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HomeMy WebLinkAboutMinutes City Council - 05/02/2000 - RetreatI HEREBY CERTIFY that the foregoing is a true and correct copy of the minutes of the City Council Retreat of the City of Corpus Christi of May 2, 2000, which were approved by the City Council on August 22, 2000. WITNESSETH MY HAND AND SEAL, this 22nd day of August, 2000. Armando Chapa City Secretary SEAL MINUTES CITY OF CORPUS CHRISTI, TEXAS City Council Retreat May 2, 2000 8:33 a.m. PRESENT Mayor Samuel L. Neal Jr. Mayor Pro Tem Dr. Arnold Gonzales Council Members: Javier D. Colmenero Melody Cooper* Henry Garrett Rex A. Kinnison Betty Jean Longoria* John Longoria* Mark Scott City Staff: City Manager David R. Garcia Deputy City Manager George Noe City Attorney James R. Bray Jr. City Secretary Armando Chapa Recording Secretary Rachelle P. Ramon Mayor Neal called the retreat to order in the Watergarden Room of the Corpus Christi Museum of Science and History. City Secretary Chapa verified that the necessary quorum of the Council and the required charter officers were present to conduct the retreat. City Manager Garcia said that during the morning session they would address the city's current operating budget. He said there were a number of issues that occurred during the year which require a modification of the budget, the most significant being Lower -than -budgeted revenues from sales taxes, property taxes, and franchise fees. *Council Member Cooper arrived at 8:37 a.m.; Council Member John Longoria arrived at 8:40 a.m.; and Council Member Betty Jean Longoria arrived at 8:46 a.m. Deputy City Manager Noe gave a computer presentation about the FY99-00 General Fund budget as well as options for amending the budget to compensate for projected shortfalls. Mr. Noe explained that revenues for the current fiscal year are expected to be $125.18 million while expenses are expected to be $127 29 million. Mr. Noe also reviewed revenues and expenditures over the last six fiscal years, noting that expenditures have exceeded revenues for four of those years, which has resulted in a cumulative deficit of $4.29 million. However, in FY97-98 expenditures were lowered by $4.2 million for lease payments and debt service expenditures that were funded by the G.O. Debt Service Fund. If that had not occurred, the actual cumulative deficit would be $8.49 million. Mr. Garcia said that last year staff discussed with the Council the need to reestablish the credibility of the Debt Service Fund. He said if the city continued to take operating expenses out of Minutes - City Council Retreat May 2, 2000 Page 2 the Debt Service Fund, the city would have had to borrow money in order to make its debt payments. Consequently, the decision was made to take the operating expenses out of the operating fund. As a result, this year the Debt Service Fund is stable and the key to that fund is the coverage ratio. With regard to the fund balance of the General Fund, Mr. Noe said the projected amount for FY99-00 is $1.07 million, which includes the unreserved fund balance and the reserved for commitments balance, but not the encumbrances. The amount of the fund balance as a percentage of expenditures for this fiscal year is expected to be 0.84%. Mr. Noe said that for the last five years there has been moderate growth in revenues and expenditures; revenues and expenditures have been out of balance, resulting in the need to draw down the fund balance; and since revenues and expenditures remain out of balance, immediate corrective actions are needed. Mr. Noe also discussed revenue and expenditure variances that occurred in FY98-99, which resulted in an actual beginning balance on August 1, 1999 of $1.65 million, rather than the $4.92 million that had been budgeted. He said the total current year beginning fund balance shortfall is $3.27 million. Mr. Noe said the FY98-99 major expenditure variances had to do with brush collection efforts, Police building chiller replacement, Fire Department insurance payment, and group health insurance. Mr. Garcia and Mr. Noe responded to Council members' questions about those issues. They also discussed charging engineering costs to different departments. Mr. Noe reviewed the actions of the last few months to address the budget shortfall: in January 2000, the five-year financial forecast was prepared and presented to the Council; in February a selective hiring freeze was implemented to build the fund balance; in March and April the FY99-00 revenue and expenditure reestimates were completed; and also in April a "hard" hiring freeze was implemented and staff developed a strategy to address the budget issues. Based on staff's analysis to that point, Mr. Noe said revenues are estimated to be $761,053 lower than budgeted; expenditures are estimated to be $1 19 million more than budgeted, for a total shortfall (current basis) of $1.95 million. Taking into account that shortfall along with the beginning balance shortfall of $3.27 million, it results in a total current -year shortfall of $5.22 million Mr. Noe then discussed the current status of the reestimated, unadjusted FY99-00 budget: beginning balance - $3.19 million; revenues - $125.18 million, total available - $128.36 million; expenditures - $127.29 million; closing balance - $1.07 million. Mr. Garcia said that if the Council did not adopt any of staff's recommended budget adjustments, there would still be a fund balance of about $1 million. However, he said staff feels that is too narrow a margin with the amount of expenditures this city has. A discussion ensued about the city's recent historical practice of using the reserves to balance the budget (in FY88-89 the reserve amount was $12 million). The Deputy City Manager also described major revenue variances for FY99-00 in the following areas: ad valorem taxes, sales taxes, electrical franchise, landfill disposal, Municipal Court fines, administrative cost recovery fee, and FEMA reimbursement. He said the major expenditure variance for the current fiscal year resulted from the following unbudgeted retirement "drag -up" pay amounts: Fire - $2,208,949; Police - $546,818; and other - $321,400, for a total of $3,077,167. Minutes - City Council Retreat May 2, 2000 Page 3 Council members then made several comments and asked questions about those variances, particularly the issue of drag -up pay. Mr. Garcia said that until recently the city did not budget for drag -up pay. He said part of the reason was that historically the city budgeted for 100% of staffing levels while actual staffing levels were usually at 98%. Consequently, those savings in personnel costs were used to pay drag -up costs, which had been about $600,000 to $700,000. However, staff began to more accurately budget for personnel costs at the 98% level and they never identified the resources to make up that difference for the drag -up pay, except for FY97 when it was established as a specific line item. He said that error was the result of inconsistent budgeting policies and unusually higher amounts of drag -up pay. Mayor Neal said that for years the budget has had to absorb the drag -up costs with no tax increase, which is one of the reasons why the reserve has continued to be drawn down. Mr. Noe pointed out that contract amendments in 1998 capped vacation leave drag -up costs for the future, and the Council has the option of introducing additional limits in future negotiations with both unions. Additional discussion ensued. Mr. Noe said the preliminary results from the current actions implemented were: hiring freeze salary savings - $1.6 million (based on actual savings realized and projected savings to be realized through the end of the fiscal year for 142 current vacant positions); cost reductions - $203,426; for total cost reductions of $1,803,426. Mr. Noe then reviewed the five-year forecast and its implications under various scenarios. He said the mid -year action alternatives are: do nothing; implement staff revenue and expenditure recommendations; consider the issuance of certificates of obligation to finance drag -up costs; or identify new revenue items or expenditure reductions to be implemented. Under the second alternative, the revenue recommendations include the implementation of a revised street recovery fee and an increase in the fire hydrant maintenance rate for total revenues of $883,312. Staff s expenditure recommendations include sharing economic development costs with Utilities; utilizing the Self -Insurance Fund balance for loan obligations; eliminating the summer middle school recreation program (at Wynn Seale, Baker and Cullen); and eliminating lifeguards at Corpus Christi and McGee beaches, for total expenditure adjustments of $835,130. Mr. Noe and various staff members then responded to Council members' questions and comments. The next issue to be discussed was a preview of the FY00-01 budget. Mr. Noe said that in preparing that budget, the following assumptions were being made: no increase in the ad valorem tax rate or other major General Fund user fees; current revenues should be equal to or exceed current expenditures; uniform police and fire services are the highest priority; proceed with current plans and policies for the landfill; and adjust the debt service coverage ratio from 63% to 50%. He said that in preparing their target budgets, the departments were instructed to use a balanced budget approach: determine current revenues available, fund scheduled obligations (debt service, lease payments, and internal service allocations), and fund priority costs. Mr. Noe said the departments were required to reduce their net operating budgets by 11.03% from the FY99-00 adopted net operating budget. Preliminary budget reductions have resulted in 154 positions targeted Minutes - City Council Retreat May 2, 2000 Page 4 for a reduction in force, which if approved will affect programs and service levels. In conclusion, Mr. Noe said immediate action is needed to ensure an adequate fund balance for FY99-00; in addition, revenues and expenditures will need to be balanced beginning in FY00-01. He noted that the Council is facing difficult decisions, including the elimination of positions, and he said staff will continue to follow through on the drag -up pay issue. Mayor Neal said he would like the city's outside auditors and bond counsel to provide opinions on the impact of staffs recommendations. Following additional discussion about a reduction in force and accounts payable activities, the Mayor said the Council needs to make some decisions on those recommendations in about two weeks. The Mayor then recessed the retreat for a lunch break. Upon reconvening, Mr. Scott Elliff of Capstone Solutions reviewed the vision statement that the Council members crafted following their retreat last year: "To make Corpus Christi one of the most livable communities in America, to create a vibrant, progressive, clean city that rejoices in its diversity, to keep our citizens safe and secure, and to provide an abundance of economic development opportunities while paying special attention to our unique environment." He also reviewed the ground rules set last year. Through Mr Elliff s facilitation, the Council discussed at length the goals set during the 1999 retreat and categorized them into the following three areas: 1999 Areas of Completion or Significant Progress; 1999 Priority Issues: Continue "As Is"; and 1999 Priority Issues: Continue with Revisions. (Mr. Elliff's report detailing those and other issues is attached to these minutes.) The Council then developed a list of New Priority Issues for 2000 (also attached) under the subheadings of Internal Issues, External Issues, and Long -Range Issues (after the bond issue). Additional discussion ensued. The Council then addressed the schedule of upcoming Council meetings and agreed to cancel the following Council meetings: August 8, August 15, November 28, and December 26. There was a question about the December 5 meeting due to its proximity to the National League of Cities Conference scheduled for December 6-9 in Boston. The next issue to be addressed was the new policy regarding agendas and meeting procedures. City Attorney Bray explained a memo that was sent to the Council from Mr. Garcia, Mr. Chapa and himself regarding the Texas Attorney General's opinion which addressed the common local government practice of having a "public comment" agenda item. Mr. Bray explained the essence of the opinion and discussed staff's recommendations regarding requiring persons to sign up in order to participate during the public comment portion of the meetings and more specifically listing matters to be discussed during the Mayor, Council and City Manager comment portion of the meetings. The Council then further discussed staff's recommendations. There being no further business to come before the Council, Mayor Neal adjourned the retreat at 4:28 p.m. on May 2, 2000. 1�1� 1213 7q y 22O a M r_CE VEC e ITY SECRETA�RY'E \ OFFICE CITY OF CORPUS CHRISTI CITY COUNCIL RETREAT MAY 2, 2000 CORPUS CHRISTI MUSEUM OF SCIENCE AND HISTORY Capstone Solutions (-in, Council Retreat Llav 1. 2000 CITY OF CORPUS CHRISTI CITY COUNCIL RETREAT MAY 2, 2000 The Corpus Christi City Council met in a full-day retreat on May 2, 2000, in the Watergarden Room of the Corpus Christi Museum of Science and History. The purposes of the retreat were to discuss current budgetary issues, review progress on priority issues established in the 1999 retreat, and identify new issues for the next year. During the priorities session, Council members reviewed areas where significant progress had been made since the previous retreat. Each of the priority issues established in the 1999 retreat were reviewed and categorized as (1) those whose current action plans should continue "as is", and (2) those whose current action plans should be revised in some way. Council members then identified additional priority issues to be explored in the next 12 months. Those issues were categorized as (1) internal issues within the primary scope of Council influence; (2) external issues requiring coordination or collaboration with other entities; and (3) longer -range issues to be explored after the November bond election. Council members and staff also discussed the calendar of meetings for the coming year, as well as public and council comment procedures during meetings. Cin Council Retreat L/av 2. 2000 3 1999 AREAS OF COMPLETION OR SIGNIFICANT PROGRESS 4 "Cash for Trash" 4 Reengineering effort begun 4 Environmental Compliance Department established 4 CDBG Funding Assessment 4 Citizen Response System 4 JFK Funding 4 '86 Bond Issue progress 4 Annexation 4 Airport expansion begun 4 Dam improvements 4 Getting the Mary Rhodes pipeline working again 4 Brush collection improvements 4 Packery Channel 4 Lobby ordinance 1999 PRIORITY ISSUES: CONTINUE "AS IS" • Improve Basic Services: Trash, Brush, Debris + Improve Basic Services: Street and Road Maintenance • Improve Basic Services: Animal Control ❖ Improve Basic Services: Quality Water ❖ Improve Basic Services: Lighting ❖ Stormwater / Drainage + Northside Plan ❖ Residential / Community Park Development ❖ Capital Improvements / Bond Issue ❖ Airport Improvements ❖ Street Assessment ••• Golf Course • Youth Crime Initiatives :• Environmental Compliance • llevelopment tenter ❖ Community -Oriented Policing City Council Retreat May 2. 2000 -1 1999 PRIORITY ISSUES: CONTINUE WITH REVISIONS ❖ Privatize Services • Explore additional opportunities ❖ Crime Control District Initiatives • Address budget concerns and the ability to fund the program for the long-term Bayfront Development Plan • Continue to vigorously pursue development in the Bayfront Arts & Sciences Park area • Continue coordination / collaboration among entities in the area ❖ Improve Basic Services: Park Maintenance • Prepare / repair facilities • Evaluate current facilities for improvement priorities • Identify undeveloped park land for possible sale • Consider outsourcing neighborhood park maintenance to Neighborhood Associations, with assurances of equity • Explore establishment of Adopt -A -Park program ❖ Animal Control • Ensure adequate staff and equipment • Establish a "Cooperative Veterinarian" program ❖ Economic Development • Participate with local and regional economic development initiatives (not necessarily with funding) d• Bayfront Convention Center Expansion • Modify plans or identify alternative funding sources as a result of study City Courted Retreat May 2, 2000 5 NEW PRIORITY ISSUES FOR 2000 Internal Issues 4• Charter Revision • Tax Cap • Term Limits • Utility Transfers • Review previous Charter Commission's recommendations ❖ Improve working relationships with other taxing entities • Invite to quarterly meetings • "Tax Summit" • Explore opportunities to share in tobacco settlement dollars ❖ Landscaping / improvement of entryway from Corpus Christi International Airport • Code enforcement ❖ Address long-term budgetary issues • Reach agreement on a plan / philosophy • Acquire software, ensure monthly requisitions and timely CAFR ❖ Legislative Issues ❖ Museum of Science and History Long -Range Plan 4• Tax Increment Financing District (Packery Channel) ❖ Long-range strategic water planning capacity External Issues • Metrocom ❖ Crosstown Expressway ❖ Spaceport ❖ Medical Campus Long-range (after the Bond Issue) 4• Downtown development • Median improvement / landscaping • Plan for development of west end of downtown (First United Methodist ThW_U_ to Memorial C v,li J cuul ❖ Hospitality industry development — Central City 4• CC Beach Development • Marina Development •: Development of island, post-Packery Channel • Foreign Trade Zone expansion ❖ Community -wide visioning process