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HomeMy WebLinkAboutCC 2011-08-05 Minutes MINUTES OF THE BUDGET WORK SESSION OF THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, HELD AT THE NORTH RICHLAND HILLS LIBRARY COMMUNITY ROOM, 9015 GRAND AVENUE, NORTH RICHLAND HILLS, TEXAS — AUGUST 5, 2011 Present: City Council: Oscar Trevino Mayor Tim Barth Council Member / Mayor Pro Tem Tito Rodriguez Council Member Tom Lombard Council Member David Whitson Council Member Scott Turnage Council Member Tim Welch Council Member Staff: Mark Hindman City Manager Karen Bostic Assistant City Manager Jared Miller Assistant City Manager Mike Curtis Managing Director Vickie Loftice Managing Director Jimmy Perdue Director of Public Safety Patricia Hutson City Secretary Larry Koonce Director of Finance Mark Mills Director of Budget Mary Peters Public Information Officer Patrick Hillis Director of Human Resources Andy Jones Fire Chief Craig Hulse Economic Development Director Jennipher Castellanos Budget Analyst Shirley Hoover Financial Analyst Kristin Weegar Sr. Mgmt. Asst. — Dev. Services Andy Kancel Assistant Police Chief Mike Hamlin Assistant Police Chief Absent: Ken Sapp Council Member (present at 1:30 p.m.) CALL TO ORDER Mayor Trevino called the Council Budget Work Session to order August 5, 2011 at 8:31 a.m. with all council members present except Councilman Sapp. Mayor Trevino briefly commented on the budget expressing his support of the budget. The Council also expressed their support of the budget. The Mayor and Council expressed appreciation to the Staff for producing a balanced budget and expressed appreciation and their support of the employees. Budget Work Session Minutes August 5, 2011 Page 2 Throughout the work session Staff presented a PowerPoint presentation that provided an overview of the Revised 2010/2011 and Proposed 2011/2012 Operating and Capital Project Budgets, initiatives to be continued from previous years, trends and major financial and economic issues affecting the budget, and modifications to existing services. The City Manager began the presentation by giving an overview of the budget discussing financial and economic assumptions, the guiding philosophy used to formulate the budget and highlights of the budget. Mr. Hindman reported that the local economy is showing slow signs of recovery, most of the local economic indicators have improved since 2008, and tax revenues have stabilized. Over the last 19 years, one of the trends has been a greater alliance on property taxes. Very limited new development or redevelopment combined with declining values for existing properties has resulted in overall property values essentially remaining flat when compared to last year's figures. Since 2008 property values have dropped approximately $75 million and to collect the same amount of property taxes as in 2008 the City would need to raise the tax rate by 12 cents to remain even. Taxes were last raised in 1993 -1994. The proposed budget does not increase the tax rate to account for the decreased value but maintains a tax rate of $.57 per $100 of assessed value for the 19 year in a row. • Council requested Staff to add in future years to the Tax Revenue History provided to Council in the PowerPoint presentation information on population growth or tax value. Mr. Hindman highlighted some of the past year's accomplishments supporting the Council's Goals and Objectives. Council was advised philosophies used to develop the budget included stabilizing expenditures, the elimination of unplanned use of reserves, adherence to capital replacement plans, and maintaining the City's investments in its physical assets and staff. Some of the highlights of the proposed Budget include: • Continuation of the Capital Improvement Programs • Maintaining the City's investment in its employees through funding to retain existing health, benefit and retirement programs; a salary increase is not currently in the budget but funding equivalent to a 2% merit increase and market based pay range adjustments is included as an option for consideration by Council. Staff is recommending the increase to be held until January 2012 to determine if sales tax revenues are coming in as projected. • Restoring $100,000 of the $200,000 reduction in 2010/2011 to street maintenance funds in an effort to minimize the amount of street inventory that requires replacement in the future. • Full funding of any program costs related to code enforcement and neighborhood revitalization • Funding for the replacement of major capital equipment and maintenance projects for several city facilities. Changes in the proposed 2011/2012 budget include: Budget Work Session Minutes August 5, 2011 Page 3 • SRO position reduced — Birdville Independent School District has had to reduce the number of School Resource Officers from four to three as a result of the state education funding crisis. The SRO position remains in the budget as an unfunded position allowing the reduction to be restored should funding from Birdville Independent School District and the City become available in the future. • Reinstatement of one firefighter position — Several years ago a Fire Public Safety Education Specialist was established by pulling one firefighter position off of one of the three fire shifts. Staff is recommending the reinstatement of the position while leaving the Education Specialist position intact. • Opening of NRH Centre /Senior Center — Revenues and expenses related to the recreation center programs have been moved out of the General Fund to the Park and Recreation Facilities Development Fund in preparation for the opening of the NRH Centre in the spring of 2012. Between start-up costs and limited revenue during the first half of the year, the Park and Recreation Facilities Development Fund will require the appropriation of fund balance and a contribution from the revenue bond reserve. Once the facility is able to operate on a full year basis, future years should not require the utilization of reserve funds. • Completion of Golf Fund Initial Pay Off — The Golf Fund has retired the original construction debt for Iron Horse and will begin funding more of its capital needs on a cash basis and begin repaying the General Fund for funds loaned the past few years for equipment purchases. • Utility Fund Rate Adjustments — The Utility Fund includes a water rate increase and a sewer rate increase reflecting the first year of a multi -year plan established through a rate study to implement rates needed to fund upcoming capital improvement projects and the cost for wholesale water and sewer treatment. Mr. Hindman discussed with Council some of the highest priority unfunded needs and requested Council consider restoring some of them to the budget. Items discussed were: Reinstatement of Full Stability Pay $ 97,765 Salary increase $281,504 Fraud /Computer Crimes Detective $ 73,713 Library materials $ 20,000 Two Parks Maintenance Workers $ 86,298 Restoration of Street Maintenance Budget $100,000 Enhanced Neighborhood Initiative Program $ 50,000 Fire Stations #1 & #4 Apparatus Bay Floor Resurface $135,000 Mr. Hindman advised of programs /projects he would like to see accomplished during the next budget year: Budget Work Session Minutes August 5, 2011 Page 4 Action Steps for 2011/12 • Substantial progress on Boulevard 26 • Develop plans to implement Regional Assessment and Opportunity Analysis for Inside Loop 820 • Confirm plan for City facilities • Continue progress on improving property conditions • Food Lion property use resolved Mr. Craig Hulse, Director of Economic Development presented the economic outlook discussing national and local trends. Mr. Hulse discussed the consumer confidence index, consumer credit, prime mortgage lending and foreclosure and distressed housing levels. Council was updated on local business and employment growth trends, taxable sales comparisons, commercial and new residential permits and real estate taxable value trends. Mr. Patrick Hillis, Director of Human Resources, presented the proposed compensation and benefits program for the 2011/2012 budget. Council was advised of the City's recruitment efforts the past year and turnover activity. For Fiscal Year 2010/2011 the City's health insurance costs have been under budget. The Fiscal Year 2011/2012 budget includes a 3% increase for health /medical and 3% increase to employee monthly medical premiums with no plan design changes. Mr. Hillis discussed conducting the salary survey, the methodology for the survey and the results of the most recent survey. Council was given an update on the City's Wellness Program and advised that next fiscal year the City plans to offer to the employees Health Check 2011, skin cancer screening, Naturally Slim on -line weight loss program and a fitness challenge for employees. Mr. Hillis advised that the passage of Senate Bill 350 will have a positive impact on the City's retirement program by lowering the ultimate contribution rate to the retirement program. It is anticipated that there will be a slight increase in the City's contribution rate in 2012. No changes are planned to the Retirement Program in Fiscal Year 2011/2012. Mr. Mark Mills, Budget Director, provided an overview of the Revised 2010/2011 General Fund Budget. Mr. Mills compared the adopted versus the revised revenues and expenditures and appropriations of fund balance. The revised budget projects an increase of $1.3 million in total revenue and a $1.2 million increase in expenditures over the Fiscal Year 2010/2011 Adopted Budget. Mr. Mills provided an overview of the Proposed 2011/2012 General Fund Budget. Mr. Mills gave an overview of net taxable value history. The net property taxable value for tax year 2011 is $3,618,184,021 compared to $3,602,317,711 for tax year 2010. For FY 2011 -2012 General Fund sales tax revenues are projected at $8,417,919 and total revenue is projected at $37,732,042, an increase from FY 2010/11 adopted revenues by $98,370. Expenditures are forecast to be $37,603,760 a reduction of $49,912 compared to FY 2010/11. For the 19 consecutive year, the tax rate is proposed to be set at 57¢ per $100 valuation. Mr. Mills explained the two components of the tax rate and reviewed the history of the 57¢ tax rate distribution since inception to present. Budget Work Session Minutes August 5, 2011 Page 5 Tax Rate Components: General Fund — M & O 62.5% $0.356419 Debt Service Fund & TIFS 37.5% $0.213581 Total Distribution of Tax Rate 100% $0.570000 Council was advised the proposed tax rate was expected to remain lower than the effective tax rate of $0.581415. Mr. Larry Koonce, Director of Finance, reviewed the Summary of Property Tax Revenue and Distribution and the General Debt Service Fund. Ms. Karen Bostic, Assistant City Manager, discussed with Council the City's debt capacity over the next ten years. Council was advised that remaining from the 1994 bond election is $425,000 in authorized unissued bonds for Holiday Lane at 820 which will be done after the expansion of Loop 820. Council was updated on the remaining authorized unissued bonds from the 2003 election. Amount Amount Issued 2011 Issue Authorized Authorized to Date Un- Issued Streets $30,010,000 $22,200,000 $ 750,000 $ 7,060,000 Drainage 4,000,000 1,640,000 1,115,000 1,245,000 Public Safety 1,900,000 1,650,000 0 250,000 Facilities Animal Shelter 1,300,000 0 0 1,300,000 Expansion Total $37,210,000 $25,490,000 $1,865,000 $9,855,000 Mayor Trevino recessed the work session at 10:39 a.m. and called the work session back to order at 10:45 a.m. Ms. Bostic explained the total debt capacity for ten years assuming a 57¢ tax rate and the ten year debt capacity for tax rates with a 1¢, 2¢, 3¢ and 4¢ increase with 0% tax growth to 4% tax growth. Council was advised of the effect the increases would have on the average taxable value. Council concurred with the General Fund budget as presented and with setting the tax rate at 57¢ per $100 valuation. Mr. Mills began a review of the Special Revenue Funds beginning with the Park and Recreation Facility Development Fund. Mr. Mills highlighted the Revised 2010/2011 Park Fund Revenues and Expenditures and the preliminary 2011/2012 Park Fund Revenues and Expenditures. Revenues and expenditures in the 2010/2011 Revised Budget Work Session Minutes August 5, 2011 Page 6 Budget have been revised to $4,761,757, an overall revenue increase of $140,606. For the Proposed 2011/2012 budget, revenue is projected at $7,195,832 and expenditures are projected at $7,142,066. Sales tax revenues are projected to increase $97,205 between the Adopted 2010/2011 and Proposed 2011/2012 budget. Overall, revenues will increase $2,574,681. The largest increase in the fund is the result of the opening of the NRH Centre. Mayor Trevino announced at 11:08 a.m. that he was recessing the Council Budget Work Session and calling the Crime Control and Prevention District Budget Work Session to order. After the District's Board of Directors discussed the proposed budget, Mayor Trevino adjourned the Crime District Work Session at 11:17 a.m. and called the Council's Budget Work Session back to order at 11:17 a.m. Staff reviewed and discussed with Council the remaining budgets for the Special Revenue Funds consisting of the Promotional Fund, Donations Fund, Special Investigation Fund, Drainage Utility Fund, Gas Development Fund, and Traffic Safety Fund. Council was advised that there were no significant changes to these funds. Council concurred with the budgets for the Special Revenue Funds as presented. The Revised and Proposed Budgets for the Enterprise Funds (Utility Fund, Aquatic Park Fund and Golf Fund) were presented to Council. Ms. Bostic highlighted the Revised 2010/2011 Utility Fund Revenues and Expenditures. Total Revised Revenues and Appropriation from Fund Balance are $26,087,856, an increase of $867,771 from Adopted. Total Revised Expenditures are $25,897,745, an increase of $677,660 from Adopted. Ms. Bostic recapped the new rate structure resulting from the Impact Fees Study and Utility Rate Study performed earlier in the year and presented to Council in June. The Proposed 2011 -2012 budget includes the implementation of the new rate structure and the impact of pass through charges. Water sales and charges for FY 2011/2012 are projected to be $17,500,895, sewer sales and charges are projected to be $8,778,309 and miscellaneous revenue is projected to be $973,261 for total revenue of $27,252,464. Total expenditures are projected to be $26,982,213. Ms. Bostic highlighted the Revised 2010/2011 Aquatic Park Fund. Total revenue for the 2010/11 season is projected at $4,879,377, a 7.11% increase over the Adopted Budget. Expenditures are revised to $4,879,377. Infrastructure & Major Repairs has been increased to fund an expansion to the Viper project to include a conveyor system for the tubes. The increased revenues also allowed for an increase in the Reserve for Park Expansion. The Proposed 2011/2012 budget projects revenues of $4,556,246 and expenditures of $4,543,287. Ms. Bostic highlighted the budget for the Golf Course Fund discussing the history of rounds of golf played, the 2010/2011 Revised Golf Course Revenues and Expenditures and Proposed 2011/2012 Revenues and Expenditures. Revised Revenues for FY 2010/2011 are projected at $2,379,615 and Revised Expenditures are projected at $2,377,295. The proposed 2011/2012 Budget projects net revenues of $2,272,018 and expenditures of $2,260,350. Included in the FY 2011/2012 budget is $139,250 for Budget Work Session Minutes August 5, 2011 Page 7 equipment replacement. Mayor Trevino called Staff's attention to three vacant lots, possibly a drainage easement, near Tyson that needed to be maintained. Staff advised they would look into and work together to resolve the issue. There was a brief discussion by Council on additional revenues that could be generated if the pavilion was enclosed. Council concurred with the Enterprise Funds as presented. Mayor Trevino recessed the work session at 12:01 p.m. and called the work session back to order at 1:30 p.m. All Council members and Staff were present as previously recorded with the addition of Councilman Sapp. Mr. Mills presented overviews of the Internal Service Funds consisting of the Facility /Construction Management Fund, Fleet Services Fund, Information Services Fund and Insurance Fund. Council concurred with the Internal Service Funds as presented and with the budgets for all Operating Funds. Council began a review and discussion of the Capital Improvements Program Budget. The total proposed CIP Budget for 2011/2012 is $18,753,405. The total proposed CIP Budget for Public Works is approximately $11.3 million consisting of $3.04 for streets, $1.69 million for Drainage and $6.58 million for utility improvements. Mr. Curtis highlighted the completed street, drainage and utility projects. For Fiscal Year 2011/2012 the proposed Public Works Capital Improvements Program consists of twenty -one continuing street projects, five new street projects, seven continuing drainage projects, three new drainage projects, six continuing utility projects, and nine new utility projects. An overview of the significant projects was presented. After discussion and questions from the Council, Council concurred with the Public Works Capital Improvements Program. Ms. Vickie Loftice, Managing Director, presented the Park and Recreation Facilities Development Corporation Capital Projects Budget for Fiscal Year 2011/2012. The total proposed budget is $2,239,195. Ms. Loftice highlighted the continuing projects and four new projects. Ms. Loftice presented the proposed 2011/2012 NRH2O Waterpark Budget. The proposed budget includes two continuing projects and one new project for general facility improvements for a total of $90,000. The Council concurred with the Park and Recreation Capital Projects Budget and the Aquatic Park Budget. Council reviewed and discussed the Municipal Facility Capital Improvements Program for 2011/2012. Mr. Miller highlighted the municipal facilities projects consisting of six Budget Work Session Minutes August 5, 2011 Page 8 continuing projects, one permanent building maintenance project and two new facility projects. There were no questions from Council on the projects. Staff presented to Council the Major Capital Equipment Program. Ms. Bostic highlighted the Continuing Technology Projects (Police Department Notebook Replacement and SCADA Control Upgrade) and New Technology Projects (Video/Camera Security System Replacement, Computer/Phone Upgrade/Replacement for NRH Centre, Hardware Replacement for IBM AS 400 and Teleworks Replacement). Council discussed the video/camera security system replacement and the consensus was to remove the project from the CIP Budget and use an alternate funding source for the project. Mr. Miller presented the Major Equipment Capital Projects and the Economic Development Projects. The Council concurred with the 2011/2012 Capital Projects Budget. Mr. Mills reviewed the budget calendar and dates for the upcoming public hearings. At the request of Council, Mr. Hindman re-addressed some of the unfinanced needs. Mr. Hindman discussed possible ways to fund the full stability pay and 2% compensation adjustment. Mr. Hindman suggested implementing the merit adjustment after the first of the year using reserves as the funding source. He suggested lowering the capital improvements reserves from $300,000 to $50,000 and combine with the General Fund ending balance of excess revenues over expenditures. Mr. Hindman recommended funding the full stability pay in the Fiscal Year 2012 budget and delaying the 2% compensation until after the first of the year. The compensation increase would be reassessed in January and implementation would be contingent on revenues and economic conditions. Mr. Hindman recommended that the Fraud/computer Crimes Detective be funded from any savings as a result of the Public Safety Consolidation project and after completion of the project funding would be evaluated. The consensus of the Council was to follow the City Manager's recommendation on the unfinanced needs. There being no further business, Mayor Trevino . e th- rk session on August 5, 2011 at 3:23 p.m. Oscar Trevino — j `i - or ‘\ ............. .. - 4 0" : 5 v o P4 icia HMS4 y Secretary .••• 4„/ImialiAlso