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Minutes August 8, 2005 CITY OF DENTON CITY COUNCIL MINUTES August 8, 2005 After determining that a quorum was present, the City Council convened in a Special Called Work Session on Monday, August 8, 2005 at 9:00 a.m. in the Council Work Session Room at City Hall. PRESENT: Mayor Brock; Mayor Pro Tern McNeill; Council Members Heggins, Kamp, Montgomery, Mulroy, and Thomson. ABSENT: None 1. The Council received a report, held a discussion, and gave staff direction regarding the 2005-06 Budget and the 2005-2010 Capital Improvement Program. City Manager Conduff stated that staff was presenting a draft budget that needed fine-tuning from the Council. Additional times were available for budget discussion should they be needed. The draft budget was a challenge to continue to budget with the growth of the city within the available revenue. A key recommendation was to have an efficiency study performed, as it would help identify areas for elimination due to duplicated efforts, increase efficiencies, streamline operations and suggest outsourcing opportunities. The cost of the study would be $200,000. The study process would start as soon after the budget was approved as possible. There was a possibility that there might be some budget savings this year. Council discussion- . Was there enough expected savings this year to pay for the study - Conduff replied that the hope was for more savings than the cost of the study. . The study was not just to show how to save money but how to do things better. . A concern was expressed about past studies that produced information that was not very useful. . What were some measures to look at as to whether this study would be a worthwhile approach or not - Conduff indicated that an outside expert would have an advantage as he would have access to processes from other communities. The process could be designed to have reports back on a regular basis to weigh in whether or not to proceed with the recommendation. . Would it be advantageous to look at an incremental study perhaps in one department and if the results were favorable then do more? . Was there an idea on where there might be some savings or areas already targeted? - Conduff replied that through the process of elimination of jobs some areas had already been examined. The technology area would probably be studied first as that area affected procedures and software. . The study would only include general government and not the utility department. . There would probably be public concerns about the expenditure for the study. City Manager Conduff continued that the other key was the issue of the general fund reserve level. Currently the City was striving for a 15% cash reserve level. He reviewed the appraisal roll comparisons from 1994-2005. The City had been consistently growing in value. The recommendation was to add one cent to the property taxes and reviewed the tax rate comparison since 1994. The proposed property tax rate was well within the rollback rate. Property tax incentives were included economic development agreements. City of Denton City Council Minutes August 8, 2005 Page 2 Sales Tax Conduff indicated that there was good growth this year at about 6.5%. 4.0% needed to be subtracted due to economic development sharing for a net of 2.5% in sales tax growth. Economic development agreements were in effect with Triad Hospital, Denton Crossing, Teasley Partners, and Unicorn Lake. Benefits Adiustment The benefits adjustment would be eliminated and 5% added to the employee's salaries. This elimination would provide a true cost of employee salaries. The recommendation was to roll the 5% into the salaries except for the salaries in the general fund and internal service funds. Those two areas would only receive 4%. Utilities and solid waste would receive the 5%. Compensation Conduff indicated that non-civil service employees would receive a 1 % cost of living adjustment and Civil Service employees would receive a 1 % cost of living plus normally scheduled step increases. The cost of living adjustment would increase pay ranges by 1 % which meant that the value end of the range would go up one percent which benefited those employees at the top of the range. Compensation and Classification Conduff indicated that staff was recommending a comprehensive review of the City's compensation philosophy. Phase one would cost approximately $100,000 and would look at job classifications and pay plan design. The target area for this year would be public safety. Based on the study there could possibly be a recommendation for broad banding instead of smaller market bands that the City currently used. Health Insurance Conduff indicated that the proposed budget held the City's contribution increase to 3% and required employees to take on more responsibility with a $35 per month increase in employee contribution. The proposal also included deductibles of $500 per individual, $1000 family; co- insurance at 90/10; out-of-pocket expenses capped at $1000 individual/$2000 family, an increase in co-payment for office visits and drugs. The proposal also included an aggressive wellness program. There would be no increase in the City's contribution to retirees. Currently the City provided $100 per month for retirees. Council discussion- . It had been suggested that the process of insurance bidding was not open and if it were, the city could realize savings. . When selecting an insurance consultant, work to align the plan year with the fiscal year in order to have better data comparisons. City of Denton City Council Minutes August 8, 2005 Page 3 Public Safety Jon Fortune, Assistant City Manger, stated that the Police Department had requested eight additional positions consisting of three patrol officers, one school resource officer, one investigator, one sergeant, one clerical position and one jail administrator. The proposed budget also included red light camera enforcement, an upgrade of the public safety radio system and new vehicles. The Fire Department's proposed budget included the first full year of staffing for Fire Station #7, the completion of the public safety training facility and replacement of several vehicles. Council discussion- . A future discussion for consideration was how to hire the firefighters for the new station and the consideration of changing the current requirement to hiring only certified firefighters. . Be aware that allowing only certified firefighters to take the fire test may not produce the desired diversity in the department. Economic Development Conduff stated that an imaging and marketing campaign was performed this year. The City had contributed $321,000 to the Chamber this year with a recommendation of $260,000 to be contributed in the proposed budget. Council discussion- . What did the Chamber contribute - The Chamber contributed $20,000 for imaging and marketing. Funds from the City covered operational costs, salaries, phones, equipment and supplies. $80,000 had been received from private advertising and special events. . The private sector contribution to the Chamber had grown over the past year. Human Services Contributions Conduff indicated that the proposed general fund contribution was $184,000 plus Block Grant funding for a total of$331,000. Council discussion- . The need was great for human service contributions because Denton had a higher percentage of lower income people in the city. . The City was required by law to provide public services, not human services. . There appeared to be more private sector contributions to the social service agencies. Airport Construction projects included the terminal building, the terminal apron expansion, taxiway realignment and runway extension. Gas well revenues would be used for CIP projects. Outside help might be considered for long term financing of the gas well revenues at the Airport. A City of Denton City Council Minutes August 8, 2005 Page 4 seven-year plan had been structured into capital improvement projects. The plan provided for a component to develop revenue-generating opportunities at the Airport. Council discussion- . Opposition to the City getting into another business. . Consider a work session with the Airport Advisory Board regarding the philosophy of operations at the Airport. . Don't spend gas well money on business interests instead use the money on infrastructure projects. . The broad direction by the Council was improvement of the infrastructure at the Airport and not business ventures. . Consider statistics from other area airports on these types of developments. . Council was not prepared to approve an Airport Master Plan at this point in time. Consensus of Council was to prepare additional information and hold a future discussion with the Airport Advisory Board on the subject. Council convened into Closed Session to consider the following: 1. Received a presentation and information from staff pertaining to the Denton Municipal Electric ("DME") Proposed Annual Budget for the Fiscal Year 2005-2006, consisting of competitive electric and commercial information respecting the details of the present and future operational and financial plans and strategies of DME; and discussed, deliberated, considered, and provided Staff with direction regarding such matters. After discussion, Council reconvened into Open Session. Public Transportation Jon Fortune, Assistant City Manager, stated that the LINK system would be transferred to DCTA with no funding in the proposed budget for DCTA. The CIP had proposed funding for the multi- modal transportation station location. Development Review Jon Fortune, Assistant City Manager, stated that the engineering development functions had been outsourced and the development review functions remained in house. The in-house functions had been transferred to Utilities for the reorganization of the department. Other Services . Building Energy Savings-modified heating/cooling temps in all city buildings. . Teen Court-new state fee would fund this program. . Neighborhood Empowerment Program-provided matching funds for neighborhood projects. . CIP Operational Costs-several projects opening this year with associated operational costs. City of Denton City Council Minutes August 8, 2005 Page 5 Hotel Occupancy Tax Funding The 2005-06 proposed allocation with revenues was projected at 3% over current revenues. Streets Howard Martin, Assistant City Manager, reviewed the pavement management system and the pavement overall condition index. There was an annual need for $13 million worth of repairs with the current effort at $3.5 million. CIP funding had a proposed $22.7 million mainly designated for street construction. Traffic Howard Martin, Assistant City Manager, reviewed the aging infrastructure of the traffic controllers, the use of the Intelligent Transportation System Signals, what would be included in the CIP and pavement marking needs. Parks and Recreation Martin indicated that the proposed budget for Parks and Recreation included a reduction of 9.7 full-time employees, the outsourcing of mowing operations, vehicle replacements and the completion of Lake Forest Park in 2005-06. Aquatic Fund Summary Report Martin reviewed the financials for the Aquatic fund through the year 2010 and the fact that there was a need in the budget to recognize the need to utilize maintenance/operational dollars for these types of proj ects. Solid Waste Martin stated that the proposed budget for solid waste included the transition to cart service, a rate increase for curbside household hazardous waste collection of 51 cents per month/residential and $1.75/unit for multifamily curbside recycling. The proposed budget also included a projected bond sale of $4.9 million. Council discussion- . Concern of changing to mandatory cart service. . The public needed more time to adjust to the service. . Two carts outside each residence were unsightly. . How was the increase for the cost for residential cart service determined? . Consider offering an incentive to use the 35-gallon containers. Water City of Denton City Council Minutes August 8, 2005 Page 6 Martin indicated that there would be no retail rate increases in water rates, the department would realize an net increase of 33 full-time employees with the addition of the engineering positions previously funded in general fund and no change in cost allocation, and a proposed bond sale of $4.2 million. Wastewater Martin stated that the proposed budget contained a rate increase of 6% for wastewater services, a net increase of 3.5 full-time employees and a projected bond sale of $6.3 million. City Manager Conduff stated that the budget calendar indicated that on August 16th there would be a notice of a public hearing on the budget, the first public hearing would be held on September 6th and the second public hearing on September 13th. The budget would be formally adopted on September 20th. With no further business, the meeting was adjourned at 3:10 p.m. EULINE BROCK MAYOR CITY OF DENTON, TEXAS JENNIFER W AL TERS CITY SECRETARY CITY OF DENTON, TEXAS