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2004 08 11 WS MinutesMINUTES OF THE WORK SESSION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN August 11, 2004 The City Council of the City of Baytown, Texas, met in work session on August 11, 2004, at 5:00 p.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. Patti Merrell Council Member Council Member Council Member Council Member Council Member Mayor City Manager Assistant City Manager City Attorney Assistant City Clerk The meeting was opened with a quorum present after which the following business was conducted: Discuss the 2004 -2005 fiscal year budget. City Manager Jackson reviewed the Storm Water Utility Rate Structure. Maximus has prepared a new schedule with more classes of rates, with each class having a smaller range. The Council discussed the service levels and impact service that levels One and Two would have on consumers and the general fund. Option One reduces the current charge of $1.00 to $0.23 per month and would generate $169,335 in the 2004 -2005 budget year. Option Two reduces the current charge to $0.48 and would generate $190,425. Mr. Jackson said that, while Option One would have the least impact on the ratepayer, Option Two makes more sense from a cost - accounting standpoint. The funds generated may be moved to the General Fund and used for recurring costs, such as street sweeping. Mr. Jackson said that if Option Two were not adopted in the 2004 -2005 budget, Council would probably be forced to do so in the following year's budget. Assistant City Manager Bob Leiper noted that the cost for the new construction inspector would come from these funds. He said the position has only been budgeted for ten months in the proposed budget, due to the time it will take to advertise and fill the position. Mike Lester, Director of Health and EMS, explained that the funds generated must be used for storm water related projects. He said that if Council chooses Option Two, it will likely fund the Storm Water Pollution Prevention plan through the fourth year. He noted that there will be more unfunded mandates issued by the EPA in the coming years, and when the program reaches years six through ten, Council will probably be forced to adopt level six. Council Members Anderson, Renteria, and Sheley advised staff to plan for this future possibility. Page 2 of 4 Minutes of the Work Session — August 11, 2004 Mr. Jackson queried Council regarding exempting religious organizations and/or schools (except for Lee College, which by law, may not be charged the fee). It was the consensus of Council to adopt Option Two, with no exemptions for schools or religious organizations. The Council then discussed revisions that had been made to the Hotel/Motel budget. Mr. Leiper informed Council that, after the adjustments had been made, $100,000 had been moved into the contingency fund and the days of working capital had been reduced from 391 to 261. Mayor Mundinger noted that this contingency could be a funding source for eligible projects. He thanked staff for making the adjustments requested by Council at the last budget work session. Mr. Jackson then explained the revisions that had been made to the Water and Sewer Fund. He said that the budget proposed for this fund is $22,461,245, with 80 days of working capital. The additional "working capital" funded capital improvements is now 51,044,000, which can be used for any water or sewer - related project. He informed Council that the Street Bond Program is estimated to require $5.9 million, with only $3.5 million in bond money available. He said $750,000 would be needed for water line relocation in relation to the program. He said due to the higher than expected estimate, Council may wish to consider the use of asphalt as an option. Mr. Leiper stated that Pate Engineering is going to reevaluate and bring new options for Council's consideration. He noted that one of the reasons for the high estimate is due to the fact that the cost of steel has tripled. He said Pate is comparing the cost of using concrete to using asphalt, as well as whether or not it is cost effective to mill and recover the asphalt or to simply remove it. Mr. Jackson addressed revisions made to the Sanitation Fund. The proposed budget for this fund is $3,054,443, with 73 days of working capital. The General Fund was then discussed. Mr. Jackson said the proposed budget for this fund is $45,045,862, with 80 days of working capital. The new organizational chart deletes Administrative Services Directors, and includes the second City Manager position as well as a Deputy Finance Director. The current Assistant City Manager's title will change to Deputy City Manager, and he will be the first in the line of succession. Mr. Jackson emphasized that the chart and the departments as assigned to the Deputy and Assistant City Manager could change, depending upon each person's personality, strength, weakness, etc. Council Member Murray agreed that the City Manager needs the flexibility to make such changes, if necessary, and wondered if the new Assistant City Manager could assume the duties of supervising at least one of either the TIRZ #1, BAWA, Redevelopment Authority, or MDD Boards. Mr. Jackson pointed out that it is impossible to include a property tax freeze in the proposed budget due to an Attorney General opinion, which ruled that cities cannot retroactively apply the property tax. The budget year begins on October 1, 2004 and any tax freeze passed by the City Council cannot go into effect until after December 31, 2004. The Attorney General's ruling was against the City of Pasadena, which passed the freeze earlier this year. Council Member Sheley stated that the Texas Municipal League does not recommend that cities pass a tax freeze. Page 3 of 4 Minutes of the Work Session — August 11, 2004 City Attorney Ramirez opined that, since the proposed budget does not contain a tax freeze, such discussion was not appropriate. Council Member Murray said that the issue needed to be resolved soon. Mr. Jackson said that the General Fund also includes $25,000 for a one -time Police Overtime Pilot Program and $250,000 for the Capital Improvement Program. He noted that the net expenditure change is $464,548. Mr. Leiper suggested that, since it will be a diminishing amount each year, the $190,425 gained from adoption of Option Two of the Storm Water Pollution Prevention plan could be added to the funds in the Capital Improvement Program. Council Member Renteria noted that the revenue from the Industrial District agreements could be used for any project Council prefers. Mr. Leiper added that this is recurring revenue. Mr. Jackson informed Council that the Downtown Master Plan will be placed on the September 9, 2004 City Council agenda for adoption. H3 will make the presentation. He said that, among other things, it includes a 50/50 match for any downtown program, if eligible. He emphasized that this 50150 match is not related to another part of the plan, the 50150 fagade program. He indicated that the fagade program needs a great deal of research before implementation. He said this plan could serve as a blueprint for Texas Avenue. In order to be successful, a market -driven downtown must be developed, and a market study may be necessary. He noted that the 50150 match program may be an appropriate source of funding for the market study, but the cost would reduce the match program amount. Mayor Mundinger agreed that a market study is a critical first step. He quoted an article from TML Town and City, which stated that a downtown area that is not market -driven could not succeed. He said he believed a market study to be a smart expenditure. Council Member Murray concurred but wondered where the funds should originate. Businesses will thrive, but should the City expend the funds, or the entrepreneurs? He said the City should communicate with the businesses that the City will assist them, but perhaps Council should wait until the following budget year to decide. He said he would rather have the market study in hand before the City makes any investment and he supports the expenditure for the study. Council Member Renteria said that obtaining the information is imperative. The Mayor noted that the City intends to ask the County for assistance. Council Member Renteria said there would be spillover into other areas of the City. Council Member Murray cautioned that the study should not be too broad as to dilute the results; it should concentrate on one area. Council Member Sheley said that the Downtown Committee appreciates the City's help. He said the study could serve as a model for other areas. He noted that the market study is a one -time expenditure and he supports making the expenditure for it as soon as possible. Page 4 of 4 Minutes of the Work Session — August 11, 2004 Council Member Mahan agreed. Council Member Anderson stated he would withhold comment until he knew the cost of the study. Council Member Sheley said it would be a minimum of $25,000 The Mayor suggested that the authors of the article from which he quoted could be a good resource of information for staff. Council Member Renteria stated that the City Council is doing everything possible to revitalize the downtown area. There was further brief discussion regarding laptop computers for Council and placing Council meetings on the website via webcam. The Mayor said these issues would be addressed at a later date. Council Member Murray stated that the City now had a balanced budget for 2004 -2005 with 80 days of working capital. The Mayor said he appreciated both the staff and Council taking the time for the many long meetings held during the past few days. He noted that the budget work session posted for 4:00 the next day had been canceled. Mr. Leiper announced that the General Fund was $500,000 in the black. Council Member Sheley indicated that he had some issues to discuss privately with the City Manager. He said that he would appreciate due diligence on all of the "gentlemen's agreements" that had been made during these sessions. Adjourn. There being no further business, Council Member Sheley moved that the meeting adjourn. Council Member Murray seconded the motion. The vote follows: Ayes: Council Members Anderson, Mahan, Murray, Renteria, and Sheley Mayor Mundinger Nays: None. The motion carried and the meeting adjourned at 7:03 p.m. 5d Patti Merrell, Assistant City Clerk