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ccswks 06-06-1995 -.::..,,:,,,,,., /1 'I-:J-- SPECIAL WORKSHOP SESSION OF THE CITY COUNCIL JUNE 6, 1995 The Schertz City Council met in Special Workshop Session, following the Regular Session, on Tuesday, June 6, 1995, in the Municipal Complex Conference Room, 1400 Schertz Parkway, Schertz, Texas. The following members were present: Mayor Hal Baldwin, presiding; Councilmembers Charles McDonald; Joe Potempa; Timothy Swinney and Ken Greenwald. Absent: Councilmember Dereda Burkett. Staff present were City Manager Kerry Sweatt and City Secretary Norma Althouse. #1 Discuss mid-year budget amendments. Mr. Sweatt reminded Council they each should have a copy of the document titled Mid-Year Budget Adjustments FY 94/95 and dated May, 1995. He will try to review the highlights first, and then answer any specific questions Council may have about individual departments. The revenue includes estimates of increases that account for $87,693. Under the General Fund, on page 3, increases as well as decreases are reflected. Those total a net increase of $87,693. That's made up primarily of the recovery of an interest and sinking fund double payment, the sale of park property for $25,000, an estimated increase in sales tax of $30,000, and under miscellaneous income, the pass through of an AACOG solid waste study. There are some decreases noted that appear to be in line with our major activities. They reflect our best guess based on where we were at six months into the fiscal year. Mayor Baldwin asked about the $25,000 sale of park property and Mr. Sweatt advised that was the property in Oak Forest. We are restricted to using it for park purposes and as we get into expenditures, we'll be discussing that. Mayor Baldwin also remarked that the $20,000 we're budgeting for recycled materials is good. Mr. Sweatt said he believes, quite frankly, they're going to exceed that. The price of paper has jumped from $50 a ton to $90 a ton. Through five months of the fiscal year, we're at $11,000. Mr. McDonald asked if Alamo Waste is still accumulating stuff they haven't sold and Mr. Sweatt replied very little. The month of May's collection of glass and tin are the only items that haven't been sold. The quantity hasn't been worth delivering. Mr. Potempa asked what's wrong with the Municipal Court system. He noticed we keep losing. Mr. Sweatt explained they are taking a hard look at it. There's a lot of use of actions other than monetary fines. There's deferred adjudication and defensive driving. Every year at budget cPt;3 time we look at this and say we're writing more tickets and such and such is going to happen, and then at mid-year come back and adjust it back down. We have an internal committee reviewing some of our procedures to determine if maybe we can streamline the process a bit. Mr. McDonald asked if we're writing more tickets and Mr. Sweatt answered yes we are, but receiving less revenue. Part of it has to do with alternatives to paying fines. Mr. Potempa asked if the city still has a contract with a warrant commission to collect our warrants and Mr. Sweatt replied yes we do. Mr. Potempa then commented that the amount of revenue from warrants seems low. Mr. Sweatt pointed out that amount is just the Municipal Court warrant fees, not the warrants. The Municipal Services Bureau, with whom we contract, is a firm to which we turn over warrants after 60 days and outside of a 50 mile radius, and we've been getting a good response. Mr. Potempa asked if we still have a local warrant officer and was informed we do. Mayor Baldwin asked what the huge increase in 46110, general fund miscellaneous income, represents. Mr. Sweatt answered that comes primarily from two things: (1) recovery of a double interest and sinking fund payment from the bank that flowed back to the general fund upon collection; and, (2) a contract with AACOG for a Solid Waste Study. (The payment for the Solid Waste Study will show up later as an expenditure of $5,000.) Mr. Sweatt referred back to page 1 where it shows a breakout of the expenditures and revenues for the general fund. There is a projected revenue increase of $87,693.03 and a projected expenditure increase of $82,663.31. A projected closing fund balance of $20, 168.72 is basically the recycling revenue. Council had asked that it be set aside as a reserve against future expenditures for public purposes. Mayor Baldwin asked if the City is going to maintain records on the recycling revenue and account for every penny at the end of the first two years. Mr. Sweatt indicated that is correct. We keep a running total each month of the volume and the receipts. The Council, as of this date, has not approved an expenditure from that fund. The commitment initially was to hold it in reserve for the first year and make a decision at next year's budget time as to how the money will be spent. Mr. Sweatt, saying he knows there's a lot of uses, needs, wants and desires, felt one of the items Council may want to think about for future years is when our current recycling contract with Alamo Waste expires, Mr. Gutierrez will probably want an increase and Council may want to use a portion of the recycling income to buy that rate down. Of course, there are many other legitimate uses for the recycling income. ~ ;? ftf Mr. McDonald asked how many customers the City has and how much that is per customer. Mr. Sweatt replied there's approximately 4,000 customers. We're currently paying $1.25 per month per customer. Mr. Greenwald remarked the basic intent behind the holding of the money in reserve was to look at whatever amount Mr. Gutierrez is going to bring in for a rate increase. Everyone is well aware of the fact he was not happy with the $1.25. He made that offer and then when he put the numbers to it, he couldn't do it. Mr. McDonald asked if anyone knew about a new recycle test plant being built on 1-10, but no one did. Mr. Swinney observed that the $25,000 from the sale of the park will relieve quite a bit of pressure from wanting to use the recycling reserve fund for parks, but Mr. Sweatt explained to Mr. Swinney that it probably will not, because we have been asked to budget for the repainting of the large pavilion. Currently that project is estimated to cost about $30,000. As we get into the expenditures, you will see a $30,000 expenditure in the Park Department which will use up all that $25,000 plus $5,000 more. Everyone agreed it needs to be repainted. Mr. Greenwald pointed out that when you sell parkland, the only way you can spend that money is for parks and for nothing else. Mr. Greenwald also stated if the City had to come up with $25,000 in next year's budget, they would be hard-pressed, so this is almost a gift. Mr. McDonald again brought up the source of the hotel/motel tax and said that improving your parks is tourist enhancement for which that tax money could be used. Mr. Swinney questioned if we issue many speeding tickets on IH-35. Mr. Sweatt answered we limit our officers' involvement on IH-35 to no more than an hour at the close and beginning of each shift. Clearly there is a need for enforcement. It has been our philosophy, however, that there are many more needs for a police officer rather than just sitting up along IH-35. Mr. Greenwald mentioned we're limited anyway on how much we can collect off IH-35. Mr. Sweatt added there is a bill now which limits the maximum amount of fines of a municipal corporation budget to 30%. Schertz is nowhere near that. Mr. Potempa, commenting he's suggested this before, indicated he would like to see Schertz go to a step program. It would give the officers more money and no doubt cut down on the number of accidents. Mr. Sweatt stated the City would follow the direction of Council, but in the overall scheme of things he feels the bad press and problems associated with a rigorous enforcement of the speed limit causes more ill will than good. Mr. Sweatt then remarked he is sure Council is aware of a nationwide movement to do away with the national speed limit and return the control of the speed to the states and / ------~ ~ Af2 consequently back to the cities. Getting back to the budget, Mr. Sweatt reported the primary expenditures include the recommendation of a salary change across the board to all City personnel. An increase is proposed for each of the employees to implement a revised salary plan effective April 1, 1995. For those employees at salary grade 4 through 18, the average is a 4% increase. For those at salary grade 19 and up, it is a flat 3% increase. Mr. Sweatt continued, saying the City has a salary plan that was developed in the early 1980's as a result of a personnel study. It has been continually updated and upgraded with either cost of living raises or other various kinds of raises built into the program. Over a period of time, however, it has gotten out of step. We had circumstances where there was no uniformity either vertically or laterally. We have long embraced and encouraged a merit program based on evaluation for lateral step improvements and the vertical has been a job classification plan that pretty well has maintained a clear relationship between particular positions. Over the years, however, there has been some flattening out and a deterioration of the differences between the individual steps. A proposed plan will correct those anomalies and errors and establish a clear career path in each horizontal step that will amount to a 2% differential between each step going laterally and a beginning 3% going vertically. The total recommended increase to the general fund this year is $35, 685, to the water and sewer fund it is $6,929, and to SAFES it is $5,392, for a total overall cost this fiscal year of $48,008. Mr. McDonald asked how much we gave each person at the beginning of the budget year and Mr. Sweatt replied we gave them 3% across the board. Mr. McDonald then wondered what the total cost was at that time, but Mr. Sweatt did not have those figures with him. Mr. McDonald then remarked this increase would cost the City $96,000 per year. Mr. Sweatt reminded Council those figures are not the amount they will see next year because there will be the availability of step increases. Mr. Potempa observed then next year you won't have an across the board raise, but Mr. Sweatt disagreed, saying they probably will. He's just pointing out this number will be subject to those employees who will have a two step increase between now and next year. Mr. Sweatt noted this proposed plan was the result of Council's direction. Mr. McDonald acknowledged they had talked about the 3% across the board given at the beginning of this fiscal year and then the pOSSibility of another 2% at mid year if we had the money. Mr. Sweatt commented they attempted to do a study and report to Council, as they requested, on how the City could increase its salaries to make them more competitive with our immediate neighbors. .~- c?1~ Unfortunately, this proposal of an average of 4% increase for employees at salary grade 4 through 18 and a flat 3% increase for those at salary grade 19 and up will not change our relative position in almost any category. We're still one of the lowest paid in the area of police salaries. Mr. Potempa asked for a comparison of that between Schertz and Converse and Mr. Sweatt replied in Converse, the minimum police salary is $1500 per month and the maximum is $1833 per month. Under the City's new recommendations, the minimum is $1425 per month and the maximum is $1844 per month. Mr. Sweatt explained we surveyed basically all of our neighboring cities and found that the average starting salary for a police officer is $1603 per month. Our current starting salary is $1384 per month and the new rate would be $1425 per month, still almost $200 per month under the average. The maximum average is $1936 per month. Our current maximum is $1688 per month and the new rate would be $1844 per month, still $100 per month below the average. That same situation generally exists through the ranks of second lieutenant and dispatcher. Mr. Sweatt went on to say they looked at areas other than police officers and found that on a local and statewide basis, the City still fares well below the average, even with the increases. Mayor Baldwin remarked you will never ever catch up by having percentage increases on pay plans. The gap is too hard to close. The only way it can be done is to analyze the salaries and asked if you're ready to spend the amount needed to adjust those salaries to make them competitive with other cities. There was a brief discussion on merit pay raises and the fact they are, in most cases, used to raise the employees' salaries. Mr. Swinney asked if, because of the lower salaries, the City has a low retention rate of employees. Mr. Sweatt answered they have had a lower turnover rate in the past several years than they had been experiencing previously. Mr. Sweatt then pointed out people work for a lot of reasons, and salary is certainly one of them, but it is not the only reason. He then mentioned it looks like we're stabilizing, but still experiencing, in some professions, a move to another city when an employee gets close to the top because the other city pays more. Mr. Sweatt related the Council has done some very positive things for employees as far as the retirement system, the longevity payments, the insurance program, and vacation and sick leave. The City's fringe benefits are very comparable and in some cases maybe a bit better. Mayor Baldwin stressed, that as the tax base grows, the City is going to have to commit major chunks of money to adjusting salaries so we fit in with our competitors. We should not be the largest city and yet have the lowest salaries. -- ~'11 Mr. Potempa mentioned we are facing the dilemma of purchasing a new fire truck and ~e doesn't see anything in this budget, reserve or anything else, to start putting money away to get a new truck. Mr. Greenwald reminded Mr. Potempa they just passed the first reading of the Southwestern Bell ordinance which would pay the City a settlement of $160,000. Mr. Sweatt suggested City Council c0nsider dedicating the bulk of the proceeds from the settlement to the acquisition of a new fire pumper. If Council makes that action at a future meeting, Mr. Sweatt said he expects the Fire Department will start preparing plans and specifications so we can solicit bids and be ready to purchase a new fire truck. We're looking at somewhere between $145,000 and $185,000. A new truck is a high priority. Mr. Swinney remarked the City is proposing two fire substations in the next bond issue and asked if a bond issue can include vehicles. Mr. Sweatt replied the initial bond issue did not anticipate construction of a substation in the first element, but yes it can pay for the price of equipment. After looking through the mid-year budget amendments, Mayor Baldwin concluded the salary increases are the only real large amount. Mr. Sweatt acknowledged that's true. The only other considerable amount is for the painting of the pavilion and it's in the budget. Mr. Sweatt briefly reviewed some of the other costs. Mr. Potempa asked what recognizing insurance deductibles for specifiC insurance cases means. Mr. Sweatt explained we have two insurance cases pending, that are covered under our TML professional liability insurance, and we have deductibles we have to meet in both cases. There being no further question on the budget amendments, Mayor Baldwin asked if they will approve these by official action at the next regular meeting and Mr. Sweatt indicated he would like to place it as an action item on their next workshop agenda if that's okay with Council. Council had no problem with that. Before adjournment Mayor Baldwin mentioned, that at the Northeast Partnership meeting today, Mayor Carroll said the old Golden Corral restaurant is now the North China Buffet. He also mentioned there will be a Taco Cabana built near the new Hi Lo auto parts store and the Golden Corral is constructing a new restaurant on the same piece of land next to where the new Acme Lumber will be located. Mayor Baldwin then introduced Richard Nash who was in attendance at the meeting. Mr. Greenwald suggested it's time for another tour of the City, especially since we have some new Councilmembers. ...-:---- Jltji' Mr. Potempa Waste. Mr. would file City would be asked if the City is going to annex Sweatt commented they have indicated a request for annexation if they thought receptive. Alamo they the Speaking of annexation, Mr. Greenwald asked if the City had gotten anything definite on Northcliffe. Mr. Sweatt answered they just received a study today that looked at one more round of bond information. For the first time, it's beginning to look like something Schertz could consider doing. He reported he had spoken to a group of Northcliffe residents about a month ago and the feelings are mixed about annexation. Some of the residents are real anxious to be annexed by Schertz and others are just as adamant about not being annexed. Talk of Northcliffe prompted discussion about the feasibility of golf courses, municipal and otherwise, about the MUD districts, about gated communities and about extended municipal services. Mayor Baldwin updated the Council on the situation at the Texaco on the corner of Aero and Schertz Parkway and said Melissa Flores called him today and she thought the owner would be at the Council meeting tonight to apologize for his nephew's actions and swear to us his nephew would never do anything like it again. Apparently the owner has refused to fire his nephew. Mr. Sweatt remarked that Mrs. Flores had told him last week the owner was going to fire his nephew. Mayor Baldwin said it's a situation where the nephew's mother is dying of cancer and he needs the job. Several Councilmembers thought writing to Texaco would solve the problem. Mr. Sweatt advised a case related to that particular Texaco has gone to the grand jury. # 2 ADJOURNMENT On a motion unanimously by Mr. Potempa, seconded by Mr. Greenwald and carrled, the meet~~journed at 8,45 p.m. Mayor, City of Schertz, Texas ATTEST ~~ City Secretary, City of Schertz