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08-02-2011 MinutesMINUTES REGULAR MEETING August 2, 2011 A Workshop and a Regular Meeting was held by the Schertz City Council of the City of Schertz, Texas, on August 2, 2011, at 4 :30 p.m., in the Municipal Complex Council Chambers, 1400 Schertz Parkway, Building #4, Schertz, Texas. The following members present to -wit: Mayor Hal Baldwin Councilmember David Scagliola Councilmember Cedric Edwards Staff Present: City Manager John Kessel Assistant City Manager David Harris City Secretary Brenda Dennis CALL TO ORDER: WELCOME / OVERVIEW: Mayor Pro -Tern Jim Fowler Councilmember George Antuna Councilmember Michael Carpenter Assistant City Manager John Bierschwale City Attorney Michael Spain • Presentation and discussion of the FY 2011 -12 Budget. (Staff) Mayor Baldwin called the Workshop to order at 4:37 p.m. Mayor Baldwin recognized City Manager John Kessel who provided opening statements by stating that he would like to cover the process, priorities, and set expectations. Staff started working on the budget in April and May when the departments submitted their budgets to management. In June and July, the City Management Office and Finance Department then fine tuned the budgets meeting with various Department Heads. August is the scheduled time for management to go through the document with proposed tax rates, expenditures, and revenues. Then present the proposed budget to the City Council. The proposed budget before you amounts to $63 million total that Council will be considering. Mr. Kessel stated that what is important for him going through this the first time on a staff level is that we had a lot of feed back. He spent time with several focus groups, all the department heads, some middle management, and some front line staff talking about various issues associated with the budget; making sure he understood what was going on. Mr. Kessel stated it was all very informative and the budget reflects items that came out of some of the focus groups. Mr. Kessel stated the number one priority was returning approximately $250,000 to the fund balance this coming year. He stated we have proposed a significant larger number for the end of the current year of $900,000 to be returned to the fund balance. Mr. Kessel stated the second highest goal is the equitable distribution of benefits across the board for staff; given the limited funds the city has to work with. A lot of time was spent on the benefits package, as well as, building things for the future in that looking to see what will be needed in the future that we need to put in place today. Finally, maintaining the AA bond rating. 05 -02 -2011 Minutes Mr. Kessel introduced Assistant City Manager David Harris who provided the following information regarding the proposed FY 2011 -12 budget answering questions from Council: Mr. Harris stated the FY 2011 -12 proposed budget is balanced structurally, conservative and responsible, follows financial policies, maintains current service levels, and focuses on priorities. Mr. Harris reviewed all funds, revenues, and expenses. He stated tonight you have before you a balanced budget that would require a tax rate of $0.4843; last year the tax rate was $0.4493. The $0.4924 is the proposed preliminary maximum rate per $100 of value and is not subject to rollback. The proposed rate is $0.4843 per $100; the rollback rate is $0.5335 per $100. As will be explained Tuesday, the increase is a result of additional bond expenses. • August 2, 2011 • August 9, 2011 • August 16, 2011 • August 23, 2011 • August 30, 2011 • October 1, 2011 1" Workshop regarding the budget 2A Workshop regarding the budget 1St Public Hearing 2 "d Public Hearing and first reading of Ordinance on Tax Rate and Budget Final Reading of Ordinance on Tax Rate and Budget New Budget in Effect Assistant City Manager David Harris provided the following additional information: The proposed M &O $0.2993 would provide the following: Current approved staff Reserve Funding $250,000 Adds a Vehicle Replacement Program 20% increase in fuel expense 11% Health Insurance cost increase I% Cost of Living Adjustment Market Rate Wage Adjustment 3 additional Dispatch personnel 2 School Resource Officers 1 Planning Manager 13 11 Representative, part time The proposed I &S $0.1850 would provide the following: Aquatic Center Soccer /Athletic Fields Main Street/FM 78 Animal Shelter $0.1550 goes to cover older bonds 08 -02 -2011 Minutes Page - 2 - Tax Rate: Current: $0.4493 Effective: $0.4616 Proposed: $0.4843 —proposed budget is balanced at this rate Rollback: $0.5335 (Additional $0.01 is ,$212, 000 revenue) Mr. Harris proposed the following Option 2 tax rate of $0.4924: M &O at 0.3074 and I &S at 0.1850 = 0.4924 Allows for a 2% COLA Increase reserves by extra $70,000 (increase tax on average home value = $13,) Mr. Harris provided information on the General Fund: FY 2010 -11 FY 2010 -11 FY 2011 -12 Budget Estimate Proposed Revenue $18,886,418 $19,510,837 $20,804,290 Expenditures $18,885,872 $18,598,752 $20,554,725 Over /under $ 546 $ 912,085 $ 249,565 Revenues $20,804,290 Expenditures $20,554,725 Increase of Fund Balance $ 249,565 Beginning Fund Balance $ 3,095,000 Ending Fund Balance $3,345,000 25% Required Policy $5,139,000 Mr. Harris stated the 2010 -11 estimate is $17,316,13; the 2011 -12 proposed budget is $18,882,876 with an over /under of $1,566,741 - 9.05% change. The new personnel requested are: 3 Communication officers, 2 School Resource officers, which will be paid by SCUCISD, 1 Planning Manager and 1 part -time 311 /Representative. Mr. Harris stated that a market study was performed and 50% of City Staff will receive a change in grade, 25% of City Staff will receive a change in pay. The cost of the program is $140,000 (all funds). Mr. Harris provided information on how the management broke out the market study in that there were four (4) personnel change categories. Mr. Harris provided information regarding the capital expenditures: Police — 6 replacement vehicles with equipment, Fire — 1 Tahoe, Marshal — 1 vehicle with equipment, and IT — new phone system and data storage server. Mr. Harris went over each department's budget answering questions from Council. Finally, Mr. Harris provided the following information regarding the FY 2011 -12 budget calendar: July 29 File with City Secretary 08 -02 -2011 Minutes rage - 3 - August 2 Budget workshop, vote to place preliminary tax rate on agenda, and schedule public hearings August 9 Budget workshop August 16 First Public Hearing August 23 Second Public Hearing and First Vote August 30 Second Vote October 1 New budget in effect Mayor Baldwin recognized Mayor Pro -Tern Fowler who asked Mr. Harris if on the chart regarding four (4) personnel change categories did this cover all hourly and salaried employees. Mr. Harris stated that yes with the exception of the ones the Council sets. City Manager John Kessel concurred and stated that staff took a lot of time looking at everyone below the City Managers office. He stated that this does not have anything to do with merit increases. The focus groups spent a lot of time on what was more important: cost of living increase, adjustments on the medical insurance, merit increases, and all of the items from internal equity to compression and also market, Mr. Kessel further explained details addressing Mayor Pro -Tern Fowlers question. Councilmember Edwards who stated that he agreed that the City needed to do a merit increase explaining why. He would like to see an incentive pay be given at the discretion of the City Manager, to allow him to structure the discretionary pay. Mr. Kessel stated that he could and would want to structure this in a way that so that it would not cause a disincentive. He stated the organization is very team oriented and there was a lot of discussion as to what is good for the team. He has not seen a productivity issue. He further stated that he would want to push for a merit base pay increase, but would want it to be a meaningful amount. Mr. Kessel does not want good hard working employees to get behind on their paycheck. He stated that becomes the nature of the situation, when you do not have enough money to divide up. How do you equitably distribute that to as many employee as possible and create a teamwork environment? He stated with the current funds he believes the COLA is an incentive to keep people moving in the right direction to stay motivated. Mr. Edwards also believes the EDC budget should be more. Mr. Harris stated that the EDC budget has been approved by the EDC Board. Mr. Edwards requested that signs be put up regarding the ongoing CIP projects. Mayor Baldwin recognized Councilmember Carpenter who asked how much money you would estimate the City would need to have an effective merit based increase pool. Mr. Kessel and Mr. Harris stated it would cost approximately an additional $250,000 in this budget. Mr. Carpenter asked for the total spent on personnel cost; the answer was approximately $18,636,000, this is fully burdened. If you back out and get to base salary, the number is $14,000,000, which is a 33% burden. His point is that he would be interested in and in favor of including and funding a one -time merit increase pool for the employees of 1.75% of the overall cost of unburdened salaries. This is about $249,000 and look at funding the one time merit increase from the $912,000 surplus we think we are going to have from this year, putting $662,000 back into the fund balance this year. He would also challenge staff to find another $100,000 in savings if they can over the course of next year, which would put us at a two -year position of putting just over $1 million back into the fund balance. He wanted to see if his colleagues would want to do 08 -02 -2011 Minutes Page - 4 - the above and have invested money over the past few years in land/real estate and very good projects for the City and would be in favor of taking this one step to putting some investment back in our employees. Mayor Baldwin recognized Councilmember Scagliola who also stated he would be interested in something like this and make it across the board. Mayor Baldwin recognized Mayor Pro -Tern Fowler who believes a merit increase pay should be toward outstanding people; look to make sure outstanding people get the appropriate % of the pool, and yet some might get none. ADJOURNMENT WORKSHOP: Mayor Baldwin adjourned the workshop at 6:07 p.m. CALL TO ORDER REGULAR MEETING Mayor Baldwin called the meeting to order at 6:15 p.m, and welcomed everyone in attendance. INVOCATION AND PLEDGES OF ALLEGIANCE TO THE FLAGS OF THE UNITED STATES AND STATE OF TEXAS, Mayor Pro -Tern Fowler gave the invocation followed by the Pledges of Allegiance to the Flags of the United States and State of Texas. INTRODUCTIONS: (New Staff) Introduction of Ms. Donna Thompson, new Director for the Schertz Senior Center. (G. Logan) Mayor Baldwin recognized Director of Parks & Recreation George Logan who introduced Ms. Thompson. Ms. Thompson provided a briefing on her background and updated the Council regarding recent events of the Senior Center. CITY EVENTS Tuesday, August 9, 2011, at 4:30 p.m. the City will be hosting another budget workshop which will start at 4:30 p.m. Tuesday, August 16, 2011, at 6:00 p.m. is the kick -off of the first of two public hearings; August 23, 2011, at 6 :00 p.m. is the second public hearing. Reminder that August 29, 2011, and August 31, 2011, are the dates set for the City of Schertz Planning & Design Charrette. Hearing of Residents Mayor Baldwin recognized the following who signed up to speak: Mr. Elia Rosetta, Encanto Mexican Grill, 6032 FM 3009, who spoke of concerns on the road construction on FM 3009, in particular the issue of Four Oaks Lane. He requested 08 -02 -2011 Minutes Page - 5 - Council and staff look at the possibility of adding an additional left turn lane. City Manager John Kessel stated that he would have the City Engineer and the Traffic Safety Advisory Board look at this issue. Ms. Maggie Titterington, President of the Schertz Chamber of Commerce, who provided updated information regarding the Chamber. Mr. Robert Brockman, 1000 Elbel Road, who stated that the City had passed an ordinance for "No Parking" on both sides of Westchester Drive and that the "No parking Signs" need to be placed before school starts. Discussion and/or Action Items Minutes - Consideration and/or action regarding the approval of the minutes of the Regular Meeting of July 26, 2011. Mayor. Baldwin recognized Mayor Pro -Tem Fowler who moved, seconded by Councilmembers Scagliola and Edwards to approve the July 26, 2011, minutes. The vote was unanimous. Motion Carried. 2. Property Tax Rate — Consideration and/or action on a Record Vote on setting the Preliminary Tax Rate for FY 2011 -12 and Scheduling of Public Hearings on the proposed tax rate. Q. KesseI/D. Harris /J. Santoya) Mayor Baldwin recognized Assistant City Manager David Harris who stated that action sets the preliminary tax rate for the FY 2011 -12 as $0.4843 per $100 of value. This rate is not subject to rollback. Mr. Harris provided the following information on Council approving this rate: Tax Rate Current Proposed M &O $0.2993 $0.2993 I &S $0.1500 0.1850 Total $0.4493 $0.4843 proposed budget is balanced at this rate Mr. Harris also proposed the following Option 2 tax rate of $0.4924 per $100 of value is not subject to rollback: M &O at 0.3074 and I &S at 0.1850 = 0.4924 Allows for a 2% COLA Increase reserves by extra $70,000 (increase tax on average home value = $13.) He stated the public hearings are set for August 16th and August 23rd. He reminded Council that once a rate is established the Council may not go higher than this rate upon final adoption of this tax rate. Mayor Baldwin recognized Councilmember Edwards who moved, seconded by Councilmember Carpenter to approve the proposed preliminary maximum rate of $0.4843 per $100, and to schedule two (2) Public Hearings for August 16, 2011 and August 23, 2011 - 08 -02 -2011 Minutes Page - 6 - The vote was: Mayor Pro -Tem Fowler voting for, Councilmember Scagliola voting for, Councilmember Antuna voting for, Councilmember Edwards voting for and Councilmember Carpenter votingfor. The vote was unanimous. Motion passed. 3. Ordinance No. 11 -A -22 — Consideration and/or action approving an ordinance by the City Council of the City of Schertz providing for the extension of the boundary lines of the City of Schertz, Texas by the annexation of approximately 3,315 +/- acres, less certain properties subject to development agreements, located east of FM 1518, South of FM 78, and North of I -10, substantially all of which in Bexar County, Texas, as described herein, and related matters. First Reading (M. Spain/M. Sanchez) Mayor Baldwin recognized City Attorney Michael Spain who introduced this item stating that this ordinance provides for the annexation of approximately 3,315± acres of land east of FM 1518, south of FM 78 and north of IH -10 all in Bexar County. The fiscal impact of the annexed property in ad valorem taxes is: Tax Est. Annual Ad Property Value Rate Valorem Revenue Ag- Assessed 2,996,780 0.4493 $ 13,465 Non Ag- Assessed 11,522,880 0.4493 $ 51,772 TOTAL 14,519,660 $ 65,237 If all of the properties come into the City, $65,237 in Ad Valorem taxes and $0 in sales taxes will be added to the tax rolls and the City will be responsible for providing municipal services to these properties. Recommend approval. Timeline is as follows: First Public Hearing: June 28, 2011 Second and Final Public Hearing: July 5, 2011 FirstReadmg _ August 2 2011 Second and Final Reading: August 9, 2011 Mr. Spain stated that there are currently 61 owners — 11 of the owners will be annexed and there are 50 development agreements. Out of the 50 development agreements, 24 are fully complete, 26 not complete and need other information, and that his best guess is 3 to 5 property owners may not complete everything by the deadline and will be annexed. Mr. Spain stated that out of 3,315 total acres less the properties taking the development agreements, he estimates between 500 and 750 acres that will actually be annexed. Mayor Baldwin recognized Mayor Pro -Tem Fowler who moved, seconded by Councilmember Scagliola to approve Ordinance No. 11 -A -22 on first reading The vote was unanimous. Motion carried. 4. EMS Performance Review Contract — Consideration and/or action authorizing the City Manager to engage a contractor to perform a performance review of the EMS Department. (J. Kessel/D. Wait) 08 -02 -2011 Minutes Page - 7 - Mayor Baldwin recognized City Manager John Kessel who introduced this item stating that as a continuation of the 7 -26 -2011 workshop discussion on the EMS Department. Should Council wish to direct staff to research and obtain the services of a qualified and experienced EMS Consulting Agency to review EMS operations and make recommendations to City Council on improvements. A motion could be made to seek a qualified agency that could be used to accomplish this task in an amount not to exceed $30,000. Mr. Kessel stated this is not a budgeted item and recommends Council discuss this and provide their input as to the direction they wish him to take. Mr. Kessel stated that regarding the expense and revenue side, the trend is EMS is coming out of the loss areas. He reminded Council that now EMS has a lower density area of coverage. EMS will be going to smaller chassis on vehicles (lower cost of these vehicles). They are looking at travel and training across the board, which is an area that you have to be very careful with. He stated that the figures presented at the last workshop on total profit and loss over the last five (5) years were correct. He asked Council to allow hire and staff to go back and conduct an external audit focusing on areas of concern. If Council is concerned about EMS or Management practices, then Council should allow him to fund a contractor /consultant. Mr. Kessel stated that it would be helpful to him if they would identify specific areas in which he could take a look. Mr. Kessel stated that he would like Council to allow him to take the opportunity to review the EMS Department and come back with a recommendation to Council at a later date of what the City should do. Mayor Baldwin recognized Councilmembers Edwards and Antuna who agreed to have an outside consultant familiar with the EMS program to take a Iook top to bottom. Mayor Baldwin recognized Mayor Pro -Tm Fowler who stated he thought it was a good idea to have Finance look at the effectiveness and economy of skills, but does not agree it is time to fund the $30,000 and go outside for a consultant. He stated he is willing to put this off another year. This year, take a earnest look at the operation, ask questions of efficiency, and find ways to get better; not focusing on response times. He also mentioned to take a look at trade off regarding the maintenance of the vehicles. Utilize our own EMS team to find creative ways that could improve their efficiencies. Mayor Baldwin recognized Councilmembers Scagliola and Carpenter who stated that they would first like to give the opportunity to the City Manager to take a look along with the staff to find ways to save money. They stated that they didn't believe the $30,000 was appropriate at this time. Councilmember Carpenter stated that the report of last week from staff was to allow the City Manager to have time to look at this and agrees with Mr. Fowler and Mr. Scagliola to let the City Manager look at this first and not spend the $30,000. Mr. Carpenter further stated that he believes it is working correctly and what is the impetus for prompting this concern? Mayor Baldwin stated the concern is with the service area as stated last week; taking in Comal and Guadalupe County, we the city are paying for these and not making these counties paying their portion. He stated it has bothered him for some time that they are operating at a loss and have been for several years. He believes the cities and counties that our EMS is servicing should bear the costs associated with this and that the City, if having to take a loss should not be the only entity absorbing this. The loss should be passed to the cities and counties EMS is servicing. Mayor Baldwin further stated that indeed the EMS 08 -02 -2011 Minutes Page - 8 - department has made and come up with several ways to save money, i.e., part time workers and other programs EMS have come up with. Mayor Baldwin recognized City Manager John Kessel who stated that he wants Council to know that either way the City Manager's Office will be conducting an external audit of EMS. He is open to a beginning balance to tell where we want to draw the line to scheive a zero balance to the general fund. He further stated it is possible to pro -rate the balance repayment giving forward up to 5 years. He with or without the consultant will look into real numbers and savings. He requests what additional values and items the council would like him to look at? More importantly, Council needs to feel comfortable and confident in the EMS program. Mayor Baldwin recognized Councilmember Antuna who moved, seconded by Councilmember Edwards to authorize the City Manager to go out for an RFQ, also allowing the City Manager to develop the scope of work. The vote was unanimous. Motion carried. 5. Schertz Seguin Local Government Corporation (SSLGC) Fiscal Year 2011 -12 Annual Budget SSLGC Resolution # SSLGC RI1 -06 - Consideration and/or action approving the Schertz Seguin Local Government Corporation (SSLGC) FY 2011 -12 Budget, (J. KcsseUA. Cockerell) Mayor Baldwin recognized SSLGC Manager Alan Cockerell who introduced this item stating that action approves the Schertz Seguin Local Government Corporation proposed annual budget for FY 2011 -12. The total proposed budget is $5,096,675. FY 2010 -11 Budget was $4,192,174. The main increase is due to $300,000 that has been added to transfers for future development and repair and replacement of water lines and equipment. Recommend approval. Mayor Baldwin recognized Councilmember Edwards who moved, seconded by Councilmember Antuna to approve the SSLGC FY 2011 -12 Budget of $5,096,675 as presented. The vote was unanimous. Motion Carried 6. Schertz Seguin Local Government Corporation (SSLGC) Fiscal Year 2011 -12 Water Rates SSLGC Resolution # SSLGC RII -07 Consideration and/or action approving the Schertz Seguin Local Government Corporation (SSLGC) FY 2011 -12 Water rates. (J. KessellA. Cockerell) Mayor Baldwin recognized SSLGC Manager Alan Cockerell who introduced this item stating that action approves the Schertz Seguin Local Government Corporation water rates for FY 2011 -12. The proposed water rate is $1.55 per thousand gallons. This is a $.08 increase fi-om FY 2010 -11 and the increase is due to the increase in the number of water leases. This rate increase was reflected in the fee schedule approved by Council on July 12, 2011. Recommend approval. Mayor Baldwin recognized Councilmcmber Edwards who moved, seconded by Councilmembers Scagliola to approve the SSLGC FY 2011 -12 rate increase of $1.55 per thousand gallons as presented. The vote was unanimous. Motion Carried Council did not meet in executive session. 0$ -02 -2011 Minutes Page - 9 - EXECUTIVE SESSION Called under Section 551.071 Texas Government Code Litigation, pending or contemplated litigation; Section 551.072 Texas Government Code - Deliberation regarding the purchase, exchange, sale, lease,'or value of real property. RECONVENE TO REGULAR SESSION 7. Take any action deemed necessary as a result of the Executive Session. No action was taken as Council did not meet. Requests and Announcements 8. Requests by Mayor and Councilmembers that items be placed on a fixture City Council agenda. No items requested 9. Requests by Mayor and Councilmembers to City Manager and Staff for information. Mayor Baldwin recognized Mayor Pro -Tem Fowler who requested staff take to a look at speeding issues, as well as possible placing speed limit signs within the Kramer Farms area, particularly on Rooster Run. Mayor Baldwin recognized Councilmember Edwards who stated he has forwarded an email from Anthony Blevins regarding information and development plans within Schertz Forest. In the email, Mr. Blevins stated that this area is not equipped for cable. Assistant City Manager John Bierschwale stated that he would get back with Mr. Blevins. 10. Announcements by Mayor and Councilmembers Mayor Baldwin recognized the following Councilmembers: Mayor Pro -Tem Fowler who stated that he will be out of town this Thursday and return back sometime on Friday. Councilmember Scagliola who announced he attended the following: Thursday, July 28, 2011 attended the Taste of Schertz Friday, July 29, 2011 attended the Best in Commercial Real Estate awards luncheon. Councilmember Antuna who announced he attended the following: Thursday, July 28, 2011 attended the Taste of Schertz Friday, July 29, 2011 attended the Best in Commercial Real Estate awards luncheon. 08 -02 -2011 Minutes Page -10 - Councilmember Edwards who stated the Texas Tigers AA Basketball Tournament was held at Disney World recently and that they placed 2nd out of 4000 teams. He stated that the YMCA program was a great deal. Mayor Baldwin recognized Councilmember Carpenter who stated "Nix, meine Biirgermeister, danke ", which he said "nothing my Mayor, thank you." Mayor Baldwin stated that he would be out of town starting tomorrow, August 3, 2011, and returning Saturday, August 13, 2011. 11. Announcements by City Manager Mayor Baldwin recognized City Manager John Kessel who thanked the Council for the healthy discussions this evening and congratulations that he had another WOW moment and is very impressed with their ability to focus on a common goal even when they disagree on how to get there. The also thanked the Council, department heads, focus groups, and the Finance Department for the work they did regarding the budget. ADJOURNMENT As there was no further action, Mayor Bal,w /vdjourned the mecting at 5:23 p.m, Hal Baldwin, Mayor ATTEST: Bi ennis, C, ity Secretary 08 -02 -2011 Minutes Page - 11 -