2013 08 01 CC Minutes, SpecialMINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL
OF THE CITY OF BAYTOWN
August 01, 2013
The City Council of the City of Baytown, Texas, met in a Special Meeting on Thursday, August
01, 2013, at 6:00 P.M. in the Council Chamber of the Baytown City Hall, 2401 Market Street,
Baytown, Texas with the following in attendance:
Brandon Capetillo
Council Member
Robert Hoskins
Council Member
Mercedes Renteria
Council Member
Terry Sain
Council Member
Scott Sheley
Council Member
Stephen H. DonCarlos Mayor
Robert D. Leiper
Ron Bottoms
Kevin Troller
Ignacio Ramirez
Leticia Brysch
Keith Dougherty
City Manager
Deputy City Manager
Assistant City Manager
City Attorney
City Clerk
Sergeant at Anus
Mayor DonCarlos convened the August 01, 2013, City Council Special Meeting with a quorum
present at 6:00 P.M., all members were present with the exception of Council Members Hoskins
who arrived at 6:16 P.M., and McCartney who was absent.
1. PUBLIC HEARINGS
a. Conduct the second public hearing regarding the proposed disannexation of
approximately 43.8 acres located on the north side of the I -10 feeder road, west of
Thompson Road, legally known as a portion of land out of the Nathaniel Lynch Survey,
Abstract 55, Harris County, Texas.
At 6:03 P.M., Mayor DonCarlos opened and conducted the second public hearing regarding the
proposed disannexation of approximately 43.8 acres located on the north side of the I -10 feeder
road, west of Thompson Road, legally known as a portion of land out of the Nathaniel Lynch
Survey, Abstract 55, Harris County, Texas.
City Manager Leiper stated that the City entered into a Strategic Partnership Agreement (SPA)
with Lake Municipal Utility District (Lake MUD) and annexed a portion of its land for limited
purposes on June 27, 2005, to collect sales and use tax on any commercial development in the
area. He stated that since that time, the area has been developed into residential lots as West
Meadows subdivision and that the City and Lake MUD agree to the disannexation of this area.
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August 01, 2013
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With there being no one registered to speak, Mayor DonCarlos closed the second public hearing
at 6:04 P.M.
2. DISCUSSIONS
a. Discuss the City of Baytown Fiscal Year 2013 -14 Proposed Budget.
City Manager Leiper presented the agenda item to discuss the City of Baytown Fiscal Year
2013 -14 Proposed Budget and stated that the discussion will cover General Fund, General Debt
Service Fund 2007 GO Bonds, Water and Sewer Fund (Utility Capital Improvements), Sanitation
Fund, Storm Water Utility Fund, Hotel Occupancy Tax (HOT), and Street Maintenance Sales
Tax Fund.
City Manager Leiper stated that the budget priorities were altered from last year and that instead
of maintaining services, we are focusing the priorities enhance and improve our services through
public safety; expanding essential services; attracting and retaining the highest quality workforce
and providing competitive employee benefit programs; implementing capital projects and bond
programs to ensure that our infrastructure keeps pace with our growth; continue quality of life
and infrastructure maintenance and improvement programs; continuing economic development
in all areas; and ensuring long term financial integrity.
City Manager Leiper stated that a 6.8% increase which totals approximately $4,500,000 is
proposed for the General Funds in which the majority is in personnel costs. He stated that the 17
public safety positions and the pay increase that were added last year increased this year's budget
by approximately $2 million. He stated that the budget is proposed for no property tax rate
increase, but includes the seven other bonds and keeping them moving forward. City Manager
Leiper stated that the 2010 Water and Sewer Rate Study provided a plan of the increases
necessary to fund the operations and bonds for ten years beginning the year 2013 with a rate of
5.85 %. He stated that the 2013 year was skipped, but proposes for it to start in 2014. He stated
that there are no increases proposed in the Sanitation, Storm Water, Building Inspection/Permit,
or Parks Department building use fees. Additionally, City Manager Leiper stated that the overall
2013 44 proposed budget is for about $162,000,000 which is a 13.2% increase.
City Manager Leiper stated that the focus of this budget is to begin enhancing the service levels
to meet the City's growth needs while starting the return to market in salary compensation. He
stated that in terms of enhancing service levels, there would be six (6) additional Police Officers,
one (1) Police Property Room Technician, three (3) additional Firefighters to open Fire Station 7,
one (1) Combination Building Inspector, a step pay increase for Police and Fire for Civil Service
Step Program, and $1 million set aside for compensation increases, effective January 2014 for
nine (9) months of the year.
City Manager Leiper stated that the General Fund Budget is proposed to utilize $4.9 million of
the fund balance; however there would be a one -time expenditure of $5.5 million. He stated that
this is a balanced budget and the recurring revenues exceed the recurring expenditures.
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August 01, 2013
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Additionally, he stated that the general fund balance is projected to be 73 days at end of the fiscal
year, but is targeted for 60 to 90 days.
During further discussion, City Manager Leiper stated that the tax rate allocation was unchanged
and of the $.82 cent ad valorem, 53.1 % goes to the General Fund and 46.9% goes to the Debt
Services Fund. He stated that the sales tax revenues continue to accelerate and that the assessed
values are estimated to increase about 10% ($234 million) from current certified roll in which the
HCAD certified value is not expected to be received before adoption of the budget. He stated
that the property tax revenues are projected to increase 9.8% and that the Ad Valorem taxes
make up 17% of General Fund revenues.
City Manager Leiper stated that the Sales and Use Taxes are projected to increase $1.2 million
(11.9 %) and is 18% of General Fund revenues. He stated that the Industrial District revenue
increased $1.8 million which is 6.6 %, but included in that number is $600,000 of Industrial
District Agreement advances from ExxonMobil and Chevron Phillips for the police officers. He
stated that the industrial district funds are 44% of General Fund revenues.
City Manager Leiper stated that Permits and Licenses increased $401,000 which is about 45%
and about half of that is for sign operating permits which are good for two (2) years. He stated
that the Intergovernmental transfers increased 56% which was caused by the fire protection
contract with Emergency Services District (ESD) 75 that replaces the old county contract. He
stated that this is a long term contract and that the amount is fixed at $450,000 for the first three
(3) years but thereafter will be determined by analyzing the revenue.
City Manager Leiper stated that the Operating Transfers decreased by almost half of a million
dollars to the direct result of the completion of IKE recovery repayment and that the charges for
services decreased by $104,000. He stated that fines and forfeitures were down slightly at $2.2
million and is budgeted conservatively. He stated that miscellaneous income increased to
$142,000 reflecting an improvement in investment rates following the diversification for greater
returns.
City Manager Leiper stated that 73% of the General Fund Expenditures are primarily due to
personnel services. He stated in regards to employee compensation, that Human Resources (HR)
completed a compensation study to help develop a strategy for returning employees to market.
He stated that utilizing the "new" match cities, it would cost $5 million to bring all of the
employees to market next year. He stated that alternative revenue sources and expenditure
reductions were used to provide as much money as reasonable for compensation increases. City
Manager Leiper stated that to begin the return to paying market salaries, $1 million has been set
aside to fund increases to take effect in January 2014, which is in addition to the Step Program
that's already included in the budget. He stated that of the $5 million dollars that it would cost to
bring everybody to market, 25% would go to the General Fund's Non -Civil Service employees,
35% would be for Fire Civil Service, and 40% would be for Police Civil Service. He stated that
he felt that the most equitable way to distribute the $1 million set aside was based on the
proportionate shortfall cost to market. He stated that general employees make up 62% of the
general fund employees, 20% are police and 18% are fire. City Manager Leiper recommended
that the police get twice their compensation because they are far behind in the market. During
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August 01, 2013
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further discussion an inquiry was made to have criteria set for police officers being hired to
justify the market increase. City Manager Leiper stated that bargaining sessions are in progress
with Police and Fire employee organizations and staff is working to identify 70 to 100 general
fund non civil service employee positions that are further off market, below the minimum pay, or
can't be filled. Additionally, he stated that the budget is proposing that Christmas Eve be an
additional City holiday.
In regards to Health Care Costs and Benefits, City Manager Leiper stated that the Affordable
Care Act impacts Baytown in 2014, and proposed is an allocated cost of $250,000 for part time
employees that work more than 40 hour a week and a couple of administrative positions that
were part time, but will become full time. He stated that there are some changes to the Medical
Plan to control costs and that the City contribution for health insurance increased over $800,000.
He stated that the reason the number is high is to be able to minimize the impact on the
employees, because under his proposed compensation plan, there will be a lot of employees that
will not receive a raise, but will have their insurance increased. He stated that there were two
plans (A and B) that were the same with the exception of the premium, copay and deductible. He
stated that in order to make the plan more efficient and cost effective, there will only be one plan
(Plan A) in which the vast majority of the employees are already on and that already has the
lower premium, copay, and deductible. He stated that employee increases will range from $1.65
per check to $31.42 per check and those former Plan B participants decreases will range from
$27.45 to $64.32 per check.
During further discussion, City Manager Leiper stated that average home value increased to
$129,900, which is a change from the year 2000 when it was $63,500. He stated that the City
taxes paid by average household per year with Homestead exemption are $854 which is $71 per
month to support the City services that the employees provide.
City Manager Leiper stated that the general government is 25% of the general fund budget and
that the City Council budget increased slightly for travel and training purposes in the amount of
$55,795.
During further discussion of the budget, City Manager Leiper stated that Administration has
eight (8) full time equivalents (FTE) and that funding is included to continue the Citizen Survey.
He stated that Fiscal Operations (Finance Department) has (20 FTE) and that the Utility Billing
employees are funded from the water and sewer fund. He stated that the Legal department has
four (4) Attorneys' and two (2) staff supports; Information Technology department has (12
FTE); the Planning and Development Services department has (20 FTE) and adding one
Combination Building Inspector funded by GCCISD permit fees; the Human Resources
department has (8 FTE); the City Clerk has (5 FTE); and the Municipal Court of Record has (16
FTE).
In regards to the City Facilities and Overhead, he stated that the City Facilities is the funding for
all of the joint functions and operations of City Hall (utilities, copiers and maintenance) and
capital maintenance on other facilities (roofs, HVAC). He stated that the General Overhead is
funding for expenditures not directly associated with any other department in the General Fund
such as street lighting ($750,000 for over 5,000 lights), property and liability insurance, special
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August 01, 2013
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programs and contingencies; joint venture with Harris County for public transportation services
in Baytown ($210,000); and Downtown Quiet Zones: $350,000.
City Manager Leiper stated that public safety is 56% of the General Fund Budget which includes
Police, Fire, Communications, and Emergency Management. He stated that Police has (193
FTE), adding six (6) additional Police Officers and equipment plus Property Room Technician
($665,415), and purchasing 20 replacement vehicles at a cost of $800,000. He stated that there's
a proposal for $50,000 for development of a master plan for a Police Facility and $1 million to
relocate the PD garage in which there is $300,000 in the general fund and $700,000 in the 2007
bonds.
City Manager Leiper stated that the Fire and EMS has (150 FTE) and proposing three (3)
additional Firefighters to open Fire Station 7 (FS7) with the cost of almost $300,000. He stated
that in the 2012 -13 budget there were six (6) firefighter's for FS7 and three (3) paramedics to
begin building up staff for a 4`h ambulance. He stated that if the nine (9) additional firefighters
and three (3) additional paramedics were added, the cost would be almost $1 million. He stated
that he recommends adding three (3) new firefighters and three (3) paramedics from last year
(now FF/PM) with use of shift breakers and overtime to get Fire Station 7 open.
During further discussion, City Manager Leiper stated that Emergency Management department
has (5 FTE); Communications has (21 FTE); and stated that the 9-1 -1 Data Center is in the future
for 2013 -14.
He stated that the Public Health is 3% of the general fund budget which includes neighborhood
protection, environmental health, mosquito control, and animal services. He stated that there is
(24 FTE) with the approval of adding a 2 Community Service Crew funded through MDD.
City Manager Leiper stated that public works and engineering is 6% of the general fund budget
which includes engineering, public works administration, streets and drainage, and traffic
control. He stated that there is (34 FTE) in public works and (10 FTE) in Engineering.
City Manager Leiper stated that Culture and Leisure is 10% of the general fund budget which
includes the library and parks and recreation. He stated that the parks and recreation has (40
FTE). He stated that there will be dock repairs at Goose Creek and Britton Parks and $35,000 for
playground equipment in need of replacement. He stated that vast majority of the parks projects
are in the MDD. In regards to aquatics, he stated that there is an increase of almost $1.2 million
in revenues with the expansion and about the same in expenditures. He stated that the attendance
is projected to increase about 40,000 so the capacity will increase by 500. Additionally, he stated
that the Library has (24 FTE).
City Manager Leiper stated that in the Debt Service Fund, the revenues of $15.3 million include
taxes and transfers from other funds. He stated that the expenditures are expected to be $14.3
million and are expected to spend $2.8 million in refunding bond payments with an estimated
debt fund balance of $4.2 million. Additionally, he stated that the Debt Service Fund makes up
2.6% of the total City budgets.
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August 01 , 2013
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During further discussion, City Manager Leiper stated that the tax rate has been behind the
projected rate of $.10 cent and projects that year 2007 will be without a tax increase. He stated
that Year 7 is the last of the $5,000,000 in street improvements and that there are the following
allocations: $400,000 in drainage improvements; half of the construction of the 9 -1 -1 /Data
Center of $4,000,000; $1,300,000 for the Aquatics Facilities which completes the Aquatics
Master Plan excluding Pirates Bay; $525,000 for Parkland north of I -10; and Issuance Costs of
$143,000. He stated that the remaining projects include the 9-1-1/Data Center at $4,000,000,
radio system upgrades for $1,150,000, and carry over matching funds of $5,000,000.
City Manager Leiper stated that his recommendation, which requires no action by Council, is to
consider establishing a Citizens Bond Committee in 2015 and calling a Bond Election in 2016 to
take advantage of additional Industrial District Agreements (IDA) revenues in 2017.
Regarding the Water and Sewer Fund, City Manager Leiper stated that it is not supported by
property taxes but is an enterprise fund supported by water and sewer revenues. He stated that
the expenditures of $42,000,000 are an increase of $7,000,000 primarily due to the increase of
$6,000,000 in Capital Projects. He stated that $6.5 million is being cash funded for water and
sewer projects.
City Manager Leiper stated that Utility Billing/Collections has (21 FTE); Water and Sewer
General Overhead has (1 FTE) with the proposal of adding a new GIS Technician to update and
maintain system maps and assist with design. He stated that there are (42 FTE) in Water
Operations. He stated that the costs associated with the purchase of treated water from BAWA
will increase and BAWA approved a 7.5% increase in rates for 2013 -14, as proposed in the 2010
rate study. He stated that Wastewater Operations has (43 FTE) and Utility Construction has (16
FTE). He stated that $200,000 is included to continue the in -house waterline rehabilitation
program. During further discussion, City Manager Leiper stated that Water and Sewer Rates are
proposed to increase by $4 for Inside Citv Residential Customers and $7 for Outside City
Residential Customers.
City Manager Leiper stated that the FY 2014 Utility Projects is proposed to issue $3.4 million in
debt in conjunction with another issuance to keep the costs down.
City Manager Leiper stated that the Sanitation Fund has (13 FTE) with no increase proposed and
makes up 3.1% of the total city budget. He stated that the revenues are about $4.6 million and the
expenditures are about $5 million with the ending balance of about $340,000.
City Manager Leiper stated that the Storm Water Utility Fund has (4 FTE) and makes up 1% of
the total City budget. He stated that there is no rate increase proposed and that part of the funding
is transferred to the General Fund for partial funding of eligible drainage activities required by
Federal permit. He stated that the revenues are $1.2 million and the expenditures are about the
same having an ending balance of an estimated $254,531.
In regards to the Hotel/Motel Fund, City Manager Leiper stated that revenues are predicted to
increase to $900,000 with proposed expenditures of $1.2 million which is a 47% increase. He
stated that a full -time Marketing Specialists is being proposed. He stated that the proposed
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August 01, 2013
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ending balance is $278,863 and that the Hotel Motel Fund makes up less than 11% of total City
budgets. He stated that the Tourism Partnership Grant projects will be brought before Council in
September and there is $125,000 set aside to fund those grants. He stated that funding for state
wide advertising is being expanded. Additionally, he stated that the costs for tourism and
marketing is $159,000, tourism material is $40,000, tourism website is $8,000, transfer to
General Fund for Graphic Design is $ 10,800, and $350,000 for unforeseen/new initiatives.
During further discussion, City Manager Leiper stated that the collection of sales tax was re-
authorized by voters on November 2011 and up for renewal in 2015. He stated that the estimated
new revenue is up to almost $3 million. He stated that almost $1 million will be utilized from the
previous fund balance. He stated that the budgeted allocation include $1.3 million for Mill &
Overlay, $ 700,000 for Crack and Joint Sealing, almost $1 million in Concrete Street Repair, and
$500,000 in Contingency. City Manager Leiper recommended increasing the contingency to
$900,000.
City Manager Leiper stated that the meetings scheduled for Thursday, August 81h at 6:30 P.M.,
and Thursday, August 22 "d at 6:30 P.M., will have an action item to allow for discussion and
action. He stated that August 22 "d will have a public hearing during the regular session and
Council must take action to postpone voting on the budget as State Law requires for a vote when
there is a public hearing. City Manager Leiper stated that he pro uses the consideration of budget
adoption during the regular session on Thursday, September 12' at 6:30 P.M.
3. ADJOURN
A motion was made by Council Member Terry Sam and seconded by Council Member Brandon
Capetillo adjourning the August 01, 2013, City Council Special Meeting. The vote was as
follows:
Ayes: Mayor Stephen DonCarlos, Council Member Brandon Capetillo, Mayor
Pro Tem Robert C. Hoskins, Council Member Mercedes Renteria 111,
Council Member Terry Sain, Council Member Scott Sheley
Nays: None
Other: Council Member David McCartney (Absent)
Approved
With there being no further business to discuss, Mayor DonCarlos adjourned the August 01,
2013, City Council Special Meeting at 8:14 P.M.
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