2004 08 02 WS MinutesMINUTES OF THE WORK SESSION
OF THE CITY COUNCIL OF THE CITY OF BAYTOWN
August 2, 2004
The City Council of the City of Baytown, Texas, met in work session on August 2, 2004, at
11:11 a.m. in the Hullum Conference Room, Baytown, Texas, with the following in attendance:
Ronnie Anderson
Sammy Mahan
Don Murray
Mercedes Renteria III
Scott Sheley
Calvin Mundinger
Gary M. Jackson
Bob Leiper
Ignacio Ramirez, Sr.
Gary W. Smith
Council Member
Council Member
Council Member
Council Member
Council Member
Mayor
City Manager
Assistant City Manager
City Attorney
City Clerk
The meeting was opened with a quorum present after which the following business was
conducted:
Discuss the 2004 -2005 fiscal year budget.
Mayor Mundinger reviewed the rules for participation. Each person is to participate. Be
courteous and do not interrupt. Respect the views and opinions of others. Stay on the issues.
Pursue the common good of the entire Council. Consensus is the agreement of the majority of
the Council. Staff is guided by consensus.
Gary Jackson, City Manager, presented an overview of the general fund budget. The proposed
expenditures in the general fund are increased by $1,031,729 or 2.4 %.
Enterprise funds are like business. The funds are operated from the special revenues dedicated to
their operations. The revenues are rates and fees, not taxes. The general fund provides the basic
operations that are funded in part by taxes, fines, grants, and industrial district payments.
The general obligation interest and sinking fund provides payment of the debt service on tax -
supported bonds.
The hotel occupancy tax fund provides for limited purpose expenditures, as authorized by
statute. The proposed reduction is due to the removal of the convention center debt financing.
The debt is being transferred to the water and sewer fund to provide capital to pay for water and
sewer projects within the original purpose of the certificates.
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Minutes of the Work Session — August 2, 2004
The expenditures in the general fund from 1999 through 2005 were reviewed. No property tax
rate increase is proposed. No fee, permit, or rental increase is proposed. Three new employees
are proposed, PC Technician, VoIP Technician, and EMS billing clerk. Approximately $2.3
million of the fund balance is proposed to provide for capital and non - recurring expenses. The
total of capital and non - recurring expenses is $2,831,973. The fund balance is proposed to be
reduced from 92 days (current budget) or 109 days (current budget year estimate) to 84 days of
working capital. Each day is valued at $122,000.
The Council engaged in discussion of previous projections of revenues and expenditures in the
general fund. Reductions in general fund expenditures and enhanced general fund revenues
avoid adverse consequences of previous projections. The Council discussed the number of
working days capital that should be maintained. Council discussed whether staff should be
instructed to revise the revenue and expenditure projections based on the historic pattern of
surplus funds at the end of each budget year. Staff explained that using fund balance created in
the previous year does not equate to deficit budgeting. The discussion continued concerning the
benefit of utilizing funds that will be in the fund balance to pay for current year projects. The
Council discussed the possibility of deferring payments in the capital replacement fund in order
to fund current year expenditures.
Mr. Jackson reviewed the projected revenues. In the general fund, 40% will come from
industrial district agreements; 22% will come from property tax; 16% from sales tax; 15% from
other; and 7% from franchises. Assessed values are projected to increase by 3 %. The growth in
the tax levy is projected to be 3 %. Sales tax is projected to grow by 0.7 %. IDA growth is
projected to be 0.6 %. Permits and license revenue is projected to drop by 23.2 %. Transfers in
are down by 4.6 %. Intergovernmental transfers are level. Charges for services are down 0.6 %.
Fines and forfeitures are projected to increase by 8.5 %. Interest on investments is projected to be
up by 12.9 %.
Expenditures for public safety make up 52% of the general fund; for health, 2 %; for public
works, 9 %; for culture and leisure, 12 %, and for general government, 25 %.
Personnel expenditures account for 70% of the general fund and 45% of the overall budget. The
salary ranges were last adjusted in 2000 -2001. Employees received at 2.5% increase in 2003 and
non - collective bargaining employees a 2.5% increase in 2004. Collective bargaining employees
received a 2.1% and a .4% increase in 2004.
Alison Smith, Director of Human Resources, explained how "market" for employee
compensation is calculated. After the study, it was found that the exempt employees were at
93% of market, non - exempt at 97% of market, Police at 94% of market, and Fire at market. The
pay grade structure for non -civil service employees will be raised two grades. On January 1,
each full -time non -civil service employee will receive a 3% pay increase. In Police, the officer
tiers will be compressed from 13 to 10, ranking officers will top out in 10 years, rather than 15,
and certification pay is adjusted and the additional pay for a field training officer is increased. In
Fire, no adjustments are proposed. Any change will be determined through collective
bargaining.
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Minutes of the Work Session — August 2, 2004
Healthcare has a $381,000 deficit. A premium increase is proposed to provide an additional
$60,000 from the employees and retirees and $170,000 from the City. Savings from the change
in coverage will make up the rest of the deficit. Dental is under - funded by 57.9 %. The
premiums will be increased 20% to provide employee funding of the program.
The budget includes a proposal to adopt 20 -year retirement. The cost is $44,025 for the general
fund and $12,884 for other funds. The retiree health package remains unchanged from last year.
Council Member Anderson left the meeting at 2 p.m.
The Council resumed the discussion of reserve levels and the use of the fund balance for current
year projects. The discussion included the possibility of changing the policy on fund balance.
Adjourn.
There being no further business, Council Member Murray moved that the meeting adjourn.
Council Member Renteria seconded the motion. The vote follows:
Ayes: Council Members Mahan, Murray, Renteria, and Sheley
Mayor Mundinger
Nays: None.
The motion carried and the meeting adjourned at 2:32 p.m.
Gary W. Smith
City Clerk