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HomeMy WebLinkAbout100315 CC Min (Budget Workshop)The City of West University Place A Neighborhood City CITY COUNCIL Susan Sample, Mayor Bob Kelly, Mayor Pro Tem Burt Ballanfant, Councilmember Brennan Reilly, Councilmember Mardi Turner, Councilmember STAFF Michael Ross, City Manager Alan Petrov, City Attorney Thelma Lenz, City Secretary CITY COUNCIL BUDGET WORKSHOP MINUTES The City Council of the City of West University Place, Texas, met in Budget Workshop on Saturday, October 3, 2015, in the Municipal Building, 3800 University, West University Place, Texas beginning at 8:00 a.m. Agenda Items were as follows: Call to Order. Mayor Sample called the meeting to order at 8:05 a.m. in the City Council Chambers. Council and Staff in attendance were: Mayor Pro Tern Kelly, Councilmembers Ballanfant, Reilly and Turner, Interim City Manager Peifer, City Secretary Lenz, Executive Staff and Treasurer Renea Dobbs Notice of the Budget Workshop was duly posted in accordance with the Texas Government Code, Chapter 551. 1. City Finances, Facilities, Programs, 2015 Tax Rate and the 2016 Budget Matters related to city finances, 2015 tax rate and the 2016 Budget including revenues and expenditures for current and future years for all funds. Interim City Manager Peifer and Finance Director Daugherty presented this item and said the City is a service organization, therefore, approximately 60 percent of the City's costs and expenses are personnel related, so he introduced the City's compensation consultant Lori Messer, along with Human Resources Director Standorf, who presented a slide presentation clarifying the City's compensation and benefits structure. Ms. Standorf explained that in 2008, the City conducted it's first official compensation study and it was implemented in January 2009. She said in 2013, the City found that the initial compensation plan was lagging in the market and so the City conducted a new study in 2014 and, as a result of the study, implemented a 75th percentile plan, which means that in comparison to the City's benchmark cities, West U pays its employees more than 75 percent of those benchmark cities and pays less than 25 percent of those benchmark cities. Ms. Standorf then turned the presentation over the consultant Lori Messer of Gallagher Benefits Servcies / Fox Lawson Group who explained the methodology for the study, salary data comparisions, pay practices and benefits, and her recommedations as a result of the study. After Ms. Messer's presentation, Mr. Peifer and Finance Director Daugherty presented a slide presentation of the proposed 2016 Annual Budget, the financing sources, financing uses, personnel and highlights of each of the major funds. City Council Budget Workshop Minutes, October 3, 2015 The following are highlights from the presentation: Overview — Financing Sources: • The tax rate used to support this proposed budget is $0.33179 per $100 value, with $.18321 supporting Maintenance & Operations and $0.14858 supporting Debt Service. This is a $0.03 decrease in the overall tax rate and $0.00392 less than the not -to- exceed tax rate of $0.33571. • Decrease in license, permits and fees is due to higher estimated building and contractor permit revenue in 2015. 2016 brings the budget back to a conservative level although construction trends remain promising. • No proposed increases in water and sewer rates other than a possible pass through increase from the City of Houston in early 2016, to be determined at that time. • Proposed 30.0% increase in solid waste fees. A 20% increase is necessary due to increased operational costs. A 10% increase is attributable to the Green Waste proposal to be discussed later in this presentation. • Transfers are increased due primarily to the expansion of the use of the Equipment Replacement fund to be discussed later in this presentation. Overview — Financing Uses: • Personnel (service) increases of $1.12 million • Operating increases of $1.48 million • Capital outlay increases of $55,900 • Transfer out incrases of $0.26 million Overview — Personnel • 2016 Compensation includes the full year funding of the updates to the compensation plan as approved in the 2015 budget. • Includes a 3% structure and salary adjustment on January 1, 2016, continuing the compensation policy approved in the 2015 budget as well as an average 3% merit increase on anniversary date. • TMRS funding rate is budgeted at 13.01% for 2016, which is slightly up from 12.09% in 2015. The increase is primarily attributable to the TMRS update to the mortality tables used in calculating retirement benefits. • 122 proposed positions for 2016 (there were 123 authorized positions in 2015) General Fund: • Fund Sources • Tax rate for Maintenance & Operations: $0.18321 per $100 valuation, a slight decrease from the 2014 rate of $0.19356 • $674,000 revenue increase due to increased property values • All other sources relatively stable • Budget Increases over the 2015 Budget include: o $658,000 and $427,000 increase in compensation and benefits, respectively, over 2015 budget. o Transfer of $171,000 to Technology Management Fund, of which $84,000 is for compensation plan udpates. o Transfer of $421,000 to Capital Reserve Fund for financing future special projects. o $777,000 to Equipment Replacement Fund for incremental financing of future capital -type purchases. 2of7 City Council Budget Workshop Minutes, October 3, 2015 o $34,000 for the replacement of the expansion joints in the pool and on the pool deck at Colonial Park as well as restaining the stamped overlay on the deck. o $25,000 for public works professional services for updates to the comprehensive master plan and subdivision ordinance regulations. o $42,000 for fees previously charged to Water & Sewer fund now allocated to where utilized. o $43,000 for other equipment (lift for work on high areas, ESO /CAD integration, and a SCOTT Bluetooth radio interface). Budget Highlights by Department • Administration o Legal fees: $145,000 (same as 2015) • Finance o $50,000 increase for addition of temporary personnel o $26,000 decrease due to allocation of credit card fees to user departments /divisions o $19,000 increase for additional retiree benefits (city -wide division) • Police o 1,647 Direct Link Customers — a decrease of 6 accounts since September 2014. • Fire o $16,000 for an ESO /CAD Integration and the SCOTT Bluetooth radio interface. • Public Works • Added $179,400 for Streets & Drainage division transfer to the Equipment Replacement Fund • Added $172,500 for General Servcies division transfer to the Equipment Replacement Fund • Added $112,700 for General Services division transfer to the Equipment Replacement Fund • Included $50,000 in the Planning division for a consultant to assist in updating the comprehensive master plan and the subdivision ordinance regulations Parks and Recreation • Added $5,500 for Senior Services division transfer to the Equipment Replacement Fund • Added $128,600 for Recreation Center division transfer to the Equipment Replacement Fund • Added $59,400 for Park Maintenance division transfer to the Equipment Replacement Fund • Added $145,400 for Colonial park division transfer to the Equipment Replacement Fund • Swimming pool maintenance increased $34,000 for the replacement of the expansion joints in the pool and on the pool deck at Colonial Plark, as well as re- staining the stamped overlay on the deck. General Debt Service Fund Highlights • Tax rate for debt $0.14858 per $100 valuation, a decrease of $0.01965 or 11.68% from the 2014 debt tax rate of $0.16823 • Debt service based on current outstanding debt — any new debt will increase future year's debt service • In 2020 a large portion of the infrastructure debt incurred will begin retiring through its normal course Water and Sewer Fund Highlights • No scheduled rate increase 3of7 City Council Budget Workshop Minutes, October 3, 2015 • New non -slip floor coating in buildings at the wastewater treatment plant: $15,000 • Decreased surface water and electric service to align with a normal rain event year: $100,000 and $98,100 • Decreased sewer system maintenance due to replacement of airlift pumps and repair of air diffusers in 2015: $31,000 • Added $75,000 for water and sewer rate study • Eliminated $22,400 for the manual meter reading contract due to completion of automated meter reading project Solid Waste Fund Hightlights: • 2015 Budget includes a 20% rate increase for existing operations • Additional 10% increase for adding curbside green waste • Addition of curbside collection of green waste ($143,000 net cost) • Addition of curbside collection of bulk trash in lieu of the City's Heavy Trash Days (saving of $18,600) Staff discussed green waste and a proposed new program. • Collection. The yard waste would be collected once a week • Staffing. 2 person crew (would require a new employee) • Equipment: Requires the use of a dedicated truck. City currently has two backup trucks • Estimated Annual Cost: • Option 1 — City collects and hauls green waste to local composter. Minimal use of 3`d party hauler during heavy leaves times. Approximately $95,000 per year • Option 2 — City collects curbside yard waste and loads into a container. 3`d party hauler transports container to local composter. Approximately $143,000 per year Pros of Recycling Yard Waste: • Based upon previous quantities, the City's recycling (diversion) rate would increase by approximately 15 percent. The City's overall rate would be more than 40 percent, which is extremely good for a City using 18- gallon bins and manual recycle collection. • Would reduce the amount of a recyclable product being sent to landfills that have limited space. • The City would receive approximately 100 cubic yards of mulch each year. This would save an estimated $5,000 in annual parks maintenance cost. This savings is calculated in the annual cost on the previous slide. Cons of Recycling Yard Waste: • Monthly rates would increase by approx. $1.24 per month for senior and disabled customers and $2.43 per month for regular customers. This is currently included in the 2016 proposed budget. • Would require residents to use paper yard bags or plastic compostable bagsMany residents are already using paper yard bags or compostable bags. Vehicle Replacement Fund Highlights • Replacement of two patrol vehicles ($96,000) • Pressure Washer for the Solid Waste Division ($9,000) • Sedan for General Services ($25,000) • Half -ton Work Truck for Water & Sewer Operations ($34,000) Technology Management Fund Highlights • Hardware and software maintenance contracts: $510,000 4of7 City Council Budget Workshop Minutes, October 3, 2015 • Telecommuniations /Data /Radio: $241,600 • Consultants: $20,000 • Technology projects: $122,400 • High Tech Replacements: $57,300 Equipment Replacement Fund Fund Highlights • LifePack 12 cardiac monitor — Engine 1: $42,000 • Traffic signal controllers and signal indication /illumination: $61,700 • Ellipticals atWest U Recreation Center: $2,300 Capital Projects • Water & Sewer Capital Projects Fund • No. 9 water well rehabilitation: $225,000 • Replace 2nd Belt Press Filter: $300,000 • Lift Stations Renovations S —12: $275,000 • Milton Pump Station Climate Control: $15,000 • Replace Public Works Operations Air Handler: $4,000 • Public Works Yard Fence Replacement: $30,000 After the presentation, there was a question /answer session. Councilmember Turner confirmed with staff that the properties the City owns outside of the City are: Recycle Center property, Ruffino Hills, Wastewater Plant on Braeswood, Goode Company property on Dincans and Westpark, Elevation Storage Tank in Southside Place and Elevation Storage Tank on Wakeforest. Councilmember Turner asked whether the communications manager's position is necessary Mr. Peifer responded that the position is budgeted, but it has not been posted. He said it is a necessary function, but if Council decides not to fund it the City will need someone to serve as the webmaster and for other communication functions. He said regardless of whether the City increases someone's salary and reallocates human resources to handle those functions, the City will still need additional funds to handle community outreach projects from cradle to grave professionally, which could cost $50,000 to $60,000 annually. Councilmember Reilly said he doesn't think the City needs a full -time communications manager. Councilmember Reilly said he would like to see some proposals that would help Council get to the effective tax rate. He said the City is doing a lot of great work in budgeting the internal funds, but said it also needs to be taken into account that in 4 years the City will see a dramatic drop in its annual debt service and the City should plan for that. Councilmember Reilly said the City is accumulating funds to pay for long term Capital Improvements and he wants all residents to pay for that — the residents that are here now and the residents who are going to be here 10 years from now. He said residents five years from now are getting a big windfall on the backs of the residents who have paid for that infrastructure over the last 10 years. Councilmember Reilly said he thinks it is great that the City has capital improvement projects and that it is able to do them on a pay -as- you -go basis, but at the same time at some point what future Council's have to do is justify if there is a need, for example, to replace a section of the street. He 5 of 7 City Council Budget Workshop Minutes, October 3, 2015 said the City should not fund that on a pay -as- you -go basis. He said it's long term improvement and should be a long term project. He said he thinks the City can get too fancy in accumulating internal funds for expenses that provide long term benefits and he wants to be sure the City matches up the benefits with the costs. Mr. Peifer said the City has never intended to do a street replacement project without debt. Finance Director Daugherty said the pay -as -you go fund pays for large items when looking at the operating budget, but not large enough for debt. She said the City doesn't want to go and issue a $1,000,000 debt every time it needs to replace a cooler or a chiller. Mayor Sample said to go from pay -as- you -go to issuing debt would, for a one -year time, allow the City to stick to the effective tax rate, but then it would call for debt from then on; so, either the City stays on pay -as- you -go, which she likes, or switch over to borrowing. Councilmember Reilly said that is not what he said. He said he would like to see a proposal for the effective tax rate and take into account whether the City is correctly matching up, because there are other ways to get to that effective tax rate. He said he wants to see some specific proposals to get the City to the effective tax rate, which means cutting approximately $411,000. Councilmember Reilly also said he would like staff to consider a change in the salary increases. He said the two increases being proposed. He said instead of the 3 percent across the board increase to everyone employee on January 1, 2016 and the up to 3 percent merit increase, he would like to see all the the money to be allocated on a merit basis and let staff have more discretion as to who gets how much, rather than have an across the board 3 percent. He said he would like to see staff have the discretion to reward high performers and not give an automatic three percent pay raise to employees that are perceived to be performing below average. Councilmember Reilly inquired about the $300,000 budgeted for library improvements. Mr. Peifer said that figure was inserted to address the life safety issues and the amount was estimated by an architect. He said the amount was for a sprinkler system and second floor exit. Councilmember Reilly asked if approving the budget means approving those funds for improvements to the library. Mr. Peifer responded no. He said Council approves the improvements when it approves the contract. He said the budget is to reserve the funds, but nothing actually goes into motion until Council approves the contract. Councilmember Reilly said that given that a Facilities Master Plan Task Force will be appointed to look at the library and other facilities, why wouldn't this be put off until after Council receives the report from the task force, because why would the City want to spend $300,000 if the recommendation from the task force is to substantially renovate it or tear it down completely and replace it. Mr. Peifer said staff's only concern is the life safety issues now that staff has been made aware of them. He said as a public official /senior staff member, if he is informed and something does happen and he didn't do his due diligence, he has some liability and he is trying to protect the City. Mayor Pro Tem Kelly said compared to the other taxing entities, West U taxes are the least 6 of 7 City Council Budget Workshop Minutes, October 3, 2015 Councilmember Reilly said he would still like to see an alternate budget that includes cost savings that will get the City to the effective tax rate. He said he would not vote for a proposed tax rate without justifications. Mayor Sample said she doesn't mind seeing an alternate budget but she doesn't want to compromise City services, so she wouldn't vote for it. Councilmember Reilly asked if there were any other Councilmembers who wanted to see an alternate budget. Councilmember Ballanfant said he has confidence in the staff, but if somebody wants to look over their shoulders, then that's fine with him. Councilmember Reilly said he is not looking over staff's shoulder, because he would not be the one proposing the changes. Councilmember Kelly said he is not interested in seeing an alternate budget. Mr. Peifer confirmed with Council that they would keep the communication manager's position in the budget for now with the commitment of staff to look at the options and costs reduction of removing the position. With no further discussion, Councilmember Turner moved to adjourn the Budget Workshop at 12:30 p.m. Councilmember Ballanfant seconded the motion. MOTION PASSED. Ayes: Sample, Kelly, Ballanfant, Reilly, Turner Noes: None Absent: None Prepared B The rm a A. Lenz, Ci y Secrets Date Approved J'Exas 7 of 7