The City Council of the City of Abilene, Texas, met in a Pre-Council Work Session on February 12, 1998, at 8:30 A.M. in the Basement Conference Room of City Hall. Mayor Pro Tempore Ray Ferguson was present and presiding with Councilmen Paul R. Vasquez and A. Don Drennan, Councilwoman Carol Martinez, Councilman Rob Beckham, and Councilwoman Kay Alexander. Mayor Pro Tempore Ferguson explained that Mayor McCaleb would be arriving late. Also present were City Manager Roy L. McDaniel, Assistant City Manager Mike Morrison, City Attorney Sharon Hicks, City Secretary Jo Moore, and various members of the City staff. Mayor McCaleb arrived before the Pre-Council Session was over.

The Council briefly discussed various consent and regular agenda items. During discussion of Item 4.2, "Ordinance changing City's 1998 contribution rate to Texas Municipal Retirement System", Councilman Drennan stated it should be emphasized to City employees that the City's retirement program is one of the best retirement programs for employees in the industry. City Manager Roy McDaniel asked Council to check their calendars and let him know in the near future the best time to hold the budget worksessions - either the week of July 13 (first choice) or the week of August 3. There being no further discussion, the meeting was recessed until 9:00 a.m. for the regular Council Meeting.

Mayor McCaleb convened the City Council of the City of Abilene, Texas, into Regular Session February 12, 1998, at 9:00 a.m. in the City Council Chambers of City Hall.

Councilwoman Kay Alexander gave invocation.

Pledge of Allegiance was led by Heather Brunts, fifth grader at Dyess Elementary, who was accompanied by her parents, Steve and Julie Brunts.

City Secretary Jo Moore assisted Mayor McCaleb in presenting the Employee Service Awards to the following individuals for their years of service:

25 Years Fidencio A. Alvarez, Firefighter, Fire Department

25 Years Jerry C. Medley, Fire Captain, Fire Department

25 Years Pedro M. Ybarra, Firefighter, Fire Department

25 Years Alvie Hutchins, Supervisor II, Equipment Services

20 Years Vickie "Susie" Tyson, Meter Reader III, Water Utilities

Mayor McCaleb recognized Adam Lott, a Boy Scout in attendance working toward his Communication Merit Badge, and son of Dee Lott in Computer Services.

There being no corrections, additions, or deletions to the minutes of the Pre-Council Session, Regular City Council Meeting held January 22, 1998, Councilman Drennan moved to approve the minutes as printed. Councilwoman Alexander seconded the motion and the motion carried.

AYES: Councilmen Vasquez and Drennan, Councilwoman Martinez, Councilmen Beckham and Ferguson, Councilwoman Alexander and Mayor McCaleb.

NAYS: None.

Councilwoman Martinez moved to approve consent agenda items 3.1 and 3.2, approval of first reading for items 3.3 and 3.4 as recommended by staff. Mayor McCaleb stated approval of the consent agenda includes the amendment to Item 3.2, Oral Resolution approving the proposed amended Rules of Procedure of the Sister Cities Committee, which will change the wording in Article III, Composition of Committee, Section 3 - Qualifications from "…have a vested interest…" to "…either live or work…" Councilman Vasquez seconded the motion and the motion carried.

AYES: Councilmen Vasquez and Drennan, Councilwoman Martinez, Councilmen Beckham and Ferguson, Councilwoman Alexander, and Mayor McCaleb.

NAYS: None.

The Resolution is numbered 3-1998 and is captioned as follows:

Mayor McCaleb opened a public hearing on the request, and there being no one present and desiring to be heard, the public hearing was closed.

Councilman Drennan moved to approve by Oral Resolution an application/permit from Schkade Brothers Operating Company to drill and operate an Oil & Gas well within the City limits and to authorize the City Manager to execute Permit No. 9801. Councilwoman Alexander seconded the motion and the motion carried.

AYES: Councilmen Vasquez and Drennan, Councilwoman Martinez, Councilmen Beckham and Ferguson, Councilwoman Alexander, and Mayor McCaleb.

NAYS: None.

4.2 David Wright, Finance Director, briefed the Council on an Ordinance considered on second and final reading changing the City's 1998 contribution rate to the Texas Municipal Retirement System. It was noted Council action taken today on the Ordinance would have no impact on employee benefits.

Councilman Vasquez moved to approve the Ordinance considered on second and final reading changing the City's 1998 contribution rate to the Texas Municipal Retirement System, as recommended by staff. Councilman Ferguson seconded the motion and the motion carried.

AYES: Councilmen Vasquez and Drennan, Councilwoman Martinez, Councilmen Beckham and Ferguson, Councilwoman Alexander, and Mayor McCaleb.

NAYS: None.

The Ordinance is numbered 10-1998 and is captioned as follows:

Mayor McCaleb recessed the Council into executive session pursuant to Sections 551.071 and 551.074 of the Open Meetings Act, to seek the advice of the City Attorney with respect to pending and contemplated litigation, and to consider the appointment and evaluation of public officers.

The Council reconvened from executive session to the Basement Conference Room and reported no action taken.

5.3 David Wright, Finance Director, began the Worksession by stating the annual audit report is not in final form due to the Housing Authority Audit, which is conducted by another auditor, not being complete at this time. Mr. Wright then introduced auditor Don Ashmore of Davis, Kinard & Co.

The General Fund revenues and expenditures were reviewed. Councilman Vasquez asked if most of the amount under budget was due to personnel vacancies. Mr. Wright answered yes, but noted other items, which also contributed. Mr. McDaniel stated that 65-68% of the cost is personnel related. Councilman Vasquez replied that an increase in revenue is a positive.

Mr. Wright continued with the recommended use of the General Fund year-end balance; citing three programs which Council had placed as high priority on recommended use of year end balance. The three programs were the Cultural Affairs Council, Expo Center, and Council on Alcoholism. Council reviewed the nine programs as follows:

$34,000 Cultural Affairs Council

$20,000 Expo Center

$8,310 Council on Alcoholism

$35,000 Gym Floor - Sears Park

$25,000 Gym Floor - South Park

$250,000 Technology

$250,000 Equipment Replacement

$100,000 Traffic/Street Signs

$150,000 Facilities Improvement

$872,310 TOTAL

$76,536 Undesignated Balance

$948,846

Undesignated @ 9-30-97 - $8,532,351

2.1 Months Reserve

Mr. McDaniel asked for Council input on future prioritizing and budgeting for the three high priority items on the recommended use of year end balance list.

Mayor McCaleb stated the first two (Cultural Affairs Council and the Expo Center) are important for the City and the County in continuing our cooperative effort - an effort that contributed to the City not having had to raise taxes this year.

Councilman Vasquez stated the Cultural Affairs Council and Expo Center greatly affects the tourism and should be a priority in the regular budget, but if not, then they should be first priority on the year-end balance use.

Councilman Drennan questioned whether the Council on Alcoholism is state funded or a charitable organization. Mr. McDaniel answered that it is a non-profit/charitable organization with some funding from the State.

The Council voiced concern about funding non-profit charitable organizations and asked that at the next budget session these non-profit organizations be reviewed carefully and clear rationale be established for funding or not funding them.

Mr. Wright went on to review the Water & Sewer Fund revenue and expenditures and capital improvement projects. Mr. Wright addressed the Financial & Investment Policies as noted in the transmittal letter received by the Council, stating there are no changes.

Don Ashmore, auditor for Davis, Kinard & Co., reviewed historical and statistical information on the City, then briefed the Council on the single audit information and report. Mr. Ashmore stated the ˝ cent sales tax has allowed the City to maintain funding while adding programs without raising property taxes.

Mr. Wright stated the City is in compliance with grant requirements on the many grants being utilized. Councilman Vasquez stated we are exercising good government in a lot of areas, and complimented staff for a job well done.

Mr. Ashmore stated that from 1988 to 1998 there has been an 50% increase in volume of activity, but limited staff. He noted three areas needing Council review: 1) the need to increase staffing in the finance department, 2) fleet management software, and 3) utility billing receivables and deposits. Mr. Wright explained that currently in the water utility office an up front connection fee is required with no deposit unless payment history justifies one.

Mayor McCaleb thanked Mr. Ashmore and his firm for a thorough audit.

Mr. Wright thanked his staff, Mr. McDaniel, Mr. Morrison, the internal auditors, and the Council for their support.

Councilman Vasquez moved to approve the Financial Policy, Investment Policy, and other Financial Information presented and to accept the Comprehensive Annual Financial Report (CAFR) for FY 97, as presented by staff. Councilwoman Martinez seconded the motion and the motion carried.

AYES: Councilmen Vasquez and Drennan, Councilwoman Martinez, Councilmen Beckham and Ferguson, Councilwoman Alexander, and Mayor McCaleb.

NAYS: None.

Mr. Wright presented the first quarter financial status and referred to the General Fund Revenue by Category chart, which included property tax collections and sales tax performance - Mr. Wright stated the sales tax is 8.5% above last year's projected figure and 6% above his projection.

Mr. Wright concluded by stating the Capital Improvements Program for 1998 will be provided for Council review, which would include recommendation for a certificate of obligation sale. One of the changes in next year's process will be a more proactive approach to obtain community input.

Mayor McCaleb summarized his assessment of the City's financial status, outlining three important factors:

1. Start with a very well done budget, thoroughly prepared.
2. Revenue line came out higher than projected with recognition going to the citizens who voted for the ˝ cent sales tax and the establishment of a sound economic base.
3. Positive on expenditure side with recognition going to employees who have responsibly used City funds.

The Mayor concluded by stating the people of Abilene can feel good about the financial health of the City, and thanked the Council and City staff.

Appreciation was given to the City's many boards and commissions, the City directors, and Mayor McCaleb for his proactive approach.

There being no further business, the meeting adjourned at 10:45 a.m.

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Jo Moore, City Secretary

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Gary D. McCaleb, Mayor