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08-03-10 MINUTES REGULAR MEETING August 3, 2010 A Workshop and Regular Meeting was held by the Schertz City Council of the City of Schertz, Texas, on August 3, 2010, at 5:00 p.m., in the Municipal Complex Council - Chambers, 1400 Schertz Parkway, Building #4, Schertz, Texas. The following members present to-wit: Mayor Hal Baldwin Mayor Pro-Tem Edwards Councilmember Jim Fowler Councilmember David Scagliola Staff Present: City Manager Don Taylor Assistant City Manager John Bierschwale Assistant City Manager David Harris City Attorney Michael Spain City Secretary Brenda Dennis Councilmember Michael Carpenter was absent. CALL TO ORDER: WELCOME /OVERVIEW: 1. Presentation and discussion of the FY 2010/2011 Budget. (Staff) Mayor Baldwin called the Workshop to order at 5:40 p.m. and recognized City Manager Don Taylor who briefed the Council stating that this is the first of several workshop meetings scheduled for the Council to discuss the proposed budget and to ask questions. Mr. Taylor stated that staff would be going over the Executive Summary of the proposed budget. Mr. Taylor stated that the management staff has come up with three different plans: Plan A: $0.4342 includes • Current approved staff • 9% Health Insurance cost increase • 20% increase in fuel expense • Code Enforcement Officer and Service Clerk for Marshal Services • Master Planning Project Plan B: $0.4493 Adds: (Proposed budget is balanced at this rate) • Parks & Recreation 2 Seasonal Part-time workers • Adult Services Librarian • 2% Cost of Living adjustment Plan C: $0.4615 adds $250,000 to reserves $0.4675 adds $375,000 to reserves 8-3-10 Minutes Mr. Taylor further mentioned that he is not for or against the proposed bonds, but if they were to pass, what amount and what projects are passed will dictate what the City is going to do for the next several years. Mr. Taylor stated that should the Council place a moratorium on R6 and R7 zoning it could seriously impact the permits and items associated with new development in the Development Services budget of a possible 8 to 10% cut in what the city would receive. He stated that staff every quarter looks at where the city is in regard to the budget and makes the necessary adjustments so not to go into the red and that they will continue to do so this next year. Mr. Taylor mentioned that staff would continue to monitor appraisals that were down this year as well as the decrease in sales tax, which has been figured into this budget. He stated that any projections that staff has made are just that, projections and as staff monitors the budget throughout the year they make adjustments and cut spending necessary so that at the end of the twelve months the city is not in the red. Mr. Taylor indicated that Council will see as they are going through the proposed budget department by department, that staff has provided the proposed changes in the budget from last year to include any additional costs, as well as new personnel. Mr. Taylor introduced Assistant City Manager David Harris who gave a brief Power Point presentation going over the following: General Fund Revenue Revenues for FY 2010-11 will increase by 7.74% from FY 2009-10 ending estimates. With a slow economy growth projection, sales tax is budgeted to increase 3.00%. Property taxes will increase by $650,566 with the new rates. With the additional personnel in the Marshal Services department, revenues from court fees are expected to increase with more collections. These increases are partially offset by permits, which will decrease due to the large one-time building permit issued to Sysco in FY 2009-10. Expenses Expenses for the General Fund in FY 2010-11 will increase by 8.90% from FY 2009-10 ending estimates. Health insurance costs have increased by 9.00% per employee and there is a cost of living adjustment of 2.00% for personnel. Fuel is estimated to increase in FY 2010-11 by 20.00% Training and Travel increase for all departments to resume training deferred in FY 2009-10. Other increases are detailed by department in the narratives that follow. City Council FY 2010-11 budget will increase by $19,175 to cover the additional personnel costs following the elections of council members who, due to a change in the charter, are now eligible for stipend. This also covers two elections this fiscal year for a bond election in November and a general election in May. Training and Travel was reduced midyear due to budget constraints and will be raised back to standard levels. ' City Manager The FY 2010-11 Budget increased 4.77% over the FY 2009-10 estimates largely due to an increase in health insurance costs. Training and Travel was cut due to budget constraints and will be reset to average levels. 8-3-10 Minutes Page - 2 - Municipal Court The FY 2010-11 budget increases 19.06% over FY 2009-10 Estimates. The biggest increase is to other consultation and professional services resulting from expected jail fees Schertz will be charged from Guadalupe country to hold our inmates. Along the same lines, judge and prosecutor fees will also increase due to a higher number of court dates expected in 2010-11. Other increases are from personnel services and support staff services; i.e., overtime, certification allowance, health insurance,. uniforms, training and travel, meeting expense, and publications. 311 Customer Service The FY 2010-11 budget increases from the projected FY 2009-10 estimate by 0.41 Two positions are now unfunded resulting in only two filled positions in the department. Planning & Zoning The FY 2010-11 Budget will increase by 60.17% from FY 2009-10 ending projections. This is largely due to a $137,000 expense to cover the General Fund's portion of the North and South Schertz Master Lane Use Plan. The SEDC will cover the other costs during the study. Legal Services The FY 2010-11 budget for Legal Services includes a 0.04% decrease from FY 2009-10 estimates. No significant changes. Facilities Maintenance The FY 2010-11 budget will increase 10.93% from year-end projections. Facilities Maintenance filled some vacancies, which will increase personnel costs. They will also take on more expenses to tint and clean the Library's windows and to start funding HVAC replacement. In addition, Training and Travel will be returned to previous levels, before the budget constraints. City Secretary The FY 2010-11 budget increases 3.51 % over the FY 2009-10 projections. The main causes are an increase in health insurance costs and office supplies. Non-Departmental The FY 2010-11 budget has decreased by 2.86% from FY 2009-10 estimates. The big causes of the decrease are from the Parks and Recreation Foundation taking on the costs of the Jubilee and Schertz Fest and that there is no planned land purchases in the FY 2010-11 budget. Costs of envelopes and copy paper have been moved to individual departments. The large decreases are offset somewhat by an increase in Auditing expense and the City Insurance charges. Public Affairs Schertz Tales was separated within the Public Affairs Department for FY 2010-2011. Publications Editor Position was added for expansion of publication. Postage for Schertz Tales magazine will stabilize due to change of mailing location, but may increase due to population growth and number of issues printed. These costs are offset by decreasing advertising expenses for the City and meeting costs related to Schertz Tales clients. Public Affairs works with all areas of the media and oversees Schertz Tales Magazine & the Civic and Community Centers. Even when separated into two budgets, Public Affairs has no significant budget change for FY 2010-11. Records Management The FY 2010-11 budget increases by 14.30% from FY 2009-10 estimates. The increase is due to higher Contractual Service expenses related to scanning commercial plans. The line item was greatly reduced in FY 2009-10 during budget constraints and needs to be increased to continue the document scanning process. Schertz Tales New Department for FY 2010-11. Levels are comparable as in FY 2009-10 with full funding of personnel. Engineering The FY 2010-11 budget increases 10.43% over the FY 2009-10 estimates. FY 2009-10 budget constraints caused this department to cut expenses. In FY 2010-11 these items will be increased to their previous levels: Professional Services expense category and Other Maintenance Agreements. 8-3-10 Minutes Page - 3 - GIS The FY 2010-11 budget will increase 5.70% from FY 2009-10 ending projections. The main expense increase is to Training and Travel, which was, adjusted mid FY 2009-10. Police The FY 2010-11 increases by 4.55% from FY 2009-10 year-end projections. Vehicle fuel budget increased with the anticipated increase in gasoline prices and additional areas within the city to patrol. Staff support increased for FY 2010-11 for mandatory training and the replacement of 10 ballistic vests for officers. Maintenance services remain about the same due to radio and intoxilizer equipment maintenance. New equipment and vehicles are funded in FY 2010-11 that were not purchased in FY 2009-10. Fire Rescue The FY 2010-11 budget will increase 11.97% from FY 2009-10 year-end budget projections. The majority of the increase comes from higher personnel costs. The rest of the increase comes from the Department meeting the operating requirements. These costs include Training and Travel expenses, physicals for the firefighters, and inspections on the PPE. Vehicle fuel prices are rising again which raises the need to increase the budget to cover the expenses. New materials for the rescue tower are needed as well. Inspections The FY 2010-11 budget will have a 7.61 % increase in expenses from FY 2009-10 year end projections. These increases are in expected personnel and vehicle fuel expenses. Marshal Services The Marshal Services FY 2010-11 budget will increase by 72.44% from the FY 2009-10 estimates. This large increase is from the addition of three new positions: a Deputy Marshal, a Code Enforcement Officer, and a Service Clerk. Personnel costs of these three total $139,306. Along with personnel costs, supplies, staff support, and operations support will increase $83,772 for the new employees and the expanded operations. These expenses are offset by additional revenue from fines in Court and the Court Security Fund. Streets The FY 2010-11 budget increases by 12.91 % from FY 2009-10 estimates. The biggest increase is in street materials. This line item was greatly reduced during FY 2009-10. This increase is to get materials to repair damaged streets in the City. There will also be a purchase in FY 2010-11 of a Tack Kettle, for work on smaller street repairs, two asphalt plate tempers, and building maintenance materials. Parks The FY 2010-11 budget will increase 2.80% from the FY 2009-10 year-end projections with the addition of two part time workers. Other expenses are reallocated within the department for different needs but with no net increase in overall expenses. Pools The FY 2010-11 budget will increase by 0.92% of FY 2009-10 estimates for maintenance on the buildings and equipment. Civic Center The Civic Center & North Center FY 2010-11 budget will increase 8.85% from the FY 2009-10 estimates with the addition of an Administration Assistant funded from the Hotel Tax Fund transfer. Senior Center This is department was removed for FY 2010-11. Expenses related to the Senior Center were moved into City Assistance. Library The FY 2010-11 budget will increase 5.74% from FY 2009-10 estimates. There are increases from higher personnel costs, use of a delivery service, and for additional library materials but these costs are offset with no planned computer purchases for FY 2009-10. Part of the personnel costs is a new Adult Services Librarian position, which will be mostly offset by not funding a Part Time Library Clerk Circulation position. 8-3-10 Minutes Page - 4 - Animal Services The FY 2010-11 budget will increase 17.73% from the FY 2009-10 estimates. Half of the increase is from personnel vacancies being filled. Training, Travel, and Medical Services were decreased in budget adjustments but will be put back at previous levels. Radio maintenance will now be charged to each department. Operating equipment costs are increasing for maintenance on the building and kennels. There will also be a replacement purchase of a livestock trailer in FY 2010-11 of $4,000. Information Technology The FY 2010-11 budget increased by 8.81% over the FY 2009-100 estimates. Part of the budget covers annual support costs for the Alamo Regional Public Safety System C Computer Aided Dispatch (CAD) project that went online in July 2010. Phone upgrades will take place this year increasing usage costs, hardware costs, and maintenance costs. Finally, cost-cutting measures over the last two years have resulted in an aging fleet of desktop hardware. In order to maintain productivity levels and prevent work slowdowns due to failing hardware, fT needs to replace one third of the desktops. These are offset by a large decrease in computer fees & licensing. Less software purchases are needed in the upcoming year. Part of the personnel cost increase is due to added personnel, which will be funded by the Water & Sewer Fund. Human Resources The FY 20010-11 Budget will increase by 9.29% from FY 2009-10 year-end estimations. Most increases are offset by decreases in other line items. The costs of employee assistance will increase per employee starting January 1, 2011. To stay current on Human Resources policies and procedures three conferences are added to Training and Travel. These are the Texas Municipal Human Resources Association Employment Law Conference, the Texas Municipal Retirement System Conference, and the Texas Municipal League Conference and two employees will be sent. The last increase is a service contract for an Occupational Nurse. The offsetting decreases come from the transfer of a Floating Clerk position out of the department to the Water & Sewer department and a decrease in operational equipment purchases. Finance The FY 2010-11 budget has a 3.99% increase over the FY 2009-10 estimates. The increase is from higher personnel costs, membership fees, training, and equipment purchases. The membership fees, training costs, and the equipment purchases were all decreased in FY 2009-10 and were deferred to the next budget year. Purchasing & Asset Management The FY 2010-11 budget is an increase of 3.78% over the FY 2009-10 estimates. Copy paper and envelopes will be expensed by department now instead of by fund. Staff support and personnel costs will increase for FY 2010-11. Fleet The FY 2010-11 budget will increase 12.43% from FY 2009-10 estimates. Much of the increase is returning the expenses to their yearly starting values. Purchases of light upgrades, radiant heaters, and an air compressor make up the additional expenses. City Assistance The FY 2009-10 budget will increase by 420% as compared to FY 2010-11 estimates by moving the costs from Senior Center department to City Assistance. Costs for the Senior Center will also increase due to lease payments to the Comal County Senior Citizens' Foundation. Special Events Fund Revenue Revenue for FY 2010-11 will decrease 19.17% from FY 2009-10 estimates. The change is due to a lower fund transfer from the General Fund since the Parks and Recreation Foundation will now sponsor the Jubilee and Schertz Fest. Expenses FY 2010-11 budget will increase by 21.71 % from FY 2009-10 estimates. Expenses are returned to their yearly expected amounts. Walk for Life's expenses were raised higher and the Sweethearts event will be lowered to better match the actual amounts spent. 8-3-10 Minutes Page - 5 - Water & Sewer Fund Revenue Revenue for FY 2010-11 will decrease by 15.62% from FY 2009-10 estimates. The largest decrease comes from a lower fund transfer since there are no approved projects that are funded out of fund balance for FY 2010-11. Water sales and sewer fees also decrease. Expenses The total Water & Sewer Fund budget for FY 2010-11 will decrease by 15.68% from FY 2009-10 estimates. Many projects have been completed and no new ones are planned to start. There will be a new transfer from Water & Sewer to the Recycling Fund cover the costs of the Fall and Spring Clean U p. Business Office The FY 2010-11 Budget will increase by 0.38% from the FY 2009-10 Estimates. Lower and bank charges will help offset increases in personnel with addition of the Floating Clerk position, postage costs, and the purchase of two replacement laptop computers. Administration The FY 2010-11 budget will decrease by 5.46% from FY 2009-10 estimates. Large increases in this department are from filling vacant positions, raising contingency amounts, and a higher waste contractor expense. These increases are more than offset by lower water testing costs, sewer and garbage fees, sewer treatment costs, lower debt service expense, and capital outlay. The only capital purchases expected is two service trucks totally $58,000. EMS Fund Revenues The FY 2010-11 revenues will increase by 20.14% over FY 2009-10 estimates. There is an expected increase in transports of 8.85% from the projected year-end of FY 2009-10. Membership subscriptions were lower than anticipated but there will be a more aggressive advertisement campaign to bring in more patrons. Expenses The FY 2010-11 expenses will increase by 7.64% over FY 2009-10 estimates. Personnel costs will be lower since overtime and FICA were much higher than anticipated in FY 2009-10. Many purchases were deferred since revenues did not meet expectations. With the expected increase in revenue for this fiscal year, on-board computers, toughbook laptops, Lucas Mechanical cardiopulmonary resuscitation (CPR) devices, and the Portable Classroom copier will be added back into the budget. Along with the expected increase bad debt expense and Medicare/Medicaid write- offs will also increase by default. Debt service will increase with this issuance of a new bond to cover a Station Alerting system and a new ambulance. Drainage Fund Revenue The FY 2010-11 revenue will increase by 1.77% from FY 2009-10 estimates. Revenues from drainage fees are expected to increase while other income sources will remain at current levels. Expenses The FY 2010-11 Budget will increase 1.59% from FY 2009-10 estimates. There will be a small increase in personnel costs while other costs remain constant. Hotel Motel Tax Fund Revenue Revenues for FY 2010-11 are calculated to increase 19.18% over FY 2009-10 estimates. Expenses FY 2010-11 budget will increase by 27.21 % from FY 2009-10 estimates. A billboard advertising expense will be added to this fund. A new Civic Center Administrative Assistant's salary was added to be paid from this fund as well. This Fund will also help support a new Event Coordinator position to handle special events in the City. Park Fund Revenue 8-3-10 Minutes Page - 6 - Revenue for FY 2010-11 is anticipated to decrease by 70.92%. The revenue for this fund is tied to development of property within the City. Previous development caused higher revenues than what is expected in FY 2010-11. Expenses FY 2010-11 budget will decrease by 44.14% FY 2009-10 estimates. Total signs, fixtures and other improvements will be less than in FY 2009-10. Total landscaping costs will also be lowered. These decreases were made to match expected revenues. Recycling Fund Revenues Revenues for FY 2010-11 will increase by 21.74% to FY 2009-10 estimates by increasing rates to cover rising expenses. Sale of recyclable materials will be lower but the total revenues will be covered by a transfer in from the Water & Sewer Fund. Expenses FY 2010-11 expenses will increase by 21.74% compared to FY 2009-10 Estimates. In addition to the Fall and Spring Clean Up charges, the City will now incur a storage charge for materials. Capital Recovery Fund Revenues FY 2010-11 revenues decreased by 22.43% from FY 2009-10 estimates. Capital Recovery will not be getting a fund transfer, as no projects need to be funded by another fund. Expenses . The FY 2010-11 budget will decrease by 80.98% from FY 2009-10 estimates with the completion of projects and construction in progress. No debt service charges are budgeted either. Projects Completed in FY 2009-10 • Southwest Quadrant Booster Pump Improvements - E Live Oak Town Creek Wastewater Collection System Phase 2 Projects to be Completed in FY 2010-11 • Town Creek Wastewater Collection System Phase 3 • Schaefer Road 12"Water Line Upgrade Interest & Sinking Fund Revenues Revenues for FY 2010-11 are expected to increase by 4.69% from FY 2009-10 estimates. Property taxes will increase along with a larger transfer in from reserves to maintain the current I & S rate. Expenses FY 2010-11 expenses will increase 3.46% over FY 2009-10 estimates. The increase is due to the higher debt service payments. Parks & Recreation Foundation Revenues The FY 2010-11 revenues will increase 12.02% over FY 2009-10 with higher expected donations, especially to the City Events of the 4th Jubilee and Schertz Fest. Expenses The FY 2010-11 budget will increase 7.58% over FY 2009-10. Expenses will increase for a bigger Jubilee and Schertz Fest. Schertz Economic Development Corporation (SEDC) Revenues Revenues for the FY 2010-11 will decrease by 8.35% from the FY 2009-10 Budget Estimates. Sales tax revenue increases will be offset by no transfer-in from reserves and the income from the Sysco Project as in FY 2009-10. 8-3-10 Minutes Page - 7 - Expenses Expenses in the Non-departmental side will decrease by 6.45% since there will be no operating equipment purchases expected in FY 2010-11. Expenses in the Schertz Economic Development Corporation will also decrease by 6.30% overall. The North and South Master Land Use Plan will increase previous consulting expenses. During FY 2009-10, one Economic Development Specialist position was converted to an Administrative Assistant position; FY 2010-11 provides a full year funding for this position. Debt Service will increase and money will be set aside to replenish the fund balance. This fund will also contribute to the salary of the Event Coordinator that will be paid out of various funds. Decreases offset these expenses with lower advertising costs, no retention & expansion incentives will be offered, no more improvements to the parks from this department, and the deletion of the Director of Intergovernmental Relations position. ADJOURNMENT WORKSHOP: Mayor Baldwin adjourned the workshop at 6:20 p.m. CALL TO ORDER REGULAR MEETING Mayor Baldwin called the meeting to order at 6:40 p.m. INVOCATION AND PLEDGES OF ALLEGIANCE TO THE FLAGS OF THE UNITED STATES AND STATE OF TEXAS. Councilmember Fowler gave the invocation followed by the Pledges of Allegiance to the Flags of the United States and State of Texas. HEARING OF RESIDENTS Mayor Baldwin recognized the following citizens: • Ms. Yolanda Suarez, 3808 Broughton, who spoke on adding additional language to proposition number 1 to include: enclosed community-eight lane competition pool. • Mr. Robert Wallace, 3301 Baldwin Park, who spoke on the Schertz Soccer Alliance update. • Mr. Ted Meyers with Jung Jung Mu Sul, who introduced the top winners of their recent kick-a-thon. Mayor Baldwin also recognized in the audience this evening Eric Balser, Boy Scout from Wylie who is attending this evening as a requirement for one of his boy scout merit badges. Mayor and Council welcomed everyone. Discussion and/or Action Items 1. Property Tax Rate -Consideration and/or action on a Record Vote on setting the Preliminary Tax Rate for FY 2010-11 and Scheduling of Public Hearings on the proposed tax rate. (D. Harris/J. Santoya) 8-3-10 Minutes Page - 8 - Mayor Baldwin recognized Assistant City Manager David Harris who introduced this item stating state law mandates that City Council set a maximum tax rate that will be considered for adoption later this month, as well as formally declaring two public hearings for the public to comment on the budget and tax rate on August 17tH and 24tH Current $0.4342 Effective $0.4493 ~ Proposed budget is currently balanced at this rate Rollback $0.4676 Mr. Harris stated that the proposed budget is currently set at a rate of $0.4493 if you desire and he believes that there maybe merit in the Council wanting to add money to the reserves. If that is the desire of Council, then they could consider going beyond the effective tax rate and consider adding funding to fund balance (reserves). To add to reserves Rate will have to be $250,000 $0.4615 $375,000 $0.4675 Staff is asking Council to consider the rate of $0.4675, which is below the rollback rate of $0.4676. At the rate of $0.4675 Council is not saying that they will go to that rate, what this is saying is that the Council cannot go past that rate. Staff recommends that the Council take a Record Vote on the preliminary tax rate and schedule two (2) public hearings for August 17, 2010, and August 24, 2010. Assistant City Manager David Harris stated that the Council's debate is basically going to center around whether the Council wants to consider a maximum rate just under the rollback amount of $0.4675 or does the Council want to pick a lower number. City Manager Don Taylor stated that for Council's clear understanding, they can cut anything they want; you can go down, but you cannot go up. City Attorney Michael Spain stated that setting the higher rate does not obligate the Council to go to that rate, that is the maximum possible rate. Mayor Baldwin asked City Attorney Michael Spain that since there are only three Councilmembers here this evening, then there must be three affirmative votes. His vote would not count, but only to break a tie. Mr. Spain stated that is correct. Mayor Baldwin recognized Mayor Pro-Tem Edwards who moved to accept the proposed tax rate of $0.4493. Mayor Baldwin recognized Councilmember Fowler _ who stated that if they went to $0.4493 then that would not allow the Council to put in money in the reserves, staff stated that was correct. City Attorney Michael Spain stated that if you set the rate right now at $0.4675 then that would allow the Council 8-3-10 Minutes Page - 9 - to either add some money to the reserves or not, or drop the rate back down below f $0.4675. Mayor Baldwin stated that this would be his recommendation. Mayor Baldwin recognized Mayor Pro-Tem Edwards who amended his motion to approve the proposed tax rate of $0.4675 seconded by Councilmember Fowler. The vote was 2-1 with Councilmember Scagliola voting no. Motion failed. Mayor Baldwin asked if Councilmember Scagliola had alternate tax rate suggestion, Councilmember Scagliola stated that staff indicated that this was a balanced and responsible budget; in his view, raising taxes is neither balanced nor responsible. He stated that last year he indicated that he did not like staff putting the cost of living raise for the workers in amongst the tax increase and that by doing that it puts him in a difficult situation. He made a promise to the residents when he said, "he is physically responsible and believes in balancing budgets." If he goes with an increase in taxes, he breaks that promise. However, if he does not go with the increase in taxes then the workers of the City say, well he doesn't care about us, and that's not true either, so he is darned if he does and darned if he doesn't. He stated put the 2% COLA in and have a proposed tax rate of $0.4400. City Manager Don Taylor stated that if that is what he wants then he can bring back cuts to the budget next week to meet that amount. Mayor Baldwin recognized Councilmember Fowler who asked if they could discuss this in that Councilmember Scagliola made a comment that is also sensitive to him, and that is a COLA. He stated that he has a real concern that since Social Security was flat this year, the military retirements are flat, and we are in an economy right now that no one can tell him that the recession we are in could not become a double dipped situation or go into a deflation. Deflation concerns him, as they look at the total budget that if they go into deflation it is going to hurt them even more in trying to make ends meet and they would have to cut back maybe sooner then the want. He stated that he does not believe it is the right time to do a COLA, he does not see it in the budget and does not see it in the economy, but he would be willing to hold off on the 2% COLA until mid term when they can see what is going to happen to the economy. City Manager Don Taylor stated that he agrees that it is a difficult time, but one thing to understand with the employees this year, is they are receiving a 9% increase in health care insurance costs and will still slip in the hole with a 2% COLA, in that they will lose 7% in their pay status this year. Mayor Pro-Tem Edwards stated that he is very physically conservative; economists predict often enough to know that we will live through this recession. He is not going to tell anyone that it is not going to be a double dipped recession, but that things have a way of working themselves out. He believes if Council passes the rate at $0.4400 it leaves it so tight there is no room for options. Mayor Pro-Tem Edwards stated that the reason he proposed the rate of $0.4675 was it was a place to start, not that the tax rate would be this amount. He stated that 8-3-10 Minutes Page -10 - Council will be going through the budget workshops and that the rate of $0.4675 is just a starting point and can be lowered, but if you set it at $0.4400 then staff is already going to have to make cuts to the budget in front of them. Mayor Pro-Tem Edwards reiterated that this is the maximum proposed rate and that Council cannot exceed this rate, but can lower it. Staff concurred. Mayor Baldwin stated that Councilmember Scagliola's recommendation of a tax rate of $0.4400 if passed, would dictate that the Council cannot go past that rate and as they go through the budget workshops and the rate is set at $0.4400 then Council would have to make cuts from that point on. Mayor Baldwin indicated that it was unfair for him to disapprove any suggested rates this evening, as there is one council member not present to speak on his behalf and that he knows it will take three affirmative votes to pass a proposed tax rate. Mayor Baldwin stated that he could propose a final tax rate after the Council has had an opportunity to go through the budget, which would allow him the opportunity to make his suggested cuts in the proposed budget. Mayor Baldwin recognized Councilmember Scagliola who moved to set the tax rate at staffs recommendation of $0.4493, motion died for lack of second. Mayor Baldwin recognized Mayor Pro-Tem Edwards who restated his motion to set the tax rate at $0.4675 seconded by Councilmember Fowler. Mayor Baldwin recognized Councilmember Fowler who asked for more discussion. Councilmember Fowler stated that going to the rate of $0.4675 allows the Council to add $375,000 to reserves. Mayor Baldwin stated that at that rate it would allow the Council the opportunity to add money to the reserves in that amount. Councilmember Fowler stated that he would not have a problem with going to the rate of $0.4615 to put $250,000 into reserves, which still allows Council negotiating room to maybe cut some things out of the budget or leave things in the budget. He stated that it does not make sense to him not to go to the higher level, which would allow the Council opportunity to come down from there. City Manager Don Taylor stated that this was correct, that as Council goes through the budget, they could make any changes or cuts to that rate: it is whatever tax rate the Council wants. Mayor Baldwin called for the vote of $0.4675 as stated above. The vote was 2-1 with Councilmember Scagliola voting no. Motion failed. Mayor Baldwin called for another motion and recognized Councilmember Scagliola who stated that staff is recommending a rate of $0.4493, which is balanced at that rate. Motion died for lack of second. Mayor Baldwin recognized Councilmember Fowler who stated that if Council will not go to the rate of $0.4675, then he still would like to go to the rate of $0.4615 and made a motion to go to the rate of $0.4615, seconded by Mayor Pro-Tem 8-3-10 Minutes Page -11 - Edwards. The vote was 2-1 with Councilmember Scagliola voting no. Motion failed. Mayor Baldwin stated that since the Council was at a stalemate, Council would have to wait until the next meeting, and asked the staff if that was possible. Council discussed tabling the item until the August 10, 2010 meeting. After research and concurrence from the City Attorney, that Council could table this until the August 10, 2010 meeting. Mayor Baldwin recognized Mayor Pro-Tem Edwards who moved, seconded by Councilmember Fowler to table this item until the August 10, 2010 meeting. The vote was 2-1 with Councilmember Scagliola voting no. Motion Carried. 2. Minutes -Discussion and consideration and/or action regarding the approval of the minutes of the June 27, 2010 regular meeting. Mayor Baldwin recognized Mayor Pro-Tem Edwards who moved, seconded by Councilmember Fowler to approve the minutes of the regular meeting of June 27, 2010. Vote was unanimous. Motion Carried. Staff noticed after the meeting that this item had been incorrectly posted; it should have read approval of the July 27, 2010 minutes. Staff will placed this item on the August 10, 2010 agenda for consideration. 3. Calling a Bond Election -Discussion only regarding Council calling a November 2, 2010 Bond election on August 10, 2010. (M. Spain) Mayor Baldwin recognized City Attorney Michael Spain who introduced this item stating that as a result of a report delivered to the City Council by the citizens' blue ribbon committee, the City Council has determined to place six general obligation bond propositions on the November 2, 2010, ballot. The cost of conducting the election will be approximately $18,645, as estimated by the Guadalupe County Elections Administrator. City Attorney Michael Spain stated that in calling the bond election, there is a specific statutory exception of charter requirements of more than one reading of an ordinance, but since Council discussed in previous meetings that citizens would have more opportunity to speak on the proposed bond election this item is posted this evening for discussion only. He stated that approval of an ordinance calling a bond election can be handled in one reading. Therefore, it will be on the August 10, 2010, agenda for first and final reading. Mr. Spain stated that the suggested change made earlier of a request for adding the language to include "enclosed community eight -lane competition pool" to proposition number one would be considered. He asked Council if they had any other changes to the proposed propositions. No other suggestions noted. 8-3-10 Minutes Page -12 - Mayor Baldwin recognized Mayor Pro-Tem Edwards who stated that he wants to make sure that the propositions are specific in regards to the language of an enclosed competition pool. City Attorney Michael Spain addressed Mayor Pro-Tem Edwards's concern in stating that you do not have to be overly specific on bond proposal, but could be on any advertisement going out to citizens on what is actually going to be done with the bond proceeds. Mayor Pro-Tem Edwards also asked City Manager Don Taylor to restate what he mentioned earlier regarding setting a certain rate that the Council needs to go to and restate the information given earlier regarding the bond proposals. City Manager Don Taylor stated that it is impossible at this point to know what positions the citizens will take on the bonds. If for some reason they voted to do the total $22 Million, then you know how much that is going to cost even though it is the I & S rate; it will move up your tax rate to reflect that. This would give you very little wiggle room in the budget unless you want a tax rate of $0.58 - $0.59 cents. Mayor Baldwin asked what was going to happen to the old playscape and the plaques with the names etc. Assistant City Manager David Harris stated that the old playscape would basically be replicated using modern materials and moved to an area close to the existing location, as well as saving as many trees in that area. City Engineer Larry Dublin stated that they are aware of the significance of the playscape and preservation of the majority of the items. He will do everything possible to make sure this is completed. No action was taken on this item. 4. Resolution No. 10-R-42 accepting land into ETJ -Consideration and/or action approving a resolution accepting certain land from the City of San Antonio into the extraterritorial jurisdiction of the City of Schertz, Texas. (M. Spain/D. Harris) Mayor Baldwin recognized City Attorney Michael Spain and Assistant City Manager David Harris who introduced this item stating that .action requested of Council formally accepts the remainder of ETJ from San Antonio roughly bounded by Trainer Hale Road, I-10, and Cibolo Creek. In the coming weeks, staff will begin the process to annex portions along I-10. Mayor Baldwin recognized Councilmember Fowler who moved, seconded by Councilmember Scagliola to approve Resolution No. 10-R-42. Vote was unanimous. Motion CaNYied. EXECUTIVE SESSION Called under Section 551.071 Texas Government Code Litigation, pending litigation; Section 551.072 Texas Government Code -Deliberation regarding the purchase, exchange, sale, lease, or value of real property. 8-3-10 Minutes Page -13 - Council did not meet in executive session. Requests and Announcements 6. Requests by Mayor and Councilmembers that items be placed on a future City Council agenda. Mayor Baldwin recognized Councilmember Scagliola who requested that on next week's agenda an item be placed so the top two candidates who interviewed for the Council vacancy could come and address the council and citizens before the Council voted. Councilmember Fowler stated that he would not mind, Mayor Pro- Tem Edwards indicated that he did not think it was necessary. "Items requested by Council to be placed on an agenda must have three Councilmembers agree to place that item on the agenda." Therefore, this item will not be placed on the agenda. 7. Requests by Mayor and Councilmembers to City Manager and Staff for information. Mayor Baldwin recognized Mayor Pro-Tem Edwards who stated that he recently learned that cities that have universities and colleges in their districts have decided to come up with a Zoning Code called "University Campus" - "UC" and he would like to have staff look at designating an area of our city for this. Maybe come back at a later date and give a briefing on how this is done. City Manager Don Taylor stated he believes this would be a great idea for the new planning group to look at. 8. Announcements by Mayor and Councilmembers • City and community events attended and to be attended • City Council Committee and Liaison Assignments (see assignments below) • Continuing education events attended and to be attended • Recognition of actions by City employees • Recognition of actions by community volunteers • Upcoming City Council agenda items Mayor Baldwin recognized Mayor Pro-Tem Edwards who stated that he attended the Culinary Carnival last week at the Civic Center where the Mayor was honored as well as other members of Council. He stated it was a great event and thanked everyone involved in making it a success. Mayor Baldwin recognized Councilmember Fowler who also stated he attended the event and stated there was a variety of food. He stated that he looks forward to other events such as this by the Chamber. Mayor Baldwin recognized Councilmember Scagliola who reiterated the outstanding job by the Schertz Chamber of Commerce in hosting the Culinary 8-3-10 Minutes Page -14 - Carnival event. He stated that the staff at the Civic Center did an outstanding job in - . assisting with this event. Mayor Baldwin stated he attended the Culinary Carnival event and was lucky to be a judge and serve with Leslie Mouton. He stated it was a great event and thanked everyone. 9. Announcements by City Manager • Recognition of City employee actions • New Departmental initiatives Mayor Baldwin recognized City Engineer Larry Dublin who gave an update on Country Club Blvd stating that it should be finished on Friday. ADJOURNMENT As there was no further action, Mayor Baldwin adjou d the eting at 7:50 p.m. Hal Baldwin, Mayor ATTEST: Brenda Dennis, TRM , CMC City Secretary 8-3-10 Minutes Page -15 - t i I'i