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HomeMy WebLinkAboutMIN 05.10.2011 CC-WCouncil Meeting Minutes for the City of Georgetown, Texas Tuesday, May 10, 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, Gabe Sansing, Danny Meigs, Bill All Council Present. Sattler, Pat Berryman, Dale Ross, Tommy Gonzalez Staff Present: Paul E. Brandenburg, City Manager; Jessica Brettle, City Secretary; Mark Sokolow, City Attorney; Elizabeth Cook, Community Development Director; Jordan Maddox, AICP, Principal Planner; Trina Bickford, Purchasing Manager; Ed Polasek, Transportation Services Director; Robert Fite, Fire Chief; Clay Shell, Assistant Fire Chief; Lorie Lankford, Controller; Laurie Brewer, Finance Director Minutes Policy Development/Review Workshop A Workshop presentation and discussion on revisions to the Fiscal and Budgetary Policy for the 2011/12 budget cycle -- Micki Rundell, Chief Financial Officer Ross, Berryman absent from the dais. With a Powerpoint Presentation, Brewer said as part of the budget process, one of the important elements is the fiscal and budgetary policy. She said this will guide the staff in the process of building the budget. She noted this will be the policy that staff utilizing in the upcoming fiscal year. Berryman and Ross arrived at the dais. She provided Council with a historical overview of the policy. She said it was developed and adopted in 2001/02 and it is an updated and revised set of financial policies and practices. She said it is based on recommended best practices by Government Finance Officers Association. She said, at the time the policy was originally created, there was a general fund shortfall of over $1 million. She said it included a "What It Takes to Balance" (WTTB) plan to take money from the utility fund to pay that shortfall. She said this plan was called scenario "H" and added it was implemented in 2003/2004. She noted it is reviewed and updated annually. She said the bond rating agencies recommended that Council remove the WTTB plan. She spoke about policy compliance and added that means sustainable funding sources must fund ongoing expenses. She said they require 1.5 times coverage ratio for any funds with debt service requirements. She said the purpose of the policy is to provide fiscal discipline and achieve and maintain long-range stable financial conditions. She said it gives the City Manager, the Chief Financial Officer and the rest of staff very clear instructions on how to manage the city's financial systems. She described the fund structure and basis of budgeting. She said it was separated from policy purpose in 2011/12 and it more clearly identifies the fund structure. She said the fund balance policy is new this year and it establishes GASB policy number 54. She noted it separates out how the city will designate fund balances. She listed the limitations in this section including non spendable fund balance, restricted fund balance, committed fund balance , assigned fund balance and unassigned fund balance. She said there are no changes in the operating budget section. She said it links to the comprehensive plan and it defines a balanced budget. She noted it includes the fact that quarterly reports must go to Council. She said the operating budget assigns control and accountability of the funds and added it designates the council's contingency funds. She said the policy speaks a lot about revenue management and said it defines conservative revenue projection philosophy. She said it defines "sustainable" revenue that is consistently available year to year. She said the revenue management section also establishes a rate stabilization fund. She continued to speak about the City Council Meeting Minutes/ Page 1 of Pages revenue management section. She described the city's expenditure policies and added most of the control is at the department level, with the City Manager approving any transfers between departments. She noted personnel cost is budgeted at 100% with efforts made to take into account possible vacancies. She said the social service and youth program funding is still set at $5.00 per capita. She said there are no changes proposed for the next year. She noted social service funding can be adjusted according to inflation and the funding level increase achieved through growth. She said public art funding is also outlined in the fiscal and budgetary policy. She said the Council approves expenses based on recommendations of the City's Arts and Culture Advisory Board. She said it also states that the City will write off bad debts that are in excess of one year. She noted, however, the City utilizes a collection service and will continue to try and collect fees. She spoke about the purchasing policy and how that policy has changed this year. She said, on the retirement benefits, the change is that the City has established 80% as the targeted funding goal for the City's unfunded pension liability. She described the budget contingency plan and said it establishes guidelines for managing revenue shortfalls. She said the big issue with this is the service level reductions are addressed by the Council. She said the Capital Improvement Program is something they have been working on recently. She noted this will come back to Council on June 14. She said it establishes the types of funding available to us as well as the operational impacts for the infrastructure improvements. She said the funding must be identified prior to the CIP contract being approved. She said the City has an extensive capital maintenance policy to ensure that the city is not having a short term benefit that will hurt us in the long term with capital assets. She said, in the general government and finance subcommittee, the council added 2 citizen members and that change is being made in the policy tonight. She noted the outside audit is required every year. She continued to speak about the city's audit services. She said they have a debt management policy which discusses the types of debt. She continued to speak about debt types, debt structuring and debt coverage ratio. She noted the City also frequently uses bond reimbursement resolutions. She said this allows the City to start construction projects and reimburse itself at a later date. She described what the policy says about financial conditions, reserves and stability ratios. She said it requires a minimum of 75 days as the citywide contingency reserves. She said the City has an extensive internal control policy and she described that policy for the Council. She described the staffing policy for the Council and the cost of living adjustment and pay for performance plans. Brewer reviewed the major areas for discussion including increasing the target for unfunded pension liability from 75% to 80%, finalize "rate stabilization" fund and determines when it will be used and to include longer and graduating maturity for facilities. She said there is an action item later tonight to improve the changes that staff has highlighted in red. She said the budget is being prepared within the current policy guidelines. Mayor said the type of report Brewer provided for the Council with the red text highlighting the changes is extremely helpful. Sattler asked about the rate stabilization fund. Brewer said we currently have $5 million dollars that has been set aside from previous years for the stabilization fund. She described a scenario where the city would use those funds. Sattler asked and Brewer said staff looks at rates and then looks at whether or not the City should use those funds. Sattler asked and Brewer said there is not a trigger, but it is an ongoing analysis. Gonzalez asked and Brewer said the rate stabilization funds are invested in certificates of deposit and investment pools. She said, since the City has an election each May, the staff has to plan to issue bonds at least once a year. Gonzalez asked and Brewer said we have not yet used the rate stabilization funds at all. Briggs said the City established that fund due to the lack of control with the City's fuel exposure between now and June of 2016. There was much discussion regarding the City's use of these funds. He said they have seen that fuels have trended upward because of regulatory issues as well as the market. He said, however, they expect to see the fuel costs go down because of the fracking that has occurred. He said this is an issue the city continually monitors. Gonzalez said the policy is obviously sound but he wanted to make sure the citizens should not expect a spike in rates. Sansing said he wants to expand on Gonzalez' statements and said Councils in the past have sought to expand the city's sources of energy. He added he hopes some decisions made by the Council in the past will help citizens continue to see a steady rate. He said he thinks Briggs has done an excellent job monitoring these issues. B Discussion and possible direction on the 2011 Annexation Priorities -- Jordan J. Maddox, AICP, Principal Planner and Elizabeth A. Cook, Community Development Director With a Powerpoint Presentation, Maddox described the annexation priorities for the City. He said the September 2010 workshop reviewed the City's annexation policy, which was created in 2005 and dictated the principals and priority areas for annexations in the City. He said staff has studied the entire extra -territorial jurisdiction to prioritize areas and a new priority map has been created. He described the elements considered in the study including infrastructure needs, land use considerations, economic development potential, public safety, property value and infill areas (donut holes created by past annexations). He showed Council the priority map and noted each Council member has received a copy of this map. He said there are some high priority areas, mostly in the south development area of the city. He spoke about the elements of the high priority annexation areas. He said the elements that determine whether an area is high priority are minimal capital improvements are needed, the areas are already served by City utilities and that the area has economic development potential. He spoke City Council Meeting Minutes/ Page 2 of Pages about the South Georgetown Development Zone. He said the high priority areas are targeted to be annexed within 0-3 years. He noted there were nine areas that staff recommended as high priority. He reviewed each high priority area for the Council. Gonzalez asked and Maddox said the area in front of the CitiCorp property is not yet annexed. Maddox said the City is required to offer development agreements to any property owners that have an Agricultural (AG) exemption. He said the one neighborhood put forward as a recommended area is Escalera Ranch. He spoke about the area and the pros and cons of annexing it. He noted the reason it has been brought forward as a high priority area is that, in two or three years, it may not be available for annexation. He said the City has contiguity with Escalera in that the Water Oak development is part of the City, however, if Water Oak is disannexed, then the Escalera area would no longer be contiguous. He said the other consideration about Escalera is that Garey Park is directly to the West of that property. He continued to describe the high priority areas for the Council. He said they did study some medium -priority areas and noted they are mostly established neighborhoods, on City water and no wastewater is required. He spoke about the annexations costs of the annexations in 2006 and 2008. Maddox described the 2011 procedure for annexation if the Council decided to annex this year. He said staff can complete a fiscal analysis and return to Council in a July Workshop with a completed final data analysis on each area. He said they can attempt to study additional areas or take some off of the priority list. He noted all of this will depend on action from Council. He reviewed several considerations for Council including the short term and long term cost to annex. He said staff can also study any medium or low areas, if it is desired by Council. He said staff is needing Council's direction on how to move forward. Mayor asked and Brandenburg said a lot of this is driven by the discussions that have occurred regarding he South Georgetown Development Zone and the need for that area to be "shovel ready." He noted, even if that area is annexed this year, it would be another three years before it is shovel ready. He said staffing is looking to look forward with at least the financial analysis for Council to consider. Meigs asked and Maddox said he has not studied these priority area enough yet to provide Council with a long term cost. Mayor said and Maddox agreed staff would do more research on the costs of annexing the proposed priority areas and will bring that information back to Council. Gonzalez said he thinks each of these zones are very important, especially when it comes to the growth of the Southeast side. He noted he would like them to rank the priority areas according the development turnaround, possibilities and cost. Berryman asked that staff look at the corner of Shell Road and Shell Spur and to the east of Shell Road toward 195. She said she would like for the City to consider annexing that area. Maddox said staff has looked at the Logan Ranch Road and noted they will need to place the area in medium priority because there is a waterline that will be very expensive for the area. He said there is a difficulty with the Logan Ranch subdivision, but staff is willing to look into this further. Berryman asked and Maddox said there are five and six properties around Berry Creek that can be annexed. Berryman said if Logan Ranch is not affordable, the City should look to go around it. Maddox said he can certainly look into that. Ross asked and Maddox said the city is limited to annexing a total of 10% of the total City area but added the City is able to bank areas as well. He explained what the City has banked. Mayor asked and Eason said she would support staff moving forward with the items that have been brought up this evening as well as the questions brought up by Gonzalez and Berryman. Sansing spoke about the "donut holes" in the City and added the City should not be too concerned with the cost of annexing those areas. He said the City needs to fill in all of those bare spots. Council recessed to Executive Session under Section 551.071 of the Local Government Code -- 5:02 PM Council returned to Open Session and adjourned --- 6:03 PM Regular Session Executive Session Regular Session Statutory Consent Agenda City Council Meeting Minutes/ Page 3 of Pages Legislative Regular Agenda Adjournment Approved: Mayor George Garver City Council Meeting Minutes/ Page 4 of Pages The meeting was adjourned at Attest: City Secretary Jessica Brettle