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HomeMy WebLinkAbout092401S CC Min CITY COUNCIL SPECIAL SESSION MONDAY, SEPTEMBER 24, 2001 MUNICIPAL BUILDING 3800 UNIVERSITY BLVD. 6:30 P.M. The City Council convened in Special Session in the Municipal Building Conference Room (3800 University Blvd.) on September 24, 2001, with the following members present: Mayor Lewis presiding, Council Members May, Farley and Griffin. The Assistant City Manager, City Secretary, City Attorney, Finance Director, Public Works Director, Parks and Recreation Director and Building Official were also present. Council Member Jackson was absent. The notice for this meeting was posted in accordance with the Texas Government Code, st Chapter 551, on the 21 day of September 2001 at 4:00 p.m. Agenda Review: The City Council reviewed the regular meeting agenda and discussed items under consideration with the Staff. Priority Area 12 reconstruction. Matters related to infrastructure improvements in Priority Area 12 including the installation of raised intersections and traffic control devices. Assistant City Manager Michael Ross reported that the City Council, with the recommendation from the Traffic Task Force, had authorized Claunch & Miller, Inc. (CMI) to revise the paving plans on Community so that the intersections of Judson and Dartmouth were designed as raised intersections using inlaid brick. The raised intersections would serve as a speed hump while the inlaid bricks would help to slow traffic due to the rougher riding surface and the color difference. Since the recent flooding caused by Tropical Storm Allison CMI has been retained to do a drainage study involving Priority Area 2. During a discussion involving the drainage study, it was realized that the proposed raised intersections on Community presented an impediment to future ?sheet-flow? storm water proceeding in a southerly direction as it has in the past and could possibly cause certain streets to receive more storm water. Mr. Ross stated that CMI is now recommending that the city eliminate the two raised intersections but maintain the use of inlaid bricks for traffic control. City Council Special Session, September 24, 2001 A motion was made by Council Member Farley, seconded by Council Member Griffin, to remove the raised intersections on Community at Judson and Dartmouth but use the inlaid brick. A vote was taken on the motion with the following result: Voting Aye: Mayor Lewis, Council Members May, Farley and Griffin Voting Nay: None Absent: Council Member Jackson Goals and objectives of Boards and Commission members. Matters related to establishing goals and objectives for Board and Commission members. Mayor Lewis requested that if the Council had any changes, additions or deletions to the goals and objectives list to give them to the City Secretary. This item will be presented at the next meeting. 2002 Budget. Matters related to the 2002 Budget. Mr. Ross stated that during the 2002 budget workshops held on September 10 and 17 several questions were raised about certain aspects of the proposed budget. The following is a report submitted by the City Manager responding to the questions. Benefits Using data supplied by the Houston-Galveston Area Council, in 2001 the City had a benefits burden of 45.40% of its total payroll, just under the average of 46% for selected cities in the area. The total survey of some 54 cities indicates a range of benefits burden from a low of 24.56% in Willis to a high of 68.76% in Tomball. Specifically related to health care coverage (although there are fewer reporting cities for this variable), at least 20% of the total cities fully pay HMO medical insurance for employees; 26% pay a portion of dependent?s coverage ranging from 10% in Richmond to 92% in Galena Park. Based on information available, it appears that the City is close to average with its benefit burden. Staff will be reviewing proposals in November for health care coverage and redesigning the benefits package. This may result in lower overall premiums while at the same time maintaining the 90% - 10% cost-sharing. No further action is recommended at this time. General Fund 2 City Council Special Session, September 24, 2001 The General Fund Balance is projected to decline $141,000 to $3.2 million (35% of General Fund Revenues) at the end of 2002. Of this decline, $250,000 is proposed to be transferred to Capital Projects Fund for one-time capital projects. This means that there is a surplus of operating fund over operating revenues amounting to $108,000, or about a half cent of the property tax rate. The General Fund Balance provides the City funding for disasters and protects against sudden revenue shortfalls. The amount that is adequate to provide this cushion is subjective, but analysts often use 25% of revenues as the floor. It is anticipated that some costs associated with the infrastructure improvement program will be needed from this fund balance in order to close-out the project. It is staff?s opinion that it is generally not good financial policy to use fund balances to finance operating costs, because the fund balance will eventually be exhausted and the operating costs will still require funding. As noted earlier presentation, all of the increases in General Fund expenditures proposed for 2002 can be attributed to salaries and health care costs. While the original budget proposal stands, a one half cent reduction in the Maintenance and Operations rate would not severely effect services or capital projects; however reductions of about $110,000 would be required. Debt Service Fund Balance The Debt Service Fund Balance is projected to be $748,831 at the end of 2002. This represents 14% of the $5.25 million in anticipated revenues. There is no definitive standard to use in determining the amount of fund balance that should be maintained to insure the orderly repayment of the City?s bonded debt. The most important factors to consider regarding the amount of fund balance that should be maintained in the Debt Service Fund are: The City?s historical property tax collection rate. The stability of the City?s tax base. The level of reserves in the City?s other funds that could be used to repay debt. In West U these factors are very positive ? the City?s collection rate for property taxes is above 99%; the tax base is residential property and is not subject to erratic swings in value; and the General Fund?s Reserves have been substantial. Taken together, the factors allow the City to operate with a Debt Service Fund Balance below the arbitrary, but often used, 25% of revenues. Reducing the Property Tax Rate dedicated to Debt Service will result in the reduction of the fund balance. For each half cent reduction in the property tax rate, the fund balance will fall about $110,000, so a tax rate of 22 cents per $100 valuation would drop the Debt Service Fund Balance to $638,000 or 12% of Debt Service Fund revenues. It is important to note that debt service payments will continue to increase over the next three years, rising from $5.2 million in 2002 to $6.2 million in 2005. Projected tax rates in the Debt Service Fund assume a 15% growth in assessed values during that period. If these projections prove optimistic, more debt service fund balance will provide future Councils with some flexibility to smooth out sharp increases to the property tax rate dedicated to debt service. Additionally, the fund balance in the Debt Service Fund cannot be transferred for 3 City Council Special Session, September 24, 2001 any other purpose, so once tax is collected to pay debt service it is dedicated to that purpose only until all outstanding general obligation bonds are retired. It is staff?s opinion that while the City Council could adopt a tax policy leading to a lower Debt Service Fund balance than was provided in the proposed budget, increasing future debt service and uncertainty surrounding assessed values seem to suggest caution and is not recommended. The City Council recessed the Special Session at 7:30 p.m. to convene in Regular Session. The Special Session reconvened at 8:57 p.m. The City Council continued the discussion on the 2002 budget. Council Member Farley addressed capital improvement projects and the possibility of delaying expenditures in order to avoid a tax increase. The staff will present an ordinance with a 2001 tax rate of $.42 at the public hearing on st October 1. Report from Board or Commission Liaisons. The City Council reported on Board or Commission meetings attended by the liaisons. Council Member Farley reported that the Zoning Board of Adjustment was addressing garage overhangs. Council Member Griffin reported that the Adult Services Board was acquiring new furniture for the waiting area in the Senior Services Building. Mayor Lewis reported that the Recycling and Solid Waste Reduction Board was having quarterly joint meetings with the City of Bellaire. She also commented that the City does not recycle in the parks. Inquiries, requests and complaints. The City Council reviewed matters received from the public and referred them to the appropriate department or will place them on a future agenda for consideration or action. Matters related to pending or contemplated litigation; or a settlement offer. (a) Priority Area 6B and final payment to Contractor Technology, Inc. (b) Priority Area 12 4 City Council Special Session, September 24, 2001 Closed Executive Session to be held under Sections 551.071 Texas Government Code. The City Council recessed the Special Session and convened in Executive Session at 10:00 p.m. The City Council adjourned the Executive Session at 10:32 p.m. and reconvened in open session. Adjournment. With no further business to come before the City Council at this time, a motion was made by Council Member May, seconded by Council Member Farley, to adjourn. The Special Session adjourned at 10:34 p.m. 5