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MIN 03.08.2016 CC-WMinutes of a Meeting of the Governing Body of the City of Georgetown, Texas Tuesday, March 8, 2016 The Georgetown City Council will meet on Tuesday, March 8, 2016 at 4:00 PM at the Council Chambers, at 101 E. 7"' St., Georgetown, Texas The city of Georgetown is committed to compliance with the Americans with Disabilities Act (ADA). If you require assistance in participating at a public meeting due to a disability, as defined under the ADA, reasonable assistance, adaptations, or accommodations will be provided upon request. Please contact the City Secretary's Office, at least four (4) days prior to the scheduled meeting date, at (512) 930-3652 or City Hall at 113 East 8`h Street for additional information; TTY users route through Relay Texas at 711. Mayor Ross called the Meeting to Order at 4:00 PM. All Councilmembers are in attendance. Policy Development/Review Workshop — Call to order at 4:00 PM A. Discussion of the City's annual year-end external audit and Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30, 2015 -- Laurie Brewer, Assistant City Manager and Leigh Wallace, Finance Director Leigh Wallace, the Finance Director, spoke on the City's annual year-end audit and the Comprehensive Annual Financial Report. Wallace explained that the presentation is finance based and not budget based. Generally accepted accounting principles are used, which are rules and standards by which all financial reporting is presented and prepared. Wallace explained that the GASB, Governmental Accounting Standards Board, is the oversight body for accounting standards for governmental entities. Wallace began with an explanation of Financial Reporting. She said that financial reporting demonstrates fiduciary accountability to citizens, bondholders and granting agencies. Financial reporting is required by state law, City Charter and bond covenants. Wallace presented a slide showing the things that demonstrate compliance: Council adopted budget Bond covenants Budget and fiscal policies Investment policy Grants Proper internal controls Wallace went on to explain that an independent audit is performed by an outside independent audit firm selected by the Council. The audit is conducted in compliance with government auditing standards. This provides assurance of accurate reporting and financial integrity within policies. Wallace explained that the CAFR is an historical document showing the financial condition and results of operations for year ended September 30, 2015, with a budget adopted in September 2014. She went on to explain that the interim reporting includes monthly and quarterly revenue reports, quarterly financial reports and a year-end variance report. Wallace then provided a Summary Statement of Net Position which sowed comparisons of assets and liabilities for years 2014 and 2015. She then explained the modified approach. Wallace showed a Financial Organizational Chart and reviewed the steps and processes. She said that a full report would be generated after approval from the Council. Adam McCane, from the auditing firm Weaver and Tidwell spoke next. He complimented the accounting and finance departments for their fine work. He said because Georgetown had very few clean ups, it saved the City money. He explained that the City, again, earned the highest level of insurance. McCane spoke about his recommendations to the General Government and Finance Advisory Board (GGAF) regarding internal controls best practices. McCane then provided an Audit Summary. He said that there was a change in financial reporting this year and that all governments were required to make the change. The Audit Summary included: Unmodified opinion on the financial statements Unmodified opinion on internal control and federal awards New accounting standard implementation (GASB 68 — Pensions) Results of internal control procedures Required communications Other items The Comprehensive Annual Financial Report for the year ended September 30, 2015 will be available at City Hall, the Georgetown Public Library and the City of Georgetown Website. McCane said that changes made would include a beginning balance adjustment in 2015 which does not impact the actual liability. He said that in the past, this type of entry was buried in the report, but it is now on the face of financial reports. Ross asked McCane to clarify. McCane said that the contracts with TMRS are the same contracts with a difference in where the information is displayed. Ross inquired if evaluations were conducted by a third party. McCane confirmed and said that the evaluations are coming from actuaries contracted by TMRS. McCane advised Council that it is helpful to read through the footnotes on these type of reports. He said the footnotes help one to understand the perspectives. Brainard thanked the auditors and staff for the clean and strong audit. B. Presentation regarding the FY2017 Budget Calendar and Process — Paul Diaz, Budget Manager Paul Diaz, the City's Budget Manager, provided a presentation on the upcoming budget calendar and process. He provided graphic representation of all items up for discussion over the next few months. Diaz said that the process starts with the fiscal and budgetary process. He spoke on the Economic forecast and revenue assumptions. Diaz said that during the process, the 5 year CIP, transportation and sidewalks would all be discussed. Diaz provided a slide showing the Budget Adoption Calendar and the Areas of Focus: Fiscal and Budgetary Policy Economic Forecast and Revenue Assumptions Budget Initiatives and Issues Compensation and Benefits Internal Service Funds Capital Improvement O&M 5 Year CIP (GUS) 5 Year CIP (Trans) 5 Year CIP (GCP) Review of Sidewalks Review of Transit Operational Impacts/Growth Funding Opportunities New Initiatives Tax Impacts Diaz explained that there are 3 important focal points when processing the budget: Growth Investments already made and their continuation Council Goals established in Council visioning The 2016/17 City of Georgetown Property Tax and Budget Adoption Calendar (March 2016) provided by Diaz will be attached to the approved minutes of this meeting. Morgan thanked Diaz and the finance team. He explained that the document is a draft at this point but wanted to show Council the proposed calendar. Morgan said that July 12 and July 13 would be additional council meetings and August 17 would be a special meeting. Morgan said the budget would be adopted in early September. Gonzalez said he was pleased with the break in dates for Council consideration. Ross asked about the visioning sessions. He asked if the starting point for the budget is based on the Council Vision. Morgan confirmed and explained that implementation plans regarding the Council Vision are coming soon to Council. He said, with Council feedback, the implementation will turn into action items for Council approval. C. Council consideration and direction concerning the proposed 2016 Street Maintenance — Mark Miller, Transportation Services Manager, Edward G. Polasek, AICP, Transportation Services Director and Jim Briggs, General Manager of Utilities Jim Briggs, the City's General Manager of Utilities, provided a presentation and discussion regarding the City's proposed 2016 street maintenance program. He explained that staff had reviewed new maintenance programs and options with Council direction. Briggs provided a slide showing a comparison of single course chip seal vs. two course chip seal and the impacts and cost differences. He explained that the overall budget impact for two course instead of single course chip seal for years 2016 and 2017 would be $889,000.00. Briggs then showed a plan for lane mile reduction and its impact because of budget constraints. He explained that the overall lane mile reduction for 2016 and 2017 would need to be 26.5 less lane miles maintained. Briggs then showed a budget comparison slide of HIPR in lieu of chip seal for years 2016 through 2018 and the budget impact of each year. Briggs spoke on the budget comparison of the cutler method and chip seal for four year plans. He explained that the cost impact would be an addition $3 million for each budget year. Briggs showed a map of the current 2016 street maintenance program and spoke on the rejuvenator process. He then showed a modified 2016 maintenance program using only 2 course chip seal. This would require a reduction in streets receiving maintenance explained Briggs. Briggs showed the planned 2017 maintenance program for streets, with rejuvenator and chip seal applications. He explained that Sun City will be 20 years old and will need much street maintenance. Briggs said that heavy accelerated growth impacts road maintenance because of the miles of roads added each year in the City. Briggs then summarized: The Right Tool at the Right Time Follow All Best Management Practices Identify and Respond to Areas Needing Improvement Monitor and Evaluate Performance Insure QA/QC Through On -Site Project Management: Traffic/Speed Control, Public Communication & Clean -Up. Briggs presented slides that Councilmember Fought provided showing problems with the recent rejuvenator process in Sun City. Fought explained that the process, which was supposed to take 1 or 2 hours to dry, was still tracking into driveways and homes much longer. Fought added that one of the pictures showed that it was still tracking 8 days later. Briggs said there were problems and they are doing testing. He said it does appear that there is a tracking aspect to the application that is lasting much longer than specifications. Brainard asked if the application was outsourced or if it was handled in-house. Briggs said that the City would be providing clean-up and there would be cleaning costs to the City. Gonzalez said the costs should be built into the program in order to make everyone whole. Briggs showed pictures of an area of road driven with tar tracks, a tar puddle and an area of incomplete coating. Briggs explained that sometimes a road needs a second coat like painting. Fought said this picture was taken 7 days after the application. Ross asked about the current process and asked what the City was doing going forward to mitigate these type of issues. Briggs said the City will need to touch up. He said the issue has been with the performance of the material, which was supposed to set sooner than it has. Briggs said that humidity has had an impact. Briggs said they are looking into a fast set material and sealer. Jonrowe asked if the manufacturer has any guarantees when application guidelines were followed. Briggs said he is working with the manufacturer on solutions. Briggs said they will be evaluating before proceeding with other applications. Briggs said he is not sure if the material is incompatible with road conditions and they are looking into the possibility. He said the material stayed tracking much longer than expected. Jonrowe asked why this has not happened in the past. Briggs said it has only happened with the most recent application. Briggs explained that it has to be the actual product and its reaction with existing pavement. Ross asked what the next step would be. Briggs said the reevaluation of the material and the process. Fought said the material was applied poorly. He said either those applying the product don't know how to apply it, or it is the wrong product. Fought said he will not allow any more experiments in Sun City. Fought told the City to clean up the driveways. He added that some streets are fine. Fought said there has been more time and energy spent cleaning up than spent on the initial application. Briggs said clean up starts next week. Ross asked Briggs if they would come back to the Council with recommendation after the evaluations. Briggs confirmed and said that, weather permitting, it would be next week. He explained that there is the need for good weather in order to get a good test. Gonzalez asked if the product could be tested at the PD test track. Briggs said there is untraveled road that they will test near the entrance to the Dove Springs Wastewater Treatment Plant. Ross asked if Briggs needed guidance from Council. Briggs said it will be a part of the budget and he would need to know whether to use double course or single course chip seal. Briggs said he will need Council's direction on whether it will be best to cut back on miles and apply double course chip seal. Morgan said the test will let us know if they can go with a different fast setting product. Morgan said the City is committed to the clean-up. Morgan added that the product should be easily cleaned from concrete. Morgan said staff would need Council direction on whether to find additional funds for double chip seal or use double chip seal, but reduce the lane miles maintained. Fought said the City should primarily use double chip seal fitting within the budget. He said he would want to dial back the miles to make sure it is working. Fought said the City needs to bid the Cutler process. He said that double chip seal is a better product and single chip seal by exception. Ross asked Morgan if additional funds would be needed. Fought said less miles should be practiced to stay in budget. Eby asked Fought if he is willing to take lane miles out of Sun City. Gonzales said every year the City will fall further behind in the street maintenance schedule. Fought said he is only proposing this for the first year so that it can be properly evaluated. Ross said the conversation can be revisited at budget season after more is known from the testing. Gonzalez explained how this would be continually leaving street maintenance behind. Ross asked Council if anyone disagreed. Morgan asked for clarification. He asked Briggs to reshow the maps explaining chip seal comparisons. Morgan said staff would need direction after all of the options that were given. Jonrowe said go along with the reduction in lane miles. Briggs said that there was only one neighborhood scheduled for single course chip seal this year. Morgan explained that during budget cycle Council will be able to decide which lane miles to be reduced. Morgan recapped: Move forward with 2016 street maintenance with a reduction in lane miles and 2 course chip seal. Next year several plans will be proposed and reiterated for Council and Council approval. Jonrowe asked for the current PCI. Briggs said the impact would be significant because of the acceleration of roads needing maintenance and the increase in funds needed. Mayor Ross recessed the workshop meeting to executive session under Sections 551.071, 551.072, 551.074 and 551.087 at 5:00 PM. 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. D. 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 Sec. 551.072: Deliberation Regarding Real Property - Deliberation concerning the acquisition of real property from San Gabriel Storage Systems Venture in connection with the Rivery Blvd. Extension Project Sec. 551.074: Personnel Matters - City Manager, City Attorney, City Secretary and Municipal Judge: Consideration of the appointment, employment, evaluation, reassignment, duties, discipline, or dismissal Sec. 551.087: Deliberation Regarding Economic Development Negotiations - Project Mesa - Project Voyager Adjournment Mayor Ross adjourned the meeting at 6:00 PM Approved by the Georgetown City Council on 3 I a D l a, i lO Date Dale Ross, Mayor Attest: City S r ary t7�— 2016/17 CITY OF GEORGETOWN PROPERTY TAX AND BUDGET ADOPTION CALENDAR As of March 2016 Feb 23 City Council WORKSHOP March 8 City Council WORKSHOP - Discuss Budget Calendar and Process March 22 City Council WORKSHOP -Update on Council Goal/strategies -Emergency Medical Services update April 12 City Council WORKHSOP -No Budget items April 26 City Council WORKSHOP -Budget Outlook — revenue assumptions & forecast, budget initiatives -Fiscal and Budgetary Policy Review May 10 City Council WORKSHOP -Review/discuss recommendations for compensation & benefits May 24 City Council WORKSHOP -Review/discuss proposed 5 -Year GCP CIP (Parks, Downtown, Facilities) -Review/discuss proposed capital maintenance and internal service funds June 14 City Council WORKSHOP -Review of Sidewalks June 28 City Council WORKSHOP -Review/discuss proposed 5 -Year CIP (Utilities, Transportation) July 12-13 City Council WORKSHOP and SPECIAL MEETING (early start each day) - Budget Work Sessions — detail review, operational impacts/growth, new initiatives, funding/revenue update July 22 Property Tax Rolls are certified July 26 City Council WORKSHOP -Review/discuss City Manager's Proposed 2016/17 Budget -Set "maximum" tax rate for 2017 and set public hearing dates to comply with Texas Truth in Taxation legislation August 9 City Council REGULAR MEETING - 1St public hearing on tax rate August 16 City Council SPECIAL MEETING -2nd public hearing on tax rate -public hearing on budget August 17 Publish 2nd Public Notice on Tax Rate (for hearing) August 23 City Council REGULAR MEETING -Resolution to ratify tax rate -11t readings — ordinances for tax rate, administrative departments, budget -Review and approval of proposed GTEC, GEDCO budgets September 9 City Council REGULAR MEETING - 2nd Reading Tax and Budget Ordinances