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