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2023 08 10 WS Minutes MINUTES OF THE REGULAR WORK SESSION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN August 10, 2023 The City Council of the City of Baytown, Texas, met in a Regular Work Session on Thursday, August 10, 2023, at 5:03 P.M. in the Council Chamber of the Baytown City Hall at 2401 Market Street, Baytown, Texas, with the following in attendance: Laura Alvarado Council Member Sarah Graham Council Member Kenrick Griffith Council Member Heather Betancourth Council Member Jacob Powell Council Member Mike Lester Mayor Pro Tem Brandon Capetillo Mayor Jason Reynolds City Manager Scott Lemond City Attorney Angela Jackson City Clerk Mayor Capetillo convened the August 10, 2023, City Council Regular Work Session with a quorum present at 5:03 P.M. All members were present with the exception of Council Member Graham who later arrived at 5:06 P.M. 1. CITIZEN COMMENTS There were no citizens signed up to speak. 2. DISCUSSIONS a. Discussion regarding Tax Increment Reinvestment Zones (TIRZ) in the City of Baytown. City Manager Jason Reynolds informed Council this item would be considered on September 1st. b. Discuss the City of Baytown Fiscal Year 2023-24 Proposed Budget. City Manager Jason Reynolds opened the item explaining that he would first give a presentation on the FY2023-24 Proposed Budget. After, Interim Assistant City Manager Carol Flynt would facilitate questions on the budget. The City Manager's Presentation Mr. Reynolds explained their focus would be on policy and its impact to the budget. Staffs goal was to provide Council with an overview of the elements that would create the budget.They would highlight how Council's policy and philosophy could influence those elements and affect the over- all budget. With that settled, Mr. Reynolds walked through each element as follows: City Council Regular Work Session Minutes August 10,2023 Page2of5 FUND BALANCE: BEGINNING Policy Impact Council provide guidance • The City's ability to respond to disasters on the amount of reserves to be held. • The City's ability to cover unanticipated or emergency expenses • The City's Bond Rating REVENUE: PROPERTY Policy Impact Council make decisions regarding: • Determines largest revenue contribution • Tax Rate • Establishes a growth rate • Sales Tax Rate (Current rate: 2.3%) • Industrial District Agreements(IDA)and 212 Agreements REVENUE: ACUTE Policy Impact Council make decisions regarding: • Revenue that funds supplemental services • Fee schedules and their renewal • Rate Growth (Ongoing or as needed) • Service charges On acute revenue, Mr. Reynolds explained that the City provided a multitude of services. The revenue collected from those services were meant to cover the costs of the specific services that each fee related to. In theory, fees should be reviewed annually so that the costs of providing those services would be covered. However, Mr. Reynolds informed Council that their rate schedules were modified periodically. Thus, their rates were not keeping up with what those services cost. Mr. Reynolds expressed that the fees were fairly static from Administration's point of view. Mr. Reynolds also noted that if Council were to ask if fees were a source to address revenue in- creases, it would not be a focal point. If every fee, fine, and service charge of the City were in- creased by ten percent (10%), it would only increase revenue by nine hundred thousand dollars ($900,000). Thus, fees would not be something that would change the City's revenue front. REVENUE: TRANSFERS Policy Impact Council consider: • How the transfers would be used • Authorizing one-time transfers from other • Administration and Outside Entities funds • Approving the use of the fund balance to offset non-recurring expenses • Supporting Boards and other GOs Mr.Reynolds relayed an important policy decision with those one-time revenue transfers was how they would be used. He recommended for Council to set standards so that one-time revenues could only be used to fund one-time costs and or contributions to capital projects. City Council Regular Work Session Minutes August 10,2023 Page 3 of 5 EXPENSES: ONGOING Policy Impact Council create policies and be involved in: • Finances • Creating departments and total expenses • Personnel Count for each department (73%of operating expenditures) • Programs/Services • Growth Rate • Growth Rate (Proposed rate was at 7.9%) EXPENSES: NON-RECURRING Policy Impact Council would: • Money for One-Time Costs • Approve Capital Improvement Plan(CIP) • Operational Programming for CIP and Funding(debt or cash) • Resources to address unforeseen • Determine Contingent Level by Charter operational items • Consider Enterprise Funds Support On non-recurringexpenses, Mr. Reynolds recommended that the Cityadopt a five (5) year CIP p Yn p which would set in motion of chain of events for how Administration moved forward. FUND BALANCE: ENDING Policy Impact Council would determine the reserve balance. • Equate to>$22 Million(70 days) • Base for Following Year • Additional Funding Source for One-Time Expenses Mr. Reynolds displayed the following charts below. He noted the orange line was for their operat- ing expenses and blue was their revenue. Rev v Exp Rev v Exp: Draft Model Talking Point ONLY 130 160 120 150 110 140 130 100 120 90 110 80 100 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 Revenue —Expense Ops Revenue —Expense-Ops Mr. Reynolds provided a few talking points for Council's next Special Budget Work Session. In the middle of FY2025 to FY2026,he highlighted that their expenses would outweigh their revenue. However, Council had a chance to realign and avoid that intersection. The policies up for Council's consideration were listed as follows: • Annual Budget City Council Regular Work Session Minutes August 10,2023 Page4of5 - CIP 5-Year Plan - Revenue>Operating Expenses • Tax Rate • Fees (scheduled increases or as needed) • Debt Issuance • Enterprise Fund(additional allocations) • Days of Reserve • Programs/Services Staffs Budget Questions Ms.Flynt facilitated questions based on the presentation that was given to Council over the budget. The Council Members answered each question. Mr. Reynolds took a moment to address the questions raised around personnel and departments. He first asserted that Council did not determine the employees that were added to the budget. He stated that was his job. Council had zero say, but it was done out of respect to get them involved in the process. For ongoing expenses, Council allocated the funds to each department. All Council should care about was that he spent that amount of money and that he got the job done to their expectation. Mr. Reynolds explained he only said this to start discussions on the policies Council needed to collectively feel more comfortable with how things were spent within the budget. Mayor Pro Tem Lester commented that Mr. Reynolds was technically correct. However, he clari- fied his comments were over the fact that the City was growing,so the Police and Fire Departments increased personnel by seven to nine percent (7%-9%) every year, for example. Mayor Pro Tern Lester expressed that they needed to talk about that budget increase. Mr. Reynolds further spoke on that point in terms of a policy and conversationally made note of what would be unfeasible. Council Member Alvarado similarly clarified that her comments were in terms of understanding of the staffing for public safety. As they took the highest budget, she wished to understand the levels of where they needed to be and how to support the growth needed. The Council Members proceeded to discuss and inquire over matters concerning the staffing of Police and Fire. Council Member Graham mentioned she would rather allow public safety take priority over anything else. Upon further discussion, Mr. Reynolds addressed matters concerning the Police and Fire associa- tions. He emphasized the data that was presented to Council was on behalf of the Chiefs and every other Department Director. While he did not convey anything negative towards the associations, he affirmed that it was their job to look at the data presented from the City and not outside entities. Further discussion ensued over matters concerning public safety and other department personnel. Mr. Reynolds thanked the Council Members for their time and input. He closed the item by noting that their proposed tax rate at that time was around seventy-four cents (740). The number would later be fully vetted and discussed with Council next week on August 15th and 16th City Council Regular Work Session Minutes August 10,2023 Page 5 of 5 3. ADJOURN Mayor Capetillo adjourned the August 10, 2023, City Council Regular Work Session at 6:16 P.M. a 0 ) i 7(:;.0. ""n....774. ,i Angela til son, City s-r`. 1-•;'r L , City of Baytown A r".r ';�,-': r" o \:;.:4',:jg"."...,„ a�°am�nv r+