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HomeMy WebLinkAbout08/13/2019 - Special Minutes - City CouncilWKSHP081319 Minutes Page 1 MINUTES OF THE CITY COUNCIL BUDGET WORKSHOP CITY OF COLLEGE STATION AUGUST 13, 2019 STATE OF TEXAS § § COUNTY OF BRAZOS § Present: Karl Mooney, Mayor Council: Bob Brick Jerome Rektorik Linda Harvell Elianor Vessali 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 Ian Whittenton, Deputy City Secretary 1. Council and CMO budget lunch. 2. 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 12:30 p.m. on Tuesday, August 13, 2019 in the CSU Meeting/Training Facility, 1603 Graham Road, College Station, Texas 77842. 3. Presentation, possible action, and discussion on the FY 2019-2020 Proposed Budget. Mary Ellen Leonard, Finance Director, continued with the review of the proposed FY19-20 budget and citywide budget issues. ENTERPRISE FUNDS WKSHP081319 Minutes Page 2 Jeff Kersten, Assistant City Manager, provided Enterprise funds summaries, along with Service Level Adjustments (SLAs) and proposed projects: The Electric Fund: FY19 Electric Fund revenue is estimated to be $108,213,545 million, and no rate increase is proposed of the Electric Fund in FY20. Working Capital Uses forecasted for the next five year include utilizing the fund balance for planned capital projects, exceeding $6 million by FY 24. Service Level Adjustments include a Relay Foreman and Vehicle for $165,151; Electric Project Coordinator/Designer for $91,947; AMI Metering O&M Budget for $22,750; Asset Management System for $110,000; and a Comprehensive Transmission Cost of Service (TCOS) Supply for $100,000. The Water Fund: Earlier this year Fiscal and Water conducted a joint workshop related to the current status of the fund and explained the need for a 15% rate increase in the Water Fund. The Water Fund is currently projected to be below the required 15% fund balance in FY19, and without the planned 15% rate increase, the decline is projected to continue. The planned rate increase was 9%, but the proposed increase is 15%. There is only one planned SLA due to the revenues of the fund related to water rate restructuring review concurrent with Wastewater in the amount of $75,000. The Wastewater Fund: Revenues are consistent with budget with no rate increase proposed for FY20, but rate increases of 6% are currently planned in FY21 and FY23. However, those will be dependent upon the results of the Wastewater rate restructuring review concurrent with Water. Service level adjustments include Wastewater rate restructuring concurrent with Water for $75,000; and Collection flow monitoring equipment for $42,000. The Sanitation Fund: Maintaining its revenue as rates were indexed to the CPI-U in FY19 to keep pace with inflation. The fund is requesting 3 SLAs for Street sweeper and Operator for $337,473 reoccurring with $263,000 one time; Safe Driver Training to be developed for $25,000; Recycling Contamination Campaign for $10,000. The Drainage Utility Fund: No rate change is proposed. There are no Service Level Adjustments. The Northgate Parking Fund is maintaining its revenue. The Garage bond debt should be paid off in FY20 and recommendations are expected from the study commissioned in FY19 related to the future of the Northgate District next year as well. Service level adjustments include temporary closure of Boyett for $85,312; and Surveillance camera system maintenance for $43,800. Mary Ellen Leonard, stated that the proposed tax rate is 53.4618 cents 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. If we move forward with proposed tax rate the two public hearings will be held on September 5th at 7:00 p.m. September 13th at 6:00 p.m., and possible adoption of proposed tax rate on September 27th at 6:00 p.m., in the Council Chambers at City Hall. Each cent on the tax rate generates approximately $820,000; and as a reminder the Effective Tax Rate is the rate that will raise the same revenues on the same properties as last year WKSHP081319 Minutes Page 3 and the Rollback Tax Rate is the highest rate that can be adopted before citizens can petition to lower the tax rate to the rollback rate. Mayor Mooney recessed the meeting into Executive Session, Item 5. GENERAL GOVERNMENT CAPITAL PROJECTS Mary Ellen Leonard, Finance Director, stated that this year, the amount requested in Capital Projects is 21% of the overall request, or $71 million. This amount is about $19 million below requests for the last several years due to the significance of projects which are still underway. Currently, the City has three major projects, (Police Station, City Hall and Lick Creek Wastewater Treatment Plant) all over $35 million apiece and approved in prior years. Prior Councils have requested that all capital capacity be scheduled through FY24; therefore, limiting the ability for new projects to be added to until capacity becomes available in FY25. Streets and Transportation: Project currently total $170.5 million in projects underway in some phase. Major projects seeking additional appropriations this year include: Jones Butler Extension and Roundabout, Luther Extension from FM 2818 to North Dowling, Rock Prairie Road from SH6 to Medical way and a signal light at Dartmouth and 2818. Upon approval from the Railroad, the City is planning significant activity related to the Cain/Deacon Railroad Cross Switch. Safety improvements at Holik, Park Place, Anna and Glade as well as Greens Prairie Trail City limits west of Woodlake to Royder Road and Royder Road Phase II from Backwater to FM2154 should all see significant activity in FY20 Parks: Projects currently total $25.5 million in projects underway in some phase. Limited additional appropriations are needed in this fund. Field redevelopment fees and Parkland Dedication Funds are appropriated as they are accrued, so an appropriation is requested for those funds. In addition, there is a request for appropriations for future amenities and improvements in parks that will be allocated to a project by Council at a later date. The projected expenditures for FY20 in Parks are focused on the completion and opening of Southeast Park Phase I. Facilities: Projects currently total $104.7 million in projects underway in some phase including $29.5 million for the New Police Station currently under construction and $39.3 million for a New City Hall. FY20, the budget appropriates an additional $6.3 million for City Hall , $5 million of this appropriation was allocated to renovations at the old PD station in prior years. However, as the City Hall project got underway in design, it was determined that the highest and best use of those funds would be to utilize them at City Hall and investigate the elimination of the old PD as a City facility. Instead, $1 million is being requested as appropriations for the old PD building. Technology: FY20 technology appropriations include the request for the establishment of a $1 million IT revolver fund for significant technology purchases that can be capitalized. Planned expenditures from the IT Revolver fund in FY20 include to refresh the City’s firewall, obtain software to help Legal with Open Records requests and the replacement of Utility Billing Software. Electric: With $21.1 million in projects budgeted, the project budget for FY20 equals to $23.3 million with future funded project expenditures is approximately $51.1 million. Electric has a WKSHP081319 Minutes Page 4 number of significant projects underway including improvements to both the overhead and underground delivery systems. One visible project citizens will see next year is the installation of automated meters, the AMI go Live isn’t scheduled until FY21, but the changing out of 42,000 meters should occur next year. Most of the improvements in the Electric Fund are paid for in cash, with only minimal debt incurred for the AMI project. Water: Projects currently total $73.4 million underway in some phase to ensure the sustainability of the delivery of water to the growing population both now and in the future. FY20, the budget appropriates an additional $14.4 million for projects including collection and transmission lines and replacement of motors at Wells 1, 2, and 3. The largest project included in the appropriation is the Rock Prairie Road Elevated Storage Tank, which is the creation of another water tank to serve the growing population on the South side of College Station. This project will exceed $8 million in cost and is not scheduled to be completed until FY21. Wastewater: Projects currently total $172.9 million underway in some phase including a major expansion of the Lick Creek Wastewater Treatment Plant budgeted at $38.9 million . FY20, the budget appropriates an additional $14.3 million for collection projects including the final phase of the Northeast Sewer Trunk line and the rehab of the McCulloch Utility. Treatment and disposal improvements at the Carter’s Creek plant are also included in the appropriations. Significant expenditures on the LCWWTP project of $20 million make up almost half of the work that will occur in FY20. The largest project included in the appropriation is the Rock Prairie Road Elevated Storage Tank, which is the creation of another water tank to serve the growing p opulation on the South side of College Station. This Project will exceed $8 million in cost and is not scheduled to be completed until FY21. Special Revenue Capital Projects: Special Revenue projects include Hotel Fund (Veterans Park Synthetic Fields, Southeast Park, equipment purchases), Community Development (Georgia Fitch Park, SW Parkway North Sidewalks), Fun for all P layground, Sidewalk Zones (various minor sidewalk projects), Park Land Dedication (various park projects), and Drainage Utility (Various minor drainage projects, Southwood Valley). Mayor Mooney recessed the budget workshop at 3:05 p.m. The budget workshop reconvened at 3:16 p.m. DEBT SERVICE FUND Jeff Kersten, Assistant City Manager, 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. Ad Valorem tax amount on the debt side of .221444 must go into this account to pay our debt obligations. Capacity is generated as existing debt falls off the payment schedule or the debt side of the tax rate is raised. Fire Station 7 was added to the General Government project schedule by prior Councils. The proposed FY20 budget assumes that 0.7 of a cent will be added to the tax rate in FY22 in order to design and construct Fire Station 7. As the funded projects move forward and at current debt service rate, the next WKSHP081319 Minutes Page 5 opportunity to add streets, facilities or technology projects will be in FY25 when current debt begins to roll off. He stated that in order to pay for the projects we just discussed, staff will be bringing an item to Council in March/April of 2020 for permission to issue a notice of intent for $68.235 million in additional CO’s. The actual amount to be issued will be determined with the help of our Financial Advisors, Hilltop Securities, which take into account the issuance costs and current interest rates at the time of the notice. As mentioned the .7 of a cent increase in the tax rate in FY22 is also included in the projections for the debt issuances. SPECIAL REVENUE FUNDS Jeff Kersten, Assistant City Manager, stated that Special Revenue Accounts are bank 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 FY20. HOTEL TAX The Hotel Tax (HOT) Fund holds the tax revenue generated by room taxes on hotel nights. The City receives a portion of those taxes. With the continued construction of hotels in our community, the amount in this fund continues to rise. Uses in this fund include the funding of Experience Bryan College Station and the Arts Council and sporting events hosted by the City. Construction of major parks to attract sporting tournaments can also occur with these funds. Veteran’s Park and the new Southeast Park have each been partially funded by the use of this special revenue. IMPACT FEE FUND In FY17, the Council enacted impact fees for water, wastewater and transportation. The impact fees are paid by growth related development and can only be used on specific projects that were identified when the fee was established. The fees were intentionally set by prior Councils at a low rate with room to be raised if necessary. Currently, the most significant fee is the wastewater fee and collections are used to pay the debt service on the LCWWTP expansion. 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. FY20 is the first year the fee can be adjusted. In lieu of conducting an expensive rate study to determine the increase need to adjust for the material costs related to road maintenance, staff is proposing that this fee be indexed to the CPI-U similar to the Solid Waste and Planning fees. CPI increase in the FY20 budget to cover the last 3 years is 5.5% DRAINAGE UTILITY FUND This is a special revenue fund that receives its money from a fee charged on all utility bills. The fee of $5 is charged to help maintain the storm drain system and minimize flooding. The fee has not been increased since 2009, yet the cost of the equipment to maintain the storm drain system WKSHP081319 Minutes Page 6 continues to rise. Storm drain inspection camera - this equipment will be used to inspect storm drains that are too small or unsafe for human inspection ($131,000). For FY20 the fee is proposed to be raised to $6.00 and then indexed to the CPI-U similar to the Solid Waste, Roadway Maintenance Fee and planning fees. COURT TECHNOLOGY FUND Funded by a $4 charge to defendants convicted of a misdemeanor offense, the Court Technology fee can only be expended on technology to be utilized by the Municipal Court. In prior years, the fund has been utilized to purchase ticket writers for the Police department to improve the efficiencies of collecting and recording initial information for the Court. The software currently used to run the Court is no longer supported by the vendor. Therefore, in order to minimize the risk of a shut-down of Court operations, new software must be acquired. Court software is highly specialized and very expensive. The funds in this restricted account will be utilized for the software purchase, the related SLAs for the hardware and implementation costs out of the General Fund ($428,000). 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 like Police, Fire, Parks, Public Works, Electric, Water and Wastewater. Employee Benefit (Insurance) Fund  Claims over the last 5 years have been trending upward, increasing from $7.8 million to a projected $12.9 million in FY19.  FY20 budget assumes that trend will continue and by FY24, claims will exceed $16 million.  City contribution for FY20 is 10.1% and the employee contribution is 4.5% to cover the increase in claims cost.  Future years plan has City and Employee contributions closer to a 50/50 split once the claim drain of the last few years is stabilized. 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 • Growth Related Risks:  Contributions have not fully offset cost of replacement vehicle  Estimated Shortfall = $8,000,000  Funding through fund balance transfers and $1 million per year in revolving debt through FY24 Technology Replacement Fund • Rapid changes to technology necessitate the establishment of a replacement fund WKSHP081319 Minutes Page 7 • 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 Utility Customer Service Fund • Average growth since FY15 = 2.0% • Future growth thru FY24 = approximately 950,000 meters read • Growth Related Risks:  Maintenance & Support issues due to systems first implemented ‘99  Coordination concerns with AMI initiative  Estimated Cost = $750,000  Funding through IT Revolving Debt in FY20 Bond Issuance 4. Presentation, possible action and discussion on the 2019-2020 ad valorem tax rate; and calling two public hearings on a proposed ad valorem tax rate for FY 2019-2020. No action was required on this item. 5. Executive Session In accordance with the Texas Government Code §551.086-Competitive Matters, the College Station City Council convened into Executive Session at 1:14 p.m. on Tuesday, August 13, 2019 in order to discuss competitive matters as that term is defined in Gov’t Code §552.133; to wit:  Power Supply The Executive Session was recessed at 1:45 p.m. 6. Take action, if any, on Executive Session, No action was required from Executive Session. 7. Adjournment MOTION: There being no further business, Mayor Mooney adjourned the budget workshop of the College Station City Council at 4:11 p.m. on Tuesday, August 13, 2019. WKSHP081319 Minutes Page 8 ________________________ Karl Mooney, Mayor ATTEST: _________________________ Tanya McNutt, City Secretary