Minutes June 30, 1992290
CITY OF DENTON CITY COUNCIL MINUTES
JUNE 30, 1992
The Council convened into the Work Session at 5:15 p~m.
civil Defense Room. ~'
in the
PRESENT: Mayor Castleb~rry; Council Members Brock, Perry, Smith
and Miller.
ABSENT: Mayor Pro Tem Hopkins and Council Member Chew
1. The Council received a report and held a discussion regarding
the 1992-93 Major Budget Issues.
Lloyd Harrell, City Manager, presented Council with a calendar
outlining the various items to be presented during the budget
process. The July 7 agenda would include a discussion of the
major budget issues, no work session would be needed for July 14,
July 21 would be a regular meeting with the work session including
presentations by the hotel/motel tax recipients. The July 28
meeting would be a work session at 5:15 at which time the proposed
budget would be submitted to Council followed by a reception for
retiring Council Members and Board/Commission members.
Consensus of the Council was to hold the reception on July 28 at
the Visual Arts Center.
Council Member Chew joined the meeting.
Harrell continued with the August 4 meeting which would begin at
4:00 p.m. with staff budget presentations. On August llth, staff
budget presentations would be completed.
Mayor Pro Tem Hopkins joined the meeting.
Harrell stated that the August 18th meeting would be a general
budget discussion, a public hearing on a proposed tax increase and
budget would be held on September 1 and Sept 8 would be the final
budget discussion. The September 15 meeting would include the
adoption of the budget.
Consensus of the CounCil was to proceed with the proposed schedule.
Harrell continued with the Major Budget Issues. This report was a
preview of what the budget looked like. He stated that the
philosophy of the Major Budget Issues Report was to identify those
issues which were policy decisions which would make a difference in
the community depending on the option the Council chose. He felt
this was the most difficult budget he had put together since being
in Denton. The city used a modified zero based budget process.
Department directors were asked to submit budgets that limited
expenditures to previous year levels. Because of inflation and
other circumstances, the approach required department directors to
offer program cuts to meet their budget targets. Normal budget
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June 30, 1992
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debates then occurred ~about programs to restore and what new
programs to add. This year there was no debate about packages.
The program reductions offered to meet targets were taken and
department directors were asked to offer additional cuts of 2%.
Many of these reductions were incorporated into the budget in order
to present a balanced budget to Council. The total City budget
revenues for 1992-93 was proposed at $129,133,501 and proposed
expenditures at $128,800,996. General fund revenues were proposed
at $27,700,000 with expenditures proposed at $28,000,000. The
expenditures exceeded revenues by a small amount which was made up
by using fund balance. The proposed expenditures for the general
fund were $28,064,160. Last year's general fund budget was
$28,376,920 which was a drop in the proposed 1992-93 budget of more
than $300,000.
Major Issues - General Fund
1. General Fund Reserve Level - 8-10% was the adopted goal to
maintain the fund balance. Last year, Council preferred to keep
the amount at 10%. The budget was built on a 10% fund balance.
Staff was recommending that $362,000 of the unreserved balance be
used to help balance the budget and keep the balance at 10%.
Current figures indicated that only $300,000 would be needed to
balance the budget and there might be $62,000 available for other
uses.
2. Revenues
A. Property tax - valuation was down over $6 million from
the Appraisal District with potential further drops after the
appeal process was completed. Staff was recommending setting the
tax rate at the effective tax rate level which was the rate it took
to bring the same amount of property tax revenue as the previous
year. Because of Council's desire to limit a tax increase, the
proposed budgetwas based on the effective tax rate which would be
$.6882 per $100 valuation plus an amount to be determined after the
appeal process. If an additional reduction of 4%-6% occurred, an
effective tax rate of $.7247 to $.7325 might be required. Setting
the tax rate at the effective rate level would produce the same
revenues as last year and would not cover any increases for
inflation, salary adjustment, or any new demand for services.
Essentially this was not a tax increase as the' same amount of
revenue would be received as last year.
B. Sales Tax - this year sales tax collections through May
were 3.28% over prior year collections for the same period. A 4%
sales tax growth rate was recommended to be used in balancing the
1992-93 budget.
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C. Utility Sales Tax - this item was not included in the
budget but might be an ~ption for the Council to debate. In the
1970's the Legislature gave cities the option to exempt residential
gas and electric customers from a 1% city sales tax. Denton took
advantage of the exemption. Since that date, most cities in the
Metroplex had repealed that exemption. The City could generate an
additional $198,165 in General Fund revenues by repealing this
exemption. Implementation would be January 1, 1993. The action
would allow for a reduction in the property tax rate, or allow for
funding of services that had been reduced in the proposed budget.
D. Health Inspections - fees in this area had not increased
since 1988. An increase of $10 per category fee was proposed with
a reinspection fee of one-half the original inspection fee.
Approximately $9,000 of revenue would be generated. This amount
was not included in the proposed budget.
Council Member Chew asked for an analysis of costs if the fees were
increased more due to the discrepancy between revenue and
expenditure.
E. Storm Drainage Utility - it was recommended by the Storm
Water Utility Committee that the utility be created, but not
implement the charges. Council then could impose the fee whenever
it desired. If the charges were imposed, an additional $800,000
per year would be generated.
3. Pay Plan Adjustments - Harrell stated that any adjustment to
the pay plan resulted in major dollar amounts. In the 1991-92
budget, Phase I of the new classification and compensation plan was
implemented. This provided funds to bring any position which was
80% below market up to that level. All other employees received a
3% salary adjustment with the commitment that Phase II
implementation would be considered in the 1992-93 budget. To
implement Phase. II, $938,837 would be needed. Due to the limited
resources in the 1992-93 budget, staff recommended no salary
increases for City staff. If the Council wanted to give employees
an increase, every 1% of increase would result in $200,000 of
needed dollars.
4. Benefits Adjustments
A. Health Insurance - an anticipated increase of 15% in the
health insurance premiums was seen and the budget was based on that
amount of increase. If the premium went higher than that, design
modifications would be made to the plan in order to keep the rate
at no more than 15%.
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B. T.M.R.S. Adjqstment ~ all City employees belonged to
T.M.R.S. except for th~ fire fighters who had their own pension
system. The City was paying approximately 14% for the fire
fighters pension fund and 10.8% for other employees. It was
recommended that due to the inequity between City contributions for
fire fighters and all other employees and because no salary
increases were proposed, the adjustment to the T.M.R.S.
contributions increase to 6% and 6.8%. This was on the lower end
of the level with the surrounding communities. Half of the money
had been set aside in the budget to phase in the contributions.
$108,500 would be set aside for contributions and any unreserved
year-end balance which exceeded the 10% level would be added to the
fund.
5. Positions - no new positions were recommended and eight vacant
positions were being recommended for elimination. Those positions
included (1) Emergency Management Coordinator - duties for this
job would be assumed for the City by the Police Chief and the Fire
Chief; (2) Engineering Tech II - this was one of three positions;
(3) Adult Athletics Supervisor - this position was the coordinator
for adults athletic leagues, oversaw the golf driving range and
oversaw the swimming pool. If eliminated the swimming pool
management would be taken over by other staff, the golf driving
range would have to be closed or leased and the adult leagues would
have to increase their own self-management; (4) fire staffing would
eliminate 4 positions. Last year the Council decided to add nine
new fire fighter positions during this budget year. At the same
time, Council decided that when Station 6 was opened, Station One
would be closed. This would increase the manning level of the
current fire trucks. Unfortunately, it was not possible to
increase service levels at this point. The nine new positions
would be reduced to seven with one of those being assigned to EMS
Program Manager. Two of the seven positions would be held vacant
and filled upon the retirement of two Battalion Chiefs which was
anticipated sometime during 1992-93. Thereafter, the Battalion
Chief positions would be eliminated. $166,000 would be needed to
restore these positions.
6. Service Reductions
a. Taxation - eliminate two extra mailings the City
preformed which were not required by law.
be
Street Construction - eliminate tree trimming for 1992-
c. Police - line item reductions which reduced film, travel,
schools and seminars. It also would hold vacancies to accommodate
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June 30, 1992
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salary savings.
d. Library - various service reductions which included no
travel, schools or seminars for the entire staff. The Library
would lose its membership in the American Library Association and
the Texas Library Association. There would be no repair funds for
broken equipment and no books would be sent for repair.
e. Budget/Accounting - the 1993-94 budget would be limited
in the number of copies that were made for distribution. Currently
165 copies were made. This number would be cut back to 25 copies
of the proposed budget and 75 copies of the approved budget.
Another service reduction would be in Animal Control which would
eliminate routine patrols between 5:00 p.m. and 8:00 a.m.
7. Other Agency Contributions - the current budget for other
agencies was $115,600 with a request from the Human Services
Committee for $129,800. The proposed budget was based on $114,444
which was a reduction of 1% from the current level.
Council Member Chew asked for a description of the Court Appointed
Special Advocates program.
8. Transportation - the proposed budget provided for a 1%
reduction from current funding levels for SPAN ($100) and HANDIHOP
($460) transportation services.
9. County Funding for the Library - The City spent much more
money serving county patrons than it was receiving compensation
from the County. Options included to continue subsidizing non-City
patrons and accepting the County allocation or not accept the
current County proposal of $110,932 and begin assessing a user fee
for out-of-City patrons. If this option were selected, it would
require the elimination of three positions and the Library would
need to reduce hours of operation. Staff was recommending
accepting the County's proposal.
10. Split Tax. payments - it was estimated that an additional
$20,000 of interest income was earned when no split payment was
used. The majority of the users of the spilt payment program was
not homeowners but rather commercial and apartment owners.
11. Tax Exemption for Persons Over 65 - increasing the exemption
by $1,000 to $21,000 was recommended in the proposed 1992-93
budget.
12. Cable Television - the operational cost for televising the ~
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City Council meetings was not included in the 1992-93 budget.
Total cost to provide this service was approximately $2500 for
temporary interns and equipment maintenance and $40,000 to be taken
from the special fund established for this purpose for equipment.
The DISD was very interested in a joint agreement with the City for
these services and the Council would be receiving a report at the
next meeting regarding such a proposal.
13. Swimming Pool Improvements - Council had authorized Phase I
which addressed problems associated with the circulation and
filtration systems and would be paid from interest funds from
previous bond issues. Phase II dealt with renovating the building
and grounds of the pool area. Staff recommended that Phase II
begin in early 1993 using the issuance of Certificates of
Obligation to fund $309,000 of structural improvements. It was
also recommended that the revenue needed to pay the debt service on
the Certificates come from a $.0024 increase in the ad valorem tax
rate. This increase was not programmed into the 1992-93 budget at
this time.
14. Police - Public Safety Officers - the Police Chief had
identified approximately 5 positions in the Department which did
not require a uniformed officer to perform. He was suggesting that
over time these positions be transferred to public safety officers
who were civilians. This would also maintain the Police Officer
positions at 104. This budget year proposed shifting one vacant
position to a public safety officer.
15. Fire Reserve Fund - over the past several years, a fire
reserve fund had been built to phase in the fiscal impact of
opening a new fire station. The 1992-93 budget used $132,000 of
the reserve to offset expenditures required for opening Station #6.
16. Mowing- when Loop 288 opened, the City would be responsible
for an additional 60 acres of mowing. South Park would add 6 acres
of additional mowing. Staff was recommending that mowing services
be cut in the.following areas: no renewal of the lease on the 13
acre school site at the corner of Teasley Lane and Longridge,
eliminate mowing of 30 acres of Class C areas at North Lakes Park
which was the proposed area for new athletic fields, and reduce
mowing of an additional 30 acres of Class C area at North Lakes
Park on the south side of the park.
16. Library Automation - the automation equipment at the Library
was over 15 years old and needed to be replaced. Lengthy input
time, loss of data, erroneous file comparison verifications had
impacted service levels. DUe to the tight financial year, it was
recommended that this program be left in the CIP and not funded out
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of current revenue.
17. Street Improvements - this area was not reduced in the
proposed budget. This would allow the Department to expand its
service levels as per the indications from the Council budget
questionnaire.
Utilities - Major Issues
These recommendations came directly from the Public Utilities
Board. The Board proposed a 4.8% reduction in electric rates, a
6% increase in water rates and a 10% increase in wastewater rates.
The net amount of these rate changes was anticipated to increase an
average residential customer's monthly utility bill between $3.50
and $4.00.
Mayor Pro Tem Hopkins requested further discussion regarding TMPA
and rate reductions.
Harrell stated that a real concern was the 10% increase in
wastewater rates. That increase was entirely driven due to the
expansion of the treatment plant to incorporate the new Federal
guidelines. If a 10% increase were done this year, a 25% increase
would probably be needed next year. The Public Utilities Board had
indicated that a 25% increase would not be done, that ways would be
found to keep the rate increase below that percent. If the rate
were held to 15% next year, it was anticipated that 7 wastewater
treatment operators would have to be laid off.
Harrell listed the proposed Utility positions -
a®
Electric - net reduction of two positions
Water - recommend one new person
Wastewater - no new positions
Sanitation - no new positions
The Public Utilities Board had recommended a $.35 per month
increase for residential customers and a State landfill fee on
residential and commercial customers which would be added as a
separate line item on the utility bill of 3 1/2%.
Recycling - The Public Utilities Board recommended keeping the
current program. Some small programs would be added such as
household hazardous waste public information program, paint swap
program and waste reduction and recycling public education
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June 30, 1992
Page 8
advertising program. Other options presented to Council included
mandatory cu~bside recycling which would add $1.25 per month on a
residential customer bill. A voluntary subscription program could
be started for citizens to volunteer for the program. If a 20%
participation rate was realized, the service could be offered for
$3.25 per month.
Item 4. was considered.
4. Miscellaneous matters from the City Manager.
City Manager Harrell had no items for Council.
5. New Business
The following items of New Business were suggested by Council
Members for future agendas:
A. Council Member Chew requested a report on the possibility
of establishing a pedestrian crossway on East McKinney between
Crawford and Wood Streets.
B. Council Member Brock stated that she felt the bird problem
was not solved and requested a further report.
C. Mayor Castleberry credited the City Manager with the way
the Old Steam Plant building was looking. Much work had been done
to improve the site.
The Council returned to the agenda order.
2. The Council convened into Executive Session to discuss legal
matters, real estate, and personnel/board appointments (considered
appointments to all City of Denton Boards and Commissions.) No
official action was taken.
With no further business, the meeting was adjourned.
NIFER~ALTERS
Y SECRETARY
Y OF DENTON, TEXAS
ACC0009B
BOB CASTLEBERRY, MAY~R
CITY OF DENTON, T~ ~