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HomeMy WebLinkAboutMIN 07.09.2007 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; Jim Briggs, Assistant City Manager for Utility Operations; Patricia E. Carls, City Attorney; Sandra D. Lee, City Secretary; Micki Rundell, Director of Finance and Administration; Leticia Zavala, Controller; Joe Lara, Chief Financial Analyst; Lorie Lankford, Chief Accountant; Terry Jones, Support Services Construction Manager; Kathy Ragsdale, Utility Office Manager; Danella Elliott, Finance Administrative Analyst; Trish Long, Finance Administrative Assistant; Lisa Haines, Accountant; David Morgan, Police Chief; Kevin Stofle, Assistant Police Chief; Anthony Lincoln, Fire Chief; Randy Morrow, Director of Community Services; Kimberly Garrett, Parks and Recreation Director; Mark Miller, Transportation Services Manager; Mike Mayben, Energy Services Manager; Tom Benz, Systems Engineering Manager; Dennis Schoenborn, Information Technology Director; Kevin Russell, Human Resources Director; Keith Hutchinson, Public Information Officer; Jessica Hamilton, Assistant City Secretary; Cherie Vasquez, Police Services Administrative Assistant; Shelly Hargrove, Tourism Director and Main Street Manager; Bobby Ray, Planning and Development Director; Karen Frost, Planning and Development Administrative Supervisor; Jennifer Bills, Housinq Coordinator '• li •• �-11 1, 1 1,11111111• •• -• •• •- ��' A Workshop overview, discussion, and possible action regarding the 2007/08 City Manager's Proposed Budget -- Micki Rundell, Director of Finance and Administration and Paul Brandenburg, City Manager Rundell gave the highlights of the proposed budget, saying it is $181.7 million, a 7.8% increase over the prior year; with $39.6 million in Capital Projects, and $13.6 million in Debt Service. She displayed pie charts for the Budgeted Expenses and Budgeted Revenues. Brandenburg explained the priorities determined by the City Council in March, 2007, and ranked by the Council in priority order. Those being: Continued Revitalization and Economic Development; Alleviating Traffic Congestion; Continuing the Implementation of the Downtown Master Plan; Improving the Quality of Services While Keeping Property Taxes Low; Improving Emergency Response Levels; Expanding Recycling Opportunities; Expanding and Coordinating the Parks System; Continuing Efforts for Community Long -Range Planning; Developing an Affordable Housing Program; and Ensuring Adequate Staffing and Related Compensation for Non-public Safety Employees. There were questions from Berryman regarding positions for the office of the Convention and Visitors Bureau, and Oliver confirmed the method to assist tourism. Sansing asked about WiFi downtown and suggested waiting for WiMax to come out. He asked about the increase for longevity and suggested that Human Resources be contracted out. Sattler asked and Brandenburg explained the need for the Community Project Manager position. Snell questioned the approach to compensation, asking for confirmation that this year's adjustment for City Council Meeting Minutes/July 9, 2007 Page 1 of 4 Pages compression is a short-term nx toward a goal of equal compensation with the market, and moving closer to level with the compensation paid by City of Round Rock. He asked about the priority of the "yellow" pages in the budget book. Brandenburg responded that those were projects that were not proposed to be funded in this year's budget, typically, because those projects were not ready to be followed through. Brainard asked and was told that there is no relationship between longevity and pay for performance. Brainard asked for graphs that reflect the proposed positions and describe that Georgetown and Round Rock have their own utilities. He questioned the level of COLA. Berryman said she thinks the outdoor siren system is an old fashioned way of notifying citizens. She questioned how the public is supposed to know what the sirens mean and what the citizens should be prepared to do. Sattler questioned and Morgan responded that the Police Department Communciations Manager would oversee 17 employees. Rundell explained the Financial Overview, saying that all funds are within fiscal and budgetary policy compliance. She noted that operating revenues cover ongoing expenses, with remaining fund balances used for one-time expenses. She said "times coverage ratios" are maintained, and the contingency reserves are above minimum. She listed the operating plan variances over the prior year. Rundell noted that the preliminary valuations of property tax show a taxable value of $3.6 billion, which includes $329 million of new and annexed property, saying this is a 15% overall increase in appraised valuation, which includes a 5% increase in existing property. Rundell said the estimated effective tax rate equals $0.34941, with a proposed property tax rate of $0.35930, which includes $0.0312 sales tax for property tax relief. She said the estimated impact of the property tax increase on homeowners on a $150,000 value (after exemptions) would be $565, a difference of $46 over last year's amount.* She said the projected sales tax for the 2007/08 budget year is $7 million, a 5.5% overall increase from 2006/07. Regarding other revenues, Rundell said there will be no increase in water rates, and electric rates will be reviewed and adjusted in the fall (no "real" impact to the rate base). She said implementation of the sanitation contract rate changes will take place in September. She noted that there would be another presentation at this meeting to further explain some of the issues being faced by the sanitation fund. She said there will be no increase this year in stormwater drainage fees. She noted there are proposed fee adjustments in recreation -related program fees and community center fees, and the initiation of a false alarm program fee. (*This amount was later re -stated as $15 over last year;s amount, after checking the calculation.) Rundell gave highlights of the Capital Improvement Program for 2007/08, listing the following: Water Services - $19.6 million; Electric - $10 million; Transportation Services - $3.2 million; Stormwater - $1.3 million; and General Projects/Equipment - $5.6 million. She said the projected debt in the upcoming budget is $17,033,837, which includes public safety vehicles and other equipment, facility, electric, water, and transportation improvements, saying the City's debt continues to decline. She said the payments are about $5.5 million. She told the Council that the City doesn't issue 20 -year level debt for all of the assets, only for the length of life of the asset; for example, police vehicles are on a 4 -year replacement cycle and fire apparatus are on a 10 -year replacement cycle, so the debt is completely paid off by the time the item is fully amortized. Brainard asked about the chart showing property taxes and the proposed increase of 11 % to a home of $150,000 valuation, and Snell asked how much of that was new debt. Snell confirmed with Rundell that if the bond election to expand the recreation center, build the library, etc. had not passed, there would not be an increase. Brainard questioned the fungibility of debt payment and property taxes. She said when bonds are issued, there is, in effect, a levy against future tax revenues, saying there is an implied revenue stream from property taxes related to debt. Nelon said there is a standard in the industry as far as how municipalities normally handle this. He said the City has done very well with the bond rating companies regarding the division between revenue and debt. Snell said a question had been raised in prior years, that since there is increasing sales tax income, why not borrow against it. Nelon said effectively that is being done when the City uses the tax revenue of the sales tax -oriented corporations, like the Georgetown Transportation Enhancement Corporation, to fund transportation projects. Rundell said that sales tax is the most volatile revenue stream and a higher risk than property tax. Sattler questioned the times coverage ratio requirement and was told that the ratios are set by the bond holders. Sattler had further questions concerning contingency reserves and Nelon suggested that Sattler get with staff regarding establishing a policy change concerning contingency reserves and then possibly bring something back for Council's consideration. Snell questioned the 1.5% reserve and Rundell suggested that if revenues were short and debt payments couldn't be made, this reserve would be used. Sansing said if the reserve wasn't there, the City would have to borrow the money, so basically, even though the taxpayers are putting it in "on the front end," if the City has to borrow the money, they will be paying for that. Rundell noted that if a project comes up during the year that needs to be funded, the City will use the reserves and wait to issue bonds one time a year. Sattler asked and Rundell and Nelon responded that there can be no "cross collaterilization" between funds. Oliver asked and was told that the projected fund balances are included in this budget. Brandenburg explained the timeline and process for the budget adoption as follows: City Council Meeting Minutes/July 9, 2007 Page 2 of 4 Pages 1. Vote to place the tax rate on a future agenda and set public hearings at a special meeting on August 6 2. Required tax publications 3. Two Public Hearings on the Tax Rate on Monday, August 20 (special meeting) and Monday, August 27 4. Public Hearing on the 07/08 Budget on Tuesday, August 28 5. First Reading of the Budget & Tax Ordinances on Thursday, August 30 (special meeting) 6. Beginning of new fiscal year on October 1 Mayor suggested if Council had specific projects that they wanted added to or withdrawn from the proposed budget, that they bring them up and be ready to vote up or down on specific proposed projects. Snell said he thought the Council should go ahead and make their suggestions at tonight's meeting. Rundell said the numbers were incorrect on the calculation of the impact of the increased property tax on a valuation of $150,000. She said the difference would be $15, not $46 as previously listed. She said the new amount is $566, and it amounts to an increase of $15 annually over last year's amount of $551, not $519. Sansing asked to know what the amount would be if the property tax rate were not increased. Rundell confirmed that he was suggesting taking the money from the General Fund and transferring it to the "INS side of it," and said she would calculate that figure.* She cautioned that this is similar to the situation in the late 1980's, at the beginning of the WTTB (What it Takes to Balance). *Rundell said the answer to Sansing's question is $105,000. Brainard asked about the position to be added in the Police Department based on a change of policy if the fire alarm system is adopted. It was confirmed that if the fire alarm fees are not approved, the position will not be added. Sattler asked about the position of Battalion Chief for training purposes and asked if the City needs a training facility. Brandenburg noted that it has been requested every year for the last six years but it has been difficult to find a piece of property where that type of facility would be appropriate. He said this is ongoing training that firemen are required to do and currently the administration of that training is being handled by two lieutenants in addition to their regular duties. 5:37 p.m. recessed 5:42 p.m. resumed Sanitation Fund Overview Rundell explained that the sanitation program is a contracted service, and the revenue margin is minimal. She said there is no real investment for a return on investment (ROI) asset in the closed landfill property and the collection station is fully amortized. She noted that the ROI for this year's budget is 3% and explained the reason for lowering that amount from 8% as for all utilities last year. She said a sanitation rate of $14.90 ($0.85 increase in residential rate) would be required for an 8% ROI. Nelon suggested to Council that there might need to be a policy change to remove the expectation that the Sanitation Fund is an enterprise fund, because as long as the City is trying to pass on the cost of service as close to the contract as possible, there would never be enough margin to get that kind of ROI. Snell said the way he perceived this is, for the first time, this operation was defined the same way as the electric fund, saying before the City was just "passing through" contract money. He said, in the future, the Sanitation Fund might want to build a new recycling center, patch the roads, or borrow more money, but at 3% ROI, there won't be enough money to do that. He asked for a statement of capital investment in each of the funds and he said he wants the ROI to be based on how much is invested in each fund. He said the infrastructure is owned by the City but paid for by the taxpayer. He said he would rather increase the rate. Nelon agreed that the cost of service should be passed on to the rate payers. He suggested that this be considered tomorrow night at the second reading of the ordinance to change the sanitation rates. Briggs added that typically, the rate payers are paying for certain assets and the assets are owned by the rate payers that are citizens of Georgetown. He said those utility rate payers who are not citizens of Georgetown do not own those assets and are paying the citizens for the provision of that service. He said prior to this, inside -the -City rate payers were subsidizing outside -the -city rate payers, and now it will be just the opposite; and with the rate changes, the Tier II and Tier I II rate payers will "pick up the slack." It was determined that this could be discussed tomorrow night at the consideration of the second reading. Sansing asked and Kathy Ragsdale responded that sending out the utility bills costs the City $0.49 each, including postage. 6:00 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. B 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 City Council Meeting Minutes/July 9, 2007 Page 3 of 4 Pages the City Council, including agenda items -Transamerican Underground vs. Arch Insurance Co., C. C. Carleton Industries, and Third Party Defendant the City of Georgetown, Cause No. 06-121-C277, District Court of Williamson County, 277th Judicial District - Discussion and possible action regarding Williamson County MUD No. 19, request for sewer Certificate of Convenience and Necessity (Application No. 35375-C) (SOAH Docket No. 582-07-0786; TCEQ Docket No. 2006 - 1810 - UCR) - Discussion of legal issues related to the "Williamson County Regional Raw Water Line Agreement" between the Brazos River Authority, City of Georgetown, City of Round Rock, and Jonah Water Supply Corporation, and the letter dated May 7, 2007 to BRA from Chisholm Trail SUD, Brushy Creek MUD, and City of Round Rock. - Consideration and possible action related to the pending or threatened litigation against LCRA related to the Wholesale Power Contract - Consideration and possible action regarding legal issues related to public financing requirements for new and existing special districts - Carol Polumbo, McCall, Parkhurst & Horton, LLP. C Sec 551.072: Deliberations about Real Property -Consideration and possible action regarding the acquisition of 0.652 of an acre of land consisting of a 0.292 acre tract (Tract 1) and a 0.360 acre tract (Tract 2), from the Leroy and Merle Weir Charitable Trust for electric utility improvements. -- Patricia E. Carls, City Attorney D Sec.551.086 Competitive Matters -Consideration and possible action related to the pending or threatened litigation against LCRA related to the Wholesale Power Contract. -- Jim Briggs, Assistant City Manager for Utility Operations - Consideration and possible action for extension of the contract between McCord Engineering, and Georgetown Utility Systems,to provide engineering services related to the planning, design, and review of the City's electric system improvements, system construction, system expansion (due to development), and system mapping.ord. -- Mike Mayben, Director of Energy Services and Jim Briggs, Assistant City Manager for Utility Operations 6:55 p.m. returned to Open Session and adjourned The meeting was adjourned at 06:55 PM1 Approved : ity Secretary Sandra Lee i City Council Meeting Minutes/July 9, 2007 Page 4 of 4 Pages