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Home My WebLink About07/27/2020 - Special Minutes - City CouncilWKSHP072720 Minutes Page 1 MINUTES OF THE CITY COUNCIL WORKSHOP VIA TELECONFERENCE CITY OF COLLEGE STATION JULY 27, 2020 STATE OF TEXAS § § COUNTY OF BRAZOS § Present: Karl Mooney, Mayor Council: Bob Brick John Crompton Linda Harvell John Nichols Dennis Maloney City Staff: Jeff Capps, Interim City Manager Jeff Kersten, Assistant City Manager Mary Ellen Leonard, Finance Director Carla Robinson, City Attorney Mary Ann Powell, Deputy City Attorney Tanya Smith, City Secretary 1. Call to Order and Announce a Quorum is Present With a quorum present, the Budget Workshop of the College Station City Council was called to order by Mayor Karl Mooney at 1:08 p.m. on Monday, July 27, 2020 in the Administrative Conference Room via Teleconference of the City of College Station City Hall, 1101 Texas Avenue, College Station, Texas 77840. 2. Special (Budget) Agenda 2.1 Presentation, possible action, and discussion on the FY 2020-2021 Proposed Budget. Jeff Kersten, Assistant City Manager and Mary Ellen Leonard, Finance Director, provided a review of the proposed FY20-21 budget and citywide budget issues. STRATEGIC PLAN OBJECTIVES The focused is on the City’s Core Value of Financial Sustainability O&M Objectives Achieved.  Balanced budget with a diversity of revenue sources  Seek grants and other outside funding WKSHP072720 Minutes Page 2  TDEM, Cares, Families First, HUD etc. not reflected until awarded  Developed off of current worst case sales tax scenario  Reflects reduction of compensation expense of ($2,881,000)  Reflects reduction of services and other expenses ($2,492,000) Capital Objectives Achieved  The city will endeavor to maintain or improve its current bond ratings  Outlook upgraded to Stable  1.85% new money and .95% refunding interest rates The proposed FY21 budget is $312,621,887, this is 8.37% below last year’s due to the COVID- 19. A Public Hearing for the Budget will be held on Thursday, August 13, 2020 at 6:00 pm. Key decision points include public safety, maintenance needs, capital project planning and funding, compensation and benefits, wastewater rate increase, service level increases to address growth and maintenance needs; and the proposed tax rate is 53.4618 cents per $100 of assessed valuation and which is the same cents per $100 assessed valuation as the FY20 overall tax rate. The budget and tax rate are scheduled to be adopted September 27th. Staff prepared multiple sales tax scenarios for the FY21 budget, ranging from a (5.7%) to (16.3%) decrease below the FY20 budgeted sales tax level. The budget presented reflects the most conservative sales tax projection for the FY21 budget. Jeff Kersten, Assistant City Manager, presented Council an overview of the continued population growth in the city. The population within the City limits has steadily grown an average of 2.6% per year since the last census in 2010, with an overall growth o f 28.1% since the last census. Because much of the demand for City services relates to the growth rate of its citizens, the Planning and Development Services department estimates population monthly between official US Censuses. The estimated City population is 123,761 as of June 30, 2020. The Texas A&M student population has also steadily grown at 16.9% per year since the last census in 2010. Spring 2020 enrollment for the University population according to Data and Research Services at Texas A&M was 59,837 with 81.4% of the student population living “off-campus” in the College Station community. Due to the concentration of off campus students enrolled in the University, the impact of an extended closure of University services was considered in the FY21 budget development. Property Tax Assumptions  2.05% overall increase in taxable value over last year  Existing value increase is 0.47%  New Value increase 1.58%  $1.04 billion still under review  $156 million in new taxable value The proposed budget recommends a tax increase of 2.8777 cents per $100 of assessed valuation. The proposed tax rate is 53.4618 cents per $100 assessed valuation with the Maintenance and Operations rate being 31.3174 cents per $100 assessed valuation; and the Debt Service rate being 22.1444 cents per $100 assessed valuation. Sales Tax Assumptions  FY20 YEE is projected under budget by ($1.3M) or (4.3%)  FY21 is Projected ($1.7 to $4.6M) or (6%-16%) below FY20 WKSHP072720 Minutes Page 3  FY21 Budget is based off worst case of three scenarios  Scenarios developed with help of data analytics firm Utility Transfer Assumption  Increase Electric from 8% to 9%  Increase collection on other utilities to policy of 10%  Total dollar increase of $1.5M Other Revenues  Other taxes is franchise fees for the use of right of ways  Building permits and Court fines are adjusted for decreased activity and COVID-19  Other in FY20 includes sale of land of $1.4M GENERAL FUND EXPENDITURE OVERVIEW Mary Ellen Leonard, Finance Director, stated that the General Fund is the chief operating fund and primary governmental fund of the City of College Station that includes: the Police and Fire that is made up 52% of the total General Fund and General Fund Expenditures. The other departments that make up is General Fund are: Public Works 9%, Parks 12%, Planning 5%, Information Technology 7%, Fiscal Services 5% and General Government 10%. Mrs. Leonard, explained that the significant revenue losses as a result of the COVID‐19 pandemic discussed above, necessitated that the City reduce service levels which impacts the number of FTE’s included in the proposed FY21 budget. The City has elected to continue a flexible hiring freeze instituted in March 2020 of approximately 55 to 60 positions across all departments. In the General Fund alone, approximately 75.7% of total operating and maintenance expenditures are salaries and benefits. The number of employees per 1000 people in the City has decreased significantly from 9.68 people in 2011 to 7.88 people in 2021. The FY21 proposed budget also does not reflect the full time employees (FTE’s) that will join the City from Experience Bryan College Station as of August 1, 2020 as the City of College Station Tourism department. Approximately ten to twelve FTE’s, funded by the Hotel Tax Fund, will be added in the final approved budget document. Expense Reductions Departmental Travel, Training, Supplies and Other Reductions. Function Totals Supplies $682,000 Maintenance $280,000 Professional Serv. $638,000 Travel/Training $447,000 Transportation $78,000 Other Purchased Services $248,000 Direct Capital Contribution $42,000 Misc. $77,000 Grand Total ($2,492,000) At 3.13 p.m., the Mayor recessed the Special (Budget) Workshop. WKSHP072720 Minutes Page 4 The Special (Budget) Workshop reconvened at 3:28 p.m. Five Year Forecast FY20 YEE FY21 FY22 FY23 FY24 FY25 Beginning Fund Bal – Assigned & Unassigned $ 24,328,349 $ 24,439,767 $ 25,268,502 $ 26,182,425 $ 26,217,387 $ 26,983,883 Revenues $ 83,801,818 $ 82,615,990 $ 83,933,559 $ 85,937,744 $ 88,414,482 $ 90,813,566 Total Expenditures $ 82,065,005 $ 81,787,255 $ 83,019,635 $ 85,902,782 $ 87,647,986 $ 87,682,624 Measurement Focus Inc. (Dec) ($1,625,395) Surplus/(Deficit) $ 111,418 $ 828,735 $ 913,924 $ 34,961 $ 766,496 $ 3,130,942 Assigned Fund Balance $ 5,173,566 $ 7,636,985 $ 7,720,250 $ 7,836,243 $ 8,156,448 $ 8,643,367 Ending Unassigned Fund Balance $ 19,266,201 $ 17,631,517 $ 18,462,175 $ 18,381,144 $ 18,827,435 $ 21,471,458 Unassigned Reserve % 23.48% 21.59% 21.36% 20.70% 20.79% 23.80% FY22 Budget Outlook  Currently able to project a balanced budget in FY22 in spite of anticipated revenue declines  Ad Valorem = projecting a (2.00%) decrease in valuations for COVID effect  Sales Tax estimate projecting recovery – still below FY20’s projected year end estimate  Strategies to offset include continuing mitigation strategies from FY21:  Utility Transfer increase continues  Continuation of hiring freeze at some level  Continuation of departmental expense reductions at some level Should these decreases continue beyond FY21, there will be significant service level reductions that will be implemented that could possibly include public safety, public works, parks programming, utility services, and other City services. 3. Adjournment MOTION: There being no further business, Mayor Mooney adjourned the budget workshop of the College Station City Council at 4:16 p.m. on Monday, July 27, 2020. ________________________ Karl Mooney, Mayor ATTEST: ________________________ Tanya Smith, City Secretary