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Geo tow
October 1, 2000
To the Honorable Mayor Kersch, members of the City Council and citizens:
I am pleased to present to you the adopted Annual Operating Plan Element (Operating Plan) of
the Georgetown Century Plan for 2000/2001. The Georgetown Century Plan is the
comprehensive strategic plan by which Georgetown strives to enhance its quality of life. The
Operating Plan is an outline of the programs and services to be provided by the City during the
coming year. The Operating Plan continues the direction established by our citizens and the City
Council to meet the existing challenges and effectively plan for fixture needs. It is also an
opportunity to ensure energies and resources are directed to the programs, policies and issues
that are shaped by the Georgetown Century Plan.
In developing the 2000/01 Operating Plan, a new, more community -involved process was
developed. Town Hall Meetings, public workshops and televised meetings were implemented to
give more citizens the opportunity to be involved in the budget process. The Council took the
active role in balancing the community needs with the available resources. The result is what
you see before you.
Budget Process for 2000/01 Annual Operating Plan
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CITY HALL • 609 MAIN STREET
POST OFFICE Bax 409 • GEORGETOWN, TEXAS 78627-0409 - 51 2/930-3652 • FAX: 51 2/930-3659
BUDGET OVERVIEW
As Georgetown continues to 10%
grow, so do the expectations of s%
the citizens of Georgetown. The soy,
projected increases for the a%
2000/01 Operating Plan are the
direct result of the phenomenal 2%
growth the City of Georgetown 0%
continues to experience.
Variables of Growth
This is the sixth straight year the City has grown by more than 7% annually. The outcome of this
growth is. an increasing demand for services by our citizens, which is offset by the City's ability
to retain valued employees and compete for job applicants in today's tight labor market.
2000101 Budget by Function
Operations
58%
Debt Service
7%
Interfund Capital
9% Projects
26%
The 2000/01 Operating Plan totals $85 million for
all funds. Of that amount, approximately $49
million is for continued operations, $5.6 million is
for debt service, and $22 million for capital
improvement projects. Interfund charges/transfers,
which. include internal service fund transfers, are
approximately $8 million. Overall increases in this
Operating Plan are due to additional staffing in Fire
Services and demand -based costs, such as
purchased electric power. The General Fund, which
accounts for basic _ tax supported services, totals
$13.6 million, an increase of 8% more than
1999/2000. This increase mirrors the 7-8% growth
in residents and utility customers over the past year.
Property Taxes. The City Council adopted a property tax rate of $0.31409 per $100
valuation, which is the effective tax rate for 2000/01. While the tax rate itself decreases from the
current rate of $0.34, the average homeowner in Georgetown will pay approximately the same
amount in City property taxes as they did in 1999/2000. This decrease in rates results from
increased valuations on existing property. Assessed Property valuation
2.000
,.750
Property Values. The total taxable ,soo
property has risen 14%; from $1.4 billion in
,z5o
1999/2000 to $1.6 billion in 2000/01. This
increase includes $110 million in new 1'000
property., This also includes a 6.5% increase 750
in existing property values over last year. 500
250
0-
94195
95198 96197 97/98 98199 99M 00101
❑ Existing Property E3 New Property
2000/0/ Operating Plan Element - Transmittal Letter Page ii of vii
Utility Rates. There are no water, wastewater or electric rate increases included in 2000/01 for
the ninth consecutive year. Sanitation rates will increase $0.90 for residential and 5.4% for
commercial customers in December 2000. This increase will help offset the rising operational
costs incurred by the City's sanitation contractor.
$140
$120
$100
$80
$60
$40
$20
$0
Sales Tax Per Capita - 7.25%
'96 '97 '98 '99 '00
Economic Outlook. Georgetown and
the Central Texas region continue to
experience strong economic growth.
Sales tax revenue for Georgetown has
increased an -average of 16% over the
past five years. Sales Tax growth is
expected to increase to approximately
9% over the next two to three years.
Housing starts continue to remain strong, totaling 757, of which 317 were for Sun City Texas.
This is the fifth straight year of 750 or more residential permits per year. Non-residential starts
have also increased, with numerous new- retail, commercial and small industrial facilities in
various stages of construction.
Sun City Texas continues to provide long-term retail and commercial growth for the community.
In 199.5, Del Webb Corporation began a 9,500 home, 5,300 -acre active retirement community in
the northwestern quadrant of the City. The City's development agreement with the Del Webb
Corporation provides for fire protection, wastewater, water and electric services and
transportation improvements. Del Webb pays a per unit fee (called SIP fee) for its share of the
improvements. The City makes all infrastructure improvements and debt payments using the SIP
fees without cash shortfalls or increases in overall service rates. As of September 30, 2000,
2,247 homes have been completed and over 150 more are in various states of construction.
BUDGET HIGHLIGHTS
The major initiatives for the 2000/01 Annual Operating Plan and beyond are outlined as follows:
• Economic Development
In 1999/2000, the Council appointed an Economic Development Task Force to make
recommendations for the community's economic development strategy. From this process, an
Economic Development Division was created for 2000/01. The purpose of the division will be
to recruit new business and help sustain the local economy, direct the Main Street Program and
manage the Convention and Visitor's Buteau.
2000/01 Operating Plan Element - Transmittal Letter Page iii of vii
Fee Analysis and Review
A major objective for 2000/01 will be to assess the citywide financial condition and review its
financial strategies in order to develop a long-term business plan that will ensure adequate
financial resources for the City in the future. As part of this project, a competitive fee analysis of
all City fees, including utility rates, will be undertaken to determine whether the fee structure is
adequate to cover the costs associated with providing service.
• Staffing Issues
The 2000/01 Operating Plan reflects a substantial commitment to invest in the human resources
of the City. It includes a 5.5% increase in salary adjustments, or $550,000, to fund the City's
merit based pay -for -performance system. In addition, $200,000 was included to improve the
employee benefits program. The 2000/01 Plan includes ten (10) additional full-time .positions
and two (2) up -graded positions, for a total of 350.50 full-time equivalents (FTE's). The most
significant increase is the addition of seven (7) positions in Fire Services to alleviate staffing
shortages and to fully staff Fire Station No. 4 on Airport Road. Other additions include two full-
time positions in the legal department and a new webmaster position in Information Resources to
manage the growing demand on the City's website.
• Affordable Housing
The City has allocated $30,000 to begin implementation of a citizen committee to plan for the
City's need for affordable housing. These funds will be used for the further development of the
housing plan and for possible grant matching funds for affordable housing projects.
• Utility Issues
Providing clarity for the City's long-range water planning process, to ensure future community
needs, will be a priority for 2000/01. This includes researching options for securing future water
availability and further developing a long-range regional approach to this issue. The City will
also implement a Backflow Prevention program to provide protection of the City"s water supply
and ensure citizens of the safest and highest quality of water. Another priority for 2000/01 will
be to continue monitoring electric deregulation issues to ensure that the City's electric system
will be compliant and provide quality service to our customers.
• Capital Projects
The City will spend $22.4 million on new infrastructure projects in 2000/01. The City will begin
construction of the Pecan Branch Wastewater Treatment Plant to provide treatment capacity for
Sun City Texas and other significant development in the City's north and northwest quadrants.
Major street projects include the realignment of Country Club Drive and the Maple Street
extension. The City's Water Department will also complete the construction of pump stations at
Sun City and Rabbit Hill, along with continued construction of the. West Loop Water Line to
improve water transmission to various parts of the city.
2000/01 Operating Plan Element - Transmittal Letter Page iv of vii
FINANCIAL HIGHLIGHTS
The City is committed to sound, financial planning and direction, as reflected in the Finance
Policy portion of the Georgetown Century Plan and the Budget and Financial Policies adopted as
part of the budget. The Council's goal to achieve Finance Focus End 14.01, which states "Each
utility system is a self -supported operation that provides a desirable and affordable level of
service." is continued in this budget. All of the City's enterprise Rinds, including the Airport,
are self-supporting. The City has also met its commitment for minimizing tax increases by
including no increase to our property tax rate. The minimum contingency reserve remains at
$8.5 million to meet policy requirements. A more detailed look at the City's revenues and funds
is provided in the Financial Summary Section.
95196
96197
97198
98199
99100
00101 Proj.
Combined Utility Revenues
Millions
0 10 20 30 40
® Electric . ® Water o Wastewater D Sanitation tD Stormwater
Revenues. The City's revenues
continue to rise due to growth in
sales tax revenue, increased property
taxes from increased valuations, as
well as new property, and increased
utility services demand. The City's
overall customer base for its electric,
sanitation, wastewater and water
services has increased at a rate of 8-
9% for the last three years.
However, the City has elected to conservatively project at a 6-7% increase in revenues due to
utility growth. Since weather conditions affect the electric and water revenues significantly,
revenue projections utilize these conservative growth estimates to avoid budget shortfalls, and
utilize a rolling average consumption method to factor out any weather aberrations.
General Fund. As in many other cities,
Georgetown's General Fund revenues, do not
support its expenses, which are increasing at a
higher rate than its revenues, due in part to the $3
increased demand for governmental services,
such as Fire and Police Services. Historically, $2
the City has maintained a low tax rate by using
the excess revenues from its utility funds to $1
balance the General Fund. Although all other
City funds will be self-supporting, the General
Fund continues to rely on substantial transfers to $0
fund operating expenditures.
General Fund Transfers
9455 95198 98/97 97/98 98/99 99W 00101
0 GFund Shortfall Transfers o % GFund Expenditures
40%
30%
20%
10%
0%
2000/01 Operating Plan Element - Transmittal Letter Page v of vii
c
0
9455 95198 98/97 97/98 98/99 99W 00101
0 GFund Shortfall Transfers o % GFund Expenditures
40%
30%
20%
10%
0%
2000/01 Operating Plan Element - Transmittal Letter Page v of vii
Because of customer growth, there is an increased demand for utility services; therefore, the
excess funds previously sent to the General Fund are now needed to fund infrastructure
improvements within each utility. Recognizing this issue, the City Council minimized new
General Fund spending in the 2000/01 budget to reduce the reliance on utility transfers. In
2000/01, the General Fund will require a balancing transfer of $1.9 million or 14.4% of
expenses, which is a 36.8% decrease from the prior year. The long-term goal is to continue
reducing these transfers through gradual increases in fees and other General Fund revenue.
Additional efforts will be managed through the policy limit on transfers and limiting growth in
available City services.
General Obligation Debt. The City included a proposed debt issuance of $490,000 in its
property tax rate calculation for 2000/01. Currently included in this proposed debt issue is the
$490,000 reimbursement of funds expended on lighting at the City's new athletic complex. This
debt issuance is for street projects included in the Capital Improvement Program may also be
added, depending on the timing of the individual projects. Council sub -committees for
transportation and facilities are currently meeting to finalize projects that may also effect the
spring 2001 debt issue. Currently, the City's General Obligation Debt per capita is $626, well
below the national average of $765. The City currently holds an "A" bond rating with both
Standard & Poors and Moody's. The economic outlook for Georgetown has recently moved to
"positive" from "stable", thus indicating the City's continued strong economy and sound fiscal
management.
Electric, Wastewater and Water Funds. The City's electric, wastewater and water systems
continue to generate revenues sufficient for operations and maintenance and some system
improvements. An increase in the fuel surcharge assessed by the Lower Colorado River
Authority, the City's source of purchased power, was passed through to the City's electric
customers in 2000. Future long-term water supply and the uncertain issues related to electric
deregulation may require a rate increase at some point in the future.
The City plans to issue $1 million in new revenue debt in 2000/01 to fund electric system
expansions. This additional debt will not require a rate increase to- fund the added debt
payments. -The City is using a combination of previously issued revenue. debt and cash to fund
the Pecan Branch Wastewater Treatment Plant and interceptor. _The times coverage ratio, a
standard measure of utility revenue debt capacity, is 3.29 times coverage for 2000/01, which
exceeds the policy requirement of 1.5 times coverage.
Airport Fund. The recent closure of private aircraft facilities in the Austin metropolitan area
has caused a dramatic increase in service demands at the City's airport over the past three years.
Previously issued Airport debt proceeds will be used as a grant match for the expansion of the
terminal building. Fuel revenues, leases and rents are projected to be sufficient to fund the
related- debt payments and to set aside reserve funds for future,improvement projects.
Internal $.ervice Funds. The internal service funds provide administrative services and asset
management for information, facility, and fleet services to City programs and departments by
charging lease and administrative fees.
2000/01 Operating Plan Element - Transmittal Letter Page .vi of vii
Information Services Fund $1,123,000 Add and replace desktop, network and application
technology and hardware, including 77 new and
replacement PC's, training for City staff and -
maintenance costs of existing software applications.
.Facilities Maintenance Fund $609,000
Fleet Management Fund $1,110,000
CONCLUSION
Building maintenance and repairs to include
HVAC, janitorial services and minor remodeling.
Add/replace 16 vehicles and various shop
equipment.
Growth issues will continue to dominate Council and staff time. The staff is ,prepared to respond
to the growth and associated service demands. I believe this budget accomplishes the goals and
objectives set forth by the Council and the community. It reflects the,importance and value we
place in City staff, as well as emphasizing the demands placed on staff, by the community, for
quality service.
Finally, I acknowledge the tremendous contributions and teamwork of all City staff in preparing
the 2000/01 Annual Operating Plan Element. Most notably, I,want to recognize the Finance and
Administration Division for their long and dedicated hours in preparing the Operating Plan.
2000/01 Operating Plan Element - Transmittal Letter
Page vii of vii
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