BUDGET WORKSESSION

JULY 24, 2002, 8:00 a.m.

 

               CITY COUNCIL OF THE CITY OF ABILENE, TEXAS

  BASEMENT CONFERENCE ROOM

 

          The City Council of the City of Abilene, Texas, met in budget worksession at 8:00 a.m. on July 24, 2002, in the Basement Conference Room of City Hall.  Mayor Grady Barr was present and presiding with Councilmen Norm Archibald, Kris Southward, Anthony Williams, John Hill (arrived at 8:30 a.m.), Jimmy McNeil, and Councilwoman Kay Alexander.  Also present were City Manager Larry D. Gilley, Assistant City Manager Michael Morrison, Director of Finance David M. Wright, Assistant Director of Finance Mindy Whisenhunt, City Attorney Sharon Hicks, City Secretary Jo Moore, and various other members of staff.

 

          Mayor Barr called the meeting to order. 

 

          Councilman Kris Southward gave the invocation.

 

          Mayor Barr reviewed the expected schedule for the budget worksessions, stating the worksession today should be over no later than 12:30 p.m.; then tomorrow’s meeting will begin at 1:00 p.m.  Mayor Barr then turned the meeting over to the City Manager.

 

City Manager Larry Gilley noted the challenge of coming in to the budget this late in the process, and stated his appreciation to staff for their assistance and work on the budget. Mr. Gilley reviewed the following through a PowerPoint presentation:

 

BUDGET OVERVIEW

          General Fund                                                           $60,094,860

          Community Development Block Grant (CDBG)                $ 1,847,130

          HOME                                                                            $     601,000

          Housing Fund                                                           $ 5,028,530

          Health Services Fund                                                         $ 2,864,890

          Seized Funds                                                                   $     192,391

          Water & Sewer Operating Fund                                       $19,486,570

          Abilene Transit System Fund                                        $  3,512,110

          Equipment Maintenance Fund                                        $  3,251,910

Equipment Replacement Fund                                        $  3,707,170

          Central Warehouse Fund                                        $     485,000

          Facilities Improvement Fund                                        $     191,444

          Self-Insurance fund                                                         $ 8,758,910

          Technology Fund                                                                $  1,172,240

          Development Corporation of Abilene                           $  1,802,190

 

GENERAL FUND:

          The FY 03 budget proposes a General Fund increase of $1,118,460 (1.9% over FY 02 revised).  These costs are associated with the following programs and initiatives:

Personnel Issues:

·     3% pay increase across the board for all city employees, effective in January = $768,240

·     Annualized cost of FY 02 pay adjustments = $1,028,630

·     2 airport maintenance workers = $51,130

·     Increased health claims and prescription costs = $500,000

·     Police academy = $390,000

 

Proposed Staffing Changes:

          Deletions

·     3 in Public Works Technical Services

·     1 in Public Works Design Services

·     1 in Senior Citizens

·     4 in the Health Fund for the HIV Clinic

Additions

·     2 Airport maintenance workers

·     2 in the Health Fund through Bioterrorism Grant

·     Formal funding of one emergency management specialist

Net decrease of four positions (to 1,154)

                  

          General Fund Revenue by Category FY 2002-03

          General Fund Revenue 10 Year Comparison

          Property/Sales and Franchise Taxes

General Fund Expenditures by Category FY 2002-2003

General Fund Expenditure by Department FY 2002-2003

Unfunded requests 2002-2003 (An updated total was noted by David Wright, Director of Finance).

 

WATER UTILITY

Water Fund Revenue by Category FY 2002-2003

Water Fund Expenditures by Category FY 2002-2003

 

Proposed General Fund Revisions:

Proposed Revisions

 

Revised

Proposed

Sales

Tax

$231,300

$223,430

Delinquent Taxes

$42,000

$2,000

Misc./Other Sources

$61,420

$26,540

Electric Franchise

($120,000)

($50,000)

TOTAL

$218,320

$201,970

Options

·     Revise Health Insurance Contribution

·     Revisit Unfunded List

·     Lower Tax Rate

·     Less use of Fund Balance

·     Combination of any of the above

·     Other options…

 

Major Areas of Multi-Year Planning

·     Street Maintenance

·     Equipment Replacement

·     Facilities Maintenance

·     Health Insurance

·     Pay & Compensation

 

Mr. Gilley addressed reversing the trend of revenue growing slower than expenditures and recommended a multi-year financial plan be considered.  Mr. Gilley concluded his presentation to Council by reviewing his recommendations in the area of:

 

Staff Undertakings

·        Review all vehicles and equipment and their utilization

·        Begin Program Review Process

·        Do we need the program?

·        Is it running efficiently?

·        Are community needs being met?

·        Is outsourcing an option?

·        Are fees and private funding an option?

 

Council and staff discussion included: 1) supplying Council with a breakdown for the year on sales tax and the ½-cent ad valorem tax for property tax relief; 2) the philosophy on the use of the year-end excess funds; 3) the need for a multi-year plan; 4) what is actually deducted from employees; 5) the benefit and impact of insurance to employees; and 6) reviewing ways each year to reduce the cost of the insurance program.

 

David Wright, Director of Finance, distributed replacement General Fund Summary of Revenues & Expenditures 2002-2003 Budget, Community Development Block Grant (CDBG) Source and Use of 2003 Funds, Transportation Planning Fund Statement of Revenues & Expenditures 2002-2003 Budget, and Water & Sewer Operating Fund Statement of Revenues & Expenditures 2002-2003 Budget.

 

Council and staff discussion included: 1) the preference that pay for performance be reinstated next year; 2) the need to attract, retain, and provide competitive salaries for employees as committed to last year; 3) $256,000 being the additional cost to the FY04 budget for a 3% across the board pay increase; 4) reviewing programs and staffing needs yearly; 5) directing the City Manager to begin next year’s budget process sooner than traditionally has been done; 6) a year round budget process being needed; 7) Abilene’s employees and cost being overall comparable to other cities;  and 8) supplying Council with a five-year increment (beginning with 1980) budget comparison of personnel and population totals.

 

The Health Insurance rates effective January 1, 2002 were reviewed from a handout distributed by the Finance staff.

 

          Council recessed for a break at 9:30 a.m. and reconvened at 9:40 a.m.

 

Mr. Wright reviewed departmental budgets, outlining the organizational structure and highlighting various activities per department.

 

Council and staff discussion included: 1) how Directors determined what to reduce in their departmental budget; 2) options the $420,000 surplus funds could be used for; 3) General fund unfunded requests and the tax increase that would be required to fund all the requests; 4) impact of expected retirements in the Police and Fire departments; 5) devising a 3-year plan to better control budget challenges; 6) items that would have the greatest impact to the self-insurance fund; 7) property values; 8) grant funding and programs; 9) consider funding the civil service pension contribution rate of 1% for the fire department; 10) verifying contribution rates of the fire department and compare to other cities; 11) the impact to the Airport in not funding their unfunded requests; and 12) providing Council with a chart of the 10 comparable cities tax rates.

 

Mayor Barr announced the budget worksession would resume tomorrow, July 25, 2002 at 1:00 p.m., following the 8:30 a.m. regular Council meeting.

 

There being no further business, the meeting was adjourned at 11:00 a.m.

 

 

 

 

_________________________                  ___________________________

Jo Moore                                                    Grady Barr

City Secretary                                                Mayor
BUDGET WORKSESSION

JULY 25, 2002, 1:00 p.m.

 

               CITY COUNCIL OF THE CITY OF ABILENE, TEXAS,

  BASEMENT CONFERENCE ROOM

 

          The City Council of the City of Abilene, Texas, met in budget worksession at 1:00 p.m. on July 25, 2002, in the Basement Conference Room of City Hall.  Mayor Grady Barr was present and presiding with Councilmen Norm Archibald, Kris Southward, Anthony Williams (arrived at 1:10 p.m.), John Hill, Jimmy McNeil, and Councilwoman Kay Alexander.  Also present were City Manager Larry D. Gilley, Assistant City Manager Michael Morrison, Director of Finance David M. Wright, Assistant Director of Finance Mindy Whisenhunt, City Attorney Sharon Hicks, City Secretary Jo Moore, and various other members of staff. 

 

          Mayor Barr called the meeting to order. 

 

          Councilman John Hill gave the invocation.

 

          Mayor Barr stated the information requested at yesterday’s budget worksession has been distributed to Council. 

 

          City Manager Larry Gilley reviewed the information as follows:

1)             Budget Comparison 1980-2003

2)             Tax Rate Comparison for 10 Comparable Cities

3)             Proposed FY 03 General Fund revenue budget and expense budget (provided to clarify reflected changes).

 

          Mr. Gilley addressed Council’s questions from yesterday’s budget worksession concerning increasing the City’s contribution to firefighter’s pensions.  Mr. Gilley stated that although he believes the request has merit it would send a message to employees that one group of employees is being treated differently than others in a year when uniformity is the rule (with a 3% pay raise for all City employees being recommended in the proposed 2003 budget).

 

          Mr. Gilley stated the firefighter pension contribution and TMRS should be reviewed as a package.  Mr. Gilley further stated his recommendations, based on further review of the budget in the past 24 hours, are as follows:

 

          From the Health Care Insurance Program:

          Cut $100,000 from the revised FY02 budget, and

          Cut $100,000 from the FY03 proposed budget for a total of

                $200,000

 

          By combining this $200,000 with the $420,000 in unanticipated revenue for a total of $620,000, the recommended tax rate could be reduced by 2 cents, from 66.05 cents per $100 valuation to 64.05 cents.

 

          Council and staff discussion included: 1) a portion of the tax increase resulting from voter approved bonds; 2) history of employee pay increase and adjustments; and 3) the debt service being reduced next year.

 

          Councilman Southward recommended the following:

a)              Increase the city’s contribution to the firefighter pensions by ½ percent.

b)             Cut a vacant secretary’s position in administration.

c)              Delay hiring three Development Services employees until FY 2004.

d)             Cut additional maintenance worker at the Airport.

 

          Following Council and staff discussion, Councilman Southward withdrew his proposed cuts in Administration and at the Airport.

 

          Further Council and staff discussion included: 1) the need for Council’s involvement in long range financial planning; 2) beginning the FY 04 Budget process sooner than has been done in the past; and 3) looking at services to determine if they should be continued and at what level.

 

          Councilman Southward made a motion to eliminate the hiring of the three development services employees from the proposed budget at a cost savings of  $30,090.

 

The motion died for lack of a second.

 

          Councilman Southward made a motion to increase the City’s contribution to the firefighters pension by ½ percent, effective the first pay period in October 2002.  Councilman Williams seconded the motion.

          AYES: Councilmen Southward and Williams.

          NAYS: Councilmen Archibald, McNeil, Hill, Councilwoman Alexander, and Mayor Barr.

 

          The motion failed.

 

          Council and staff discussed: 1) reviewing firefighters pension and addressing other employee issues next year; 2) reasons employees leave the City’s employment; 3) comparing employee salaries and fringe benefits to the private sector; and 4) the cost to the owner of the average value Abilene home if the proposed tax rate is approved.

 

            Councilman McNeil moved to approve first reading of the Ordinance approving the Revised 2001-2002 Budget and Proposed 2002-2003 Budget as presented by the City Manager, and to approve the first reading of the Ordinance setting the FY 2002-03 Tax Levy at 64.05 cents per $100 valuation.  Councilwoman Alexander seconded the motion and the motion carried.

          AYES: Councilmen Archibald, Southward, Williams, Hill, McNeil, Councilwoman Alexander, and Mayor Barr.

          NAYS: None.

 

 

 

 

          AN ORDINANCE APPROVING REVISED BUDGET FIGURES FOR FISCAL YEAR 2001-2002; APPROVING AND ADOPTING BUDGET FOR THE FISCAL YEAR OCTOBER 1, 2002, THROUGH SEPTEMBER 30, 2003, FOR THE CITY OF ABILENE; APPROPRIATING FUNDS; REPEALING ALL ORDINANCES AND PARTS OF ORDINANCES IN CONFLICT HEREWITH; CALLING A PUBLIC HEARING.

 

 

          AN ORDINANCE OF THE CITY OF ABILENE, TEXAS, APPROVING THE ASSESSMENT ROLL FOR 2002, LEVYING AN AD VALOREM TAX FOR THE CITY OF ABILENE, TEXAS, FOR THE YEAR 2002; PROVIDING FOR THE ASSESSMENT AND COLLECTION THEREOF; REPEALING ALL ORDINANCES AND PARTS OF ORDINANCES IN CONFLICT HEREWITH; CALLING A PUBLIC HEARING; PROVIDING AN EFFECTIVE DATE.

 

          Mr. Wright reviewed the time frame and action needed for the August 22, 2002 second reading, public hearing and vote on the Budget Ordinance and proposed tax levy.

 

          The budget worksession posted for July 26, 2002 will not be held.

 

          There being no further business, the meeting was adjourned at 3:00 p.m.

 

 

 

          _________________________                 ___________________________

          Jo Moore                                                         Grady Barr

          City Secretary                                            Mayor