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Home My WebLink About07/19/2021 - Workshop Minutes - City CouncilWKSHP071921 Minutes Page 1 MINUTES OF THE CITY COUNCIL SPECIAL (BUDGET) MEETING VIA IN-PERSON & TELECONFERENCE CITY OF COLLEGE STATION JULY 19, 2021 STATE OF TEXAS § § COUNTY OF BRAZOS § Present: Karl Mooney, Mayor Council: Bob Brick John Crompton – via remote Linda Harvell Elizabeth Cunha John Nichols Dennis Maloney City Staff: Bryan Woods, City Manager Jeff Capps, Deputy 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 In-Person and Teleconference at 1:03 p.m. on Monday, July 19, 2021 in the Council Chambers 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 Executive Session was held. 4. Special (Budget) Agenda WKSHP071921 Minutes Page 2 4.1 Presentation, possible action, and discussion on the FY 2021-2022 Proposed Budget. Bryan Woods, City Manager, provided housekeeping items and explained the overall format for the budget workshops:  Revenue Overview  Recurring Expense Requests  One-Time Expense Requests  Fund Balance & Future Years  Proposed Property Tax Rate Jeff Kersten, Assistant City Manager and Mary Ellen Leonard, Finance Director, provided a review of the proposed FY21-22 budget and citywide budget issues. The proposed FY21 budget is $353,737,474; this is 15.4% increase over last year’s proposed budget. A Public Hearing for the Budget will be held on Thursday, August 12, 2021 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 FY21 overall tax rate. The budget and tax rate are scheduled to be adopted September 26th. Mr. Kersten presented to Council an overview of the continued population growth in the city. The estimated City population is 125,881 as of May 2021. College Station has the third lowest unemployment rate in Texas at 5.5% as of March 2021. Travelers to Easterwood Airport have increased 67% year over year for FY21, trending towards pre-pandemic levels. According to the Texas Health & Human Services COVID-19 50.84% of the State over the age of 12 is considered fully vaccinated. In 2019, Texas A&M indicated that ~18% of students could be housed on-campus with the remaining 82% housed off campus. Property Tax Assumptions  Estimated Taxable value $10.73 billion  5.75% overall increase in taxable value over last year  Existing value increase is 3.92%  New Value increase 1.83%  Percentage of Taxable Property by Type  16.5% Commercial  17.6% Multi-family  17.2% All other including exempt  46.9% Residential  1.8% New Value FY22 Sales Tax Revenue Estimate ($3.0 Million over Actual FY20 Receipts)  FY20 to FY21 Year End Variances  $2.2 Million Over Fy20 Receipts  $555 thousand from “Wayfair” agreement including single local rate payers  $452 thousand, net from top 12 taxpayers  $385 thousand from Comp Plan regions with ~1/3 each from Post Oak Mall businesses and businesses on G. Bush to SW Parkway  $266 thousand from new businesses in FY21 WKSHP071921 Minutes Page 3 Transfers $4.3m, net  Primarily transfers into General Fund for Replacement Purchases and out of General Fund for shared departmental costs Utility Transfer $14.5m No change from prior year  Electric 9%  Water 10%  Wastewater 10%  Solid Waste 10% All Other $15.3m  Midtown Land Sale = $3.2M  Ambulance Charges = $2.4M  Court Fines = $2.3M  Licenses & Permits = $1.6M  All Other = $5.8M FY22 Fee Adjustments – Proposed General Fund Fee Changes Planning (CPI-U Indexed)  Rate tied to CPI-U for all sections administered by Department  Increase thru Dec 2020 of 1.7%  Anticipating increase for FY23 of ~5% or more Parks (Added Cemetery Dual Columbaria Niche)  Rates typically change in the late wintertime frame annually Fire (No FY22 Rates Changes)  Clarified 2 person minimum to standby special events  Ambulance Billing contract is out for bid currently Fiscal Services (No FY22 Rates Changes)  Court Fees are primarily determined by the State Legislature  Clarified Consolidated Court fee.  No change in rate  Clarified NSF and Notary fee.  No Change in rate Coronavirus Grant Receipts TDEM, CARES and ARPA Funds are included in a Special Revenue Fund Allocations  $6.4 million CARES received in FY20 and FY21  $2.12million CDBG received in FY20 and FY21  $29.48 million ARPA allocated for FY21 to FY24 Community Grants  $1.7 million sub-granted to the community Hospitals  $1.52 million expended on CDBG community needs WKSHP071921 Minutes Page 4 Assigned Reserves  $4.3 million of the funds are currently held in Special Revenue Account for future needs GENERAL FUND EXPENDITURE OVERVIEW Mary Ellen Leonard, Finance Director, explained that in the General Fund alone, approximately 74% of total operating and maintenance expenditures are salaries and benefits. Fixed Costs, which are Maintenance, Utilities, and Miscellaneous expenses for City Facilities are made up of 10%, Professional, Purchased Services, and Supplies at 11% consist of Temporary Help, Contractual Services for studies, annual services, and departmental supplies, lastly Replacement Costs is 5% the Charges to the departments for future equipment and expenses for current equipment. Mrs. Leonard 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 50.6% of the total General Fund and General Fund Expenditures. The other departments that make up is General Fund are: Public Works 9%, Parks 11.5%, Planning 4.7%, Information Technology 7.2%, Fiscal Services 5.3%, and General Government 11.7%. FY22 Recurring Additions - All Departments Received 75% of the Reduction of Expenses from Covid-19 Police  2 Detectives with Vehicles for CID  1 Sergeant with Vehicle for CID  Upgrade to Patrol Fleet Fire  5th Ambulance Overtime Staffing Fleet Maintenance  Fleet Service Technician Community Services  1 Code Enforcement Officer City Hall  Overtime for PD to staff Security at City Hall  2 Custodians for City Hall FY22 One-Time Additions – Paid from Fund Balance Police  CSTEP Ticket Writers  Extended Range Impact Weapons Fire  5th Ambulance  Diesel Exhaust Removal System Public Works  Facility Maintenance Corrective Increase  Traffic Calming  Tree Spade  Signal Camera Replacement Parks WKSHP071921 Minutes Page 5  Reaccreditation  Library Materials Cemetery Software Planning  Comprehensive Plan Implementation  Redevelopment Area Planning  Computer Upgrades IT  Beyond Trust Password Safe  System Center Configuration Manager (SCCM) Reconfiguration  Camera Maintenance Fiscal  Temporary Help for Court Software Upgrade General Government  HR Compensation Survey Fleet  2 Laptops At 2:42 p.m., the Mayor recessed the Special (Budget) Workshop. The Special (Budget) Workshop reconvened at 2:57 p.m. FY22 Compensation - All Fy21 Frozen Positions added back in FY21 Budget Amendment #3 Non-step cost of Living Adjustment is a 3% scale adjustment has been allotted for all employees that are not uniformed; Public Safety (Step) Employees Cost of Living Adjustments is a 3% scale adjustment has been allotted for all step-plan based, (primarily uniformed) employees. Step increases are included as earned; and Non-Step One-Time Merit Based Bonus Pool, a one-time expense of 3% has been allotted for a merit-based bonus pool for non-step employees. The FY22 Benefits / Insurance Funds is 10% Healthcare estimate, and the contract is currently out for bid to try and lower the cost. As of now there is no significant changes to the workman’s comp, unemployment, and property and casualty. FY22 General Fund Assigned Balances (Total Assigned Balance = $13.2m)  Key Assumptions – Assigned Fund Balance  Reserve for Future Operational Needs - $3.8M  Transfer to CIP - Midtown Business Park Improvements - $3.1M  Additional reserve for Bond Rating - $3.0M  Accounting items (Tyler Credits & Court Transfer)- $575K  IT Replacement Transfer - $2M  TDEM Grant Funds – transferred to separate fund  Misc Council Requests - $575K General Fund Five Year Forecast FY22 Proposed FY23 FY24 FY25 FY26 FY27 WKSHP071921 Minutes Page 6 Reserve for Future Operational Needs $ 3,810 $ 5,320 $ 6,830 $ 8,350 $ 9,880 $ 11,410 Additional reserve for Bond Rating $ 3,070 $ 3,110 $ 3,190 $ 3,270 $ 3,350 $ 3,440 Technology / Account Items $ 2,580 $ 2,200 $ 2,000 $ 2,000 - - Future Economic Development $ 150 $ 150 $ 150 $ 150 $ 150 $ 150 Misc. Council Requests $ 580 - - - - - Total Assigned Fund Balance $ 10,190 $ 10,780 $ 12,170 $ 13,770 $ 13,380 $ 15,000 Ending Unassigned Fund Balance $ 26,930 $ 26,890 $ 26,270 $ 26,190 $ 28,570 $ 29,060 Total Reserve % 38.62% 38.95% 38.82% 39.37% 40.33% 41.66% Unassigned Reserve % 23.48% 21.59% 21.36% 20.70% 20.79% 23.80% The proposed budget recommends a tax 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 31.8175 cents per $100 assessed valuation; and the Debt Service rate being 21.6443 cents per $100 assessed valuation. No-New-Revenue and Voter Approval Rates not available from Tax Assessor/Collector until July 25, 2021 WKSHP071921 Minutes Page 7 FY22 Proposed Budget Next Steps  Valuations from BCAD from April 30th to July 25th  Special Council Meeting - Budget Public Hearing - July 27th  Special Council Meeting- Call Tax Rate Public Hearing -August 3rd  Budget and Tax Rate Adoption, Election - August 12th  Budget and Tax Rate Adoption, No Election - August 26th At 3:57 p.m., the Mayor recessed the Special (Budget) Workshop. The Special (Budget) Workshop reconvened at 4:13 p.m. ENTERPRISE FUNDS Erik Walker, Budget Manager, provided Enterprise funds summaries that total $146,587,462; along with Service Level Adjustments (SLAs) and proposed projects: The Electric Fund: Cost Per Meter Absorbed by City $1,108. Cost of Winter Storm to date $48,333,000:  Power Supply Replacement Cost = $13,665,000  Ancillary Costs = $34,678,000 Amount and due date of Uplift - Total amount of charges is not known; Rule is subject to change by Governor and / or TX Legislature; Uplift Charges (max $15.0m) - ERCOT rules currently allow for charges from bankrupt companies to be spread across remaining users at $2.5M per month. It will take 96 years for the Uplift charges to be paid; and Pass-thru charge to customer - If uplift charges get passed to the City, we will need to pass through those charges to customers to maintain financial stability, and charges will appear as a separate line on the bill. Impact of Winter Storm Uri Impact on Reserve Balance – Electric working Capital 2004-2026. In 2004 the reserve balance was around $10M, the highest amount was in 2020, roughly between $50M and $60M but the forecast shows that by 2026 the amount is around $30M. The Water Services Operations: neither COVID-19 nor Winter Storm URI significantly affect operations. Water System  43 employees  40,356 connections  Average consumption 12 MGD  10 wells with capacity of 35 MGD per day Wastewater System  47 employees  43,169 connections  381 linear miles of sanitary sewer  3 treatment plants with capacity of 11.5 MGD Mr. Walker explained that all FY22 Major Enterprise Fund Requests with departments will receive back 75% of the reduction of expenses from COVID-19. WKSHP071921 Minutes Page 8 Electric (One-Time)  2 4x4 Trucks Wastewater (One-Time)  Laboratory Software  Industrial Pretreatment Program Study Minor Enterprise Funds Requests Solid Waste (Recurring)  Front End Loader Operator and Vehicle  Vehicle Routing System Northgate (One-Time)  Pay Stations Replacement  Street Meter Dome Replacement Drainage (One-Time)  4 Yard Dump Truck Roadway Maintenance Fee and UCS Roadway Maintenance  No requests Utility Customer Service  Call Center Recording Software (Recurring)  Temporary Help for System Upgrade Mr. Walker summarized the proposed Utility Rate/Fee Changes. On the Water and Wastewater rates is waiting on the rate study decision. The Electric Rates there were TDA reclassifications, such as reclassifications to better account for Transmission Delivery Adjustment and possible change if Uplift charges from Winter Storm are revised but no overall FY22 changes. Northgate Parking  All Rates to Increase to competing levels with University Garages Solid Waste  Rate tied to CPI-U  Increase thru Dec 2020 of 1.7%  Anticipating increase for FY23 of ~5% or more Drainage  Rate tied to CPI-U  Increase thru Dec 2020 of 1.7%  Anticipating increase for FY23 of ~5% or more Roadway Maintenance  Rate tied to CPI-U  Increase thru Dec 2020 of 1.7%  Anticipating increase for FY23 of ~5% or more Mary Ellen Leonard, Finance Director, presented a brief overview on the FY22 Hotel Tax Fund and the ways in which COVID-19 has impacted operations and maintenance. ($19,554,865) FY22 Revenues WKSHP071921 Minutes Page 9  Exceeding budget by $1.4M in Hotel receipts and $427K from closing EBCS FY21 Expenses  Under budget in Tourism by $1.4m because of unspent FY20 grant funding (due to COVID) that rolled over into FY21 Budget  Grant Funding by $323k FY21 Fund Balance  Budgeted ($4.0M) use in FY21  Projecting ($100K) use for FY21 due to expense savings  FTE added in FY21 Budget Amendment #3 to Tourism FY22 Hotel Tax Expenditures Tourism: 48.5% - 10 FTE’S and advertising expenses focusing on bringing events to College Station. Parks & Recreation: 11.1% - Project based charges and supplies for personnel maintaining Veteran’s Park and managing sporting events. Public Communications: 3.8% - Project based charges for personnel creating advertising for sporting and other HOT events. Grant Programs: 24.8% - of which 69% is for Sports & Tourism and the remainder is for Arts & Culture. Collection / G&A / Contingency: 8.5% - Tax collection, Hotel Audit, shared services, and facility charges including a 3% overall fund contingency Agency Funding: 3.3% - Arts Council, Chamber of Commerce and Veterans Memorial funding. Capital and Preferred Access  Texas Independence Ballpark at Midtown: $6.8M of the estimated $15.0M cost of construction to be paid for by Hotel Tax funds.  Visitor Center: $750K budgeted for renovations to the former Fire Station 1 for Tourism division.  Preferred Access: City & County pay $1.225M from hotel tax receipts to Texas A&M for facility access thru 2043. 5. Adjournment MOTION: There being no further business, Mayor Mooney adjourned the budget workshop of the College Station City Council at 5:28 p.m. on Monday, July 19, 2021. ________________________ Karl Mooney, Mayor ATTEST: ________________________ Tanya Smith, City Secretary