Minutes August 25, 1992432
CITY OF DENTON CITY COUNCIL MINUTES
AUGUST 25, 1992
The Council convened into the Work Session at 5:15 p.m. in the
Civil Defense Room.
PRESENT: Mayor Castleberry; Mayor Pro Tem Hopkins; Council Members
Brock, Chew, Smith and Miller.
ABSENT: Council Member Perry
1. The Council held a discussion and gave staff direction
regarding the 1992-93 fiscal year budget.
Lloyd Harrell, City Manager, stated that this was the beginning
step to finalize the budget. There would be a regular meeting on
September 1 with budget discussion and a public hearing on the
budget. On September 8, the work session would deal with remaining
budget issues and discussions. The intent was that the September
8th meeting would deal with remaining budget questions with formal
adoption of budget on September 15. This meeting would be a review
summary~of responses from Council questions for the proposed budget
and a time to solicit any additional questions/alternatives for
staff to follow-up for Council. There would be a review of the
major budget issues which had been presented to Council at a prior
meeting. The Council could add to the major budget issues any
other items they desired. The final point of discussion would be
to review the major issues and determine if there were any
tentative decisions associated with those items. Any decisions
made at this point would be tentative.
Summary Of Responses To Questions
1. Reallocation of funds from the Human Services Committee - the
Human Services Committee had presented to Council their rankings
and allocation of funding. One of the budget issues and
recommendations was that the amount given to the Committee last
year be discounted by another percent. The Committee was asked to
rank the allocations based on a 1% reduction. The Council was
presented with the 1991-92 budget, the recommended budget which was
the initial budget submitted bYt~e Human Services Committee, the
1992-93 alternate budget which held the dollars constant and
reallocated, thelamounts among the various agencies and the 1992-93
alternative budget with the 1% reduction. $114,444 was the amount
included in the~budget.
Mayor Castleberry stated that the two new agencies which were
originally requested to be added were not included in the
alternative budget. There were no new agencies with the 1%
reduction budget.
City Manger Harrell replied that the Human Services Committee
recommendation was that if the Council cut back their recommended
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Page 2
programs that those agencies would not be funded. Another item to
consider was the request from the Parkland Hospital Poison Control
Services for a $6000 allocation to continue that service. The
Human Services Committee felt that it was a good program and the
Council should try to fund the program but they did not include it
in their allocation.
2. Economic DeveloDment Contributions - In 1992-93 the total
amount in the proposed budget for economic development was $1.8
million in annual and/or one-time contributions.
3. Pay plan alternatives/Effect of more licensed professional
counselors on the health plan/Explanation of Texas Municipal
Retirement System fundinq mechanism and survey of metroplex cities
contribution rates - it was projected that there would be a 15%
increase in health insurance. Fifty six percent of the employees
covered-some member of their family and would be subject to the
increase in the family portion of the coverage. To compensate for
the increase in family coverage, a 1-2% increase of salaries would
be needed. Alternative #1 allowed for a 1%, 2% or 3% general
across-the-board pay increase for all satisfactorily performing
employees beginning October 1, 1992. Alternative #2 allowed for no
across-the-board increases but a partial Mercer implementation with
three options of an average increase of 1%, 2.6% or 3.4%.
Alternative #3 allowed for an increase in the City's current
contribution for TMRS from 5% to 6%. The proposed budget allowed
for $108,000 which would be one-half of the cost effective January
1, 1993.
Mayor Pro Tem Hopkins asked if there were a way to reduce what the
City paid on TMRS to give a 1% or 2% increase in employee salaries.
City Manager Harrell replied that it was possible and that it was
optional for a municipality to pick up a share of the contribution.
This had been done in the past in lieu of a salary increase. The
problem with this year was that no salary increases were proposed.
If a 2% Mercer would be implemented and the employee did his own
2%, it would equal out.
Tom Klinck, Director of Human Resources, stated that the minimum
contribution was 5%. Denton was one of the few cities still at 5%.
He was not sure if the contributions could be split.
City Manager Harrell stated, that if the Council wanted to get away
from the City paying the employee share, one option might be to
have the City's share be increased from 5% to 6% and then the
employee would be responsible for the other 1%. Staff could supply
Council with more information but it would be difficult to
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August 25, 1992
Page 3
implement this year. Council had requested information on the
effect of mental health providers on the insurance program and that
information had been provided.
Supplemental information had been given to Council regarding
alternatives with dollar amounts for the implementation of a
partial Mercer program. If that alternative were implemented
October 1, 1992 including matrix and police/fire steps, $236,000
would be needed for a 1% increase. Mercer increases were available
in steps. Service/Maintenance would be October 1, Office Support
would be November 1, Technical/ Para-Professional would be December
1, and Professional/Management would be January 1. These steps
would provide a monthly difference of $19,746. There was the
option of a partial Mercer and the option to slide the dates.
Implementation could be delayed a month and each month would save
$19,746.
Council Member Chew asked if-the implementation could begin January
i and what that cost would be. Mercer must be a real commitment if
it were ever going to be implemented.
City Manager Harrell stated that the cost would be $177,000 if
implemented January 1 and the cost of starting on October 1 would
be $236,000.
Council Member Brock asked how it was determined how many people
would receive a "far exceeds" ranking, etc.
Klinck replied that that was a variable available in the Mercer
system. The variable placed 10% in the "far exceeds" category with
a different percentage throughout the system. The computer
calculated the salary figures in with those percentages.
Mayor Pro Tem Hopkins stated that Council had seen the categories
and those employees who would not receive raises until others who
were on the low end of scale were brought up.
Klinck replied that an employee in that category would receive a
one-time lump sum and it would not be rolled into their salary.
This would keep the salary of employees closer to the value of the
job.
City Manager Harrell continued with Alternative 2B which included
an average increase of 2.6% with the same data as Alternative 1.
The monthly slide would be $36,000 per month. Alternative 2C
included a 3.4% increase with a monthly slide of $48,000. Pledges
had been made to add steps to the command rank in the police and
fire departments. The current pay schedule did not have those
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additional pay ranks for the command people. This would be a 2%
increase per step for those individuals.
Council Member Brock asked if these were required increases.
City Manager Harrell asked if he could hold that answer for another
section. He indicated that if a partial Mercer were done and the
steps added for command ranks of police and fire, there would be a
few individuals who would not receive an increase in the police and
fire departments. Other supplemental items presented to Council
included a recap of the TMRS proposal which was a breakdown of the
1% cost effective January 1, 1993 which would be $64,981. The
City's contribution would be $87,695 if it went into effect January
1, 1993. If the TMRS proposal were implemented, then the Civil
Service employees would have to be increased by 1% or $82,000. The
total cost would be $237,000 to the General Fund.
Mayor Pro Tem Hopkins asked if this could be done in lieu of a
salary increase.
City Manager Harrell replied that if the Council did not want to
implement that option, approximately $110,000 would be available
for use. A concern had been raised that if there were no salary
increase and there was a 15% increase in insurance costs, the
employee would take home less money next year than this year.
Staff calculated what was the maximum amount that an employee would
have to pay in additional health insurance if there was a 15%
increase. Employee and family coverage would increase per month by
$26.25. An option to assure that employees did not fall behind was
to provide a $27 per month health insurance supplement effective
January 1 for every employee. The cost to the General Fund would
be $126,000.
Mayor Castleberry felt that this option should really be considered
as it was a fall behind situation.
Mayor Pro Tem Hopkins asked if the supplement would be only for
those employeeslwith family/spouse coverage as the amount was not
going up that much in all categories.
City Manager Harrell stated that the downside to the supplement was
that the best design of the health insurance program was one in
which the employee shared in the increase of health insurance so
that they saw first hand what the costs were doing.
council Member Miller stated that they must be careful so that they
did not get in the same situation as the retirement plan. These
were two separate issues of compensation and pay. He felt it was
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hard to deal with these issues with the message Council gave at its
last meeting regarding pay increases.
City Manger Harrell stated that up until last year, the City had
been giving an employee health supplement of $20 per month. With
the new health program, this supplement had been discontinued.
Council Member Chew felt the message the Council gave at its last
meeting was that they were probably not going to be able to give
City employees a raise and if by chance it would be possible to
give City employees a raise, there would be nothing wrong in
rescinding the previous action. It did not tie the hands of the
Council and that the Council needed to look at every option to give
employees an increase.
4. Salary Adjustments - even though there were no salary
increases in the proposed budget, there were still dollars for step
increases for Civil Service employees under the adopted pay plan.
There would be 7 fire fighters and 50 police officers who would be
eligible, for an increase. It was debatable if this had to be done.
Those dollars were included within the budget and if Council wanted
to take that out, there would be $60,0000 to allocate elsewhere.
Council Member Brock asked if this were a contract or a requirement
under the Civil Service law.
City Manager Harrell replied that it was an adopted pay plan and
adjustments would have to be made in order to not give the
increases.
5. Leisure Services Division Proqram Enrollment/6. Leisure
Services Personnel Detail- these two sections detailed what every
leisure recreation program needed for enrollment, what the actual
enrollment was and what the fee was for that program. Additional
information was presented regarding the positions in the recreation
department from 1987 to present which had been requested but which
had not been funded.
Council Member Chew asked for a report on temporaries used in the
Parks and Recreation departments.
7. Environmental Health Budqet Scenario for Full Recovery - a
request had been made for information detailing the schedule of
fees necessary to make the Environmental Health budget self-
supporting. In order to do so, the existing food establishment
permit fee would have to be increased by $50 which was a 90.9%
increase along with the implementation of a reinspection fee which
would amount to one-half the original annual inspection fee.
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8. Court Appointed Special Advocates - this was a request for
more information on this agency which staff provided for Council.
9. Tax Exemptions - Council had requested a listing
exemptions offered by other taxing entities which the
provided.
of tax
staff
10. Mowinq Costs for 30 acres at North Lakes Park - this was a
request for information relating to the cost for mowing the 30
acres of park land on the south side of North Lakes Park. This
land was proposed to be reassigned to Class D maintenance level, no
mowing. The cost was estimated to be $2,160 for mowing this area
six times between May and October.
Council Member Smith asked if the number of mowing times per year
could be reduced which would reduce the cost.
11. Administrative Transfers from Utility Funds to General Fund
Operations - these were not arbitrary amounts which were used. A
consultant did an audit to determine how many hours employees spent
in the General Fund area doing utility related matters such as
Human Resources, Legal, etc. The amount was arrived at by an
independent person determining the costs.
A final report included a recap of appraisal rolls comparisons.
Harrell then outlined the Major Budget Issue Items and presented
Council with a detailed handout.
1. Fund Balance - if the fund balance was lowered to 10%, there
would be $298,000 to help balance budget. This was included in the
proposed budget.
2. Revenues
A. Property tax - the budget had an effective tax rate which
would provide $59,000 which was included in the budget. Each
additional 1 cent would provide $183,500 which was not included in
the budget. The effective tax rate was $.7180 and the current rate
was $.6851. Harrell asked how much additional revenue would be
realized if the rate went up to the 3% level.
John McGrane, Executive Director for Finance replied that the rate
would be $.7357 and the revenue would go up approximately $200,000.
City Manager Harrell stated that the maximum increase was 3%.
McGrane indicated that each additional penny would provide $183,000
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and would provide approximately $325,000 at the 3% level.
Council Member Brock stated that property owners were not going to
understand effective tax rate when they received an increase in
taxes. She asked who were those with low taxes.
McGrane replied that the business/commercial category had gone down
considerably, residential-multifamily had gone down, residential-
single family went up a little, residential single-family land went
down and raw land went way down. He stated that in areas where
there were a lot of home sales, the market was generally lower and
the Appraisal District took the appraisal on the homes in that
area.
Mayor Pro Tem Hopkins was concerned that most of homeowners would
not see a drop in taxes.
City Manager Harrell stated that the effective tax rate gave the
same amount of money as the previous year which was really less
money due to inflation, etc.
B. Sales Tax - sales tax for the next fiscal year would be
estimated at a 4% level which would generate $216,000 which was
included in the budget. For every additional 1% increase, $54,000
would be available for the budget.
C. Utility Sales Tax - the recommendation was to repeal the
exemption on residential utility sales of natural gas and
electricity effective January 1. Denton was one of the few cities
still with the exemption. This would provide $198,000 effective
January 1, 1993 and was not included in the proposed budget.
D. Health Inspection Fees - this would provide a $9,140
increase which was not included in the budget.
E. Storm Drainage Utility - this item was tabled by Council.
Pay Plan Adjustments - alternatives included:
A. Full Mercer implementation at a cost of $938,837 which
was not included in the budget.
B. Implement Mercer at 1% at a cost of $236,951 which was
not included in the budget. $19,746 would be saved for each month
of implementation delay.
C. Implement Mercer at 2.6% at a cost of $433,131 which was
not included in the budget. $36,094 would be saved for each month
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of implementation delay.
D. Implement Mercer at 3.4% at a cost of $586,531 which was
not included in the budget. $48,878 would be saved for each month
of implementation delay.
E. 1% across the board increase at a cost of $202,036 which
was not included in the budget.
4. Benefits Adjustments
A. 15% health insurance increase at a cost of $100,000 which
was included in the proposed budget.
B. TMRS - 1/2 of 1% increase at a cost of $108,500 which was
included in the proposed budget.
5. Position Reductions - the positions of Emergency Management
Coordinator, Engineering Tech II, Adult Athletics Supervisor and
Fire staffing reductions were recommended to be eliminate in the
proposed budget. If the Council did not want to reduce these
positions it would be necessary to find the money for those
positions. Fire staffing was a net number which allowed the Chief
to return new pieces of equipment to the budget.
6. Service Reductions - a detailed list of service reductions
included eliminating extra mailing of delinquent tax notices,
eliminating tree trimming program, reducing the police budget,
reducing the library budget, reducing quality and quantity of
budget documents and limiting the animal control response hours was
provided along with the amounts needed to return the service to the
budget if Council not want to eliminate a particular service.
Council Member Chew questioned if overtime would exceed $5,000 as
opposed to not having the Animal Control officer.
City Manager Harrell replied that staff would not respond except
for an emergency.
McGrane replied that the full amount of the salary of the officer
was not given up to allow for some overtime.
Council Member Brock asked if the reduction in the Library budget
included reduction in hours.
city Manager Harrell replied no but that the reduction included
elimination of membership in professional organizations and the
purchase of materials.
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Mayor Pro Tem Hopkins asked for the specific dollar amounts for the
two organizations which were under consideration for elimination.
7. Aqenc¥ contributions
A. Reduce Human Resources another 1% which included $1,156
in the proposed budget.
8. Reduce TransDortation Funding - this reduction included a 1%
drop which was included in the budget for $560.
9. County Fundinq for Library - The County determined that the
City would receive $12,806 less than projected in this year's
budget.
Council Member Brock stated that the City needed to start planning
for the future of charging out-of-city residents and eliminate
county funding.
City Manager Harrell replied that the City now received $100,000
from the County. It was estimated that charging for out-of-city
residents would net $30,000 per year. The problem was that as long
as the City took County money, it could not impose a charge. If
the Council decided not take County money, $70,000 would have to
be made up somewhere in the budget.
Council Member Brock stated that much of the use of out-of-city
patrons was for reference materials.
Mayor Pro Tem Hopkins felt that the City needed to begin looking at
future options as funds might be reduced considerably in future
years.
10. Split tax payments - the Council would need to find $20,000 if
they wanted to return to the split tax payments option.
11. Over 65 exemption - the Council's philosophy was to raise the
exemption to $25,000. The proposed budget included $1,000 towards
that goal.
12. Cable Television Funding - $2,500 would be needed to televise
Council meetings which was not included in the proposed budget.
Council Member Miller asked if that figure was over and above the
amount included in the Community Services budget which indicated
$2400 for interns, etc.
City Manager Harrell stated that there was enough money in the
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August 25, 1992
Page 10
budget package for equipment funding that once the new channel was
wired, the City could use the screen and emergency messages. The
$2500 would be the cost to pay the interns for the televising, etc.
Council Member Miller pointed out that on page 347 of the proposed
budget it indicated that there was $2400 for two temporary interns
for Council cable broadcasting, $4000 for maintenance associated
with cable.
City Manager Harrell indicated that he had been referring to page
56 of the Major Budget Issues which indicated that operating costs
for televising the Council meetings were not included in the 1992-
93 budget. Total cost to provide temporary interns and maintenance
was $2500. He stated that he would research that information for
Council Member Miller.
13. swimming Pool Improvement Phase II - the total cost of Phase
II was $309,000. If Council wanted to do certificates of
obligation, a quarter cent increase in the tax rate would allow the
issuance of those certificates of obligation.
Mayor Castleberry asked the City Manager to comment on using
interest money to replace the mechanism at the pool.
City Manger Harrell stated that Phase I already had that money
provided and that project was in Phase I. In order to do Phase II,
the Council would have to allocate a quarter of a cent for that
project.
14. Public Safety Officer Staffing - this was changing a position
from a uniformed officer to a non-uniformed officer and would add
$8,000 which was included in the budget.
15. Fire Reserve Fund - this reserve had been built up to provide
staffing and according to the plan adopted by the Council, this
year would draw down $137,000 from the fund to help balance the
budget in that area.
16. Mowing - '$41,000 would be needed if the Council added
additional mowing crew. If the Council put back the mowing
North Lakes, additional money would be needed.
an
Utility Funds
Harrell indicated that the major issues in the utility funds
17. Library Automation - funds were not included in the budget for
the outright purchase or the lease/purchase option.
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City of Denton City Council Minutes
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Page 11
centered on rates. The electric rate, as submitted by the Public
Utilities Board, was a 5% rate reduction. There was a net
reduction of 5 positions in the electric area. The water rate was
a proposed 6% increase, wastewater proposed a 10% increase. In
this area there were three choices. The first choice centered on
the original staff recommendation to the Public Utilities Board for
a 15% increase this year and a 15% increase next year. Almost all
of this money would go to pay off the bonds for the new expansion
of the wastewater treatment plant which was mandated due to new
regulations. The second choice was a 10% increase this year and no
more than a 15% increase next year. Implementation of that choice
would require major service reductions in the wastewater area which
would have to begin within the next few months. The third choice
was a 10% increase this year and a 25% increase next year. When
Council debated this issue, staff would need direction for not only
this year but also for next year.
Mayor Pro Tem Hopkins asked about the kind of reductions and were
the layoffs necessary positions. She wanted to know how this
translated down to the reduction aspect. She was opposed to a
10%/20% increase and would possibly consider a 12%/17% or a
similar combination to get to 30%. She felt that the Council would
be sorry next year if not do more than a 10% this year.
Council Member Chew agreed. He felt the rate this year should go
up to at least 15% to even out the increase.
City Manager Harrell indicated that staff would do a detailed
analysis of the three options and what the implications would be
for those options.
Council Member Miller asked what was the impact of the expenditure
for which there was no revenue. He understood the problem to be
that the City had to make a big investment which required debt
service and there was no revenue generated for that. Someone had
to pay for that and it was different than investing for expansion
for the future.
Mayor Pro Tem Hopkins stated that in the electric area there was a
5% rate reduction but the Public Utilities Board recommendation
said nothing about the extra money the City would be paying TMPA
this coming year as was paid this last year and had not taken that
into account. She felt the ratepayers would rather get a 4% rate
reduction and not have that rate be raised in the future for TMPA.
Bob Nelson, Executive Director for Utilities, stated that over the
last two or three years, natural gas prices had been going down
which had been a financial assistance to the City. The City had
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city of Denton city Council Minutes
August 25, 1992
Page 12
been reluctant to totally drop rates as it was not known when those
gas rates would go back up again. They were now at a point that
that could be done.
City Manager Harrell stated that Mayor Pro Tem Hopkins had raised
a very valid concern. The electric system was very healthy
financially and that was not being jeopardized financially by
granting this reduction. The large industrial users would see the
most reduction.
Council Member Smith asked if staff was predicating an increase for
next year.
Nelson replied that at this point, it appeared that the rated would
be kept the same unless natural gas increased.
Council Member Miller asked how Denton's rates compared to TU's
rates.
Nelson replied that Denton was lower in the residential area, in
the small commercial area Denton was very competitive, in the
larger commercial customers Denton was slightly higher and in the
large commercial customers Denton was slightly higher.
City Manager Harrell stated that in the sanitation area there was
a 3.5% increase in the residential area and that all customers
would be charged the state mandated charge which would be printed
on the bill. Another issue was the area of recycling and the
options available.
Mayor Castleberry asked if Council had any additional information
it needed from staff.
Council Member Miller stated that there were alternatives for a 1%
and a 2.6% salary increase for employees. He asked if staff could
develop an alternative for a 2% salary increase and how that would
fit with the Mercer plan and an across the board increase.
Implementation .to be either October 1 or January 1. He was also
concerned about the action the Council took at a prior meeting
relative to the budgets for the hotel/motel tax recipients.
Budgets had been received from the Human Services Committee for
proposed funded agencies. The Council had not reviewed those
budgets to determine if there were salary increases in those. He
felt that if the Council was going to look at that for some
agencies, it might need to look at it for all agencies.
Council Member Brock asked if the City had contracts with the
various organizations which received Laylor funds. Had changes ever
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City of Denton City Council Minutes
August 25, 1992
Page 13
been made in the allocations and how had that been determined. Had
any changes been made since it went into effect.
City Manager Harrell stated that the City had formal contracts with
each agency which detailed the level of support. Those contracts
had been renegotiated in 1990. There had been a change in State
law which required the City Council to formally approve those
budgets for organizations receiving Laylor funds.
City Attorney Drayovitch stated that the contracts indicated that
if the Council failed to pass those budgets, the organizations
would not receive any funds until a budget had been approved.
Mayor Castleberry indicated that there were two agencies which did
not have an increase in their budgets. Could those two budgets be
approved at the next meeting.
City Attorney Drayovitch replied that those agencies were on the
preliminary agenda for September 1.
Mayor Castleberry stated that actually there were three agencies
which did not have any salary increases - the North Texas Fair
Association, the Denton County Historical Museum and the Denton
County Historical Foundation.
Council Member Miller asked if they had any salary increases.
Mayor Castleberry indicated that there were no Salary increases.
Council Member Miller stated that Council needed to be sure that
the total budgets were being looked at.
Mayor Castleberry stated that those three did not have salary
increases.
Council Member Miller replied no increases in their organizations.
The employees in those organizations were not receiving salary
increases.
council Member~ Smith indicated that the Historical Museum had
indicated that the director's salary had been increased to the
level of the prior director.
Council Member Miller indicated that the Council needed to be sure
that the employees were not receiving salary increases as opposed
to the budget f~om the Laylor funds. Was the Council looking at
total funding and total salaries regardless of source of income.
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Council Member Chew indicated that several of the agencies had been
asked where they were using the Laylor funds. Many had indicated
that they were using the funds in personnel because it was easier
to keep track of.
Mayor Pro Tem Hopkins stated that Council must remember each agency
except for the Convention and Visitors Bureau received money from
other areas. Each agency could say that it was not using Laylor
funds for any salary increases and use that money for rent or
utilities and use other funds for salary increases.
Council Member Smith stated that she would like to see the current
budget along with the proposed budget in the budget presentations
from the agencies next year.
Council Member Brock asked what happened to money which was for
certain services and was not all used. What incentive was there to
save money.
City Manager Harrell stated that any money not spent by the end of
the fiscal year lapsed back into the General Fund balance.
With no further business, the meeting was adjourned at 8:03 p.m.
cx%Y)
CITY OF DENTON,! TEXAS
CITY OF DENTON,
ACC000B2