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04/20/2009-CC-Minutes-Work SessionMINUTES: CITY COUNCIL WORK SESSION MINUTES April 20, 2009 MEMBERS PRESENT: Mayor Joe Higgs, Councilman Garza, Councilman Robert Patton, Councilman Thomas Muir, Councilman Glenn Ervin, Councilman Walker OTHERS PRESENT: Mike Brice City Manager, Rose Chavez City Secretary/Asst. City Manager, Shannon Cox/Sanger Courier, Cora Harner 1. Call Meeting to Order. Mayor Higgs called meeting to order. 2. Discussion on Mid -Year Financials. City Manager gave an update on mid-yeaf revenue and expenditures. A Power Point presentation on a comparison of last year's revenues to date to this year was given. In the General Fund revenues, 50% is property tax, 11% is sales tax, another 11% is franchise fees, and 16% is Fire/EMS revenues. The property tax is meeting projections and EMS revenues have not reached full capacity. The revenues for Fire/EMS show to be higher, and that was due to revenue collections being lower last year. The revenues are still behind in Fire/EMS. The Library revenues are lower this year, and the difference is that last year they received grant funds. The General Fund revenues are 108% compared to last year. City Manager proceeded with the Enterprise Fund. The electric revenues represent 75 o of the totals in this fund, water revenues 119/o; sewer revenues 8%, and sanitation revenues 5%. The electric revenues in comparison to last year were less, but not too significant. The majority of the revenues are collected in the summer time. There was discussion concerning connect fees and what those represent. City Manager explained these fees are collected when a customer establishes service or service is re- established. Discussion concerning tap fees revenues and the impact growth has had on these revenues. The presentation continued with actual revenues in comparison to the budget in the General Fund. The revenges percentages are where they need to be for the year. In the Enterprise Fund the revenues collections compared to budget are also where they need to be for the year. The housing starts are down 40% from the first quarter of last year and 91% from their peak in the first quarter of 2005. (Urowth has slowed down significantly. The strengths and weaknesses of the City followed. The sales tax and property tax has held its own, both commercial and residential growth continue although at a slower pace, budget measures have been put in place early to help absorb revenue shortfalls. Conservative measures have been taken to save money where possible, and we have not relied on future growth to pay the bills. The weaknesses were addressed as follows: the General fund is heavily dependent on property tax and transfers from the Enterprise Fund, revenues in the Enterprise Fund are dramatically impacted by the weather; growth in exurbs like Sanger may take longer to recover than other areas due to more affordability closer to the Metroplex; and the City has become a very lean organization and further personnel cuts will start to impact service levels. The City Manager advised he has cut all that needs to be, and this was done by attrition not by laying off people. The City Manager continued with discussion concerning the threats that face the City. A greater economic downturn begins to erode the property tax and sales tax base. A cool, wet summer causes a loss in utility revenues; EMS revenues do not rebound as anticipated; and as we continue to build contingency reserve funds, they are insufficient to reply on for long-term operation needs. The opportunities are that 4A and 4B are financially sound and can be utilized to spur economic growth and enhance the quality of life. This gives the City a competitive advantage. Planning can take place in a slow growth environment preparing us for the next growth cycle. The City Manager advised we will continue to monitor revenues to identify trends in the early stages, expenditures will be closely watched while maintaining current service levels; evaluating any position that becomes open on a case-bywcase basis; and public safety positions will continue to be filled. Councilman Muir indicated if we are not filling positions, does this mean other employees have stepped up to the plate with any excess capacity or more efficient work habits. His concern was employee morale. The City Manager advised three of the positions were in public works, .and due to growth slowing down they are not as busy. The other position was a cashier at the front counter. Other people in the office are filling in. He advised that this is one of the issues that will be addressed in the audit is "separation of duties." This is done to avoid any possible lay-offs in the future. In the budget preparations for next year we will be very conservative. Current open positions will be evaluated and some may be eliminated from next year's budget. We will continue to build contingency reserves funds with unexpected 'revenue into next year's budget. '1iiscdssiori'continued concerning budget preparations for next year and -the balan'ee of the contingency reserves fund. Discussion concerning some line item expenses in the current budget and the transfers to the General Fund from Enterprise Fund. It was discussed that we billed Medicare and private insurance about $637,000.00 for EMS calls, and we anticipate 50% collection. The delay in processing was due to not getting the Medicare number from the Social Security office. The discussion continued concerning revenues in miscellaneous income and the reimbursement from the school for the reserve officer. 3. Overview of Items on Regular Agenda. City Manager addressed item #7. He advised this is to automate a valve on the new Marion Road water line. When the line was installed the purpose of the line was to be able to feed water from Wal-Mart back to the older part of town. We operate on two pressure plants. The one North is a lot higher pressure than the one in town. In order to connect those systems we need a method of control to make them work together. The system was originally designed with a pressure reducing valve on the line to take care of the pressure differential. The pro>tlem was trying to adjust the valve on systems that fluctuate back and forth, causing us to either overflow the ground storage tank at Cowling or we were having to drain the tower at Wal-Mart. The scada system will provide a level of control and allow the Wal-Mart Pump Station and the Well to be utilized in the existing water system. This system will allow us to monitor the system on a 24 hour basis. The cost for the system will be $11,500. Discussion followed concerning the water we purchase from Upper Trinity. Councilman Ervin asked when the system was last updated. I3e indicated that some time ago we were having troubles. The City Manager discussed the hardware has been updated and the software was not. There is a newer version, but it is very expense. We will be purchasing a version of the system. Councilman Muir asked a question on item # 6 concerning the lease purchase on the EMS vehicle and if the agreement had the $1.00 purchase option at the term of the lease. The City Manager indicated that it did. There was discussion concerning the other ambulance that is getting a new replacement engine. The new ambulance was a budgeted item. The City did receive a grant for reimbursement cost on the replacing the new engine on the older ambulance. Discussion continued on the new ambulance. The Ciiy Manager gave an update on the closing of the property at 103 Dolivar. The contract has been officially signed last Wednesday. All financial information has been forwarded to the bank. 4. Adjournment. Mayor Higgs adjourned the work session.