Minutes June 29, 1993CITY OF DENTON CITY COUNCIL MINUTES
June 29, 1993
The Council convened into a Special Call Session of the City of
Denton city Council on Tuesday, June 29, 1993 at 5:15 p.m. in the
civil Defense Room.
PRESENT: Mayor Castleberry; Mayor Pro Tem Smith; Council Members
Brock, Chew, Cott, Perry, and Miller.
ABSENT: None
1. The Council considered adoption of an ordinance authorizing
the City Manager to execute a contract with the Missouri Pacific
Railroad for the purchase of the Missouri Pacific, Denton Branch,
right-of-way.
Lloyd Harrell, City Manager, stated that this was the culmination
of three years of work. The contract would preserve the eight
miles of right-of-way which the Council had previously discussed.
The importance of this contract involved long range planning for
Denton and was not the fact that there would be a trail for
recreational use but rather the strategic value to preserve the
right-of-way for future rapid transit uses. If the City had not
moved to preserve the right-of-way, the corridor would have
vanished and it would have been extremely difficult to connect
Denton and Dallas with any type of future mass transit.
The following ordinance was considered:
NO. 93-117
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE
CITY MANAGER TO ACT ON THE CITY'S BEHALF IN EXECUTING THE
ATTACHED LINE SALEAGREEMENT WITH MISSOURI PACIFIC RAILROAD
COMPANY FOR THE PURCHASE OF A RAIL CORRIDOR, MORE PARTICULARLY
DESCRIBED IN EXHIBIT A TO THE ATTACHED LINE SALE CONTRACT;
AUTHORIZING THE CITY MANAGER TO ACCEPT AT CLOSING THE BILL OF
SALEAND QUITCLAIM DEED ATTACHED AS EXHIBIT B TO THE ATTACHED
LINE SALE AGREEMENT; AUTHORIZING THE EXPENDITURE OF FUNDS FOR
THE PURCHASE OF THE RAIL CORRIDOR; AND DECLARINGAN EFFECTIVE
DATE.
Perry motioned, Chew seconded to adopt the ordinance. On roll
vote, Brock "aye", Cott, "aye", Miller "aye", smith "aye", Chew
"aye", Perry "aye", and Mayor Castleberry "aye". Motion carried
unanimously.
2. The Council received a presentation and discussion regarding
the 1993-94 Major Budget Issues Report.
Lloyd Harrell, city Manager, stated that this was the initial step
in finalizing the budget for fiscal year 1993-94. The City Charter
indicated that the City Manager had to submit a proposed budget to
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City of Denton City Council Minutes
June 29, 1993
Page 2
the City Council by the end of July for the start of the fiscal
year in October. The policies would be presented at this meeting
with discussion to follow at later meetings. Harrell detailed the
schedule of upcoming meetings in relation to the budget discussions
and noted the attachments in the document. Attachment "A" - the
proposed budget was a modified zero based budget. Each department
had a target number to reach and anything above that target had to
be submitted to the Executive Staff as a budget package. Each
package was discussed with the Executive Staff in hearings and
following the hearings, the Executive Staff ranked the packages.
The numerical rank order was the building block which helped to
balance the budget. This attachment represented those packages
included in the budget. Attachment "B" included packages submitted
which were not included in the proposed budget. Attachment "C" was
the Council priority questionnaire and Attachment "D" represented
the general fund revenue summary. Attachment "E" was a breakdown
of the expenditure side of the budget with major categories.
Attachment "F" was a budget calendar for the next few months.
Harrell stated that the proposed budget was a maintenance budget
that only marginally addressed service level weaknesses. The
budget incorporated $137 million of revenues with expenditures
totalling $135 million.
Major Issues
1. General Fund Reserve Level - Council traditionally had the
policy of maintaining a general fund unreserved balance between 8-
10% of the General Fund expenditures. In the last budget year the
City Council indicated a preference for a fund balance of 10%. The
balance at the end of 1993-94 was projected to be 10.13%. This
budget recommended a 10.13% general fund balance which allowed the
use of $527,000 to help balance the budget. Alternatives relating
to the unreserved fund balance included (1) allowing the balance to
stay at its current level and find an additional $527,432 of
revenue or decrease expenditures, (2) use $527,000 of the balance
as a resource to help fund the 1993-94 budget, or (3) reduce the
fund balance below the 10.13% level and use the additional funds to
offset other revenues or fund additional expenditures. Staff
recommended utilizing $527,000 of the unreserved balance to help
balance the 1993-94 budget.
2. Revenues
A. Property Tax - the preliminary tax roll, submitted by the
Appraisal District, showed a decline of $24 million from the 1992-
93 fiscal year final roll, including supplements. The effective
rate would be $.7320 per $100 valuations compared to the current
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June 29, 1993
Page 3
rate of $.7180. Alternatives for the ad valorem tax rate were (1)
keep the rate at the current amount which would require a reduction
of $256,355 in the General Fund expenditures plus an amount to be
determined after appeals were heard by the Appraisal District, (2)
set the tax rate at the effective rate which would be $.720 per
$100 valuation plus an amount to be determined after the appeal
process, or (3) increase the actual rate over the effective rate in
which each additional $.01 increase over the effective ~ate would
generate an additional $183,111 in revenues that could be used to
fund unmet budget needs or restore services that had been
eliminated. Staff recommendation was that the city adopt the
effective tax rate. This would be the fourth straight year that
the tax rate had been set at or below the effective rate if Council
decided to proceed in that direction.
B. Sales Tax - the budget included a 3% growth in receipts
over the current budget amount. Alternatives for sales tax
receipts were (1) project less than a 3% growth, (2) project a 3%
growth for 1993-94 or (3) project greater than a 3% growth. Staff
recommendation was for a 3% sales tax growth rate to be used to
balance the 1993-94 budget.
C. Ambulance Fees - the Fire Department had reviewed the fee
structure and billing process for the changing of ambulance fees.
Their conclusions were that the City was undercharging the amounts
charged to other small cities and over time it was hoped that those
fees would be increased. A second conclusion was that the City was
not charging enough for the its ambulance service. The current fee
was $120 per incident and the average rate was $219 for area
cities. Alternatives for increasing the ambulance fees were (1)
keep the fee at $120 which would require $100,000 to be found for
the budget, (2) increase the fee to $363 which would provide for
full recovery of costs or (3) raise the fee to recover some of the
subsidized costs. Staff recommendation was that the fee be
increase to $200 per incident which would bring in $100,000 of
additional revenue.
Council Member Chew asked how much the City was subsidizing the
smaller cities.
Rick Svehla, DePuty City Manager stated approximately $7 per
incident.
Council Member Chew stated that he would like to have hard figures
regarding that difference.
Council Member Brock asked for an update on how the ambulance
insurance program was working.
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D. Park and Recreation Fees - with the anticipated
completion in the fall of the softball and soccer fields at North
Lakes Park, a major issue was lighting and field maintenance. It
was projected to cost $17,000 per year to light the new fields and
$62,000 to maintain them. It was recommended that the leagues
utilizing the fields pay for the cost of lighting. Each
participant would be charged $3.50 for the lighting and if
maintenance were included, the cost would be $12.50 per participant
per season. Alternatives for charging a fee for field lighting
were (1) not charging which would require an additional $17,000 be
found for the budget, (2) split the additional costs between the
taxpayers (maintenance) and the participants (lighting) (3) or
charge a fee for both the additional maintenance and lighting
expenses. Staff recommendation was that a fee be charged for the
use of lighted fields. Maintenance costs would be paid by taxes.
Council Member Perry suggested the possibility of the leagues
paying the cost rather than individuals.
City Manager Harrell replied that however the league wanted to make
payment to the City would be fine as long as it were paid. The
money obtained from this fee would be used exclusively for park
expenses.
3. Pay Plan Adjustments
Last year staff had recommended no increase when presenting the
major budget issues but Council came up with a 2.6% increase by the
end of the budget discussions. This year it was proposed to
continue to implement Phase II of the pay plan but not at a full
implementation. A 2% range adjustment would be necessary to keep
from falling further behind the area market. The second area of
compensation provided increases for pay for performance. The pay
for performance matrix was redesigned to better fit the
organization by shrinking the number of performance categories and
quartiles. The PRI increases ranged from 0 - 5.5%. The market
adjustment plus the pay for performance would provide for an
average increase of 4.64%. These increases would be effective from
January to April d~p~nding on the Day plan~ involved. A to%al
compensation increase of 4% had been programmed for fire and police
civil service employees to be effective January 1, 1994.
Alternatives included (1) fully implement Phase II of the
compensation program which would require an additional $364,000 and
the average employee would receive a 6.44% increase, (2) delay the
compensation program and provide no increase in employee
compensation which would provide a budget savings of $603,000 or
(3) implement a range adjustment and performance based pay
increase.
City of Denton City Council Minutes
June 29, 1993
Page 5
Council Member Miller stated that this past year 2.6% had been
budgeted and asked for a report on how this compared to projected
amounts.
city Manager Harrell stated that another program would include
small immediate incentives for exemplary service suggested by the
Public Utilities Board which would be detailed during the
department presentations.
4. Benefits Adjustments
A. Health Insurance - It was anticipated that there would be
a 20% increase in health insurance premiums, effective January 1,
1994. If the increase were larger, an adjustment in the plan would
be required meaning higher deductibles, co-payments, etc. for
employees. It was recommended that a 20% health insurance increase
for the employee be funded. Alternatives for the increase in
health insurance costs were (1) require the employee to pay the 20%
increase in rates which would allow $229,000 to be reallocated in
the budget or (2) fund a 20% maximum increase and readjust the plan
design if the increase exceeded 20%.
Council Member Brock requested a discussion regarding moving toward
a managed care system.
B. T.M.R.S. Adjustment - The City currently contributed a
percentage of annual salary to the Texas Municipal Retirement
System for all city employees except firefighters. The
firefighters had their own pension retirement system. The TMRS
contributions were 5.76% city and 5% employee, of which the City
paid both. The contribution to the Denton Fire Pension Fund was 9%
City, 9% employee with the City paying 5% of the employee's share.
The City paid a total of 14% towards the firefighters pension
contribution. State law dictated what was paid for Civil Service
employees. The police department belonged to TMRS. There was more
than a 3% difference between the City contribution for firefighters
and all other employees. The City's level of participation was at
the lowest level offered and was below that provided by many of the
area cities. It was proposed to adjust TMRS contributions,
effective January 1, 1994, to 6.76% City and 6% employee, at a cost
of $114,335. The City would not fund the additional employee
increase of 1%. It was also recommended to include an enhancement
to retirement eligibility requirements and for an employee to buy
back prior military and public service credits. Alternatives for
funding the TMRS adjustment were (1) continue the current Drogram
and contribution levels which would allow $148,955 to be
reallocated, (2) fund only the contribution increase which would
allow for $34,620 to be reallocated, (3) fund only the enhancement,
City of Denton City Council Minutes
June 29, 1993
Page 6
military credit and prior service buy back provisions which would
allow $114,335 to be reallocated, or (4) fund the contribution
increase and the program enhancements. Staff recommended the
funding of both the contribution level increase and the program
enhancements.
5. Positions - the proposed budget contained a few new General
Fund positions in three categories. Restructuring ~ 5 total
positions were proposed for the following departments: Municipal
Court - Warrant Clerk; Library - Library Clerk II and Library Page;
Customer Service - receptionist; and City Manager - Public
Information Officer. New Programs included positions in Facilities
Management - Building Maintenance Technician II and Administrative
Assistant I; Park Maintenance - Light Equipment Operator and
Seasonal Groundskeeper. New positions included Police - Civilian
Jailer; Facilities Management - Building Maintenance Technician II;
and City Manager's Office - Secretary upgrade from 3/4 time to full
time. Alternatives included (1) keeping current staffing levels
which would allow $145,474 to be reallocated or (2) fund the
positions. Staff recommendation was to fund the limited positions
proposed.
6. Other Agency Contributions - the proposed budget increased the
funding level for the Human Services Agencies by 2.5% from its
current level. The total amount proposed was $117,305. The Human
Services Committee received requests totalling $554,734. Of those
requests, the Committee recommended Community Development Block
Grant funding of $100,000 and General Fund funding of $148,300.
Alternatives included (1) fund at the 1992-93 level of $114,444
which would allow $2,861 to be reallocated, (2) fund the agency
request of $554,734 which would require an additional $337,429 to
be funded from additional resources or expenditure reductions, (3)
fund at the Human Services Committee recommended level which would
require an additional $30,995, or (4) fund at a 2.5% increase which
approximated the increase in other budgets.
7. Transportation - the proposed budget provided for a 2.5%
increase from current funding levels for SPAN ($248) and HANDIHOP
($1,139) transportation s~rvic~s. With th~ 2.5% increase, th~
total funding for transportation services would be $56,827.
Alternatives included (1) keeping the funding at its current level
which would allow $1,387 to be reallocated, or (2) fund at a 2.5%
increased level. Staff's recommendation was to fund at 2.5%
8. Tax Exemption for Persons Over 65 - in 1989, the City Council
agreed to help individuals on fixed incomes absorb any additional
property tax increases. At the time, Council established a goal of
raising the over 65 exemption from $16,000 to $25,000. The current
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City of Denton City Council Minutes
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Page 7
exemption was at $20,000. Last year the $1,000 increase was not
granted. Staff recommendation was to increase the exemption $1,000
for the 1993-94 fiscal year. Alternatives for the over 65 tax
exemption were (1) leave the exemption at the current amount of
$20,000 and utilize an additional $18,302 for other purposes, (2)
increase the exemption to $25,000 immediately and eliminate $73,208
of expenditures from the budget or increase revenues, or (3)
proceed with the goal of increasing the exemption by $~,000 per
year, for a total exemption of $21,000 in 1993-94.
9. 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 1993-94 budget incorporated that
strategy and used $137,000 of the reserve to help balance the 1993-
94 expenditure required for opening Station #6.
10. Street Improvements - the Council questionnaire indicated that
street construction/rebuilding was one of its top priorities. The
current budget allocation was $1.5 million which would allow for
four lane miles of new construction and reconstruction of 150,000
square yards or about 120 blocks of streets. Because of limited
resources, the 1993-94 budget could not provide additional funding
for street construction/repair with current revenues. An alternate
resource that could increase the funds available was a solid waste
user fee. This would be assessed to the Sanitation fund to help
maintain streets for additional street construction/repair and
would generate $124,000 for the budget. Alternatives for street
improvements were (1) keep the funding at the current level, or (2)
charge a 3% user fee for solid waste collection and allocate those
funds to street construction/repairs.
Council Member Perry asked who would pay the fee.
City Manger Harrell replied that it would be a 3% fee assessed to
the sanitation fund. This would be an operational cost for use of
streets and not charged to citizens.
Mayor Pro Tem smith asked if this would reflect in any rate
increases.
City Manager Harrell replied that any increase of rates would not
be in addition to this proposal.
11. Legal Assistance - there were two different packages
recommended with this proposal. One would allow the City to
address personnel and civil service matters and would cost $28,000
to employ an attorney for these issues. The second issue dealt
with the preparation of the new zoning ordinance. A $20,000
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City of Denton City Council Minutes
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Page 8
package was included to hire outside counsel with expertise in the
zoning field.
Council Member Cott requested that staff check to see if any local
attorney could be hired instead of going outside of the City.
Harrell continued with the alternatives which included (1) fund the
packages for outside legal assistance which would allow'for legal
assistance requiring personnel civil service and zoning issues, or
(2) eliminate the packages for legal assistance which would allow
$48,000 to be reallocated but would make it difficult to implement
the new zoning ordinance and would delay the resolution of
personnel issues.
Council Member Brock asked if Council would see the proposed zoning
ordinance before adoption of the budget.
City Manager Harrell felt that it would be held until the budget
was finalized. If Council decided not proceed with the projects,
the money could be used for other reasons.
Major Issues - Utilities
City Manager Harrell indicated that the City Charter specified that
the utility budget would be submitted to Council as recommended by
the Public Utilities Board without amendment by staff. The
proposed utility operations budget allocated total revenues of
$96,634,000 and expenditures of $95,594,000. The revenues were
based on a 3.2% increase in electric rates, a 4% increase in water
rates and a 13% increase in wastewater rates. Solid waste rates
were proposed at a $.50 per month residential increase and an 8%
commercial rate increase with a $.50 per cubic yard landfill
disposal increase. An average customer's utility bill would
increase by $5.69 per month or by a 4.63% increase overall.
The Electric Summary, Water Summary and Wastewater Summary
indicated no new positions with some decreases in positions. The
Sanitation Summary included many recommendations which spoke to a
recycling effort. A new Drogram effective with the new budget year
would be to ban yard waste from normal collection activities and
pick up yard waste on Wednesdays as a special collection. This
would go to the wastewater treatment plant to be ground up and be
available as fertilizer. In addition, it was recommended to
eliminate the curbside recycling when the special Wednesday pickup
was implemented. Seven new positions were suggested including a
Recycling Coordinator who was the current Community Improvement
Coordinator and who would no longer be available for neighborhood
work.
City of Denton City Council Minutes
June 29, 1993
Page 9
Council Member Cott indicated that recycling had long term
financial and social implications. He suggested a projection of a
longer period of time than one year. This might be needed to
reorganize the Council's thinking if the City were going to lose
money over a number of years.
City Manager Harrell stated that when the utility budget was
presented it would include those issues. This budget 'indicated
that initial feeling, pending the results of the comprehensive
study, was that it was not profitable to go with curbside
recycling. A more probable long range solution was some type of
material recovery. This budget advocated some incremental steps
which could be done without having a full scale program and without
having curbside recycling to help with recycling. It provided for
a recycling coordinator, a ban of yard waste from the landfill, the
start of recycling of cardboard and plastics, established two
additional recycling sites, and provided for waste oil collection.
Council Member Cott stated that the problem was not the unit cost
but was the lack of a selling price for those items. He was
willing to take the loss'as the social aspects were more important.
If over time, at least 5 years, the community would loose "x"
number of dollars, he wanted to know if the community would be
willing to accept that loss.
Council Member Miller asked if the tax rate included debt service
and did it assume the purchase of the computer packages for fire,
police and library.
city Manager Harrell replied yes that it would be part of the first
year of the CIP program and would be incorporated into the debt
service portion of the levy.
Council Member Cott stated that the City had had a flat revenue for
the past several years. Council must keep that in mind and not
project a large leap in revenue in future years. He also felt that
the Council needed to remember that it was not operating in a
vacuum and federal taxes, school taxes, etc. needed to be
considered. The Council needed to begin to make more start up
choices. There were new projects which would take cash for a long
time and not give cash. In the utility business, there was a
situation which needed to be discussed regarding the fact that the
City only produced 35% of what was used and had to buy the rest.
There were four partners in TMPA and a situation similar to
Bryan/College Station where by 10-12% or more percent of the units
sold were sold to state agencies. It was projected to put $60
million into that department and it was time to determine where
that was going. It was his personal belief that it required a lot
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City of Denton City Council Minutes
June 29, 1993
Page 10
more than normal presentations on the issue and he would like to
hear from the Public Utilities Board on how to address issue.
There was a great need to upgrade equipment but not a great
prospect for demand of the product.
3. Miscellaneous matters from the City Manager.
City Manager Harrell did not have any items for the Council.
4. New Business
There were no items of New Business suggested by Council for future
agendas.
With no further business, the meeting was adjourned at 7:08 p.m.
J~N~IPER~ALTERS
C Y SE ETARY
~yY OF~DEENToN, TEXAS
ACC0012A
BOB CASTLEBE~Y,
CITY OF DENTON, Tf~XAS