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Minutes August 28, 1990CITY OF DENTON CITY COUNCIL MINUTES AUGUST 28, 1990 The Council convened into the Work Session at 5:15 p.m. in the Civil Defense Room. PRESENT: Mayor Castleberry: Mayor Pro Tem Boyd; Council Members Ayer, Gorton, and Trent. ABSENT: Council Members Alexander and Hopkins 1. The Council held a discussion and gave staff appropriate direction regarding budget issues for the 1990/91 budget year. Council Member Hopkins joined the meeting. LLoyd Harrell, City Manager, stated that the format for the meeting would be a discussion of the major budget issues and other items requested by the Council. General Fund Maior Issues (1) General Fund - over the last few years, the Council had followed a fiscal policy of maintaining a General Fund undesignated and unreserved balance within a range of 8% to 10% of total expenditures. In balancing this year's budget, $575,000 of the unreserved balance was proposed to be implemented into the budget. This ~would reduce the projected unreserved balance to 9.7% of totaI expenditures. It was hoped that this would be a one-time reduction in the reserve. The 9.7% would be a worse case scenario. Council Member Alexander joined the meeting. Council Member Trent asked for some examples that a portion of the balance would be used for for one-time capital expenditures. City Manager Harrell replied major street work or to fund recreational centers which were now proposed to be postponed. Council Member Trent stated that it appeared to be a good move to take the $575,000 out of the balance because it was getting too high. Harrell replied that the Council had been traditionally comfortable with an 8-10% reserve. If it would get much more than that, the taxpayers might question why the Council was levying the amount of property tax that was being levied. A certain amount was needed to protect for unforeseen emergencies and disasters which might come into the City. Council Member Gorton asked if some of the reserve money could be used to off-set health benefits rather than pay raises. He asked how that would impact the reserve fund. 135 136' City of Denton City Council Minutes August 28, 1990 Page 2 Consensus of the Council was to hold the fund at the 9.7% and utilize the $575,000 to balance the 1990-91 budget. (2) Revenues - The property tax alternatives were: (1) $.6483 was the amount included in the proposed budget, would finance the proposed budget and have enough money to finance as submitted with $367,000 extra: (2) $.6183 was based on the 1989-90 tax rate and would require an additional $225,000 to balance the budget: (3) $.6298 was the figure from the budget as submitted with salary freezes; (4) $.6553 was back to the effective tax rate with the same money as last year. Council Member Gorton stated that he could consider holding the effective rates to maintain what was had last year. The Council needed to look to the future and not just one year at a time. Sales Tax - Harrell stated that the staff recommendation was to keep the sales tax at a 2% estimate and continue to monitor the revenue source for any potential fluctuations. Other revenues - Harrell stated that the budget was based on about $100o000 worth of fees and charges that would be increased because it had been some time since that happened. Three methods were used to determine the increase in fees which included a review of the 1983 Grfffith Revenue Study which analyzed fees and actual costs of providing service; taking those fee amounts and applying an annual inflation factor and comparing the amounts to the North Central Texas Council of Governments and other metroplex cities; and contacting each department director for input and recommendations. Approximately one-half of the amount was made up by increasing the ambulance service fee. Mayor Pro Tem Boyd cautioned that a fee might be raised too high so that there would be a decline in the use of the service. Was the City making the service too high and running the risk of not receiving payment for the service. Harrell replied that the percentage of ambulance pays was about the same because of the nature of the business. (3) New Fire Station - The proposed budget had $150,000 to go towards the reserve fund to increase the amount to $615,000. That money would be used to cover the estimated $480,000 yearly operation and maintenance costs associated with the second station. Consensus was to follow the staff's recommendation to fund $150,000 to the reserve fund. City of Denton City Council Minutes August 28, 1990 Page 3 (4) New Positions - Harrell stated that in the 1990-91 budget, there were no new positions recommended for the General Fund. Some positions and programs had been eliminated: animal control supervisor with a net savings of $20,200, a plumbing inspector with a net savings of $39,500, a maintenance worker at the Airport with a net savings of $11,000 and an intern and associated supplies/equipment for the Quest operation for a net savings of $11,000. In addition, it was proposed to hold several positions open: park planner for one-half a year with a net savings of $20,000, a recreation specialist and a Civic Center supervisor for three-quarters of a year with a net savings of $18,000 per position. All of those affected positions net the City approximately $137,000 which was incorporated into the budget. Council Member Trent felt that the net savings on the Airport worker was not $11,000 but more like $6,000 due to the fact that the City would have to contract to cut the grass. Harrell replied that the gross figure was much higher, approximately $22,000, and approximately $11,000 was plugged in for contract mowing work. Thus the net savings would be $11.ooo. A discussion was held by the Council rega~ing the maintenance worker at the Airport and the other positions affected by the proposed budget. Consensus was to look at all of the positions at a later date after further budget discussion. (5) Salary Adiustment - Harrell presented the following alternatives for possible salary adjustments. The adjustments would allow for a modest salary increase for employees from a high of 3.1% to a low of 1.3%: #la - would provide a 2% market adjustment effective October 1, 1990 for all employees with $25/month/employee for insurance costs effective January 1, 1991. Average yearly salary adjustment per employee would be 2.08% for 100% of the employees. That would cost the General Fund approximately $466,000. 9lb - would provide a 2% market adjustment but would be delayed from October 1, 1990 to January 1, 1991. The cost if the adjustment were effective January 1, 1991 would be $380,000 with a 1.58% average yearly salary adjustment per employee. 137 138 City of Denton City Council Minutes August 28. 1990 Page 4 The advantage of package ~1 would be that it would help with recruitment, all employees in the organization would receive the same benefit and it would cover all of the health insurance increases that would be experienced. The disadvantages were that the market adjustment was not based on merit, the employees would recognize the $25 per month health insurance suppIement this year and would be well received but that that would probably be soon forgotten, and it froze merit increases for City employees with possiSle litigation for Civil Service employees. %2a - this alternative restored the merit and Civil Service step program and would be effective October 1, 1990. A $25/month health insurance supplement would be effective January 1, 1991. 62% of the employees would be eligible for a salary adjustment with an average salary adjustment per employee of 2.58%. Cost of this alternative would be $387,000. %2b - in this alternative, merit and Civil Service step programs would be included with an effective date of January 1, 1991 plus the $25/month health supplement effective January 1, 1991. Again the percent of employees eligible to receive salary adjustments would be 62% with an average yearly salary adjustment per employee of 1.33%. The cost of this alternative would be $316,000. The advantages would be that it was close to the current system and took away the litigation threat. The disadvantages were that many employees would not get an increase other than the $25 health insurance supplement, employees would soon loose track of the supplement, it did not help with recruitment, and the delay of three months would build in costs for the next budget year. %3a - this alternative, effective October 1, 1990, would provide a merit increase for those eligible and would be coupled with a one-time payment for those at the top-of-the-range based on an evaluation and performance for up to a 2% increase. 100% of the employees would be eligible for an increase with an average yearly salary ad3ustment Of 2.25% per employee. The cost would be $393,602. #3b - would provide the same benefits as #3a with an effective date of January 1, 1991. The cost would be $327,980 with an average yearly salary adjustment per employee of 1.6%. City of Denton City Council Minutes August 28, 1990 Page 5 139 The advantages of ~3 were that all increases would be based on merit except for Civil Service. the one time payment for people at the top-of-the-range would not be built into the base budget, the merit system would remain, and all employees would be eligible for some type of increase. Disadvantages would be in the recruitment area and the fact that it was a new concept and would have to be well explained to the employees. Council Member Alexander asked for the number of employees who were at the top-of-the-range for one, two, three, and five years. Council Member Gorton asked how the one-time payment would affect the net take home pay. Would that be a benefit or not. ~4 - would offer merit increases and annual market adjustments by pay ranges. The lower pay families (Service/Maintenance, Clerical/Office Support, Technical/Para-professional and Seasonal) would receive a 3% annual market increase. The higher paid areas (Professional. Management/Supervision, Fire, Police and Executives) would receive a 2% increase. The cost would be $466,000 with an average yearly salary adjustment of 3.13% per employee. The advantages were that it was the most similar to the current pay program, all employees would get some type of increase, and helped with recruitment. Disadvantages were that non-merit increases were built in, in order to afford the option, all was keyed to a January 1, 1991 implementation date, and costs would be built in for the next year. Council Member Ayer asked for a comparison of tax rates to fund the increases. Harrell replied that if there were no further cuts in the budget, the current levy when proposed was $.6483. If that rate were used, $367,000 would be available for salary increases. The effective rate of $.6553 would provide $505,000. (6) Benefits Adjustments - Harrell stated that there was no choice in relation to the Fire Pension contribution. This was the last year of the phase-in. (7) Other Agency Contributions Human Services - Harrell stated that the current budget, as submitted to Council, had the human services funded at the amount of $101,520. If the contribution were held even, the amount would be $115,600. If that were done, $14,000 of additional revenue or additional expenditure cuts would have to be done. A 10% cut in funding would require $104,320 and an additional $3,000 would be needed. Staff recommendation was a 10% decrease. 140 City of Denton City Council Minutes August 28, 1990 Page 6 Transportation - this item showed a 10% cut at $41,400. The proposed budget indicated the $41,400 figure. (8) Tax Exemptions For Persons Over 65 - Staff was recommending an increase of the exemption by $1,000 which would place the total exemption at $19,000. Cost to the City would be $14,627. (9) Improvements Program - The same recommendation was presented as before in postponing the building of a new library, two recreational centers and a law enforcement center until the economy improved. (10) Street Improvements - If an additional $.02 tax increase were implemented, $370,000 would be generated to allow an additional 7 miles of street to be done. If additional cuts were made in the budget, this would be an area to redirect any additional money. (11) Budget Reductions - The following were proposed budget reductions: (a) eliminate the funding to youth athletic officials - this would net the City $15,500. The Parks Board recommended either to fund the officials or to eliminate the administrative fee for persons participating in youth athletics. (b) Potential Court Judgments for Flow Hospital - the $200,000 was eliminated. (c) Auto Accident Liability - $50,000 in budgeted savings would be realized. (d) City Hall Roof Repair - This was the one area in which a Certificate of Obligation was needed for the next year. Other Fund Ma~or Issues Proposed rate increases were: Electric - no rate increase Water - 9.97% Wastewater - 9.46% Refuse - 6% Sanitation - 6% increase Harrell continued that the rest of the back-up consisted of questions from the Council expressed at earlier meetings. City of Denton City Council Minutes August 28, 1990 Page 7 141 Harrell stated that the Mayor had requested he spend some time on the issue of Training/Travel. He felt that there was some very real inherit value in training. If one looked at the entire budget, only 4/lOths of 1% of the budget was spent on training/schools/seminars. The General Fund operation total amount for training/schools/seminars in actual dollars was down approximately 3% over last year and adjusted for' inflation, decreased the figure to 8%. Most of the increases were in only three different line items. One in the Fire Department where training would be for 15 paramedics, the second in Engineering/Data Processing for GIS, and the third for training for a new librarian. If those three were taken out, the actual increase would be 8% and adjusted for inflation would be 13%. Discussion was held by the Council concerning travel expenses, room expenses and conferences. The Council convened into the Special Called meeting at 7:00 p.m. in the Council Chambers. PRESENT: Mayor Castleberry; Members Alexander, Trent. ABSENT: None Mayor Pro Tem Boyd; Council Ayer, Gorton, Hopkins and 1. The Council considered a m0~ion to approve the 1990/91 hotel/motel tax recipient budgets as presented and submitted to the City Council. John McGrane, Executive Director for Finance, stated that according to state law, each of the recipients of the hotel/motel tax had to submit to Council for approval their budgets. Each of the organizations had done that and were reviewed. The City Attorney felt that one motion would cover all the budgets which included the Denton Convention and Visitors Bureau, the Greater Denton Arts Council, the Greater Denton Arts Council Building Fund, the Denton County Historical Museum, the Denton County Historical Foundation and the North Texas State Fair Association. Hopkins motioned, Gorton seconded to approve the 1990-91 hotel/motel tax recipient budgets. On roll vote, Trent "aye," Alexander "aye," Hopkins "aye," Gorton "aye," Ayer "aye," Boyd "aye," and Mayor Castleberry "aye." Motion carried unanimously. 2. The Council received a report and gave appropriate direction concerning alternatives for the Luther King, Jr. Outreach Library Program. staff Martin 142 City of Denton City Council Minutes August 28, 1990 Page 8 Lloyd Harrell, City Manager, stated that per Council direction, staff went back and looked at the Outreach Program which was schedule to be discontinued, to see what kind of options the City would have to continue the program. Several options were presented from continuing the existing program in its present form with current hours to a program which would involve purchasing a book mobile for the community. For each option, advantages and disadvantages had been discussed. Staff was recommending Option V in which the Literacy Center would provide children with recreational reading materials in the form of periodicals, popular paperbacks and hardback books. Included in that option were (1) volunteer staff would be provided from NICE, MLK Advisory Board Committee Members, NAACP Youth Group, members of the Community with RSVP coordinating and scheduling the group; (2) the Parks and Recreation Board had approved the use of the two meeting rooms to the left of the entrance of the Center. The Literacy Center would be open 10 hours per week with procedures for use of the building provided to RSVP: (3) library cards would be issued and materials provided by the Library and added to by members of the community. Magazine subscriptions would be paid for by local fraternities, sororities, and members of the local community. These subscriptions would be arranged by the Collins Youth Council; (4) Friends of the Emily Fowler Public Library would match up to $500 contribute~_by other community groups to purchase a wide assortment of paperback books; (5) procedures would be developed for the material collection by the Library staff. Training of the RSVP volunteers would also be provided by the Library staff; (6) the project would be evaluated after six months and the status would be reported to the Council and (7) SPAN would provide transportation for any child who wanted to come to the main library. This proposal would provide Southeast Denton a Literacy Center in the neighborhood, fully maintained and operated by the residents with local donations. There would be no impact on the 1990-91 budget. However, with the normal use of the collection, there would be an estimated replacement cost of materials of approximately $2,000.00 in the next year's budget. The Center should be opened by September 10, 1990. Council Member Gorton stated that the minutes of the Library Board indicated that the volunteers would be managed by the MLK Advisory Board and assumed that the MLK Advisory Board reported to the Parks Board which reported to the Council. What was the line of responsibility. City Manager Harrell replied that the Library Board would have no direct responsibility in the day-to-day operations. RSVP would coordinate the daily supervision of the program. City of Denton City Council.Minutes August 28, 1990 Page 9 Council Member Gorton asked who would be responsible for the ultimate answer with a problem. Joella Orr, Librarian, replied the ultimate answer would be to the Library Board. Council Member Ayer-stated that SPAN was not mentioned in the agreement and as they did play an important role, they should be included in the agreement. Hopkins motioned, Alexander seconded to accept Option V. On roll vote, Trent "aye," Alexander "aye," Hopkins "aye," Gorton "aye," Ayer "aye," Boyd "aye," and Mayor Castleberry "aye." Motion carried unanimously. 3. The Council convened into Executive Session to discuss legal matters, real estate, and personnel/board appointments (considered an appointment to the Public Utilities Board). No official action was taken. With no further business, the meeting was adjourned. 143 CITY OF DENTON 3297C BOB CASTLEBEERY, MAYO~ C TY OF D .,TON. T .XA /