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HomeMy WebLinkAboutMIN 02.08.2011 CC-WThe City Council of the City of Georgetown, Texas, met in Regular Session on the above date with Mayor George Garver presiding. T11 Council Present: 1 Council Absent: 1: Patty Eason, Gabe Sansing, Danny Meigs, Bill All Council Present Saftler, Pat Berryman, Dale Ross, Tommy Gonzalez --- — ------ ------------ -------------- ------------- - ---------- ------ --------- Staff Present: Paul E. Brandenburg, City Manager; Mark Sokolow, City Attorney; Micki Rundell, Chief Financial Officer; Jessica Brettle, City Secretary; Jim Briggs, Assistant City Manager; Terry Jones, Support Services Manager; Mike Peters, Information Technology Director, Keith Hutchinson, Public Information Officer ........... . Mi to nu With a Powerpoint Presentation, Rundell reviewed the annual debt overview and will officially kick off the annual debt season. She reviewed the many types of debt including general obligation (GO), certificates of obligation (CO), limited tax notes, leases and revenue bonds. She described each type of debt the city holds. She spoke about general obligation debt and said it is tax supported, 20 year debt and it is voter approved. She said certificates of obligation bonds function in the same way. She said they are allowed understate law, considered routine, public notice is required, it is generally considered tax supported and the majority of them are 20 year bonds. She noted the City also issues self supporting CO debt, mainly because interest rates are more attractive for tax supported bonds. She said self supporting debt saves the City money. She reviewed the other types of tax supported debt including limited tax notes and certificates of participation. She continued to described types of tax supported debt. She said, currently the City has $68,987,618 of tax supported debt and she described what that debt is made of.She said there are $26,217,382 worth of self supporting bonds that are supported through fees and not taxes. She showed Council a graph showing the historical CO debt She said the city has increased its debt over time but it has also doubled in population. She spoke about the city's general debt capacity and added only 9.1 % of that capacity has been used. She showed Council a pie chart demonstrating how this debt is used and what the money is being spent on. She showed Council a historical graph showing the comparison between tax supported and self supported debt She spoke about revenue bonds and said they fund the City's utility infrastructure. She said they are issued on the electric, water and waste water system and are supported through system revenue. She said coverage is required when the city uses revenue bonds. She described times coverage ratio and said it is the number of times the annual debt service payment can be divided into the net revenue after the city pays operating expenses. She said the city is required to have 1.35 times coverage for bond covenants and 1.5 times for city fiscal and budgetary policy. She said the outstanding balances for revenue bonds are $24,882,157 for electric and $37,977,843 for water and waste water services funds, which mostly consists of plants and major interceptors. She showed Council a graph showing historical utility revenue bond coverage. She said the weather affects the results displayed on the graph in that it affects how much water and electric customers use and how much revenue is brought in to the City. She showed council a historical listing of the revenue debt in the City. She said, at no time does the City issue debt for operating purposes. She noted, at all times, the City issues debt to procure capital. City Council Meeting Minutes/ Page 1 of 5 Pages Rundell moved on to speak about the City's current debt conditions. She mentioned the importance of bond ratings and said rating agencies review the city's financial and management conditions and will determine the City's "credit worthiness." She said the credit worthiness results in a bond rating, which impacts the cost of funds. Since the financial collapse that occurred in the nation a couple of years ago, there is no longer bond insurance. She spoke about the City's current bond rating. She said Moody's rated the City with a A2 General Obligation and Revenue rating and Standard and Poors gave the city a AA+ General Obligation rating and AA revenue rating. She said there are very few cities in the nation who holds a AA revenue rating with Standard and Poors and also has its own electric utility. She showed Council a graph of the population growth in the City, which has generated needs to address. She showed Council the total tax guaranteed debt per capita. She noted much of that is not tax generated. She said the assessed valuation plays a key role in the Citys bond rating. She said the more the assessed valuation, the better the bond rating. She said Williamson County is a AAA rated City and noted Georgetown can get to a AAA rating with a higher assessed valuation. She showed Council a chart comparing the total tax supported debt with general fund sales tax revenue growth. She said they pretty much mirror each other, She showed Council the city assets net of related debt She described the debt to assessed valuation comparison in Georgetown and said it is 2.17%, which is lower than all the cities Georgetown benchmarks against. She spoke about maintaining utility customer growth and how this helps to maintain debt credits. She said the outstanding utility debt per customer has grown a bit because growth has slowed She spoke about the total electric and water debt compared to electric and water assets and she described the upcoming debt issues. Rundell said the 2011 bond issue will bring the total net proceeds to $7.27 million of tax supporting bonds. She said they want for the City to go in as bank qualified, which means the issue can be placed in a bank. She said there is a 75 point base spread with the city being able to issue as bank qualified. She said, this year, the amount the city can issue and still maintain bank qualified is $10 million. She said staff will come back to Council in March will a final amount for the bond issue. She said they will issue bonds for a security system, public safety ISF vehicles, the fire vehicle for station five, construction of fire station five, purchase of land for public safety facilities as well as the purchase of land for the renovation of station two and Madella Hilliard Center improvements. She said all of this has been approved by Council. She said the net tax impact of the issue will be 0.0077 cents on last years assessed valuation. She said the City will be issuing $3.1 million worth of self supporting bonds. She said a portion of this will be for the third payment toward the Wiliams Drive widening project. She said the rest will go toward the purchase of land for a GUS facility. She said this is funded through utility revenues and ETEC sales tax. She spoke about the next steps debt issuance process. She said Council, tonight, will be asked to authorize Specialized Public Finance (SPFI) to proceed with bond documents, Council will be asked to approve the "notice of intent' to issue CO debt on March 8, 2011 meeting, offering documents are finalized, rating agency presentation will occur in late March, the bond sale is scheduled for April 12 and the bond closing is scheduled April 25. Sansing asked and Rundell confirmed improving assessed valuation could bring Georgetown to a AAA bond rating. He said this is why he has supported annexing as many areas as the city can Rundell said the bond rating agencies look at new development and new properties but they also look at how well the City holds the value of current properties. Mayor asked and Rundell spoke about the cost of the two substations and how they pay for themselves in two years. Briggs said the substations, at the minimum, are twenty year assets. He said the equipment within and around those substations could possibly be thirty year assets Mayor asked and Briggs confirmed the improvements being made at the Rivery will support growth and expansion in that area Zft] ITQZM_Q.I NQ 0101109] n I Ir'NA w r 11 mptilm 11 Lea w Im IN Lmem I a2ropirtw. K Bowlin gave a brief background of their firm, Broaddus and Associates. He said he will provide information regarding various construction delivery methods and the pros and cons of each of them. He said they are very owner oriented. He spoke about how Broaddus worked for the University of Texas as the Director of the Office of Facilities Management and Construction. He spoke about how his experience there helped to inform him on project delivery methods. Bowlin spoke about senate bill 510 initiated in 2001, concerning county governments, cities and municipal governments and river authorities. He said this bill addressed alternate delivery methods for counties and cities. He said the key provisions and options within SB 510 is competitive bidding, competitive sealed proposals and construction manager at risk. He noted it is important for the City to choose the best delivery method for the particular project they want to pursue. He described the first method called competitive bidding or design -bid -build. He said, under this option, the City would have two different contracts: one with the architect and one with a contractor, which is awarded based on low bid and nothing else. He said, up until 1997, this was the only option in the state of Texas. He described the project timeline for design -bid -build process. He described the problems this process would bring to your project He said, many times, the bids come in over the budget that was put aside forthe project. He noted it is easy to miss deadlines if you do not have control over the design phase. He said this is very linear and is the longest process out of all the delivery methods. He told Council not to use this method unless it is the absolute last resort. Hecontinuedto describe the pros and cons of the design -bid -build process. He siad this is a well defined, established process, the contractor selections are simple to defend as they're based only on price; manages to known challenges (unknown: change orders), but, it does not always meet owners needs for collaboration, innovation and accountability. He said it inherently antagonistic and low bid does not equal best value. Bowlin reviewed the competitive sealed proposal delivery method He said this is very similar to the last method, but it is much more effective. He said; with this method, when you bid you ask for more than just the bid. He said you would ask for many different elements within the project He said this method gives the owner the ability to award to a firm that is not necessarily the lowest bidder. He said this is a lessadversarialrelationship than competitive bidding and many factors are evaluated other than the bid. He noted the basis of selection is for the "best value" to the owner. He noted this is a best value determination and subcontracts are awarded by multiple criteria including: experience, team, financial capability, reputation and quality of work, He said another good thing about this approach is it allows you to enter into negotiation with a firm He said you have a lot more latitude with this method. He said there are cons with competitive sealed proposals and said one con is you must have a good objective procurement process, or selections will be hard to defend. He said another con is this schedule has a slower overall schedule than construction manager at risk and Design -Build. He gave an example of what has been built using this method, the Texas A&M Univeristy Health Science Center. Bowlin said there is not one delivery method that is good for any one project He said it important to make sure staff is comfortable with the nuances of the option. He moved on to the construction manager at risk delivery method. He said the owner would have two contracts, one with the architect and one with the contractor. He spoke about the timeline for this method. He said the timeline is differentin that you bring a construction manager at risk on board early on in the process to oversee the project He said, by having the construction manager on the project earlier, you have the benefit of having real cost data and it will be accurate. He said this also eliminates the 30-45 day bid period and will allow you to start construction earlier. He noted you definitely have a compressed schedule with this method. He showed Council a graph demonstrating three contractors that are hard bidding to an owner. He said the construction manager approach results in better market coverage and lower cost. He said it is not always the case that hard bidding results in lower costs. Sattler asked and Bowlin said the term construction manager at risk refers to a firm that is managing a construction manager project He said the amount of people working on the project will depend on the size and scope of the project Bowlin reviewed the pros about construction manager at risk and said it provides the owners with greater control in selecting the construction manager through pre -qualifications. He added some other positives are the selection is based on both cost and qualifications, the construction manager is involved at onset of design, the management of change is more effective with a team approach, and the schedule can be more compressed. Mayor asked and Bowlin said, when determining the cost of a project you will have to incorporate the costs of the construction manager as well. He said Council should want to select a firm that will allow the City to have control of 90% of the budget. He said it is important not to forget about the soft costs; of a project either, which can make up to 25%o -of the budget. He said the biggest advantage is the owner will have the manager on the project during the design phase to offer advice and suggestions about thedesignprocess. Bowlin listed the cons of the construction manager at risk delivery method. He said it is more complex than a traditional delivery, it requires an owner to have experienced staff, accounting is much more detailed and contractors seek to "self -perforin" work to enhance fees. Sattler asked and Bowlins said, when you go with construction manager at risk, the owner's staff on the project can vary depending on the project. He said it always a function of the size and complexity of the project as well. Bowlins spoke about the staff that was involved in a Tarrant County Jail project Mayor asked and Bowlins said you determine the fee for the construction manager at risk via a bid process. Bowlin described atypical bid process for a procuring a construction manager at risk. Bowlin spoke about the design build delivery method. He said the key difference is there is one contract with the design/builder entity. He said that entity can be one of a couple of different formats. He said there are a few companies that can do both design and build. He said most design build deliveries are done by a local contractor and a local architect that agree to work together and form a partnership to go in on a bid together. He said, when City Council Meeting Minutes/ Page 3 of 5 Pages this first started, dwas resisted alot by the American Institute of Architects and many other firms because they were unfamiliar with it. He saidthis can beavery successful delivery method. Hasaid MDAnderson Cancer Center tries \ouse this method smoften m*possible. Hesaid many companies love the fact that, with this method, you have one point oYresponsibility. Hegave examples cflocal projects that were built using this method. He said this is, without a doubt, the fastest and most compressed delivery method. He reviewed the pros ofthis method and said itioa single point of responsibility and accountability to owner, it eliminates a lot of changes orders, you don't have to procure several contracts, you can get an early idea ofcosts and it is the fastest method. He said some of the cons are that it is a new learning curve for owners, there is resistance among those not familiar withLhedmaignbui|dappnoauhomdUhamwnermuetbepnapmnsd0omekequick decisions earlier inthe process. Henoted decisions will need tobemade rapidly. Henoted ithelps tmhave oset cfdesign standards. He provided an example of various projects built using the design build process. Bowlin encouragedthe Council to call any of these folks to give perspective on their projects Lastly, he provided Council with a slide from the Construction Owners Association of America (COAA) matrix of selection. He said this matrix is COANs way to try and determine when a group should use a particular delivery method He said there is not one particular delivery method that is best and added it depends on what the City is comfortable with and what it feels it can manage. Sattler asked about the CMAR process and the guarantee. Bowlins said any of these delivery methods are required to be paid for by a performance bond. He noted, in terms of where the maximum price comes from, it can happen pretty much anytime along the process timeline. He described various scenarios in which a guaranteed maximum price is obtained. There was much discussion. C Presentation on City Council Video Production and Streaming Equipment and Services from Swagit Productions, LLC for $52,9DO—Mike Peters, Information Technology Director and Keith Hutchinson, Public Information Officer With opowerpmintPresentation, Peters described the project requirements. Henoted staff has been pursuing this project for a while now. He said this product will allow the City to stream Council meetings online as well as manage content on Channel 10. He said staff went out for request for proposals and looked at both an internal and out sourced approach. He said staff agreed the outsourced approach would be best by using the services of Swagit Productions of Piano, Texas. He described the necessary equipment and how the Council Chambers will be set up. He said the actual control of the system is done by the outsourcer in Plano and no one needs to be in the room 0ocontrol the equipment. H noted the City would have the ability over the website *alook mtupVu three years of historical meetings. He added the online streaming will be available on all PCs as well as most mobile devices. He said there is a number of cities in Texas and elsewhere that used this project Hesaid City of Plano is one of the existing customers of this product and he showed the Council an| nfhow Plano uses Swo8ithustream their City Council meetings online. Heshowed Council eplayback ofthe video. He noted this product integrates smoothly with the current agenda program, MuniAgenda.Hesaid the beauty ufthis program is the viewer i$able hmview any particular agenda item mfinterest units own instead mfthe entire meeting. He said this is advantageous to both the citizens and staff and will help people to see and here exactly what is said in the meeting.d this would relieve the City Secretary of a lot of minutes work in that people will be able to see the meeting verbatim here. He said some cities also put other content on there website such as ribbon cuttings and parades. He said Swagit hosts the content so the city will not be handling all the bandwidth. Mayor asked and Peters spoke about which server will store the content Peters showed the Council a list of the various cities that use this product. He reviewed the initial and ongoing costs of the project He added the contract allows for up to thirty meetings a year and one meeting is considered from the Workshop all the way through the regular meeting. He noted Council could choose to start integrating other board meetings into the system, but the constraint will be room availability as the equipment will be limited to the Council Chambers. He compared the cost of this project with the cost of the other options available as well as the current agreement with Matthew and Company. He gave Council an estimated timeline of the project. Meeting recessed to Executive Session under Sections 551.071, 551.072 and 551.087 of the Local Government Code 5:07 PM The meeting was adjoumed at 06:05 PM. Approved : Attest: Page 4 of 5 Pages May6—r 5 o7f 5 P ges