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HomeMy WebLinkAbout11/08/1989 - Workshop Minutes City Council MINUTES CITY COUNCIL WORKSHOP MEETING WEDNESDAY, NOVEMBER S, 1989 4:00 COUNCIL MEMBERS PRESENT: COUNCIL MEMBERS ABSENT: STAFF PRESENT: Mayor Ringer, Councilmembers Brown, Gardner, McIlhaney, Haddox, and Schneider Councilman Birdwell City Manager Ragland, Assistant City Secretary Jones, City Manager Woody, Assistant City Manager Brymer, Executive Director Fiscal/Human Resources Harrison, Executive Director of Management Services Piwonka, City Attorney Locke, Budget Director Schroeder, Assistant City Secretary Hooks Aqenda Item No. i - Discussion of proposed increase in local sales tax. City Manager Ragland introduced this item. He stated that City Finance Director Bill Harrison would review the advantages and disadvantages of an increased sales tax. Using an overhead presentation, Mr. Harrison listed the advantages. He noted that a 1/2% increase would generate $1,800,000 (50 cent increase on $100 purchase). He referred to the city's bond rating and pointed out that College Station currently transfers a large percentage of monies from the utility fund to general fund for administration. Mr. Harrison stated that staff feels an increased sales tax is the approach to take in keeping the transfers down substantially. He pointed out that the sales tax would bring in revenue from those persons impacting the service levels, for example, football weekend visitors. Mr. Harrison noted that a potential mechanism of this increase is a reduction in electric rates and a potential funding source for the Capital Improvements Program. An additional advantage will be a funding parity with the City of Bryan in relation to electric rates and property taxes in each city. Mr. Harrison referred to an excerpt from the Financial Management Magazine which lists all the cities and counties that have adopted the sales tax to reduce property taxes. Councilman Haddox asked staff to explain the council's options. 007539 City Council Workshop Meeting Page 2 Wednesday, November 8, 1989 Mr. Harrison explained that one of the options is as follows: Sales tax revenues increase $1,800,000, and utility rates decrease $1,800,000 and property tax revenues remain the same. Mayor Ringer noted that another option is to increase revenues by $1,800,000 and not change other funds. Mr. Harrison described the disadvantages: 1) regressive tax, (food and medicine exempt); 2) public vote required; 3) reduces effective tax rate - tax rollback provisions; and, 4) potential higher sales tax rate than City of Bryan. He further explained that the reduction in the effective tax rate does not require a reduction in the tax levy that determines a citizen's bill. Mr. Harrison presented the ballot issue as it would read on the ballot to the citizens. He added that staff has recommended that an ad be published in the paper describing the council's intent in clearer terms. Further discussion continued. Mr. Harrison pointed out that if the Council agrees to this concept, the next step is that the City of College Station notifies the Office of the State Comptroller by June 30th for the tax to become effective October 1st. Mr. Harrison described two of the options that would be available. Using information from the Revenue Manual, he said that Option A would provide 1) Direct reduction of the utility transfer, $1.8 million reduction in utility rates; 2) 6% reduction in customers' electric bills. Councilman Schneider asked about the benefits from Option A when compared to the impact of the sales tax. Mr. Harrison replied that with the exemption of food and medicine from sales tax, sales tax is less regressive than a reduction in the utility rate. Mr. Harrison described Option B, (1/2% sales tax = $1,800,000), including the following points: 1) $5 million general obligation debt, $500,000 annual debt service. 2) $1.3 million reduction in utility rates and transfers 3) 4.3% reduction in customers' bills 4) $43.40 annual savings - average single family 5) $580.40 annual savings - average medium commercial Mr. Harrison referred to the calendar provided in the packet. If the Council agrees to proceed with the sales tax increase election, the election must be held either January 20th or May 4th to allow the increase to become effective in 1990. He added that if the Council agrees to a January 20th election date, then the Council order must be placed on the next council agenda, 007540 City Council Workshop Meeting Page 3 Wednesday, November 8, 1989 November 29th. Public notices would be advertised December 20, 1989 and December 27, 1989. Councilman Brown commented that he would like the city to hold a city sales tax election, but in conjunction with the City of Bryan. Councilman Haddox commented that the sales tax increase will be a good way to reduce electric rates. Councilman McIlhaney stated that the city should encourage Bryan to take the same steps, but she does not feel Bryan's decision should be the Council's deciding factor in making their decision. She added that she is in favor of the proposed election. Councilman Schneider stated that Option A appeals to him. Councilman Gardner stated that he has not heard any complaints about the utility rates. The Council discussed a possible date for the Charter Revision Election. After further discussion, a motion was made by Councilman Brown to submit the proposition to voters on January 20, 1990 on the question of adopting an additional one-half of one percent local sales and use tax within the city to be used to reduce the property tax rate, and to hold absentee voting in College Station City Hall. Councilman Schneider seconded the motion which carried by a vote of 5-0-1, Councilman Gardner abstained with Councilman Birdwell absent. Aqend& Item No. 2 - Discussion &nd consideration of approvinq a request th&t the City of Colleqe Station endorse the City of Bryan,s proposal to the 8tare Hiqhway Commission in relation to the Lotrak Project. Mayor Ringer noted that he received a letter from the City of Bryan indicating their proposal to the Highway Department to involve short sections of Finfeather Road and Wellborn Road located within the city limits of College Station to tie into the Lotrak Project. Councilman Haddox asked if the proposal amount would be contributed to any part of the project or specifically isolated to a certain area. Mr. Ilschner replied that the Highway Department has estimated that to extend the Lotrak proposal northward would cost approximately $4.8 million. The City of Bryan has stated that it will fund 60% of this amount, up to a fixed amount of $2.9 007541 City Council Workshop Meeting Wednesday, November 8, 1989 Page 4 million as previously approved by its citizens. He noted that the money will not be allocated solely toward a grade separation at either F&B or Villa Maria. This amount is a contribution in general to the project which results in the two grade separations, one located at Finfeather and Wellborn, and the other separation at F&B and Villa Maria. He further clarified that the fixed amount will be contributed to this portion of the project. Councilman Haddox moved to authorize the Mayor to send a letter of endorsement for the City of Bryan's proposal. Councilman McIlhaney seconded the motion which carried unan- imously, 6-0. A~enda I~em No. 3 - Council concerns. Councilman Brown reported that the fifth grade class at Oakwood Middle School raised $175.00 from their recycling projects. He stated that the students are very excited about the recycling program. Councilman Haddox reported an innovation used by the City of Decatur, Alabama. Decatur distributed special bags for citizens to use when raking and sacking leaves. When filled and piled on the yard, the bags show a big pumpkin face. Mr. Haddox presented a drawing prepared by the Parks and Recreation Department illustrating an idea of what can be done to clean up and beautify the area near the Hilton and the Creekside Shopping Center next to Chimney Hill Hotel. He stated that he hoped the Council will help encourage the Hilton Hotel, TAMU (owner of the building next to the Hilton Hotel) and the owners of the shopping center to build such a project. He asked Council to allow the staff to spend some time based on the City Manager's direction, to pursue this idea. Councilman Gardner referred to a news article in the EAGLE which indicated that the Highway Department has plans to develop a highway from the Green's Prairie/Texas Avenue interchange to the intersection of Graham Road with Wellborn Road. He mentioned that he has not seen any evidence that the City has been involved with the planning of this proposal. He pointed out that this project is not on the comprehensive plan. Mayor Ringer noted that the Planning Staff is aware of the project. 007542 City Council Workshop Meeting Wednesday, November 8, 1989 Page 5 Councilman Gardner stated that the University has indicated renaming FM 2818 to George Bush Parkway. Mayor Ringer commented that he has heard the same issue; at this time, he is looking for the source of this information. Councilman McIlhaney reported that a member of the ad hoc sidewalk committee inquired about the progress of construction on the projects. Mr. Ash explained that the proposed sidewalks near schools are the first ones on the priority list compiled by the sidewalk committee; therefore, improvements have been timed to avoid conflict with the school year. Construction should begin the latter part of May and be completed by the end of the summer. Aqenda Item No. 4 - City Manaqer Concerns. Mr. Ragland reported that the staff has notified the Police Department and the War on Drugs Advisory Committee per council's request for proposed uses for additional funds. The chairman of the committee, Mr. David Branham, has indicated that they will bring a report to the Council in January. Aqenda Item No. 5 - Closed session to receive staff report 6252-17¢2)¢r)]. 5.1 Staff Report (Power Supply Negotiations) The council moved into closed session at 5:20 p.m. Aaenda Item No. 6 - Adjourn. The Mayor adjourned the meeting at 7:19 p.m. ATTEST: City--es APPROVED: , 007543