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HomeMy WebLinkAboutMIN 02.28.2012 CC-WMinutes of the Meeting of the Governing Body of the City of Georgetown, Texas Tuesday, February 28, 2012 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, Danny Meigs, Bill Sattler, Pat All Council Present. Berryman, Rachael Jonrowe, Troy Hellmann, Tommy Gonzalez Staff Present: Paul E. Brandenburg, City Manager; Bridget Chapman, City Attorney; Jessica Brettle, City Secretary; Micki Rundell, Chief Financial Officer; Jim Briggs, Assistant City Manager; Laurie Brewer, Deputy City Manager; Kevin Russell, Human Resources Director; Susan Morgan, Finance Director; Lorie Lankford, Controller; Minutes Policy Development/Review Workshop - Call to order at 03:00 PM A Discussion of the Comprehensive Annual Financial Report for Fiscal Year Ended September 30, 2011 -- Micki Rundell, Chief Financial Officer, Susan Morgan, Finance Director, Lorie Lankford, Controller. Rundell said she would like to provide Council with the results of the annual audit and the CAFR (Comprehensive Annual Financial Report). She recognized the staff who helped prepare this report. She introduced Susan Morgan, Finance Director, to the City Council. Morgan introduced Jerry McMillon, the City's external auditor of Clifton Larson Allen LLP. With a PowerPoint Presentation, Morgan reviewed some background information and terms including CAFR, GAAP (Generally Accepted Accounting Principles) and GASB (Governmental Accounting Standards Board). She spoke about how the CAFR is a very technical product She spoke about financial reporting and why it is done by the City. She said it is an important part of what the staff does as management, to present the City's fiduciary responsibility to the citizens and it is required by law. She said it is also in the City Charter and bond covenants. She spoke about the financial report audience and noted it is an importance compliance tool. She said it is a technical document that is geared more toward the professional and financial persons as well as governmental accountants. She said one of the primary things done with this document is to demonstrate compliance. She noted this document is how the City demonstrates compliance with the annual operating budget council approves. She said the document also shows that the City complies with the bond covenants as well as the City's investment policy, grants and other policies. She said it is the staffs responsibility to prepare the document but noted it is the Council's responsibility to hire the outside auditors. She spoke of the independent audit and said it is performed by an outside independent audit firm. She spoke about the CAFR and said it is a historical document and it is for the year that ended 5 months ago and for the budget adopted 18 months ago. She said the City has received monthly and quarterly reports on this budget She said, by this point, there are no surprises in this document. She showed the Council a summary statement of net assets in the document, which is the balance sheet. She said this is everything in the City's government. She referred the Council to the total net assets, where more information on the City's net equity is located. She said it is important to note the net equity is going up. She showed Council the summary statement of activities, which is the income statement. She said the City is adding to the capital. She said there is one thing different in the City's operating statements. She noted instead of recognizing depreciation, the city uses a modified approach. She described the modified approach for the Council. She said the City measures and reports the condition of the infrastructure City Council Meeting Minutes/ Page 1 of 4 Pages instead of depreciating the infrastructure. She showed Council a summary of everything in the financial report She quickly walked through the CAFR and highlighted a few important sections She showed the Council the introductory statement, the independent auditor's report, the summary balance sheet, summary income statement, the notes of the financial statements, the debt issues, the commitment and contingencies footnote. She showed them the page of the ten year summary of the Citys assessed values. She spoke about the diversity of the tax rolls and the history of the tax rates. She spoke about how the report shows how the City is compliant with the bonds and times coverage. She spoke about the demographic information included in the report. She continued to describe the other content in the report. McMillon provided comments to the Council on the external audit. He thanked the staff said the document is great and that staff does a good job. He referred to the independent auditors report on page two of the report He also spoke about the independent audit reports as well as the single audit reports. He said they are required to look at grants and test for compliance with the grants. He said they had no findings related to those grants and noted those are clean opinions as well. He spoke about the management discussion and analysis section and how its a good summary and year in review. He concluded his presentation and said there were no findings and it was a good year. Jonrowe thanked the auditor for all of their work. Sattler asked about the excess and surplus funds. Meigs said he appreciates the tabs staff has used to mark the report and added he recommends the City publicize this to the newspaper. Mayor asked and Rundell said the City puts this online and it is required to be published Hellmann asked and Morgan said the City retired $6 million. Morgan referred the Council to page 80 for more information on the retirements. There were many questions. Eason said she is impressed that the point was made that the staff knows this book and information inside and out. She said she is thankful and appreciates all that staff does to keep the Council in line financially. Mayor asked and Rundell said the City does not depreciate streets. She said the City does a modified approach, or an assessment instead. She said the City runs the reports through a model that tells the City where it needs to spend money on streets. Berryman asked and Rundell spoke about the $900,000 in excess funds from last year. Berryman asked and Rundell confirmed that excess amount was a return on investment from the utilities. She said that was revenue that was not anticipated. Berryman asked to see the reserves in the utility. Rundell said she can get that information for Berryman. B Presentation and Overview of the City's current outstanding and proposed debt obligations-- Micki Rundell, Chief Financial Update Rundell provided Council with a debt update. She spoke about the types of debt and said the first type is General Obligation debt and noted it is tax supported and voter approved. She said all of the GO debt to date has been 20 year bonds. She noted this debt includes amounts approved in the 2004 and 2008 bond elections. She said the first bonds of the May 2011 bond election will be included this year, for the public safety facility. She said the second type of debt is Certificates of Obligation and noted they are allowed under State Law She said they are generally considered "tax supported." She added the majority is twenty year bonds, but noted the life of the issue is matched to the asset. She said the City also issues self-supporting CO bonds, which saves on interest costs by issuing those rather than revenue bonds. She spoke about self-supporting CO debt. She said it saves the city money as much as 100 basis points. She said there is other tax supported debt including limited tax notes and certificates of participation. She noted the City has used these in the past but added it does not have any of those at this time. She reviewed the GO/CO debt outstanding as of December 31, 2011. She showed Council a historical view of the CO debt and spoke about the general debt capacity. She said State law allows the City to levy $1.50 per $100 valuation and the current levy is $0.1646. She said the City is at 10.97% of the allowable levy. She showed Council a graph of where the tax dollars have been allocated Rundell spoke about revenue bonds and how they are based on the revenues of the utilities. She said they are issued on the electric, water and wastewater systems combined. She said they are supported through system revenue. She said the requirements through the bond covenants are 1.35 times coverage and 1.5 times coverage through the fiscal and budgetary policy. She said the outstanding balances of revenue bonds are $23,218,648 in the electric fund and $34,511,352 in water and wastewater services. She said the City using most of the debt funding capacity for major capital improvement expenditures. She showed Council a graph of the utility revenue bond coverage over the past ten years. She showed Council a chart demonstrating the historical revenue debt and said revenue debt continues to spike. Rundell proceeded to discuss the City's current debt conditions. She said bond ratings are exceptionally important and noted rating agencies review financial and management conditions every year. She said the CAFR is one of the most anticipated documents each year. She said the bond rating agencies determine the City's "credit worthiness." She said the City's current ratings is A2 with Moody's and AA+ General Obligation and AA Revenue with Standard and Poor's. She said this is something the City needs to be proud of because it has an electric utility. She said the City is the only electric utility in the State with that rating. She showed Council a graph demonstrating the population growth and how it has effected the rating She showed Council a graph of the total tax guaranteed debt per capita. She spoke about the assessed valuation and City Council Meeting Minutes/ Page 2 of 4 Pages how it continues to grow. She said the City is fortunate to not have seen a decrease. She spoke about the total tax supported debt compared to the general sales tax revenue growth. She spoke about the City assets net of related debt. She showed Council a graph of the debt to assessed valuation comparison. She spoke about how the City has had continued growth in utility customers. She described the outstanding utility debt per customer and noted it went down significantly from last year. She showed Council a graph of the total electric debt compared to electric assets as well as of the total water service debt compared to water service assets. Rundell spoke about the upcoming debt issues. She said the City has some general obligation bonds they are looking at for the public safety facility. She said the City is at 60 year lows for interest rates. She said the City has planned certificates of obligation for a fire truck and public safety vehicles. Sattler asked and Rundell said the Council can use whatever is not used for Bellaire in the excess funds for the public safety facility. She spoke about how the City cannot use the excess in the utility funds for that purpose, however. She said the net tax supported process is $4,050,00. She said the tax impact of all of this together is estimated at 1.4 cents. She spoke about refunding opportunities that will save the City money. She described the next steps of the budget and bond process. Rundell provided a hand out for the City Council. She said the City is at the lowest interest rate levels in sixty years. She spoke about the different possibilities of issuing bonds, whether to issue the amount all at once or in phases. She spoke about how each scenario would affect the debt and tax rate. Meigs asked and Rundell said "refunding" means refinancing the existing debt. Meigs agreed that we are at an all-time low for interest rates and noted he would hate to miss this opportunity. Berryman said the nation is in a deflation and may not see increases in the interest rates for a number of years. She said the debt issue options will be coming back at the next meeting in March for Council consideration. Mayor asked and Rundell said the refinancing will occur with the bond process. Jonrowe asked and Rundell said she is not making a recommendation on the bond issue and added she is just trying to provide information to Council. Sattler asked and Rundell said the City will phase the tax impact, which will begin at the next fiscal year. Mayor said it seems there is some significant cost savings that can be made for the City and tax payers. He asked that Rundell bring back the data on cost savings to the Council as well. He said staff should bring back recommendations for the best way to save the City money and the least tax impact Hellmann spoke about the cost per homeowner on the handout and Rundell said that cost is per year. Hellmann asked and Rundell confirmed the difference between option one and two is about $10 per year. There was much discussion. C Discussion and possible direction to staff on benchmarks for the 2012 employee compensation study-- Laurie Brewer, Deputy City Manager and Kevin Russell, Human Resources Director Brewer introduced the item and noted this Workshop will be to gain some feedback from Council on the compensation study. She said, back in October, when the benefits were brought to GGAF, GGAF asked staff to review compensation as well. She noted Council also approved the study. She said the City is under a pretty aggressive timeline and noted they would like this to coincide with budget She said staff is looking to complete this study within 90 days. She introduced Matthew Weatherly, President of Public Sector Personnel Consultants. Weatherly said they have been charged with two major elements, city wide classification and base pay compensation study and review as authorized by Council. He said they will conduct a compensation survey and include only base pay. He explained the goals of the study. He noted this intended to provide as much information as possible but does not change any compensation unless approved and voted upon by the Council Jonrowe asked and Weatherly explained why this is for base pay only and not benefits. He showed Council the recommended data sources for the survey, including cities, utilities and employers. He said they want to collect as much information as possible from a group of cities and employers. He spoke about other elements that will going into the study. Berryman asked that the City remove the bigger organizations and look at cities that are more of Georgetowrls size. She said the City cannot compete with those larger cities. She spoke about Grapevine and how it is not the same as Georgetown. Weatherly spoke about why some of those cities were included on the list Berryman said she thinks Council should look at the City's ability to pay as the basis of this study. Weatherly said that is definitely within the Councirs policy right. Berryman said she would like for the consultant to revise this list and come back with more comparable cities. Brewer said tonight staff is looking for input from Council this list Berryman said the City should be comparing itself with cities with the same income. Hellmann agreed with Berryman and said Council needs to see more information on the cities on the list including their income and tax base. Brewer said gathering the data does not necessarily mean a policy decision Berryman said she wants to make sure the standard is one the City can afford. Mayor said the sizes of two entities is only part of the equation. He said the other question is the tax base. He also spoke about the tax rates that are being levied to be able to pay those salaries. He noted once that data is incorporated into the equation, there will be a new list with more suitable cities. Brewer said the staff can certainly narrow the list down. She said she is not sure she is understanding if Council wants them to gather data on some of the cities or just take them off of the list City Council Meeting Minutes/ Page 3 of 4 Pages completely. Mayor asked and Brewer said staff is looking for direction from Council on this. Brandenburg spoke about the history of compensation and how Georgetown has dealt with the competition from other cities He added there has been a huge issue with salary compression in Georgetown. Jonrowe asked who compiled the list. Weatherly said the intent of the list is to show what cities pop up when you search for population sizes that are similar to Georgetown. He said the bulk of the City's competitors is on the left hand side under the list in area employers. He spoke about why the area employers are important to this study. Weatherly said the consultants generated the list and he explained how they came up with the cities and other entities included on the list Jonrowe said her inclination is to respect the consultants expertise. Jonrowe said when it comes to upper management jobs, the City deserves the best. Berryman asked that Weatherly include information for income of the Cities and she asked that they show which utilities are private or quasi -private. He said they have the ability to display all of that data. Hellmann asked if there is a way to rank the cities based on assessed valuation. Weatherly said yes that is possible. Weatherly said he wants to be sensitive to the Dallas metro area, where there are many cities around 40,000 to 50,000 in population. He said he wants to make sure concentrates on the local area market. Berryman thanked the consultant and said there are a lot of factors that contribute to the ability of the City to pay. Weatherly showed Council an example of a survey that was done for a City in the Houston area He spoke about the mitigation of the pay range width. He spoke about policy development and survey comparators. He described the application of market data, pay structure comparisons and desired competitiveness level. He said, when this is done, he would like to be able to say that the Citys pay is within a particular percentage of market. He said another issue is a pay range and where an employee lies within that pay range He spoke about how the City can move an employee through their pay range. He said the City should push to put people in the middle of the pay range. He spoke about the factors that influence pay strategy and said the intent is to root everything in common sense. Mayor asked and Weatherly said he should be back to Council in April after some more discussions with staff. Meeting recessed to Executive Session under Sections 551.071, 551.072 and 551.074-- 4:55 PM Approved: Mayor George Garver City Council Meeting Minutes/ Page 4 of 4 Pages Meeting returned to Open Session and adjourned -- 6:16 PM Adjournment The meeting was adjourned at 10:30 PM. Attest: City Secretary Jessica Brettle RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS AUTHORIZING THE MAYOR TO SIGN THE ADVANCE FUNDING AGREEMENT WITH THE TEXAS DEPARTMENT OF TRANSPORTATION RELATED TO THE NORTH AND SOUTH AUSTIN BRIDGES PROJECT. WHEREAS, the Texas Transportation Commission passed Minute Order Number 114335, authorizing the State to undertake and complete a highway improvement generally described as reconstruct the North and South Austin Avenue bridges from 2nd Street to Morrow Street, Georgetown, Texas called the "Project"; and, WHEREAS, for the Project the term reconstruct includes replacement, rehabilitation, preservation, protection, and/or anti-icing/deicing for bridges and tunnels on a public road; and WHEREAS, as part of the administration of the Project, the Capital Area Metropolitan Planning Organization, by resolution number 2014-11-4, awarded the City of Georgetown a total of $1,299,174 in Surface Transportation Program Metropolitan Mobility (STP -MM) for the Project; and WHEREAS, in order to determine which alternative best serves the interests of the citizens of Georgetown, the City supports a study of alternatives including the following (1) do nothing, (2) alternative alignment, (3) maintenance, (4) rehabilitation/preservation and/or (5) replacement through a public involvement process which is also a requirement of the National Environmentally Policy Act (NEPA); and WHEREAS, the STP -MM award by CAMPO, using the term reconstruct, may require the City of Georgetown to submit to CAMPO a Transportation Improvement Project (TIP) amendment in the Spring of 2017 based on the decision resulting from the range of alternatives undertaken by the City of Georgetown; and WHEREAS, TxDOT works with the Federal Highway Administration (FHWA) and other federal agencies to comply with the National Environmental Policy Act (NEPA) and uses the TxDOT environmental compliance process for state and local projects, where TxDOT is the state approval authority; WHEREAS, the Advance Funding Agreement between TxDOT and the City allocate funds including a City contribution of $142,000 for the environmental review and is required for TxDOT approval. Resolution No. ban ';�i 11.0 - L Page 1 of 2 Date Approved 3 a a NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GEORGETOWN TEXAS. SECTION ONE. The facts and recitations contained in the preamble of this resolution are hereby found and declared to be true and correct, and are incorporated by reference herein and expressly made a part hereof, as if copied verbatim. SECTION TWO. The City Council of the City of Georgetown finds it to be in the best interest of the citizens of Georgetown to enter in the Advance Funding Agreement with the Texas Department of Transportation related to the North and South Austin Avenue Bridges Project. SECTION THREE. The Mayor is hereby authorized to sign this Resolution and the Advance Funding Agreement and the City Secretary to attest thereto, on behalf of the City. SECTION FOUR. This Resolution shall become effective on the c�aday of n& 2016. PASSED AND APPROVED on the as day of MW c.�. , 2016. ATTEST: S Shelley Nlin City Sec re 7� APPROVED AS TO FORM: Charlie McNabb, City Attorney CITY OF GEORGETOWN, TEXAS By: dA �Z� Dale Ross, Mayor Resolution No. 0'25;�,a 1 t n^ L. Page 2 of 2 Date Approved 3 60ap