08-05-2014 MinutesMINUTES
REGULAR MEETING
August 5, 2014
A Regular Meeting was held by the Schertz City Council of the City of Schertz, Texas, on
August 5, 2014, at 6:00 p.m., in the Hal Baldwin Municipal Complex Council Chambers, 1400
Schertz Parkway, Building 94, Schertz, Texas. The following members present to -wit:
Mayor Michael Carpenter
Councilmember Jim Fowler
Councilmember Cedric Edwards
Staff Present:
Deputy City Manager John Bierschwale
Chief of Staff Bob Cantu
City Secretary Brenda Dennis
Councilmember Matthew Duke was absent.
Call to Order
Mayor Pro -Tem Daryl John
Councilmember David Scagliola
City Manager John Kessel
Executive Director Brian James
City Attorney Charles Zech
Deputy City Secretary Donna Schmoekel
Mayor Carpenter called the Regular Meeting to order at 6:00 p.m.
Invocation and Pledges of Allegiance to the Flags of the United States and the State of
Texas (Pastor Garry Shelton, Church of God by Faith Spirit of Life, Universal City)
Pastor Gary Shelton provided the invocation followed by the Pledges of Allegiance to the Flags
of the United States and the State of Texas.
A. Mayor Carpenter administered the Mayor Pro -Tem Oath of Office to
Councilmember Daryl John.
Mayor Carpenter stated that procedurally their first step is to have a motion from
one of the Councilmembers to appoint Councilmember John as the next Mayor Pro -
Tem.
Mayor Carpenter recognized Councilmember Edwards who moved, seconded by
Mayor Pro -Tem Scagliola to appoint Councilmember Daryl John as the next Mayor
Pro -Tem. The vote was 3 -04 with Mayor Pro-Tent Scagliola, Councilnrembers
Fowler and Edwards voting yes and no one voting no, and Councilmember Dmyl
John abstaining. Councilmember Duke was absent. Motion Curried.
Mayor Carpenter administered the Oath of Office for the Mayor Pro -Tem to
Councilmember Daryl John. Mayor Pro -Tem John introduced his mom Debra and
daughter Amber who were in the audience this evening.
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Mayor Carpenter congratulated Mayor Pro -Tern John, and also thanked former
Mayor Pro -Tern Scagliola for a job well done.
City );vents and Announcements
• Announcements of upcoming City Events (J. Bierschwale /B. James)
Mayor Carpenter recognized Executive Director of Development Services Brian
James who provided the following announcements and upcoming events:
• Wednesday, August 6, 2014, City of Schertz Conummity Budget meeting, Schertz
Civic Center (Bluebonnet Room) from 7 -9 p.m.
• Friday, August 8,2 ad Annual Senior Center Gala Fundraiser Event, Schertz Civic
Center, 1400 Schertz Pkwy, Bldg. #5, 7:00 -11:00 p.m. A night of big band,
and more; contact Sandy Bryant at 619 -1854 for more info.
• Thursday, August 14, 2014, tad City of Schertz Community Budget meeting,
Schertz United Methodist Church, 3560 Roy Richard Drive (FM 3009), from 7 -9
p.m.
• Announcements and recognitions by City Manager (J. Kessel)
Mayor Carpenter recognized City Manager John Kessel who gave kudos to the
Finance Department and all the Department Heads for the work they have done on the
proposed budget. He also reiterated the importance of citizen input and attendance at
the upcoming Community Budget Meetings and asked those who attended last year to
stand and be recognized.
Hearin¢ of Residents:
Mayor Carpenter recognized the following who spoke:
Miss Claire Jones, a student at Kung Jung Mu Sul. Mayor Carpenter came down from the
dais to greet Claire and asked her how old she was; she responded stating she was 8 years
old. Miss Jones updated the Council on their recent events and invited Council to the
following:
- August 27, 2014, Belt testing, Miss Jones stated she will be testing for her red
belt.
- August 29, 2014, Back to School Bash
- August 30, 2014, Belt Ceremony
Mayor Carpenter stated that this evening Miss Jones showed her indomitable spirit, one
of the required tenets of the program. Mayor Carpenter congratulated and thanked Miss
Jones for coming this evening.
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• Mr. David Richmond, 2921 Bent Tree Drive, who spoke on the approval, importance and
significance of the Lone Star Rail District as well as the importance of having a member
of Council serving. Mr. Richmond urged Council's continued support.
Mayor Carpenter moved to the Consent Agenda section of the meeting.
Consent Agenda Items
1. Minutes — Approve the minutes of the regular meeting of July 29, 2014. (J. Kessel /B.
Dennis)
2. Resolution No. 14 -R -43 — Consideration and/or action approving a Resolution authorizing
an agreement for leased copiers with Ricoh, USA, Inc. (B. Cantu/J. Santoya/R. Galindo /J.
McFarland)
Mayor Carpenter recognized Councilmember Fowler who moved, seconded by
Councilmember Scagliola to approve the consent agenda items 1 and 2. The vote ryas
unanimous with Mayor Pro -Tent John, Councihnembers Fowler, Scagliola and
Edwards voting yes and no one voting no. Councilmemher Duke was absent. Motion
Carried.
Mayor Carpenter moved to the Discussion section of the agenda.
Discussion and Action Items
6. Lone Star Rail District Board Council Appointment — Discussion and consideration
and /or action appointing an Elected Official to the Lone Star Rail District Board,
replacing Councilmember Edwards. (Mayor /Council)
Mayor Carpenter recognized Councilmember Edwards who stated it is very important to
have someone who can stay active on this board. He recommended Mayor Pro -Tern
Daryl John for the post. Mayor Pro -Tem John stated he would volunteer for this
appointment. Mayor Carpenter thanked Mayor Pro -Tem John for volunteering and
reiterated that this was indeed an important role for the city.
Mayor Carpenter recognized Councilmember Edwards who moved, seconded by
Councilmember Fowler to approve the appointment of Mayor Pro -Tem John to the Lone
Star Rail District Board. The vote was 3 -0 -I with Councihnembers Fowler, Scagliola,
and Edwards voting yes and no one voting no, and Mayor Pro-Tent John abstaining.
Councilmember Duke was absent. Motion Carried.
Workshop
• Presentation and discussion of the FY 2014 -15 Proposed Budget. (J. Kessel/ J. Walters)
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Mayor Carpenter recognized Senior Budget/Finance Analyst James Walters who
provided a PowerPoint presentation on the proposed FY2014 -15 budget. The following
information was included:
FY 2014 -15 Proposed Budget
Budget Goals:
• Balanced Structurally
• Conservative and Responsible
• Follows Financial Policies
• Maintains Current Service Levels
• Focuses on Priorities
Management Practices:
• Focus on Priorities
• Maintain Appropriate Fund Balance
• Team Input
• Departments, Council, and Citizens
• Forward Looking
• Planning for Future Revenues & Expenses
• Consider Project schedules
• 5 Year Forecast
• Long Term Debt Model
2013 Key City 5 Year Goals:
• Building Repairs*
• Rebuild Reserves **
• Construct Fire Station 3
• Update our P25 Compliant Public Safety Radios **
• Conduct a Master Facilities Plan*
• Hold Tax Rate Flat*
• Perform an Employee Compensation Study*
Currently being worked on
** Has been completed
2014 Key City 5 Year Goals
• Still have Building Repairs*
■ Still working on Fire Station 3*
• Conduct the Master Facilities Plan*
• Hold Tax Rate Flat*
• Conduct and act on Compensation Study*
• New FM 1518 Funding Study*
• New Maintain Reserves*
* Currently being worked on
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Mr. Walters stated that at the end of this fiscal year we will be above the 25%
recommended reserve balance.
Budget Highlights:
■ Addresses all Key 5 Year Goals
- Funding of the Compensation Study and implementation
- Fund Administration Building, Fire Station #2 Repairs, Recreation Center
Repairs
- Continues Master Facilities Plan, which includes Fire Station #3
- Includes a Funding Study on FM 1518
- Continues to fund replacement reserves
• Focus on our Fleet vehicles and operations
• Focus on Replacing aging equipment
• Introduced New Long Term Debt Model
Pre - Budget Community Input in Spring
• FM 1518 solution study as a priority
• Facilities and Infrastructure planning to take place
• Continued focus on public safety
• Plan for the future needs and services of the community
• Move forward with our Long Term Debt Plan (bond capacity analysis)
• Includes Employee Compensation, Staffing Levels, and Training
City Manager John Kessel interjected by stating there are a number of citizens in the
audience this evening that attended some of these meetings, and asked if they would
stand. Mr. Kessel encouraged the citizens to come and participate at the upcoming
Community Budget Meetings on Wednesday, August 6, 2014, 7 to 9 p.m., Schertz Civic
Center and Thursday, August 14, 2014, 7 to 9 p.m., Schertz United Methodist Church.
He also encouraged them to attend the meetings next year. Mr. Kessel stated that staff
developed the list of priorities based on the community input last year.
All Funds — Revenues
Mr. Walters stated that the general fund makes up 39% of the budget, Water & Sewer
fund makes up 27 %, EMS fund makes up 12 %, I &S fund makes up 9 %, and the rest goes
to the smaller funds.
General Fund
$25,814,170
Special Events Fund
153,800
PEG Fund
209,000
Water & Sewer Fund
17,860,678
EMS Fund
8,186,919
Drainage Fund
1,159,200
Hotel Tax
565,353
Park Fund
100,116
Tree Mitigation
116,335
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Capital Recovery Water
885,500
Capital Recovery Sewer
1,160,497
I &S Fund
5,707,276
Other Funds
349,010
SEDC
3,692,257
GRAND TOTAL
$65,960,111
All Funds — Expenses
Mr. Walters stated that the general fund makes up 39% of the budget, Water & Sewer
fund makes up 28 %, EMS fiend makes up 13 %, I &S fiord makes up 9 %, and the other
funds make up the rest.
General Fund
$25,460,304
Special Events Fund
153,800
PEG Fund
209,000
Water & Sewer Fund
17,788,563
EMS Fund
8,151,501
Drainage Fund
1,094,618
Hotel Tax
564,402
Park Fund
60,000
Tree Mitigation
116,125
Capital Recovery Water
536,109
Capital Recovery Sewer
1,160,497
I &S Fund
5,636,157
Other Funds
339,000
SEDC
3,074,554
GRAND TOTAL
$64,344,630
Fund Balancc/Equity
Mr. Walters stated that you can see the beginning balance of each fund as well as the
ending balance, and whether next year we are expecting a change either up or down. If
you add up the middle column overall the City will be putting back $890,000 into its
reserves over all funds, which includes capital recovery funds, which is meant to save up
and build a water tower or sewer lines.
FY 2014/15
Estimated Beginning
Balance
Net Change
Budgeted Ending Balance
General Fund
$5,936,142
$353,866
$6,290,008
Special Events Fund
89,752
(16,125)
73,627
PEG Fund
419,655
(89,428)
330,227
I &S Fund
537,677
71,119
608,796
Water & Sewer Fund
2,324,516
72,115
2,396,631
Capital Recovery -Water
4,885,761
349,391
5,235,152
Capital Recovery -Sewer
3,912,719
(559,497)
3,353,222
Drainage Fund
1,067,462
64,582
1,132,044
08 -05 -2014 Minutes Page - 6 -
EMS Fund
1,651,754
35,418
1,687,172
SEDC
6,494,930
668,447
7,163,377
Hotel Tax Fund
358,072
(19,049)
339,023
Park Fund
93,023
40,000
133,023
Tree Mitigation
340,600
(79,915)
260,685
Library Fund
58,099
(6,940)
51,159
Historical Committee
9,659
0
9,659
Parks & Rec Foundation
146,966
6,950
153,916
2014 Property Values
Mr. Walters stated that our 2014 property values came in with an increase.
2013 Adjusted Taxable Value $2,502,344,661
2014 Equivalent Taxable Value $2,571,657,271
2014 New Improvements +$134,651,610
2014 Adjusted Taxable Value $ 2,706,308,881
Difference $ 203,964,220
Mr. Walters showed a slide on how the property taxes are broken out with all entities
depending upon which county you live in.
Tax Rate
The current tax rate is broken out into two sections:
Tax Rate Current
M &O $0.3010 To operate general City Services
I &S $0.1964 Pays for the City's Debt
Total $0.4974 The combined tax rate seen on tax bill
Tax Rate
Mr. Walters stated that the state has us calculate different property taxes and present them
to City Council and to the citizens. Following are the calculations:
Effective: The tax rate which, on average, will keep the tax bill the same as in 2013.
Current: The rate currently adopted by the City.
08 -05 -2014 Minutes Page -7-
Proposed Max: The maximum rate set at which the final adopted rate cannot exceed,
and the rate we are requesting Council set tonight. This is also the rate
that we cannot exceed without issuing notices.
Rollback: The rate if exceeded allows citizens to initiate a rollback election. The
results of this election can reduce the adopted tax rate back to the
rollback rate.
Effective: $0.4857
Current: $0.4974
Proposed Max: $0.4974 - Proposed budget is balanced at this rate
Rollback: $0.5066
$0.01 is equal to $270,630 revenue or $17.42 on the average ]ionic
Proposed Tax Rate Breakdown
The proposed tax rate does change:
Tax Rate Proposed
M &O $0.3164 To operate general City Services
I &S $0.1810 Pays for the City's debt
Total $0.4974 The combined tax rate seen on the tax bill
FY 2013 -14 City Tax Rate
At $0.4974
2013 Tax Bill
2014 Tax Bill
Increase
2013 Tax Bill
2014 Tax Bill
Increase
$820 Average Home Value $164,194
$866 Average Home Value $174,200
$ 46
$497 Home Value of $100,000
$497 Home Value of $100,000
$0
Mr. Walters showed information on the historic tax rates for our M &O and I &S.
Breakdown of General Fund Revenues
Property Taxes
$ 9,288,520
Sales Tax
7,346,170
Fees
2,814,366
Franchises
1,986,159
Fund Transfers
1,878,881
Permits
1,175,803
Inter - Jurisdictional
708,392
Miscellaneous
462,650
08 -05 -2014 Minutes Page -8-
Licenses
91,229
Library Fines
31,000
Other taxes
31,000
Total Revenues
$25,814,170
Mr. Walters stated that 36% represents property taxes, 28% represents sales taxes, 11%
represents fees, and the others represent the rest.
General Fund Expenses
General Government
$ 7,364,919
Internal Service
3,789,517
Police
5,776,509
Fire Rescue
3,488,849
Inspections
588,744
Marshal Service
662,603
Streets
1,056,219
Parks & Recreation
1,380,331
Library
846,896
Animal Services
505,717
Total Expenses
$25,460,304
Mr. Walters stated that General Govertmient make up 28 %, Police make up 23 %, Fire
Rescue make up 14 %, Internal Service make up 15 %, and the others make up the rest.
General Fund
Mr. Walters stated that using our revenue and expenses our increase in fund balance is
expected to be $353,866. Below is the breakdown:
Revenues
$25,814,170
Expenditures
25,460,304
Increase of Fund Balance
353,866
Beginning Fund Balance
5,936,141
Ending Fund Balance
6,290,008
25% Reserve Policy
$ 6,142,323
Mr. Walters stated that our reserve policy requires us to have at least $6.14 million; this is
a goal that the City has been working on for the past 5 years. This is the first year where
we have gotten back to our 25 %.
City Manager John Kessel stated that this is an area of policy discussion. We have
reached our 25% reserve policy mark. One position that staff takes, and Council can
discuss this in more detail as we go through the budget process, is if we feel we should
place additional Rinds in reserve beyond the 25% that we know we are going to have to
spend, (for example, vehicle replacement), this will allow us to start saving up for future
08 -05 -2014 Minutes Page - 9 -
vehicles that we know we are needing to purchase. This will allow us to purchase them
on a cash basis where we won't have to dip into the reserves and drop below the 25%
amount. The 25% is equivalent to 3 months of operating reserves in case something of a
catastrophic nature were to happen with the economy or with a natural disaster. We want
to be in a position to operate for a period of time, and that is the purpose of the 25 %, and
not to dip into it for operational items.
M &O $0.3164
Total Change in Expenditures
$ 203,000
New Employees
$ 54,015
Small Expanded Programs (10,000 or less)
$ 794,800
Large Expanded Programs (over 10,000)
$ 300,000
Act on Compensation Study
$ 770,000
Continued Existing Staffing Levels & Programs
$2,121,815
Total Increase
$ 353,500
Reserve Funding
M &O $0.3164
New Personnel
$ 26,000 2 Seasonal Park Workers
$ 45,000 Accountant I
$ 93,000 2 additional mechanics
$ 39,000 Building Maintenance Worker I
$203,000 Total New Employees
M &O $0.3164
Small Expanded Programs
$ 1,500 Baby Changing Stations
$ 2,500 Lyne Implementation— add on to our new Office 365 program
$ 5,250 Portable AC Unit
$11,200 Fleet Equipment
$19,565 Laptops, Tablets, Printers, and Servers
$14,000 2 Defibrillators - Fire
$54,015 Total Small Expanded Programs
M &O $0.3164
Large Expanded
Programs
$ 327,200
Vehicle Replacements
$ 36,000
Planning Tracking Software
$ 109,600
Replace 1/3 of Self Contained Breathing Apparatus
$ 30,000
Additional Landscaping Services
$ 21,000
Animal Adoption Trailer (City Portion - $10,000)
$ 50,000
New/Replacement Desks & Minor Renovations
$ 150,000
Building Repairs — Admin. Bldg. and Parking lot, and Fire Station 2
$ 20,000
May Charter Election
08 -05 -2014 Minutes Page - 10 -
$ 50,000 FM 1518 Funding Study (1 -10 to FM 78)
$ 794,800 Total New Programs
M &O $0.3164
Large Expanded
Programs - Vehicles
$ 36,000
Replace Fire Chief's Vehicle
$ 65,000
Replace Battalion Chief s Vehicle
$ 28,000
Replace Inspections' Truck
$ 28,000
Replace Streets' Truck
$ 25,200
CID Replacement Vehicle
$ 60,000
Replace Parks' Truck
$ 28,000
Building Maintenance Truck
$ 57,000
Fleet Replacement Fund
$327,200
Vehicle Replacements
Mr. Kessel stated that regarding the vehicle replacements, they have attempted to identify
the vehicles which are the worst performers, as we do not want to be caught short and dip
into the reserves for those funds. If we do not spend this money it will go back into
reserves. Mr. Walters stated that the vehicle replacement list was comprised based on the
cost of repairs that we have seen over the last few years. There are vehicles that are over
10 years old and have 90,000 and 100,000 miles on them.
M &O $0.3164
Reserve Funding
$ 169,000 Vehicle Replacement — able to replace more often
$ 24,500 A/C Replacement
$ 25,000 Server Replacement
$ 35,000 Phone System Replacement
$ 100,000 Unassigned Fund Balance — to be used on other projects necessary
$ 353,500 Total Reserve Funding
Mr. Walters stated that not all the general fund is frmded by property tax. There is also a
sales tax component. A chart was shown for those over the last five years. Month to
month sales tax over all have been positive. There was only one dip in this last month that
was due to a one time sales tax collection that we had the year prior. Since last year we
had a large one time sales tax bump, which is why we are estimating a 10% increase for
this year end over last year, but reducing this to only 4% for next year. We are starting to
see those one time payments fall off. Current year to date is a 12.8% growth from last
year. We still have a couple of months to finish out the fiscal year.
08 -05 -2014 Minutes Page - 11 -
Sales Tax breakdown component:
FY 2012/13
Actual
General $6,421,478
Fund +10%
FY 2013/14 FY 2014/15
Estimate Budget
$7,063,625 $7,346,170
+4%
Mr. Walters stated that last year we introduced the five (5) year forecast and below is what it
looked like last year based on the rate Council adopted. He pointed out FY 2014 stating that
we are still $1,000,000 away from our goal; now we are showing we will reach that goal. In
FY 2018 we are projecting we would have to dip into reserves for $107,000, and still be
$1,000,000 away from our mark.
2013 — 5 Year Forecast Information
The FY 2014 — five (5) year forecast now shows in FY 2014 we will be over our goal by
$250,000; next year we will be over our goal by $239,000. Starting FY 2016 we will still
fall below our goal of 25% when we take on new estimated operations of the natatorium as
well as a fire fighter ramp -up program for the new station where we will be hiring multiple
fire fighters per year to get them trained and ready to go by the time the fire station is
complete. This all comes to a head in FY 2018 once all the fire fighters are hired; then the
revenues will start to pick up and we will once again begin to close the gap. In the new
forecast not a single year dips in reserves to fund operations.
Councilmember Edwards stated that this doesn't include any other growth that we have
from the commercial base. Mr. Walters answered, `no ". This has a conservative growth
rate for the property tax as a whole. Mr. Kessel stated that appears obvious in the FY 2018
number of the over /under in the red at the bottom, the $655,000; if you see the chart on the
previous forecast, that same number was over $1,000,000 so that is in one year with the
planning and efforts we have made. We have made up that ability to get to the $400,000.
Our goal is to each year as we go through these exercises, that we make decisions that help
us get closer and closer, so that each of those years are into the yellow (meaning) it is better
than the year before.
08 -05 -2014 Minutes Page - 12 -
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
Revenue
$ 22,689,507
$ 23,170,010
$ 23,501,901
$ 24,092,029
$ 24,754,718
$ 25,440,833
Expense
$(21,513,138 )
$22,618,597
$ (22,776,669)
$ 24,009,901
$(24,699,240 )
$(25,547,867)
Reserve
Funding
$1,176,369
$551,413
$725,232
$82,128
$55,479
M &O Fund
Balance
$3,976,709
$4,528,123
$5,253,355
$5,335,484
$5,390,962
$5,283,928
25% Goal
$5,471,635
$5,637,149
$5,694,167
1 $5,983,725
$6,174,810
$6,371,967
Over/Under
$(1,494,926)
$(1,109,026 )
$ (440,812)
The FY 2014 — five (5) year forecast now shows in FY 2014 we will be over our goal by
$250,000; next year we will be over our goal by $239,000. Starting FY 2016 we will still
fall below our goal of 25% when we take on new estimated operations of the natatorium as
well as a fire fighter ramp -up program for the new station where we will be hiring multiple
fire fighters per year to get them trained and ready to go by the time the fire station is
complete. This all comes to a head in FY 2018 once all the fire fighters are hired; then the
revenues will start to pick up and we will once again begin to close the gap. In the new
forecast not a single year dips in reserves to fund operations.
Councilmember Edwards stated that this doesn't include any other growth that we have
from the commercial base. Mr. Walters answered, `no ". This has a conservative growth
rate for the property tax as a whole. Mr. Kessel stated that appears obvious in the FY 2018
number of the over /under in the red at the bottom, the $655,000; if you see the chart on the
previous forecast, that same number was over $1,000,000 so that is in one year with the
planning and efforts we have made. We have made up that ability to get to the $400,000.
Our goal is to each year as we go through these exercises, that we make decisions that help
us get closer and closer, so that each of those years are into the yellow (meaning) it is better
than the year before.
08 -05 -2014 Minutes Page - 12 -
2014 — 5 Year Forecast Information
Mr. Walters stated that this year we have introduced the Long Term Debt Model, which is
the capacity analysis. This is the second part of our five year forecast. This is for the I &S
fiord as the other one was for the general fund. The purpose of the long term debt model
was to avoid large tax increases on the I &S rate in the future. He stated that earlier in a slide
where the I &S tax rate was broken out you saw every time the city had a bond issue the tax
fates jumped. The purpose of the model and its design is to anticipate future bond packages
and set a rate that will provide enough revenue so that we would not have to move the
property tax rate. There will be some fluctuating depending on what bonds get approved, on
how the economy is, and how the city grows, but it will be a much smaller change than if
we were to just wait until the bonds are issued and they would go up .06 cents at a time.
Councilmember Edwards stated what we are doing is leveling off that long term debt rate.
Mr. Walters indicated "yes ". City Manager Joint Kessel stated that one goal is to not have
to have the I &S rate jump every time there is a bond election. No one wants to put our
citizens in the position to vote for a Fire Station 3, for example, and in order to do this we
would have to fund a tax increase. We should be planning and having that tax rate for debt
service stay relatively flat. He stated that the other thing that came out of the citizen and
council discussions in the pre - budget planning sessions was the desire to have facilities and
infrastructure funded for the growth when we are 50,000 and 70,000 in population, how we
are going to have proper buildings, road ways, drainage features, parks, all of those things
that make up a community. The Citizens and the Council wanted to see a clear path to this,
and this debt model lets us start to understand what we can afford as a community for our
bond measures, not just for one time, but over several years holding that constant tax rate.
Staying with these conservative forecasts this is what we can reasonably afford to do in five
year increments.
Mayor Carpenter commented that by starting to build this model and put this together has
taken a lot of research and effort. One of the things that was done was we took a look at
other cities on similar growth trajectories as Schertz and see what they did during the period
of 35,000 to 50,000 and looking at what they did to their tax rate, their spending, the bond
elections that they had etc., and we learned from that. We basically saw that those that
didn't do the five year rolling budget planning, those that didn't look at a long term debt
model, continued to have that regular stair step of rising of tax rates in order to fund the
bonds they had to float in order to keep up with their growth. The purpose here is to avoid
08 -05 -2014 Minutes Page - 13 -
FY2013
FY2014
FY2015
FY2016
FY2017
11"Y2018
Revenue
$ 24,611,808
$ 25,814,170
$ 26,755,653
$ 27,822,123
$ 28,943,387
$ 30,122,409
Expense
$(23,338,563 )
$(25,460,304)
$ 26,525,088
$(27,808,712 )
$ (28,912,910)
$(29,795,924)
Reserve
Fundiag
$1,273,245
$353,866
$230,565
$13,410
$30,477
$326,485
M &O Fetid
Balaace
$5,936,141
$6,290,008
$6,520,572
$6,533,982
$6,564,460
$6,890,945
25% Goal
$5,686,391
$6,150,872
$6,578,522
$6,918,178
1 $7,219,477
$7,448,981
Over/Under
$249,750
$139,136
$(558,036)
Mr. Walters stated that this year we have introduced the Long Term Debt Model, which is
the capacity analysis. This is the second part of our five year forecast. This is for the I &S
fiord as the other one was for the general fund. The purpose of the long term debt model
was to avoid large tax increases on the I &S rate in the future. He stated that earlier in a slide
where the I &S tax rate was broken out you saw every time the city had a bond issue the tax
fates jumped. The purpose of the model and its design is to anticipate future bond packages
and set a rate that will provide enough revenue so that we would not have to move the
property tax rate. There will be some fluctuating depending on what bonds get approved, on
how the economy is, and how the city grows, but it will be a much smaller change than if
we were to just wait until the bonds are issued and they would go up .06 cents at a time.
Councilmember Edwards stated what we are doing is leveling off that long term debt rate.
Mr. Walters indicated "yes ". City Manager Joint Kessel stated that one goal is to not have
to have the I &S rate jump every time there is a bond election. No one wants to put our
citizens in the position to vote for a Fire Station 3, for example, and in order to do this we
would have to fund a tax increase. We should be planning and having that tax rate for debt
service stay relatively flat. He stated that the other thing that came out of the citizen and
council discussions in the pre - budget planning sessions was the desire to have facilities and
infrastructure funded for the growth when we are 50,000 and 70,000 in population, how we
are going to have proper buildings, road ways, drainage features, parks, all of those things
that make up a community. The Citizens and the Council wanted to see a clear path to this,
and this debt model lets us start to understand what we can afford as a community for our
bond measures, not just for one time, but over several years holding that constant tax rate.
Staying with these conservative forecasts this is what we can reasonably afford to do in five
year increments.
Mayor Carpenter commented that by starting to build this model and put this together has
taken a lot of research and effort. One of the things that was done was we took a look at
other cities on similar growth trajectories as Schertz and see what they did during the period
of 35,000 to 50,000 and looking at what they did to their tax rate, their spending, the bond
elections that they had etc., and we learned from that. We basically saw that those that
didn't do the five year rolling budget planning, those that didn't look at a long term debt
model, continued to have that regular stair step of rising of tax rates in order to fund the
bonds they had to float in order to keep up with their growth. The purpose here is to avoid
08 -05 -2014 Minutes Page - 13 -
large tax increases in the future and to learn from other communities whether it was done
well or, as many as we did look at, not well, and make sure that we do not find ourselves in
that same position. Mayor Carpenter thanked staff for this work because there is no better
way for us to avoid failures other cities have experienced than by studying what they did,
and making sure that we do not do the same things. Mayor Carpenter stated this is very well
done and this is a very important part of the work that takes us out to 30 years.
Below was the information provided on how the model works:
Long Term Debt Model
o For I &S Fund
o Purpose
-To avoid large tax increases in the future
o Design
-Model is long term in nature
- Includes all current debt obligations
-Takes into account the growth of the tax base
- Ensures fund balance never falls below a certain level
- Includes bond elections every 5 years
5 Year Summary — I &S
o At I &S Rate of $0.1810
- Includes $25 million bond package from elections in 2015
- The lowest fund balance is $522,147 in FY 2017/18 which is 8.4% of the
annual debt service.
- Rate could fluctuate based on the actual growth of the tax base and the
results from the bond election but at a reduced rate due to the model
Mr. Walters stated that the model will be updated every year to keep it current. Mr.
Kessel stated that this model and the five (5) year budget forecasts are tools they work
with that the community will be able to use long past the 50,000 population mark.
Certainly we expect these models to change and grow and become more sophisticated.
This is what communities do to be proactive and accomplish certain tasks and still
maintain a quality of life in an affordable economically sustainable community over one
that is reactionary and always feels they are behind the curve. He is proud of the finance
department for putting this information together and in reacting to the citizens and
councils challenge. Mi•. Walters showed a graph of debt service on how this model
works.
08 -05 -2014 Minutes Page - 14 -
Target Tax Rate
Mr. Walters stated that our current tax rate is $0.4974 with an M &O of $0.3010 and I &S
of $0.1964. Below is a chart of the current, recommended proposed maximum as well as
an alternative rate. Mr. Walters stated that should council adopt the alternative it would
remove the maintenance worker and their vehicle. He stated there were other positions
they wanted to hire, but they could not fit this into the $0.4974 rate.
Tax Current Recommended Alternative
Rate Maximum
M &O $0.3010 $0.3164 $0.3139
I &S $0.1964 $0.1810 $0.1810
Total $0.4974 $0.4974 $0.4949
Proposed Public Hearing Dates
Mr. Walters stated that below are the proposed public hearing dates Council will also be
asked to take action on later on the agenda.
• August 191", 2014
• August 26, 2014
Budget Calendar FY 2014/15
Mr. Walters provided the below information on what the budget calendar looks like:
July 31 File with City Secretary, Budget Workshop
August 5 Budget Workshop, vote to place a preliminary tax rate on the agenda, and
schedule public hearings
August 6 First Community Budget Presentation — Civic Center
August 12 Budget Workshop
August 14 Second Community Budget Presentation — Schertz United Methodist
Church
August 19 First Public Hearing
August 26 Second Public Hearing, First Vote
September 2 Second Vote and adoption of the budget and tax rate
October 1 Budget goes into effect
Mayor Carpenter stated that this is a workshop and opened it up for Council comments
and questions. Mayor Carpenter recognized Councilmember Edwards who commended
staff stating we are $186,000 away from having our reserves back up to where we need
them. This is a great goal to shoot for and would like staff to continue to work on this.
He understands that this is an ongoing process. As long as we keep our measures in place
08 -05 -2014 Minutes Page -15 -
to continue to look for ways to give the maximum amount of service to our residents and
cut costs, if we can do that, we can meet that reserve amount.
Mayor Carpenter recognized Councilmember Fowler who also thanked Mr. Walters for
the presentation. He stated that the forward looking five year budget and the five (5) year
debt model allow us to take a look at setting the priorities of what we need in the future.
Councilmember Fowler commented on the successes of the communications between the
different departments allowing them to prioritize projects on what is most important and
what needed to be funded. This budget shows as we go forward, the ability to hold our
tax structure and the ability to pay for our bond issues at the same time. We have done
our citizens a great service. Councilmember Fowler stated this is putting us on the right
track, and as we grow we will have to make adjustments to the models as indicated
earlier. The growth of our city is going to require us to start looking at hiring more
employees. The process we are looking at now, especially now that we have our reserves
up to where we want them, this allows us more flexibility to hire and do more projects
that we were unable to do as we were rebuilding our reserves. Again, Councilmember
Fowler thanked the finance department and the other departments on their work on the
proposed budget.
Discussion and Action Items
3. Ordinance No. 14 -5 -41 - Conduct a public hearing and consideration and /or action
PH approving an Ordinance amending the Comprehensive Land Plan associated with a
revision to the Parks Master Plan. First Reading (B. James /L. Wood)
The following was read into record:
1 t 1 ► .109 AZU-19 MwEll
AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF SCHERTZ,
TEXAS AMENDING THE COMPREHENSIVE LAND USE PLAN AND OTHER
MATTERS IN CONNECTION THEREWITH
Mayor Carpenter recognized Executive Director of Development Services Brian James
who stated that a few weeks ago they had listened to a work session presentation led by
Parks and Recreation Advisory Board member Mark Davis on the Parks Master Plan
update where they outlined the process we would go through, which was going to the
Planning and Zoning Commnission to ask for them to recommend approval of the City
Comprehensive plan to incorporate the Parks Master Plan document into the Comp plan.
The Parks Master Plan becomes the guide for our future Parks and Recreation system
going forward in what our needs and assets are as well as future goals. The Parks
Advisory Board recommended approval of it as did the Planning and Zoning
Commission. Staff is recommending approval.
Mayor Carpenter opened the public hearing and as no one spoke, closed the public hearing
and called for Council comments.
08 -05 -2014 Minutes Page - 16 -
Mayor Carpenter recognized Councilmember Fowler who pointed out that the Parks
Master Plan has been reviewed by the state and he saw it as receiving kudos because of
the effort we put into it. Mr. James stated that one of the requirements for applying for a
grant and going before the Texas Parks and Wildlife Department is that a community
must have an up to- date -Parks Master Plan component. Former Director of Parks and
Recreation George Logan, Parks Manager Chuck Van Zandt, and Parks and Recreation
Board Member Mark Davis took the time to take it up to the state to review and ask for
any recommendations they might be able to provide. He stated this was done to make
sure the plan was done right and meets all the state requirements going forward. Part of
the point of this plan is that when we get unexpected future opportunities to do something
cost effectively, we can measure it against what is already in the plan to evaluate it and
make a good decision. The plan does a good job in balancing specificity with flexibility
so we are not too constrained, but we are also not too free to go off in a direction that
may not be in our best interest. Councilmember Fowler stated he wanted to thank Mark
Davis for his excellent work on this document.
Mayor Carpenter stated this plan was not written with help from a consultant. Our
neighbors and your neighbors put this together, which included hundreds of hours of
time. Nobody put in more time than Mark Davis.
Mayor Carpenter recognized Councilmember Scagliola who stated he recommends
everyone take time to read it. What caught his attention were the captions such as,
diversity, accommodation, conservation, opportunity, and connectivity. You can detect it
throughout the document. He thanked everyone for putting it together.
Mayor Carpenter recognized Councilmember Fowler who moved, seconded by
Councilmember Edwards to approve Ordinance No. 14 -S -41, first reading. The vote was
unarzunorrs lvith Mayor Pro -Tent John, Councilmernbers Fowler, Scagliola, and
Edwards voting yes and no one voting no. Councilmember Duke was absent. Motion
Carried
4. Ordinance No. 14 -M -39 — Consideration and /or action approving an Ordinance
amending the City of Schertz Code of Ordinances establishing fees for certain licenses,
permits, and other services provided by the City of Schertz. Final reading (J. Kessel/J.
Santoya/J. Walters)
The following was read into record:
ORDINANCE NO. 14 -M -39
AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF SCHERTZ,
TEXAS AMENDING THE CITY OF SCHERTZ CODE OF ORDINANCES AND
CERTAIN OTHER ORDINANCES BY AMENDING AND ESTABLISHING FEES
FOR CERTAIN LICENSES, PERMITS, AND OTHER SERVICES PROVIDED
BY THE CITY OF SCHERTZ.
08 -05 -2014 Minutes Page - 17 -
Mayor Carpenter recognized Senior Budget/Finance Analyst James Walters who went
over the proposed fee schedule. He stated the majority of the proposed fee changes in the
General Fund are not expected to result in significant revenue changes. The convenience
fee removal will affect the General Fund by an estimated $4,000. The EMS Fund will
now be adding other rates to the fee schedule that were already in place, including:
standby rates for being present at a sporting event or another event, training fees, and
vaccinations. There will be no fiscal impact for these additions. The EMS Fund is a self -
sustaining fund. For the Water & Sewer Fund, the proposed Water rates increase is
expected to generate an additional 2% in revenue or $150,000. The increase in the Sewer
rates along with population growth is estimated to generate an additional $592,000 in
revenue; roughly $300,000 of this will go toward sewer treatment. These changes to the
Water and Sewer rates are in accordance with the approved Rate Study and will help
offset increases in maintenance costs and contributions to Cibolo Valley Local
Govermnent Corporation (CVLGC). The removal of the convenience fee will affect the
Water & Sewer Fund by an estimated $40,000. The Water & Sewer Fund is a self -
sustaining fund and these fee increases are necessary to support ongoing operations and
maintenance.
The proposed rate changes will be effective October 1, 2014. Staff recommends this
Ordinance be approved.
Mayor Carpenter moved, seconded by Councilmember Fowler to approve Ordinance No.
14 -M -39 on final reading. The vote was unanimous with Mayor Pro -Tem John,
Councilmembers Fowler, Scagliola, and Edwards voting yes and no one voting no.
Councilmember Dadre was absent. Motion Carried.
5. Ordinance No. 14 -5 -38 — Conduct a public hearing and consider an Ordinance on a
request for a Specific Use Permit to allow a Convenience Store with Gas Pumps with
associated site plan at 21901 IH -35 North. Final reading (B. James/M. Sanchez/L.
Wood)
The following was read into record:
ORDINANCE NO. 14 -S -38
AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF SCHERTZ,
TEXAS ZONING 2190111135 NORTH, SCHERTZ, COMAL COUNTY, TEXAS
TO ALLOW A SPECIFIC USE PERMIT FOR OPERATION OF A
CONVENIENCE STORE WITH GAS PUMPS
Mayor Carpenter recognized Senior Planner Lesa Wood who introduced this item stating
that this item was heard last week for first reading at Council. She stated at that meeting
Council discussed the Specific Use Permit and also discussed for consideration the
placing of sidewalks along the IH 35 frontage road. Ms. Wood stated that this morning
she received an email from the applicant of the developer and they have agreed to put the
08 -05 -2014 Minutes Page -l8-
sidewalk in along IH 35. She stated that staff has reviewed this and does recommend
approval of the Specific Use Permit with the following conditions:
• That the site plan is revised to include the 5 foot concrete sidewalk to be
installed along 1113 5 frontage road and constructed in accordance with the
City of Schertz specifications.
• That a building permit has been approved within one -year of the adoption
of the Specific Use Permit ordinance; and
• The use has begun operation within 2 years of the issuance of the
necessary building permit.
Mayor Carpenter recognized Councilmember Edwards who stated we are planning to have
this sidewalk put in right on the edge of IH 35 and there could be a widening of IH 35 so
the most important thing is how far away from the curb now. In the future, we or TxDOT
may be tearing them up and he asked if this is a cost we should be passing on to a
developer at this point. Ms. Wood stated that TxDOT would actually have to approve the
sidewalks and they have already reviewed the plat and verified how much dedication they
would need and at the point when they would do the development they would submit their
application to make sure we get it in the right location.
Mayor Carpenter recognized Councilmember Fowler who asked about the original plans
for shrubbery in front. Would the sidewalk installation eliminate the shrubbery? Ms.
Wood answered that the developer is still required to fit the shrubbery in the plan layout.
Mayor Carpenter recognized Councilmember Edwards who moved, seconded by Mayor
Pro -Tem John to approve Ordinance No. 14 -S -38 on final reading and revising the site
plan to include the five foot concrete sidewalks along IH 35. The vote was unanimous
with Mayor Pro -Ten¢ John, Councilmembers Fowler, Scagliola and Edwards voting
yes and no one voting no. Councilmember Duke was absent. Motion Carried.
7. Resolution No. 14 -R -66 — Consideration and /or action approving a Resolution
authorizing an Interlocal Agreement between the City of Schertz and the Cibolo Creek
Municipal Authority regarding purchase of property for a future Wastewater Treatment
Facility. (J. Kessel /J. Bierschwale)
The following was read into record:
RESOLUTION NO. 14 -R -66
RESOLUTION BY THE CITY COUNCIL AUTHORIZING THE CITY
MANAGER TO ENTER INTO AN INTERLOCAL AGREEMENT BETWEEN
THE CITY OF SCHERTZ, TEXAS AND THE CIBOLO CREEK MUNICIPAL
AUTHORITY REGARDING PURCHASE OF PROPERTY FOR A FUTURE
WASTEWATER TREATMENT FACILITY
08 -05 -2014 Minutes Pnge - 19 -
Mayor Carpenter recognized Deputy City Manager John Bierschwale who stated the
Cibolo Creek Municipal Authority (the "Authority ") is a regional agency designated to
provide regional wastewater service in the Cibolo Creek Watershed. The City will assist
the Authority in its efforts to acquire the Plant Site located off Interstate Highway 10 and
Cibolo Creek. The Agreement will not affect the existing wholesale contract between the
City and the Authority.
The City and CCMA are amending the original agreement to simplify the language in
Section II Repayment of Funds 2.2, in the event the project does not develop then the
properties will revert back to the City. This amendment allows for the flexibility for
CCMA to complete negotiations with the last tract of land to meet the terms with
property owners. The City is faced with future growth within its city limits in the vicinity
of Interstate Highway 10 and Cibolo Creek for which additional wastewater treatment
facilities will be needed. The only change they ask is to change District to Authority.
Mayor Carpenter recognized Councilmember Edwards who moved, seconded by
Councilmember Scagliola to approve Resolution No. 14 -R -66 with the stated change
from `District' to `Authority.' The vote was unanimous with Mayor Pro -Tern John,
Councilmembers Fowler, Scagliola and Edwards voting yes and no one voting no.
CounciGnember Dube was absent. Motion Carried.
8. Resolution No. 14 -R -67- Property Tax Rate — Consideration and /or action approving a
Resolution taking a Record Vote on setting the Preliminary Maximum Tax Rate for FY
2014 -15 and Scheduling of Public Hearings on the proposed tax rate. (J. Kessel /J.
Walters)
The following was read into record:
RESOLUTION NO. 14 -R -67
A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ,
TEXAS AUTHORIZING A PRELIMINARY MAXIMUM TAX RATE FOR
FISCAL YEAR 2014 -15, AND OTHER MATTERS IN CONNECTION
THEREWITH
Mayor Carpenter recognized Senior Budget /Finance Analyst James Walters who stated in
accordance with Chapter 26.05(d) of the State's Property Tax Code, a governing body
must take a Record Vote to place a proposal to adopt the rate on the agenda of a fixture
meeting as an action item if the preliminary tax rate exceeds the Effective Tax Rate. The
proposal must specify the desired rate.
After the Record Vote, the governing body must then schedule two (2) Public hearings at
which the proposed tax rate will be considered. A one - quarter page "Notice of 2014 Tax
Year Proposed Property Tax Rate for the City of Schertz must be published in the local
newspaper and online in compliance with Senate Bill 1510. The notice will contain
information based upon a preliminary tax rate to be determined by the City Council and
08 -05 -2014 Minutes Page - 20 -
the dates of the public hearings, if necessary. Further, another record vote will have to be
taken on the proposed rate prior to final adoption of the tax rate ordinance.
The proposed maximum property tax rate maintains quality services to residents and
businesses, provides for public safety, adds best management processes for our growing
community, and replenishes the General Fund reserve. The current property tax rate is
$0.4974 per $100 valuation. The proposed maximum tax rate will remain the same at
$0.4974 per $100 valuation. The M &O portion of the property tax rate will increase to
$0.3164 per $100 valuation. The I &S portion will decrease to $0.1810 per $100
valuation. The rollback rate is $0.5066 per $100 valuation.
Staff recommends the Council take a Record Vote on the preliminary maximum tax rate
of $0.4974 per $100 valuation and schedule two Public Hearings for August 19, 2014 and
August 26, 2014. Final adoption vote is scheduled for September 2, 2014.
Mayor Carpenter recognized Councilmember Edwards who moved, seconded by
Councilmember Fowler to approve Resolution No. 14 -R -67, setting the preliminary
maximum tax rate for FY 2014 -15 at $0.4974, with the M &O rate at $0.3164 and the I &S
portion at $0.1810. The vote was 3 -7 -0, with Mayor Pro -Tem John, Councilmembers
Fowler, and Edwards voting yes, and Councilmember Seagliola voting no.
Conmcdbnennber Duke was absent. Motion Carried.
Roll Call Vote Confirmation
Mayor Carpenter recognized Deputy City Secretary Donna Schmoekel who recapped the votes
of items I through 8.
Executive Session
Mayor Carpenter recessed the regular meeting into executive session at 7:31 p.m.
9. City Council will meet in closed session for evaluation of the City Secretary and Deputy
City Secretary under Texas Government Code Sections 551.074 personnel issues and
551.071 consultation with attorney.
10. City Council will meet in closed session for evaluation of the City Manager under Texas
Government Code Section 551.074 personnel issues.
Reconvene into Regular Session
Mayor Carpenter reconvened into regular session at 9:06 p.m.
9.a. Take any necessary action based on discussions held in closed session under Agenda
Item number 9.
08 -05 -2014 Minutes Page -21-
Mayor Carpenter recognized Councilmember Scagliola who moved, seconded by
Councilmember Fowler to rescind the City Secretaries' previous retro- active pay increase
to provide a one -time pay increase of $613.16 for the City Secretary and $711.46 for the
Deputy City Secretary for the pay period of August 9 through August 22, 2014 per their
evaluation and pay increase of two (2) percent for the City Secretary and four (4) percent
for the Deputy City Secretary beginning on August 23, 2014. The vote was unandmous
with Mayor Pro -Tern John, Councilmembers Toivler, Scagliola and Edwards voting
yes and no one voting no. Councilmember Duke nvas absent. Motion Carried
10.a Take any necessary action based on discussions held in closed session under Agenda
Item 10.
No action was taken but Council requested that the City Secretary place the City
Manager's evaluation back on the agenda in two weeks.
Roll Call Vote Confirmation
Mayor Carpenter recognized Deputy City Secretary Donna Schmoekel who recapped the vote of
item 9.a.
Requests and Announcements
11. Announcements by City Manager
o Citizen Kudos
o Recognition of City employee actions
o New Departmental initiatives
No further announcements provided.
12. Requests by Mayor and Councilmembers that items be placed on a firture City Council
agenda.
No items requested.
13. Announcements by Mayor and Councilmembers
o City and community events attended and to be attended
o City Council Committee and Liaison Assignments (see assignments below)
o Continuing education events attended and to be attended
o Recognition of actions by City employees
o Recognition of actions by community volunteers
o Upcoming City Council agenda items
No announcements were provided.
Adiournment
08 -05 -2014 Minutes Page -22-
As there was no further business, the meeting was adjourned at 9:12 .
rchael R. Carpenter, Mayor
(gnda�Dcnnis, T:
City Secretary
08 -05 -2014 Minutes Page -23-