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HomeMy WebLinkAboutCC 2023-08-04 Minutes MINUTES OF THE BUDGET WORK SESSION OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, COUNCIL OF THE HELD AT TARRANT COUNTY COLLEGE, NORTHEAST CAMPUS 828 WEST HARDWOOD ROAD, HURST, TX 76054 AUGUST 4, 2023 Present: Oscar Trevino Mayor Tito Rodriguez Place 1 (present at 8:27 a.m.) Rita Wright Oujesky Place 2 Suzy Compton Place 3 Mason Orr Place 4 Blake Vaughn Associate Mayor Pro Tern, Place 5 Scott Turnage Deputy Mayor Pro Tern, Place 6 Kelvin Deupree Mayor Pro Tern, Place 7 Staff Members: Mark Hindman City Manager Paulette Hartman Deputy City Manager Karen Manila Assistant City Manager Caroline Waggoner Assistant City Manager Alicia Richardson City Secretary/Chief Governance Officer Maleshia B. McGinnis City Attorney Mary Peters Communications Director Craig Hulse Director of Economic Development Jimmy Perdue Special Project Coordinator Mark Mills Director of Finance Trudy Lewis Director of Budget and Finance Patrick Hillis Director of Human Resources Stan Tinney Fire Chief Mike Young Police Chief Cecilia Barham Director of Library Services Adrien Pekurney Director of Parks and Recreation Stefanie Martinez Director of Neighborhood Services Billy Owens Assistant to the City Manager Jennipher Castellanos Senior Budget Analyst A. CALL TO ORDER Mayor Trevino called the Budget Work Session to order August 4, 2023 at 8:01 a.m. B. PUBLIC COMMENTS There were no requests to speak from the public. August 4, 2023 City Council Budget Work Session Page 1 of 8 C.1 SUBMISSION OF THE JULY 2023 APPRAISAL ROLL TO THE GOVERNING BODY City Manager Mark Hindman gave an overview of the city's budget process. In accordance with the city charter, the city manager is responsible for preparing and submitting a proposed budget to the City Council at least 45 days prior to the beginning of the fiscal year. The city utilizes the citizen survey as a guide when developing the proposed budget. The results of the survey indicate that citizens are concerned with transportation. The presentations provided today include the revised 2022-2023 and proposed 2023-2024 Operating and Capital Project Budgets. The information presented for the proposed budget includes the base budget and proposed adjustments to the base. The city is approaching the final year for the 2020 Street Bond Program.The last issuance is scheduled for 2024. The city's sales tax is projected to increase 2% in 2024 before it begins to level off. Fine revenues are projected to decrease by $700,000 this year and staff anticipates a decrease in building revenue compared to the previous year. The city will see an increase in interest income, and this will be the final year of American Rescue Plan Act ("ARPA") funding. There is a trend in public safety among the benchmark cities to address and retain police officers. He shared that the city would see an increase in the sewer rate from Fort Worth. In looking forward, future issues for the city include growth slow down, redevelopment/revitalization, labor shortage, and the next bond program. Council member Rodriguez joined the meeting at 8:27 a.m. The City Council and staff discussed vacancies, training and recruiting for the police department, certificates of obligation being included in the city's tax supported debt, and TEXRail ridership. Deputy CityManager Paulette Hartmanprovided an overview of the city's e p Y 9 Y to date for the police department, accomplishments and highlighted the servicesprovided , p p fire department, public works, planning and building inspections, neighborhood services and parks and recreation, NRH2O and the library. The City Point Development is underway and the Peppa Pig Theme Park broke ground in June. The redevelopment Ross/PopShelf/Five Below, Wares pace, ce and projects include Volli Entertainment, , p Boulevard Café. At the direction of City Council, staff is working on a Neighborhood Empowerment Zone (NEZ) and Tax Increment Reinvestment Zone (TIRZ) for Boulevard corridor revitalization.ACode Cou rt was implemented 2 and Davis Boulevard to facilitate 6p to address code compliance cases. The city's 2020 Street Bond Program included 27 streets for reconstruction and the city is halfway through the projects. The budget was increased for preventive street maintenance. Director of Economic Development Craig Hulse presented an overview of the local economy. He reviewed city population trends, key economic indicators, local development trends, existing single-family values, local and commercial real estate trends, and taxable sales. New retail under construction includes Volli Entertainment located at Rufe Snow and 820 (west side); Pop Shelf, Five Below and Ross Dress for Less located at Rufe Snow and 820 (east side); EoS Fitness located at Rufe Snow and Hightower; Seconds & August 4,2023 City Council Budget Work Session Page 2 of 8 il'ill Surplus located at Boulevard 26 and 820; Caddo located Davis Boulevard and North Tarrant Parkway; and Peppa Pig Theme Park located at Boulevard 26 and Harwood. Director of Finance Mark Mills reviewed the July 2023 Appraisal Roll.The data is provided by the Tarrant Appraisal District ("TAD") and the Tarrant County Tax Office. The Truth-in- Taxation calculation cannot be certified until the Certified Roll and Certified Collection Rate information is presented to the City Council. The information was included in the Executive Summary provided to the City Council for the Budget Work Session. The Certified Appraisal Roll for July 2023 specifies $10,744,722,917 for appraised value, $8,623,319,355 for estimated net taxable value, and $141,009,789 for taxable new construction. According to the Certified Appraisal Roll, the market for a North Richland Hills average single-family residence is $383,824. The market is the value established by TAD. The appraised value for the same single-family residence is $337,091. The appraised is the value less appraisal caps. The taxable value for the same single-family residence is $269,976. The taxable value is the appraised value less exemptions (homestead) and tax ceilings (i.e., senior freeze). He reviewed the certified collection rates for the years 2020—2022. The city anticipates a 100% collection rate for 2023.The Certified Roll includes five categories—residential, commercial, industrial, mineral, and agriculture. Mr. Mills provided a historical overview of the net taxable value for Fiscal 9 Years 2015 — 2024. He reviewed the city'ssingle-family sin le-famil market values for Fiscal Year 2024 (table). II m s=CrrCr $age asp 3,314 s Era rear-see Grp 5,981 52i;r+ 2r sirrrr 5,43 sicr cur-sclr9rr ,, 974 s,- aa.i '1 i63 Mr. Mills stated that the City has a 20% homestead exemption and senior tax ceiling. Seniors (over 65) and disabled persons will not pay more property taxes unless (i) they purchased a new home or (ii) they modified (addition) their existing home. Currently, the city has 6,052 (27.3%) residential accounts with senior tax ceilings and 309 (1.4%) residential accounts with disabled person tax ceilings. Mr. Mills provided an overview and breakdown of the total combined tax rate. The current fiscal year tax rate is $2.406371. The tax rate encompasses the Birdville Independent August 4,2023 City Council Budget Work Session Page 3 of 8 School District at$1.2798 (53.2%), Tarrant County and Associated Districts at$0.578599 (24.0%), and North Richland Hills at $0.547972 (22.8%). The city's property tax rate is the combination of Maintenance and Operations (M&O) from the General Fund and Interest and Sinking (I&S) from Debt Service. The property tax cap limits how much properties' taxable value can grow. The property tax cap does not affect the Debt Service rate. The city's current adopted tax rate is $0.547972, of which the M&O is $0.347744 and the l&S is $0.200228. In preparation for the Proposed 2023-2024 Operating and Capital Budgets and Truth-in- Taxation calculations, staff determines the No-New Revenue Rate ("NNRR") and Voter- Approval Rate ("VAR"). The NNRR produces the same amount of taxes if applied to the same properties taxed in both years. The VAR requires an election if the City Council adopts a rate that exceeds the Voter-Approval Rate.The VAR is determined by calculating the No-New Revenue Rate and adding 3.5%, any unused increment, and the debt rate (I&S). The Fiscal Year 2024 No-New Revenue Rate is $0.489389 per $100 of assessed value and the Voter-Approval Rate is $0.498348 per $100 of assessed value. The Ij! proposed Fiscal Year 2024 preliminary tax rate is $0.498155, of which the M&O is $0.322349 and the l&S is $0.175806. The proposed preliminary tax rate of$0.498155 was used to prepare the proposed Fiscal Year 2024 General Fund budget. He reviewed the following table showing the change from Fiscal Year 2023 to preliminary Fiscal Year 2024. Description FY23 FY24 Change Adopted Preliminary @ lPilt'ilmlilpiii iui , i,61`, 'ill III191IIIFP��tiirimii ii r ",:;"d ilni ii qllp� �a ,a i)ii x i ipO��III ,I r z��a ins IIIII I'(( Iar�� � �t i- `=i ,i i0i94) ii _, Os:� It,ii Is = �I Ili III II I1'I .I ;n I� I�,". 0�34��' I•,��I�,�,I,III 0 32234� I III O�J25, �I 22 0.175806 0.0 24422 I&S Tax Rate $0.200 8 $ ($ ) I," =� ,�iIi IIIII IIiIIDq��ih"",*r - ii iOillil,I:j9I IIIIIn (I�diI�I OpIi Ir is �i di ,,J. �ilij �^(,', ,*`"mi, � _ iii11 ayiili ii l,q �;. zE pitllll,iD 'n iillhV9��gitipmm - .,V iIIgII�H III�hIIIi li ill°is ill n mli .. =m61 IIIII���Isn:.se IIdIII 3, ."I Ali IIIIIIi IIIII Idibv -—7-1 li pi0ii liil h�llil 111 dlii li III,IIIII 'i t! i gf s.,m� t,mr J"ip,,l III __ F'Qt l G i��o,( cs a ���II ICI, I. ui�i��IIiI,i r ) Ii 9 C p) �i(4itm3ha it it l��I�t�'`„� tai ,a atll�l - iillii� , r IP,Ii, j 4 rt'p 11II,IO Yjh w$ 4s.A rJ ii�II III�.t' , ($ �4 ,,-74,i H,III li IIIII i � GI��II) _ IIp6I9 l�I Ii oq�� ����i �s '�IIdI p�` Ekh j „ �V9i t ifll , iufi (I III H�a Ui�IQ dIfiiUi�li li ila ! .: i,i E ,IIIP III i�II s'ia`Mi iiiI�hd ,ii O:I„IItii9c- C.2 PRESENTATION OF THE BUDGET AND DISCUSSION OF REVISED 2022- 2023 OPERATING BUDGET AND PROPOSED 2023-2024 OPERATING BUDGET. Mr. Mills discussed the Debt Service Fund and reviewed the 2020 Street Bond Program. The amount issued to date is $43,980,000 and the remaining authorized/unissued bonds is $5,895,000. He also reviewed the debt service capacity and other tax supported debt payments. August 4,2023 City Council Budget Work Session Page 4 of 8 I'. Director of Human Resources Patrick Hillis provided an overview of the proposed recommendations for the compensation and benefits program for 2023-2024. Mr. Hillis explained the merit, step increases, and pay range movement. The proposed budget for the general government pay plan includes a merit increase of 3.5% at maximum of the pay grade and a 2% pay range adjustment, both effective October 1, 2023. The public safety (police and fire) pay plans include a 4% range adjustment on October 1, 2023 and additional salary adjustments on April 1, 2023 to move employees through the pay plan. The city has experienced a good claims year and anticipates coming in under budget for the Health Insurance Fund, and savings will be moved to the fund balance. The recommendations for health insurance include a $90.00 reduction for all monthly premiums, the HRA "employee only" plan will be offered at no cost to an employee, and an increase in dental and orthodontia cap from $1,500 to $2,000 beginning January 1. There will be no medical plan design changes. There was no objection from City Council regarding the proposed pay plans and health insurance. Mayor Trevino recessed the meeting at 11:43 a.m. Mayor Trevino reconvened the meeting at 12:02 p.m., with the same members present. Director of Budget and Research Trudy Lewis provided an overview of changes to the revised 2022-2023 General Fund budget discussing significant impacts to revenues and expenditures. There is a positive balance of $777,858 and staff proposes the following additions to base - $17,800 drone tether device; $40,000 advanced life support simulator mannequin; $90,054 city facility AED(s); and $104,922 (2) outdoor warning siren replacements for a total of$252,776. Ms. Lewis provided an overview of the proposed 2023-2024 General Fund expenditures ($58,445,762) and revenues ($60,148,295). Revenue highlights include $1.15 million in property tax ($454,000 in new construction); $363,912 increase in franchise fees; $1,725,641 increase in sales tax; decrease of$656,396 in court fees and fines; decrease of $693,167 in licenses and permits; $435,790 increase in charges for service; and $706,903 interest earnings. Expenditure highlights include $122,479 increase for the new code court; $265,872 increase for public safety step plan adjustments from mid year Fiscal Year 2023; $279,872 increase in property and liability insurance; and $166,293 in capital project transfers. A positive balance of $1,702,533 remains prior to proposed additions to the base budget. Mayor Trevino recessed the budget work session at 12:18 p.m. Mayor Trevino reconvened the budget work session at 12:33 p.m., with the same members present. Assistant City Manager Karen Manila reviewed the Utility Fund, to include the revised 2022-2023 revenues ($45,931,308)and expenditures ($44,835,974) and proposed 2023- August 4,2023 City Council Budget Work Session Page 5 of 8 2024 revenues ($42,675,352) and expenditures ($41,223,686). A positive balance of $1,451,666 remains prior to the following proposed additions to the base budget - $108,474 GIS and asset management technician; $1,250,000 Conn pump station generator UT2403; and $211,253 merit/market adjustments for a total of$1,569,727. The remaining balance of$118,061 will be paid from reserves. Manila reviewed the Drainage UtilityFund. This fund accounts for the monthlyfees Ms. a 9 charged to residents and businesses to pay for the cost of drainage improvements throughout the city. She reviewed the revised 2022-2023 revenues ($2,726,022) and expenditures ($2,726,022) and proposed 2023-2024 revenues ($1,767,515) and expenditures ($1,241,754). A positive balance of $525,761 remains, and staff proposes the following additions to the base budget - $25,000 storm water management program design consulting fee and $8,219 merit/market adjustments for a total of $33,219. The remaining balance of$492,542 will be moved to reserves. Ms. Hartman reviewed the Park and Recreation Facility Development Fund, to include the revised 2022-2023 revenues ($12,080,687) and expenditures ($9,971,749) and proposed 2023-2024 revenues ($11,748,652) and expenditures ($10,108,592). The fund will see an increase in sales tax revenue, interest income, NRH Centre revenue, and Park Fund Revenues. The fund will see a decrease in appropriation of NRH Center Fund balance and Park Fund expenditures.A positive balance of$1,640,060 remains, and staff proposes the following additions to the base budget - $72,158 salary increase for part- time staff and $125,906 market/merit salary adjustment. There was no objection from City Council regarding the proposed additions to the base budget. Ms. Hartman reviewed the Aquatic Fund, to include the revised 2022-2023 revenues ($4,884,096) and expenditures ($4,978,453) and proposed 2023-2024 revenues ($6,155,626) and expenditures ($5,387,590). The City Council and staff discussed policy during extreme weather days, locker equipment, process to receive feedback from guests, retirement celebration of NRH2O and announcement of the new replacement ride. C.3 REVISED 2022-2023 AND PROPOSED 2023-2024 CAPITAL PROJECTS BUDGETS. Special Project Coordinator Jimmy Perdue reviewed the Fleet Services Fund, to include the revised 2022-2023 revenues ($6,345,051) and expenditures ($6,281,540) and proposed 2023-2024 revenues ($4,632,087) and expenditures ($4,549,557). He highlighted changes in the revised and proposed budgets. Mr. Perdue reviewed the Facilities Fund, to include the revised 2022-2023 revenues ($3,515,072) and expenditures ($3,615,968) and proposed 2023-2024 revenues August 4,2023 City Council Budget Work Session Page 6 of 8 ($3,243,135) and expenditures ($3,295,080). He highlighted changes in the revised and proposed budgets and reviewed proposed additions to the base budget. Ms. Manila reviewed the Information Technology Fund, which oversees and manages all technology related items for the city. Revenues for this fund are generated by charges to city departments. She reviewed the revised 2022-2023 revenues ($5,401,071) and expenditures ($5,410,428 ) and proposed 2023-2024 revenues ($4,842,773) and expenditures ($5,010,789). Staff proposes the following proposed adjustment in the amount of$56,764 for merit/market salary adjustments. The negative ending balance will be offset with an appropriation from the fund balance. Ms. Manila reviewed the Self Insurance Fund, to include the revised 2022-2023 revenues ($15,829,450) and expenditures ($14,139,155) and proposed 2023-2024 revenues ($14,474,050) and expenditures ($14,457,838). The city will see an increase in insurance costs next year. calmingpolicy, and speed The City Council and staff discussed traffic, the city's traffic p cushions. Staff will place an item on a future work session to discuss the city's traffic calming policy and speed cushions. Mr. Hindman stated that the preliminarytax rate of $0.498155 was used to proposed prepare the proposed Fiscal Year 2024 General Fund budget. The proposed items to add to the base budget as presented are included in the proposed 2023-2024 budget. He sought City Council's input on the proposed competitive salary adjustments; addition of four police officers contingent upon receiving grant funds (partially grant funded); addition of three firefighter positions contingent upon receiving grant funds (partially grant funded); reduction of health insurance premiums and GIS position for the Utility Fund. The City Council had no objections to the salary adjustment, reduction in health insurance premiums, and the addition of four police officers and three firefighters contingent upon the city being awarded the grant. Mr. Hindman also sought input regarding the following recommendations to the base budget. • FlashVote Citizen Survey Tool $11,900 • Crossing Guard salary increase (part-time positions) $27,952 • Maintenance of fire burn building $22,406 • Firefighting bunker gear/PPE $28,554 • Paramedic training $31,715 The City Council discussed the proposed budget and additional requests to add to the base budget. Apart from Associate Mayor Pro Tern Vaughn, the City Council had no objection regarding the proposed additions to the base budget.Associate Mayor Pro Tern Vaughn clarified that he was 95% in favor. August 4, 2023 City Council Budget Work Session Page 7 of 8 Ms. Lewis reviewed the budget calendar and dates for the upcoming public notices and public hearings. C.4 REVISED 2022-2023 AND PROPOSED 2023-2024 PARK AND RECREATION FACILITIES DEVELOPMENT CORPORATION OPERATING BUDGET AND CAPITAL PROJECTS BUDGETS. The City Council received a presentation from staff earlier in the meeting. D. ADJOURNMENT Mayor Trevino the meetingat 2:04 p.m. Y adjourned Il Os ar revin ayor ',w+il l d#ft!!1,'yr#4,,s ATTEST: `?* ° Ctitiq . 0:°. .oy" 6.4 �D :say Alicia Richardson - 'AV City Secretary/Chief Goverrr •G pgr emr01141t August 4,2023 City Council Budget Work Session Page8of8