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Home My WebLink About07/18/2023 - Special Minutes - City CouncilSPM071823 Minutes Page 1 MINUTES OF THE CITY COUNCIL SPECIAL (BUDGET) MEETING IN-PERSON CITY OF COLLEGE STATION JULY 18, 2023 STATE OF TEXAS § § COUNTY OF BRAZOS § Present: John P. Nichols, Mayor Council: Mark Smith William Wright Linda Harvell Elizabeth Cunha Bob Yancy Dennis Maloney City Staff: Bryan Woods, City Manager Jeff Capps, Deputy City Manager Adam Falco, City Attorney Leslie Whitten, Deputy City Attorney Tanya Smith, City Secretary 1. Call to Order and Announce a Quorum is Present. With a quorum present, the Special (Budget) Meeting of the College Station City Council was called to order by Mayor John P. Nichols via In-Person at 11:00 a.m. on Tuesday, July 18, 2023, in the Council Chambers of the City of College Station City Hall, 1101 Texas Avenue, College Station, Texas 77840. 2. SPECIAL (BUDGET) ITEMS 2.1. Presentation, discussion, and possible action on the FY 2023-2024 Proposed Budget. Mary Ellen Leonard, Finance Director, provided a brief overview of the outside agency funding requests and the amount of funding received by each agency depends on Council direction and the availability of funds. Agencies are funded by the General Fund, Community Development Fund, Hotel Tax Fund, and Solid Waste Fund. Contract Partners have been identified based on their economic impact and the community services provided to the City. The Contract Partner agencies are Brazos Valley Economic Development Corporation (BVEDC) and Arts Council of the Brazos Valley (ACBV). Department Budget Agencies are agencies whose work directly supports the goals of a City Department. Outside Agencies and Sponsorship Difference SPM071823 Minutes Page 2 OUTSIDE AGENCY FUNDING Requests from the General Fund amounted for the following: Agencies with No Requested Increase:  BV Economic Development Corporation ($350,000)  Aggieland Humane Society ($276,000)  Brazos County Health District ($478,029)  Amber Alert Network Brazos Valley ($5,000) Agencies with Requested Increase:  Noon Lions Club ($17,500)  $1,000 increase for a parade in College Station that would end at one of the city’s parks where there will be games, concessions, picnicking, and entertainment.  Brazos County Appraisal District ($640,700)  $64,700 increase for personnel services, in the efforts to continue to be competitive with salaries and benefits, they have included a 4.5% cost of living increase as well a 1.5% merit pool, as well as supplies and administrative expenses.  Never Forget Garden ($10,000)  New Project - to help build the Tomb of the Unknown Soldier Never Forget Garden Veterans Memorials (NFG)  Keep Brazos Beautiful / Solid Waste Fund ($48,230)  $1,500 increase for Life-Enhancing issues of Environmental quality. HOTEL TAX FUND AGENCY FUNDING Agencies with No Requested Increase:  B/CS Chamber of Commerce ($25,000)  Veterans Memorial ($30,000)  Arts Council Marketing / Public Art Support ($35,000)  $10,000 – Arts Council O&M: These funds will be used for partial support for audit expenses, copier lease and office supplies, and a programs intern.  $25,000 – Local Arts Marketing: These funds will be used for local marketing and advertising for The Arts Council’s events and programs. Please see page 12 for the plans for these funds. Agencies with Requested Increase:  Arts Council Affiliate Funding ($560,953) SPM071823 Minutes Page 3  $360,000 – Affiliate Pass-through Sub-granting: These funds will 100% pass through to affiliate arts and culture organizations who apply for grants through our Bryan/College Station Annual Program & Marketing Grant.  $15,000 – Art Council’s affiliate marketing: New category of marketing to allow the Arts Council a place to advertise those affiliates who receive grant funds together to gain longer stays for our visitors. This will let our visitors know of the many art and cultural activities they see and partake in during their stay here. Please see page 11-12 for the plans for these funds.  $79,033 – Arts Council O&M: These funds will partially support marketing and grant management staff salaries, tourism marketing interns, and operating expenses for our galleries and grant software.  $44,000 – Arts Tourism Marketing: These funds will be used for marketing and advertising the Brazos Valley and College Station as an arts destination to out-of-market travelers. Please see page 11-12 for the plans for these funds.  $62,920 – Public Art: These funds will be used for repairs and maintenance needed to preserve our current public art to continue growing our mural projects by partnering with city individuals and businesses and starting a one-year Artist in Residence program. Council discussed the increase to the Sponsorship budget to $25,000 to incorporate Community Activities listed in the proposed budget book on page 351. At 12:35 p.m., the Mayor recessed the Special (Budget) Workshop. The Special (Budget) Workshop reconvened at 1:10 p.m. CAPITAL BUDGET Mary Ellen Leonard, Finance Director, stated that the proposed Capital Improvements Project Budget for FY24 totals $135 million for all funds that include capital projects. This is an increase of approximately 54% increase over the capital budget for FY23 yet reflects some significant capital projects scheduled to be addressed this coming year. Capital Budget - the majority of this budget is needed utilities projects. • Utilities CIP 76% • General Gov’t CIP 20% • Special Revenue 4% Proposed CIP Appropriation by Fund • Wastewater 40% • Electric 18% • Water 18% • Streets 13% • Facilities 5% • Drainage 3% • Parks 2% • Parkland 1% • Special Revenue 0% Mary Ellen Leonard, Finance Director, gave a breakdown of the Key Capital Projects that are underway as follows: SPM071823 Minutes Page 4 Electric • Underground System • New Services • Transmission • Distribution Water • Rock Prairie South to Wellborn Rd Rehab • Jones Butler Rehab • Marion Pugh Rehab • State Highway 6 Relocates Wastewater • CCWWTP Outfall Rehab • NE Sewer Trunkline Phase IV • Alum Creek Sewer Trunkline • College Heights Rehab • State Highway 6 Relocates Streets • Rock Prairie Rd SH6 to Town Lake • Krenek Tap Rehab • Marion Pugh Rehab – Luther to GB • Barron Realignment • Greens Prairie – County Portion • Streets Revolver Facilities & Tech • Fleet Fuel System Rehab • Facilities Revolver • IT Revolver • Gateway Signs 3 & 4 Parks • MC Thomas Park Infrastructure Improv • VPAC Improv • Bond Election Projects Design • Texas Independent Ballpark Mrs. Leonard continued with the unfunded CIP by Department SPM071823 Minutes Page 5 Mary Ellen Leonard, Finance Director, summarized the Debt Analysis, to include Tax Debt = $219M, Utility Debt = $216M total of $435M thru FY23 Issuance – 50/50 split. The interest rates keep going up from FED, our true interest cost is not increasing as much but our outstanding governmental debt vs. the taxable assessed value in our city is higher by .09 %. Also, on the utility side, we are well under the industry at 57% compared to 73%, only wastewater is above due to two significant capital projects which we discussed this year. Mrs. Leonard explained the estimated debt capacity at current debt rate, typically we have between $15 and $25M capacity per year, valuations play a role, but if we keep dept rate steady and that is what generates capacity. Capacity was $175M at last years’ budget. Premiums are going up and claims have also increased in FY21 (Uri) and FY 23 (Solid Waste) Utility Funds  Electric 63%  Water 11%  Wastewater 11% SPM071823 Minutes Page 6  Solid Waste 7%  Drainage O&M 3%  Roadway Maintenance 3%  Northgate Parking 1% ENTERPRISE Electric Fund:  TCOS  No settlement  Assumed historical amount of revenue in budget currently  Ancillary Costs = $34,678,000  Rates  Consumption and Purchased Power have increased significantly  No Rate change foreseen through FY28  Assumed annual TDA rate increase annually to cover pass through costs  Risk Mitigation  Established a fund for unforeseen events (Uri, Gas Prices, Heat Wave)  Will begin funding at $6M per year in Sept 2023 until reach ~$50M  Amount and timing may be impacted by TCOS settlement Mary Ellen Leonard, Finance Director, provided an overview of the SLAs for Electric.  Service Level Adjustments ($315K)  Underground Bore Machine  Cost of Service Study  TextPower Software Monthly Fees  Future Years  Total FY24 Budget change includes 1-time expenses/transfers. Forecast developed in 2023 - future years are subject to change based on the facts and circumstances at the time of analysis. The forecast does not include any rate changes. The forecast does include possible TDA adjustments based on expected Transmission costs. Water Capital SLA’s:  Opened New Water Tower  No Rate Increase planned  No Rate change foreseen through FY28  Working Capital at consistent level  Assumed increase in impact fee revenue as discussed by Council  Water Services ($150K)  Increase in Repairs / Maintenance Budget Wastewater Capital SLA’s:  Significant debt increase needed for planned capital projects  Assumes 6% rate increase in FY24  Assumes additional 10% increase in FY26  Wastewater ($150K)  Increase in Repairs / Maintenance Budget  Future Years SPM071823 Minutes Page 7  Includes debt for NE Sewer IV ($13M) and $25M for improvements to Carter’s Creek needed for TCEQ purposes. Solid Waste Fund SLA’s:  Solid Waste ($1.5M)  Rate Study  Commercial Automated Collection Vehicle – Spare  Equipment Operator and Commercial from – End Load Truck  Safety Driver Training Simulator Northgate Parking SLA’s:  Northgate Parking ($198K)  Northgate Heavy Duty Truck  Parking Lot Maintenance  Northgate Sanitation Enclosure Cameras  Northgate Garage Elevator Vandal proofing Drainage (Special Revenue Fund) SLA’s:  Drainage ($259K)  Attenuator Truck  Drainage Clean Out Equipment Mary Ellen Leonard, Finance Director, provided an overview of the Roadway Maintenance Fee Fund and noted that the full summary is in the proposed FY23-24 proposed budget. Roadway Maintenance Fee Fund (Special Revenue Fund) SLA’s:  Fund typically spends entire budget annually – so historical years are actuals with FY23 (year- end estimate) and FY24 (proposed budget) = likely actuals for those years.  2019 ($4.7M)  2020 ($4.8M)  2021 ($5.1M)  2022 ($5.0M)  2023 ($5.3M)  2024 ($6.1M) Rate Recommendations  Metered Rates with no increase – 0%  Electric  Water  Metered Rates with increase – 6%  Wastewater  Rates tied to the CPI-U index – 6%  Solid Waste  Drainage  Roadway Maintenance Impact of Rate Increases on Monthly Utility Bill SPM071823 Minutes Page 8 SPECIAL REVENUE FUNDS  Hotel Tax 31%  Roadway Maintenance (w/ Utilities) 28%  Drainage (w/ Utilities) 14%  Community Development (CDBG) 13%  Impact Fees 11%  Federal Relief 2%  Other 2% HOT Tax Funds Mary Ellen Leonard, Finance Director, stated that this tax allows the city to collect up to its current tax rate on rental income of hotels and motels within the city limits. In accordance with Chapter 351 of the Tax Code, expenditures from this fund must directly enhance and promote tourism and the hotel industry in the City. Additions to the FY24 budget are from the Tourism Division and include an increase of three FTEs and parttime non-benefitted staff to help administer large events. There are also increases to help service sports and Christmas events in the city. In FY23, the city reexamined KPIs that are historically collected and began the process of assuring that they could be more succinctly focused on priorities of the City’s strategic plan. SPM071823 Minutes Page 9 HOTEL Tax Fund  Tourism Sports 18%  Non-Department 16%  Tourism Admin 15%  Tourism Conventions 12%  Tourism Leisure 15%  Outside Agencies 12%  Park Tourism 10%  Public Comm 2% Tourism – HOT Fund SLA’s ($420K)  Meetings and Conventions Commitments  Economic Impact Study & Strategic Plan  Digital Marketing & Advertising  Visitors Guides HOT Fund Five Year Forecast HOT Tax Uses  Tourism 60%  Public Agency 12%  Parks and Recreation 10%  G&A Transfer Out 7%  Contingency 6%  Other Uses 5% Fee Resolution Mary Ellen Leonard, Finance Director, gave a brief overview of the proposed changes to the Ordinance & Policy will enable the City to achieve a long-term stable and positive financial condition. SPM071823 Minutes Page 10 The watchwords of the City’s financial management include integrity, prudent stewardship, planning, accountability, and full disclosure. The more specific purpose is to provide guidelines regarding the City’s day-to-day financial affairs and in developing recommendations to the City Manager and City Council. Item 9. Replacement Funds  9.1 to 9.3 revised for language clarity. No change in policy. Item 17. Operating Reserves  17.2 revised for language clarity regarding enterprise risk mitigation funds. No change in policy. Item 18. Capital Project and Debt Service Funds  17.2 revised for language clarity regarding enterprise risk mitigation funds. No change in policy. Fee Ordinance Majority of the Council agree if a plan comes forward to give a one-time commitment of $5,000 to the $125,000. 3. Adjournment. There being no further business, Mayor John P. Nichols adjourned the Special (Budget) Meeting of the City Council at 4:56 p.m. on Tuesday, July 18, 2023. ________________________ John P. Nichols, Mayor ATTEST: ___________________________ Tanya Smith, City Secretary