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Home My WebLink About07/28/2020 - Special Minutes - City CouncilWKSHP072820 Minutes Page 1 MINUTES OF THE CITY COUNCIL WORKSHOP VIA TELECONFERENCE CITY OF COLLEGE STATION JULY 28, 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 via Teleconference at 1:08 p.m. on Tuesday, July 28, 2020 in the Administrative Conference Room of the City of College Station City Hall, 1101 Texas Avenue, College Station, Texas 77840. 2. Executive Session No Executive Session was held. 3. Take action, if any, on Executive Session, No action was required from Executive Session. 4. Special (Budget) Agenda WKSHP072820 Minutes Page 2 4.1 Presentation, possible action, and discussion on the FY 2020-2021 Proposed Budget. Mary Ellen Leonard, Finance Director, continued with the review of the proposed FY20-21 budget and citywide budget issues. ENTERPRISE FUNDS Mary Ellen Leonard, Finance Director, provided Enterprise funds summaries, along with Service Level Adjustments (SLAs) and proposed projects: The Electric Fund: FY21 operating budget decreased 3.29% from FY20 due to expected Purchased Power/Wheeling costs and reductions in supplies, maintenance, professional services, and travel/training. These reductions are in response to the uncertainty caused by COVID ‐19. Additionally, Electric will freeze two vacant positions in FY21 in the amount of $108,000. The City does not propose a FY21 rate increase. COVID‐19 did not significantly affect operating revenue in FY20, as the City observed continued consumption across all customer classes. The Water Fund: The overall FY21 operating budget decreased 4.85% from the FY20 due to reductions in supplies, maintenance, professional services, travel/training, and direct capital. Additionally, Water will freeze three vacant positions in FY21. These reductions and hiring freeze are in response to the uncertainty caused by COVID‐19. The FY21 non‐operating budget increased 4.58% due to increases in Contingency, planned vehicle replacements, and G&A transfers. Contingency increased in response to possible COVID‐19 impacts. Net G&A transfers increased due to an updated allocation model and additional UCS costs. The ROR transfer is in lieu of franchise fee payments. For FY21, the City is proposing an ROR policy increase from 10% to 11% of budgeted operating revenue. The increased ROR transfer will support the General Fund’s response to COVID‐19. The City does not propose an FY21 rate increase. COVID‐19 did not significantly affect operating revenue in FY20, as the City observed continued consumption across all customer classes. The Wastewater Fund: The overall FY21 operating budget decreased 5.30% from FY20 due to reductions in supplies, maintenance, professional services, travel/training, and direct capital. Additionally, Wastewater will freeze four vacant position in FY21. These reductions and hiring freeze are in response to the uncertainty caused by COVID‐19. The FY21 non‐operating budget increased 17.10% due to increases in: Debt service, G&A transfers to UCS and the General Fund, Capital funding, the return on revenue (ROR) transfer to the General Fund, Vehicle replacement, and Contingency. The Impact Fee transfer increased due to the expected change in eligible projects’ debt service. When possible, the City attempts to match the Impact Fee transfer with expected debt service costs. The Sanitation Fund: Maintaining its revenue, COVID-19 did not have a significant impact on FY20 operating revenue but did cause a reduction in the growth assumption for FY21. Commercial and residential rates were increased in FY19 and include annual CPI-U Index to keep pace with inflation, if applicable. FY21 CPI-U increase is budgeted at 0%. FY21 budgeted revenue includes a payment from BVSWMA Inc. for the scheduled debt service payment. This revenue is WKSHP072820 Minutes Page 3 offset by the debt service expenditure for the actual payment. Total proposed revenue increased due to the transfer from Fleet Replacement fund for the FY21 scheduled vehicle replacements. This transfer is offset by a corresponding scheduled capital purchase budget. The fund is projecting a 1% payment loss as a measurement adjustment in FY20 & FY21. The expenditure budget includes 4 SLAs for a reduction in Solid Waste in the amount of $150,441. The Northgate Parking Fund: FY21 proposed revenue is $1,354,000, an 8% decrease from FY20 revised budget due to continuing effects from COVID-19. There are no FY21 SLA increases, however $72,629 in decreases have been made in operations to mitigate the expected reductions in revenue. FY21 proposed expenditures are $1,352,302; description of expenditures types follows:  Northgate District Operations approved base budget is $811,111 for salaries and benefits, supplies, maintenance, and purchased services. $100,000 for capital reserve, totaling $911,111.  Non-departmental expenditures proposed:  General and Administrative transfers of $91,191;  Contingency amount of $53,378;  Debt Service final payment for the Parking Garage was made in FY20. From FY01 to FY09, the Debt Service Fund made debt service payments on behalf of the Northgate Parking Fund for the garage. The Northgate Parking Fund reimbursed the Debt Service Fund as fund balance allowed. At the end of FY20, the Northgate Parking Fund still owes over $3.5 million for garage debt service payments. In FY21, Northgate Parking Fund will transfer $300,000 to the General Fund in lieu of a debt service reimbursement. GENERAL GOVERNMENT CAPITAL PROJECTS Eric Walker, CIP Coordinator, stated that the proposed Capital Improvements Project Budget for FY21 totals $46.74 million for all funds that include capital projects. This is a decrease of approximately $24.43 million or a (34.3%) decrease over the capital budget for FY20 yet reflects some significant capital projects scheduled to be addressed this coming year. The appropriations are intended to provide budget authorization for the contracts that are expected to be brought to Council for approval in FY21. In some cases, the expenditures related to these contracts may be spread across multiple fiscal years and, in those cases, the appropriations for the fiscal year would exceed the anticipated expenditure for the fiscal year. The appropriations on capital projects will carry forward into subsequent fiscal years. Associated operating and maintenance costs needed for the projects that will be operational in FY21 have been included in the proposed budget. Streets and Transportation:  $146.2 million in projects budgeted  FY21 appropriations compared to FY20 = increase 142.95%  Projected FY21 expenses = $30.0 million  Future funded project expenditures = $71.3 million  Unfunded projects submitted for FY21 = $4.05 million  Other considerations: No FY21 unfunded projects added to schedule and Anticipated $13.4 million FY21 debt issue WKSHP072820 Minutes Page 4 Majority of the Council directed staff to adjust some of these items to include Puryear and James Street projects. Parks:  $19M in projects budgeted  Minor FY21 appropriations  No debt issuance budgeted for FY21  Projects Expected to be Completed in FY21: Central Park Pavilion and Restrooms, Central Park Athletic Field Restrooms, Bee Creek Concessions / Restrooms, Veteran’s Park Phase 1B, Perimeter Fencing for Aggie Field of Honor and Memorial Cemetery Maintenance Shop  Southeast Park project delayed until FY23 due to COVID19  Unfunded Projects Submitted for FY21 = $23,997,333 Majority of the Council directed staff to adjust some of these items to include Eastside/Thomas Park. Facilities & Technology:  $104.5 million in projects budgeted  FY21 appropriations compared to FY20 = decrease 89.4%  Projected FY21 expenses = $25.9 million  Future funded project expenditures = $7.7 million  Unfunded projects submitted for FY21 = $875,000 (Tech)  Other considerations: No FY21 unfunded projects added to schedule, Fire Station #7 TBD – depends on funding mechanism and Anticipated $2.4 million FY21 debt issue Electric:  Budgeted FY21 expenses = $24.6 million  FY21 appropriations compared to FY20 = decrease 66.3%  Future funded project expenditures = $61 million  Projects funded via cash basis  Other considerations: AMI installation and deployment will span FY20 and FY21, Graham Road substation complete, Utility Service Center Design projected for FY21 – with Water/WW and Anticipated $3.5 million FY21 debt issue for Spring Creek Ring Bus project Water:  $69.3 million in projects budgeted  FY21 appropriations compared to FY20 = decrease 55.3%  Projected FY21 expenses = $18.3 million  Future funded project expenditures = $33.1 million  Priority unfunded projects submitted for FY21 = $4.4 million  Other considerations: Water Rights project defunded in FY20, debt moved to Water Tower, No FY21 unfunded projects added to schedule, Utility Service Center Design projected for FY21 – with Electric & WW and Anticipated $11.3 million FY21 debt issue Wastewater:  $168.6 million in projects budgeted WKSHP072820 Minutes Page 5  FY21 appropriations compared to FY20 = increase 3.8%  Projected FY21 expenses = $35.2 million  Future funded project expenditures = $67 million  Priority unfunded projects submitted for FY21 = $3.5 million  Other considerations: No FY21 unfunded projects added to schedule, Utility Service Center Design projected for FY21 – with Electric & Water and Anticipated $20.4 million FY21 debt issue Mayor Mooney recessed the budget workshop at 2:45 p.m. The budget workshop reconvened at 3:00 p.m. DEBT SERVICE FUND Michael Dehaven, Assistant Finance Director, stated that the Debt Service Fund is a restricted account that holds the payments on all outstanding debt for General Government Projects. Debt payments for the Enterprise Funds are not held in this account. Operating revenues are projected to increase 1.25% in FY21 to $22,050,075. This is due to changes in property valuation, added property valuation, added property to the tax rolls, an increased transfer from the Cemetery funds, and the aforementioned tax rate change. The Cemetery transfer services debt issued by the city to pay for the design and construction of a cemetery fence and building. The City expects debt obligation payments, which account for the vast majority of operating expenditures, to decrease 5.35% in FY21 due to refunding and lower than expected interest rates. This will result in a projected fund balance growth of $2,379,260. The City will use this increase to fund future capital projects. PROJECTED DEBT ISSUANCES FY21-FY25 FY21 FY22 FY23 FY24 FY25 Utility Debt $35,140,000 $39,440,000 $16,825,000 $17,136,000 $10,100,000 Gen Govt Debt $17,813,000 $36,058,000 $18,255,000 $8,742,000 $7,520,000 GENERAL GOVERNMENT DEBT SERVICE FUND  Move of ½ cent to O&M to help with COVID-19  Growth thru FY25 = 4.38%  Other Considerations:  Capacity for ~$1MM in new projects  Maximum tax rate of $2.50 / $100 assessed valuation limits growth SPECIAL REVENUE FUNDS Mary Ellen Leonard, Finance Director, stated that Special Revenue Accounts are reserved accounts where the City can only use the funds on very specific expenses. Some of the accounts we have in this area have little activity or no particular qualifying expense is budgeted to be paid for with those funds. The only Special Revenue Funds that were discussed was the significant one with activity in FY21. WKSHP072820 Minutes Page 6 DRAINAGE UTILITY FUND Proposed expenditures will decrease for FY21 due to budget reductions and prior year budget appropriations for capital projects carry forward and span fiscal years. Drainage projects are funded by utility fee revenue collected from residential and commercial consumers. COVID-19 did not have a significant impact on FY20 operating revenue but did cause a reduction in the customer growth assumption for FY21. Drainage fees will have an annual CPI-U adjustment as of October 1 if applicable. FY21 CPI-U increase is 0% and investment earning will decrease due to current interest rates. The fund is projecting a 1% payment loss as a measurement adjustment in FY20 and FY21. An SLA is proposed for the purchase of a trailer mounted storm drain clean out system in the amount of $71,000. IMPACT FEE FUNDS Water:  Average annual revenue =$330,000; fees in lieu of additional 9% rate increase  Projected FY20 revenue =$320,000  Fees support eligible projects’ debt service, primarily Well #9, and SH6 Waterline  FY21 Revenue will offset Impact Fee Study of $150,000 (Water SLA) Wastewater:  Average annual revenue =$1.6 million; fees in lieu of additional 14% and 8% rate increases  Projected FY20 revenue =$1.5 million  Fees support eligible projects’ debt service: LCWWTP, Lick Creek Trunkline, NE Trunkline  FY21 Revenue will offset Impact Fee Study of $150,000 (WW SLA) Transportation:  4 (four) separate funds, City must spend revenue in Zone collected, revenue varies based on development  Projected FY20 revenue =$955,000 across all 4 Zones;$570,000 in Zone B  For FY21, proposed transfer of $450,000 from Zone B for Rock Prairie Rd. W (ST1604)  Proposed FY21 SLA = Impact Fee Study of $70,000, paid for with revenue from all 4 Zones ROAD MAINTENANCE FUND This fee was established in FY17 and moneys collected are used on maintenance activities on existing roads. There is no reserve requirement on this fund and all moneys collected are spent or scheduled to be spent on maintenance projects. Weather can impact the schedule of spending. The FY20 beginning fund balance of $510,000 due to prior years sale of road milling and COVID19 mitigation strategy established for Roadway Maintenance to assume streets maintenance work originally planned in the General Fund using fund balance. In the FY21 proposed budget there is no planned CPI-U adjustment for residential & commercial rates in FY21. INTERNAL SERVICE FUNDS Mary Ellen Leonard, Finance Director, stated that Internal Service Funds are special accounts to accumulate support costs by internal city departments that serve the major operational departments WKSHP072820 Minutes Page 7 like Police, Fire, Parks, Public Works, Electric, Water and Wastewater. There is a decrease in Utility Customer Service of $21,000 and $69,300 in Fleet Maintenance. Employee Benefit (Insurance) Fund  FY20 Review  Revenues and expenses are projected to be at 91% of budget for the year.  FY21 Proposed Budget (Proposed Revenues)  9% Increase in Employer contributions  No change in Employee contributions  FY21 Proposed Budget (Proposed Expenses)  6% Increase in Medical and Prescription Claims  4% Increase in Dental Claims Expenses  3% Increase in Health Clinic Expenses REPLACEMENT FUNDS Fleet Maintenance Fund  Average growth since FY16= 4.0% or 18 vehicles per year  All fleet vehicles are included in the replacement fund  Other Considerations:  Shore up funding using debt revolver through FY24. (Average yearly$750K) Technology Replacement Fund  A technology specific replacement fund was established in FY20 due to the costs of rapidly changing technology  Related Equipment:  Copiers  MDTs  Servers Equipment Replacement Fund  Funding began in FY17 for long-lived Police and Fire equipment  Fund considered fully funded  Related Equipment:  Police body camera  Police in-car video  Fire SCBA  Fire extrication tools  Fire thermal imaging cameras 4.2 Presentation, possible action and discussion on the 2020-2021 ad valorem tax rate; and calling two public hearings on a proposed ad valorem tax rate for FY 2020-2021. Mary Ellen Leonard, Finance Director, stated that there will not be a discussion on the ad valorem tax rate for FY 2020-2021, due to not receiving the necessary information to authorize the calling of the two public hearings on a proposed ad valorem tax rate for FY 2020-2021, of 53.4618 cents WKSHP072820 Minutes Page 8 per $100 assessed valuation the Maintenance and Operations rate be 31.3174 cents per $100 assessed valuation; and the Debt Service rate be 22.1444 cents per $100 assessed valuation. 5. Adjournment MOTION: There being no further business, Mayor Mooney adjourned the budget workshop of the College Station City Council at 4:08 p.m. on Tuesday, July 28, 2020. ________________________ Karl Mooney, Mayor ATTEST: _________________________ Tanya Smith, City Secretary