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HomeMy WebLinkAboutMinutes City Council - 11/01/2005 - WorkshopI HEREBY CERTIFY that the foregoing is a true and correct copy of the minutes of the Workshop Meeting of the Corpus Christi City Council ofNovember 1, 2005, which were approved by the Citv Council on November 15. 2005. WITNESSETH MY HAND AND SEAL on this the 15th day ofNovember, 2005. Armando Chapa City Secretary PRESENI Mayor Henry Garrett May or Pro Tem Jerry (iarcia Council Members: Brent Chesney Rex Kinnison Bill Kelly John E. Marez Jesse Noyola Mark Scott 1BSEN.1 Melody Cooper tali MINUTES (.1 FY OF CORPUS CHRISM, TEXAS Council Workshop November 1, 2005 - 12.15 p.m. City Staff: City Manager George K. Noe City Attorney Mary Kay Fischer City Secretary Armando Chapa Mayor Garrett called the meeting to order in the Sixth Floor Conference Room of City City Secretary Chapa verified that a quorum of the Council was present to conduct the meeting and that notice of the meeting had been properly posted. Mayor Garrett referred to Item C. a presentation and discussion of City Council Fiscal Policies. City Manager Noe said during the last Council Retreat, the Council set as one of its goals to have a discussion on the city's financial policies. Specifically, the Council expressed an :merest in providing additional guidance on budget priorities in the five-year forecast. Currently, Ile said the only detailed element of the financial policies in terms of goals was related to the fund balance. He asked Assistant City Manager Oscar Martinez to present budget and economic information the Council could use as a foundation for their discussion. He would provide an update on the city's five-year financial forecast from the General Fund based on the Council's .recisions in the budget process. In addition, staff would present a number of scenarios for the Council's review in determining what service level adjustments the Council might want to nclude in the plan to accomplish these improvements. i.e_ adding five police officers or five firefighters. Mr. Martinez began the presentation by discussing the economic factors affecting the pity_ He provided statistics on the city's industry composition. He also compared the city's VISA unemployment rate with state and national unemployment rates. In addition, he compared the Texas MSA rankings for unemployment and monthly growth with the city's rankings. Mr. Martinez noted that the Corpus C'hristi MSA (including Aransas, San Patricio, and Nueces ountieswas ranked last (26 out of 26 cities) in their 2005 annual growth, with only 100 jobs. Mr Martinez emphasized that he felt this was a lagging indicator; over time, as the city's ..conomy continues to grow, the annual growth rate will increase over the next 12 to 24 months. Minutes - Council Workshop November 1, 2005 Page 2 Mr Chesney expressed concern that the city's annual job growth was not that significant. He said the community questioned the Council's contention that the city's economy was improving. and this statistic did not help the situation. He also asked why the numbers did not jive with the Economic Development Corporation (EDC)'s numbers, which indicated there was more job growth. City Manager Noe stated the state counted actual jobs created, whereas the ED(' included prospective jobs in their counts. Mr Noyola also expressed concern about this statistic. and asked for job growth statistics over the past two years. Mr. Garcia also expressed r.oncern about the numbers. saying they made the city look bad. Mr Scott pointed out that the city had issued a record number of building permits this 'car_ an indication of the level of economic growth the city had seen recently. Mr. Martinez stated welder and construction jobs were hard to estimate accurately because these workers were °,erx mobile. Mr_ Noe said the city's growth numbers were great, and staff was also frustrated that the state's numbers did not reflect this growth. He said there were other measures of growth the city could use. but this data provided one of the few consistent measures the city could use to compare its performance to other cities across the state. Mr Martinez reviewed the personal income growth rate in the Corpus Christi MSA from ,,)93 to 2003. Ile noted that the growth rate had increased every year over this period, with some cyclical growth. The average growth rate was over 4%. Mr. Scott asked if the city could include a policy statement setting a goal of personal income growth rate of over 4 percent. Mr. Noe replied this was a good goal that would be appropriate for inclusion in the city's economic development policy. Mr. Martinez discussed the five-year forecast scenario development including the ti>llowing key considerations: enhance public safety programs (police and fire); enhanced street programs. and management of property tax rate. Mr. Noe said staff chose these three areas because the Council had discussed them before. but he advised the Council not to feel constrained by these considerations. Mr Martinez provided an update of the five-year financial forecast. He highlighted the estimates on total revenues, estimated loss due to Proposition 6, total net revenues, the adjustment to balance current revenues to current expenditures. and estimated unreserved fund balance. Mr. Martinez reviewed the assumptions used in the five-year forecast revenues. Staff assumed an ad valorem tax increase of four percent, or $450,000; a sales tax increase of 3.5 percent, or $376,000; and a solid waste revenue increase to cover added final landfill debt of $497.600 for June 2007. and $661.500 per year from July 2008 to October 2011. Mr. Martinez briefly covered the assumptions for expenditures as follows: salary increases.25 percent; group insurance 10 percent, fuel & electricity — 10 percent; MIS allocation - 5 percent: solid waste -- 3,500 containers per year, 6 automated trucks in FY 2008, 1 regular truck per year starting in FY 2007, four recycling trucks in FY 2007, 2008, and 2009, add ;7 7 million in debt for landfill costs in FY 2007: and add $2.5 million in debt for landfill costs n FY 2008:; fire lease purchase of 1 pumper truck per year at $375,000 for five years; fire Minutes - Council Workshop November I, 2005 - Page 3 academy assume full staffing; police replace 35 cars at $805,000; police academy — assume full staffing; and ambulance — add one ambulance per year at $160,000 for five years. Council members asked questions about extending the life of the solid waste and recycling truck fleets. Mr. Martinez discussed the progression of the scenarios in the five-year forecast depicting the amounts needed to be adjusted from current expenditures to balance if all property value was captured as follows: no changes; adding Live police officers each year (Scenario 1); adding tine firefighters and five police officers each year (Scenarios 1 and 2); and Scenarios 1 and 2 plus the addition of street repairs (Scenario 3). In addition, Mr. Martinez presented estimates for Scenarios 1. 2 and 3 only capturing new property growth. Finally, he presented ,stimates on the adjustments needed with Scenarios I, 2 and 3 if the property tax rate was educed by $0.01. In response to Mr. Garcia's question, an additional $l million growth in sales tax could and five additional police officers. Mr Martinez also presented a graph on the general fund unreserved fund balance from 99(5 to 2u05. Mr. Noe then discussed the budget/financial policy considerations in the following areas: property tax management; service level management; and fund balance management. Regarding the fund balance, Mr. Noe said the Council had two options: increase the general fund balance from ten percent to 15 percent: and capturing the balance above ten percent threshold for one- time expenditures. He said it was relatively rare to have a fund balance requirement over 10 percent. He said the city's financial advisor Mark Seale thought the second policy was more ;prudent and typical of most cities. Mr. Garcia spoke in favor of capturing the balance over the ten percent threshold for one- time expenditures. Mr. Noe said staff would bring back an item for consideration at a Council meeting reflecting the Council's directives. Mr. Kinnison said he was looking for a financial policies that included the ten percent fund balance and the five additional public safety officers each year. At the same, he was in favor of placing limits on the amount of revenue the city would be accumulating in the future. 1 le said either reducing the tax rate b. $0.01 each year or only capturing new growth would meet !his goal Mr. Kelly asked if five additional fire and police officers was the correct number needed. Mr. Noe replied the Tri -Data study would need to be considered to determine the accurate number. Hie five policeman being presented was an estimate for illustration purposes only. Mr. Scott asked Mr. Noe to provide information on what the numbers should really be. Mr. Noe replied affirmatively, saying the police estimate could be based on the change in the number of service calls per year. Minutes Council Workshop November 1, 2005 -- Page 4 Mr, Chesney liked that the financial policies did not bind future Councils; rather, the policies simply indicated what the Council's intent was in 2005. Mr. Scott and Mr. Noyola both stated that street improvements were also a priority. Mr. Noe replied the city had a huge street maintenance need. The impact on the budget would depend on the choices the Council made Mr. Chesney agreed that this was an important issue, but he agreed with the priorities Mr. Kinnison had set. He said it was difficult to do everything .it once Mr. Kelly asked if the Council should annually set their short-term goals for each budget ear in terms of staffing levels, street maintenance. etc. Mr. Chesney thought this was a valid point the Council might consider. Mr. Garcia spoke in favor of maintaining current staffing levels. He asked staff to provide estimates on what the budget would need to be to keep service levels and add mprovements like adding five public safety officers and street improvements. Mr. Noe replied staff could produce estimates on the level of growth needed to meet these requirements. He said ,taff would draft a proposed resolution on financial policies based on today's discussion, and schedule .1 presentation item on the subject by the first meeting in December. Mr. Marez also agreed with adding public safety officers as a goal, but cautioned that the Fri -Data study also recommended an additional fire station on the south side. There being no further business to come before the Council, Mayor Garrett adjourned the �,'ouncil meeting at 1:44 p.m. on November 1. 2005