July 25, 2007 Minutes
CITY OF DENTON CITY COUNCIL MINUTES
July 25, 2007
After determining that a quorum was present, the City Council convened in a Special Called
Work Session on Wednesday, July 25, 2007 at 2:00 p.m. in the Council Work Session Room at
City Hall.
PRESENT: Mayor McNeill; Mayor Pro Tem Kamp; Deputy Mayor Pro Tem Mulroy; Council
Members Heggins, Montgomery, Thomson, and Watts.
ABSENT: None
1.The Council received a report, held a discussion, and gave staff direction on the 2007-08
Budget and five-year financial forecast.
Mayor McNeill stated that the 2007-08 budget was based on an assumed 11% growth in
appraised value. It now appeared that the actual appraised value would be 11.9%. He suggested
a discussion on how the proposed increase in the tax rate for drainage might be modified based
on this information. Options to consider included not needing a full penny increase, reducing the
proposed penny increase by the amount of the difference in appraised value or keep the penny
increase and use the additional growth amount for additional projects.
Consensus of the Council was to have those options developed by staff.
Jon Fortune, Assistant City Manager, presented the details of the proposed 2007-08 budget.
Preliminary Data
Forecast, budget and tax rate preliminary
Final certified appraised values - 11.9 % for appraised value
Final recommendation may change pending certified values
2006-07 year end estimate
Conservative estimates were used
Revenue estimate - revenues were slightly above budget; property taxes would be
collected at 100%, sales tax estimate was at budget, payment in lieu of taxes had a small
decrease
Expenditure estimates - there would be minimal savings in utility expenses and personal
services would be at 100%
Major assumptions
Property tax growth - estimated at 11%
Tax rate –proposed at $.66652
Property tax increase – proposed at $.04
Sales tax growth – proposed at 2%
Fund balance - at 15%
Use of one-time reserves – motor pool expenses proposed
Compensation - 4% non-civil service; Civil Service as agreed to in Meet and Confer
Health insurance – move to self-insurance
Vehicle replacements - bond funded
Service Enhancements – Enhancements were proposed for Building Inspections/Code
Enforcement; Planning, Parks, Streets/Transportation, Police/Fire, Audit/CMO, Airport,
Downtown, and Drainage
City of Denton City Council Minutes
July 25, 2007
Page 2
New positions – proposed new positions for CMO, Internal Audit, Building Inspections,
Police, Code Enforcement, Parks, and Planning
Operating expenses would be adjusted for inflation
Financial Forecast
Reviewed appropriable fund balance, revenues, total expenditures, fund balance target,
and the impact of packages beginning 2008-09 or later.
General fund reserve level
Reviewed ending unreserved balance, percentage of total expenditures, and reserve target
percentage.
2005 bond program
Had a 62.2% approval overall rating
Contained a potential tax rate increase of 4 cents
Have used less than a penny leaving an authorization of over 3 cents
2007-08 tax rate
Split between O& M and debt service
A 3 cent increase was for the bond program
Recommending up to a penny increase for drainage
Total tax rate increase of 4 cents
Do additional bond sale to use the penny for drainage projects
Total new rate of $.66652
Impact on an average home value was $52 per year
2007-08 Tax Rate - $.03 increase in debt service tax rate
Increase authorized in 2005 bond program
Increase necessary to cover debt service
$.03 did not allow for the accelerated completion of the 2005 bond program
2007-08 Tax Rate - $.01 for drainage
Allow the issuance of approximately $5-6 million in bonds to fund drainage projects
Projects included Pecan Creek Main Branch, Cooper Creek Basin, Pecan Creek Tributary
4, Neighborhood improvements
Deputy Mayor Pro Tem urged that this money be spent quickly. He did not want a lot of studies
taking time instead of doing the projects. He suggested doing smaller neighborhood projects to
get those done as soon as possible.
2010-2014 CIP - 2010-2014 CIP = $50-60 million
2005 bond program to be completed in 2009
Based on current growth assumptions
Assumed issuance of $20 million in CO’s for vehicles, equipment, and facilities
Proposed bond election November, 2009
Deputy Mayor Pro Tem suggested forming a committee to develop projects well in advance of
the election instead of having a lag factor and manageability problem. Also have funding for
gross engineering studies ahead of time and get the bigger studies done and have plans ready to
go after the passage of the bonds.
Sales Tax
2006-07 sales tax assumed to match budgeted amount
2007-08 assumed a 2.0% increase
City of Denton City Council Minutes
July 25, 2007
Page 3
2008-12 assumed a 5% annual increase associated with the Rayzor Ranch Development
Gas Wells
Royalty, tax or lease revenue deposited into non-operating funds
City Council policy to reserve monies for future one-time needs
Airport Gas Well fund had an estimated ending fund balance at $2.4 million
Non-airport gas well fund had an estimated ending fund balance at just over $1 million
Include this topic in the upcoming Council retreat discussion.
Compensation - Non-civil service employees
Conducting a study on the compensation system
Compensation plan - reward employees based on responsibility, reward employees based
on performance with defined developmental tracks
Upon completion of study, a specific wage increase will be recommended
Compensation increases may vary by job family, function and fund
Personal services increase budgeted at 4%
Police Compensation
Year 2 of Meet and Confer Agreement
Compensation to match market average plus 5% by rank
Increase by rank effective April 19, 2008
Additional Step for all ranks
Fire Compensation
Year 2 of Meet and Confer Agreement
Compensation to match market average plus 5% by rank
Increase by rank effective April 19, 2008
Additional Step for all ranks
Increase in city contribution to Fire Pension Fund by 1% from 11% to 12%
Service Enhancements
Building Inspections - $207,038 for three new employees; a Combination Building
Inspector, a Plans Examiner, and Commercial Plan Examiner III
Code Enforcement - $133,605 for two employees for the substandard structure program
and general code enforcement enhancement
Planning - $111,874 for two employees; an urban forester and a clerical staff addition
Streets - $863,000 for a new street infrastructure assessment, street maintenance funds
and sand spreader & sand; no new employees
Traffic - $66,500 for a graffiti program, sign and markings funding, line locations and
new traffic counters; no new employees
Airport - $129,178 for a management assistant plus a TxDot ramp grant program, radar
for the air traffic control tower, taxiway Lockheed overlay grant match, airport layout
plan update grant match and transportation operations business unit
Police - $336,638 for two additional police officers, one public safety dispatcher, one
duty officer, one civilian jailer and a civilian jailer, and a civilian evidence technician
vehicle
Fire Operations and Fire Prevention - $212,200 for occupational medicine, an AED
program, hazardous materials operations, and a shift investigator vehicle; no new
employees
Parks Maintenance - $143,632 for two employees to restore park services
Downtown development - $50,000 for downtown incentive reimbursement
CDBG - $38,041 for supplemental funding for community development administration
Internal Audit - $97,673 for the addition of a new auditor
City of Denton City Council Minutes
July 25, 2007
Page 4
City Manager - $198,830 for the addition of a new assistant city manager
Miscellaneous - $335,000 for a transfer to water shed protection, professional services for
internal control audits and miscellaneous facility needs
Total Service enhancements would be 17 full time employees at a cost of $2,923,209.
Fortune reviewed future packages which would begin in 2008-09 or later. Those included staff
or programs for various departments and also reviewed unfunded packages.
Vehicle Replacements - General Fund
Vehicles would be replaced as necessary based on mileage, age, and high life-to-date
maintenance costs. The number of vehicle replacements would be 45 and 9 new vehicles
for a total number at 54. These would be purchased through the issuance of Certificates
of Obligation bonds.
Other Issues
Health Insurance Fund - a new internal service fund would be established to
accommodate self-insurance operations with a beginning fund balance of $500,000
(General Fund contribution)
Red Light Camera Revenue – had a balance as of 09/30/06 at $283,374; recommended
allocating $143,000 in 07-08 for school crossing safety enhancements for $100,000 and
traffic enforcement enhancements for $43,000
Human Services Agency Contributions - total General Fund support of $231,448 for a per
capita figure of $2.03.
Tourist and Convention Fund
Fleet Services - would add two new employees
Water
PUB recommended
3% rate increases
Proposed bond sale of $29 million to include funding for the Lake Lewisville Plant
rehabilitation and disinfection upgrade to ozone; a high school booster pump station and
north-south water main
Net decrease of 1 employees
4% salary increases
Wastewater
PUB recommended
No retail rate increases
No increase in drainage fee
No proposed bond sale
Net increase of .5 employees
4% salary increases
Solid Waste
PUB recommended
No rate increases for residential carts, commercial, or multifamily recycling
$.50 monthly single-family residential recycling increase (final contract will determine
rate)
Projected bond sale of $1.85 million
Net increase of .5 employees
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July 25, 2007
Page 5
Denton Municipal Electric
PUB recommended
No base rate increases
Energy cost adjustment (ECA) rate would change as required to cover actual energy costs
New increase of 8.5 employees
Proposed bond sale of $7 million
Fortune reviewed the upcoming budget calendar which included
July 26 - City Council budget workshop
July 31 proposed budget and CIP submitted to City Council and placed on file with City
Secretary
August 21 - vote to consider a proposal for a tax increase prior to publishing notice of
hearing
September 11 - first public hearing on tax increase and public hearing on the budget.
Sept. 18 - second public hearing on tax increase
September 25 - adoption of annual program of services, adoption of CIP and approval of
tax rate
Council directed staff to prepare options for additional funding opportunities. Options included
whether to put the additional funding for drainage projects or reduce proposed penny tax increase
to accommodate the additional funding.
Council Member Thomson requested a report on what projects were accomplished with the
current drainage fees.
The Council did not meet in Closed Session.
With no further business, the meeting was adjourned at 3:40 p.m.
______________________________________
PERRY R. MCNEILL
MAYOR
CITY OF DENTON, TEXAS
______________________________________
JENNIFER WALTERS
CITY SECRETARY
CITY OF DENTON, TEXAS