinks the operating trust would be more flexible and could be operated through a third party
trustee or done in house. Brainard said foundations and endowments produce hundreds of billions of dollars in
this country, and the majority of those are funded through private equity investments, public equity, real estate,
hedge funds, and other instruments; and the idea that the City would be restricted to bonds, which are currently
paying about 3%, precludes the City from ever having a meaningful trust fund. He asked, and Rundell said she
City Council Meeting Minutes/April 7, 2008
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would
research that.
Sattler confirmed
that there would be a fee charged by the trustee. Rundell said she
would
make sure the
City had the most
cost effective arrangement possible.
Rundell explained the option of creating an "endowment" from annual excess funds at year's end in the General
Fund, but, depending on deposits, it could be years before earnings would generate noticeable funding. She
explained the option of creating an oversight/operating trust where the City would deposit a minimum balance at
year's end to fund the first year operations (determined by per capita spending indexed to population and CPI)
and then fund the next year from the trust. She said the benefit of the oversight/operating trust would be the
formula/amount would be pre -determined before the budget, using prior year funds with increases no longer
dependent on budget growth; and it would no longer be considered operating expense, because it uses end of
year excess funds from conservative revenue projects and excess utility usage due to weather.
Snell said the Council could determine that the amount of money to be available could be calculated, or there
could be a per capita number; and both of those could be funded from the General Fund. He said the idea of
going back into the prior year excess is an additional idea about getting the funding from the General Fund, but
would reduce the amount of money available from the excess. He said there should be a trust created, but it
would have to have a lot of money coming into it for it to ever get to the place where it could begin to fund social
services. He suggested that every year the Council would look at what is "leftover" in the budget and go into the
surplus to put money in the trust, but couldn't spend it both ways; so if it was funded from last year, then the
possibility of doing other things, including "feeding" the trust, would be lost. He said the choice of using a
percentage or per capita is a Council decision. Nelon said it was Council's decision six years ago to use the
"tithing method," and he wants to make sure if Council is going to revisit this, that a change in policy be
approved. Rundell said this policy is a part of the fiscal and budgetary policy.
Sattler asked and Snell explained that if a trust is created, he would pefer that it be "in house;" and in a given
year, if the formula, whichever one Council decides on, produced "X" amount of dollars, and it turns out that for
whatever reason it is more money than Council wanted to allocate, the surplus between the formula amount and
the actual allocations could go into that trust; and each year when the Council gets a positive report and
receives excess revenue, the Council could add money to that trust. Then, over ten years, there would be a
number producing revenue that would allow the Council to rethink what was needed for that year, and "in the
best of all worlds" cover it all. Sattler said he was thinking of putting the surplus each year into an endowment
fund that would draw interest and supplement the 1 % and 1/8%. Snell said the problem with endowment is the
principal can't be touched. Rundell said she would explore further whatever Council chooses.
Rundell also explained the option of having a 3rd Party Trustee to act as program administrator, following the
Council social service program guidelines; who would recommend funding levels to the Council, perform
accountability audits on grants, and provide quarterly reports to Council. Sattler suggested, and Rundell said
she would research to see if the Trustee could apply for grants and other donations to fund social services.
Snell said he is concerned that the person who invests this money would also be the person who receives the
requests for social service funding and makes recommendation to the Council. He said his concerns are (1) he
likes the the present application system by which the Council can review the request, and if a 3rd Party Trustee
was handling the review process, they would just provide Council with a list of allocations and would have to
educate Council on the dais if there were questions as to why one organization should be funded instead of
another one; and (2) the 3rd Party Trustee might make decisions based on their own preferences; and (3)
regarding accountability, a 3rd Party Trustee is not really equipped to monitor the 15 or 20 organizations that
receive funds from the City. He suggested the City "sharpen" the current reporting system to require that the
organization show statistics or results from the funding. There was further discussion regarding the capability of
the organization being considered as the 3rd Party Trustee, saying that organization is in it's "infancy," and does
not, at this time, have the experience and sufficient staff to investigate and monitor the activities funded by the
City to the various organizations; and the issue of paying them a percentage of the social service funding for
their administrative services might not be acceptable to the taxpayers.
Rundell said she needs Council to give her direction as to whether to change the current method of funding.
She said she hears that Council is not in favor of the 3rd Party Trustee, and noted that the City could take care
of it "in house," but needs to know if the Council wants to set up a "special revenue fund" in this budget year and
implement it as early as the next budget process.
Berryman confirmed that this discussion and planning would be for next year's budget, and that the allocations
for this year's budget have already been decided. Motion by Berryman, second by Brainard to create a Task
Force composed of citizens to investigate the options and bring back recommendations to the Council. Oliver
said the decision needs to be made now and the Council Subcommittee was charged with determining how
much money would go into next year's budget for this activity. Eason said the Mayor and Snell are highly
committed to this issue and want to see a decision made before they leave office. Nelon thanked Eason for the
sentiment, but said any Council can make this decision. Snell said anything decided can be revised in
subsequent years. He said there is an item on the agenda tomorrow night to determine fiscal policy. Vote on
the motion: Denied 4-3 (Eason, Sansing, Oliver and Snell opposed) Motion by Snell, second by Sansing to
instruct staff to prepare language that would indicate in the two sections on the funding that the 1 % be continued
for social services and increase the 1/8% to 1/4% for youth and children's funding. Snell said he has been
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working for hours on these numbers, and suggested shifting from 1% and 1/8`io to 7/8% and 1/4%. He said for
this year only, that will not generate enough money to sustain the commitment made this year. Brainard said
since FY2002, the City allocation for social service funding has grown by five times, while the population has
increased by a third. There was further discussion. Sansing said he thinks he will choose to stay with the status
quo, with an extra 1/8% for the "kids." He said he feels more should be taken from the services funding and
given to the "kids" because eventually, helping the kids will allow the organizations needing funding to not need
as much in the future. Motion by Brainard, second by Berryman to amend to not spend any more than 10%
*above the prior year's level on social service funding. Sansing said 10% would not work and suggested 15%.
Snell said a cap wouldn't work unless the amount was 1 % and 114%. Vote on the amendment: Denied 4-3
(Eason, Sansing, Oliver, and Snell opposed) A friendly amendment by Berryman to include a study committee
for next year's budget, was not accepted by Snell. Vote on the original motion: Approved 5-2 (Berryman
and Brainard opposed) Motion by Berryman, second by Sansing that when this subject is discussed in the
future, that no one on the Council Subcommittee, **"that reviews agency funding requests," be a member of any
organization that receives funding from the City. There was discussion. Eason pointed out that the Mayor will
be the one who appoints the Council Subcommittee. Vote on the motion: Approved 7-0. Motion by Snell,
second by Sansing to request staff to include in the proposed amended Fiscal Policy a provision for a Sociai
Services and Youth and Children's Program Trust Fund, to be vested in the City's reserve funds, the primary but
not sole purpose of which is to generate income for the annual budget for Social Services and Youth and
Children's Programs, and/or for exceptional one-time needs of either. Funds for the Trust may come from
unallocated amounts in any given year in either/both the Social Services or Youth and Children's Programs, or
in any year from the unexpended surplus in the General Fund by action of the Council. Sansing asked to
friendly amend to add the phrase "or by line item in the budget" before "by action of the Council." Snell
accepted the friendly amendment. Berryman said Rundell told them that an endowment is not going to make
any money so this would end up being another "pot of money" that is created and growing at only 4%. There
was further discussion. Motion by Sansing, second by Snell to not touch the principal and spend only the
interest. Snell confirmed that any change in the policy tonight will be brought back to Council tomorrow night for
approval to serve as guideline for the preparation of the 2008/09 budget. Nelon suggested since this will be at
Council discretion anyway, this could be determined at that time, midyear, when the discretionary funds are
presented to Council. Snell withdrew his motion. Motion by Sansing, second by Snell to create a trust fund with
the caviat that the principal can't be used. Brainard said his concern with that is there are too many details to be
worked out and creating something so complicated would be imprudent. There were further comments. Motion
by Oliver, second by Berryman to defer action on this until the Council takes up the question of what specifically
they wish to do with the excess funds coming out of the budget this year. Rundell said she can bring Council
the amount once the fiscal year 2008 is closed and the audit is finished, saying it will probably be in January,
2009. Vote on the motion: Approved 6-1. (Sansing opposed) (*as corrected by Brainard at the April 22,
2008 Council Meeting)(**as corrected by Oliver at the April 22, 2008 Council Meeting)
C Presentation and discussion on revisions to the Fiscal and Budgetary Policy for the 2008/09 budget cycle --
Micki Rundell, Director Finance & Administration
Rundell gave a historical overview of the current fiscal and budgetary policy, giving the history of Scenario "H."
She explained the definition of WTTB, "What it takes to balance." She said that practise was begun in the early
1990's, and as much as 33% of operations were funded by WTTB. She said this became an issue with the
rating agencies, and in the summer of 2001, the transfer process was eliminated, so Scenario "H" was devised
to eliminate a $3.1 million Genral Fund operating shortfall. She said policy compliance means that current
revenues must fund on-going expenses, and there must be a 1.5 times coverage ratio for all funds with debt
service requirements (Utility Funds). She said this applies to all of the General Obligation debts repaid through
self-supporting fees.
She explained some proposed changes in policy, such as identifying sanitation as a general government
function; updating the language in the budget to include the 2030 Plan; designating the annual Council
"contingency fund" as "discretionary fund" at $50,000; adding a 5% sanitation franchise fee; increasing
Children's and Youth Program Funding to 1/4 of 1 % of the General Fund on-going operating budget; allowing
unallocated funding for social services/children's programs to be redistributed between either program; requiring
formal bids for only those items greater than $50,000 (to match state law); providing an exception for timing of
economic development projects related to the CIP; allowing that the Georgetown Transportation Advisory Board
shall review the streets and stormwater drainage CIP; establishing an unscheduled repair reserve; providing an
exception for bond reimbursements due to project delays and market conditions; with three areas for Council
discussion (1) whether to include a vacancy factor to reduce unspent and budgeted personnel costs; (2)
whether to create a reserve to fund accrued employee benefits for terminating employees; and (3) whether to
change the social service funding policy after midyear when discretionary funds are presented to Council.
There were questions and comments from the Council. Nelon suggested that Council wait until the action item
on tomorrow's agenda to give direction to staff.
D Presentation regarding City -Wide Reorganization Efforts -- Paul E. Brandenburg
Brandenburg said there would be an item on the agenda tomorrow for Council action regarding creating a new
position, but for the most part, this is item is informative for Council and requires no Council action. He
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described the types of changes to the organizational structure that have taken place in the recent past and
explained the current proposed reorganizational changes involving the Transportation Division, Community
Development, and Main Street/Tourism/CVB. He explained as the City has grown, the responsibilities and
authorities have increased, saying transportation and traffic have been identified as the City's number one
priority. There were questions from the Council. Brandenburg indicated, regarding changes involving new
positions, that the appropriate money has been budgeted and a pool of applicants is being considered. He said
the needs in Community Development are to enhance and improve the responses to customer needs, improve
efficiency in the current organizational structure, and enhance the division's accountability and performance. He
said there is an item on the agenda tomorrow night for Council approval to create the new position of Director of
Community Development. He said the third area is the reorganization of the Main Street/Convention and
Visitors' Bureau. He said the effort will be to restructure the existing staff with an increase from three to four
full-time positions. He noted that the Visitors' Center Coordinator position is to be included in the 2008/09
Budget, and the Downtown Main Street Manager position will be maintained or at least that name will remain in
the title and that takes Main Street to another level. He told Council the Visitors' Center Coordinator and
Downtown Main Street Manager will report to the Economic Development Director. He said the CVB
Coordinator will oversee the Visitors' Center Coordinator and the CVB Coordinator and Administrative Assistant
in CVB would report to the Community Services Director. There were clarification questions from the Council.
6:20 p.m. -- recessed to Executive Session
Executive Session
In compliance with the Open Meetings Act, Chapter 551, Government Code, Vernon's Texas Codes,
Annotated, the items listed below will be discussed in closed session and are subject to action in the
regular session that follows.
E Sec.551.071: Consultation with Attorney
- Advice from attorney about pending or contemplated litigation and other matters on which the attorney has a duty to advise
the City Council, including agenda items
- Texas Indigenous Council, et al. v. City of Georgetown , et al., Cause No. A08 -CV -062 LY, in the United States District Court
for the Western District of Texas
F Sec 551.072: Deliberations about Real Property
- Consideration and possible action to deliberate the purchase of real property for city facilities
. CAMMM
6:44 p.m. -- returned to Open Session and adjourned
The meeting was adjourned at 06:44 PM.
City Council Meeting Minutes/April 7, 2008
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ity Secretary Sandra