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09-02-2014 MinutesMINUTES REGULAR MEETING September 2, 2014 A Regular Meeting was held by the Schertz City Council of the City of Schertz, Texas, on September 2, 2014, at 6:00 p.m., in the Hal Baldwin Municipal Complex Council Chambers, 1400 Schertz Parkway, Building #4, 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 Call to Order Mayor Pro -Tern Daryl John Councilmember David Scagliola Councilmember Matthew Duke 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. Texas (Councilmember Cedric Councilmember Edwards provided the invocation followed by the Pledges of Allegiance to the Flags of the United States and the State of Texas. Presentations • Proclamation recognizing National Payroll Week (Mayor Carpenter) (Andrea Spanley/ Sandra Jones to accept) Mayor Carpenter introduced Speaker Coordinator of the Alamo Chapter of the American Payroll Association Ms. Andrea Spanley and Web Master of the Alamo Chapter of the American Payroll Association Ms. Sandra Jones. Mayor Carpenter read and presented the proclamation. Ms. Spanley thanked Mayor and Council. Councilmember Edwards left the meeting at 6:07p.m. City Events and Announcements • Announcements of upcoming City Events (J. BierschwaleB. James) Mayor Carpenter recognized Executive Director of Development Brian James who provided the following announcements: 09 -2 -2014 Minutes Page - I - • Saturday, September 6, National POW /MIA Recognition Day Ceremony, 1000 FM 78, VFW Post 8315, 11:00 a.m. • Monday, September 8, 2014, Ribbon Cutting for Mattenga's Pizzeria, 6044 FM 3009, Suite 290, 11:00 a.m. • Thursday, September 11, 2014, North East Partnership Meeting, Olympia Hills Golf & Conference Center, Universal City, 11:30 a.m. RSVP to Donna or Brenda by Monday, September 8 if you will be attending. • Tuesday, September 16, 2014, Chamber Luncheon, Schertz Civic Center, Building #5, Guest Speaker, Michael Brough — Topic: "Translating Your Vision into Words, 11:30 a.m. SAVE THE DATE: • Monday, October 20, Wendy Swan Memorial Park Dedication Northcliffe Subdivision, 6:00 p.m. • Announcements and recognitions by City Manager (J. Kessel) Mayor Carpenter recognized City Manager John Kessel who stated he wanted to cover one big topic and highlight two different groups of individuals. Mr. Kessel stated that it is hard working City Employees, and provided the following examples: (1) Tonight you will have a presentation by Mr. Walters who has been running the City budget presentations for two (2) years now, and you are going to see one (1) particular slide that addresses a concern of a citizen, Mr. Brockman, who brought it up last week. Mr. Kessel stated that Mr. Walters does this remarkably well throughout the entire process, which starts in the spring. Mr. Kessel stated that all the comments we say; the comments from citizens, comments from Council and comments from staff, Mr. James captures and tries to address almost seamlessly so that you do not notice that it has happened. Mr. Kessel stated that Mr. Walters has done a tremendous job, and when you see that particular slide of information, no one had to ask him to add it, he did it on his own. Mr. Kessel stated the other thing is a hidden group of individuals. Although they should not be hidden, this is about our Public Works staff. Mr. Kessel stated that it has been in the upper 90's, and 100 degrees for the last several weeks, and our Public Works staff are out in the field, not in air conditioning, working on streets and water and sewer lines. He stated it is really warm outside and our Public Works staff is trying to stay hydrated. Mr. Kessel asked that when you see these individuals and the crews, realize they are working day in and day out getting the job done just the same as if the weather was nice. It takes a toll on them and by Friday it is tough for them to work in those conditions and we just wanted everyone to know how much it is appreciated. Mayor Carpenter recognized Boy Scout Ben Reeder with Troop 343 who was in the audience this evening. Mayor Carpenter came down from the dais and asked Ben to join him at the podium and explain why he was here. Ben stated that he was here this evening to observe a 09 -2 -2014 Minutes Page - 2 - Council meeting as it was a requirement on achieving his Citizenship in the Community Merit badge. Mayor and Council welcomed Ben. Workshop Discussion and update regarding Main Street related projects — Historic grant program, proposed zoning district, and Main Street bond project. (B. James/K. Woodlee/M. Sanchez) Mayor Carpenter recognized Director of Development Services Brian James who provided a PowerPoint presentation regarding Main Street Focus with the following highlights and answering questions from Council: Projects - Thoroughfare Plan update - Main Street Bond Projects - Parking Lot improvement - Historic Preservation Incentive Program - Main Street Mixed Use Zoning District Thoroughfare Plan update - The Gateway Plan notes the need to address the turning movements at FM 1518, First Street, and Main Street that create a barrier to a pedestrian friendly environment. - Main Street, from First Street to FM 1518 is designated as a truck route which also creates challenges. - Part of the purpose of the thoroughfare plan update is to address connectivity issues and develop appropriate street cross sections. Main Street Bond Projects - Approximately $1.4 million is available for street improvements along Main Street. - Pape Dawson, one of our on call engineering firms is being engaged to design this project. - They are currently reviewing existing information and will be preparing a scope of work and cost proposal. - A key element of the project is providing more defined useable on street parking. Parking Lot Improvement - The City controls the small vacant tract of land at the eastern corner of Main Street and First Street. Staff has developed a design for the parking lot that provides for 15 spaces, additional landscaping and screening. The lot can also be used during various Schertz festivals and events for exhibits, grandstand seating, food vendors, etc. 09 -2 -2014 Minutes Page - 3 - Historic Preservation Incentive Program - The program is intended to protect and preserve the City's historic resources and strengthen the economy by promoting the Main Street area to tourists and residents. - Eligibility — must be at least 50 years old, within the area and all taxes and fees must be current. - Matching grant program of up to $20,000 with proposed work approved in advance by the Schertz Historical Preservation Committee. - Funding to come from the Hotel Occupancy Tax of up to $40,000 per year. Main Street Mixed Use Zoning District - Per the Gateway Plan, new zoning regulations should be put into place to: Evaluate non - conforming standards and amend them to the extent possible — setbacks, lot size, lot coverage, etc. Evaluate use standards. Revise off - street parking standards to fit the context and needs of Main Street. Provides for reduced parking requirements. Includes single family dwellings and commercial uses (generally NS — Neighborhood Services) Has less stringent setback and lot size requirements. Mr. James addressed questions from Councilmembers. Hearing of Residents: Mayor Carpenter recognized the following who spoke: Mrs. Maggie Titterington, Chamber President who came forward providing information on the Chambers upcoming events: - Monday, September 8, 2014, Ribbon Cutting and Grand Opening for Mattenga's Pizzeria, 6044 FM 3009, Suite 290, 11:00 a.m. - Tuesday, September 16, 2014, Chamber Luncheon, Schertz Civic Center, Building #5, Guest Speaker, Michael Brough — Topic: "Translating Your Vision into Words ", also they will be having their Membership 101 Class. - Thursday, September 18, 2014, After -Hours Mixer, 5:30 to 7:00 p.m. hosted by ReMax, 17156 11135 North in Schertz. Mrs. Titterington also stated that they are still accepting their Leadership Core applications, deadline is October 31, 2014, and you do not have to be a Chamber member to apply, go to Schertzchamber.org. She stated the class is half full and she is excited that Amazon will be leading a half morning class in industry and Caterpillar will be taking the second half. Mrs. Titterington also thanked Councilmember Scagliola and Fowler for attending the Grand Opening and Ribbon cutting ceremony at Suzie's Thrift and Gifts and thanked Mayor Carpenter, Councilmembers Scagliola and Fowler who came out last Friday to the Senior Center for the check presentation by the HyPer Group. 09 -2 -2014 Minutes Page -4- Finally, Mrs. Titterington stated that there will be 6 prints, 5 with a signature from Tim Duncan, at the September 16th Schertz Chamber Luncheon. The Schertz Chamber will begin the silent auction for these prints at the luncheon and will end the auction with the other items October 3rd at the Caterpillar Golf Classic. Fifty percent of the proceeds from the October 3rd Golf Classic will be donated to the Clemens and Steele High School students which includes the sale of these auction items. Mr. Robert Brockman, 1001 Elbel Road, who came forward stating that as the public watch dog for the City one of his duties is to check the pedestrian crossing signals before school starts. He stated that the crossing signal at Schertz Parkway and Woodland Oaks failed his test. He contacted 311- Customer Service, who placed a work order to the Public Works Department advising them of the problem. As it turned out, a switch had gone out and they would have to order it. Mr. Brockman stated that it has been over ten (10) days ago and inquired as to when the signal would be fixed. Mayor Carpenter stated that they would get with Public Works to find out the status and get back to Mr. Brockman on the progress. Mr. Stephen Jameson, 673 Cotton Patch, who came forward stating that he has a situation with the parking of his company vehicle. He stated that according to the Ordinance anything over a 1 ton vehicle is not allowed to be parked on the City streets. He was requesting information why an F550 that is less than 6000 pounds and does not require a DOT sticker cannot be parked on this street. He inquired as to where he could obtain a permit to park his company vehicle on the street as his driveway is to short. He indicated that he has been parking his vehicle in an area that is unsafe. Mayor Carpenter directed Mr. Jameson to meet with City Marshal Michael Harris to obtain the information he was seeking. Mayor Carpenter recognized Councilmember Fowler who requested that items 2 & 3 be removed from the consent agenda for separate action. Consent Agenda Items 1. Minutes — Approve the minutes of the regular meeting of August 26, 2014. (J. Kessel/B. Dennis) 4. Resolution No. 14 -R -77 — Consideration and/or action approving a Resolution authorizing a Management Services Agreement with Schertz Seguin Local Government Corporation (SSLGC). (J. Bierschwale /S. Willoughby /A. Cockerell) The following was read into record: RESOLUTION NO. 14 -R -77 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING AN AGREEMENT FOR MANAGEMENT SERVICES BETWEEN THE CITY OF SCHERTZ AND THE SCHERTZ /SEGUIN LOCAL 09 -2 -2014 Minutes Page - 5 - GOVERNMENT CORPORATION WITH SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION, AND OTHER MATTERS IN CONNECTION THEREWITH Mayor Carpenter recognized Councilmember Scagliola who moved, seconded by Councilmember Duke to approve the consent agenda items 1 and 4. The vote was unanimous with Mayor Pro -Tem John, Councilmembers Fowler, Scagliola, and Duke voting yes and no one voting no. Councilmember Edwards was absent. Motion Carried Discussion and Action Items 2. Resolution No. 14 -R -75 - Schertz Seguin Local Government Corporation (SSLGC) Fiscal Year 2014 -15 Annual Budget SSLGC Resolution # SSLGC #SSLGC R -14 -08 - Consideration and /or action approving the Schertz Seguin Local Government Corporation (SSLGC) FY 2014 -15 Budget. (J. Bierschwale /S. Willoughby /A. Cockerell) The following was read into record: RESOLUTION NO. 14 -R -75 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS APPROVING THE SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION FISCAL YEAR 2014 -15 ANNUAL BUDGET, AND OTHER MATTERS IN CONNECTION THEREWITH Mayor Carpenter recognized Councilmember Fowler who asked about line item #2, "Capital Outlay" which showed a 11355% increase. He stated that he understand that they are looking at the Cathotic Protection of the entire line. Mayor Carpenter recognized Schertz - Seguin Local Government Corporation (SSLGC) General Manager Alan Cockerell who confirmed yes. Councilmember Fowler stated that he was surprised that this wasn't something that SSLGC had put money aside for several years in order to do this, as this was going to be an on -going project. He stated that once they get it fixed he understands that the anodes in the ground will have to be replaced every so often as well. Councilmember Fowler asked Mr. Cockerell to provide an understanding as to why they are being hit with the $2.2 million dollar project. Mayor Carpenter recognized Mr. Alan Cockerell who stated it is actually a $2.7 million dollar project. He stated that it is in their Capital Improvements Plan that they have and that every five (5) years this is updated. Mr. Cockerell stated they knew this activity needed to be done but it was a matter of finding a source of revenue to complete this task. He stated that one thing that has happened for the next fiscal year with the onset of the SAWS project is selling them access to water and then also treating and transporting their water. They will have increased revenues, and with the increased revenues the SSLGC Board decided that it would be an appropriate source to fund this project. Mr. Cockerell stated that what they have had in the past, as you can see by the large percentage increase in capital projects, is in the past they have had modest capital projects (i.e., bought a 09 -2 -2014 Minutes Page -6- vehicle or two), and last year they did computer upgrades, so this large percentage increase is surprising but because of the increased revenues they are able to fund the majority of this project with cash on hand from their revenues next year. They felt it appropriate to do this in the budget. Councilmember Fowler stated that as he understands it and looks at the percent changes in the different fund accounts, overall percent changes, taking out item 2, is running at a 50 percent increase in budget. He understands with revenue coming in the impact upon the citizens is only about a 2 percent increase in their water rates. Mr. Cockerell stated that the Corporations water rates are remaining the same. Mr. Cockerell provided information that was provided by their rate consultant showing that the rates are 1.55 and forecast them to be constant for the next four (4) years. Mr. Cockerell stated that they will revisit this every year and look at the numbers but right now their forecast shows that their rates are going to be level for the next four (4) years. Councilmember Fowler stated that it looks like they have the capital improvements covered and that was the important thing even though they are seeing a lot of increases; the impact to the citizens for the next four and five years is not going to be changing. Mr. Cockerell concurred that this is their projection. He stated that the contract that they have with SAWS is very beneficial to the Corporation in providing some additional revenues, their costs are going up but not at the same rate as their revenues are so that gives us some additional revenue to do some things like the Cathotic Protection project this next year and not have to go out and borrow the money. Mayor Carpenter recognized Deputy City Manager John Bierschwale who stated that on the 2% that the City has increased that is for our line maintenance repair; we have a lot of old lines in Aviation Heights, Parkland Heights and also Northcliff where we have a lot of work to be continued. Our 2% is covering this cost so that we do not have to go back out and issue more bonds. Mr. Bierschwale stated that we are talking two different items. The wholesale contract with Seguin is stable and they are projecting from the Schertz Seguin side that it will be stable for another four years. Councilmember Fowler stated that this information answered his questions and he doesn't believe it is necessary for him to ask any more questions on Item 3. No further questions from Council. Mayor Carpenter recognized Councilmember Fowler who moved, seconded by Councilmember Scagliola to approve Item 2, Resolution No. 14 -R -75. The vote was unanimous with Mayor Pro -Tent John, Councilmembers Fowler, Scagliola, and Duke voting yes and no one voting no. Councilmember Edwards was absent. Motion Carried. 3. Resolution No. 14 -R -76 - Schertz Seguin Local Government Corporation (SSLGC) Fiscal Year 2014 -15 Water Rates SSLGC Resolution # SSLGC #SSLGC R -14 -09 - Consideration and/or action approving the Schertz Seguin Local Government 09 -2 -2014 Minutes Page - 7 - Corporation (SSLGC) FY 2014 -15 Water rates. (J. Bierschwale /S. Willoughby /A. Cockerell) The following was read into record: RESOLUTION NO. 14 -R -76 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS APPROVING THE SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION FISCAL YEAR 2014 -15 WATER RATES, AND OTHER MATTERS IN CONNECTION THEREWITH Council had no discussion on this item as information was provided on item 2. Mayor Carpenter recognized Councilmember Fowler who moved, seconded by Councilmember Scagliola to approve Item 3, Resolution No. 14 -R -76. Tile vote was unanimous with Mayor Pro -Ten: John, Councilmembers Fowler, Scagliola, and Duke voting yes and no one voting no. Councilmember Edwards was absent. Motion Carried 5. Ordinance No. 14 -T -42 - City of Schertz FY 2014 -15 Budget - Consideration and/or action approving an Ordinance on the proposed FY 2014 -15 Budget. Filial Reading (J. Kessel/J. Walters) The following was read into record: ORDINANCE NO. 14 -T -42 AN ORDINANCE ADOPTING A BUDGET FOR THE FISCAL YEAR BEGINNING OCTOBER 1, 2014, AND ENDING SEPTEMBER 30, 2015, IN ACCORDANCE WITH THE CHARTER OF THE CITY OF SCHERTZ, TEXAS; PROVIDING FOR THE FILING OF THE BUDGET; PROVIDING THAT THIS ORDINANCE SHALL BE CUMULATIVE OF ALL ORDINANCES; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. Mayor Carpenter recognized Senior Budget/Finance Analyst James Walters who provided a PowerPoint presentation on the FY2014 -15 budget with a few reflected changes from last week. The changes are: 1) the City is planning to hold the upcoming Charter election in November of 2015, and 2) the funding for the election will be in the FY 2015 -16 Budget and will be removed from the current proposed budget. Mayor Carpenter added that since the Charter requires us to seat a Charter Review Commission for 180 days, even if we seated the commission within the next 30 days that 180 days would push us out past the time when we have to call for the election. This would not be enough time for the public to review it properly and would be a disservice to them. It makes more sense to not be in a rush to try and meet state law and simply have the election in November. 09 -2 -2014 Minutes Page - 8 - Mr. Walters showed a new slide of the local property tax rates of our neighboring cities as had been requested by resident Robert Brockman at last week's council meeting. Schertz is in the middle (0.4974) of its benchmark cities (population of about 50,000) of New Braunfels and San Marcos. Schertz is lower than New Braunfels, Live Oak, Seguin, San Marcos, San Antonio and Converse. Selma, Garden Ridge, and Cibolo are all below this mark. Most of the cities either went with the effective rate or stayed flat. The one exception was Live Oak who went up with their rate due to a bond issue. Mr. Walters continued with his presentation answering questions from Council. Mayor Carpenter recognized Councilmember Scagliola who stated this budget is balanced using the current rate and staff did an exceptional job on it. However it is not conservatie based on his definition. He does not disagree with the expenditures listed but believes the budget is founded on overly pessimistic assumptions. He thinks the assumptions ignore the efficiencies of our staff and the potential of our economic development strategy and the opportunity to return some of those benefits to the residents in lower taxes. He thinks we could reduce the tax rate below it and still come up with an exceptionally balanced budget. Mayor carpenter recognized Councilmember Fowler who said he disagreed with Councilmember Scagliola; he believes in making a midcourse correction when you can make very small changes and not wait until a big change is needed and you may not be able to pull off a realignment. At this time, he would rather we be more conservative now than wait four or five years later when we wished we had done otherwise. Mayor Carpenter recognized Councilmember Fowler who moved, seconded by Councilmember Duke to approve Ordinance No. 14 -T -42 final reading. The vote was 3 -I with Mayor Pro -Tem John, Councilmembers Fowler and Duke voting yes and Councilmember Scagliola voting no. Motion Carried Councilmember Edwards was absent. 6. Ordinance No. 14 -T -43 — Tax Rate for Fiscal Year 2014 -15 - Consideration and/or action approving an Ordinance on the proposed FY 2014 -15 Tax Rate. Final Reading (J. Kessel/J. Walters) The following was read into record: ORDINANCE NO. 14 -T -43 AN ORDINANCE APPROVING THE APPRAISAL ROLL; SETTING THE TAX RATE; LEVYING AND ASSESSING GENERAL AND SPECIAL AD VALOREM TAXES FOR THE USE AND SUPPORT OF THE MUNICIPAL GOVERNMENT OF THE CITY OF SCHERTZ, TEXAS; APPORTIONING THE LEVIES FOR SPECIFIC PURPOSES; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. 09 -2 -2014 Minutes Page - 9 - Mayor Carpenter stated he was going to hold off on Item 6 for a minute while he went back to read the caption on Item 5. Mayor Carpenter proceeded to read the caption for Item 5 and then he returned to Item 6. Mayor Carpenter recognized Senior Budget/Finance Analyst James Walters who presented a PowerPoint slide of the Target Tax Rates Target Tax 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 Mayor Carpenter recognized Councilmember Scagliola who stated he doesn't believe it is possible to get our tax rate down this year to the effective rate, but he believes it is possible to go with the 0.4949 and still be moving in the right direction. Mayor Carpenter recognized Councilmember Duke who stated this is a booming community and we need to meet the new costs coming up to ensure we have the same quality of life ten years from now that we have today. If we don't stay up to it, things can change. The Recommended Rate is the way to go to ensure we can be consistent. Councilmember Fowler stated, suppose in a few years we have another major rainstorm or tornado and it goes through our maintenance shop or equipment. He prefers to be conservative knowing the type of weather we have can change everything; he is comfortable with staying with our 0.4974 rate. Mayor Carpenter stated we learned something when we lowered the tax rate by three cents some eight years ago. There is danger in being too aggressive with either a reduction or an increase in taxation. After that three cent reduction, a recession followed it and we had to draw down on our reserves to maintain our status. We also had to raise the tax rate to address that. We are in a growth position now and will continue for a while. We have to manage that. We have deliberately gone after driving our economic engine and have had some success. He suggests if we are talking about a quarter cent reduction or increase, if we stay within that realm, we are doing our job as a council. The impact to each family will be small. Being that we just had a strong year he would advocate that we go with the alternative rate of 0.4949, or like Mr. Fowler suggested a 0.4962. He stated when we are in a strong year position, we should evaluate whether it makes sense to make that quarter cent reduction. He stated when we are in a lean year, work to hold the tax rate, and in a difficult or down year look at a quarter cent increase. We can manage those positions. He thinks this has been a strong year and we can afford to go with a small reduction in the tax rate. 09 -2 -2014 Minutes Page -10- Mayor Carpenter recognized Councilmember Scagliola who moved that property taxes be increased by the adoption of a tax rate of 0.4949, which is effectively a 1.9% increase in the tax rate, seconded by Councilmember Fowler. The vote was 2 -2 with Mayor Pro - Tem John, and Councilmember Scagliola voting yes and Councilmembers Fowler and Duke voting no. Mayor Carpenter voted in the affirmative and broke the tie vote, resulting in a final vote of 3 -2. Councilmember Edwards was absent. Motion Carried. 7. Cancellation of September 9, 2014 City Council Meeting Consideration and/or action cancelling the September 9, 2014 City Council meeting due to lack of agenda items. (J. Bierschwale /Council) Mayor Carpenter recognized Councilmember Scagliola who moved, seconded by Councilmember Fowler to cancel the September 9, 2014 City Council meeting. The vote was unanimous with Mayor Pro -Tem John, Councilmembers Fowler, Scagliola, Edwards, and Duke voting yes and no one voting no. Motion Carried. Councilmember Edwards returned to the meeting at 7:15 p.m. Mayor Carpenter was about to move to the Roll Call portion of the agenda and recognized Councilmember Duke who asked if there was a procedure where they could reconsider Item 6 now that Councilmember Edwards had arrived. Mayor Carpenter stated yes they could. He referred to the City of Schertz City Council Rules of Conduct and Procedures. A motion to reconsider must be made by one of the voting members who voted on the winning side of the exercise. A main motion can be made from the chair by the mayor as well as stated in Article 9, Motions and Meeting Procedures - Under Section 9.3 Motion Procedures - Item 12c, Main Motions - Item 12 is to take action or reconsider an action taken - A second to the motion would be required. It is debatable and amenable; it is not resolvable by me and the chair alone. It requires an affirmable vote by three Councilmembers; it does not require a super majority. The mayor read Section 9.14 to the council: "To Take Action or reconsider an Action; Main Motions. These main motions state proposed policy or action on a substantive issue being considered by the Council. As such, the motion can be an initial call to take particular action; to reconsider action taken; or to rescind a prior decision. Although lowest in precedence among all motions, main motions are clearly the most important: through their content, the business decisions of the Council are determined. A main motion can be made only when a prior main motion has been disposed of, It cannot interrupt a speaker; a second is required; it is debatable and amendable; and an affirmative vote of three (3) Councilmembers is required unless a greater vote is prescribed by the Charter or State law. Mayor Carpenter recognized Councilmember Duke who stated the reason for the fact that we believe we shouldn't be talking about $68,000 is, we have a lot going on in Schertz and the budget is not fat by any means; to ask the staff to go back and cut $68,000 is not appropriate. It's a blip one way or the other for the families here. Looking at the five (5) year forecast, it looks like we are just getting back to even on that reserve fund. The budget is a responsible one and we shouldn't go back and ask staff to cut more programs 09 -2 -2014 Minutes Page - 11 - and we shouldn't just rely on that big win to come in the future. That's why I asked now that the full Council is present to go back and reconsider Item 6. Mayor Carpenter recognized Councilmember Scagliola who asked Mr. Walters at what rate was the anticipated increase for health insurance set at in this proposed budget? The answer was 8 %. The actual increase turned out to be 0 %. So that is 8% right there, which according to calculations turns out to be $140,000, which was overestimated for this year's budget. All he is asking for is $68,000. That's all he had to say. Mayor Carpenter recognized Councilmember Duke who asked Mr. Walters this question: On the capital improvements that we need to make for the Civic Center, are we making all those expenditures? Mr. Walters said, no, we had already planned over $100,000 of capital improvements. So we are pushing a lot of those things aside to make the budget we are living with. So there is a lot of the 8% that is gone here and it exemplifies all the work the staff has done to balance all the variables out there. They put together a balanced budget. Now what we have gotten down to is we have approved a budget and then immediately afterward approved a tax rate that does not fund that budget. This is irresponsible. Mayor Carpenter reminded everyone that the motion currently before us is whether or not we are going to reconsider the item (Item 6); if we choose to do so we will start the debate process again and have lots of time to talk about the rate. Mayor Carpenter recognized Councilmember Duke who moved, seconded by Councilmember Edwards to reconsider Item 6. The vote was 3 -2, with Councilmembers Fowler, Edwards, and Duke voting yes and Mayor Pro -Tern John and Councilmember Scagliola voting no. Motion Carried 6. Ordinance No. 14 -T -43 — Tax Rate for Fiscal Year 2014 -15 - Consideration and/or action approving an Ordinance on the proposed FY 2014 -15 Tax Rate. Final Reading (J. Kessel/J. Walters) ORDINANCE NO. 14 -T -43 AN ORDINANCE APPROVING THE APPRAISAL ROLL; SETTING THE TAX RATE; LEVYING AND ASSESSING GENERAL AND SPECIAL AD VALOREM TAXES FOR THE USE AND SUPPORT OF THE MUNICIPAL GOVERNMENT OF THE CITY OF SCHERTZ, TEXAS; APPORTIONING THE LEVIES FOR SPECIFIC PURPOSES; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. Mayor Carpenter recognized Councilmember Fowler who stated he agrees with Councilmember Duke, but what he remembers from what we said a few weeks ago, if we went with the 0.4949 tax rate we would not be able to hire an employee because of the lack of money there. He made an offer a few weeks ago because he was not comfortable going that low but was willing to go to a 0.4962, which indicates we would lose about $30,000. 09 -2 -2014 Minutes Page - 12 His position is to go with this 0.4962 tax rate and we could still hire the employee and then just find the rest of the money elsewhere. Mayor Carpenter recognized Councilmember Edwards who asked City Manager John Kessel if since he came on board as City Manager, hasn't he said that there are no sacred cows; we need to trim where we need to trim and be more efficient. Is this not a model of efficiency we are continuously looking for? Mr. Kessel replied.yes and we will continue to look regardless of other items that will be approved; the staff has clear direction that our goal is not to spend above the approved budget item but try and get the job done and meet the goal for that amount or less if possible. Councilmember Edwards said so we have department heads who we have told to manage their budgets and now we don't have faith in funding that particular budget. This makes no sense and is irresponsible. To Councilmember Fowlers point, 0.4962, he could live with that tax rate. As elected officials, we are supposed to set the vision; we have a city manager who said this is what our forecast is. We have residents and our future at stake. He thinks it is irresponsible to pass the budget and then come back and lower the tax rate. Mayor Carpenter summarized by saying what we have before us is we are taking another vote on the original motion of setting the tax rate at 0.4949. That motion remains before us and we can debate this as long as we want and then take a vote on it again. Then when that action is completed, if there is another motion to consider a different tax rate we will consider that separately. Mayor Carpenter recognized Councilmember Scagliola who stated he thinks the responsible approach is to question the validity of the question that is asked and was it really the question that needs to be asked and was the question answered effectively. In his view it wasn't. An example is the health care cost/estimate mentioned earlier where we projected an increase of $140,000 that ultimately was not needed. He thought this budget was padded in certain directions and he found one example where it was. He sticks with his conservative approaches. Mayor Carpenter recognized Councilmember Duke who wanted to clarify that he feels Councilmember Scagliola is being consistent. His comment of the irresponsibleness earlier this evening was addressed only at the action of voting for a budget that was approved and then turning around and approving a tax rate that doesn't fund that budget. Mr. Scagliola stated the process is fundamentally broken and it happens every year. By first approving the budget you have essentially established that it is mandatory that you establish the tax rate. The process should be reversed. There is flexibility built into the budget. It takes into consideration there will be some ebb and flow in the market. These are not fixed numbers. Mayor Carpenter stated the budget numbers are inter - related, not absolutely related. A budget gives staff direction; a not -to exceed amount unless they come back to council for an adjustment. Then we move to a policy decision about what the tax rate should be set at that funds a budget to a certain level. We don't know if we are going to cover that 09 -2 -2014 Minutes Page - 13 - difference in the future or if we are going to have another recession in a quarter where the budget is not viable after all, because we don't have the funds to fund the approved budget. When we make a policy decision to set a different tax rate that does not match to the budget we are not mandating the future but making an educated guess based on experience and current conditions that we believe we will get there anyway. If we do not get there, we will take some action to adjust it. The amount of tax revenue that will come into the city based on what we set today as a tax rate cannot be perfectly envisioned. Small incremental changes simply set a desired direction and do not set absolutes because the macro economic conditions can change at any time. He is comfortable with 0.4974 or 0.4949 or anywhere in between. The macro economic conditions are not going to conform to our actions in these chambers. Therefore setting a tax rate is a statement of policy and intended direction only. Mayor Carpenter recognized Councilmember Fowler who asked if this budget does not assume any new projects coming on line. Mr. Walters stated that is not correct. It assumes a relatively stable rate of future growth for both our commercial and residential properties at a 50 -50 ratio. Mayor Carpenter recognized Councilmember Duke who moved, seconded by Councilmember Edwards to reconsider Item 6, reaffirming the setting of the tax rate at 0.4949. The vote was 2 -3, with Councilmembers Scagliola and Mayor Pro -Tem John voting yes and Councilmembers Fowler, Edwards and Duke voting no. Motion Failed. Mayor Carpenter recognized Senior Budget/Finance Analyst James Walters who recalculated the increase percentage for 0.4962, which was 2.2 %. Mayor Carpenter recognized Councilmember Fowler who moved, seconded by Councilmember Duke that property taxes be increased by the adoption of a tax rate of 0.4962, which is effectively a 2.2% increase in the tax rate. The vote was I -4, with Councilmember Fowler voting yes, Mayor Pro -Tem John, Councilmembers Scagliola, Edwards and Duke voting no. Motion Failed Mayor Carpenter recognized Councilmember Edwards who moved, seconded by Councilmember Duke that property taxes be increased by the adoption of a tax rate of 0.4974, which is effectively a 2.4% increase in the tax rate. The vote was 3 -2, with Councilmember Fowler, Edwards and Duke voting yes, Mayor Pro -Tem John, and Councilmember Scagliola voting no. Motion Carried Roll Call Vote Confirmation Mayor Carpenter recognized Deputy City Secretary Donna Schmoekel who recapped the votes of items 1 through 7. Requests and Announcements 8. Announcements by City Manager 09 -2 -2014 Minutes Page - 14 - o Citizen Kudos o Recognition of City employee actions o New Departmental initiatives Mayor Carpenter took time to thank Council for conducting the budget voting items tonight in a very professional manner. No further announcements were provided. 9. Requests by Mayor and Councilmembers that items be placed on a fixture City Council agenda. Mayor Carpenter recognized Councilmember Scagliola who stated he really did not need this put on the agenda but in comparison of the things we talked about tonight, he would like a clear definition of gambling, specifically Bunco, and does it fit into the category of gambling. He has been approached by people and they want to know why they can't play Bunco in the City. City Manager John Kessel offered up Lt. Michael Carey from the Police Department to provide a report on that in two weeks. Mayor Carpenter recognized Councilmember Duke who asked about the natatorium update request he had made last week. Executive Director of Development Brian James confirmed with City Secretary Brenda Dennis that this item is scheduled three weeks from now for September 23, when Owner's Representative Phil Gaudreau will be in town and available to answer questions and provide the most recent information. 10. 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 Mayor Carpenter recognized Councilmember Fowler who stated he attended the following: o Friday, August 29, Senior Center check presentation by Schertz Chamber Hyper Group, 12 noon. o Tuesday, September 2, Suzie's Thrift & Gifts Ribbon Cutting, 205 First Street Councilmember Fowler stated his church, the Cibolo Valley Church on FM 1103, had a back -to- school bash for the kids last Saturday, August 30, from 5 -8 p.m. There were two Schertz police officers who came with some literature and gave away safety locks for guns to the people attending the event. A lot of people were speaking with the police officers and he was happy to see them there showing the good relationship our police 09 -2 -2014 Minutes Page -15 - department has with our citizens in the community. Officers Jeffrey Krivaka and Chris McWhirt were very cordial and spent time talking to the people there. He .appreciates what our city staff does for the residents. Mayor Carpenter recognized Councilmember Scagliola who stated he attended the following: o Thursday, August 28, Cibolo Valley Local Government Corporation meeting. o Friday, August 29, Senior Center, two cheek(s) presentation by Schertz Chamber Hyper Group. o Tuesday, September 2, Suzie's Thrift & Gifts Ribbon Cutting, 205 First Street Mayor Carpenter recognized Councilmember Edwards who wanted to thank the rest of the councilmembers for sticking through it with the budget & tax rate debate. He also mentioned that his son has been accepted to play on the starting roster for West Point Military Academy for next year. He now has two sons attending West Point. Mayor Carpenter stated that this was fantastic. Adiournment As there was no further business, the meeting was adjourned at 8:1 Michael R. Carpenter, Mayor ES a Dennis, City Secretary 09 -2 -2014 Minutes rage - 16 -