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HomeMy WebLinkAbout081009R CC Min0 The City of West University Place A Neighborhood City CITY COUNCIL Bob Kelly, Mayor Bob Fry, Council member George Boehme, Councilmember Steven Segal, Councilmember Chuck Guffey, Councilmember STAFF Michael Ross, City Manager Alan Petrov, City Attorney Thelma Lenz, City Secretary CITY COUNCIL MEETING MINUTES City Council of the City of West University Place, Texas, met in a special workshop meeting and regular session Monday, August 10, 2009, in the Municipal Building, 3800 University Boulevard, West University Place, Texas beginning at 5:00 p.m. Council and staff in attendance: Mayor Kelly, Mayor Pro Tern Fry, Councilmembers Boehme, Segal and Guffey, City Manager Ross, City Secretary Lenz, City Attorney Petrov, City Manager/Public Works Director Peifer, Finance Director Daugherty, Human Resources Director Standorf, Police Chief Walker, and Fire Chief Rails. CALL TO ORDER Mayor Kelly called the special workshop meeting to order at 5:10 p.m. Agenda items were as follows. 1. Board and Committee Interviews City Council interviewed candidates for the various City boards and commissions. The special workshop meeting closed at 6:28 p.m. REGULAR MEETING: Mayor Kelly called the regular meeting to order at approximately 6:30 p.m. in the Council Chambers. Notice of the regular meeting was duly posted in accordance with the Texas Government Code, Chapter 551. Agenda items were as follows: Mayor Pro Tern Fry led the Pledge of Allegiance and the Pledge to the Texas Flag. 2. Public Comments There were no comments from the public. 3. Consent Agenda All Consent Agenda items listed are considered to be routine by the City Council and will be enacted by one motion. There will be no separate discussion of these items unless a Council member requests in which event the item will be removed from the Consent Agenda and considered in its normal sequence on the agenda. City Council Minutes, August 10, 2009 A. City Council Minutes Approve City Council meeting minutes and Employee Benefits Trust minutes of July 27, 2009. B. Matters pertaining to the second and final reading of an ordinance relating to water rates; amending the fee schedule of the Code of Ordinances of the City of West University Place, Texas; and containing findings and provisions relating to the subject. Recommended Action: Adopt Ordinance on second and final reading. C. Software and Support Contract Matters related to a contract with Innoprise for replacement software, conversion services, new services, support services, and new software development. Recommended Action: Approve a 5- year contract with Innoprise Software, Inc., in an annual amount of $42,588.00. D. Internet Connection Services Contract Matters related to a contract with Comcast Commercial Services to provide the City with internet connection services. Recommended Action: Approve a 5-year contract with Comcast Commercial Services in an annual amount of $14,580.00. Councilmember Guffey pulled Consent Agenda items C and D for discussion. Councilmember Segal moved to approve Consent Agenda items A and B as presented. Mayor Pro Tern Fry seconded the motion. MOTION PASSED. Ayes: Kelly, Fry, Segal, Boehme, and Guffey Noes: None Absent: None Regarding Consent Agenda items C and D, Councilmember Guffey asked the purpose of five- year contracts. Finance Director Daugherty explained that the five-year contracts have a 90-day out clause to where we can give notice of termination. City Manager Ross stated that it allowed us to get a better rate in the bidding process and said if Council does not approve these expenditures during the budget process each year, staff would cancel the contract within the 90-day period before the beginning of a new year. Mayor Pro Tern Fry moved to accept the recommendations for (C) the software support contract and (D) the internet connection services contract that were a part of the original Consent Agenda. Councilmember Boehme seconded the motion. MOTION PASSED. Ayes: Kelly, Fry, Segal, Boehme, and Guffey Noes: None Absent: None 4. Texas Municipal Retirement System (TMRS) Matters related to the City's employee retirement benefits, including discussions with a TMRS representative. Recommended Action: Discuss benefits and provide direction to City Manager. Anthony Mills, Regional Manager and Leslie Hardy, In-House Actuary, with TMRS were on hand to provide information and answer questions. City Council Minutes, August 10, 2009 Mayor Kelly started by stating that he and Councilmember Segal met with the TMRS representatives before the Council meeting and it brought about more concerns regarding the numbers relating to the retirement package. He said his primary reason for wanting to see the numbers was to give Council some idea of the impact they can have on the City if the numbers change. Mayor Kelly said the three areas he has been able to identify as the driving forces for the high numbers are: the matching ratio; annuity increase (COLA); and updated service credits. He said we are at the highest level you can have in TMRS in all three areas. Mayor Kelly said the things that have caused West U and other cities to look at this are the general economy as a whole and because the legislature changed the plan to allow TMRS to put more funds into stocks, which is a significant change in the risk structure. Mr. Mills began his presentation and said he wanted to make sure that all members of the Council are clear on just how the funding in TMRS works and to clarify some items that have been put in the public that are either just partly accurate or just downright wrong. Mr. Mills said the different provisions in our plan do affect the City's rate and the unfunded actuarial liability (UAL), but he doesn't know of too many retirement plans that would not have a UAL. Regarding the UAL, Mr. Mills said what TMRS has done over the last couple of years has probably been the most substantive changes in its history. He said they changed the way they account for certain provisions that we have adopted in our plan, specifically the updated service credits and the cost of living adjustments, which are the two cost drivers, the COLA more so than the updated service credit. Mr. Mills said the updated service credit is related specifically to active employees while the COLA is adopted by the Council for members that have retired from the City. Mr. Mills said one of the reasons that TMRS made the changes it has made over the last couple of years was in order to move towards a more prospective view. He said to do that they changed to the Projected Unit Credit Methodology (PUCM), which will add to the City's liabilities and increase the rate the City formerly paid into TMRS to pay for the same benefits, because we are no longer looking a year-by-year view, but rather prospectively. Mr. Mills said when looking at the City's demographics, TMRS is accounting for what it anticipates the cost of the liabilities to be in future years, which explicitly says the City's UAL should increase if the City keeps the plan as it is. He said the movement on the City's UAL will be affected by the rate we pay each year. Mr. Mills said it has been reported in the public domain that the UAL that TMRS has given the City must be paid for in eight years, which is a misrepresentation of how the plan works. He said this UAL is amortized and said the scheduled liability is to be paid for over a 30-year period and we are now in the 29" year. He said the 8-year phase-in is a change from the former method of calculating the cost of the City's liabilities to the new PUCM. He said when TMRS made the change to bring the City forward, it put an automatic default in the system so that the City would pay a portion of the higher contribution rate that it is charging the City over an 8-year period. He said during this time it will be the first of net pension obligations that the City would incur, because, traditionally, the City has paid its full contribution rate since 1950. Mr. Mills said going to the PUCM immediately meant that some cities saw a significantly higher rate and because of that, TMRS gave the 8-year phase in period. City Council Minutes, August 10, 2009 Mr. Mills reiterated that unfunded actuarial liability is an amortization schedule of 30-years for a city like West University Place and that the 8-year phase-in is simply a stair step period for the City to gradually get up to the full contribution rate that TMRS calculated for the 2009 calendar year. Mr. Mills said going forward, as the City continues to pay the rate that TMRS sends us each year, that rate will ultimately get the City back to the full contribution rate. He said any contributions the City makes over and above the phase-in amount sent to the City each year during the 8-year window will count directly towards the unfunded actuarial liability and due to the way the rates are calculated it will run about a year in arrears; so, any contributions made over and beyond the City's phase-in rate for this year, will not affect the City's rate until 2011. Mr. Mills said it has been characterized as though the legislature has dictated to TMRS how the 5 percent to the member's accounts should be treated. He said it was TMRS that went to the legislature and asked for a guaranteed five percent to employee accounts. He said there are three main pots of money that TMRS oversees, which are the employee's savings fund, the municipal accumulation fund, and the current senior annuity reserve fund (CSARF). He then proceeded to explain each fund. Mr. Mills said one of the things that TMRS asked for in the legislative session was that we put a guarantee in law that we would pay at least 5 percent to the member's account and untie the City's account from that 5 percent guarantee. Simply put, he said that with a more robust investment portfolio, which means moving away from the fixed income TMRS had historically invested in, it guarantees that the member's accounts continue to grow and that the cities rates would not be as high as they would have been had they not been able to continue with the diversification process, because they are accounting for and assuming a higher return on a more diversified asset allocation in their investments. In addition to the investment change and the change in the accounting methodology, Mr. Mills said that TMRS also closed the amortization schedule for cities. He said it had been a rolling amortization schedule, where each year it would reset the schedule for paying down the liability. He said what they found for the City of West U and others, who are not seeing their payrolls grow as rapidly as TMRS assumes, is that the liability continues to increase while the funded ratio continues to decrease. He said by diversifying, by closing the amortization schedule, and by advanced funding the liabilities the City incurs, TMRS is now moving the City towards a 100 percent ratio at a faster pace than we would have under the previous methods. Councilmember Guffey asked Mr. Mills to provide more information on the updated service credit. Mr. Mills replied that the updated service credit brings retiree benefits up so that they most accurately reflect the best plan that was in place during an employee's career, and in some part, the best salary that an employee had during his or her career with the City. Mr. Mills explained the updated service credit formula. He said each year that the updated service credit is on the books for the City, TMRS reviews all of the employee's data, disregards the most . recent year of salary, and then goes back and finds the highest 36 consecutive months. He said out of the 36 months, they drop the highest month and the lowest month to take away any anomalies in a salary to end up with an updated service credit average salary. Mr. Mills pointed out that the City does not have to grant 100 percent updated service credit, but could offer 75 or 50 percent of the updated service credit. Councilmember Segal asked how salaries fit in to updated service credit City Council Minutes, August 10, 2009 Mr. Mills said the only salary TMRS looks at when calculating an updated service credit is the highest 36 consecutive months. He said look at the updated service credit as a separate component from the plan design. He said once the salary is determined, then they look at the current plan design so that the career employee can get the net benefit of having worked under that plan design. Mr. Mills said all throughout an employee's career, they will always track whatever actual match was in place and they never go back to change that. Mr. Stills clarified that even though the updated service credit is something that the City has in effect, it is not something an employee automatically receives. In response to a question by Councilmember Boehme, Mr. Mills explained that about 80 percent of 140,000 active TMRS memberships are covered by cities that have updated service credit. Mr. Mills said he will provide the names of the cities and other information to Council as soon as possible. Mayor Pro Tern Fry asked Mr. Mills if he has an opinion as to why a city would pay social security and pay into this plan. Mr. Mills said he feels it's because TMRS is not going to be enough upon a member's retirement to sustain the lifestyle an employee would like to sustain. Mayor Kelly noted that Bellaire employees do not pay into social security. Councilmember Boehme said the City had an option to opt out of social security in the mid 1980's and chose not to do so. He also stated that it is safe and important to note, as we talk about the competitive feature of our benefit plan we offer employees, that not only is the City paying 7.65 percent, but so are the employees, which decreases their take home pay by 7.65 percent. Councilmember Guffey said he has been under both contributions and defined benefits and said he thinks this is a great plan because it seems to have the best features of both of them, especially picking the stocks for those employees that are not good at picking their own. Councilmember Guffey asked Mr. Mills if there are any cities that have cut back on the benefits in the last year or two. Mr. Mills replied that most cities have managed not to, so far, in order to see if they are going to get any relief in the way that TMRS now calculates the COLA, which is the real cost driver in the plan. Mr. Mills pointed out that the current way COLA is calculated is by an accumulative effect, which means that if the City ever turns off the COLA and the rules stay as they are today, then at some point down the road the members that retire from the City lose ground. Also, if it's turned off and the City decides to turn it back on at some point in the future, the way that it is currently calculated, TMRS will go back to the original annuity and ultimately the City will have to fill end the gap. Councilmember Segal asked where the straight line allocation to cities is and where does discretion of TMRS come in. Ms. Hardy explained that right now TMRS has to earn 5.9 percent overall in order to be able to credit 7.5 percent to meet their assumptions. She said they have to be barely under 6 percent of the total fund in order to be able to credit the 5 percent to the employees (not optional), credit 5 percent to the CSARF (not optional), and credit the 7.5 percent to cities, which are assumed assumption for the cities each year. She also said that if there is a windfall after TMRS has made its allocations, the TMRS Board of Trustees then has the discretion to give back to the cities to make them whole, which they will always do first. She said TMRS will not take away from the cities and let them get hit on the downside without making them whole on the upside. City Council Minutes, August 10, 2009 Mayor Kelly provided closing remarks. He said City Council is the firewall and represents the taxpayers and this is their chance to challenge TMRS on its concepts. He said the TMRS Board does not include any elected official and it's the Board that makes the TMRS policies and that they have a fiduciary duty to the beneficiaries of the plan. Mayor Kelly said we have every addition to the plan and there is only way to go, which is down. He said you can't add any more bells and whistles, you can't increase the matching, and you can't increase the contribution. He said we may have been the benchmark city, but it was a different world then on retirement plans and what people expected. Mayor Kelly said the charge of this Council is to take a hard look at the plan and decide whether this is something financially they can justify to the citizens of West U. Mr. Mills ended by saying that TMRS has changed over the years at the request and needs of cities. He said nothing changes very quickly because they have to have time to get enough perspective to know what they need to do. He said the changes that were made are considered proactive because they recognize and understand that gatekeepers for cities and the residents are not endless streams of revenue. Councilmember Segal said he thinks the presentation showed Council what the City would be headed for in a shortfall if we didn't recognize the liabilities which our current plan set us up for 20 years from now. He said we definitely have to take a look at this, but without these changes, Councils' 10 to 15 years from now would be getting the call to pay it rather than to look whether we can afford it. Councilmember Boehme said he likes comparing apples with apples, so he would like more information on other cities and what they are contemplating. Mr. Mills said staff has some of what he is requesting, but he will get with staff to make sure Council gets all of what it needs. 5. TMRS Consultant Matters pertaining to hiring a consultant to research and report on City retirement benefits. Recommended Action: If desired, authorize City Manager to negotiate a contract with an expert in matters relating to government and private retirement packages. Mayor Kelly said after the presentation and questions and answers by TMRS, he feels Council has the information needed to get through the budget session and no longer feels that a consultant is necessary. No action necessary. 6. Public Safety Facilities Matters related to the consideration of design options for the proposed public safety facilities. Recommended Action: Authorize City Manager engage PGAL for preliminary design services in an amount not to exceed $11,500. City Manager Ross said Pierce Goodwin Alexander and Linville provided a proposal to continue with preliminary architectural design services and the preparation of a project budget and schedule for an amount not to exceed $11,500 for work that includes further evaluation of both Options 2 and 6 of the PGAL designs. Mr. Ross said if Council wants to only consider Option 6, which is the option to attach the police facility to end of City Hall, that cost could be slightly reduced to approximately $9,000. Mayor Kelly asked Fire Chief Rails if Option 6 works for the Fire Department. Fire Chief Rails said Option 6 includes a dormitory for female firefighters and a locker room, but there is the issue that the City Council Minutes, August 10, 2009 truck room is too small for the trucks. He said there is less than 3 inches of clearance from the top of the new fire truck and the top of the door that it backs into and so he suggests raising the roof on the apparatus room and getting 14-foot doors to replace the 10-foot doors. Other than that, he said Option 6 works for the Fire Department. Police Chief Walker said Option 6 is good because it gets the job done faster, but he thinks Option 2 would be better for the Police Department and the Public Works Department long-term. Mr. Gerber stated that in his initial numbers, Option 2 required more funds because it involves tearing down two buildings and not one. He said it is over a $2 million difference, which does not factor in relocating components to the Braeswood site. Mayor Pro Tern Fry moved to authorize the City Manager to sign a contract with PGAL for an amount not to exceed $11,500. Councilmember Boehme seconded the motion. City Manager Ross asked if Option 2 also included meeting the Fire Department needs. Mr. Gerber said the current budget does not include all of what Chief Rall's mentioned, but said it does include the expansion of the second floor to accommodate female firefighters. Councilmember Boehme asked if staff recommends one of these options. City Manager Ross said it is staff's job to try and look 30 to 50 years in the future and staff's recommendation 3 years ago, and still today, would be to go with Option 2, because it is the best overall solution for the police, fire, public works, and the public's needs as far as having one stop shopping. Councilmember Boehme said one stop shopping is less important to him than upgrading the quality of our public safety's infrastructure and technology and Option 6 seems to do that quicker. However, he said he is willing to support whatever the majority supports in order to get things moving forward. City Manager Ross said based on Council's approval tonight, staff will continue to flush out the two options and look at the different financing methods, etc., and let Council ultimately tell us which direction it prefers. Mayor Kelly confirmed his understanding that we would be looking at both Option 2 and Option 6 and confirmed with Mr. Gerber that Option 2 includes tearing down the Public Works Building, adding on to City Hall for Public Works and Fire Department needs, and building a new Police Station. He also confirmed with Mr. Gerber that the price difference between Option 6 and Option 2 is $2,000,000. Mayor Kelly said if the City spends $6,000,000 to build one building for the police station, how do we build a public works building for only $2,000,000 more? Mr. Gerber said because the public works component is a much smaller piece, and the price doesn't include an additional approximate cost of $1.5 million to move components to the Braeswood site. Mayor Kelly said he will have a problem down the road to support Option 2 and has reservation about voting in favor at this point. At this time Mayor Kelly called for a vote to the motion by Mayor Pro Tern Fry and second by Councilmember Boehme. MOTION PASSED. Ayes: Kelly, Fry, Segal, Boehme, and Guffey Noes: None Absent: None City Council Minutes, August 10, 2009 7. Colonial Pool and Recreation Center and West University Place Recreation Center Matters related to the ratification of Colonial Pool and Recreation Center Refunds and Discounts for Membership to the West University Place Recreation Center. Recommended Action: Approve ratification of refunds and discounts. Parks and Recreation Director O'Connor presented and said that on June 10, 2009, Council authorized the closure of Colonial Park Pool to be in effect at the conclusion of the 2009 Labor Day weekend. He said staff made an assumption at that same meeting that they were to move forward with refunding unused portions of active memberships beyond the point of the closing. He said staff also took some license in rewarding long standing adult members to our lap swimming operations, weight room, cardio-vascular, and racquetball memberships to offer them a free month membership at the new facility once it was completed. Mr. O'Connor said the cost for the Colonial Park Pool and Recreation Center refunds at this point would be $34,188.61, which are monies that members paid in good faith for their memberships not knowing that the facility would close on September 8. He said the estimated preferred customer credit costs would be $25 each to 150 members (members who consistently participated for 3 years on longer) for the 6 months inconvenience of being without a facility, which totals $3,750.00. For both refunds and credits, the estimated grand total is right at $38,000. Mr. O'Connor said not that this amount is insignificant, but staff estimates, conservatively, that the savings in operational costs by closing the facility on September 8 through December 31 is about $80,000. Mr. O'Connor said because Council did not formerly approve the free month offer and Council did not vote on the refunding of the unused portions of memberships that were sold, staff is recommending that Council ratify the promise of a free month membership to the new West University Recreation Center, specifically for long standing resident Colonial members and to authorize staff to facilitate full refunds for all Colonial members for any time remaining on their memberships. Councilmember Segal moved to only approve pro-rated refunds to all Colonial members for the time remaining on their current memberships after September 7, 2009. Mayor Pro Tern Fry seconded the motion. MOTION PASSED. Ayes: Kelly, Fry, Segal, Boehme, and Guffey Noes: None Absent: None Mayor Pro Tern Fry moved on the second issue to authorize giving a free first month memberships to the West U Recreation Center, specifically for long standing resident Colonial members. Councilmember Guffey seconded the motion and then amended the motion to offer three months free instead of one month. There was no second to the amended motion and it failed for lack of a second. Discussion regarding the original motion by Mayor Pro Tern Fry ensued. Councilmember Segal said we've done what is fair by paying people for time they paid for and are not going to get and said he doesn't mind some kind of encouragement to bring the lap swimmers back to the Recreation Center when it opens, though he is concerned about the definition of long-term residents. He said he would like staff to revisit this and maybe come up with a promotional idea and because we are also going to have classes and have other people with swimming memberships and thinks that the way it is written doesn't make a lot of sense. He said we need to come up with something to reward and encourage people to come to the new Recreation Center. City Council Minutes, August 10, 2009 Councilmember Boehme said he has some concerns about this. He said with the Recreation Center being a totally modernized and state-of-the-art facility, he prefers that we refund as discussed and not give the free month. Councilmember Boehme moved to table the consideration of the one month free membership. Mayor Pro Tern Fry seconded the motion. MOTION PASSED. Ayes: Kelly, Fry, Boehme, and Guffey Noes: Segal Absent: None Mr. O'Connor confirmed that it is his understanding that Council wants this to be more of a promotional effort and look at it equitably for all those members that participate in all aquatic and non- aquatic activities. He noted that he has concerns as to how they would include those that participate in the general public swim because that component will primarily stay at Colonial Park and the instructional and fitness component would move to the West University Place Recreation Center. Councilmember Segal said having heard that, he is concerned that we will make more people unhappy than we would make happy so he now moves more towards not doing anything free and just open up and show them what we have. Councilmember Boehme said he believes that if we are going to do something at no cost, we should not segregate one group of residents against another. Mr. O'Connor said he will discuss some options with the City Manager and will bring ideas to Council as the opening nears. Mayor Kelly took item 10 out of order at this time. See item 10 for action. 8. Reschedule September 28, 2009 Meeting Date Matters related to rescheduling the September 28, 2009 meeting to September 21, 2009 in recognition of the religious holiday. Mayor Pro Tern Fry moved to approve rescheduling the September 28, 2009 meeting to September 21, 2009 in honor of Yom Kippur. MOTION PASSED. Ayes: Kelly, Fry, Segal, Boehme, and Guffey Noes: None Absent: None 9. Audit Committee Matters related -to the creation of a City of West University Place Audit Committee. Recommended Action: Discuss. Mayor Kelly said he requested that this item be on the agenda because he has always been concerned about City Council's lack of involvement in City audits. Mayor Kelly called for a motion to consider the creation of a City of West University Place Audit Committee and charge the City Attorney to work out the details and bring forward a resolution to Council. City Council Minutes, August 10, 2009 Mayor Pro Tern Fry made the motion. Councilmember Guffey seconded. MOTION PASSED. Ayes: Kelly, Fry, Segal, Boehme, and Guffey Noes: None Absent: None 10. Harris County Appraisal District. Matters related to Harris County Appraisal District and its Board of Directors including a resolution of the City Council of the City of West University Place, Texas nominating a candidate for a position on the Board of Directors of the Harris County Appraisal District. Approve resolution. Mayor Pro Tem Fry read the resolution and then moved to approve the resolution nominating Ed Heathcott for the Harris County Appraisal Board of Directors position. Councilmember Boehme seconded the motion. MOTION PASSED. Ayes: Kelly, Fry, Segal, Boehme, and Guffey Noes: None Absent: None 11. Executive Session (if necessary) No Executive Session. ADJOURN With no other business before Council, Mayor Pro Tem Fry moved to adjourn the regular meeting at 9:01 p.m. Councilmember Gulley seconded the motion. MOTION PASSED. Ayes: Kelly, Fry, Segal, Boehme, and Guffey Noes: None Absent: None Prepared By: V Thelma A. Lenz, City Secretary Date Approved: W~ li 7, m t ~ a B+~ n i