Loading...
2017 08 03 WS Minutes, Special Budget MINUTES OF THE SPECIAL BUDGET WORK SESSION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN August 03, 2017 The City Council of the City of Baytown, Texas met in a Special Budget Work Session on Thursday, August 03, 2017, at 5:10 P.M., in the Council Chamber of the Baytown City Hall, 2401 Market Street, Baytown, Texas with the following in attendance: Laura Alvarado Council Member Robert Hoskins Council Member Charles Johnson Council Member David McCartney Council Member Chris Presley Council Member Terry Sain Council Member Stephen DonCarlos Mayor Rick Davis City Manager Ignacio Ramirez City Attorney Leticia Brysch City Clerk Keith Dougherty Sergeant at Arms Mayor DonCarlos convened the August 03, 2017, City Council Special Budget Work Session with a quorum present at 5:10 P.M., all members were present. 1. DISCUSSIONS a. Discuss the City of Baytown Fiscal Year 2017-18 Proposed Budget. City Manager Davis presented the agenda item to discuss the City of Baytown Fiscal Year 2017- 18 Proposed Budget. He noted that the proposed budget was an implementation of the strategic plan in action and further presented a summary of such proposals. City Manager Davis stated that the proposed budget completely implements Council's goal that includes the five (5) priorities of community reputation and image; infrastructure and mobility; community amenities; neighborhood quality; and operational excellence. He stated that the proposed budget avoids a tax rate and water and sewer fee increase, adds to operating reserves, and supports the completion of key capital projects. He stated that the proposal included a request for the following new personnel: Management Analyst to assist with the implementation of new strategic initiatives, Construction Inspector, Inspector I, Plans Examiner, Administrative Assistant-Building Services, Facilities Tradesman, Patrol Officers (4), Asset Manager, Community Service Supervisors (2), Trails Crew (2), Concrete Crew (6), Engineer in Training- CIPF, Storm Water Maintenance Crew(4), and Sweeper Heavy Equipment Operator. Council Member Sain stated that he thought three (3) firefighter positions were included in this proposed budget. City Manager Davis stated that there's a sizeable task to fill the current vacant City Council Special Budget Work Session Meeting Minutes August 03,2017 Page 2 of 6 positions and by such time that those positions are filled; the new Fire Chief would have time to evaluate the need for new positions. City Manager Davis further stated that are more than 17 positions to be filled, but of the original 17 positions there were eleven (11) that were filled leaving six (6)vacant. He stated that beyond that there were the six (6) ambulance crew positions and the three (3) backfill lieutenant positions. He noted that the three (3) lieutenant positions would be worked on, but is not part of the budget proposal but rather the lieutenant move. Council Member Hoskins further inquired if there was only room in the budget for lieutenants. City Manager Davis further explained that the lieutenants were promoted, so the budget supports the three(3) positions that were left vacant as a result of the lieutenants being promoted. For clarity purposes, Council Member Hoskins stated that once the lieutenant positions were promoted it's possible that the remainder of the vacant positions could be filled in the next budget cycle. City Manager Davis stated that Council Member Hoskins's statement was correct and that as many positions as possible would filled this year, but further noted that there may be a continual recruitment until all of the positions were filled. Council Member Hoskins stated that the positions were needed for some time and being that the budget supports such, they should be filled regardless of the Fire Chiefs position. City Manager Davis stated that staff intends to fill, as expeditiously as they can, every position that Council authorized to be filled that is vacant,but further noted that it's highly unlikely that those positions would be filled in a short order. General Manager Davis provided time so that Finance Director, Wade Nickerson could provide details to some of the budget items. Mr. Nickerson stated that the general fund revenues were$13.39 million over the prior budget with some contributing factors being due to the increases of$2.7 million in property taxes and the IDA revenue of approximately$10.2 million. He noted that the operating expenses were increased by $6.5 million, with the bulk of such being related to personnel. He stated that the equipment improvement and replacement costs were budgeted at $2.24 million and the capital projects for $4.06 million, which included a reimbursement of $847,000 to FEMA, lease payments, and $2.85 million for street projects. Mr. Nickerson stated that the operating reserves were increased from 62 days to 74 days. Mayor DonCarlos inquired with regards to reserves as to how much money does one day represent. Mr. Nickerson stated that one day represents approximately$225,000. During further discussion and with regards to the hotel occupancy fund, Mr. Nickerson stated that the revenues were decreased substantially as compared to the prior year, being that the attendance decreased. He stated that because the revenues decreased; the operating expenditures were also decreased by $737,000, which included the transfers of July 3'' and 4`h events, the Grito Fest, and the funding for one (1) of the nature center crews from the HOT fund into the general fund, which is more of an appropriate use of such funding. Additionally, he noted that there was funding included for the convention center project. Mr. Nickerson noted that the aquatics fund revenues were up because of the increased ticket price and use of the additional new rides available. He noted that the total expenditures of$3.5 million were lower than the previous year and were primarily due to the amount being spent on construction and capital outlay. City Council Special Budget Work Session Meeting Minutes August 03,2017 Page 3 of 6 With regards to the water and sewer fund, Mr. Nickerson stated that the revenues increased by $280,000, the operating expenditures by $1.40 million, and the operating reserves by $666,000. Additionally, he noted that there was no increase in the water or sewer rates. Mayor DonCarlos stated that if the revenues for the water and sewer fund were up $280,000 and the operating expenditures up by 5.5%, how could operating reserves be increased by $666,000. Mr. Nickerson stated that the difference is within the capital expenditures, whereas, there would not be as much capital being spent this year. Council Member McCartney inquired of the status on the streets for Bay Oaks Harbor. Deputy City Manager Bottoms stated that it's being worked on as staff is trying to use dollars currently available from other projects to work on those streets as they are going to be hard to do. He further noted that the wait was initially on the street maintenance tax to be re-approved so that the streets could be added to the list. Mayor DonCarlos inquired if there was a timetable for the streets to be done and inquired of the cost to repair those streets. Deputy City Manager Bottoms stated that there wasn't a timetable, but the plan was to build up savings from current projects already being done to work on those streets and noted that he didn't have a cost of such repairs at the time. Council Member Hoskins inquired if part of the reason for the streets not being done was due to the roads being narrower than standard. In response to Council Member Hoskins inquiry, Deputy City Manager Bottoms stated that reasons include drainage issues, as well as, the streets being looped which makes it challenging. Council Member Hoskins further stated for clarity that the plan for those streets were for them to be complete to standard and not just repairs. There was further discussion regarding the streets being concrete and whether there was enough width for them to be widened. Deputy City Manager Bottoms reiterated that the streets have challenges, which is causing the delay in them being done. Mayor DonCarlos requested that staff plan the concrete work and a timetable to get those streets complete. City Manager Davis noted to Council that included in their budget binders was a list of council's goals, along with key initiatives,the lead department for that initiative, an explanation of how the budget addresses that initiative, and how that amount in the budget that supports the completion of that initiative. Council Member McCartney requested a breakdown of how the $20 million allocated for the streets is going to be spent for each project. Mayor DonCarlos requested information and an explanation on the proposed decrease for fines and forfeitures, which seemed to decrease every year. City Manager Davis stated that this decrease is not unique to Baytown or Texas and is actually happening all over the country. He noted that the state laws are ever changing with regards to what the City can fine people and of such fine,what the City can keep,but staff would research more information as requested. Mayor DonCarlos noted that the collections for the municipal court fines were done in-house and further requested for a three(3) year review of such collections. City Council Special Budget Work Session Meeting Minutes August 03,2017 Page 4 of 6 Council Member Hoskins inquired if there was a way to ease the costs of the insurance rate that the employees pay being that an increase is being proposed. City Manager Davis stated that the City of Baytown is a self-insured group and the insurance rate is always going to be the product of experience, therefore, the attempt is to maintain the solvency of the insurance firm by anticipating also what may happen in the coming year based on historical trends. He noted that in the past there's been a generosity of keeping the increase to zero, as well as, giving employees a premium holiday where they didn't have to pay the premium for one(1) month. He further stated that this year some of the fund balance is being utilized to cushion the effect of the rate increase in an incremental phase as opposed to all at once, if necessary. Assistant City Manager Troller noted that the rate is a function of the medical claims and increases of the pharmaceutical costs, whereas, a balance is worked through with the human resources department in terms of how much the City is able to financially subsidize with the lesser of that cost being the responsibility of the employee. Council Member Hoskins stated that being that more revenue is expected to come in with this budget reflecting such, is there possible to see some sort of tax relief to the citizens. City Manager Davis stated that because the local portion of the property tax is such a small portion compared to other jurisdictions, a huge decrease in the City's property tax rate would on the residential side result in a small decrease in the overall burden, because the City's rate is not divaricated from the IDA's. He stated that it would cause a tremendously large decrease in revenue disproportionately because of its linkage to the IDA's. He further noted that something should be done on the stated level to give City's latitude to provide more relief to the residential tax payers. Council Member Hoskins requested for a detailed analysis of the effects of decreasing the tax rate. Council Member McCartney noted that most of the constituents that's he's spoken to state that they would rather see improvements to the City as opposed to getting a$5 to $10 tax cut. City Manager Davis noted for clarity purposes that when more money comes into the City the budget is always going to go up,but it doesn't signal that more spending is being done. He stated that budgeted revenues must equal budgeted expenses, so basically staff is expensing addition to the fund balance. Additionally, he noted that this budget calls for a dedicated one time capital as opposed to the previous budget. Mayor DonCarlos stated that he's on board with fixing what can be fixed since there is extra money, but also stated that within the next five (5) to ten (10) years there'll be a substantial amount of IDA coming in and the City should be in a position to reduce the tax rate. City Manager Davis stated that as the value of the community grows, that buys the City latitude to lower the tax rate as the base and rate are the only two parts to the property tax. He noted that the base has to expand or services must be cut, specifically programs. He further stated that at the retreat in November, this should be a discussion item. Council Member McCartney noted that another contributing factor to the high property tax rate is because the property value is lower than average than in most communities, therefore there's City Council Special Budget Work Session Meeting Minutes August 03,2017 Page 5 of 6 a higher tax rate to offset such. He further noted that the goal is to increase property equity so that the tax rate can decrease. Mayor DonCarlos noted that he was pleased to see the allocations put towards the improvements for the animal facility. City Manager Davis stated that staff followed the recommendations and is now entering into Phase II, which is the implementation of the improvements to animal control. Additionally, he stated that more discussion will be made at the next Council meeting regarding such future plans. With regards to the water and sewer budget, Mayor DonCarlos inquired of the reason for the decrease in personnel. Deputy City Manager Bottoms stated that personnel were not being reduced. Mr. Nickerson further noted that the decrease was due to a cost savings, whereas, a superintendent left and the replacement for such position was internal, but he further reiterated that the number of personnel did not change. Mayor DonCarlos stated that there were still many needs in inflow and infiltration "I&I", particularly on the east side of town and noted that this would not be a good time to pull out on projects related to such improvements, as he's distressed that the City continues to violate its permit. Deputy City Manager Bottoms stated that improvements continue to be made as staff continues to do the annual $1 million sewer rehabilitation, the annual $1 million water rehabilitation, follow the sanitary and sewer overflow initiative (SSOI) with TCEQ, and noted that there's a large expenditure allocated for the Crestmont Lift Station design. Council Member McCartney inquired of what the total amount of I&I repair would be, if it had to be done all at once. In response to Council Member McCartney's inquiry, Deputy City Manager Bottoms stated that he was not certain of the amount, but if looking at the infrastructure that's actually been replaced, staff believes that much of the I&I is coming from the private side and further noted that they're addressing the areas according the SSOI program. City Manager Davis further noted that staff is engaged in a sewer master plan, which was an initiative for the current year, that would provide more intelligence and understanding as to what future improvements would have the most impact. Additionally, Deputy City Manager Bottoms noted that the report for the sewer master plan would be available in September and stated that this year staff was pushing the limit as to what could be done without adding additional debt. Council Member McCartney inquired if staff was going to continue charging people $25 a month that refuse to fix their I&I problem or try to move away from that approach and get a more viable solution. Mayor DonCarlos requested results from the impact of the Kilgore Road Project, as well as, inclusive to the sewer master plan, staff's recommendation as to where the biggest impact would be. He further requested for staff to think of an effective way to utilize the money from the fines and get the problem fixed, if the private lines appears to be the issue. City Manager Davis stated that he's floated the question to other jurisdictions as to correlate capital investment with the impact on I&I and received the response that there's no methodology that could conclusively show the impact of a project on I&I. Deputy City Manager Bottoms recommended having a work session to provide the new council members with a presentation of the work already done, along with a discussion on what's going to be done and noted that the City was not paying fines for the sewer because there's a ten City Council Special Budget Work Session Meeting Minutes August 03,2017 Page 6 of 6 (10) agreement with the state. Council Member Hoskins stated that the City should correct the spillage in the bayou issue now, instead of relying on the leveraged opportunity extended by the state. City Manager Davis stated that the City continues to spend approximately $10 million on sewer improvements and although the issue with the spillage in the bayou has been going on for years, the City's intent is to remedy the situation. Additionally, he noted that staff is currently looking into creative ways through the state to fund private line replacements. During further discussion of the private line issue, City Manager Davis stated that the issue with the fee is that when presenting a lot of folks the cost to repair their lines, the owners don't have the funds to do so, and the $25 fee not coming into compliance helps to subsidize the work that needs to be done. Council Member Alvarado inquired as to what is staff doing to give the owners information of the resources available, if they can't afford it. City Manager Davis stated that a more comprehensive discussion will be done in September, specifically to this topic. During further discussion, it was agreed upon, to further discuss the sewer improvements to include private line issues, the results of the master plan, along with recommended program improvements. Council Member McCartney stated that when he first became a member of Council the average property value was at $80,000 and is now at $120,000. He further inquired if the Council could now put something in place, whereas, moving forward that when the property value appreciates to a certain amount, the rates can decrease and mentor it with the appreciation without causing a financial impact to the City. Mr. Nickerson noted that when the tax rate is lowered, the IDA rate • is also lowered. Lastly, City Manager Davis stated that the directions he received from the Council were to look for opportunities for property tax relief and tackle the I&I issue with a definite resolution. 2. ADJOURN With there being no further business to discuss, Mayor DonCarlos adjourned the August 03, 2017, City Council Special Budget Work Session at 6:14 P.M. Leticia Brysch, City ( k ° ' "' City of Baytown `