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2023 08 16 WS Minutes, Budget MINUTES OF THE SPECIAL BUDGET WORK SESSION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN August 16, 2023 The City Council of the City of Baytown, Texas, met in a Special Budget Work Session on Thursday,August 16, 2023, at 5:36 P.M. in the City of Baytown's Fire Training Center located at 7022 Bayway Drive, Baytown, Texas, with the following in attendance: Laura Alvarado Council Member Sarah Graham Council Member Kenrick Griffith Council Member Jacob Powell Council Member Mike Lester Mayor Pro Tern Brandon Capetillo Mayor Jason Reynolds City Manager Scott Lemond City Attorney Angela Jackson City Clerk Mayor Capetillo convened the August 16, 2023, City Council Special Budget Work Session with a quorum present at 5:36 P.M. All members present with the exception of the absence of Council Member Heather Betancourth. 1. CITIZEN COMMENTS Mayor Capetillo announced no citizen had signed up to speak. 2. DISCUSSIONS a. Discuss the City of Baytown Fiscal Year 2023-24 Proposed Budget. City Manager Jason Reynolds facilitated the discussion of the City's Fiscal Year 2023-2024 Pro- posed Budget. The following numbers were provided and discussed amongst Council and Staff: GENERAL FUND Actual Budget Estimated Proposed 2021-22 2022-23 2022-23 2023-24 Revenues Taxes-Property $ 22,795,782 S 24,000,000 $ 25,038,783 $ 25,450,617 Taxes-Sales&Franchise 24,034,771 25,317,917 25,697,205 26,138,868 Payment In Lieu of Taxes 389,646 410,000 309,823 400,000 Special Assessments 221,747 284,610 200,000 200,000 Industrial District Taxes 65,730,347 66,500,000 66,500,000 65.500,000 Total Taxes 113,172,293 116,512,527 117,745,811 117,689,485 City Council Budget Work Session Minutes August 16,2023 Page 2 of 5 Licenses&Permits 2,227,669 2,652,467 2,469,659 2,409,563 Intergovernmental 1,717,326 1,173,933 1.279,759 1,133,973 Charges for Services 2,585,438 2,487,976 2,400,784 2,454,595 Fines&Forfeitures 1,463,619 1,649,405 1.352.375 1,393,000 Miscellaneous 5,777,609 1,158,970 1,698,365 1.780,515 Transfers In 1,638,578 3,207,413 3.207,833 6,207,413 Total Revenues 128.582,532 128,842,691 130,154,586 133,068,544 Recurring Expenditures by Type Personnel Services 82,204,048 88,578,271 91,319,546 96.285,629 Supplies 5,136,980 6,860,081 6,718,346 7,875,636 Maintenance 6,881,271 8,017.899 7,953,942 9,574,396 Services 12,690,300 15,387.381 13,775,636 16,692,330 Sundry 39,765 63,642 58,599 67.764 Miscellaneous 1,100 12,000 - - Total Operating 106,953,464 118,919.274 119,826,069 130,495,755 Non-Recurring Expenditures Capital Outlay 1,900,075 1,169,217 1,323,717 893,500 Transfers Out 24,935,571 26,392,311 21.365,811 3.677,811 Contingency - 2,015,000 1,750,000 1,000,000 Total Expenditures 133,789,110 148,495,802 144.265,597 136,067,066 Excess(Deficit)Revenues Over Expenditures (5,206,578) (19,653,111) (14,111,011) (2,998,522) Fund Balance-Beginning 48,976,075 43,769,497 ' 43,769,497 29,658,486 Fund Balance-Ending $ 43.769.497 $ 24.116.386 $ 29.658.486 $ 26.659.964 Days of Operating Expenditures 149 74 90 75 ENTERPRISE FUNDS FY24 Proposed 2023 vs 2024(%Change) Reserve Hotel/Motel—Fund 232 1,575,111 (46%) 630 Days Sanitation—Fund 500 8,308,309 2.9% (28)Days Aquatics—Fund 502 4,534,547 11.9% , (82)Days Storm Water—Fund 505 3,453,566 (32.7%) 807 Days Water and Sewer—Fund 520 53,915,723 9.1% 112 Days Garage—Fund 552 3,362,722 (1%) N/A Warehouse—Fund 552 461,447 11.6% N/A FY24 PROPOSED WATER AND SEWER RATES—6% INCREASE Water - Single Family Residential Water - Single Family Residential Inside Cit Outside Cit Current Rates Current Proposed Current Rates Current Proposed Tier 1 First 2,000 $ 2.57 $ 2.72 Tier 1 First 2,000 $ 3.86 $ 4.09 Tier 2 Next 4,000 $ 6.41 $ 6.79 Tier 2 Next 4,000 $ 9.62 $ 10.20 Tier 3 Over 6,000 $ 8.84 $ 9.37 Tier 3 Over 6,000 $ 13.26 $ 14.06 City Council Budget Work Session Minutes August 16,2023 Page 3 of 5 Sewer - Single Family Residental Sewer - Single Family Residental Inside Cit Outside Cit Current Rates Current Proposed Current Rates Current Proposed Tier 1 First 2,000 $ 2.81 $ 2.98 Tier 1 First 2,000 $ 4.22 $ 4.47 Tier 2 Over 2,000 $ 6.36 $ 6.74 Tier 2 Over 2,000 $ 9.54 $ 10.11 2,000 Gallon Bill- Inside City 2,000 Gallon Bill -Outside City Charges Current Proposed Charges Current Proposed Water Base Charge $ 11.15 $ 11.15 Water Base Charge $ 16.73 $ 16.73 Water $ 5.14 $ 5.45 Water $ 7.72 $ 8.18 Sewer Base Charge $ 12.04 $ 12.04 Sewer Base Charge $ 18.07 $ 18.07 Sewer $ 5.62 $ 5.96 Sewer $ 8.44 $ 8.95 Garbage $ 27.02 $ 27.02 Garbage $ - _ $ - Recycling $ 2.98 $ 2.98 Recycling $ - $ - MDUS $ 4.00 $ 4.00 MDUS $ - $ Total $ 67.95 $ 68.60 Total $ 50.96 $ 51.93 Impact to Customer(6%) $ 0.65 Impact to Customer(6%) $ 0.97 6,000 Gallon Bill - Inside City 6,000 Gallon Bill -Outside City Charges Current Proposed Charges Current Proposed Water Base Charge $ 11.15 $ 11.15 Water Base Charge $ 16.73 $ 16.73 Water $ 30.78 $ 32.63 Water $ 46.20 $ 48.97 Sewer Base Charge $ 12.04 $ 12.04 Sewer Base Charge $ 18.07 $ 18.07 Sewer $ 31.06 $ 32.92 Sewer $ _ 46.60 $ 49.40 Garbage $ 27.02 $ 27.02 Garbage $ - $ - Recycling $ 2.98 $ 2.98 Recycling $ - $ - MDUS $ 4.00 $ 4.00 MDUS _ $ - _ $ - Total $ 119.03 $ 122.74 Total $ 127.60 $ 133.17 Impact to Customer(6%) $ 3.71 Impact to Customer(6%) $ 5.57 Next, Mr. Reynolds posed the following questions to the Council Members regarding the decision points they needed to make for the General Fund: Tax Rate • Question: Are we okay with the tax rate of 74.50? • Response of Council: Yes Reserves • Question: Are we happy with the reserves of 75 days? • Response of Council: Yes Expenses • Question: Are we okay with expense growth at 9.7%? • Response of Council: Yes • Question: Are we okay with the 3.3% growth in all other operations? • Response of Council: Yes, or at least acceptable with their plan to review their programs. City Council Budget Work Session Minutes August 16,2023 Page 4 of 5 As Council agreed with all those questions, Mr. Reynolds relayed they just approved the General Fund budget. He then asked Council the following questions concerning their Enterprise Funds: Enterprise Funds • Question: Are we happy with the suggestions for the Enterprise Funds? • Response of Council: Somewhat okay • Question: Are you in agreeance with the 6%water and sewer increase on rates? • Response of Council:Understood the 6%,but were interested in reducing that if they were to have options. They also voiced their interest in finding another water source. Mr. Reynolds then questioned Council over the City of Baytown having Juneteenth as a paid em- ployee holiday. Staff and Council deliberated over the question,but Council ultimately settled that they would leave the matter alone. Next, Council discussed over credit card fees as they wished to reduce the amount of money it took citizens to pay their water bill. In their discussion, allowing the use of e-checks and moving from paper bills to emails was suggested by Council. The discussion then evolved to each Council Member questioning or commenting over specific budget items. Of those discussions, the following Council Members provided direction to Staff: Mayor Pro Tem Lester • Requested to have a new policy for getting new street lighting. • Expressed concern with the departments that decreased their education and training. At 7:18 P.M., Mayor Capetillo recessed the meeting and later reconvened at 7:34 P.M. Council Member Powell • Suggested the City Council budget item of$300,000 for capital to be removed as it was difficult for Staff to execute, it could cause issues, and was unnecessary. On Council Member Powell's suggestion, Council Member Griffith alternatively wanted to see guidelines for that. Mayor Capetillo took a moment to speak on the origins of that budget item. After being told no for many years,he wanted the Council Members to have the ability to identify needs in their district and to have funding available.Council Member Graham commented that she was not on board to get rid of that, especially as they were moving so much money around. In response, Council Member Powell noted nothing that had been mentioned were needs. They were talking about district-specific amenities. Thus,the item was for$300,000 on district-specific wants. If they were to identify needs,he believed they should then put that in the budget.He further described the item as a$300,000 blank check, $50,000 for each of them. The Council Members further deliberated over the matter. Council Member Alvarado agreed that they needed guidelines versus taking it all away. However, Mayor Pro Tern Lester stated he would rather"fight his battles" at their Budget Work Sessions to get projects done than for them to have a$50,000 blank check. Mayor Capetillo, on the other hand, agreed with having guidelines. Mr. Reynolds summarized the consensus of Council was to keep the budget item, so he proposed they move it in to the Neighborhood Grant Program. Library Director Jamie Eustace, however, City Council Budget Work Session Minutes August 16,2023 Page 5 of 5 made note of her capacity issues. Nevertheless, she acknowledged that it could be a source for participatory budgeting. Based on their deliberation, Council Member Powell was in favor with moving it in to the Neighborhood Grant Program as the guidelines and process were already there. Mayor Capetillo alternatively suggested that it could be tied to some kind of strategic initiative. The Council Members than continued to individually voice their questions and comments over the budget. In their discussions,the Council Members that provided direction to Staff were as follows: Mayor Capetillo • Interested in having the Jenkins Park Train for events. • Suggested continuing their pop-up park events. Mayor Pro Tem Lester • Requested to have software budget items in the actual department's budget as opposed to it being rolled in to the Information Technology Services (ITS) Department's budget. Mr. Reynolds assured Mayor Pro Tem Lester that they would find a better way to present that. He gave a few closing comments,such as thanking all the Staff present,before the meeting adjourned. 3. ADJOURN With there being no further business to discuss, Mayor Capetillo adjourned the August 16, 2023, City Council Special Budget Work Session at 8:10 P.M. 7......---- 4.... v*N‘N'Ilivivk _.._ bra a Cr) / Angela Ja kson, Cit Clerk , -,--' City of Baytown •1, tr`. � ,;;.` -` , : ,0 ' ,i -