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HomeMy WebLinkAboutMIN 07.17.2018 CC-SMinutes of a Meeting of the Governing Body of the City of Georgetown, Texas Tuesday, July 17, 2018 The Georgetown City Council will meet on Tuesday, July 17, 2018 at 2:00 PM at the Georgetown Communication and Technology Building (GCAT), 510 W. 9" Street, 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 81" Street for additional information; TTY users route through Relay Texas at 711. Mayor Ross called the Special Meeting to order at 2:00 PM. All Councilmembers were in attendance, with the exception of Steve Fought, Councilmember District 4 and Anna Eby, Councilmember District 1. Mayor Dale Ross, Valerie Nicholson, Councilmember District 2, John Hesser, Councilmember District 3, Kevin Pitts, Councilmember District 5, Rachael Jonrowe, Councilmember District 6 and Tommy Gonzalez, Councilmember District 7 were in attendance. Councilmember Eby joined the meeting at 2.03 PM. Regular Session (This Regular session may, at any time, be recessed to convene an Executive Session for any purpose authorized by the Open Meetings Act, Texas Government Code 551.) A. Call to Order— A Special Meeting of the City Council B. Workshop overview, discussion and feedback regarding the FY2019 City of Georgetown Budget and Tax Rate -- David S. Morgan, City Manager City Manager, David Morgan, spoke on the proposed budget. The Council had been provided individual Budget Workbooks which contain all of the details of the proposed budget. These individual workbooks aid the Councilmembers to be able to review details, as they wish, and are helpful as reference material at the budget meetings. The complete budget workbook can be viewed here: https:lffinance.georaetown.orglfiles12018107lFY2D19-bud et -Council -Workbook. df Morgan explained that this session would be a preview of the proposed budget. Morgan said this would be a chance for the Council to give good feedback and direction regarding the FY2019 budget. He noted that he would be describing the legal requirements, structure and process of the budget and speak on the budget drivers and areas of focus. Morgan said staff would speak on the budget by funds, revenues, operating expenditure highlights and variances. Morgan reviewed the budget language in the City Charter • Budget Workshops shall be held within the City limits of Georgetown in meetings open to the public prior to the adoption of the budget • At lease (30) thirty days prior to the end of each fiscal year, the City Manager shall submit to the Council a proposed budget presenting a complete financial plan for the ensuing fiscal year • The budget shall be finally adopted not later than the twenty-seventh day of the last month of the fiscal year Morgan spoke on the budget process to date. He said that Council goals had been established, strategies developed and the budget impact had been evaluated for implementation. Morgan noted the completed budget workshops: Utility Rates, Fire Station 7 Staffing, Fiscal Policies, Transportation CIP, Parks Capital Improvements, Facilities CIP, Utilities CIP, IT Strategic Plan and Debt and Tax Rate Models. Morgan said this workshop is the final workshop before the City Manager proposed budget is submitted on August 7, 2018. Morgan said that budget development is still a work in progress and staff will continue to review revenue estimates and expenditure requests. He spoke of the importance of the Council seeing the elements of the budget coming together, prior to budget finalization. Morgan said the workshop is an opportunity for the Council to generate discussion and give staff feedback. Morgan described Georgetown's Budgeted Funds. He explained that governments use a fund system of accounting. • A fund is an accounting device — balancing set of books to account for a specific area • Funds demonstrate accountability and source/use rather than profitability • Governmental Accounting Standards Board (GASB) guides fund accounting for governments • Funds are set up by the Council depending upon restrictions/conditions placed upon the fund • General Fund is for the majority of traditional governmental services not restricted to be in another fund • Governmental Funds demonstrate the flow of resources o General Fund — all departments not required to be in another fund; "bread and butter" government operations such as police, fire, streets, parks and library o Debt Service Fund — accounts for repayment of general debt o General Capital Projects — construction and acquisition of governmental assets o Special Revenue Funds — revenues restricted for a specific purpose • Proprietary Funds used for activities that are primarily supported by the activities: fees/user charges are designed to support their costs o Enterprise (services to external customers) = Electric • Water • Stormwater • Airport o Internal Service (services to internal customers) • Fleet • Facilities • Joint Services • Information Technology • Self -Insurance Morgan noted the City Council Mission Statement: A caring community honoring our past and innovating for the future. He spoke on Budget Themes and Key Issues. He described the 3 major budget themes as Infrastructure Investment, Maintaining Service Levels and Continuing to Plan for the Future. Infrastructure Investment F7'2039Mnu•i bud(•t Infrastructure Investment • $80M in new projects for infrastructure investment 53i W — J,i-".,�: sI1w — F,ark� S3 lh4 I i. iryl A itIr� rtl3irl,�iiAr�.Ci, Maintain Service Levels Maintain Service Levels • Continued explosive growth creating pressures in most service areas • Major new facilities — Fire Station 6 and 7 — Garey Park — full year of operations — Downtown West/City Center • Increasing support staff to maintain service levels Population Growth was discussed and shown in bar charts and a heat map showing the velocity of growth in the City, which demonstrated high development areas. Morgan spoke on growth statistics and indications from building permits. 9-7 r*7o18Mnur 80jW Population growth Population in City and City w/ET1 e. ■ Growth Statistics • In City Limits 0 11.500 platted subdivision lots, with only 2,100 permits issued = 9,400 ready for development 0 4-5 years of sustained growth with just the number of available lots • ETJ 0 2,400 platted lots, with 1900 permits = 500 ready for development 0 Future phases being planned/platted Developing Subdlvisons 1 Mfg 40 LM o — — Building Permits Permit Valuer by Type wr Permit Ctjunt% by Type N — Plumber of Development Applications Morgan noted that the type of subdivisions has changed to high velocity developments. He set it is important to study trends and anticipate the need for services. Measures were shown. Morgan explained that measures help determine the need for additional staff or resources. E4 i1oktJ lin\n� Parks Measures a 11 D 0 Fleet 5 -Year Comparison — Fire and EMS 7Y111 l�•.a� �ZWS IM) 2010 2011 2U12 ID13 2014 2015 2016 2u i .' 9% Morgan explained that unit count is the need for water and utilities, trucks, etc. He noted that units per mechanic in the Fleet department has increased and the need to add another mechanic was apparent. The Department is anticipating 100 units per mechanic. Service Levels in the Fire Department were shown and described. • Continued growth in call volume o Hire 3 positions in October in preparation for Fire Station #7 • Opening of two stations o One company moves from FS1 to FS6 o Hire 11 FTE in July for Fire Station 7 • Operational early 2020 ■ FF/EMT hiring option to train up to paramedic • ESD Partnership o Current funding - % of Calls • New Model methodology — weighted by: o # of properties served o Assessed valuation o Population served o # of calls • New model provides additional operating contribution from ESD, which supports growth of the fire system and distributes cost share more accurately Morgan described assessing resources and the cost of the ability to respond. The EMS Fund was shown next. • EMS Fund Trends o Fund position is improving to repay investment o Projected to have a positive fund balance by 2020 • Continue integrated response with Fire ■ Consolidating into General Fund and showing as a cost center Morgan emphasized the importance to continue to Plan for the Future. Continue to Plan for the Future • Comprehensive Plan — 18 month process — Kickoff public process Oct 2 ■ Annexation — funding for plan • Bike Plan — Fall semester partnerships with UT • Transportation — Impact Fee Study • Facilities Planning — GMC, Fire stations • Street Maintenance — Strategy for increased maintenance Continue to Plan for the Future • Business Improvement Program expansion —Tie with Performance Management program — Expand to city-wide services — Continue to focus on project management, innovation and process improvement — Continued increase in HR training for managers, emerging leaders, staff Morgan spoke on the Business Improvement Process (BIP). He noted that the program is a commitment to continuous process improvements and documenting processes in service delivery. Morgan said the process results in the following. • Better procedures and project management • More efficient work flow ■ Enhanced communications • Allows for individual and business growth Morgan said the Business improvement Program (BIP) is innovative and changes the way staff works. `rnvsOA.„r tiaeM Business Improvement Program (BIP) Innovating and Changing the way we work fhe 4 Pillars of BIP provide formal structure — Program Mariagernent • ProlcrtgnsingProjartMla�de_rr.rt!rytit_.te;PAfl;pr^;ipinr,;4nd mhod; — Business Process Management •ImprraingPn:.;a5:n;..y^21ni;?rnApnd�ln•.t.t!�t.:nfP.,,c ^�c; :.n,�:>;i•, ;i1BA: n.:thod•. — Organizational Change Management • EV.);_3t'-8 rr•ao. _s ind effr:t rg &jr%g , a Ilii or gr^ :,t o^ — Application Change Control Management • lalar�F.^ ehrr3n; r� hig^.-•y intqratPi Enterpr se Applirar fir; Fxamples: — Western (district Records Management Project -- NAGARA National Award — Wat'?r/WaSteWatP.r Plarlt Op!?ratluns InsourCing `rani OM1 BIP created in (JUS in 2015 -> Highly Successful -> City-wide in 2019 Morgan spoke in depth regarding utility rates. He said that discussion of rates had taken place at the June 26, 2018 workshop. Morgan noted that implementation of the impact fee recommendations would become effective January 1, 2019 and would be reviewed every 3 years. He also noted that rate studies would be implemented on January first, with electric and water rates reviewed every 3 years. Council was provided rate sheets as handouts for easier viewing during the discussion. 4;IOK(.11OlSN� Impact Fee - Committee Recommendations Cit %vide Impact Fee Recommendation Water $6,921 Wastewater 3 11, Total Proposed Fee $10,036 Total Current Fee $10,036 South/Middle Fork San Gabnei impact FPP Recornmendatum Water $6,921 Wastewater 4_34g Total Proposed Fee $11,269 Total Current Fee $11,491 c irtrht.l INn� Plan for the Future — Utility Rates Electric Rate Alternatives — Recommended "Aft 3" for Residential Rates Rates �'� Alt 1� Monthly $20.00 $27.00 $30.00 $24.80 Charge Energy $009390 $0.09390 $0.09390 $0.09390 Charge Tranaml"on $0.0019 $0.0019 $0.0019 $0.0019 Revenue $31,822,473 $33,833,171 $34,692,809 $33,201,012 From Rate % Change 6.3% 9.0% 4.3% Morgan spoke on proposed changes to utility rates for water and wastewater. He said there would be no change to the residential rate structure. Morgan noted the monthly commercial rates for meters larger than 1 '/" are proposed to increase. For irrigation, the 2nd block on each commercial meter is proposed to increase from $2.40 to $6.50 per 1,000 gallons to capture peak increases related to commercial irrigation. Plan for the Future — Utility Rates Wastewater Proposed Fixed Rates Residential 530.65 $36.00 $42.00 Small Commercial $30.65 532.00 $32.00 $36.00 $36.00 $42.00 • Wastewater • Residential Rate Change 5l 35 per month • Large Commercial, High Strength increase on volumetric and base rate to address rising costs related to treatment of high concentration flows FY20140 AnrAW 564rot 1111 71 Total Residential Monthly Bill Comparison (10,000 gallons) llu tt t; $171.94 qy ;rrn $177.90 'Y °f $162.96 Lre+,J c+ $134.41 LibcL!-r Thai! $111.59 J— $101.42 (rvlarPa* s $100.43 Pfoerrvil�n $93,84 kound Rock $88.11 GrorCetown SPropo%eJf 40." 32M $72.54 G,-wreuwn {Cu,mO 40M sm $11.15 R Water ■ W.5te atef ♦r� •e YN�N.4v�.1'u...l[«L;�r.li.+l!. cLr tnv...+.vni.«.F���l.ti1�H�Y. et ,I Yr.fry)/h114 Morgan summarized Residential Utility Rates • 4% overall increase in Electric total monthly costs for residential o $20 base charge to $24.80 • Decrease in conservation monthly fee from $1.00 to 20 Cents ■ $1.35 per month increase in Wastewater residential rate • No residential water rate increase Planning for Future — Debt and Tax Rate was shown and discussed. • Implementation of bond funded projects increased debt service payments o Shift of higher interest and sinking (I&S) than Operations and Maintenance (O&M) rate o Limiting bond projects or increasing overall tax rate will ensure health I&S/O&M balance. Planning for Future — Debt and Tax Rate Planning r +1 a PSr.I S.% 59K e'ti 59% Ir,4 i•h Lsi I�-ti i+ji sf� Morgan explained that decrease in the tax rate has resulted in decrease in O&M Rate and an increase in the AS rate. He explained that the overall rate would need to go up 6 to 8 cents to adjust properly and he described the proportions of the tax rates. iT1G19 Annual Bud Morgan spoke on Uncertainty and Risk Management. a Citywide 75 day operations reserve requirement Genera! Lund Revenue BOB% 7.155 7.SI% 6.68\ O&M Nrvrnue 8 S6% 8.32% 6 3.,% hilly 45Revenur 1104% 7.905 13.08% I4.1455 Morgan spoke on Uncertainty and Risk Management. a Citywide 75 day operations reserve requirement o Reviewed at July 10 meeting on Fiscal Policy o General Fund Reserves 90 day operational, benefit payout, economic stability o Utility Fund Reserves • 90 day operational • Designate balances non -operational, rate stabilization based upon rate studies o Other Reserves • 90 day operational in all major funds with personnel ■ Self-insurance • Build asset replacement reserves in Fleet, Facilities and IT Morgan provided a chart showing the Operating Reserves (90 Days) of the City's Funds and spoke on other reserves. Other Reserves • General Fund o Economic stability; benefit payout • General Debt Service ■ Utility non-operating contingencies o Capital planning, rate stabilization, debt coverage • Internal Service Funds o Capital replacement • Self -Insurance rate stabilization • Streets arterial reserve — for major projects Council SRF/Excess Fund Balance ■ General Fund $1.09 projected excess from 2018 put toward contingency reserves for 2019 ■ Current balance $1,233,388.00 • Additional amounts from FY2018 YE moved after audit Plan for the Future Uncertainty and Risk Management • IT Investments o Lead System Administrator for security o Back-up data center •p0dunds 2018 2019 General Fund- 90 day operating (covers EMS and increased $8.5M $9.75M operations) Electric- W Day Operating (separated operating from other $5.125M $4, 1M wserves) Water -90 Day Operating $6M $6.4M Airport - 90 Day Operating $214Y. 52EAK CVB-90 Day Operating (establish 90 days) $187K $247K Stormwater--90day Operating(establsh90days) $250K $578K Joint Services (building to 90 days) $0 $600K Information Tecttnologylost abl sh 90 days) $0 $543K Fleet(e5tablish 90 days) $0 $497K FacIhties(establish 911 day -s) $0 $210K GTEC(continue 90 days of sales tax revenue) $1.64M $1.78M GE DCO (ront inue 90 days of sales Sax revenue) $410K $442K Other Reserves • General Fund o Economic stability; benefit payout • General Debt Service ■ Utility non-operating contingencies o Capital planning, rate stabilization, debt coverage • Internal Service Funds o Capital replacement • Self -Insurance rate stabilization • Streets arterial reserve — for major projects Council SRF/Excess Fund Balance ■ General Fund $1.09 projected excess from 2018 put toward contingency reserves for 2019 ■ Current balance $1,233,388.00 • Additional amounts from FY2018 YE moved after audit Plan for the Future Uncertainty and Risk Management • IT Investments o Lead System Administrator for security o Back-up data center 0 Payment card industry audit • Citywide Risk Assessment Results 0 GGAF in August, Council in September $75,000.00 annual funding available to implement recommendations that further mitigate risk Morgan went on to speak on the Self Insurance Fund • Self-funded health and dental benefits • Continued healthy reserves o Incurred but not reported o Rate stabilization • Anticipate increases in costs over the next 3 years • Recommend a 5% increase in premiums to mitigate increased costs and protect reserves Morgan provided a Summary of Compensation & Benefits • Non -civil -service — 3% average merit (04% range) ■ Market adjustments for civil service and non -civil service ■ Continued comprehensive benefits — same coverage 0 5% increase in premiums for employees and the City Morgan summarized the Proposed Staffing Increases • Fire o New FF positions October 1 3 o Staffing Station 7 11 o Fire Inspector 1 • Police School Resource Officer 1 • Water Supervisor and crew; plant operator 4 • IT Security Analyst 1 • IT Admin Support 1 ■ IT Upgrade to AV Position 0.5 • Fleet Mechanic 1 • Parks maintenance 1 • Business Improvement Program 1 o Expand City -Wide • GUS Inspections 2 • Airport upgrade PT to FT maintenance 0.5 • Planning Landscape Planner 1 • TOTAL 29 Morgan explained that the major funds will project increases to maintain service levels for staffing, maintenance and operations, with projections as follows: ■ 3.4% Increase in the General Fund ■ 3% Increase in the Electric Fund • 10.4% Increase in the Water Fund o Mirrors higher growth in water service area An Overview Summary was provided. M039 AMUW " f Overview Summary • New Positions - 29 FTE to address service delivery and growth impacts • $$OM in new infrastructure projects • Continued planning for the future • Stronger financial position for all funds — illf;feasod contingency funding and addrPssmg ilSk w,magc,niPnt need' • Electric residential base rate increase — Paitially offset by decrease it, electric Conservation fee • Wastewater residential rate increaseof $1.35 per month • Water irrigation block rate increase (commercial) • Tax rate at or below current rate Morgan said that staff would then present Detailed Funds Review. Agenda — Detail Fund Review • General Fund • Other Enterprise Funds — Revenues — Airport — Tax Estimates — Stormwater • Final Roll due on 7/25 Special Revenue Funds — Expenditures — CVB, Street Maintenance, — Department Highlights EMS, Council Discretionary • Electric Fund (rates) • Water Fund (rates) • Capital Projects & Preliminary Debt Estimates • Internal Service Funds — Facilities, Fleet, Information Technology, Joint Services — Self Insurance Fund • Summary and Direction from Council Mayor Ross asked the Councilmembers if anyone was in disagreement with anything detailed so far. He told the Council that they should get answers to any budget questions they may have during this process. Ross explained that asking questions or providing input at the point of first or second reading of the budget is not appropriate. He noted that silence is acceptance. Councilmember Jonrowe asked about funds among the departments and asked if there is way to review the funds by revenue and expense. She said she would like to be able to see the two side by side. Morgan said these could be combined. Jonrowe asked about service level requests and if it was department heads who determined these requests. City Manager, Morgan, explained the process. He said departments submit requests in April, with time to review and discuss. He explained the difference in base requests and service level requests. Morgan noted that the Executive Team and Department heads review requests together. He said revenue and fit service level requests become based on prioritization of a group effort. He noted that directors are given the opportunity to fight for something they feel strongly about. Jonrowe asked if records were kept regarding how many years in a row a director had made a request that was pushed aside. Morgan said he would be able to provide this information. Mayor Ross said, at the end of the day, it is the City Manager's proposed budget and the budget should be aligned with Council goals, strategies and tactics. Morgan said he is a big believer in alignment. He said he takes the accountability, but works through a collaborative process and uses proven data. The City's Budget Manager, Paul Diaz, spoke on the general fund. He noted several sources that support the general fund and spoke on recent revenue increases. Diaz said a 4.4% increase over 2018 projections is expected for sales tax in 2019. He explained that Georgetown's unique sales tax sectors are growing. He noted that retail, food, information and manufacturing factors are mostly consistent in trends. He explained that the last 3 months have shown growth related to data centers. Revenues in the general fund. Diaz explained the two factors of property tax, O&M and I&S, in detail. He said the City's tax rate of 42 Cents is the lowest in the region. He noted that property tax is based on assessed value and tax rate. Diaz said the City would receive final rolls from WCAD on July 25th, after all protests had been heard and finalized. Councilmember Gonzalez asked about parks budgeting and where costs will be in the future. He noted that the parks budget is a much larger percentage than ever before and the City will need to mitigate this. Diaz spoke on increases in development fees and said the counts of permits, as well as the value of permits have increased. He spoke on other revenue as a catch all category, including the ESD#8 contract and municipal court funds. Assistant City Manager, Laurie Brewer, spoke on the general fund. She noted that the general fund represents 26 cost centers spread across different divisions. She spoke on the fund highlights, shown on Page 1 of the Budget workbook, the fund schedule, shown on page 5 and line items shown on pages 6 through 45. She explained that the items are grouped by call center. Brewer reminded everyone that the budget workshop can also be view online on the City's Website. Brewer noted a 3.4% increase in the general fund. She explained merit increases, market increases and increases in health and dental rates. Brewer said there will have to be an increase in the electric municipal rate. She spoke on continued operations and the same level of staffing. Brewer said there was a detailed column with fiscal year changes shown on pages 45 to 49 in budget workbook. She noted some personnel variances, due to vacancies or proposed new positions. Councilmember Gonzalez asked about Workman's Comp expense and why it showed a large increase in every area. Budget Manager, Diaz, explained that the way it is calculated, it goes higher in odd years and goes lower in even years. He said the up and down is determined by what is charged for the insurance. Gonzalez asked Diaz to provide information and illustration of the two year trends. Diaz said he would be happy to. Brewer said there is not much difference in dollars but there is a huge difference in percentage points. Gonzalez asked for an illustration of both percentages and total dollars. Brewer went on to speak on one time programs in the planning department. She spoke on the new annexation plan and costs to be implemented over the next couple of years. Brewer said this will also be a better way of accounting for TIAs. Brewer spoke on parks administration starting on page 13 of the workbook and noted no significant changes. She said the opening of Garey Park was the only thing new. Brewer noted a new parks attendant and the combination of 2 part time positions into 1 full time position. She spoke on an additional $12,000 that is needed to mitigate algae in the River. Councilmember Jonrowe said she is glad to see the algae maintenance and new parks maintenance worker. She asked about the heritage garden. Brewer said the garden had previously maintained by the health district, but is now being taken care of by the City. Brewer said this has been absorbed in different line items, and is less than $2,000.00. Brewer noted that if the landscape planner is funded, the urban forester will be able to devote more time and effort to the garden. Jonrowe asked about the creative landscape bathroom. Kimberly Garrett, the Parks and Recreation Director, said this is addressed in Phase 3. Ross asked where the Heritage Garden was and was told it was on Hutto Road. Brewer went on to speak on the Recreation Center. She noted the summer expenses and the need for better coverage at the Rec Center. She spoke on the Tennis Center and said there were no major changes, but slight changes in staffing to increase coverage. Brewer said the rec programs line item had increased due to additional camps and instructional programs. She explained that there has been in increase in usage, but an increase in revenue, as well. Brewer touched on the impact of a full year of operations at Garey Park and the maintenance for the Garey House. Brewer noted that there would be an Arts and Culture part time position that would be funded by the Hotel and Occupancy Tax. She said there were no major changes to the municipal court budget. Fire support was discussed. Brewer noted a new position for a fire and life safety instructor and a new vehicle, driven by growth. Gonzalez asked if this budget will alleviate the staffing issues. Morgan spoke on vacancies and the plan to overstaff by 3 in the Fire Department in October. Morgan said this will significantly impact the staffing concerns. Fire Chief, John Sullivan, thanked the Council for being so supportive in trying to put a dent in the staffing problems. Discussion followed on the plan to overstaff temporarily. Gonzalez asked to see the overall need and cost for hiring new personnel for Fire Station #6 and Fire Station V. Morgan said he will bring this information. Gonzalez said this would be good and the City would not need to take a full hit next year. Morgan said he will provide the 2 year impact. Councilmember Jonrowe asked about one time programs percentages on page 27. She said she had never seen this in previous budgets. Brewer said she would double check, but believes it is related to EMTs versus certified paramedics. Morgan said the City will hire EMTs and then have to train them as paramedics. Morgan said he does not anticipate this as an ongoing need and this is why it was placed in one time programs. Solid waste from page 28 of the workbook was discussed. Brewer said there is an increase in revenue associated with contract expense. She spoke on building inspections on page 30 and said there were some staffing adjustments made to accommodate workloads, but no FTEs were added. She spoke on administrative services, the City Council budget, and the City Secretary request for software to manage Boards and Commissions. Brewer noted the general government contract, a negative line item. She said the fiscal and budgetary policy does not fund 100% of salary costs. She said this generally is affected by vacancies and addressed through projections for staffing turnover — 1 % of salary and benefits across all departments. Brewer described the partnerships and administrative allocations in the Economic Development department. She spoke on the Communications department expenses, which do not include GUS or PD. She mentioned $15,000.00 for GTV costs. Brewer said the Police Department overall increase were due to vehicle needs and technology. Councilmember Gonzalez asked about the School Resource Officer expense and said it seemed high. Brewer explained that the figure includes salary, benefits, vehicle and radio. Councilmember Pitts asked about the line item for 2018 part time salaries and if it was the same as last year, or if it represents a second part time salary. Brewer explained that it represented the addition of the two downtown parking enforcement ambassadors. She explained that this program was started midway through 2018, and would not have a full year amount until 2019. Brewer noted no major changes in Animal Cervices or Code Enforcement. Councilmember Jonrowe asked how many years the Animal Services Department had asked for an additional Animal Control Officer. Jonrowe noted a feral cat explosion in Old Town. City Manager, David Morgan, said there has been a good deal of growth at Animal Services. Jonrowe said she knows these employees are stretched pretty thin, and asked when the last Animal Control Officer was hired. She indicated the need for an additional officer. Brewer said there was a variance of salaries in the Public Works Department due to the vacancy of a Traffic Engineer. She said the City is hoping to fill the position prior to October. Brewer noted $25,000.00 in the budget to implement communication and education of the '/4 Cent Sales Tax Renewal on the ballot in November 2018 and $30,000.00 to implement the traffic management program Brewer spoke on the ending fund balance shown on page 5 of the workbook. She noted an increase in contingency and the good shape of the funds. Mayor Ross asked City Manager, Morgan, to recap. Morgan recapped the Council requested information and their feedback and input. Mayor Ross called for a 10 minute break. The meeting resumed at 4:00 PM Jim Briggs spoke on the electric fund and described the revenues and expenses. Briggs noted a rate study and cost of service study performed in the spring. He explained that the consultant had determined that a 4.3% increase in rates was needed. Briggs said the last time cost of service was examined was 2011. He said the market has changed considerably, because resources were more available back then. Briggs spoke on the necessity for an aggressive pace and explained how growth has contributed to the need for investment in capital infrastructure. Briggs noted water pumping costs and how the rates have not been accurate in covering the cost of service. Briggs spoke on the PCA. He said that the Georgetown Utility Systems Advisory Board had recommended satisfying the amount by 2020. He noted that if more is collected than needed, there would be a negative PCA rate passed to rate payers. Briggs described each fund in detail. He said growth is still seen, but the condition is tight in the cash balance. He said there is not a lot of change among departments. He explained the City's need for a pressure digger truck and said that rock takes a toll on equipment. Briggs spoke on the inefficiency of hauling equipment across town. He said that vehicle maintenance and lease cost is associated because of the new equipment increase. Councilmember Pitts asked about CRR credits and if this was a hedge. Briggs said it represents congestion revenue rights — bringing in the City's energy lines — insurance policy protections — and the value of that hedge. He explained that if not insured and covered, these things can take several years to recover. Pitts asked if this number is easily forecasted. Briggs said the City uses external consultants, internal staff, City of Garland engineers and ERCOT to monitor data for these projections. He said the City started doing this in 2012, and said it became more vitally important when the City went toward renewable energy. Briggs explained that it gets congested when trying to bring those numbers to the grid. Briggs went on to speak on the Water Fund. He said this fund has grown considerably because of Georgetown's growth and growth from the Chisholm Trail District. He noted that the number doubled a few years ago. He noted growth in the western Williamson County areas. Briggs explained the need for large capital improvement projects in order to beef up the water system, including water, wastewater and irrigation. Briggs mentioned unexpected expense and thanked all of the talented staff that had helped during the recent pump outage. Briggs said there is a proposed increase in the wastewater rate to support the CIPs. He detailed revenues and expenses of the CIPs Briggs spoke on the end fund balance and rate adjustments. He explained that the combined revenues were sufficient, but there would be a future decline in performance without adjustments to the rates. Briggs noted that the growth demands will continue to challenge the utility. He said the impact fee has shown to be accurate. Briggs said that wastewater is slightly below its cost of service, and the water revenue is covering the slight currently, but will not be able to cover it by 2021. Briggs spoke on the intent to make adjustments in pollutant irrigation in Sun City and how it is a positive impact to the water treatment plant and a great management tool. Briggs had provided the Council with the water rates sheet and proposed rates for residential wastewater. Mayor Ross said the City had done an amazing job with the Chisholm Trial district pump outage and asked if there is money in the budget for things like this. Briggs said the budget is sufficient, but the next 2 years will see an increase in water rates. Budget Manager, Paul Diaz, spoke on the 5 year Capital Project and Debt impact. The Council had been provided with plan comparisons, which recapped the presentation Diaz had conducted at a Council workshop meeting the previous week. Diaz asked the Council if the draft worked for them and if it met their intention. City Manager, David Morgan, went through specific descriptions with the Council and described the proposed movement of projects. Morgan asked the Council to review the projects and priorities and provide feedback on the long term CIP plans. Councilmember Gonzalez spoke on Southwestern Blvd. and said he would like to see this done sooner than later. He explained that Davidson Ranch is in full swing and the City would be more prepared if this project was moved one year sooner. Mayor Ross asked if this was possible, and Morgan said it will be evaluated. Mayor Ross asked about the radio replacement in the budget. Morgan explained that this was the third year of a multi-year project. He said the whole County and its Cities have one more after that for both fixed and mobile radio replacement. Ross asked about the expense of the VFW parking lot. Morgan explained that this is to fix the dirt parking lot at 2nd street, where many people park. Councilmember Pitts asked about Blue Hole project. Morgan said this project is still on the list, but has been pushed out beyond 5 years. . Councilmember Jonrowe asked about the $410,000 for 2nd street. Systems Engineering Director, Wesley Wright, said this is for the sidewalk project. He explained that development, as it comes in, would pay for the improvements, but this project is closing the gaps on the northern side to meet ADA Compliance. He noted that this was the toughest stretch and is an accessible route now. Jonrowe said she does not see this as a top priority. Morgan asked if this should be put beyond 5 years. Jonrowe asked that it be moved to 2021. Councilmember Hesser asked about neighborhood park development. Morgan said there are dedicated parks that the City possesses and funds are needed to maintain them. He said park fees are part of the UDC and the requested $250,000 per year will give the correct funding. Morgan said the City will start implementing parks on a consistent basis. Hesser asked how many parks are included. Parks Director, Kimberly Garrett, said 5 parks have been identified as in need of development. She said the City will work with the residents and, once developed, there will be no other needs. Garrett said the current guidelines require land or money and the fee is very low. She explained that the fee will be increased to develop the neighborhood parks. Garrett said that each year a park will be designated in the budget process. She explained that, as of now, neighborhood parks must be developed by the developer. Councilmember Eby asked about Old Town southeast sidewalks. Wright explained the sidewalk projects in the San Jose area of the City, south of HWY 29 and across from University. He said this is a priority one area and is being brought into ADA compliance. Wright said the City received $200,000 in grants for this. Morgan said with the debt per year there is still capacity in 2020. Councilmember Gonzalez said capacity in an out year is good. Eby said she would try to understand, since this is a priority one. Wright explained that funds are available for many of the sidewalk projects. He said there is a potential for price savings because of competitive bids. City Manager, Morgan, suggested moving this out, adding more capacity in 2022. He said all significant projects in the transportation bond would be addressed, except for DB wood, which would be moved to 2020. Gonzalez recapped and said moving this would not be a significant impact. Morgan said staff will work on updating the sheets. Mayor Ross asked the Council if they would prefer to continue this meeting or resume at a meeting the following day. Morgan said he thought it would only take about another hour. Ross and Council said they preferred to finish up today and not come back tomorrow. Budget Manager, Paul Diaz, went on to speak on the Enterprise Funds. He detailed the airport fund revenues and expenses. Diaz noted that the price of fuel will increase over time. He noted that expenditures decreased in both operating expenses and non-operating expenses. He said there was one proposed enhancement to take a part time position to a full time position and the 90 day contingency was met. Diaz described the stormwater fund and spoke on operations and maintenance of the drainage system. He spoke on projected variances and rates, which were last adjusted in 2016 to comply with the TCEQ. Diaz spoke on revenues and revenue increases, as well as budget expenses. He described cash funding and debt funding projects. Diaz spoke on a new street sweeper badly needed and a mower needed for increases in right of way mowing. Finance Director, Leigh Wallace, spoke on Special Revenue Funds. She provided sheets with the Workers Comp explanation to the Council, answering a question brought up earlier in the presentation. Wallace spoke on Special Revenue Funds. She noted that either state law, city law, charter or ordinance says these funds can only be spent in a specific way and must be kept in its own separate fund. She noted that page 123 in the workbook provides a summary of the 20 Special Revenue Funds in the City, with descriptions of each fund. Wallace explained that each of these funds needs to have a spending policy. Mayor Ross asked about the 20 year anniversary of the Red Poppy Festival this year, and if there had been funds allocated to do something special. Wallace said that $30,000.00 had been set aside for that purpose, in addition to the regular Red Poppy budget of $136,000.00. City Manager, David Morgan, said a great celebration is anticipated. Wallace spoke on the CVB Fund and the contributions from the Sheraton and Hampton Inns. She noted the increasing H.O.T. (Hotel Occupancy Tax) revenues and spoke on proposed studies. Wallace described the EMS Fund, found on page 136 in the workbook. She explained that the current year is projecting revenues with a little bit of growth. She said the plan was to add a pique unit, but due to hiring timelines and vacancies, the unit was not activated. Wallace said the fund will come in close to budget and will continue to buy down the initial costs. Wallace spoke on revenue for 2019 and projected growth and personnel factors. She explained that the fund balance is coming down and becoming positive. Wallace said a 90 day contingency is being proposed, to be covered by the general fund. She said this further reinforces the vision for the EMS fund to be molded. Morgan added that it is difficult to split costs between Fire and EMS, since some personnel flip between both. He explained that this is what the City would want, but making fund adjustments can be challenging. Morgan said he wants to integrate EMS into general fund, which will help to be able to track and see more clearly. He said managing expenses will be improved. Wallace described how this would be incorporated into the general fund. Councilmember Pitts asked about the EMS fund payroll account which had been shown to Council at a previous meeting and if this would correct this. Pitts said he likes this proposal much better and is in support. Wallace said there is no planned transfer to the Council Contingency Fund. She said staff is trying to get better at budgeting and projections. Wallace said this will be brought back to the Council for one time uses in the spring. Wallace spoke on the Street Maintenance Fund and spoke on the renewal of the special sales tax for this fund to be proposed in the November 2018 Special Election. Wallace described proposed enhancements, new equipment and replacement equipment. Wallace said the GEDCO Fund is moving forward with existing agreements. She noted that the Fund is healthy and in good shape. Mayor Ross asked about the Grape Creek building. Wallace said the City would not be getting the lease revenue any further. She spoke on the sale of the building and detailed a lucky finding, earlier that week, when an in -tack limestone wall has been found in the building. She said staff is working through the strategies and how to best preserve it. Wallace said the main project with the GTEC Fund is the Southeast Inner Loop and debt for that project. She explained that this is being planned for, but could be pushed out. Wallace noted that Westinghouse Road repayment of debt was already issued. She explained that the Board had recommended no longer transferring funds from the Wolf Ranch PID and the South Georgetown TIRZ to GTEC. Morgan said the Wolf Ranch transfer was intended to repay GTEC for the infrastructure, but GTEC has already been paid back from the sales tax and transfers from the TIRZ. Morgan said there had been good discussion at the meeting and $500,000.00 can now be used for core services in the General Fund. Internal Service Funds were described as funds to provide services to other funds and departments in the City. Wallace said these do not have a specific revenue source, but each fund has an allocation methodology. Wallace said the Facilities Maintenance Fund has no big changes. She said the existing fund balance was placed on a 90 day reserve account. Wallace said the Fleet Fund is allocated based on number of vehicles, and equipment. She described the 5 year replacement program. She said the list of vehicles to be purchased was on page 249 in the workbook. Wallace said the Fleet Department had proposed to add a mechanic, necessary for the high level of internal service with the additional vehicles and maintenance from the City's rapid growth. The Information Technology Department budget is shown on page 186 of the workbook. Wallace said this fund allocates the costs and types of equipment, software, licenses and I.T. infrastructure. She explained that the 2019 increase in expenses represent modest contract increases. Wallace said these support functions grow with growth, as well, and decisions are made with data. She said there are many pressures in the I.T. Department and spoke on budget requests. Wallace spoke next on the Joint Services Fund found on page 193 of the workbook. This fund includes H.R., Finance, the Legal Department and Economic Development. Wallace said allocations are based on types of services. She noted many increases for enhancements, such as the services contract for the customer service system, 2 public improvement inspectors, built on standards required, and the need for another full time employee for this project. She spoke on the proposed enhancements for the Economic Development Department. Mayor Ross asked about business improvement projects and if there is a way to track the benefits. Morgan said staff will report to Council on this twice per year. Ross said he predicts double savings within the first 2 years. Morgan said the savings will be noticeable. The Self Insurance Fund was described next, with renewals and expenses for administrating the health and benefits plan. Wallace noted that there had been no increases of premiums in last 2 years, but claims are increasing and the premiums will need to increase. She explained that the strategy is to pass a small increase in anticipation, instead of a larger increase at the needed time in the future. No one would be losing ground, explained Morgan. He noted that salary increases will be larger than premium increases. Wallace said the City will continue to invest in the wellness program. She noted that health contracts are being rebid currently. Mayor Ross asked how much the premium increase would be. Morgan said 5% for the employee and 5% for the City. City Manager Morgan summarized what the Council had directed during the meeting. He spoke on the impact of the tax rate, according to changes in the CIP. Morgan said he and Brewer can shape the debt sale to avoid a tax impact, by moving the projects around He said he would provide an updated sheet to the Council at the next meeting. He said they would re -shape the payment to manage the CIP and the overall bond or debt payment. He noted that changes suggested by Council can keep the tax rate the same. Councilmember Hesser asked about the ratio of O&M to I&S. Morgan said it would be the same percentage with this plan. He said he wants to keep I&S the same and not let it creep up. Morgan proposed next steps. The next day's meeting was cancelled and he would send the information to Council by email. Morgan said the tax rate will be discussed heavily at the next meeting and final adoption of the budget is scheduled for September 11, 2018. He said information about the proposed budget would be publicized. Councilmember Eby asked about Animal Services. She said an additional Animal Control Officer is a necessity and not just a convenience, or at the very least, the City should bring a part time position to a full time position. Morgan said this is workable and staff would make the change in the proposed budget. Mayor Ross said, he too, is in in favor of an additional Animal Control Officer. Morgan said he will work with the finance team and make this part of the proposed budget. Eby said the budget process gets better every year. Councilmember Pitts asked for the schedule to be included in the City Manager's email Adjournment Motion by Pitts, second by Nicholson, to adjourn the meeting. Mayor Ross adjourned the meeting at 5:53 PM. Approved by the Georgetown City Council on Date Date oss, Mayor Attest: City Sect