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HomeMy WebLinkAboutMIN 11.12.2019 CC-WNotice of Meeting of the Governing Body of the City of Georgetown, Texas Tuesday, November 12, 2019 The Georgetown City Council will meet on Tuesday, November 12, 2019 at 2:00 PM at the Council Chambers, at 510 West 91" Street, Georgetown, TX 78626. 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 three (3) days prior to the scheduled meeting date, at (512) 930-3652 or City Hall at 808 Martin Luther King Jr. Street for additional information; TTY users route through Relay Texas at 711. Mayor Ross called the meeting to order at 2:00 p.m. The following Council Members were in attendance. Mayor Dale Ross; Valerie Nicholson, Council Member District 2; Mike Triggs, Council Member District 3; Steve Fought, Council Member District 4; Kevin Pitts, Council Member District 5; Rachael Jonrowe, Council Member District 6; and Tommy Gonzalez, District 7. District 1 is vacant. Gonzalez arrived at 2:34 p.m. during Item B. Policy Development/Review Workshop - Call to order at 2:00 PM A. Presentation and discussion regarding the first year of Garey Park -- Kimberly Garrett, Parks and Recreation Director Garrett presented the item and introduced staff and recognized Mr. and Mrs. Garey who were in attendance. She then provided an overview of the park and its amenities. Garrett reviewed the visitation by month. Pitts asked if the monthly numbers include events. Garrett responded that it includes people who come through the gates that were not coming for an event at Garey House. Mayor Ross asked why Tuesday attendance is so high. Garrett responded that it is due to free Tuesdays during a portion of the year. Garret then reviewed the Visitation in FY19 numbers. She added that overall there were 95,355 visitors with 70% being non-resident based on location. Garrett stated that peak visitation days were on free Tuesdays and Weekends. She added that the Splash Pad has extended dates of March 1st - October 31st and it is the only splash pad in the area open early March through October. Garrett reviewed the budget information for FY2019 and noted that the park was able to recover almost 49% of expenses. Mayor Ross asked if the City does cost recovery for other parks. Garrett responded that there no entry fee for the other parks, only pavilion rentals. Pitts asked if Pro Forma for years one is what was used by staff in previous presentations to staff. Garrett responded yes and noted that staff just now has numbers to use for budgeting. Pitts asked about the industry standard for cost recovery. Garrett responded that there aren't many parks like this and the national average for cost recovery is 35%. Garrett then reviewed the budget detail costs and revenue breakdown by month and by service area. Mayor Ross asked if the revenue for events would go under rentals. Garrett responded yes. Garrett then provided a revenue breakdown of resident vs. non-resident. She then reviewed the Garey House Rentals for 2019 and noted that 55 events were booked so far. Garrett stated that staff typically see bookings out one year or more at these types of venues and used introductory pricing in 2018 to attract short term rentals. She also noted that: house rental fees have been reviewed, benchmarked and increased annually; seasonal bookings are popular; capacity at the house is low 130-150; and Bridal Open Houses have yielded 18 bookings. Garret reviewed Lessons Learned that have led to changes which include: procedures and processes being continually improved and evaluating services, educating patrons, and reviewing marketing material and target audience; Free Tuesdays = BUSY and the dates have been adjusted from September 1st - May 31st to October 1st - March 31th in line with fall/winter hours and the need for extra staff; pricing and fees have been changed due to high demand for weekend pavilion rentals, rates were increased, and Garey House fees increased to align with market; the equestrian area is used by mostly non-residents and weekend trail riders and the arena is not designed to host large events with only 20 trailer parking spots; and events and programming have been reviewed including free entry events that can lead to parking issues and traffic back-ups need pre -registration, meadow events conflict with Garey House Rentals and need to be one or the other, and staff will continue to look at third party rentals, revenue impacts, overall impacts to the park such as Victory Cup. She reviewed the partnerships successes including the Good Water Master Naturalist on Wildlife Nature Viewing Blind and the Williamson County Astronomy Club on Star Gazing Night. Garrett noted the successful programs of NRPA Bio Blitz, Nature Fest, and Hay Day. She added that the volunteer program is growing. Nicholson noted that staff is expecting 40% cost recovery and asked if there is anything related to events that staff has considered for additional revenue. Garrett responded that there has been more interest in third -party rentals for meadow and arena areas. Pitts asked about the daily fees and how they compare to the regional Williamson County park fees. He added that he would like to see fees adjusted down for residents. Garrett responded that there was a table provided showing the cost comparison. Pitts asked about the use on the equestrian side of the park relating to the trails and the arena. Garrett responded the use was a lot less. Pitts asked if staff had ideas on how to increase the use of those areas. He added that he's not sure how to find equestrian users, but maybe staff could consider partnering with 4H Clubs and other groups. Pitts then asked about the marketing for the park. Garrett responded that marketing is done through programs and events at the park. Pitts asked if there was no budget for marketing. Garrett responded that yes there are some funds for marketing and print materials to market events. Pitts stated that he would like to see usage increase. David Morgan, City Manager stated that staff can look at fees and adjust to meet demand. Pitts responded that he likes that idea and noted that the free Tuesday marketing has worked very well. B. Presentation and discussion regarding the Energy Risk Management Policy -- Daniel Bethapudi, General Manager of the Electric Utility Bethapudi presented the item and noted that Steve Moffit with Schneider Engineering will also be presenting. He reviewed the background of the energy risk and noted that in 2018 the Finance Department recognized the energy market as a risk. Bethapudi then reviewed the energy market on September 22, 2019 to help illustrate the risk. He then reviewed the natural gas price movements from 2010 to 2018. Bethapudi then reviewed the need for an Energy Risk Management Policy that include: the City of Georgetown is exposed to the risks associated with purchased power - Energy Risk; poorly managed Energy Risk can have a significant impact on the overall financial performance of the electric utility and the City and affect the ability to provide economic and reliable service to its customers; to manage and control the energy risks associated purchased power activities it is necessary to establish Energy Risk Management Policy; improve predictability and stability of purchased power costs; good risk management practices can help in credit ratings; and ERCOT protocols require comprehensive risk management policies. Moffit then reviewed the municipally owned utilities risk profile which notes that municipally owned utilities (MOU) are unique in their structure and therefore their risk profile has: defined service territories that are usually not open to competition other than territories that are multi -certificated; utilities, usually electric, often support other City services through general fund transfers; citizens are customers off all the utilities - electric, water, wastewater, etc. - and do not "cherry pick" their services; and MOUs are locally owned and operated, and locally governed by City Councils, meaning governance can change at every election. He added that this MOU structure leads to a certain risk profile while rating competitiveness is important, rate certainty and stability is equally, if not more, important and a conservative approach and mindset drives hedging strategies to be conservative and not speculative. Mayor Ross asked for an example of a hedging strategy. Moffit responded that Bethapudi will present that later. Bethapudi then reviewed the purpose of the Energy Risk Management Policy and how it will: outline a planned and pro -active approach to energy risk management versus passive approach; clearly identify the risk management framework and elements that will help manage the energy risk and enhance the financial performance of the Georgetown Electric Utility and the City of Georgetown; identify organizational structures, the risk management process, management responsibilities, approved risk management tools, transactions and activities, operating procedures, and reporting requirements to ensure that the energy risk exposures are properly identified, managed and reported on a pro -active and consistent basis. He then reviewed the Energy Risk Management Policy scope as the policy will govern all purchase power and related activities that may impact the Energy Risk profile of Georgetown Electric Utility. He added that the activities that fall within the scope of this Policy include, but are not limited to, the following: Wholesale Transactions (PPA, Bilateral Trades); Independent System Operator (ISO)/ERGOT Market Transactions (DAM/RTM/AS); energy hedging activities involving physical and financial energy products; basis hedging activities involving energy products; all energy commodity trading; and counterparty contracting and credit management. Bethapudi continued that all transactions will be accomplished through hedging, not speculation and noted that a hedge is used to reduce the physical product price fluctuation associated with its normal business activity of buying and selling electricity or natural gas. For example, a commodity hedge locks in a product price and as the price rises, the hedge will have an offsetting gain or, as price declines, the hedge will have an offsetting loss. He noted that speculation is a bet on the future direction of price movements of assets and a key motivation to speculate is that the risk of loss is offset by the possibility of a huge gain. Bethapudi stated that speculation does not reduce the risk associated with normal business activities. Gonzalez asked how far in advance can the City lock into a forward -thinking contract. Bethapudi responded that there are multiple ways to hedge, starting with the contract itself. Gonzalez asked how far along in the forecasting does the City have to hedge on some of these issues. Bethapudi provide an example using weather forecasting and utilizing bilateral trades. General discussion on the right time to purchase energy for City needs. Pitt asked about the possibility of hedging the City's excess energy. Bethapudi responded that the City is working on shorter term sales to manage the City's long position. Pitts asked if the policy will outline the use of hedges to mitigate risk. Bethapudi responded yes and added that risk management is a very wide field. He then explained different aspects of risk procedures. Mayor Ross stated that he understands the hedging portion of the policy but had a question how the hedging is used to mitigate a few bad days that can have devastating effect. Bethapudi responded that the driving factor should be providing the customers the lowest possible rate. He added that staff's approach is not to play the market. Mayor Ross asked who will do the hedging for the City. Bethapudi responded that it will be explained later in the presentation. Triggs asked if the City is buying natural gas. Bethapudi responded that the City does not directly buy natural gas. Fought wanted it noted that this is not how the City manages the entire portfolio, but instead how the City manages the above and below the baseline. He noted that most of the City's energy portfolio is under control and it a small percentage that is volatile. Bethapudi agreed. Fought noted the main problem is a self-inflicted wound of buying extra energy to sell back into the market that the City needs to fix. Bethapudi the reviewed the Energy Risk Management Policy Key Considerations and Limitations that are: the standards and requirements specified in this Policy constitute only a subset of the overall managerial and technical elements that are required to successfully manage and control energy risk; the implementation of the risk management policy and its elements, by itself, will not guarantee a particular level of financial performance or energy risk control; the efficacy of the risk management policy is contingent on the quality of execution and compliance; adverse and unprecedented conditions can produce more extreme levels of financial performance than forecasted using commonly -applied risk analysis methodologies (Risk Elimination vs. Risk Management); and the implementation of the risk management policy or elements of the policy may create new sources of risk that may not have existed prior to the implementation of the policy. He then reviewed the Risk Types Covered by this Policy which are: Market Risk is the uncertainty in Georgetown Electric and the City of Georgetown's financial performance due to uncertain commodity market prices (i.e. commodity price risk) and uncertain price relationships (basis risk); Credit Risk is the uncertainty in Georgetown Electric and the City of Georgetown's financial performance and/or credit position due to the chance of non-performance in payment or delivery (either physical or financial) by counterparties; Volumetric Risk is the uncertainty of Georgetown Electric and the City of Georgetown's performance due to the variability in native load peak demand and energy volumes, and in the quantity of energy deliveries under variable off -take energy contracts and/or option contracts; Outage Risk is the uncertainty of Georgetown Electric and the City of Georgetown's performance due to variability in the availability, curtailments, forced and/or planned outage rates of the facilities that Georgetown Electric has contractual entitlements; Model Risk is the uncertainty of Georgetown Electric and the City of Georgetown's performance due to the use of insufficiently accurate models for portfolio management decision making resulting in adverse financial outcomes; Execution Risk is the uncertainty of Georgetown Electric and the City of Georgetown's performance due to the lack of speed or accuracy of the transaction execution; and Operational Risk is the uncertainty of Georgetown Electric and the City of Georgetown's performance due to inadequate or failed internal processes, people, internal systems, or from external events. Operational risk can also be exacerbated by inadequate or ineffective internal controls, transaction and/or strategy risk assessment, segregation of duties, management oversight, staff resources, expertise and/or training, and protections against fraudulent actions by employees or third -parties. Bethapudi reviewed the Energy Risk Management Organization Structure that would consist of the Risk Management Committee who reports to the Risk Oversight Committee who reports to the Independent 3rd Party and Georgetown Electric Board and Georgetown Electric Board (GTEB), who will both report to the City Council. He also noted that the overall policy oversight will be provided by City Council and GTEB and an independent third -party will provide Risk Management Compliance reporting to GTEB and City Council. Bethapudi reviewed the proposed Georgetown Electric Board as an alternate to current GUS board that would contain: three Board members and two City Council Members wit the board members have expertise in Marketing, Finance, Law or Engineering; Electric Power Distribution; and Electric Generation or Power Marketing. Gonzalez asked what staff plans on doing if they are not able to find citizens to serve on the board with those specific areas of expertise. Bethapudi responded that staff would bring in an independent third -party person who would have to be monetarily compensated for their work. Nicholson asked if the GTEB would be an alternative to the existing GUS board. Morgan responded that staff is looking at creating two separate boards with one for electric and one for water. He added that staff would bring that proposal back to Council at a later date. Gonzalez stated that he would like to see a resume requirement to guarantee desired expertise for board applicants. Bethapudi responded that staff will bring that back to Council. Gonzalez stated that there needs to be at least one person from the community on the GTEB board no matter what for the sake of transparency. Bethapudi stated that overall policy oversight will be provided by City Council and GTEB; the GTEB Board will receive Monthly Risk Management Policy updates from Risk Oversight Committee and the Risk Management Committee; and the independent third -party provides Risk Management Compliance reporting. He then reviewed the Risk Oversight Committee (ROC) which will be comprised of the General Manager of Electric and Staff, the City Manager, the Assistant City Manager, and Finance Director. Bethapudi added that the ROC will provide: approval and Compliance of Transaction and risk limits; provide inputs to the risk management strategy; and receive weekly/monthly Risk Management updates from Risk Management Committee (RMC). He then reviewed the Risk Management Committee which will consist of the Energy Manager/QSE, Electric General Manager and Staff, and independent consultants. Bethapudi noted that the RMC will: implement the risk management strategy approved by the ROC; review existing and potential transactions, monitor proximity to limits, and help support the responsibilities of the ROC; and be responsible for the day-to-day execution and management of transactions. He then provided a high-level overview of the Risk Management Process and Risk Management Reporting. Fought asked about the ability of the proposed structure to make decisions in a fast-moving market. Bethapudi responded depending on the term of the decision being made, the appropriate level of the process will lead that decision. Fought stated that he wants flexibility to answer the changing market. Morgan stated that staff is setting up the right parameters on the front end will help with that. Bethapudi stated that by having a target in mind, it will help staff and the committee manage to reach that target. Pitts asked if each level will have a certain approval authority. Bethapudi responded yes. Pitts asked if approvals would only be sought at the meeting intervals or if approvals would be sought via electronic communication. Bethapudi responded that staff will identify transaction limits and there will have to be some flexibility. Pitts stated that the proposed structure reminded him of banking structure but moving at a faster pace. Bethapudi responded that is correct and sometimes transactions will happen very quickly. Triggs asked if there was a plan to utilize external auditors. Bethapudi responded yes and noted the third -party auditor will provide input before items come to Council. He added that from the auditors are from a risk management compliance point of view only and financials will remain the same. Bethapudi provided next steps. Nicholson congratulated Bethapudi on his first month and stated that she appreciated his presentation and thoughtfulness. C. Presentation, update, and discussion regarding the 2030 Plan and introduction to the Future Land Use Map -- Sofia Nelson, Planning Director Nelson presented the item and introduced Nat Waggoner, Susan Watkins, and Seth Gipson as part of her presentation team. She added that the presentation today is based on the good work of the Steering Committee. Nelson then reviewed the work done to date. She reviewed the Planning and Zoning Commission feedback that consisted of: modifying community commercial percentage share of residential and non-residential land uses; continuing to prioritize open space when increased density is being proposed; and adjusting density ranges upward with no need for an additional category. Nelson then shared the public outreach feedback that included: additional commercial node needed at Williams Drive/Ronald Reagan; growth in mining is concerning and is impacting adjacent subdivisions; and a vision is needed for infrastructure that is tied in with land use. She then reviewed the Fiscal Impact Model which allows: multiple scenarios allowing testing and comparing for property values, timing, and type of land uses; inform land use decisions and test "what if" alternatives; test and compare potential financial incentives; plan for short- and long-term operational and capital improvement impacts; and is not an economic impact model. Nelson then noted the Fiscal Impact Model Inputs of housing units, jobs, population, and non-residential acreage and outputs of non-residential square feet, residential taxable property value, non-residential taxable property and net fiscal impact. She then reviewed scenario development and the Development Map Pipeline. Nelson then turned the presentation over Seth Gipson who reviewed Citywide trends and an evaluation of projections. Nelson resumed the presentation and reviewed the work done by the 2030 Comprehensive Plan Steering Coming. She stated that staff asked the committee, "What work have you done to update the FLUM?" and the responses were: renamed and refined land use categories; divided parks and recreation and open space into separate categories; adjusted densities within categories; created Community Commercial and Regional Center categories; planned for land use with the use of legos; added residential and non-residential ratios; and utilized the fiscal impact model. Nelson stated that staff then asked the committee, "What are the benefits of the updates to the FLUM?" and the responses were: it helps citizens and developers understand the vision for the city as they plan for development of their property; expansion of mixed density opportunities; greater integration of Multi -Family and Commercial; addresses concerns of too much Multi -Family development; increased and spread out opportunities for commercial nodes which will help with traffic node and opportunities for amenities nearby; outlines possible densities; created Regional Commercial and Community Commercial nodes; included ratios for non-residential and residential development; and helps to plan out infrastructure. She stated that staff asked the committee "What concerns you about the updates to the FLUM?" and the responses were: does the map reflect current infrastructure? Infrastructure drives development; clarity needed on how residential ratio were developed; understanding how the FLUM will be implemented; within nodes how will ratios be implemented; and what is guidance versus what will require a map amendment. Nelson then stated that the staff asked the committee, "What concrete changes are needed, if any?" and the responses were: clarify language regarding mix density residential and establish a priority land use for each category. She said that staff finally asked the committee, "What final changes do you want to make, if any?" and the responses were to clarify language regarding mix density residential and establish a priority land use for each category. Pitts asked about the use of percentages for different uses rather than a range of hard numbers. Nelson responded that the percentages will allow for flexibility. Mayor Ross asked Nelson what she needed from Council. Nelson responded that she was looking for Council support and to see if Council had any additional suggestions. Mayor Ross stated that after the last steering committee meeting, more feedback from Council was needed. He added that builders be held accountable to the percentage requirements after building residential first and development agreement incentives are based upon completion Gonzalez noted that the requirements of developers could be implemented in agreements. Nelson responded that items that can be continued to be worked into implementation plan and recommendations made for specific categories. Mayor Ross asked that if anyone on Council feels strongly then get with Planning prior to next Council meeting. Nelson responded that staff will be back to present in December and January. Mayor Ross recessed at 3:49 p.m. and noted that Executive Session will begin at 4:00 p.m. 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 - Proposed settlement in The City of Georgetown, Texas v. Steele Georgetown LIHTC, LLC - Proposed Possession and Use Agreement in The City of Georgetown, Texas v. Forster & Giles, a partnership - Litigation update regarding The City of Georgetown v. Buckthorn Westex LLC - LHISD Waterline Easement - Nemir - PEC Franchise - Industrial District Agreement with Texas Crushed Stone Sec. 551.086: Certain Public Power Utilities: Competitive Matters - Purchased Power Update - Portfolio Manager RFP - Energy Risk Management Policy Sec. 551.087: Deliberation Regarding Economic Development Negotiations - Project Antler Sec. 551.072: Deliberations about Real Property - Sale of Property - Riverplace - 2nd and Austin -- Travis Baird, Real Estate Services Manager 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 - City Manager Work Plan Review Adjournment Approved by the Georgetown City Council on ^00J o AaNb Date <I'L CFM, Dale Ross, Mayor Attest: Ci , ecretary