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07/09/2018-CC-Minutes-SpecialCITY OF SANGER, TEXAS MINUTES: CITY COUNCIL SPECIAL WORK SESSION July 9, 2018 — 5:30 PM 502 Elm Street, Sanger, Texas COUNCIL MEMBERS PRESENT: Mayor Thomas Muir, Councilman Bill Boutwell, Councilman Lee Allison, Councilman Allen Chick COUNCIL MEMBERS ABSENT: Councilman David Clark, Councilman Gary Bilyeu The Mayor and three Council Members were present constituting a quorum. STAFF MEMBERS PRESENT: Alina Ciocan, City Manager; Clayton Gray, Finance Director, Cheryl Price, City Secretary. 1. Call Meeting to Order Mayor Muir called the Work Session to order at 5:36 PM on July 9, 2018. 2. Budget Workshop. Alina Ciocan, City Manager summarized noting that two meetings ago she provided a brief overview of the budget, and we did not get to visit on the details of the budget at the last work session on July 2"d. She noted that she covered the timelines at the last meeting and provided them to Council. There are three main funds for operations; the general fund, the enterprise fund and the internal service fund. There are also other main funds and special revenue funds. She summarized revenues. Property tax collections are at 3.2 million and we are ahead of projections, sales tax is at $646,000 and should end right on projection. Building permits year to date are at $212,000 and are expected to exceed projections by year end. Municipal Court fines year to date are at $62,000 and they are expected to end the year at approximately 25% below projections. The number from last presentation in property tax projections has been adjusted. Property taxes were trending at about 15%; and, they are trending about 14% over last year. Estimated revenue is an increase of 9.6% and have rounded it up 10%. The certified tax rolls will be available on July 25th and that is when we will determine the tax rate and the property tax revenues will be calculated. We have updated the charts since the last meeting and we have had a drop in assessed valuations; but, it has been steady for the last three weeks. If nothing changes we are in ok shape, if it drops further, we may have to look at minor adjustments to the budget. Enterprise fund revenues are slightly below projections due to a mild winter. The good news is our consumption is down; and, so is production cost. When we budgeted for the 2018-2019 Fiscal Year we based it on projections that were provided by NewGen, who completed the study a few months ago. Projections for electric revenues have been adjusted to account for realignment of service territory that is expected to occur in October. On Expenditures, there are some significant budget changes. Projected increases in wholesale water costs; we have been provided preliminary estimates based on a letter recently received by Upper Trinity of 1.5% which is less than originally proposed. Internally, we have increased the water system maintenance funds to $100,000 from $70,000 (previous budget year). The wastewater system maintenance funds were increased to $150,000 from $130,000. The street system maintenance funds were increased to $200,000 from $175,000. We have made a change from the last budget presentation increasing the general fund transfer for capital improvement for street rehabilitation to $600,000; in fiscal year 2017-18 it was budgeted for $460,000. As mentioned at the last budget presentation, we have allocated partial funding for the Electric Department to do a feasibility study; we are going to have some significant IT funding for infrastructure for the Police Department to accommodate for electronic storage, which is estimated at approximately $77,000. We are working with our IT provider to see if they can lower the cost and they are negotiating with a third party so that number may come down a little. Mayor Muir noted that he understands this is for storage of all of the videos from the cars and body cams, etc. There are different retention schedules based on the video types and cases, some may have to be stored for up to 25 years. We have reduced Enterprise Transfers in the electric storm recovery fund. She noted that she has read memos where the goal was to transfer 2% of the revenues into this recovery fund. Because of our tight funds we are proposing to reduce the transfer amount for the fund to 1.58% which will be approximately $39,000 less. Mayor Muir noted that this was agreed upon about 8 to 10 years ago and there was no money in this fund and now the reserves have been built up and he noted that he personally is ok with that cycle because right now we have a fund that we did not have years ago. Ms. Ciocan noted that right now we have $926,000 in the storm recovery fund, so this proposal would still put us at over 1 million dollars. We have eliminated the enterprise transfer to 4A in the amount of $25,000 and the transfer to general fund in the amount of $100,000 and this is because of a tight budget for enterprise fund; and, trying to balance it. Another significant budget change is we allocated $75,000 for engineering services. Councilman Boutwell asked if we would be bringing on a City Engineer. There was brief discussion regarding this and Councilman Allison noted the expense of bringing on a full-time engineer, and noted he was not saying whether we should or should not hire one, just discussing the pros and cons. Mayor Muir noted that we are going to see how it plays out and that staff has been researching the feasibility of hiring an in-house Engineer. We have also increased Development Services budget by $50,000 both on the revenue; and, expenditure sides for third party reviews. Basically, the plan is to process the development plans and charge the applicant; and, Council will see an ordinance at the next meeting which spells out the details. Ms. Ciocan noted the on -going Capital Projects: the McReynolds Road reconstruction and the Wastewater Treatment Plant rehabilitation. Upcoming Capital Projects are the FM 455 widening project and we have tried to estimate the engineering costs and are putting a time line together. Councilman Allison brought about some brief discussion regarding the engineering details and what the costs and processes could be; along with, what the city's responsibilities and TxDOT's responsibilities would be. It was noted that staff has been doing research regarding FM 455 that may possibly help with some of the cost if we can find the information we need. Councilman Allision noted it was good we are looking ahead. With FM 455 construction in mind, we have to look at the reconstruction of Plum Street as an alternate for traffic during construction. In looking at past information, it looks like Plum Street was proposed from 51h to loth street and we are looking at embarking on the construction and engineering of Plum Street for the relocation of utilities, this fiscal year we will get the engineering done and are getting updated estimates right now and that is in the capital projects. On the outflow pipeline project we are working on also getting estimates and the engineering plans are 90% complete but as far as going for construction we are looking at finalizing that timetable as well. The painting of the Acker Tower has been deferred from this fiscal year and will be in the budget again and hopefully we will get to it in the 18-19 budget year. The Railroad Lift Station formerly known as Cowling Road Lift Station is in the capital projects to purchase easements this year. At some point, we are going to have to look at building/improving Marion Road and Bolivar Street; and, we have a lot of projects that have been identified in the updated CIP plan and have been prioritized based on need. On personnel changes, we have implemented the pay plan that was approved this fiscal year which basically increased wages in all departments. We are proposing one (1) additional firefighter position, along with pursuing the Safer Grant to add three (3) positions. We are proposing a 3% merit increase for staff. The city's TMRS rate increased from 7.93% to 8.05%. General Fund proposals are the same numbers as what was presented in the packets. We have modified Police and Fire budgets and are including some equipment that was not part of this fiscal year. In Development Services you will see in increased budget to account for the Planner hired this year and to include the 3rd party engineering fees for subdivision reviews. She provided slides on the proposed Enterprise Fund and Internal Service Fund. New equipment requests included next year are: Police - two (2) patrol vehicles, five (5) Tasers and the additional IT storage; Fire - has a requested some additional equipment as well; Parks - completing Phase II of the irrigation controls and sidewalks at the downtown park; Water - Painting the water tower that has been deferred from this current year to next fiscal year; Finance — A utility payment kiosk that was deferred from this current year. Councilman Allision asked if we defer the projects do we allow for increases in cost for items such as the painting of the water tower. She noted that she has been informed that the quote on the Water Tower painting is still a valid quote at $104,000. On 4A, we actually had in this budget year to update our Comprehensive Land Use Plan and have increased the amount from $35,000 to $45,000. As mentioned earlier we have eliminated the transfer from the Enterprise Fund of $25,000 to 4A. For 4B there is an allocated $50,000 for Community Grant Projects. As Council may recall the guidelines for the program were recently approved. These projects will be approved on a case by case basis. They have also allocated $15,000 for master planning phase II of Porter Park on the other side of the highway. Councilman Boutwell noted he thought that we did some preliminary engineering on the Porter Park Project about a year or so ago. City Manager Alina Ciocan noted that we did do preliminary work and are looking at updating that and master planning in phases because we cannot afford to do it all at the same time. The board requested to see some options. We are also pursuing a grant for a trail system and we have not heard whether we received it yet this year. They wanted to start with the trails and would like to get the park going. On the horizon, we are looking at additional staffing and additional equipment and vehicles for new staff. She summarized the big capital projects that are looming; utility relocation for FM 455; reconstruction of Plum Street; and, construction of the outflow pipeline. We will be looking at a new ladder truck for fire; a new fire station; and, a new library. There are a lot of big projects ahead of us. Along with that we will be continuing to maintain and address current needs for the community as far as streets, water and wastewater system maintenance. Councilman Boutwell asked how near on the horizon we expected some of those things, such as the new ladder fire truck. Brief discussion ensued. Councilman Allison brought up street improvements and he noted the importance of quality inspections. There was discussion regarding property taxes and Mayor Muir noted that if the School District gets the Bond package pushed through, the property taxes may go up; and, most likely it won't be because of the City. He noted that we do need to be supportive because the school district needs it. We have always tried to work within our budget and our bonding capacity. There was additional discussion regarding the road improvements. It was also noted that in the future we need to think about the utilities for the 1-35 Extension. Councilman Chick noted that it sounds like staff has a good grasp on the budget and the Council will try to give as much direction or guidance as they can. He noted to Alina Ciocan, City Manager that personnel seemed to be the biggest challenge and made a compliment that she is doing a good job and thanked her for the information tonight. Alina Ciocan, City Manager noted on the original budget timeline there would be another meeting on the 16th and since we had discussions tonight we will take it off of the calendar if Council is ok with that. Councilman Boutwell complimented staff that this was a big task and the City Manager and staff deserve compliments on the effort that was put into it and the adjustments that have been made. Down the road as we keep growing he noted at some point in the future we need to look at the contracting such as the mowing and do it in house, instead of contracting out. Staff noted that we will take a look at it and see if there is a more economical way to do the contracting and do what is best for the city. Councilman Boutwell asked if the City has code enforcement. Ms. Ciocan noted that Ronald Kinney in the Police Department is the Code Enforcement Officer who enforces all of the codes. It was noted his concern was regarding dilapidated buildings and it was noted that dilapidated building would be taken care of through Development Services. It was noted that dealing with a property maintenance code takes a lot of staff and time. Mayor Muir noted that there is quite a bit of rehab going on the city and this will help the property tax valuations and the appearance of the city. 3. Adjourn. There being no further business, Mayor Muir adjourned the Work Session at 6:33 PM.