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HomeMy WebLinkAbout092810 CC Budget Workshop Min0EN The City of West University Place A Neighborhood City CITY COUNCIL Bob Kelly, Mayor Bob Fry, Councilmember George Boehme, Councilmember Steven Segal, Councilmember Chuck Guffey, Councilmember STAFF Michael Ross, City Manager Alan Petrov, City Attorney Thelma Lenz, City Secretary CITY COUNCIL BUDGET WORKSHOP MINUTES City Council of the City of West University Place, Texas, met in a special workshop meeting on Tuesday, September 28, 2010, 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 Manager/Public Works Director Peifer, Police Chief Walker, Fire Chief Ralls, Finance Director Daugherty, Parks and Recreation Director O'Connor, Human Resources Director Standorf, and IT Director McFarland. CALL TO ORDER Mayor Kelly called the special workshop meeting to order at 5:05 p.m. Notice of the regular meeting was duly posted in accordance with the Texas Government Code, Chapter 551. Agenda was as follows: City Finances, Facilities, Programs, 2010 Tax Rate and the 2011 Budget Matters related to city finances, facilities, programs, 2010 tax rate and the 2011 Budget including revenues and expenditures for current and future years for all funds, and capital improvements, priorities and related programs and expenditures, including, but not limited to, recreation facilities, parkland and other park projects, city facilities, drainage and flood control, traffic and parking and other public improvements, and employee benefits. City Manager Ross presented and discussed with Council the tax impact of optional compensation adjustments and stated none of the options exceeds the do-not-exceed rate of 0.38805. The options provided to Council were: 19% Texas Municipal Retirement System (TMRS) funding with 0%, 1.5%, or 3.0% pay increases; 22.47% full TMRS funding with 0%, 1.5%, or 3.0% pay increases; and 15.71% TMRS funding with no cost of living adjustments (COLAs) and with 0%, 1.5%, or 3% pay increases. Councilmember Segal said it would be his suggestion to drop the TMRS funding to 15.71% and give the 3% increase to employees. City Council Minutes, September 28, 2010 Mayor Kelly confirmed with staff that without the COLA and no pay increases the 15.71% would pay the full rate for TMRS and reduce the unfunded liability from $12.9 million to $5.8 million ("correction made by Councilmember Segal at October 11, 2010 meeting: the actual reduction is from $12.9 million to 8 million, which is a reduction of $5.5 million). City Manager Ross pointed out that this is assuming that everything stays in place as it is, theoretically, for the next 30 years. City Manager Ross reminded Council that TMRS is recommending changes to the three portions of the funding structure, with the hope there will also be a bill that will address the COLA and make it flexible for cities to be able to start and stop as needed in any given budget year. He said as it stands now, if the COLA is eliminated from the plan, we would have to play catch up to reinstate it at a later time. Mayor Kelly said if it is decided to eliminate the COLA, we have to assume that it won't come back, because we can't assume what the legislature will do. After discussions, Councilmember Segal reiterated his position that he likes the direction of fully funding TMRS, giving employees a raise, and deciding whether to delete the COLA or wait until next year after seeing the impact of the merger of funds. Councilmember Boehme said he not sure which way to go on the issue, but his gut feeling is to not have pay increases, continue to do what we've done with the COLA and wait to see what the legislation does, and go fully funded. Councilmember Segal said it seems will be favoring retirees over employees if we say no pay increase to the employees, but pay $300,000 for the COLA. He also said the pay increase to employees will probably impact them more beneficially in the long run than the COLA. Councilmember Boehme stated that he doesn't think we need to have a pay increase to remain competitive. He said we have a system that works and we need to be careful when considering cutting the COLA. Chief Walker stated that we have to remain competitive and said if other cities don't cut benefits it will be hard to get skilled and qualified people to come to West U. He said if we're not competitive, we'll get employees that nobody else wants. Mayor Kelly said he initially thought of reducing the COLA as a funding source for raises, but now thinks we need to look at each issue separately. He said a policy decision needs to be made on the retirement plan and the least offensive thing to do at this time is to eliminate the COLA. Mayor Kelly said he thinks we'll catch more people's attention with a 3% pay raise more than having a COLA, especially with the younger generation. Councilmember Segal reiterated that he thinks the plan is better to give raises and drop the COLA. He said dropping the COLA will enable us to fully fund our unfunded liability at the rate of 15.71 percent. City Council Minutes, September 28, 2010 Councilmember Guffey said he is neutral on the COLA. He said he doesn't see a big incentive to cut it right now other than the fact that it would help the unfunded liability. He suggests the full 22.57% funding and 1.5% salary increases and deferring cutting the COLA until the next year or two. Mayor Pro Tern Fry said he is for cutting the COLA. He said he has the same thoughts that Councilmember Segal has on this and feels we have a big problem staring us in the face. He said the first thing we do is fully fund the TMRS. Mayor Pro Tern Fry said Council after Council has avoided making tough decisions because they were able to kick the can down the road. He said let's not kick the can down the road anymore and start taking care of the issues now. Councilmember Boehme suggested that Council requests the city manager to write a letter to TMRS informing them of our support of a flexible COLA. Council agreed that it couldn't hurt. Mayor Pro Tem Fry stated that Councilmember Segal is the expert and he has made a recommendation that makes a lot of sense and he is not going to go against that recommendation, which is to cut the COLA and give employees a 3% raise based on performance. City Manager Ross confirmed that the consensus seems to be to go with the 15.71% TMRS funding, with no COLA and 3% performance based raises, which will bring the tax rate to 0.37411. Mayor Pro Tern Fry asked Councilmember Segal if Council goes with that option, would it be beneficial to increase our TMRS contribution this year. Councilmember Segal said since we will be paying the full cost, we might want to wait to see if property values increase over the next year. Before adjourning, Finance Director Daugherty updated Council on a couple sewer/water finance issues. With no further discussion, Councilmember Boehme moved to adjourn the Budget Workshop at 6:27 p.m. Mayor Pro Tern Fry seconded the motion. MOTION PASSED. Ayes: Kelly, Fry, Segal, Boehme, and Guffey Noes: None Absent: None , Budget Workshop meeting Prepared By: A. Lenz, TRMC, City Secretary i~A NEST UN~6A9 ~S C 26 a lrXA~ Date Approved: ~~~2~1 y l . t