HomeMy WebLinkAboutMIN 11.26.2019 CC-WNotice of Meeting of the
Governing Body of the
City of Georgetown, Texas
Tuesday, November 26, 2019
The Georgetown City Council will meet on Tuesday, November 26, 2019 at 3:00 PM at the Council
Chambers, at 510 West 9ffi 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 3:00 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.
Policy Development/Review Workshop — Call to order at 2:30 PM
A. Presentation and discussion regarding the City's Quarterly Financial Report, which includes
the Investment Reports for the City of Georgetown, Georgetown Transportation
Enhancement Corporation (GTEC), and the Georgetown Economic Development
Corporation (GEDCO) for the quarter ended September 30, 2019 -- Paul Diaz, Budget
Manager
Diaz presented the item and reviewed the General Fund revenues totaling $71,400,00.00, or
100.9% of budget. He added that during the Budget process, staff projected this segment of
revenue to finish at $71,200,000.00, a variance from actuals of 0.35%. Diaz then reviewed the
General Fund Sales Tax that represents 22% of budgeted revenue and through the fiscal year
sales tax revenue totals $16,600,000.00 or 104.1% of budget. He added that staff projected this
segment of revenue to finish at $16,700,000.00, a variance from actuals of -0.9%. Diaz
provided the General Fund Sales Tax History which is as follows: FY2017 - $13,595,005.00;
FY2018 - $14,827,612.00; and FY2019 - $16,581,705.00. He then reviewed Property Tax and
noted that it represents 20% of the general fund revenues and through the fiscal year property
tax revenue totals $13,800,000.00 or 99.6% of budget. Diaz added that the property tax is
projected to finish at $13,880,000.00, a variance from actuals of 0.6%. He then reviewed the
Development Revenue with development related revenue representing 5% of budget and
through the fiscal year development revenue totals $4,150,000.00 million or 125.5% of budget
with staff projecting this segment of revenue to finish at $3,720,000.00 million, a variance from
actuals of 11.4%. Diaz then reviewed Building Permits and provided a graph that shows a
significant increase in the number of building permits issued in August and September
compared to previous years. He then covered the Fire/EMS Revenue which represents 10%
of the general fund and is comprised of ESD 8 Contract ($3,500,000.00), EMS transport
revenue ($2,600,000.00), and SAFER & TASPP grants ($826,000.00). Diaz noted that FY2019
finished at $7,050,000.00, or 101.9% of budget and is projected at $6,880,000.00 in the Budget
process, a variance of 2.5%. He reviewed the Return on Investment (ROI) and noted that this
revenue represents 11% of total general fund revenues and is comprised of a transfer from the
Electric, Water, and Stormwater funds which finished FY2019 at $7,300,000.00, or 94.7% which
includes a cap on Electric ROI and is projected to end FY2019 at $7,200,000.00, a variance from
actuals of 1.2% due to higher water sales. Diaz reviewed the Franchise Fees projections that
represent 7% of the general fund revenues. He noted that the City collects franchise fees on
electric, water, cable TV, gas, telephone (land lines), stormwater, and irrigation and through
the fiscal year franchise fee revenue totals $5,640,000.00 or 103.9% of budget, which staff has
projected this segment of revenue to finish at $5,600,000.00, a variance from actuals of 1%.
Diaz then reviewed the General Fund Park and Rec Fees that represent 4% of the general fund
revenues. He noted that through the fiscal year parks and rec fee revenue totals $2,680,000.00
or 90.15% of budget and staff has projected this segment of revenue to finish at $2,700,00.00,
a variance from actuals of -1.5%. Diaz covered the General Fund Revenues Summary and
overall, revenues finished within 0.35% of projections, $245,826.00 higher the projected. He
added that the two largest streams of revenue property tax and sales finished less than with
1% of projections and development related revenue was 11.4% variance due to continued
growth. Diaz reviewed the General Fund Expenses that total $68,800,000.00, or 97% of budget
and have projected total expenses to finish at $70,600,000.00, a variance from actuals of 2.8%
with the largest savings in the streets department and the Fire division, and Traffic Impact
Analysis (TIA) and Annexation savings in Planning. He then provided a General Fund
Summary and noted that the FY2020 beginning fund balance is budgeted at $11,500,000.00
and if FY2019 funds are rolled forward in the December amendment, the amount transferred
to the Council Fund would adjust. Diaz noted that staff will bring back the transfer to the
Council Fund after the Roll Forward Amendment and Year -End Audit are complete. He then
reviewed the Electric Fund Revenues and noted that operating revenue in the Electric Fund
totals $85,700,000.00 through the fiscal year, or 101.4% of budget and 0.33% projections. Diaz
stated that Electric revenue sales, the largest component of operating revenue, totals
$80,200,000.00 and the Power Cost Adjustment (PCA) increase occurred in February and June.
He added that other revenues, which is comprised of the AMR allocation, developer
contributions, and other components, totals $5,300,000.00. Diaz reviewed the Electric Fund
Expenses and noted that the operating expenses in the Electric Fund total $78.4 million
through the quarter, with purchase power expenses totaling $58,500,000.00 while congestion
revenue rights (CRRs) credits total-$2,800,000.00. He continued that the net purchase power
totals $55,600,000.00, which is $5,450,000.00 higher than budgeted or 10.8% which includes
congestion and curtailment, late summer price spikes and corrected accounting accruals
process to improve the matching of revenues and expenses. Diaz reviewed the Electric
Amendment and noted that staff is proposing several amendments to the Electric Fund, both
in revenues and expenses. He added that the next item on the agenda will be a detailed
explanation of these proposed amendments and the budget column in the fund schedule does
not reflect these proposed changes as they have not been approved by Council. Diaz
continued that the Year -To -Date column is shown as though these amendments have been
approved, adjustment to purchased power and CRRs ($5,400,000.00), and the selling of assets
including: fiber network installed from 2003 to 2011 to the IT fund ($645,000.00 - Multi -year
process); land to the Fleet Fund ($481,000.00); electric's share of the Westside Service Center
($356,000.00); and Renewable Energy Credits in the amount of ($722,000.00). He continued
and noted the increase in the transfer from the South Georgetown TIRZ for capital
infrastructure investment from previous fiscal years ($85,000.00), recognizing additional
utility revenue ($1,200,000.00), reduce operating expenses ($440,000.00), reducing the Return
on Investment transfer to the General Fund ($500,000.00), not moving forward with
Bloomberg Grant ($100,000.00), reducing capital expenses by ($160,000.00), and reimbursing
debt expenses for Westside Service Center ($775,000.00) and reduce remaining debt liability
($1,500,000.00). Diaz then provided an Electric Summary Chart. He then reviewed the Water
Fund noting that overall water operating revenue totals $67,800,000.00, or 113.6% of budget
with higher than projected water sales, leading to a positive impact on ROI and Franchise
Fees in the General Fund. Diaz noted that the Capital Recovery Fees finished FY2019 higher
than budget and higher than projected and stated that over the last three fiscal years, the City
has seen strong growth in this revenue stream. He continued that there were no non -
operating revenues (bond proceeds) in the water fund in FY2019, water operating expenses
total $37,000,000.00, or 99% of budget, and non -operating expenses total $37,400,000.00. Diaz
stated that the Capital Improvement budget in the Water Fund totals $85,660,000.00 and staff
will be bringing forward a CIP rollforward amendment in December to move funds unspent
in FY2019 into the FY2020 Budget with projects such as the Berry Creek Interceptor and Lake
Water Treatment Plant. He added that the debt service actuals for FY2019 exceed budget due
to the reimbursement of debt principal and interest payment made by Electric for Westside
Service Center. Diaz the provided a Water Fund Summary chart. He reviewed the Water
Fund and CIP noting that the FY2020 Capital Improvement Plan contains: new Water Projects
total $18,600,000.00; new Wastewater Projects total $17,000,000.00; and $45,000,000.00 of
FY2019 Water/Wastewater were pre -rolled in the FY2020 Budget process. Diaz said that staff
will bring the FY2020 Rollforward Amendment in December with additional projects that
were not rolled in the budget process. He then reviewed the CVB Fund and noted that overall
revenue in the fund totals $1,600,000.00, or 103.8% of budget with Hotel Occupancy Tax
revenue totaling $1,400,000.00, or 103.2 of budget. Diaz noted that the year to date expenses
in the Convention & Visitors Bureau Fund total $1,300,000.00, or 98.6% of budget and the fund
finished FY2019 with a fund balance of $1,540,000.00 and meets the 90-day operational
reserve. He then provided a CVB Summary chart. Diaz reviewed the Airport Fund and noted
that operating revenue totals $3,400,000.00, which represents 88.2% of budget and Fuel Sales
are less than Budget. He added that the margin on fuel is fixed and with the depressed price
on fuel, the City is selling gas at a lesser rate than budgeted; however, the cost of the fuel is
also below the budgeted amount. Diaz stated that operation expenses in the Airport fund
total $3,050,000.00, or 86% of budget and non -operating expenses total $717,491.00. He added
that staff will be bringing forward a CIP rollforward amendment in December to move capital
funds unspent in FY2019 into the FY2020 Budget. Diaz then reviewed the Investment Report.
Pitts asked about staff's approach to calculating sales tax projections. Diaz responded that
staff always considers the development pipeline. Pitts noted that he was concerned about the
use of projects based on business that are not currently up and running. David Morgan, City
Manager, responded that the budget office forecasts conservatively and staff will track the
sales tax closely. Pitts asked about the carried forward water bonds. Diaz responded that
they were previously issued bonds that staff didn't want represented as cash in the budget.
Pitts asked about the timing of the use of the bonds. Morgan responded that the projects are
multi -year projects and staff will bring forward CIP update. Pitts asked if staff knew how
many gallons of fuel were sold at the airport. Diaz responded that staff could get those
numbers. Pitts asked about franchise fees and if there is anything in the contract with
Suddenlink that the City could use to get Suddenlink's attention. Morgan responded that the
City is limited by State law and the City is allowed to charge rent for right-of-way. He added
that staff has met with executives at Suddenlink and they mentioned upgrades they have
completed. Morgan noted that the City does not have an exclusive franchise with Suddenlink,
and the City would be happy to have another provider.
Gonzalez asked if the City could different provider a smaller franchise fee to encourage them
to come. Morgan responded that staff would review options.
B. Presentation and discussion regarding the FY2019 Year -End Budget Amendment -- Paul Diaz,
Budget Manager
Diaz presented the item and reviewed the Electric Fund's Operating Revenue recognizing an
additional $1,200,000.00 in operating revenue primarily from energy sales. He then reviewed
the Operating Expense including: an increase to the purchase power budget by $5,200,000.00
and decrease the CRR Credits by $178,000.00; recognizing operational savings in the amount
of $440,251.00, primarily from reallocating costs of conservation programs and reducing the
ROI to the General Fund by $500,000.00. Diaz then reviewed the Non -Operating Revenue
including: a reduction in grant revenue of $100,000.00 from not moving forward with the
Bloomberg Grant; selling land owned by the Electric fund to the Fleet Fund for $481,927.00 -
the land will be the site of the new Fleet Service Center; and a Water Fund purchase the
Electric Fund's portion of the Westside Service Center including $1,500,000.00 of revenue to
offset the remaining debt liability and the reimbursement for the cash portion of the
construction of the Westside Service Center for $356,894.00. He then reviewed the Non -
Operating Revenue by: increasing the transfer amount from the South Georgetown TIRZ
Fund to the Electric Fund by an additional $85,405.00 for capital infrastructure investment;
selling a portion of the fiber network to the IT Fund in the amount of $645,000.00; and
recognizing Renewable Energy Credits sales totaling $722,000.00. Diaz reviewed the Non-
Operating Expense including a reduction in CIP expense of $160,000.00 and a reimbursement
for prior debt service on Westside Service Center $775,000.00.
Jonrowe if the IT department was prepared to assume the ongoing maintenance costs for
fiber. Morgan responded that the FY2021 budget will address the use of fiber citywide. He
added there are steps in place to make sure that the IT department can own and maintain the
system.
Fought asked for clarification that the amounts being discussed were all internal allocations.
Morgan responded yes, with the exception of the sale of renewable energy tax credits.
Pitts noted the reallocation and clean-up of the funds and asked why some of these items
were placed in the Electric Fund to begin with. Morgan responded that some of that predates
him. He added that with the fiber there is a requirement for the Electric Utility and other
things that evolved over time. Morgan stated that now staff is looking at what makes the
most sense for different departments and is making a concerted effort to improve the position
of the Electric Fund. Pitts stated that staff has done a good job of finding things to be done to
clean up the fund, but next year the fund may have to stand on its own. He then asked about
the process for selling renewable energy credits. Morgan responded that they City has sold
renewable energy credits in the past but never to this level. He added that for the sake of
transparency staff is now highlighting these sales. Morgan noted that staff is updating the
risk management policy and how renewable energy credits are handled. Pitts asked about
the financial benefit of retiring credits in the past. Morgan explained in the past the City was
either retiring the credits or holding on to them. Daniel Bethapudi, General Manager of
Electric, noted that staff is currently reviewing the policy. General discussion about past
practices related to the history of selling/not selling renewable energy credits. Pitts asked
about the goals for rate stabilization in the Electric Fund. Morgan responded noting that the
low end goal for rate stabilization is $15,000,000.00.
Triggs noted that the updating of the balance sheet is normal and meant for the sake of
transparency and that these changes are a good step to clean things up.
Gonzalez noted that the timing of selling the renewable selling of credits can determine how
profitable they are and asked that staff consider what triggers the sale of credits in the policy.
Morgan responded that the credits can be sold at different times and Council Member
Gonzalez made a good point.
Mayor Ross commended Morgan on taking action on the allocations. He asked if staff
planned on using subject matter experts when looking at allocations for FY2021. Morgan
responded that there are different ways that staff can look at allocations and noted that staff
has discussed the possibility of using outside sources when reviewing allocations.
Diaz resumed the Electric Summary chart. He then reviewed the Water Fund and its
Operating Revenue recognizing $8,100,000.00 in operating revenue and additional revenue
primarily from the sale of water, capital recovery fees, and interest. Diaz then reviewed the
Non -Operating Expenditures including: purchasing the Electric Funds portion of the
Westside Service Center that lead to $1,500,000.00 transfer out to the Electric Fund for to cover
remaining debt liability and $365,895.00 transfer out to the Electric Fund for the cash portion
previously paid by Electric for the Westside Service Center; reimbursement of $470,000.00 of
principal, and $305,234.00 of interest, previously paid by the Electric Fund; and an
appropriation of $528,000.00 for the reallocation of conservation program costs that primarily
impact water use. He reviewed the Internal Service Funds and noted that the Fleet Fund has
a corresponding amendment to buy land on FM1460 from Electric for a future vehicle services
center, $481,000.00.
Information Technology Fund. Diaz also noted the corresponding amendment to buy a
portion of the fiber network owned and operated by Electric and that this transaction would
purchase all the fiber infrastructure installed by electric from 2003 to 2011 at a cost of
$645,045.00. He then noted that staff will develop a multi -year plan to purchase the remainder
of assets and allocate back operations and maintenance costs to using departments. Diaz
reviewed the Rivery TIRZ Fund and recognized $43,375.00 of additional revenue and
appropriate $817.00 of debt service handling fees. He noted the South Georgetown TIRZ
Fund will have a corresponding amendment to recognize $85,405.00 of additional revenue
from ad valorem taxes and allocated interest. Staff is proposing to transfer the additional
revenue to Fund 610 — Electric for reimbursement of capital improvement. Diaz stated that
the PEG Fee will recognize $8,374.00 of additional PEG Fee revenue to offset expense overages
of $422.00 for communications equipment and Transportation will expense an additional
$10,820.00 that was not budgeted in 2019 for the Southwest Bypass Project phase that was in
partnership with the County. The City is working with the County to recover the receivable
for completed work and then will close out the fund.
Council had no additional questions.
C. Presentation and discussion regarding Transportation Impact Fees -- Wesley Wright, PE,
Systems Engineering Director
Wright introduced the item and then turned the presentation over to Jake Gutekunst with
Kimley Horn. Gutekunst reviewed the transportation funding needs of the City that include
existing needs of maintenance, operations, and complete reconstruction, and the growth
needs of capital. He then reviewed a map of the Overall Transportation Plan 2035. Gutekunst
then reviewed the existing funding options that include: property taxes; bonds; transportation
utility fee; and PIDs (Public Improvement District). He then reviewed the growth -related
funding options that include: TIRZ (Tax Increment Reinvestment Zone); TRZ (Transportation
Reinvestment Zone); developer agreements (380 Agreement); MUDs (Municipal Utility
District); Traffic Impact Analysis (TIAs); and Impact Fees. He then reviewed why funding is
this important for growth and noted that: infrastructure costs greatly exceed traditional tax
and fee collection rates in fast-growing cities; federal/state funding no longer keeps up with
need; funding mechanisms for infrastructure (especially transportation) are limited in Texas;
and "growth should pay for growth" is logical and reasonable. Gutekunst then reviewed a
map that provided theoretical scenarios. He then reviewed the current practice and that a
Traffic Impact Analysis is when a development is anticipated to generate more than 2,000
daily trips, a study is done to determine cost -share of improvements and noted issues which
include: this is imperfect due to "last person iri' taking a greater share; takes time, typically
3-6 months to complete; no formal update process; funds are constrained; developer
uncertainty in process; and receiving $2,600,000.00 in the last 20 years from TIAs.
Mayor Ross asked what consist of a daily trip. Gutekunst responded that is when you leave
and come home from work, each way is a trip.
Gutekunst continued the presentation and reviewed City policy decisions and if there is a
better way to do this. He noted that the City needs a system that is: predictable for the
development community and City; equitable allowing for equal development paying an
equal fee; transparent; flexible with funds collected used to add capacity to the system, not sit
in a bank or in a location where they aren't needed; legal and compliant with proportionality
rules (Ch. 212 LGC); and consistent with the City's overall goals and objectives for growth
which could perhaps even encourage development where infrastructure already exists.
Gutekunst review impact fee basics and that they are: mechanism to recover infrastructure
costs required to serve future development; governed by Chapter 395 of the Texas Local
Government Code which was established in Texas in 1987; water, wastewater, roadway, and
drainage impact fees allowed in Texas; other states may have school district, police, fire,
parks, and/or library impact fees; other municipalities that have adopted the fees include
Round Rock and New Braunfels; and other municipalities considering the fees include Austin
and Buda. He then reviewed impact fee components that include: service areas; land use
assumptions; service units; Capital Improvements Plan; maximum fee calculation; initial
collection rate; and policy.
Pitts asked if the proposed study is to look at impact fees only. Gutekunst responded yes.
Pitts asked if there were other tools communities utilize to improve their transportation
network. Gutekunst responded that some communities will adopt a boundaries street policy.
He added that fees have to follow certain parts of the LGC. Gutekunst noted a few other
options that are not as widely used. Pitts asked if the City was reliant upon voter approved
bonds to build roads. Morgan responded that the City has developer requirements through
the TIA process and that is why the City wants to study the possibility of utilizing impact
fees. Pitts noted that transportation is a citywide concern. General discussion about the
limitation of current funding sources for road improvements.
Fought stated that he supports studying the possibility of using impact fees due to the limited
nature of Transportation Impact Fees.
Gutekunst resumed the presentation and reviewed the impact fee components that include:
Service Areas - funds collected within a service area must be spent on projects within the same
service area within 10 years; Land Use Assumptions that will be consistent with Comp Plan
and establishes infrastructure demands and master plans; service unit - roadway utilizes
vehicle miles; Capital Improvement Plans. He then reviewed how the maximum fee is
calculated and collection rate options. Gutekunst reviewed the proposed schedule for the
study and stakeholder engagement. He noted that two next steps needed are establishing an
advisory committee and agreeing on the service areas.
Wright noted the service areas and commented on the proposed service area map. Gutekunst
noted that if a street is a border for multiple services areas, you can fund from both service
areas.
Mayor Ross asked what staff needs from Council. Wright responded approval from Council
on continuing the study and approval on service area. Mayor Ross asked how the service
areas were selected. Gutekunst clarified the process for determining services areas and the
six -mile trip calculation.
Fought stated that he doesn't have expertise to overrule on service areas.
Mayor Ross recessed at 4:25 p.m. and noted that Executive Session will begin at 4:30 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 Possession and Use Agreement in The City of Georgetown, Texas v. Forster &
Giles, a partnership
- Clearway
Sec. 551.086: Certain Public Power Utilities: Competitive Matters
- Purchase Power Update
Sec. 551.087: Deliberation Regarding Economic Development Negotiations
- Project Beige
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 2( Y F, u)/ o 14i
Date
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Dale Ross, Mayor Attest: Cityecretary