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August 2, 2006 Minutes CITY OF DENTON CITY COUNCIL MINUTES August 2, 2006 After determining that a quorum was present, the City Council convened in a Special Called Work Session on Wednesday, August 2,2006 at 9:30 a.m. in the Council Work Session Room at City Hall. PRESENT: Mayor McNeill; Mayor Pro Tern Kamp; Deputy Mayor Pro Tern Mulroy; Council Members Heggins, McElroy, Montgomery, and Thomson. ABSENT: None 1. The Council received a report, held a discussion, and gave staff direction regarding the 2006-07 Budget and the 2006-2011 Capital Improvement Program. Jon Fortune, Assistant City Manager, presented details on the proposed 2006-2007 budget. General Fund Reserve Level- the proposed budget would reach a 14.5% reserve level. The 2007 reserve level included utilization of vehicle replacement reserves and the incorporation of Emily Fowler fund reserves. Appraisal Roll Comparison - total taxable valve had increased 13.61 % over the 2005 taxable value and 12% over the final 2005 value including supplements. Tax rate - the proposed tax rate was $.62652, which was 1.8 cents above current rate and under the rollback rate. The proposed tax rate increase would be used for community enhancements. Those enhancements included police staffing, code enforcement staffing, street materials and library books. This equated to a $1.99 increase in taxable value per home value. He reviewed a five-year review of police department staffing. The proposed additions included five additional patrol officers, one jailer position, one dispatcher, and one duty officer position. Code Enforcement staffing included two additional code enforcement officers to encourage neighborhood vitality, protect public health and welfare and instill high community standards. The budget also included funding for a property assessment survey. Street maintenance included a budget increase in materials by $904,000 for a total of $1.7 million. Library enhanced services included an increase in funding for materials. Property Tax Rate - a property tax rate comparison was reviewed. Sales Tax - the 2005-06 sales tax was assumed to match the budgeted amount. Receipts in excess would be held in reserve against future deficits. The 2006-07 sales tax assumed a 2.5% increase based on the current year estimate plus anticipated reserve of $500,000. It was noted that the economic development agreements in place had an effect on the sales tax received by the City. Compensation - non-civil service employees would receive a 2% cost of living adjustment beginning October 7, 2006. They would be eligible for a 0-5% performance increase as part of their performance review with an average increase of 2.08%. All increases would be applied to the base pay. City of Denton City Council Minutes August 2, 2006 Page 2 Police compensation - the 2006-07 budget included a 5% increase with 2.5% effective October 7, 2006 and 2.5% increase April 7, 2007. Field training officers and tactical team members would receive an assignment pay of $100 per month. Established scheduled step increases were also included. Fire compensation - the 2006-07 budget included an 8% increase for fire compensation. A 4% increase effective October 7, 2006 and a 4% increase April 7, 2007. Certification pay was included as well as established scheduled step increases. There would also be an increase in city contributions to the Fire Pension Fund by 1 % from 10% to 11 %. Compensation and Classification - A comprehensive review to the City's compensation philosophy, job classifications, and pay plan design was included in the budget. The proposed budget included a second year contribution of $100,000 for a total of $200,000 for the study. Health Insurance - costs for health insurance were estimated to increase by 16%. The proposed budget included funding to absorb the anticipated increase. Passing the increased cost of health insurance to employees would result in a regressive reduction in salary. Public Safety - Police Department budgeting included replacement of 26 vehicles, replacement of bulletproof vests, funding increases in cost of training, vaccinations and inoculations, and pawnshop monitoring. It also included software enhancements. The Fire Department budgeting included Station #7 opening in December, replacement of ambulance and command vehicle, physical fitness and health assessment program, various facility improvements at fire stations, emergency management operations and outdoor siren maintenance, upgraded life support equipment in two ambulances and twenty mobile data computers. Community Services - Parks and Recreation Enhancements were budgeted for the implementation of facility ID cards, energy savings equipment for recreation centers, irrigation and lighting control systems, funding for Kings Kids Day Kamp and Owsley Summer Program camp, consolidation of the Civic Center Pool into the General Fund, and various facility improvements. The budget also included funding to update the current annexation plan. Downtown - funds were budgeted for additional litter control on the downtown square and surrounding area plus graffiti removal on public property around the downtown square. Transportation - the proposed budget included funding for street maintenance for an additional $175,000 for curb and gutter, sidewalk and ADA ramp improvements. Traffic and pedestrian safety was addressed in the budget with $150,000 to repaint markings and replace old street signs to meet new federal guidelines and $90,000 to enhance current signal maintenance. Funding was included for $41,000 in grant leverage, radio maintenance, fencing and a maintenance shed at the Airport. Gas Wells - the budget included provisions for depositing royalty, tax or lease revenues into a non-operative fund. The City Council policy indicated that reserve monies could be used for future one-time needs. The Airport Gas well fund had four wells in production with an estimated ending fund balance of $1,498,531. The non-airport gas well fund would have an estimated ending fund balance of$539,470. City of Denton City Council Minutes August 2, 2006 Page 3 Vehicle Replacements - the proposed budget indicated that vehicles would be replaced as necessary based on mileage, age, and high life-to-date maintenance costs. It was anticipated to have 53 vehicles replaced and five new vehicles in the 2006-07 budget. There would also be a change in vehicle purchase methodology for short-term debt and third party financing. Other Issues - Human Services Agency Contributions included a total General Fund support of $167,839 and a total proposed funding per capita of $1.55. The Capital Improvement Fund indicated that the 2005 five-year bond program would be completed in fiscal year 2008-09. Tourist and Convention Fund represented the recommendation from the committee. The 2006- 07 budget indicated that the motor pool fund would no longer be a separately budgeted fund with vehicle purchases to occur in the department's operating budgets. The Emily Fowler Fund would be combined with the General Fund. A Risk Retention Fund would be a newly budgeted fund included in the 2006-07 budget. Aquatic Center Fund - General Fund support of operations included water works park and natatorium of 49% and average recreation center of 90%. Revenue was projected to cover expenses in fiscal year 2007-08 and included DISD support. A deficit balance would be eliminated several years later. Solid Waste - various residential rate adjustments were proposed for 2006-07. A 4% commercial rate revenue adjustment was proposed, a projected bond sale of $2.6 million and a net increase of .5FTEs. Water - a 2% retail rate revenue increase was proposed. The budget also contained a proposed bond sale of$21 million with no bond sales in 2005 and 2006. A net increase of2.75 FTEs was proposed. Wastewater - no retail rate increases were proposed. An 18,000 gallon wastewater volume cap for residential customers would be included. A bond sale of $2 million was proposed. The 2006-07 budget contained a net decrease of .25 FTE. Budget Calendar - the upcoming budget calendar was reviewed. The final budget would be adopted on September 26, 2006. Following the completion of the Work Session Council convened in a Closed Meeting at 11 :40 a.m. to consider the specific item listed below under the Closed Meeting section of this agenda. 1. Closed Meeting: McElroy motioned, Montgomery seconded that the deliberation under Closed Session was a competitive matter and could be considered in Closed Session. On roll vote, Heggins "aye", Kamp "aye", McElroy "aye", Montgomery "aye", Mulroy "aye", Thomson "aye" and Mayor McNeill "aye". Motion carried unanimously. A. DELIBERATIONS REGARDING CERTAIN PUBLIC POWER UTILITIES: COMPETITIVE MATTERS - UNDER TEXAS GOVERNMENT CODE SECTION 551.086. City of Denton City Council Minutes August 2, 2006 Page 4 1. Received a presentation and information from staff pertaining to the Denton Municipal Electric ("DME") Proposed Annual Budget for the Fiscal Year 2006-2007, consisting of competitive electric and commercial information respecting the details of the present and future operational and financial plans and strategies of DME; and discuss, deliberate, consider, and provide Staff with direction regarding such matters. With no further business, the meeting was adjourned. PERRY R. MCNEILL MAYOR CITY OF DENTON, TEXAS JENNIFER W AL TERS CITY SECRETARY CITY OF DENTON, TEXAS