HomeMy WebLinkAboutMIN MAY 15 2001 M I N U T E S - CITY OF BEAUMONT
Lulu L. Smith DAVID W. MOORE, MAYOR Guy N. Goodson, Mayor Pro Tern
Andrew P. Cokinos 2001 BUDGET SUMMIT Becky Ames
Bobbie J. Patterson May 15, 2001 Audwin Samuel
Lane Nichols, City Attorney Stephen J. Bonczek, City Manager Barbara Liming, City Clerk
The City Council of the City of Beaumont, Texas, met in a special Budget Summit with
administration and staff on May 15, 2001, at the Tyrrell Park Garden Center, Beaumont, Texas,
at 11:30 a.m.
Lunch was served at 11:30 a.m., and the Budget Summit opened at 12:20 p.m. Councilmembers
present were: Mayor Pro Tern Goodson, Councilmembers Smith, Cokinos, Ames, Samuel, and
Patterson. Mayor Moore was absent(attending an out of town mandated training session for his
employer,Xerox Corporation). Present were staff members; Stephen J. Bonczek, City Manager;
Lane Nichols, City Attorney; Barbara Liming, City Clerk; Kyle Hayes, Executive Assistant to the
City Manager/Economic Development Director; Beverly Hodges, Finance Officer;Andrea Deaton,
Budget Officer; Marie Dodson, Human Resources Director; Tom Warner, Public Works Director,
Ingrid Holmes, Public Health Director; Tom Scofield, Police Chief; Micky Bertrand, Fire Chief,
Maurine Gray, Library Director; and John Labrie, Clean Community Director. Present to answer
inquiries were Stormwater Utility Study consultants: Shaun Pigott; Kim Carroll with Carroll and
Blackmon; and Mike Collins with U. R. S. Also, present were approximately 30 citizens.
The City Manager and City staff presented the City's current fiscal situation, projected financial
situation, and the City's long-term outlook as shown in Exhibit "A." Facts disclosed during the
presentation included:
• Financial impact of reduced sales tax and EMS revenue
• Flat Solid Waste and General Fund revenues
• Projected decline in General Fund
• Good news was growth in issuance of building permits, attraction of new businesses,
industrial fire training potential, and increased property values
• Bad news issues were a short fall in sales tax revenues, reduced EMS collections,
higher natural gas prices, and increases in health care costs and liability claims
• Needed funding for General Obligation Debt
• Public Works projects needing finalization
• Presentation of final report and conclusion of the Stormwater Management Advisory
Committee regarding establishing a utility fee.
The Summit recessed at 1:36 p.m.
After resuming at 1:56 p.m., the 2002 budget was presented as shown in Exhibit "B."
Presentation, conclusions and discussion included
•The budget preparation process,the public hearing date and approval by September27,
2001.
• Role of the Financial Improvement Team
• Role of the Financial Improvement Team
• Strategic financial Issues
• Establishing a Stormwater Utility Fund without specifically identifying a funding means
• Improving community understand of capital projects
• Review the street user fee
• Consideration of creating a stormwater fee based on property size rather than on
impervious surfaces
• Council preference to increasing property tax by $.02 rather than shifting $.02 to Debt
Service
• Industrial District Contract negotiations based on assessed valuations versus
establishing a base with an annual escalation
• Increase Water Fund contribution by $300,000 into General Fund
• Implementation of Phase II of compensation/classification study in July, 2002
• Monitor State Transit funding
•Add $700,000 to Capital Improvement Bond Issue for Delaware Street Extension Project
• Defer City Hall communication system
• City vehicle impound facility to be presented at future Council work session
• Review by legal staff or original jurisdiction on gas utilities
• Consensus to consider a property tax increase and reduction of expenses
There bei o other business, the Budget Summit adjourned at 4:02 p.m.
Guy N. oodson, lYayor Pro Tem
Barbara Liming, City Clerk
Minutes May 15,2001 Page 2
2001 BUDGET SUMMIT
TUESDAY, MAY 15, 2001
11:30 A.M. - 5:00 P.M.
THE GARDEN CENTER at TYRRELL PARK
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CITY COUNCIL ADMINISTRATION
David W. Moore, Mayor Stephen J. Bonczek, City Manager
Guy Goodson, Mayor Pro-Tem Lane Nichols, City Attorney
Becky Ames, At Large Barbara Liming, City Clerk
Andrew P. Cokinos, At Large Kyle Hayes, Exec. Assistant to the City
Dr. Lulu Smith, Ward I Manager/Economic Development Director
Audwin Samuel, Ward III Marie Dodson, Human Resources Director
Bobbie J. Patterson, Ward IV Kirby Richard, Central Services Director
Beverly Hodges, Finance Officer
Tom Scofield, Police Chief
Michel Bertrand, Fire Chief
Ingrid Holmes, Public Health Director
Tom Warner, Public Works Director
Maurine Gray, Library Director
John Labrie, Clean Community Director
FACILITATOR
Stephen J. Bonczek
City Manager
EXHIBIT "A"
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City of Beaumont, Texas
Mission
WORKING TOGETHER FOR A BETTER BEAUMONT
Providing our community with quality service
through courteous and dedicated employees
Guiding Principles
Integrity Doing the right thing all of the time
Communication Sharing information with each other and those we serve
Accountability Being responsible for our actions
Respect Treating each other with dignity and valuing our diversity
Empowerment Having the ability and commitment to act in the public interest
"Creating value in public service"
2001 BUDGET SUMMIT
MISSION
This meeting is planned to provide a forum for the Mayor/City Council and Administration
to achieve consensus on major financial/budgetary policy issues facing the community in
FY2002 and then for Council to provide direction to the Administration.
ROLE OF MAYOR AND COUNCIL
The Mayor and Council will discuss issues of concern and assist the facilitator in bringing the
discussion to an agreed upon closure. This closure will provide the Administration with
operational direction in preparation of the FY2002 budget.
ROLE OF ADMINISTRATION
The City Manager and Department Directors are present for the purpose of providing the
Mayor and Council with information when required,to clarify discussions and to participate
in the dialogue as appropriate.
ROLE OF FACILITATOR
The City Manager as facilitator will provide a brief introduction on the issue resolution
process,then direct discussion along the lines of the agenda stimulating participation from the
Mayor,members of Council and the Administration while assisting in bringing discussion to
closure.
2001 Budget Summit
Tuesday,May 15,2001
11:30am-5pm
Location: The Garden Center @ Tyrrell Park
Facilitator: Stephen J. Bonczek
Purpose
• To discuss strategic financial issues facing the City
• To identify alternative courses of action for addressing the issues;and
• To provide direction for the development of the 2002 City Budget
Introduction
• Purpose of the Summit
• Mayor/Council and Administration Expectations
The City's Current Fiscal Situation
• Financial Report and Analysis Seven Months(October 2000-April 2001)
• Comparative Financial Analysis
• General Fund
• Sales Tax
• EMS revenues
• Water Utilities Fund
• Solid Waste Fund
• Debt Service Fund
The City's Projected Financial Situation: Year End 2001
• Good News/Bad News 2000-2001
• Alternative Courses of Action to Enhance Revenues and/or Reduce Expenditures
• Financial and Budgetary Challenges
• Ideas That Save Costs and Increase Revenue/Service Quality
• Feasibility of Implementation-Discussion
The City's Long-Term Outlook
• Ten Year Revenue and Expenditure Projections(2001-2010)
• Capital Improvement Program
BREAK
Dress: Casual Food/Refreshments: To be provided
Participants: Mayor/Council, City Manager and Department Directors
The City's 2002 Budget
• The Budget Development Process
• The Timetable for Budget Development
• The Role of the Financial Improvement Team(FIT)
issues
Strategic Action Plan
•
• Storm Water Utility
• Restructure Street User Fee
• Property Tax
• Shift 2 cents from General Fund to Debt Service
• Appraised Values
• Industrial District Contracts
• Enterprise Funds General Fund Contnbution/Transl er
• Phase II Compensation/Classification Study
• Reduction in State Transit Funding
• Delaware Street Extension
• Upgrade of City Hall Communication System
• Creation of City Vehicle Impound Facility
• Use of Fund Balance
• Advise/Discussion on the Budget's General Direction
• Austerity Plan
•
Property Tax
• Stormwater Utility
Dress: Casual Food/Refreshments: To be provided
Participants: Mayor/Council, City Manager and Department Directors
M O N T H L Y
Finance Department
R E P O R T
April 2001
Accounting Delinquent notices for April water
INSIDE
The financial report for the month billing increased to 7,217 notices
Accounting .... .... ........ .. .. ... . t of April is submitted with this mailed. The number of phone calls
Budget/Grant Administration......... .. 1 fielded by the customer service
... I
Cash Management .. . ....... ... . .. report. Audit adjustments have
employees is down from March at
Monthly Financial Re ort ... ... ...... . I been recorded and begmmg fund
p 7,456. We continue to encourage
balances reflect audit balances. the use of direct debit which
Other comments appear under continues to grow and has
"Monthly Financial Report." increased this mom for a total of
Budget/Grant 3'104 participants.
Administration Monthly Financial
The Budget Summit has been Report
rescheduled for May 15, 2001.
The Capital Improvement Program The Monthly Financial Report for
will be presented in addition to the month ended April 30,2001, is
budget issues and a general submitted along with highlights
financial update. An agenda has where applicable. It is the seventh
been circulated and position papers month of the fiscal period and
developed to provide a basis for beginning balances have been
discussion on the budget issues adjusted enadjusted adjusted to reflect to FY00 year-
that have been identified. audit adjustments. Preliminary
projections have been established
and are reviewed and updated on a
Cash Management monthly basis.
The Small Business Revolving
Loan Fund Committee did not GENERAL FUND
meet as there was no activity Sales Tax revenues continue to lag
during the month. The balance of budget estimates. At the current
available funds is$486,372. pace Sales Tax revenues will fall
short of budget by approximately
EMS collections for the month of $1.4M at year end.
April were$121,595 which
Finance Department includes collection agency Most expenditures appear to be on
City of Beaumont remittances. This is up from March budget.
but remains below the monthly
Beverly Hodges, Finance Officer target of$145,000. As of the end HOTEL OCCUPANCY TAX
of April, collections to date are FUND
Kandy Daniel, Treasurer below estimates by$236,549. The With the receipt of several back
Andrea Deaton, Budget Officer
Paula Labrie, Controller total number of billings for the payments from area hotels
month were 803, an increase from revenues have rebounded and are
the previous month. I oroiected at budget through the
■AprB 2001
Finance Department
end of the fiscal year.
STREETS AND DRAINAGE
IMPROVEMENTS
Due to an increase in the Neches
River Hike and Bdce Trail project
budget the"Required Future
Needs"of this fund are projected
at$7.7M to complete all ongoing
prey
WATER CAPITAL
IMPROVEMENTS
One project budget has been
amended. The Prison Sewer Force
Main budget increased by
$370,000.
CASH AND INVESTMENTS
Cash and investments total
$68.4M.This compares to $44.8M
as of the same period for fiscal
year 2000.Investment revenue
earned year-to-date totals
$2,296,008 compared to
$1,405,153 for fiscal year 2000.
The year-to-date average yield on
sold or maturing investments for
fiscal year 2001 is 5.88%
compared to 2000's average yield
of 5.27%. The City's current
investment portfolio is providing
an average yield of 5.35%with an
average maturity of 95 days at
April 30,2001.
Ogencrat jund O
CITY OF BEAUMONT
GENERAL FUND
BALANCE SHEET
April 30,2001
AVAILABLE RESOURCES CLAIMS ON AVAILABLE RESOURCES
Assets Liabilities
Cash $ 16,409,184 Accounts Payable $ 13,583
Delinquent Taxes Receivable(Net) 2,088,645 Accrued Wages Payable 1,974,430
Accounts Receivable-Other -- Clearing Accounts 313,626
Inventories 32,941 Deferred Property Taxes 2,029,634
Deferred Revenue 123,881
Deposits 24,528
4,479,682
Fund Balance
Reserved for Inventories 32,941
Reserved for Contingencies 1,500,000
Unreserved 12,518,147
14,051,088
TOTAL AVAILABLE RESOURCES $ 18,530,770 TOTAL CLAIMS ON RESOURCES $ 18,530,770
2
CITY OF BEAUMONT
GENERALFUND
STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE
For the seven months ended April 30,2001
Favorable/
FYE 2001 (Unfavorable)
Current Actual Projected at Amended Year-End to
Month Year To Date 04130101 Budget Budget
REVENUES
Sales and Use Tax $ 1,898,538 $ 13,357,997 $ 26,235,000 $ 27,615,000 $ (1,380,000)
Property Taxes 142,836 11,976,804 12,500,000 12,500,000 -
Industrial Tax Payments 3,750 11,261,749 11,301,100 11,251,100 50,000
Gross Receipts Tax 813,315 1,660,793 6,154,600 6,054,600 100,000
Utlky Fund In Lieu 354,167 2,479,167 4,250,000 4,250,000 -
ChaW for Services 191,585 1,053,644 2,000,500 2,300,500 (300,000)
Fines and Forfeits 132,268 1,073,864 1,837,000 1,837,000 -
Licertses and Permits 90,144 851,564 1,300,000 858,900 441,100
Culture and Recreation 80,239 460,383 750,000 760,200 (10,200)
Irlberest Earnings 69,459 405,403 650.000 600,000 50,000
Intergovernmental Revenue - 822 1,000 500 500
Miscellaneous Revenue 25,991 406,902 802,400 802,400 -
TOTAL REVENUES 3,802,292 44,989,092 67,781,600 68,830,200 (1,048,600)
EXPENDITURES
Police 1,471,254 10,771,142 18,877,400 18,997,400 120,000
Fire 1,063,736 8,026,782 13,964,000 13,964,000 -
Public Works 717,941 4,986,246 8,946,500 8,946,500 -
Central Services 520,535 3,577,951 6,257,000 6,207,000 (50,000)
Public Health 376,036 2,618,378 4,593,200 4,593,200 -
Parks and Recreation 288,217 1,951,251 3,617,400 3,647,400 30,000
Library 139,028 1,027,786 1,888,100 1,908,100 20,000
General Government 43,761 618,263 1,788,400 1,788,400 -
Finance 101,751 704,166 1,219,600 1,219,600 -
City Clerk 90,639 621,729 1,148,400 1,148,400 -
Economic Development 51,844 475,706 764,900 764,900 -
Human Resources 47,090 378,306 649,800 649,800 -
Legal 46,382 317,238 557,700 587,700 30,000
Special Purpose 582,092 3,879,842 6,770,500 6,770,500 -
TOTAL EXPENDITURES 5,560,306 39,952,788 71,042,900 71,192,900 150,000
EXCESS REVENUES OVER
(UNDER)EXPENDITURES (1,758,014) 5,036,304 (3,261,300) (2,362,700) (898,600)
FUND BALANCE
Beginning Fund Balance 15,809,102 9,014,784 9,014,784 8,695,922 318,862
Ending Fund Balance $ 14,051,088 $ 14,051,088 $ 5,753,484 $ 6,333,222 $ (579,738)
3
CITY OF BEAUMONT
GENERAL FUND
REVENUE SUMMARY
For the seven months ended April 30,2001
FY 2001 FY 2001
FY 2001 Estimate at Actual at Over/(Under)
REVENUES Budget 04/30/01 04/30/01 Estimate
Sales and use tax 27,615,000 13,971,853 13,357,997 (613,856)
Property taxes 12,500,000 12,006,151 11,976,804 (29,347)
Industrial payments 11,251,100 11,251,100 11,261,749 10,649
Gross receipts tax 6,054,600 1,472,204 1,660,793 188,589
Utility fund in lieu 4,250,000 2,478,175 2,479,167 992
Fines and forfeits 1,837,000 1,047,275 1,073,864 26,589
Charges for services 2,300,500 1,216,332 1,053,644 (162,688)
Culture&Recreational 760,200 479,560 460,382 (19,178)
Licenses and permits 858,900 428,165 851,566 423,401
Interest earnings 600,000 353,400 405,403 52,003
Intergovernmental rev. 500 47 822 775
Miscellaneous revenue 802,400 489,769 406,904 (82,865)
TOTAL REVENUES 68,830,200 45194.031 44,989,095 (204,936)
MONTHLY CASH FLOW
Beginning Ending
Cash Balance Receipts Disbursements Cash Balance
October 9,163,169 3,217,423 5,089,252 7,291,340
November 7,291,340 4,962,254 5,786,410 6,467,184
December 6,467,184 16,741,079 17,823,873 5,384,390
January 5,3$4,390 18,538,104 5,976,782 17,945,711
February 17,945,711 7,844,945 5,943,725 19,846,931
March 19,646,931 3,837,321 5,281,097 18,403,155
A ril 18,403,155 3,615,884 5,609,854 16,409,185.
iVl�y 116,41 �')A8 - 46
August 13,08 ,�� �,(3143,�195 S��12,�'s �1.1�,1�
80,449,126 $1,072,618
Estimated
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CITY OF BEAUMONT
WATER FUND
BALANCE SHEET
April 30,2001 ,
AVAILABLE RESOURCES CLAIMS ON AVAILABLE RESOURCES
Assets Liabilities
Cash $ 5,295,110 Escheat Clearing $ 11,976
Utilities Receivable(Net) 1,649,300 Accounts Payable 30,136
Other Receivables -- Accrued Wages Payable 224,297
Inventories 870,721 Customer Deposits 749,070
1,015,479
Fund Balance
Reserve, Receivables 1,649,300
Reserve, Inventories 870,721
Unreserved 4,279,631
6,799,652
TOTAL AVAILABLE RESOURCES $ 7.815.131 TOTAL CLAIMS ON RESOURCES $ 7.815.131
s
6
CITY OF BEAUMONT
WATER FUND
STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND BALANCE
For the seven months ended April 30,2001
Favorable/
FYE 2001 (Unfavorable)
Current Actual Projected at Year-End to
Month_ Year To Date 04/30/2001 Budget Budget
REVENUES
Residential Water $ 759,896 5,763,552 10,800,000 11,200,000 (400,000)
Residential Sewer 534,323 3,915,543 6,975,000 7,210,000 (235,000)
Major Accounts 399,667 3,380,773 6,600,000 5,290,000 1,310,000
Service Charges 93,660 641,794 1,080,000 660,000 420,000
Interest Earnings 106,371 858,269 1,200,000 150,000 1,050,000
Miscellaneous Revenue 900 22,317 30,000 30,000 -
TOTAL REVENUES 1,894,817 14,582,248 26,685,000 24,540,000 2,145,000
EXPENSE CATEGORY
Operating
Sewer Maintenance 213,705 1,575,921 2,556,700 2,353,700 (203,000)
Production 193,808 1,322,471 2,227,400 2,152,400 (75,000)
Distribution 198,729 1,479,226 2,452,400 2,332,400 (120,000)
Reclamation 124,032 871,862 1,522,600 1,592,600 70,000
Customer Service 80,511 565,891 991,100 991,100 -
Administration 67,760 352,042 701,700 827,700 126,000
Non-Operating
Debt Service -- 2,325,955 6,501,400 6,501,400 -
Payments in Lieu of Taxes 304,167 2,129,167 3,650,000 3,650,000 --
Other 169,692 1,317,410 4,633,100 4,633,100 --
TOTAL EXPENSES 1,352,404 11,939,945 25,236,400 25,034,400 (202,000)
EXCESS(DEFICIT)REVENUES
OVER EXPENSES 542,413 2,642,303 1,448,600 (494,400) 1,943,000
FUND BALANCE
Beginning Fund Balance 6,257,239 4,157,349 4,157,349 4,389,212 231,863
Ending Fund Balance $ 6.799.652 6,799.652 5.605,949 3.894.812 1,711.137
Note: Major Accounts consist of all customers in a given month with total Water and Sewer charges over$2,500.
7
CITY OF BEAUMONT
SOLID WASTE FUND
BALANCE SHEET
April 30,2001
AVAILABLE RESOURCES CLAIMS ON AVAILABLE RESOURCES
Assets Liabilities
Cash $ 3,852,154 Accounts Payable $ 50,667
Utilities Receivable(Net) 602,371 State Disposal Fees Payable 75,272
Other Receivables 221,709 Accrued Wages Payable 94,898
220,837
Fund Balance
Reserve, Receivables 824,080
Unreserved 3,631,317
4,455,397
TOTAL AVAILABLE RESOURCES $ 4.676.234 TOTAL CLAIMS ON RESOURCES $ 4.676.234
8
CITY OF BEAUMONT
SOLID WASTE FUND
STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND BALANCE
For the seven months ended April 30,2001
Favorable/
(Unfavorable)
FYE 2001 Year-End
Current Actual Projected at Projection to
_ Month _ Year To Date_ 04/30/2001 _Budget Budget
REVENUES
Residential Collections $ 381,744 2,676,468 4,591,000 4,635,000 (44,000)
Landfill Fees 200,553 686,355 1,161,000 1,000,000 161,000
Interest Earnings 14,312 123,586 176,000 120,000 56,000
Clean Community Fees 23,909 166,205 276,000 264,000 12,000
Recycling 6,198 33,239 50,000 50,000 --
Miscellaneous Revenue - 354,607 357,000 10,000 347,000
TOTAL REVENUES 626,716 4,040,460 _ 6,611,000 6,079,000 532,000
EXPENSE CATEGORY
Operating
Landfill Operations 64,811 510,144 2,230,400 2,197,400 (33,000)
Yard Waste Collections 95,754 744,166 1,311,100 1,311,100 -
Residential 83,818 796,793 1,250,400 1,250,400 --
Recycling 19,779 141,237 284,900 284,900 --
Neighborhood Services 36,217 297,888 581,000 581,000 --
Administration 29,847 203,498 383,400 383,400 --
Non-Operating
Debt Service - 506,942 511,000 596,000 85,000
Transfers to Other Funds 37,300 261,100 447,600 447,600 -
Other 50,000 392,898 650,700 635,600 15,100)
TOTAL EXPENSES 417,526 3,854,666 7,650,500 7,687,400 36,900
EXCESS(DEFICIT)REVENUES
OVER EXPENSES 209,190 185,794 (1,039,500) (1,608,400) 568,900
FUND BALANCE
Beginning Fund Balance 4,246,207 4,269,603 _ 4,269,603 3,972,983 296,620
Ending Fund Balance $ 4.455.397_ 4.455.397 3.230.103 2.364.583_ 865.520
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CITY OF BEAUMONT
HOTEL OCCUPANCY TAX FUND
BALANCE SHEET
April 30,2001
AVAILABLE RESOURCES CLAIMS ON AVAILABLE RESOURCES
Assets Liabilities
Cash $ 362,114 Accounts Payable $ -_
Accounts Receivable 4,740 Accrued Wages Payable 15,359
15,359
Fund Balance, Unreserved 351,495
TOTAL AVAILABLE RESOURCES $ 366,854 TOTAL CLAIMS ON RESOURCES $ 366,854
}
12
CITY OF BEAUMONT
HOTEL OCCUPANCY TAX FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
For the seven months ended April 30,2001
Favorable/
(Unfavorable)
FYE 2001 Year-End
Current Actual Projected at Projection to
Month Year To Date 04/30/01 `Budget _ Budget
REVENUES
Hotel/Motel Tax $ 375,413 1,054,648 1,650,000 1,650,000 --
Interest Earnings 489 6,082 8,000 5,000 3,000
Miscellaneous Revenue 41 2,530 3,000 3,000
TOTAL REVENUES 375,943 1,063,260 1,661,000 1,658,000 3,000
EXPENDITURE CATEGORY
Convention and Visitors Bureau 51,454 376,526 835,400 835,400 --
Convention Facilities 23,821 267,367 528,700 528,700 --
Designated Programs -- 183,000 330,000 330,000 --
TOTAL EXPENDITURES 75,275 826,893 1,694,100 1,694,100 --
EXCESS REVENUES OVER
(UNDER)EXPENDITURES 300,668 236,367 (33,100) (36,100) 3,000
FUND BALANCE
Beginning Fund Balance _ 50,827 115,128 115,128 36,166 78,962
Ending Fund Balance $ 351,495 351,495 82,028 66 81,962
13
CITY OF BEAUMONT
STREET MAINTENANCE FUND
BALANCE SHEET
April 30,2001
AVAILABLE RESOURCES CLAIMS ON AVAILABLE RESOURCES
Assets Liabilities
Cash $ 1,960,122 Accounts Payable $ --
Utilities Receivable(Net) 177,802
Fund Balance
Reserved for Encumbrances 582,259
Reserved for Receivables 177,802
Unreserved 1,377,863
2,137,924
TOTAL AVAILABLE RESOURCES $ 2,137,924 TOTAL CLAIMS ON RESOURCES $ 2,137,924
14
CITY OF BEAUMONT
STREET MAINTENANCE FUND
STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE
For the seven months ended April 30,2001
Favorable/
(Unfavorable)
FYE 2001 Year-End
Current Actual Projected at Projection to
Month Year To Date _0.4/30/01 Budget Budget
REVENUES
Charges for Services $ 120,511 845,453 1,445,000 1,470,000 (25,000)
Interest Earnings 7,365 48,104 80,000 30,000 _ 50,000
TOTAL REVENUES 127,876 893,557 1,525,000 1,500,000 25,000
EXPENDITURE CATEGORY
Street Rehabilitation -- 30,508 2,000,000 2,760,000 760,000
TOTAL EXPENDITURES — 30,508 2,000,000 2,760,000 760,000
EXCESS REVENUES OVER
(UNDER)EXPENDITURES 127,876 863,049 (475,000) (1,260,000) 785,000
FUND BALANCE
Beginning Fund Balance 2,010,048 1,274,875 1,274,875 1,364,463 (89,588)
Ending Fund Balance $ 2.137.924 2.137.924 799.875 104.463 X95.412
Note:Total expenditures include actual outstanding purchase orders and future purchase orders necessary for
completion of projects. Actual purchase orders as of April 30, 2001 were$582,259.
15
CITY OF BEAUMONT
MUNICIPAL TRANSIT FUND
BALANCE SHEET "
April 30,2001
AVAILABLE RESOURCES CLAIMS ON AVAILABLE RESOURCES
Assets Liabilities
Cash $ -- Accounts Payable $
Due from Other Governments 1,035,123 Due to Other Funds 752,312
752,312
Fund Balance
Fund Balance,Unreserved 96,042
Equity in Bmt Municipal Transit Co. 186,769
Reserved for Encumbrances --
282,811
TOTAL AVAILABLE RESOURCES $ 1,035,123 TOTAL CLAIMS ON RESOURCES $ 1,035,123
16
CITY OF BEAUMONT
MUNICIPAL TRANSIT FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
For the seven months ended April 30,2001
Favorable/
(Unfavorable)
FYE 2001 Year-End
Current Actual Projected at Projection to
Month Year To Date 04130/01 Budget Budget
REVENUES
Service Charges $ 44,879 343,378 550,000 550,000
Intergovemmental Revenue 108,603 1,292,868 1,925,500 2,228,000 (302,500)
Interest - -- 5,000 5,000
Miscellaneous Revenue 2,550 14,500 30,000 30,000
Transfer from General Fund 85,000 420,000 845,000 600,000 245,000
TOTAL REVENUES 241,032 2,070,746 3,355,500 3,413,000 (57,500)
EXPENDITURE CATEGORY
Contract Services 264,635 1,837,620 2,900,000 2,900,000
Capital Improvements -- 35,167 236,000 500,000 264,000
TOTAL EXPENDITURES 264,635 1,872,787 3,136,000 3,400,000 264,000
EXCESS(DEFICIT)REVENUES
OVER EXPENDITURES (23,603) 197,959 219,500 13,000 206,500
FUND BALANCE
Beginning Fund Balance 306,414 84,852 84,852 167,903 (83,051)
Ending Fund Balance 282,811 282,811 304,352 180,903 123,449
17
'��sr
� ♦ �
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r
OJnternal Service funds O
CITY OF BEAUMONT
CAPITAL RESERVE FUND
BALANCE SHEET
April 30,2001
AVAILABLE RESOURCES CLAIMS ON AVAILABLE RESOURCES
Assets Liabilities
Cash $ 767,159 Accounts Payable $ 478
478
Fund Balance, Unreserved 766,681
TOTAL AVAILABLE RESOURCES $ 767.159_ TOTAL CLAIMS ON RESOURCES $----L67 159
STATEMENT OF CASH FLOW
For the seven months ended April 30,2001
Current
Month Year To Date
Cash Flow from Operating Activities
Cash Received from Charges for Services $ 171,725 1,204,210
Cash Paid to Suppliers (681) (248,377)
171,044 955,833
Cash Flow from Capital and Related Financing Activities
Proceeds from Issuing Debt -- --
Principal Retirement and Interest Charges (167,310) (339,370)
Acquisition of Capital Assets (21,241) (1,501,283)
(188,551) (1,840,653)
Cash Flow from Investing Activities
Interest Earnings 3,761 51,974
Net Cash Flow (13,746) (832,846)
CASH BALANCE
Beginning Cash Balance 780,905 1,600,005
Ending Cash Balance $----L67.159 767.159
20
CITY OF BEAUMONT
CAPITAL RESERVE FUND
STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND BALANCE
For the seven months ended April 30,2001
Favorable/
(Unfavorable)
FYE 2001 Year-End
Current Actual Projected at Projection to
Month Year To Date 04/30/2001 Budget Budget
REVENUES
Charges for Services $ 125,183 876,283 1,502,200 1,521,100 (18,900)
Interest Earnings 3,761 47,449 70,000 70,000 --
Transfers from Other Funds 46,542 325,792 558,500 558,500 -
Proceeds from Capital Leases — — — -- _-
Miscellaneous Revenue — 2,135 20,000 40,000 (20,000)
TOTAL REVENUES 175,486 _1,251,659 2,150,700 2,189,600 (38,900)
EXPENSE CATEGORY
Capital Outlay-Equipment 21,241 1,501,761 1,772,300 1,772,300 --
Capital Outlay-Critical Bldg 681 31,627 228,000 -- (228,000)
Debt Service 167,310 339,370 584,600 584,600 --
TOTAL EXPENSES 189,232 1,872,758 2,584,900 2,356,900 (228,000)
EXCESS(DEFICIT)REVENUES
OVER EXPENSES (13,746) (621,099) (434,200) (167,300) (266,900)
FUND BALANCE
Beginning Fund Balance 780,427 _ 1,387,780 _ 1,387,780 1,278,853 _ 1089927
Ending Fund Balance $ 766.681 766.681 953.580 1.111.553 (157.973
21
CITY OF BIAUMONT
FLEET FUND
BALANCE SHEET
April 30,2001
AVAILABLE RESOURCES CLAIMS ON AVAILABLE RESOURCES
Assets Liabilities
Cash $ 362,217 Accounts Payable $ 10,096
Inventories 324,805 Accrued Wages Payable 40,783
Other Receivables -- 50,879
Fund Balance
Reserved for Inventories 324,805
Unreserved 311,338
636,143
TOTAL AVAILABLE RESOURCES $ 687.022 TOTAL CLAIMS ON RESOURCES $ 687.022
STATEMENT OF CASH FLOW
For the seven months ended April 30,2001
Current
Month Year To Date
Cash Flow from Operating Activities
Cash Received from Charges for Services $ 344,546 2,447,646
Cash Paid to Suppliers (239,184) (1,523,549)
Cash Paid to Employees (85,838) 610 8r%'1
19,524 313,2au
Cash Flow from Capital and Related Financing Activities
Cash to(from)Other Funds (12,533) (87,733)
Acquisition of Capital Assets (1,383) (8,983)
(13,916) (96,716)
Cash Flow from Investing Activities
Interest Earnings 634 2,530
Net Cash Flow 6,242 219,104
CASH BALANCE
Beginning Cash Balance 355,975 143,113
Ending Cash Balance $ 362,217 362.217
22
CITY OF BEAUMONi
FLEET FUND
STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND BALANCE
For the seven months ended April 30,2001
Favorable/
(Unfavorable)
FYE 2001 Year-End
Current Actual Projected at Projection to
Month _ Year To Date 04/30/2001 Budget Budget
REVENUES
Charges for Services $ 344,546 2,447,646 3,818,800 3,818,800 —
Interest Eamings 634 2,530 3,000 3,000 _
Miscellaneous Revenue -- — 2,000 _ 2,000 —
TOTAL REVENUES 3451180 2,450,176 3,823,800 3,823,800 _
EXPENSE CATEGORY
Personnel Costs 85,838 610,807 1,151,200 1,151,200
Operating Expenses 244,697 1,537,999 2,496,900 2,496,900
Capital Outlay 1,383 9,683 16,600 16,600
Transfers Out 12,533 87,733 150,400 150,400 —
TOTAL EXPENSES 344,451 2,246,222 3,815,100 3,815,100 —
EXCESS(DEFICIT)REVENUES
OVER EXPENSES 729 203,954 8,700 8,700 --
FUND BALANCE
Beginning Fund Balance 635,414 432,189 432,189 379,120 53,069
Ending Fund Balance $ 636,143 636.143 440.889 387.820 53.069
23
CITY OF BEAUMONT
EMPLOYEE BENEFITS FUND
BALANCE SHEET
April 30,2001
AVAILABLE RESOURCES CLAIMS ON AVAILABLE RESOURCES
Assets Liabilities
Cash $ 1,815,598 Escheat Clearing $ 26,741
Receivables 125 Employee flex plan,suppl life& Itd 17,212
Accounts Payable 2,907
Accrued Wages Payable 20,361
67,221
Fund Balance, Unreserved 1,748,503
TOTAL AVAILABLE RESOURCES $ 1,815,723 TOTAL CLAIMS ON RESOURCES $ 1,815,723
STATEMENT OF CASH FLOW
For the seven months ended April 30,2001
Current
Month Year To Date
Cash Flow from Operating Activities
Cash Received from Charges for Services $ 940,382 6,615,023
Cash Paid for Benefits&Services (792,514) (6,082,0'
147,868 532,958
Cash Flow from Investing Activities
Interest Earnings 10,762 90,752
Net Cash Flow 158,630 623,710
CASH BALANCE
Beginning Cash Balance 1,656,968 1,191,888
Ending Cash Balance $ 1,815,598 1,815,598
3
3
24
CITY OF BEAUMONT
EMPLOYEE BENEFITS FUND
STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND BALANCE
For the seven months ended April 30,2001
Favorable/
(Unfavorable)
FYE 2001 Year-End
Current Actual Projected at Projection to
Month Year To Date 04/30/01 Budget Budget
REVENUES
Interdepartmental Transfers
Employee Health Ins $ 269,880 1,889,271 3,235,700 3,235,700 --
Dependent Health Ins 443,288 3,104,504 5,333,100 5,333,100 --
Worker's Comp. 84,488 591,533 1,014,800 1,014,800 --
General 24,167 169,167 290,000 290,000
Employee Contributions 114,652 809,874 1,381,400 1,381,400 -
Miscellaneous Revenue 3,907 50,674 60,000 - 60,000
Interest Earnings 10,762 80,412 125,000 90,000 35,000
TOTAL REVENUES 951,144 6,695,435 11,440,000 11,345,000 95,000
EXPENSE CATEGORY
Health
Point-of Service 257,253 2,189,955 3,690;000 4,832,000 1,142,000
HMO Blue Texas 238,380 1,719,811 3,000,000 3,400,000 400,000
Dental 48,536 296,367 568,000 568,000 --
Health Prescriptions 130,305 888,250 1,500,000 1,500,000 --
Other Benefits 6,209 47,438 85,000 104,000 19,000
Total 680,683 5,141,821 8,843,000 10,404,000 1,561,000
Worker's Compensation
Third Party Admin. 5,070 40,121 61,700 61,700 --
Claims Paid 55,288 493,984 800,000 800,000 -
Safety Management 6,774 50,501 86,300 86,300 --
Excess Insurance -- 20,900 25,000 25,000 --
Total 67,132 605,506 973,000 973,000 --
General
Unemployment 15,499 30,852 40,000 40,000 -
Short-term Disability 25,645 290,355 350,000 250,000 (100,000)
Total 41,144 321,207 390,000 290,000 (100,000)
TOTAL EXPENSES 788,959 6,068,534 10,206,000 11,667,000 1,461,000
EXCESS(DEFICIT)REVENUES
OVER EXPENSES 162,185 626,901 1,234,000 (322,000) 1,556,000
FUND BALANCE
Beginning Fund Balance 1,586,318 1,121,602 1,121,602 1,146,642 (25,040)
Ending Fund Balance $ 1,748,503 1,748,503 2,355,602 824,642 1,530,960
25
CITY OF BEAUMONT
GENERAL LIABILITY INSURANCE FUND
BALANCE SHEET
April 30,2001
AVAILABLE RESOURCES CLAIMS ON AVAILABLE RESOURCES
Assets Liabilities
Cash $ 1,272,737 Accounts Payable $ --
Fund Balance
Reserved for Claims 1,000,000
Unreserved 272,737
1,272,737
TOTAL AVAILABLE RESOURCES $ 1.272.737 TOTAL CLAIMS ON RESOURCES $ 12-72737
737
STATEMENT OF CASH FLOW
For the seven months ended April 30,2001
Current
Month Year To Date
Cash Flow from Operating Activities
Cash Received from Charges for Services $ 41,667 291,667
Cash Paid for Claims (285,618) (584,273)
(243,951) (292,6.
Cash Flow from Investing Activities
Interest Earnings 6,000 59,743
Net Cash Flow (237,951) (232,863)
CASH BALANCE
Beginning Cash Balance _ 1,510,688 1,505,600
Ending Cash Balance $_ 1.272.737 1.272737
26
CITY OF BEAUMONT
GENERAL LIABILITY INSURANCE FUND
STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND BALANCE
For the seven months ended April 30,2001
Favorable/
(Unfavorable)
FYE 2001 Year-End
Current Actual Projected at Projection to
Month Year To Date 04/30/01 Budget _Budget
REVENUES
Interest Earnings $ 6,000 52,018 80,000 60,000 20,000
Interdepartmental Transfers 41,667 291,667 500,000 500,000 --
Miscellaneous Revenue -- -- 1,000 -- 1,000
TOTALREVENUES 47,667 343,685 581,000 560,000 21,000
EXPENSE CATEGORY
Professional Services 4,240 15,532 80,000 100,000 20,000
Uability Claims 281,378 528,983 700,000 700,000 --
Other Insurance -- 3,420 4,000 4,000 --
TOTAL EXPENSES 285,618 547,935 784,000 804,000 20,000
EXCESS(DEFICIT)REVENUES
OVER EXPENSES (237,951) (204,250) (203,000) (244,000) 41,000
FUND BALANCE
Beginning Fund Balance 1,510,688 1,476,987 1,476,987 1,352,756 124,231
Ending Fund Balance $ 1.272.737 1.272.737 1.273,987 1.108,756 165.231
27
.rrA�r
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OCapital Trojects funds O
CITY OF BEAUMONT
GENERAL IMPROVEMENT FUND
BALANCE SHEET
April 30,2001
AVAILABLE RESOURCES CLAIMS ON AVAILABLE RESOURCES
Assets Liabilities
Cash $ 235,292 Accounts Payable $
Receivables 63,401
Fund Balance
Reserved for Construction 262,441
Reserved for Encumbrances 36,252
298,693
TOTAL AVAILABLE RESOURCES $ 298,693 TOTAL CLAIMS ON RESOURCES $ 298,693
STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE
For the seven months ended April 30,2001
per General Ledger
Actual
To Date
Revenues $ 84,451
Expenditures 517,951
Excess(Deficit) Revenues
Over Expenditures (433,500)
Fund Balance
Beginning Fund Balance 732,193
Ending Fund Balance $_ 298,693
FUNDING SUMMARY
April 30,2001
Project
Balance
Funds Available(On Hand/Receivable) $ 298,693
Grant Funding Provided 1,785,608
Available from Miller Trust 736,599
Required (Future) 3,284
Total $ 2,824,184
4
30
CITY OF BEAUMONT
GENERAL IMPROVEMENT FUND
PROJECT EXPENDITURE REPORT
April 30, 2001
Current
Project Expended Project
Budget To Date Balance(1)
EXPENDITURES
Perlstein Park 257,912 40,912 217,000
Fire Training Grounds Improv 1,498,600 1,496,509 2,091
Airport Fuel Facility 195,000 112,114 82,886
Theodore R.Johns Library 1,950,000 164,392 1,785,608
Miller Library Expansion 800,000 63,401 736,599
TOTAL EXPENDITURES $ 4,701,512 1,877,328 2,824,184
(1) Total project balance includes actual outstanding purchase orders and future purchase orders necessary for completion of
projects. Actual purchase orders as of April 30,2001 were$36,252.
Project Highlights
Construction of a new park in the Amelia neighbprhood to be named Perlstein Park
Construction of a retention pond and drainage improvements to the Fire'Graining Grounds.
Remove and replace existing facility with above ground Fuel Storage.
Construction of Theodore R.Johns Branch Library with funding from CDBG, Section 108.
Expansion of Miller Library with proceeds from the Miller Trust.
31
CITY OF BEAUMONT
STREETS AND DRAINAGE IMPROVEMENTS
BALANCE SHEET
April 30,2001
AVAILABLE RESOURCES CLAIMS ON AVAILABLE RESOURCES
Assets Liabilities
Cash $ 1,927,980 Accounts Payable $
Receivables 374,568
Fund Balance
Reserved for Construction (4,100,227)
Reserved for Encumbrances 6,402,775
2,302,548
TOTAL AVAILABLE RESOURCES $ 2,302,548 TOTAL CLAIMS ON RESOURCES $ 2,302,548
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
For the seven months ended April 30,2001
per General Ledger
Actual
To Date
Revenues 198,475
Expenditures 2,955,094
Excess(Deficit) Revenues
Over Expenditures (2,756,619)
Fund Balance
Beginning Fund Balance 5,059,167
Ending Fund Balance $ 2,302,548
FUNDING SUMMARY
April 30,2001
Project
Balance
Funds Available(On Hand/Receivable) $ 2,302,548
Available from TxDOT 4,226,928
Required (Future) 7,751,205
Total $ 14,280,681
32
City of Beaumont
STREETS AND DRAINAGE IMPROVEMENTS
PROJECT EXPENDITURE REPORT
April 30,2001
Current
Project Expended Project
Budget To Date Balance(1)
EXPENDITURES
Major Dr(Hwy 105 to Hwy 124) 4,000,000 1,340,868 2,659,132
Concord I (IH10 to Helena St.) 3,558,419 3,544,169 14,250
Concord II (Helena St.to RR) 8,541,581 4,538,389 4,003,192
Concord III (RR to East Lucas) 4,550,000 429,513 4,120,487
Neches River Hike&Bike Trail 3,400,000 376,445 3,023,555
Walden Road 6,569,100 6,524,696 44,404
Folsom(Dowlen to Major) 2,900,000 2,484,339 415,661
Frontage Rd(Entertain.Cmpx) 1,000,000 1,000,000 --
TOTAL EXPENDITURES $ 34,519,100 20,238,419 14,280,681
(1) Total project balance includes actual outstanding purchase orders and future purchase orders necessary for completion of
projects. Actual purchase orders as of April 30,2001 were$6,402,775.
Project Highlights
Relocation of utilities and purchase of rights-of-way on Major Dr from College to Hwy 124. The city's portion is
estimated at$800,000;the state will reimburse other costs up to total project cost of$4M.
Engineering, land acquisition and construction costs for the widening of Concord Road from IH 10 to Hwy 105.
Construction of a Hike and Bike Trail from Riverfront Park to Collier's Ferry Park The City's portion is estimated
at$900,000;the state will reimburse other costs up to the total grant amount of$2.4M.
Engineering and construction costs for the paving and drainage improvements on Walden Road from
Hwy 124 to Major Dr.
Construction of Folsom Rd from Dowlen Rd to Major Dr.
Design and construction of a Frontage Road for the Entertainment Complex.The city is participating with
the county and state.
33
CrTY OF BEAUMONT
WATER UTILITIES IMPROVEMENT FUND
BALANCE SHEET
March 31,2001
AVAILABLE RESOURCES CLAIMS ON AVAILABLE RESOURCES
Assets Liabilities
Cash $ 21,080,705 Accounts Payable $ 7,300
Receivables -- Due to Other Funds --
7,300
Fund Balance
Reserved for Construction 18,147,597
Reserved for Encumbrances 2,925,808
21,073,405
TOTAL AVAILABLE RESOURCES $ 21,080.705 TOTAL CLAIMS ON RESOURCES $ 21.080.705
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE
For the six months ended March 31,2001
per General Ledger
Actual
To Date
Revenues $ --
Expenses 2,436,316
Excess(Deficit) Revenues
Over Expenses (2,436,316)
Fund Balance
Beginning Fund Balance 23,509,721
Ending Fund Balance $_ 21.073.405
FUNDING SUMMARY
March 31,2001
Project
Balance
Funds Available(On Hand/Receivable) $ 21,073,405
Balance to Complete Existing Projects 19,267,750
Funds Available for Future Projects $� 1,805.655
34
CITY OF BEAUMONT
WATER UTILITIES IMPROVEMENT FUND
PROJECT EXPENSE REPORT
March 31,2001
Project Expended Project
Estimate To Date Balance(1)
EXPENSES
Non-SRF Construction Projects
Water Supply Study Phase II $ 1,831,450 817,395 1,014,055
Prison Sewer Force Main 1,238,000 55,650 1,182,350
Water Line Replacement 3,250,000 340,129 2,909,871
Dowlen Rd Sewer Int Rehab 2,498,000 244,400 2,253,600
11 th St Sewer Int Rehab 2,151,000 219,201 1,931,799
Grr1d Storage Tank-Pine St 6,450,000 187,709 6,262,291
11 th St Sewer Rehab 135,000 13,950 121,050
Water Meter Relocation 960,000 36,291 923,709
Entertainment Complex 350,000 173,048 176,952
LNVA Salt Water Barrier 1,800,000 600,000 1,200,000
Sewage Treatment Plant 1,157,000 21,178 1,135,822
Langham Facility Improv 138,000 207 137,793
Total Non-SRF 21,958,450 2,709,158 19,249,292
Line Relocations
Concord Rd Phase II 432,600 414,142 18,458
Total Relocations 432,600 414,142 _ 18,458
TOTAL EXPENSES $ 22.391.050 3.123.300 19.267.750
(1) Total expenditures include actual outstanding purchase orders and future purchase orders necessary for completion of
projects.Actual purchase orders as of March 31 were$2,925,808.
Project Highlights
Water Supply Study Phase It is for the construction of a 5-million gallon clearwell and high service/backwash pump
station at the water treatment plant, improvements to the Lawson's canal pipeline and pump station,and
special services for the risk management plan public hearing,economic development grant assistance and
assistance with compliance for TNRCC citations.
The Prison Sewer Force Main,constructed in 1990,has reached its maximum carrying capacity. An additional force
main is needed to provide service to the prison complex. This initial estimate is for the design phase.
The Water Line Replacement project will replace city wide water lines that are in very poor condition.
The Dowlen Rd&11th St Sewer Int Rehab projects will restore the structural integrity of the interceptors and capture the
lost carrying capacity. These projects will also reduce the load at the sewage treatment plant by reducing inflow.
The Pine St Ground Storage Tank project is for the demolition and rebuilding of the ground storage water tank at the
water production plant on Pine St.
The 11th St Sewer Rehab project is for the replacement of 340 ft of 60"sewer main on 11th St due to poor condition of
a section of the main.
The Water Meter Relocation project is for Phase I of the relocation of alley meters to street r.o.w.'s and the installation
of new water service lines.
The Entertainment Complex project involves extensions of water mains to support the SETEX Entertainment Complex.
The LNVA project is an agreement with the LNVA to construct and maintain a salt water barrier to prevent the upstream
movement of salt water and other pollutants into the portion of the river from which the City and the LNVA draw
water for distribution. City's portion will be paid over 3 year period for$600k/yr.
The Sewage Treatment Plant improvements are for the replacement of the electrical and control systems. The existing
improvements were made in 1954.
The Langham Facility improvements are for the replacement of the roof on the main bldg,conversion of the parking shed
into a machine shop,expansion of the parking lot,and additional storage area for materials and equipment.
Line Relocations consist of water and sewer line relocations or improvements due to the Concord Rd street widening
project(Phase II-Delaware Outfall).
35
♦ Ai
�f ML
OCash & investments O
CITY OF BEAUMONT
STATEMENT OF CASH POSITION
April 30,2001
Current Prior Increase/
Year Year (Decrease)
Balance* Balance* FY 2000-2001
BALANCES CLASSIFIED BY FUND
General Fund 16,409,185 17,413,136 (1,003,951)
Hotel Occupancy Tax Fund 362,114 193,475 168,639
Municipal Airport Fund 38,686 56,831 (18,145)
Texas Motor Carrier Violation Fund 15,467 4,193 11,274
Municipal Court Security Fund 66,269 31,555 34,714
Municipal Court Tech Fund 162,360 59,742 102,618
Miscellaneous Grant Fund (18,716) (440) (18,276)
ISTEA Grant Fund - 2 (2)
Police Grant Fund (207,033) (158,370) (48,663)
Tax Increment Financing Fund 350,926 259,625 91,301
Health Grants Fund (149,703) (166,449) 16,747
C.D.B.G.Program Fund (16,726) (319,212) 302,486
Shelter Plus Care Grant Fund (1,845) (36,388) 34,543
Emergency Shaker Grant Fund (45,595) (56,404) 10,809
Home Fund (78,835) (331,574) 252,740
Revolving Loan Fund 126,455 150,514 (24 rt59)
Rental Rehab Fund 173,472 205,848 (3 3)
Library Grants (16,106) - (16,106)
HUD Sec 108 Loan Fund 6,745,720 120,145 6,625,575
Confiscated Goods Fund 1,508,970 1,269,719 239,251
Local Law Enforcement Bg Fund 622,964 513,378 109,586
Weed&Seed Fund (69,765) (97,715) 27,950
Street Maintenance Fund 1,960,122 674,398 1,285,724
Fire Training Grounds Fund 4,371 5,456 (1,085)
Transit Fund (752,312) (462,347) (289,965)
Debt Service Fund 3,565,199 4,118,676 (553,477)
Water Utilities Fund 5,295,111 2,576,840 2,718,271
Solid Waste Fund 3,852,153 3,546,904 305,249
General Improvements Fund 235,292 1,515,464 (1,280,172)
Street and Drainage Improvement Fund 1,927,980 8,549,607 (6,621,627)
Water Utilities Improvement Fund 21,080,705 (667,314) 21,748,019
Capital Reserve fund 767,159 1,762,804 (995,645)
Fleet Maintenance Fund 362,217 310,039 52,178
Employee Benefits Fund 1,815,601 1,483,017 332,584
General Liability Fund 1,272,736 1,318,101 (45,365)
'Reflects general ledger(book)balances and may differ from investment report due to uncollected items or items In transit
J
(continued)
38
CITY OF BEAUMONT
STATEMENT OF CASH POSITION
April 30,2001
(continued)
Current Prior Increase/
Year Year (Decrease)
Balance* Balance' FY 1999-2000
BALANCES CLASSIFIED BY FUND — �
Julie Rogers Trust Fund 213,969 203,102 10,867
Tyrrell Historical Trust Fund 21,560 20,465 1,095
Expendable Trust Fund 187,289 213,967 (26,678)
Library Trust Fund 114,484 48,257 66,227
Ubrwy Endowment Trust Fund 24,679 24,801 (122)
Payroll Fund 505,448 449,708 55,740
Historical Fire Museum Trust Fund 9,605 9,485 120
TOTAL ALL FUNDS 68,441,633 44,813,041 23,628,592
BALANCES CLASSIFIED BY FINANCIAL INSTITUTION
Petty Cash 12,717 12,717 –
Weis Fargo – 2,945 (2,945)
Hibernia National Bank 4,411,967 2,318,946 2,093,021
TOTAL CASH 4,424,684 2,334,608 2,090,076
Texpooi 21,021,491 4,332,963 16,688,528
Logic Investment Pool 4,018,547 6,222,947 (2,204,400)
TexasTERM Investment Pool 6,000,000 – 6,000,000
Fidelity Treasury Money Market Fund 6,878,737 – 6,878,737
Agency Securities (book value) 6,101,146 – 6,101,146
U.S.Treasury Bills (book value) – 1,942,069 (1,942,069)
U.S.Treasury Notes (book value) 19,997,028 29,980,454 (9,983,426)
TOTAL INVESTMENTS 64,016,949 42,478,433 21,538,516
TOTAL CASH AND INVESTMENTS 68,441,633 44,813,041 23,628,592
*Reflects general ledger(book)balances and may differ from Investment report due to uncollected items or kems in transit
(concluded)
39
CITY OF BEAUMONT
SCHEDULE OF INVESTMENT POSITION
April 30,2001
Face Principal Book Unrealized
Amount Invested Value Earnings
CONSOLIDATED INVESTMENTS
U.S.Treasury Notes 20,000,000 20,007,109 19,997,028 282,180
Agency Securities 6,000,000 6,123,038 6,101,146 52,342
TexasTERM Investment Pool 6,000,000 6,000,000 6,000,000 100,224
Overnight investments'
Hibernia National Bank 3,318,273 3,318,273 3,318,273 377
Logic Investment Pool 3,217,469 3,217,469 3,217,469 443
TexPool 20,744,590 20,744,590 20,744,590 2,815
59,280,332 59,410,479 59,378,506 438,381
RESTRICTED INVESTMENTS"
TexasTERM Investment Pool 1,000,000 1,000,000 1,000,000 12,551
Overnight Investments'
Hbemia National Bank 846,842 846,842 846.842 96
Logic Investment Pool 801,078 801,078 801,078 110
Tw Pool 276,901 276,901 276,901 38
Fidelity Treasury M M Fund 6,878,737 8,878,737 6,878,737 25,619
9,803,558 9,803,558 9,803,558 38,414
69,083,890 69,214,037 69,182,064 476,795
' Reflects collected balances at month end. WIN vary slightly from general ledger balances due to items in transit.
Includes Debt Service Fund,and Prior Lien Interest&Sinking Fund. -
40
CRY OF BEAUMONT
SUMMARY OF INVESTMENT POSITION AND INTEREST INCOME
April 30,2001
INVESTMENTS BY TYPE Face
Amount Percentage
U.S.Treasury Notes 20,000,000 28.95%
Money Market Funds and Pools 38,918,775 56.33%
Agency Securities 6,000,000 8.69%
Bank Deposits 4,165,115 6.03%
69,083,890 100.00%
Currant Year Prior Year
Weighted Average Yield of Portfolio 5.357% 5.816%
Weighted Average Maturity of Portfolio 95 240
INVESTMENT MATURITY SCHEDULE Face
Amount Percentage
Less Than 3 Months 42,083,890 60.91%
3 Months To 6 Months 10,000,000 14.48%
6 Months To 9 Months 8,000,000 11.58%
9 Months To 12 Months 5,000,000 7.24%
1 Year to 2 Years 4,000,000 5.79%
69,083,890 100.00%
INTEREST INCOME Increase/
Current Prior (Decrease)
Year Year FY 2000-2001
Total Unrealized Earnings 476,795 445,002 31,793
Realized Interest Income 1,819,213 960,151 859,062
Total Earnings 2,296,008 1,405,153 890,855
41
CITY OF BEAUMONT
SCHEDULE OF PURCHASES,SALES AND MATURITIES
April 30,2001
SCHEDULE OF SALES AND MATURITIES
Purchase Face Principal
Date Description Amount Invested Sale Price
Treasury Note
05!27199 Maturity 04/30/01 2,000,000 2,033,438 2,000,000
Summanf Of Sales And Maturities Year To Date:
Current Year Prior Year
Average Holding Period Yield 5.877% 5.268%
Market Gain/(Loss) — —
42
CITY OF BEAUMONT
SCHEDULE OF COLLATERAL
April 30,2001
Face Market Total
Description Amount Value Investments
HIBERNIA NATIONAL BANK
FHLMC 6.500 03/01/14 CUSIP#31294JV47 4,141,505 4,134,368
FNMA 6.49411/0128 CUSIP#31382LPL4 818,559 829,470
FNMA 6.500 08/15/04 CUSIP#31359MEX7 981,211 1,041,400
FDIC 100,000 100,000
6,041,275 6,105,238 4,280,112
Reflects ledger balances at month end for the purpose of evaluating pledged collateral.
43
Total Revenues
at 04/30
$50
............... ...........
....................................................................
$40
$30
............... .......
................ .................................
$20
...............
............... .....................................................................................................................
............. ------ ........................................................
$10
$0
General Water Solid Waste
Fund Fund Fund
■ 1998 ❑ 1999 ■ 2000 ■ 20011
Total Expenditures
At 04/30
$50 .. ........................—-----------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------.................—
................................. ------------------------------ ------------------—------------------------------------------------ --------------------------------------------------
------------.............................
$40 e77 ------------------—---------- ........................................... ......................................................................................................
............-----------
.................. ............ ---------------------- ................................................................. ...........................................................
$30 ------------------ ........... --—-------------------------------------—--------------------------------------------—-- ---------------- ..................
............. --------------- ............................................................................. ............. ------------------------...............
$20 ----------------- .... -------—-------------............... .................... ..........................................
..................... ...........
---------------------- .............................................................---------------------
$10 ............ .................. ------------------------------------- ........................... ...............
$0
General Water Solid Waste
Fund Fund Fund
1998 ❑ 1999 M 2000 2001
Fund Balance
At 04/30
$20
. ....................... ................................ ............... .......................... ........................................................
.................................. ................................................ .........................
$15
..............
.............. ...... ...........................
O
$10
................ ..............................................................................................................
................... ............ ............................... ......................................................
$5
................ .....
$0
General Water Solid Waste
Fund Fund Fund
■ 1998 ❑ 1999 ■ 2000 s 2001
Fiscal Year End Fund Balance
$10 ..... ................---..... "'-------- ------------ .............................-----------
$8 T;` ........'"''-.... ........."-'...... . ............._..................._. .----....._.. .......
N
$g _ ......._.. ....... ._............ .. .............. ..-....._................................................ _
.---------
_ -.is ..._.... _. . _ __
O
,,.. ........ -------------------------- -----_------ '-"-"................. anti;;" '..'.--'-'-'-'---.......
$4
$2 ... ......_------
$0
General Water Solid Waste
Fund Fund Fund
0 1998 Actual ❑ 1999 Actual ® 2000 Actual m 2001 Projected
DEBT SERVICE FUND
Fund Balance
No two cent increase in tax rate
3 -
2
N
c
O
1
0
2001 2002 2003 2004 2005
Fund Balance
Two cent increase in tax rate
3
I
2
ti
c
0
1
0
2001 2002 2003 2004 2005
The assumption used in this presentation includes the issuance of$10M in Certificates of obligation
in FY 2001 and FY 2003 and assessed value (AV) growth of 2% in FY 2002 and 3% in FY 2003
and FY 2004 and 3.5% in FY 2005. Preliminary estimates for AV in FY 2002 indicate a 2.5% growth.
As evidenced by this graphical presentation, even with the two cent shift increase in the dedication
to the Debt Service Fund, the balance would still be below the $2.7M needed to meet the policy
requirement of 20% of debt service requirements.
STATUS OF SECTION 108 PROJECTS
In 1998,the City of Beaumont received approval of Section 108 funding in the amount of$11,000,000
from the Department of Housing and Urban Development. The Section 108 Program is a loan guarantee
provision of the Community Development Block Grant (CDBG) Program whereby municipalities can
borrow up to five times their annual CDBG allocation. The $11,000,000 loan will be repaid by the City
and project developers over a 20-year period.
Crockett Street - The Beaumont City Council approved a Section 108 loan for the Crockett Street
project in the amount of$3,000,000 in August, 1998. The total project cost is estimated at$5,700,000.
The project is the redevelopment of the "Dixie Street"commercial block in downtown Beaumont. The
developers plan to redevelop the two-story historic storefront buildings into a combination of
entertainment,eating,and drinking establishments.Approximately 300 permanent jobs would be created
upon completion of the project. A ground breaking ceremony was held on Wednesday, May 17, 2000.
Restoration of the storefront shell is approximately 50%complete. The anticipated opening date for the
Crockett Street Entertainment District is late November,2001.
Hotel Beaumont Retirement Home-The Council approved a request from the National Development
Council(NDC) for Section 108 funding in the amount of$3.175 million($2.0 million loan and $1.175
million grant)in December, 1998.The NDC is completely renovating the Hotel Beaumont,located at 625
Orleans Street. Currently, there are 88 elderly occupied units at the Hotel Beaumont. The total project
cost was $7,495,000. The project is 100%complete.
Jefferson Theatre - Council approved Section 108 funding in the amount of$2,000,000 (grant) in
September, 1998. The Theatre will be restored as close as possible to its original design In 1996, a
concentrated effort was initiated to mobilize over 150 civic leaders and area citizens to undertake a
comprehensive planning process and capital campaign with a goal ofraising$3,000,000 in addition to the
$2,000,000 grant from the City. To date,private donations total approximately$2,900,000.
Theodore R. Johns, Sr. Branch Library - Council approved Section 108 funding in the amount of
$1,825,000 for the construction of a new library,the Theodore R.Johns,Sr.Branch.The new library will
replace an outdated facility, the Spindletop Branch, currently serving the south end of Beaumont. The
building will be approximately 12,000 square feet on a five-acre site at the intersection of State Highway
124 (Fannett Road) and Sara Street. A groundbreaking ceremony was held on April 26, 2001 and
construction will begin the latter part of May.
L. L. Melton YMCA - Council approved Section 108 funding in the amount of$1,000,000 (grant) for
the renovation of the L. L. Melton YMCA and the construction of new facilities. The Melton has also
received an Economic Development Initiative(EDI) from Congress to assist in the development of the
project. As the reconstruction of the existing facility is currently underway, construction on the new
facility is scheduled to begin in September, 2001.
Good News/Bad News
FY 2001
Good News
0 Growth of Beginning Fund Balance
0 Personnel Cost Savings
O Building Permits Growth
0 Economic Development Incentive Impact
West Teleserve - New Business
Phoenix Millworks - Retention/Expansion
0 Increased Enrollment- Fire Training Center
0 Appraised Values (may end up on the bad news list)
0 Improved Financial Performance in Enterprise Funds (increase General Fund
Contribution)
0 Successful Theatrical Series
0 Increased State/Private Grants
0 Increased Employee Safety — Decreased Worker's Compensation
Bad News
0 Sales Tax Revenue Short of Projection
• Proposed Expansion of Sales Tax Holiday
• Potential Reduction in State Transit Subsidy
• Reduced EMS Collections
0 Historically Higher Natural Gas Prices
0 Census Estimate of Population Loss .04%
Effect on Grant Funding Ratio
0 Rising Employer/Employee Health Care Cost
0 Fiscal Impact of GASB 34
0 Increase in Liability Claims
Growth of Beginning Fund Balance
Factors such as increased EMS collections,departmental vacancies, lower operating costs and the
elimination and reclassification of existing positions contributed to a$2M turnaround in the
FY2000 General Fund Ending Fund Balance. The FY2000 Budget was adopted with a$1 M use
of Fund Balance projected. The additional fund balance was available to appropriate for the
FY2001 Budget and provided sufficient means to support a budgeted used of fund balance for
FY2001 of over$2M.
1999 2000
Actual Actual
General Fund
Fund Bal. $7,915,722 9,014,794
Percentage 12.74/o 13.7%
Personnel Cost Savings
The Administration will continue the efforts of the past two fiscal years,to use attrition to cut
under-utilized positions from the budget. Savings from positions cut during the present fiscal year
(as in previous fiscal years)will have a substantially larger budget impact next year. At that time
the full amount of the savings will be realized.
As positions were cut,the tasks assigned to those jobs were distributed among other employees.
In those instances where job reclassifications were not warranted,the persons assigned those
additional duties were given a pay increase commensurate with the amount of work and added
responsibility that they assumed.
In addition to salary savings from eliminating jobs, there is also benefits cost savings. The person
assuming additional duties is already a participant in the City's benefits program,therefore the
City is able to save nearly 30%of the salary amount for each position eliminated. For example
the elimination of the Parks and Recreation Director position will result in savings in excess of
$100,000 for the General Fund. Full oversight of Parks and Recreation will be re-assigned.The
day-to-day responsibilities for the two divisions will remain the same with the division managers
remaining in-place reporting to existing Department Directors. Parks will be a division of Public
Works while Recreation will be a division of the Library.
To date a total of 23 positions have been designated as"Will Not Be Filled" for a grand total
savings amount of$1,246,926. By cutting those under-utilized positions,the City has been able to
add 38 needed positions at a total cost of$1,233,988 across all funds. The results are a net gain
of 15 positions, along with a net savings of approximately$12,938. The General Fund impact is a
net savings of approximately$190,668.
Building Permits Growth
In October 1999, the building, electrical, plumbing, gas and mechanical permit fees were increased
to reflect the fee schedule in Appendix B" of the 1997 Standard Building Code. The new permit
fee schedule became effective on December 1, 1999. The FY 2000 anticipated revenue from
permit fees was $316,000. Actual revenue from building related permit fees in FY 2000 was
$471,890.
The total anticipated revenue in FY 2001 from building related permit fees were estimated at
$371,000. With fifty-eight (58)percent of the fiscal year complete, approximately$312,350 in
revenue has been generated from building related permit fees. It is anticipated that the total
amount of revenue generated from building related permit fees for FY 2001 will total $471,210.
This represents a forty-four(44)percent increase in anticipated revenue. A breakdown by permit
type reflecting the budgeted revenue amount, the revenue to date and the year end revenue
estimate is provided below for FY 2001 and FY 2000.
FY 2001 Building Related Permit Revenue
Permit Type Revenue Estimate Revenue to Date Estimated Year End
Revenue
Building $250,000 $256,540 $375,500
Electrical 55,000 26,440 45,330
Plumbing 30,000 10,520 18,050
Gas 6,000 3,870 6,650
Mechanical 30,000 14,980 25,680
Totals $371,000 $312,350 $471,210
FY 2000 Building Related Permit Revenue
Permit Type Revenue Estimate Year End Revenue
Building $200,000 $353,330
Electrical 55,000 51,500
Plumbing 30,000 24,930
Gas 6,000 8,460
Mechanical 25,000 33,670
Totals $316,000 $471,890
Economic Development Incentive Impact
West Teleservices
West Teleservices is an inbound call center operation that opened in January of 2001 in the
Village Shopping Center. West currently employs 800 people and anticipates hiring an additional
800 to 1,000 employees over the next year.
The City of Beaumont expanded the Beaumont/Nederland/Jefferson County Enterprise Zone to
include the Village Shopping to allow West to receive State incentives as well as tax abatement
from the City. The City of Beaumont also committed to provide $100,000 a year for four years
to West if hiring targets are met by the company. The City of Beaumont's unemployment rate
was 6.3% in February of 2001 which is the lowest rate in more than 2.5 years.
Phoenix Millwork
Phoenix Millwork, currently leasing a 15,000 square foot facility in Beaumont, is a division of
Baker McMillen. Phoenix Millwork is a manufacturer of hardwood Victorian trim and other
specialty wood products. On December 12, 2000, City Council established a Reinvestment Zone
at south Cardinal Drive and 4'h Street to allow local economic incentives(principally tax
abatement) in order to promote economic development, provide employment opportunities and
encourage new investment. On March 20, 2001, City Council approved a tax abatement
agreement with Phoenix Millwork. As part of the agreement, Phoenix Millwork agrees to
construct an approximate 50,000 square foot building at south Cardinal Drive and 4`h Street with
a total construction cost of not less than$1,200,000. Subject to complete compliance with the
terms and conditions of the agreement, all increases in ad valorem real property taxes resulting
from the development and improvement of the premises will be abated 30% for a period of five
years beginning the year after the construction is completed.
Increased Enrollment- Fire Training Center
The Training Center saw an increase in both student enrollment and revenues for the first half of
the 2001 fiscal year. The student enrollment for the first quarter of this fiscal year(803 students)
saw an increase of 15.21% over the preceding year(697 students). The second quarter saw a 4%
increase as well(1276 students in 2001 and 1227 students in 2000). The Training Center revenue
for the first quarter was down 3.22 % ($63,080 compared to $65,180) but made a sharp increase
of 33.26% (97,399 compared to $73,090) over the preceding fiscal year.
With a purchase agreement for the Training Center's blended fuel with Lamar University's Center
for Industrial Fire and Hazardous Materials Training and new projects coming on line, like the
BASF project, the outlook for growth in both student enrollment and Training Center revenue is
very positive.
Appraised Values
A preliminary evaluation of appraised values indicates a growth rate, net of allowance for disputed
values, of approximately 2.6%. This is slightly higher than the 2% projected in the Long Range
Financial Forecast. In FY2001 one cent of the collectible tax rate is equivalent to $366,648 . With
the increase in appraised values, the value of one cent will increase to $376,349. If the increase in
appraised values of 2.6% is realized, total collections (at the current tax rate) will increase by
$617,000 to approximately $23.9M for FY2002.
Improved Financial Performance in Enterprise Funds(increase General Fund Contribution)
The Water and Solid Waste Funds make in lieu payments annually to the General Fund. Such in lieu
payments are typically made to reimburse the General Fund for services such as personnel,
accounting,payroll, legal and computer that are provided to Enterprise Funds by the General Fund.
The in lieu payment for the Solid Waste Fund was reinstated in FY 2001 with increased fiscal capacity
related to the transfer of the grass cutting function to Parks and the potential sale of landfill space to
other entities.The in lieu payments to the General Fund totaled$4,250,000 in FY 2001, accounting
for approximately 6.3% of total revenue.
Improved financial performance in the Water Fund provides the capacity for an increase in its in lieu
payment. Growth in revenue sources other than water and sewer sales provides the capacity for an
increase to the Water Fund in lieu payment. FY 2001 revenues are projected at $26,685,000. The
proposed increase of$300,000, for a total in lieu payment of$3,950,000 in FY 2002, is well below
the 20% of prior year revenues allowed by the City Charter.
Successful Theatrical Series
The Broadway performance of Chicago on January 25 ended the inaugural season of the City's
theatrical series. According to the responses of those attending and the unprecedented ticket sales,
the series was an immense success. Attendance at each performance averaged more than 1,220
patrons. Chicago was the most favored performance with more than 1,522 attendees. Music of
Andrew Lloyd Webber and Man of La Mancha were attended by 1,116 and 1,033 respectively.
Season ticket sales were in excess of 870. Thanks to series sponsorship from Hibernia Bank and
performance sponsorships from Entergy,The Beaumont Enterprise and KFDM-TV,the City netted
approximately$19,000 in show revenues.
Due to the success of the series, staff has negotiated with Theatre League of Louisiana (TLL) to
present a 2001/2002 series. A partnership was started last year with TLL to provide talent booking
and promotional expertise. The following performances have been secured for the upcoming season:
Ragtime-October 18, 2001,Sunshine Boys-January 20,2002,and Annie Get Your Gun-April 13,
2002. Based on the results of last years shows, the City can expect another sensational Broadway
series.
Increased State/Private Grants
Ever active in pursuing Federal/State/Private grants, the Police Department and Library System
have both been very successful this year.
For FY2002 the Public Library System received in excess of$369,000 in grant funding. The
source of these awards were: The Miller Trust administered by Hibernia Bank, the Bill and
Melinda Gates Foundation,Texas Education Agency, the State of Texas Telecommunications
Fund, the Texas Book Festival, the Dollar General Store Foundation,the Meadows Foundation
and the Houston Area Library System.
In the Police Department several grants cover overlapping periods and are in some cases
extendable. Programs funded in FY2002 include: Violence Against Women Act($24,831), COPS
More 98 ($765,893),Local Law Enforcement Block Grant"LLEBG" 1999($332,911), LLEBG
2000 ($290,874), Weed and Seed($50,000), Juvenile Justice Accountability Lock Grant
($92,929), Auto Theft Task Force($347,501), Texas Statewide Tobacco Education and
Prevention- Cigarette Compliance($3,000) and Safe and Sober S.T.E.P. Grant FY2001
($32,986) FY2002 ($27,488).
Increased Employee Safety—Decreased Worker's Compensation
Based on Best Practices as reported in Workers Compensation and Human Resources
publications, an aggressive program which monitors the safety of the work environment, trains
and rewards employees; as well as actively seeks out the best care for injured workers, serves as
the most effective cost-containment program in which an organization can invest.
Periodically the City's Safety Pays program rewards departments whose employees have worked
an inordinate number of weeks without an accident and/or individuals who demonstrate success
from a new personal health regime.
As a self-insured municipality,the City is entitled to submit a notice of subrogation for any
settlement made with an injured City of Beaumont employee from a third party that is responsible
for the injuries. As in the past, during fiscal year 2001 the City has aggressively sought out
opportunities to recoup a portion of its Worker's Compensation costs through subrogation.
Resulting in payments back to the Workers' Compensation account in the amount of$40,332.
Sales Tax Revenue Short of Projection
The numbers are in for March Sales Tax Collections and they are significantly below FY2001
Budget estimates. Collections for the same period in FY2000 yielded $2,786,018. The FY2001
March sales produced $2,519,867 a difference of$266,151 or-9.55%.
The cumulative effect for FY2001 is lagging revenues to the tune of$868,122 which is equivalent
to a 5.24% budget shortfall. By year end this will approximate $1,400,000 if economic conditions
remain the same. The impact of an expanded Sales Tax Holiday has not been factored into this
equation.
With offsetting revenue gains in other sources and minor expenditure savings this shortfall will
impact the General Fund ending fund balance resulting in a$3.25M deficit which will cause the
ending fund balance to rest at the bottom of the policy threshold of 8-10% of expenditures at a
historically low 8.09% of expenditures.
Proposed Expansion of Sales Tax Holiday
Currently under consideration by the Texas Legislature is legislation which would increase the
number of items exempt from taxation and the number of days that the holiday would last. In
FY2000 the impact of the holiday was revenue neutral as the economic expansion leading up to
the holiday compensated for the loss of revenue associated with the sales tax exemption relative
to the FY2000 Budget.
At this time, when coupled with the downturn in the economy, it is anticipated that the proposed
expansion of the Sales Tax Holiday will exacerbate the projected $1M revenue shortfall
anticipated in Sales Tax Revenues.
Potential Reduction in State Transit Subsidy
The City was notified in March 2001, that the contribution from TxDOT would most likely be
reduced by $170,000. Also, operating costs are anticipated to increase due to fuel costs, age of
the fleet and employee wages. The ability to maintain or decrease the City's contribution can only
be accomplished through an increase in fare box revenue or a decrease in service.
Reduced EMS Collections
As of the end of April, EMS Revenues were lagging behind estimates by$236,549.
Approximately$250,000(in gross billings)have been identified as claims pending with twenty-
three private insurance carriers. These claims are being reviewed and refiled if necessary.
Compared to April 2000, city staff have billed less runs year-to-date in FY2001. The total runs
billed as of April 2001 was 5,191 compared to 6,183 for April, 2000. This reflects a relative time
period for both fiscal years. There has also been a change in the type of billing processed. The
number of self-pay accounts has decreased significantly while Medicaid filings have increased. The
number of accounts sent to collection has also increased.
Collections year-to-date are at 45.4%compared to 52.2% for the same period in FY2000. As
staffilng levels have now stabilized it is anticipated that some gains will be made by year end but it
is unlikely that the current shortfall will be recouped in total
CITY OF BEAUMONT
BILLING AND COLLECTION REPORT-EMS SUMMARY
For the period ended April 30, 2001
Current Month: April-2001
Tool %COkcted % Collected
Number Gross Billed Adjustments Net Billed Revenue to Gross To Net
BOW (1) CoNected(3) Billed Billed
Medicare 260 98,415 28,983 (4) 69,432 48,129 48.9% 69.3%
Medicaid 122 45,025 13,835 (4) 31,190 12,067 26.8% 38.7%
Other Insurance 204 76,415 992 75,423 47,667 62.4% 63-2%
Self Pay 217 73,415 0 73,415 13,732 18.7% 18.7%
--- - ---------
Total 803 $293,270 ;43,809 ;249,461 5121,595 41.S% 48,7%
Fiscal Year-To-D z Apr#.ZM
Number %Collected % Collected
Billed Gross BiNed Adjustments Net Billed %of Total to Gross To Net
Y-TD Y-TD(2) Y-T-D Y-T-D' Billed 681ed Y-TD. Billed Y-T-D
Medicare 1643 628,945 158,076 470,869 28.6% 429% 57.3%
Medicaid 872 322,960 123,009 199,951 12.2% 35.8% 57.7%
Other Insurance 1209 456,445 3,862 452,583 27.5% 65.6% 66.1%
Self Pay 1467 524,980 3,239 521,741 31.7% 11.9% 12.0%
Total 5,191 ;1,93 330 5288,186 $1,645.14 100.0% 38.6'6 4&4%
Revenue Revenue Over/ Prior Year%Collected
Estimate Cok4Aed %Of Total (Under) To Gross To Net
Y-T-D Y-TD(3) CoNected Estimate Billed Y-T-0 Billed Y-T-D
Medicare 355,322 269,818 36.1% (85,505) 52.9% 73.6%
Medicaid 151,986 115,448 15.5% (36,538) 41.3% 92.7°x6
Other Insurance 393,884 299,223 40.0% (94,662) 95.6% 98.4%
Self Pay 82,436 62,592 8.4% (19,844) 7.4% 7.5%
Total 5983,727 -- ;747,080 100.096 _ (2236, 43.7% 52.2°/.
Analvsis o�Ou��131gAcCouRt�:
Active Collection InstaNment
Accounts _Accounts Accounts _ Total
Medicare 190.281 190,2131
Medicaid 326,D97 326,097
Other Insurance 328,162 328,162
Self Pay 2,417,668 894,478 609 3,312,755
Total $3,262,208 $894,478 ;609 $4,157,296
(1)Includes dates of service Mar 16, 2001 to Apr 15,2001.
(2)Includes dates of service Sep 22, 2000 to Apr 15,2001.
(3)Includes collection on delinquent accounts-agency collections net of fees and refunds
(4) The difference in charges billed and charges allowed and denied claims must be written off.
Historically Higher Natural Gas Prices
According to the American Gas Association(AGA)a record cold winter played a major factor in
the higher natural gas bills that customers have received nationwide. Industry sources point to an
overall increase in demand on the part of both residential and industrial customers, as well as the
increasing role of natural gas in generating electrical power.
The historically higher prices have definitely adversely affected the City's operating budget
allocated for natural gas procurement. As of the end of April, the City has expended more than
$173,000 for natural gas used to heat City facilities. During the same period last year,the City
paid only $71,000. This represents a 144%increase in gas expenditures.
For FY2001, $98,000 was budgeted for the purchase of natural gas. If gas prices continue to
hold at current levels, the City could anticipate spending approximately$236,000 for heating
energy. This is$138,000 over the City's total gas expenditure allocation.
In order to address the issue, President George W. Bush has identified developing a
comprehensive national energy policy a top priority. Also,expectations for the future include a
diverse gas supply base, growing domestic productivity, increases in gas directed rig activity,
more gas well completions and additional gas imports from Canada. These factors will assure an
adequate natural gas supply for gas consumers, however, it is too early to predict what affects, if
any, will be seen in firture gas commodity pricing.
Census Estimate of Population Loss .04% -Effect on Grant Funding Ratio
Beaumont's population in the 1990 Census was 114,323 and the estimate in the 2000 Census is
113,866. The population loss of an estimated 457 citizens will have a minimal impact the
Community Development Block Grant funding the City receives each year. The effect of updating
population in the CDBG formula is a possible reduction of$1,000 in CDBG funding.
Rising Employer/Employee Health Care Cost
Over the past three years City employees have had the choice between an HMO(NylCare)or a self-
funded 80/20 indemnity plan(Memorial Sisters of Charity[MSCH]/Humana).Since January 1,2001,
the City's healthcare provider has been Blue Cross Blue Shield of Texas for a Point of Service plan
and HMO Blue Texas for the HMO.
The Point of Service(POS)plan is a managed-care plan with a gatekeeper that provides services at
discounted rates which result in savings to the City and its employees. The POS has an out-of-
network benefit which closely mirrors the previous 80/20 indemnity plan. (The indemnity benefits
must be maintained to be in compliance with the Fire and Police contracts.) The HMO provides
excellent coverage while requiring lower out of pocket expense for employees than the POS.
Dental insurance is a self-funded plan through Blue Cross Blue Shield of Texas for Civilian and Fire
employees, while a separate fully-funded plan is purchased through Combined Law Enforcement
Associations of Texas(CLEAT) for Police Officers.
As reported at last year's budget summit,and due to the current trend,the fund-balance is forecasted
to be less than the amount required to meet the contract-end reserve requirements.
Because the current carrier only quoted a one-year rate guarantee, the contract with HMO Blue
Texas and Blue Cross Blue Shield of Texas will expire on December 31,2001. In June the City will
solicit bids for a self-funded medical and dental indemnity plan as well as a HMO. The projected
forecast for health/benefit plans is a cost increase of 13% to 15% for this year. The increase is
anticipated to be equally high for next year. The other factor raising costs is the higher price being
charged for prescription drugs. Prescription drug costs continue to rise and are predicted to top out
at no less than 20%. The change is due to higher ingredient costs and increased utilization of new,
more expensive drugs, many of which are aggressively marketed directly to consumers.
To contain medical costs,the City will seek the services of an Insurance Broker/Consultant. Previous
experience validates the use of a consultant to save the City more than the fees charged by the firm
A consultant will be retained only if the cost of the service can be funded through savings. Because
an Insurance Brokerage firm will have the leverage of total knowledge of the market,they will have
the ability to secure long-term contracts and competitive rates.
The City will utilize their services to prepare a Request for Proposal(RFP) for a single provider to
furnish a multi-year contract for employee/retiree medical and dental insurance.Price and plan designs
will be requested for two medical plans and one dental plan.
Fiscal Impact of GASB 34
The new financial reporting model will have a significant fiscal impact on cities during the
conversion phase of GASB 34. In terms of audit fees it is estimated that the audit costs will
increase by 50%or more in some cases. The increase in charges is directly related to an
anticipated increase in the number of billable hours expected in the conversion process.
Also impacted will be City staff time. This process is expected to have an effect across
departments as input and planning from public works is essential to the accurate reporting of
infiwtructure included in the new model. In the course of a normal audit accounting staff will
work overtime/comp-time on an as needed basis. With the implementation of GASB 34 it is
expected that the city staff will double or triple the number of"extra"hours required to prepare
for the annual audit and Comprehensive Annual Financial Report(CAFR)publication.
The staff has been preparing for the transition by attending numerous training sessions and
reviewing available related materials. The next step is prepare an implementation schedule with
the collaboration of the Public Works and Central Services departments.
Increase in Liability Claims
Thus far this year the City has experienced a slight increase in the number of claims as compared
the results over the past three years. An increase has also occurred in the average amount paid per
claim. An area of particular concern involves sewage backups resulting from the Water
Departments operation of flush trucks. While there has not been an increase in the frequency of
these claims, a noticeably large increase has resulted from the cost associated with cleanup and
restoration. It has now become necessary to evacuate the dwelling and test for air borne
contaminates. The entire process to restore the building back to its condition prior to the incident
has increased cost significantly. In addition to sewage claims, an increase in payments and
reserves made on auto liability claims has occurred. The increases come as the result of accidents
involving multiple bodily injury claims deemed to be severe in nature.
2001 BUDGET SUMMIT
FINANCIAL AND BUDGETARY CHALLENGES
In order to meet the increasing challenges of reduced or limited funding and increased citizen
expectations for service, the City is exploring ideas to reduce cost, generate revenue and
increase service quality.
It is important to match the taxes and fees that the public is willing to pay with the cost of
services that the public demands. The Administration's efforts to Rightsize, as opposed to
downsize, a service cost means having the right number of people with the right kind of
skills and training, the right amount of supplies and just the right amount of physical plant
and equipment to provide the service properly.
"If you downsize,you're cutting costs but you're not fixing
fundamental problems."
- W. Edwards Deming
Before any organization attempts to Rightsize its efforts, it should ask the following
questions:
Does the activity fit the organization's strategic plan?
Does the activity produce more value for the customer than it consumes in
resources?
If not, why is the organization doing this?
Crucial to all downsizing or rightsizing efforts is deciding on what the organization does
well. Rational resource allocation simply means putting scarce resources to good use.
Government activity should produce more value than it consumes.
"Unless we change our direction, we are likely to end
up where we are headed"
- Old Chinese Proverb
To meet the financial challenges of FY2002, the City must consider changing the
fundamental way government operates. This process of change involves new directions -
• Empowerment of Neighborhoods in Decisions Allocating Resources
• Ensure Competition In Service Delivery
• Government Focus on Mission/Values
• Results-Oriented Government-Funding Outcomes, Not Inputs
• Meeting the Needs of the Customer, Not the Government
• Creating Revenue Rather Than Spending Opportunities
• Anticipate-Focus on Prevention Rather Than Correction
• Increased Employee Participation and Teamwork
The City needs to move beyond the basic improvement of an existing process. What must
occur is a fundamental change to an existing process or eliminating it totally. Therefore,
Council and Administration must provide the necessary leadership if significant changes are
to be made to provide the most efficient and cost effective services to our customers.
A process to analyze service effectiveness provides Council with various policy options:
Provide services differently or at a different service level
Raise revenue (fees and/or taxes)
Ask for understanding for a declining City and reduced service levels
An Administrative analysis of services and programs provides significant cost savings for the
long-term financial stability of the City by:
Determining services to be eliminated
Identifying subsidies to be discontinued
Determining appropriate service levels focusing the organization on mission,
engendering an entrepreneurial spirit throughout the organization
COMPETITIVE GOVERNMENT
INJECTING COMPETITION INTO SERVICE DELIVERY
Most obvious advantage of competition is greater efficiency or more bang for the
buck.
Competition forces public or private monopolies to respond to the needs of their -
i
customers.
Competition rewards innovation; monopoly stifles it.
Competition boosts the pride and morale of public employees.
Competition must be carefully structured and managed, if it is to work...unregulated
markets generate inequity.
PRIVATIZATION TECHNIQUES
Service Shedding. A form of total privatization in which government stops providing a
service entirely.
Contacting Out The City contracts with a private organization, for profit or nonprofit,
to provide a service.
Public-Private Competition. Public in-house units compete against private firms to
provide a public service.
Franchise. A private firm is given the exclusive right to provide a service within a
certain geographical area for a limited time.
Vouchers. Government provides individuals with certificates redeemable for purchase of
a good/service on the open market.
Subsidy. The producer of the service is subsidized by the government contributing
financially or in-kind to a private organization to reduce the cost of private provision of
service to consumers.
Internal Markets. Government departments are free to purchase services from either the
private sector or internal support units.
Asset Sale or Lease. Government sells assets such as airports, utilities or real estate to
private firms, thus turning physical capital into financial capital.
Volunteers. Volunteers are used to provide all or part of a government service.
Self-Help. Community groups and neighborhood organizations take over a service or
government asset such as a local park.
Private Infrastructure Development. The private sector builds, finances and/or
operates infrastructure such as roads and airports, recovering costs through user charges.
Deregulation. Government regulations are eliminated to allow private providers to
compete against a government provider; for example, allowing firms to compete with the
U.S. Postal Service.
The following are critical activities to support a process of financial renewal and
revitalization:
Create a mission and shared vision of the community and organization.
Embrace the primary values of the organization.
Mayor/Council sets strategic goals and objectives.
Mayor/Council sets priorities and eliminates programs that do not support the
mission of the City.
An effort is made to reduce organizational layers as part of streamlining the
administration.
All non-essential work that does not provide value to the customer is eliminated
through improving work processes.
Implement a quality improvement/customer service perspective.
Emphasize performance measures for all services areas.
Explore alternative service delivery approaches.
Create meaningful opportunities for citizen involvement.
Communicate the results of the process to the organization employees and
community.
Celebrate the success achieved!
ORGANIZATION GUIDELINES
Is it the right thing for the community and organization?
Is it the right thing for the department?
Is it ethical and legal?
Is it something you are willing to be accountable for?
Is it consistent with the organization values and policies? -
When the answers to all of the above questions are yes, the guidelines state "just do it"
without asking for permission or forming a committee to decide. This is direction that
encourages employees to think; and when employees think, they can respond with flexible,
innovative solutions and services for their customers.
The funding strategies to be utilized focus on the following areas:
Preserve and enhance the capital improvements program and planning
process.
Commit to not substituting City funding for reductions in state or federal
funding programs.
Reduce personnel positions by attrition when feasible.
* Identify best practices through benchmarking- search for best practices that
lead to performance; and become the standard against which the local
government compares itself.
Survey citizens to understand demands and expectations for service.
Emphasize user fees as opposed to increase in taxes.
Maintain a reasonable fund balance.
Develop productivity initiatives and gain-sharing with departments that are
successful in reducing costs while maintaining or increasing service quality.
Initiate a trust fund to encourage and facilitate private sector donation.
Institute an aggressive program to procure federal/state grants to address
identified priorities to the City.
"The only person who likes change is a wet baby."
-Roy M.Bliuw
There are other important aspects to an improvement process that Mayor and Council need
to consider prior to a major commitment.
To be successful, long-term financial forecasting and planning is essential.
However, unexpected and unpredictable events can and will occur to
impact any forecast no matter how well prepared.
The Mayor, City Council and Administration need to commit to the process
and its potential outcome.
A major improvement process can't be accomplished in one or two years. It
is a long-term commitment and a basic rethinking of the fundamental mission
on how government provides service.
It is important to solicit community understanding and involvement as the
process proceeds into reducing or eliminating programs and reviewing fees
for services.
A commitment must be made to enhance volunteer programs and
public/private partnerships in order to maintain existing levels of priority
services.
A renewed commitment is necessary to education and training to lead and
change the organization.
Sufficient time must be spent on communicating openly through focus
groups, staff meetings, public forums, citizen newsletters and other strategic
sources of information that can be identified.
"There is nothing more difficult to take in hand,
more perilous to conduct...than to take the lead in
the introduction of a new order of things."
-Nxxolo Machiavelli,"The Prince"
IDEAS THAT SAVE COSTS AND INCREASE REVENUE/SERVICE QUALITY
Mayor/Council and Administration are agents of change. Change requires a driving force
and the most powerful change agent is financial stress. The City of Beaumont must make
major changes in the operation of government if financial stability and quality services are
to be continued.
The implementation of a portfolio management tracking system to monitor
taxes, water, sewer and other City assessments will result in increased
revenues received in a more timely manner.
The City should aggressively sell assets - land, buildings, equipment to the
extent possible in order to turn underutilized physical capital into financial
capital and produce tax benefits.
Privatization of public services should be considered through a competitive
process with City employees when contracting provides a clear advantage
on cost savings and service quality. While the private sector can be an
effective agent for delivering public services,the responsibility for providing
services - determining the scope, level and conditions under which they are
delivered remains with City officials committed to the public interest.
Management improvement efforts many times focus on how to do unimportant
things cheaper. Instead, as City leaders we should ask- "should we be doing
this at all?" City government should limit activities to core functions and
missions. Does the City activity/service provide more value for the customer
than it consumes in resources? Is the service essential? Is the private sector
already providing the service or if not, is it capable of doing so better than
government? Does the program displace voluntary community or
neighborhood networks? This approach must be applied to all service areas
with the intent to eliminate activities that don't meet the criteria.
The City Council and City Manager meet quarterly with the Beaumont
Independent School District to discuss common issues and priorities. The
Council and Manager also meet quarterly with the Chamber of Commerce and
all Beaumont governmental entities for the same reason. Programs, services
and taxpayer facilities should be identified for better coordination and use.
For example, the City and BISD could expand use of joint facilities for
recreational programs.
Institute energy management program through public/private partnership to
retrofit City facilities with capital costs paid from energy savings overtime.
Develop Government business opportunities to market products or services to y
other public agencies, e.g. the "webber" back-flow device for toilets.
Solicit private sponsorship of public facilities such as the Civic Center.
Proposals would be solicited from the business community for naming rights
for an annual fee for a 20 year term.
Use of Fund Balance to address revenue shortfalls or unexpected expenses.
This is a short term solution that has negative consequences long term if the
fund balance is depleted.
Establish an employee incentive program to enhance morale,productivity and
cost savings. The program will provide monetary incentives to employees
exceeding departmental goals and budget targets. The program is based on the
following:
Incentive is based on performance measures through budgetary savings
Incentive is not related to performance evaluation system
It is department and program based not individual based
Each department has a mission statement and performance measures;
incentive comes if the department meets performance measures;partial
accomplishments are recognized as well
Capital outlays/improvements, insurance and professional fees are not
included
5001* of savings is returned to general fiord, 50% is shared equally
among employees generating the savings.
Reduction in number of Fleet vehicles.
Outsourcing City Internal Services.
Elimination/Transfer of Service Responsibility.
Adjust Service Levels.
Discontinue Subsidy of Programs/Services.
Subsidize Transfer of Service.
Encourage Volunteer/NonProfit Participation in Service Delivery.
Private Infrastructure Development.
Establish Trust Opportunities for Private Donations.
Improve Effectiveness of Collection Process of City Fees. -
ENGAGING CITIZENS IN THE BUDGET PROCESS
Why should a city market their budget?
• The annual budget process is an opportunity to dialogue with citizens regarding
community goals and priorities and to create public support.
How can the City involve the community in the budget process?
• Neighborhood meetings
• Citizen survey (PAFR distribution)
• Website
• Newsletter(water bill distribution)
• Channel 4 (local government access)
Relying on the public hearing process is in most cases "too little, too late" to involve a
significant number of participants. It is desirable to inform and educate the public so that
they might understand the "budget process" but this is often "one-way," not two-way
communication.
Focus of Public Discourse
Informing Citizens Engaging,Citizens
One-Way Two-Way
Telling/Selling Listening/Responding/Listening
Education Learning
Presenting Information Eliciting values, hopes,
aspirations, concerns
Discerning"Public Opinion" Promoting "Public Judgement"
ANALYSIS OF FUND BALANCE
Traditionally, two methods have been used to determine the appropriate size of the
unreserved fund balance:
• allocating financial resources equal to a percentage of annual operating expenditures
• allocating financial resources equal to a certain number of months' operating
expenditures
The City of Beaumont uses a range of 8-10% of expenditures in the General Fund. This
relates closely to one month's operating expenditures(8.3%)which is widely used standard.
What factors influence the establishment of a certain level of unreserved fund balance?
Revenue structure - Is it volatile? What is the City's dependence of sales tax? Are City
revenues sensitive to the effects of the business cycle?
• Expenditures - Can purchases be deferred?
• Cash flow - Can sufficient cash balances be managed with an uneven cash flow?
The projected level of unreserved ending fund balance for the General Fund as of April
30, 2001 is $5,753,484.
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City of Beaumont
March 30, 2001
To the Honorable Mayor and Councilmembers
INTRODUCTION
The Long-Range Financial Forecast, the Capital Improvement Program and the Annual
Budget, combine to form the basis of the annual budget process for the City of
Beaumont. The first report, the Long-Range Financial Forecast, is presented to Mayor
and Council prior to April 1 each fiscal year. The forecast is prepared to assess the
City's current financial condition and project that position ten years into the future
utilizing current policies, trends and assumptions, while maintaining the existing levels
of City services. The Capital Improvement Program and Annual Budget provide
increasing levels of detail and analysis.
The impact of the Long Range Financial Forecast will be reviewed during the 2001
Budget Summit on May 11, 2001 in preparation of the fiscal year 2002 Annual Budget.
The City's fiscal year encompasses the period from October 1 to September 30.
GENERAL GOVERNMENTAL FUNDS
General governmental funds include the General Fund and Debt Service Fund. The
General Fund accounts for the fundamental operating costs of most city departments.
The Debt Service Fund is used to record the resources received to retire the
outstanding debt obligations which are secured by taxes levied by the City.
General Fund Revenues
The majority of revenues recorded in the General Fund are derived from Sales Tax,
Property Tax, Industrial Payments and Gross Receipts Tax. The following illustrates the
proportion of each source for FY 2001.
General Fund Revenues
by source
39.1% Sales and use tax
18.5% Property taxes
0
10.3% Other
16-8% Industrial payments 6.3% Utility in Neu
9.1%Gross receipts tax
$67,630,200
The forecast of revenues is based on several assumptions.
Sales and use tax is projected to remain flat in FY 2001 at $26.4M. This reflects the
current national economic downturn. The remaining years of the long range forecast
project annual increases of one to four percent providing increasing additional revenue
of between $250,000 - $1.3M annually.
Property taxes represent $12.5M of total General Fund resources, a tax rate of$0.33
per $100 of assessed value. The current revenue estimate assumes the potential for
growth in assessed value which is included at an increasing rate of 2% - 3.5%. Positive
economic conditions related to the openings of Folsom Road, the Entertainment
Complex and Crockett Street support the increasing assessed value anticipated in
future years. Funding requirements for existing debt service dictate an increase of
$0.02 to the Debt Service portion of the tax rate. Rather than increase the total tax rate,
the administration proposes to shift this amount from the dedicated General Fund tax
rate. The anticipated increase in assessed value combined with the proposed decrease
in the tax rate will produce revenues of$12M in FY 2002. This is a decrease of 4.1%
from FY 2001 estimates. The forecasted increase in assessed value will drive the
increased property tax revenues for FY 2003. In fiscal years 2004, 2006 and 2008 the
anticipated reduction in debt service requirements allows for a reverse shift in the
dedication of the tax rate from the Debt Service Fund to the General Fund.
Industrial payments account for approximately$11 AM. A growth rate of 3.5% is
expected for FY 2002. Current contracts expire on December 31, 2001 and
negotiations are currently under way. The most significant contract is with ExxonMobil
followed by duPont and Goodyear. These industries combine to provide over 82% of
the existing industrial payment revenues. Projections beyond FY 2002 present a growth
rate of 3%, which like the property tax, is predicated on positive economic conditions
and growth in assessed values.
Gross receipts taxes (franchise fees), collected from utility companies operating
within the City, are estimated at $6.2M for FY 2001, an increase of 6.7%which was
attributable to extraordinary natural gas prices during FY 2001. Based on current
known conditions and trends, these revenues are projected to increase 1.5% annually
for the foreseeable future. Entergy is the lead contributor of gross receipts tax and is
the most sensitive to fluctuation. Utility rate reductions and lower usage directly impact
the receipt of these taxes by effectively reducing the "gross receipts" on which the tax is
based.
Overall, an average 3.2% growth rate is projected for in General Fund revenues for the
10 years in this forecast.
Total General Fund Revenues
100
80
w 60
c
0
40
17
20
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fiscal year
0 Sales and use tax ■Property taxes 0 Industrial payments
0 Gross receipts tax N Utility in lieu N Other
General Fund Expenditures
The basic costs of operating the City are charged to the General Fund. These
disbursements provide for Police; Fire; Public Works; Health, Cultural and Recreation;
Central Services; and General Government.
Current assumptions maintain existing services at FY 2001 staffing levels, contractual
salary increases for fire personnel, an annual salary adjustment of 3%for civilians and
the second phase of the Classification Compensation plan.
Transfers, reflecting those charges related to dependent healthcare, the cost of liability
claims and lawsuits, facility renovation and the transit subsidy, are anticipated to
increase $134,000 for FY 2001. This increase reflects an increase of$479,000 for
dependent healthcare and decreases in the transfers to Capital Reserve and General
Liability as well as a slight decrease in the transit subsidy of$45,000. Future increases
in this category are most significantly related to dependent healthcare.
Total expenditures are expected to grow an average of 3.1% annually throughout the
projection period.
General Fund Expenditures
by category
FY 2000 FY 2001 FY 2002
Actual Estimated Projected
Wages $39,563,705 42,506,800 43,782,000
Benefits 8,051,373 8,455,700 8,635,700
Other Operating 13,083,957 13,694.300 13,773,000
Total Operating 60,699,035 64,656,800 66,190,700
Dependent Healthcare 3,155,300 4,069,100 4,548,100
Workers Compensation 800,000 822,000 822,000
Capital Reserve 500,000 500,000 300,000
General Liability 400,000 300,000 200,000
Transit Subsidy 500,000 845,000 800,000
Total Transfers 5,355,300 6,536,100 6,670,100
Total General Fund $66,054.335 71,192,900 72,860,800
Fund Balance
For the fiscal year ending September 30, 2001, the City will maintain a fund balance in
the General Fund of 8% of expenditures. It is projected, based on current
assumptions, that by FY 2002, the level will fall critically below the goal of 8-10%
and end the year with a fund balance equal to 1.3% of expenditures. Using
projected levels of revenues and expenditures, the FY 2003 fund balance will fall to an
unprecedented$3.9M deficit.
Storm Water Utility
Currently under consideration is the creation of a Storm Water Utility to capture the
rising costs associated with unfunded mandates of the Environmental Protection
Agency (EPA) related to storm water runoff. If implemented, approximately $4M in
General Fund costs related to storm water would be recovered by a fee charged by the
Storm Water Utility. This revenue source could effectively provide funding relief to
General Fund resources that could be directed to other uses. It would also serve to
sustain General Fund fund balance at a level that is sufficient to meet policy guidelines.
Debt Service Fund Expenditures
The major source of revenue recorded in the Debt Service Fund is property taxes.
Currently, a rate of$0.305 is applied to each $100 in assessed valuation. As noted in
the General Fund discussion, the rate of growth for assessed valuation is estimated to
range from 2% to 3.5% during the term of this forecast.
It is anticipated that $0.02 of the General Fund portion of the tax rate will be shifted to
Debt Service for Fiscal Year 2002. This will provide the necessary resources to retire
current debt and sustain an adequate fund balance for that year.
In order to fund the ongoing Capital Improvement Program (CIP), debt issues of$10M
are anticipated in July of 2001, 2003, 2005 and 2007. The first $10M issue would
provide the resources to complete projects classified as current in the FY 2001 CIP and
fund selected scheduled projects. A dynamic document, the projects in the CIP are
reviewed, prioritized and approved annually by Mayor and Council.
Debt Service Requirements
Existing and Potential
15
C
s
5 s
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fiscal Year
IM Existing Debt Service W Potential$10M-July 2001 I® Potential$10M-July 2003
O Potential$10M-July 2005 M Potential$10M-July 2007
The full effect of debt service related to the anticipated July 2001 issue will be realized
in FY 2003. Additional revenue of$625,125 will be required to fund total debt service
and maintain an adequate fund balance of approximately 20% of principal and interest
requirements. Equating to an increase in the tax rate of $0.02, this could be achieved
by either increasing the total tax rate or shifting this amount from the dedicated General
Fund rate.
This increase in the dedicated Debt Service tax rate, along with the roll-off of existing
debt, will be sufficient to fund current and proposed debt issues through FY 2010, the
term of this plan. Based on these assumptions, the capacity exists to shift a portion of
the tax rate dedicated to Debt Service, to the General Fund in fiscal years 2004, 2006
and 2008.
INTERNAL SERVICE FUNDS
Internal Service Funds account for common charges to all departments. Risk
management for claims and lawsuits are recorded in the General Liability Fund. The
Employee Benefits Fund includes all health benefits, worker's compensation and
unemployment charges. Equipment and vehicle purchase, as well as building
renovations, are charged through the Capital Reserve Fund. These charges are
recorded proportionately in individual departments, per employee or by equipment. The
funding sources for these funds are through charges and/or transfers from other funds.
Employee Benefits Fund
Funded through charges and transfers from other funds, the Employee Benefits Fund
has no independent revenue source other than employee contributions, which provide
approximately 12% of the revenues in this fund. For FY 2001, the City raised it's
contribution toward health benefits from $5,300 per employee to $6,100, which was
primarily related to the increased cost of dependent health care. The employee rate for
dependent coverage was increased $12 per month, effective January 2001, to further
offset rising costs. Current contribution levels will result in a fund balance for FY 2001
of$750,000. An increase in the City's contribution of$450/employee is included in this
forecast for FY 2002. The approximate amount of claims that have been incurred but
not reported in the indemnity plan, coupled with the reserve requirements necessary to
fund incurred workers compensation claims, dictate a level of fund balance equal to
$13M. The projected level of contributions will not be sufficient to provide that level of
coverage. Increasing the contribution from the City, current and former employees
and/or retiree's could provide the additional resources necessary to sustain this fund.
Capital Reserve Fund
Originally created to provide for the replacement of equipment and vehicles, the Capital
Reserve Fund also exists to provide for the renovation of public facilities that are not
major capital improvements. It is anticipated that expenditure levels will be reduced and
available fund balance will be utilized during the first several years of the projection
period. The ending fund balance in FY 2002 is projected at $740,000. This will drop to
a projected low of$390,000 in FY 2004.
General Liability Fund
Initiated in FY 1987, the General Liability Fund is the central repository for the payment
of claims, lawsuits and the professional services related to the defense of claims made
against the City. With an estimated liability for claims and lawsuits of$1 M, it is
projected that adequate resources will be available through this projection period. The
sole funding source for the General Liability Fund is transfers from other funds.
SUMMARY
In summary, administration's assumptions include average general revenue increases
of 3.2%. Projections for General Fund operating expenditures show an increase 3%
annually for personnel, with other operating costs remaining relatively flat. This
increase is expected to maintain the same level of service. Based on these revenue
and expenditure assumptions, fund balance is expected to drop critically below policy
levels in FY 2002, with a deficit fund balance anticipated by fiscal year end 2003.
The Debt Service Fund will require an additional $0.02 in FY 2002 to cover existing
requirements. To achieve this, the administration proposes a transfer of a portion of the
dedicated General Fund property tax rate. Beginning in fiscal year 2004, the capacity
exists to reverse shift a portion of the Debt Service dedication to the General Fund.
Internal Service Funds, including Employee Benefits, Capital Reserve and General
Liability, are dependent on service charges and transfers from other funds to service
the claims and purchases recorded therein. Sustaining sufficient fund balances will
require additional revenue in the Employee Benefits Fund.
Tables are attached for each of the funds discussed. The information provided is
organized so that a brief historical perspective may be gained as well as a forecast
studied, which is based on current known conditions and historical trend analysis.
Reports to Council will be made as needed should future developments occur that
significantly impact the City's financial condition.
Respectfully submitted,
Stephen J Beverly P. H g , CPA
City Manager Finance Offi r
CITY OF BEAUMONT
LONG RANGE FINANCIAL FORECAST
Debt Service Fund
(In thousands)
Actual Estimated Projected Projected Projected Projected Projected Projected Projected Projected Projected
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
REVENUES
Property Tax Revenue $ 10,606 11,473 12,444 12,809 12,590 13,020 11,765 12,167 7,575 7,829 8,093
Interest Earnings 276 260 258 263 268 274 285 280 278 257 228
Miscellaneous Revenue 119 838 1,027 1,034 1,099 1,148 1,153 1,155 1,154 1,232 1,232
TOTAL REVENUES 11,001 12,571 13,729 14,106 13,957 14,442 13,203 13,602 9,007 9,318 9,553
EXPENDITURE CATEGORY
Principal& Interest(P& 1 12,481 13,135 13,299 13,386 12,867 12,867 11,579 11,519 6,923 6,991 6,984
P& I-anticipated issues -- -- 338 637 968 1,385 1,705 2,109 2,415 2,806 2,762
Bond Sale Expense - -- - - - -- -
Service Charges 7 10 10 10 10 10 10 10 10 10 10
TOTAL EXPENDITURES 12,488 13,145 13,647 14,033 13,845 14,262 13,294 13,638 9,348 9,807 9,756
EXCESS(USE)OF FUND
BALANCE (1,487) (574) 82 73 112 180 (91) (36) (341) (489) (203)
FUND BALANCE
Beginning Fund Balance 4,367 2,880 2,306 2,388 2,461 2,573 2,753 2,662 2,626 2,285 1,796
Ending Fund Balance $ 2.880 2,306 2.388 2.481 2,573 -2,753 - 2,662 ,626 -2,28 1.796 1.593
CITY OF BEAUMONT
LONG RANGE FINANCIAL FORECAST
Capital Reserve Fund
(In thousands)
Actual Estimated Projected Projected Projected Projected Projected Projected Projected Projected Projected
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
REVENUES
Service Charges $ 1,504 1,521 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Interest Earnings 77 70 50 40 40 40 40 40 40 40 40
Miscellaneous Revenue 22 40 20 20 20 20 20 20 20 20 20
Transfers In 559 558 359 358 359 358 359 358 359 358 359
Other Financing Sources 452 - - - - - - - __ _ _
TOTAL REVENUES 2,614 2,189 1,929 1,918 1,919 1,918 1,919 1,918 1,919 1,918 1,919
EXPENDITURE CATEGORY
Renovations 153 185 50 50 50 50 50 75 100 100 100
Equipment 1,051 627 400 400 400 400 500 500 600 600 600
Vehicles 1,469 1,145 1,050 1,050 1,050 1,050 1,100 1,200 1,200 1,250 1,250
Debt Service 296 585 725 675 510 325 325 - -
TOTAL EXPENDITURES 2,969 2,542 2,225 2,175 2,010 1,825 1,975 1,775 1,900 1,950 1,950
tXCESS (DEFICIT) REVENUES
OVER EXPENDITURES (355) (353) (296) (257) (91) 93 (56) 143 19
(32) (31)
FUND BALANCE
Beginning Fund Balance 1,743 1,388 1,035 739 482 391 484 428 571 590 558
Ending Fund Balance $ 1,388 1,035 739 482 391 484 428 571 590 558 527
CITY OF BEAUMONT
LONG RANGE FINANCIAL FORECAST
General Fund
(In thousands)
Actual Estimated Projected Projected Projected Projected Projected Projected Projected Projected Projected
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007_ FY 2008 FY 2009 FY 2010
REVENUES
Sales and Use Tax $ 26,481 26,415 26,679 27,213 28,029 28,870 29,736 30,628 31,853 33,127 34,452
Property Taxes 13,077 12,500 11,993 12,340 13,300 13,750 15,910 16,460 22,030 22,780 23,570
Industrial Payments 10,969 11,351 11,748 12,100 12,463 12,837 13,222 13,619 14,028 14,449 14,882
Gross Receipts Tax 5,770 6,155 6,247 6,341 6,436 6,533 6,631 6,730 6,831 6,933 7,037
Water Utility Fund In Lieu 3,650 4,250 4,650 4,650 4,650 4,650 4,650 4,650 4,650 4,650 4,650
Other 7,206 6,959 7,060 7,095 7,130 7,166 7,202 7,238 7,274 7,310 7,347
TOTAL REVENUES 67,153 67,630 68,377 69,739 72,008 73,806 77,351 79,325 86,666 89,249 91,938
EXPENDITURE CATEGORY
Wages 39,564 42,507 43,782 45,095 46,448 47,841 49,276 50,754 52,277 53,845 55,460
Benefits 8,051 8,456 8,636 8,821 9,012 9,208 9,410 9,618 9,832 10,053 10,280
Other operating 13,084 13,694 13,773 13,896 14,020 14,166 14,293 14,421 14,550 14,701 14,833
Total Operating 60,699 64,657 66,191 67,812 69,480 71,215 72,979 74,793 76,659 78,599 80,573
Dependent Healthcare 3,155 4,069 4,548 4,807 5,061 5,340 5,062 5,918 6,200 6,515 6,846
Workers Compensation 800 822 822 822 822 822 822 822 822 822 822
Capital Reserve 500 500 300 300 300 300 300 300 300 300 300
General Liability 400 300 200 200 250 250 400 400 400 400 400
Transit Subsidy 500 845 _!_. 800 700 700 700 700 700 700 700 _ 700
Total Transfers Out 5,355 6,536 6,670 6,829 7,133 7,412 7,284 8,140 8,422 8,737 9,068
TOTAL EXPENDITURES 66,054 _71,193 72,861 74,641 76,613 78,627 80,263 82,933 85,081 87,336 89,641
EXCESS (DEFICIT) REVENUES
OVER EXPENDITURES 1,099 (3,563) (4,484) (4,902) (4,605) (4,821) (2,912) (3,608) 1,585 1,913 2,297
FUND BALANCE
Beginning Fund Balance 7 916 9,015 _ 5,452 968 _ 3,934 (8,539 13,360 1( 6,272) 1( 9,880) 1( 8,295) _(16,3
Ending Fund Balance $__9,015 5,452. _ 968 (3,9341 (81539) (U360 (16,272 (19,860 (18,295 (16,382 -111Q85
CITY OF BEAUMONT
LONG RANGE FINANCIAL FORECAST
Employee Benefits Fund
(In thousands)
Actual Estimated Projected Projected Projected Projected Projected Projected Projected Projected Projected
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 _FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
REVENUES
Charges to Funds
Health Insurance $ 7,325 8,569 9,200 9,541 9,876 10,243 10,635 11,003 11,374 11,788 12,224
Worker's Comp. 990 1,015 1,015 1,015 1,015 1,015 1,015 1,015 1,015 1,015 1,015
Unemp./Term STD 268 290 270 270 270 270 260 260 260 260 260
Employee Contributions 1,209 1,381 1,396 1,411 1,427 1,442 1,458 1,474 1,490 1,506 1,522
Interest Earnings 105 90 100 100 100 100 100 100 100 100 100
Miscellaneous Revenue _ 332 50 25 25 25 25 25 25 25 25 25
TOTAL REVENUES ___10,229 11,395 12,006 12,362 12,713 13,095 13,493 13,877 14,264 14,694 15,146
EXPENDITURE CATEGORY
Health 8,676 10,374 10,716 11,066 11,433 11,809 12,211 12,589 12,986 13,410 13,855
Workers Compensation 997 1,003 1,010 1,016 1,010 1,016 1,022 1,028. 1,018 1,024 1,031
Unemployment 69 40 40 40 40 40 40 40 40 40 40
Short-term Disability 406 350 240 240 230 230 220 220 220 220 220
TOTAL EXPENDITURES 10,148 11,767 12,006 12,362 12,713 13,095 13,493 13,877 14,264 14,694 15,146
EXCESS (DEFICIT) REVENUES
OVER EXPENDITURES 81 (372) - -- -- -- -
FUND BALANCE
Beginning Fund Balance 1,041 1,122 _ 750 750 750 750 750 750 750 750 750
Ending Fund Balance $-, .- 1,122 750 750 750 750 750 750 750 750 750 750
CITY OF BEAUMONT
LONG RANGE FINANCIAL FORECAST
General Liability Fund
(In thousands)
Actual Estimated Projected Projected Projected Projected Projected Projected Projected Projected Projected
REVENUES
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
- -
Interest Earnings $ 67 60 80 70 60 60 50 50 60 60 60
Transfer in/Service Charg 600 500 400 400 450 450 600 600 600 600 600
Miscellaneous Revenue 1 -- --
TOTAL REVENUES 668 560 480 470. 510 510 650 650 660 _ 660 660
EXPENDITURE CATEGORY
Professional Services 74 80 100 100 100 100 100 100 100 100 100
Liability Claims 385 600 500 500 500 500 500 500 500 500 500
Other Insurance _ 3 _ 4 4 4 4 4 4 4
TOTAL EXPENDITURES 462 _ 684 604 604 604 604 604 604 604 604 604_
EXCESS (DEFICIT) REVENUES
OVER EXPENDITURES 206 (124) (124) (134) (94) (94) 46 46 56 56 56
FUND BALANCE
Beginning Fund Balance 1,271 _ 1,477 1,353 1,229 1,095 1,001 907 953 999 1,055 _ 1,111
Ending Fund Balance $_ 1,477 —1-353 1,229 1,095 1,001 907 953 999 1.055 1,111
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CAPITAL IMPROVEMENT PROGRAM
May 15, 2001
To the Honorable Mayor and Councilmembers
Capital Program
The Capital Improvement Program (CIP), is a plan prepared annually to provide for both
short end long range physical development within the City of Beaumont.Charter requires the
submission of the CIP to Council as part of the financial planning process. It is adopted in
September with the annual operating budget. The CIP allows for project evaluation at a
comprehensive level and also provides the financial information necessary to plan and
anticipate potential changes to the tax structure, user fees and bonded indebtedness.
Generally, a capital improvement has the following characteristics: relatively high monetary
value (at least $100,000), long life (will last at least 10 years), and results in either the
creation of a fixed asset, or the revitalization of one. Fixed assets are resources owned by
the City which have monetary value, long-term character and*11 be held or used. Examples
are land,buildings and improvements to land other than buildings. Included within the above
definition are the following specific items: purchase, improvement and development of land;
construction of new facilities for the delivery of City services;remodeling of existing facilities;
and the planning/engineering costs related to specific improvements of the type listed above.
The CIP includes a listing of all General and Public Works improvement projects along with
project descriptions and cost estimates. General Improvements include Parks and
Recreation, Public Safety and other general government municipal facility improvements,
whereas Public Works Improvements include street and stormwater drainage projects. For
informational purposes, water system projects are listed separately in this document;
however, they are funded through water revenues rather than property taxes.
Approved projects are classified in three phases: current, scheduled and planned. A
project classified as current is underway orwill be underway within the calendar year.Those
classified as scheduled are under design and right-of-way is being acquired however no
construction contract has been let. Projects classified as planned are approved projects but
are only in the preliminary stage. Other projects for consideration, also included in this
presentation, represent projects that are desirable but are not included in the five year plan.
Capital Program 2002
May 15, 2001
Completed Projects (1997-2001)
Since 1997, approximately$61.1 M of projects,both general improvement and public works,
have been completed or will be completed prior to fiscal year end 2001. The general
improvement projects completed during this five year period totaled $15.1 M. The costs for
all public works projects topped $46M. An average of$12.2M in projects were completed
annually during this period. A summary of the projects completed from 1997-2001 follows:
YEAR DESCRIPTION AMOUNT
General Improvement Projects
1997 Colliers Ferry Park $ 1,300,000
Julie Rogers Theatre- Foundation 410,000
Tyrrell Park 226,000
1998 Elmo Willard Library 1,695,000
Julie Rogers Theatre-Site Development 255,000
1999 Alice Keith Swimming Pool 1,380,000
2000 Municipal Court Building 1,904,000
Fire Station Construction (3) 2,285,000
Beaumont Yacht Club Additions 1,080,000
Parks Maintenance Facility 700,000
Airport Runway Extension 261,000
2001 Police Building Renovation 300,000
Fire Training Center Improvements 1,496,000
Athletic Complex-Softball Fields 1,616,000
Airport Fuel Facility 195,000
Public Works Projects
1997 Maury Meyers Overpass 4,050,000
West Lucas 9,000,000
South Park Relief 3,400,000
Twenty-Third Street 400,000
1998 Royal Street Outfall 940,000
Eleventh Street-Washington to Fannett 1,900,000
Folsom Road -Crow to Dowlen 1,500,000
1999 Chaison Street-Threadneedle to Harriot 156,000
2000 Walden Road/Ditch 109 845,000
Ector Street Ditch 500,000
2001 Concord Road - Phase 1 (1-10 to Helena) 3,500,000
Franklin Street 765,000
Concord Road - Phase 11 (Includes Deleware outfall) 8,556,000
Walden Road -Major Dr. To Fannett 6,570,000
Folsom Road 2,900,000
Frontage Road - Entertainment Complex 1,000,000
Capital Program 2002
May 15, 2001
.Outstanding Debt
Relative to the assessed value of property within the Beaumont city limits, the outstanding
general obligation debt has ranged between a high of 2.54% at 10/01/92 and a low of 1.95%
at 10/01/97.The increasing assessed valuation of property is attributable to both the addition
of new property to the tax roll and increasing values of existing properties. The growth in
assessed value mirrors the level of debt issued by the City for improvements to infrastructure
which support a growing economy.The debt level has fluctuated between$67M at 10/01/94
to $89M at 10/01/99 while maintaining an average basis of 2.17% for period under review.
The projected debt ratio at 10/01/01 is in line with the average at 2.12% of assessed value.
The following table illustrates this discussion.
Outstanding Assessed Debt
Debt(1) Value Ratio
10/01/92 75,991,091 2,986,049,120 2.54%
10/01/93 71,922,491 3,245,152,910 2.22%
10/01/94 67,584,491 3,251,615,993 2.08%
10/01/95 68,501,191 3,311,639,210 2.07%
10/01/96 71,482,591 3,420,010,280 2.09%
10/01/97 68,286,391 3,499,102,595 1.95%
10/01/98 76,723,691 3,661,785,240 2.10%
10/01/99 89,243,491 3,701,491,226 2.41%
10/01/00 81,093,791 3,779,873,302 2.15%
10/01/01 (prelim) 82,276,091 3,879,891,423 2.12%
(1) Outstanding debt shown net of self-supporting HUD Section 108 loan.
Capital Program 2002
May 15, 2001
As a percentage of total general government expenditures(General Fund and Debt Service),
annual tax supported debt service payments have ranged from 13.16%to 15.78%during the
period FY98 through FY01. Considering existing debt levels,this ratio is projected at 14.76%
for FY 2002.
Fiscal General Govt. Debt Service Percent
Year Expenditures Payments of Total
1998 70,273,731 9,248,501 13.16%
1999 73,707,665 11,046,675 14.99%
2000 78,433,086 12,371,272 15.78%
2001 (Est) 83,500,181 12,297,281 14.73%
2002 (Prof) 85,480,653 12,609,853 14.76%
Debt Service Payments
Relative to General Government Expenditures
100
80
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5 40
20
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1998 1999 2000 2001 2002
Fiscal Year End
0 General Fund Expenditures =Debt Service Payments
Capital Program 2002
May 15, 2001
Capital Program 2002
Current, scheduled and planned projects total $65.6M. Individual project descriptions, with
maps for street and drainage projects, may be found in the section titled "Project
Descriptions."
The following table identifies the specific cost associated with each phase of the CIP.
Capital Program 2002
Program Summary
Cost
Public Works Improvements
Current $21,860,000
Scheduled 9,200,000
Planned 25,200,000
Total 56,260,000
General Improvements
Current $3,810,000
Scheduled —
Planned 5,531,000
Total 9,341,000
Total Program Cost $65,601,000
Funding
Financing for the annual program is provided by the "cash flow" approach, whereby debt is
issued to generate enough cash to pay the actual expenditures during the year for both
existing and new projects. This approach provides the most efficient use of the public tax
dollars by allowing multi-year projects to be initiated without issuing debt for the full cost of
the projects at the time of project commencement. All available funding sources are
considered. Historically, funding has been provided by the sale of general obligation debt,
Community Development Block Grant, and various State agencies.
Capital Program 2002
May 15, 2001
Based on a "cash flow"approach the City expects to sell $10 in Certificates of Obligation in
the summer of FY 2001. This inflow of cash will provide sufficient cash flow for current
General Improvement and Public Works Improvement projects.
Funding for scheduled and planned projects has not been identified. As these projects
transition into the"current"classification funding requirements will be reviewed and proposed.
Several factors which are unforeseeable will dictate the amount of debt issued. Weather,
planning, design and construction costs all factor into the decision of when and how much
debt to issue.
The funding required to complete all current and scheduled projects is estimated at $8.6M
at this time.
Capital Program 2002
Funding Summary
Estimated Cost of Projects
Current $25,670,000
Scheduled 9,200,000
Planned 30,731,000
Total $65,601,000
Funds Available
Committed $16,267,000
2001 Certificate of Obligations 10,000,000
Total $26,267,000
Funds required to complete
Capital Program 2002 $39,334,000
Effect on Operating Costs
It is expected that the operational needs related to current and scheduled Public Works
Improvements will be absorbed into existing operating departments and will not require
additional personnel. The most significant operating item is maintenance of rights-of-way
related to street projects, which will be handled by the Parks and Recreation Department.
Capital Program 2002
May 15, 2001
Most of the projects within the General Improvements category will be handled the same
way.Additional operating needs will be absorbed.The T. R. Johns, Sr. Branch Library is the
only project of the current/scheduled projects that will affect operating costs. Included in the
FY 2001 budget is $50,000 to begin acquiring the collection. The full impact of these
additional operating costs will be in FY 2002 when personnel are hired and the remainder
of the collection is secured.
Water Utilities Improvements
The City Public Works Department has worked with engineering firms to identify necessary
improvements to the water and waste water systems. Preliminary estimates for the
renovation of the systems, which will be completed over a five year period, is in excess of
$50M. These renovations are required to meet federal and state mandates as well as meet
the needs of the City's growth. Individual project descriptions may be found in the section
titled "Project Descriptions."
The initial sale of$25M in Water Revenue Bonds in August 2000, is expected to fund the
first phase of these improvements. A rate adjustment of 30%was made in July 2000 with
increases of 4% in 2001, 2002 and 2003 to follow in July of each year. These increase are
necessary to adequately fund debt service requirements. Additional debt issuance will be
required in subsequent years to complete these projects.
Conclusion
The Capital Program is designed to annually review the development and continuing
maintenance of the City's infrastructure. The relationship between the assessed valuation,
outstanding debt, annual debt service requirements and general government expenditures
as illustrated provide a basis for project consideration and funding. Revisions and
amendments may be incorporated into the plan as desired by Council.
Capital Program 2002
Public Works Improvements
Amount
Current Probe
Major Drive $ 4,000,000 (1)
Neches River Hike and Bike Trail 3,400,000 (2)
Concord Road - Phase II (Includes Deleware outfall) 9,150,000
Concord Road - Phase III (Includes Concord Road North outfall) 5,310,000
Total $ 21,860,000
Scheduled Projects
Phelan Boulevard - Major Drive to West of Westbrook $ 1,500,000
Caldwood Outfall 3,700,000
Moore Street Relief 4,000,000
Total $ 9,200,000
Planned Pr-Qiq
Delaware - Dowlen to Major $ 3,500,000 (3)
High School Ditch 8,000,000
Madison Street- Irving to Grove 1,500,000
Main Street- Calder to Blanchette 2,000,000
Old Dowlen - SH 105 Connector 2,600,000
South Park Relief- Remaining phases 3,600,000
Twenty-Third Street- College to Washington 1,500,000
Virginia - Mercantile to Avenue A 2,500,000
Total $ 25,200,000
(1) Includes TXDOT funding of 80% or$3.2M.
(2) Includes TXDOT funding of 80% or$2.4M.
(3) Application pending for TXDOT funding of 80% or $2.8M.
Capital Program 2002
General Improvements
Amount
Current Projects
Charlton Pollard Neighborhood Paris $ 500,000 (1)
Miller Library Addition 800,000 (2)
Pedstein Park (Phase 1) 260,000 (3)
Playground Renovations (Phase 1) 300,000
T. R. Johns, Sr. Branch Library Construction 1,950,000 (4)
Total $ 3,810,000
Scheduled Projects
Total $ 0
Planned Projects
Athletic Complex - Tennis courts $ 275,000
EMS 2 Facility 315,000
Riverfront Park - Bank Stabilization 1,110,000
Telephone System Replacement 451,000
Transit System - Coach Acquisition (7) &Transit Access Imprv. 3,180,000 (5)
Tyrrell Park - Clubhouse 200,000
Total $ 5,531,000
(1) This project is 100% funded by a combination of CDBG and EDI Grants.
(2) This project is 100% funded by the Miller Community Fund.
(3) Includes $30,000 donation from the Perlstein family.
(4) This project is funded with HUD Section 108 and CDBG funds.
(5) Requesting Federal Transportation funding of 80% or $2.5M.
302
CALDWOOD OUTFALL
When completed, this project will double the capacity of the Caldwood Addition Outfall and relieve street
flooding. The project includes installation of a thank system on East Caldwood, installation of inlets and
laterals on Bristol, Sunbury, Medford, Canterbury and the reconstruction of the streets.Also included is the
installation of new laterals, replacement of 50 inlets and reconstruction of Cross, North Caldwood, Central
Caldwood, and South Caldwood Streets. The estimated cost of this project is$3,700,000.
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CONCORD ROAD
This project is needed to relieve the north/south traffic congestion on Eastex Freeway as well as to provide
an extension of M. L. King, Jr. Parkway. Concord Road has an indefinite right-of-way and as a result,
additional right-of-way requirements are difficult to determine.The addition of a curb and gutter section will
also require the construction of the Concord Road North Outfall to complement this project as well as the
Delaware Outfall(formerly known as the Prince Street Outfall)Drainage Project This project will be carried
out in three phases and provide for the reconstruction of Concord Road from IH-10 to East Lucas into an
arterial roadway. Phase I, 11-140 to Helena, has been completed. Phase 11, Helena to the railroad track,
includes the constrechon of the Delaware Outfall.Estimated cost for Phase 1I is$9.15M.Phase 111 win cover
the area from the railroad track to East Lugs and wiq include the Concord Road North Outfall. Estimated
cost for Phase III is$5.6M. Maps with descriptions for the outfalls are included in alphabetical sequence.
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During the design of the Concord Road Project it was determined that a drainage outfah would be needed
for the northem section of Concord Road. This outfall would drain an area that is bounded by Dogwood
Street on the south, U.S. 69/96287 on the west. East Lucas on the north, and the Santa Fe Railroad on
the east In addition to providing drainage for the northem section of the Concord Road Project it will also
provide relief to a portion of the Minglewood Subdivision. The estimated cost of this project is included in
Concord Road Phase III project
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The extension of Delaware is required to provide an additional easVwest corridor from Eastex Freeway
through to Major Drive.The limits of this project would run from Dowien Road to Major Drive.Most of the
street right-of-way has been donated, except in the area where an active tank farm exists. The oil field
company anticipates closing the tank farm by 2005. Upon completion of oil field activities, it is anticipated
that the property will become available for development Property acquisition could delay completion of the
middle portion of the project, and may require construction to be completed in more than one phase.The
remaining right-of-way requirements are contingent upon oil field activity completion.Estimated cost for this
project is$3,500,000.
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(formerly known as Prince Street Outfall)
The Delaware Street drainage area covers approximately 1,350 acres.This area is bounded roughly by East
Lucas on the north, Pine Street on the east, Maple Avenue on the south, Concord Road on the southwest
and Detroit Avenue on the west. Natural ground elevation In the study area varies from 33 feet in the Fair
Park area to 5 feet in the area east of Pine Street and 10 feet in the area north of Lucas, the Hayes Gulty
Outfall. Roadside ditches, which are not adequate to handle the amount of runoff, comprise 70% of the
drainage system in the project area This area is also comprised of four sections which drain independently
of each other.The northwest area drains into Hayes Gully Outfali,and the other three areas drain to the east
into Brakes Bayou.The completion of this project will require the installation of trunk lines,inlets,manholes
and connecting pipe improvements, which will provide for a more consolidated and effective drainage
system.The preliminary design is complete.The estimated cost of this project is included in Concord Road
Phase 11 project.
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There are two remaining phases of the High School Ditch project, South and North. Each section consists
of the installation of trunk lines, inlets, manholes and connecting pipe improvements that are required to
complete the drainage improvements in the entire High School Ditch area.This area covers approximately
600 acres and Is served mostly by an underground storm sewer system. The primary outfall for the High
School Ditch Drainage area is a 9 foot x 6 foot concrete box culvert which runs from Oxford Street under
the Southern Pacific Railroad tracks and South 11 th Street to a concrete lined ditch section near 13th Street.
The concrete lined ditch runs to near Highway 69, 96, 287, and IH-10,where the flow is carried under the
highway by three 7 foot x 8 foot concrete box culverts.The lined concrete ditch then conveys the flow from
the west side of the highway approximately 9,300 feet to Hillebrandt Bayou Oxbow.The engineering phase
of this project is complete. Estimated cost for this project is$8,000,000.
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Madison StreK from Irving to Grove, is the primary truck route for the industrial district located east of
Carroll Street The existing concrete pavement is deteriorating and should be replaced. Estimated cost for
this project is$1,500,000.
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The existing pavement on Main Street, from Calder to Blanchette, is beginning to experience numerous
failures as a result of an old waterline that runs underneath it After continually repairing the roadway, it is
now at the point that the entire roadway needs to be replaced. The estimated cost to reconstruct this four-
lane concrete roadway is$2,000,000.
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Major Drive is a participation project with TxDOT specifically classified as a demonstration project Our
funding provides for just the purchase of right-of-+fray and utility relocation that must ooax prior to the state
proceeding with its construction project to widen Major Drive from Hwy 105 to Hwy 124.Total cost for just
ROW and utility relocation is estimated at$4M with TxDOT responsible for 801%or$3.2M.The Qty will be
responsible for the remaining 20%or$800,000. Currently the portion from Hwy 105 to Humble has been
completed.
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MOORE STREET RELIEF
The lack of roadside drainage facilities in residential areas, inadequate capacity within existing storm
sewer systems, and large paved area within the Lamar University campus, all contribute to flooding
problems. The Moore Street Drainage Area is located within the southeast quadrant of the City and is
generally defined as the watershed contributing to the Moore Street Ditch. Drainage generally flows
westward from Highland Avenue and southerly from East Lavaca to University Drive, where storm sewer
pipes convey the storm water to the Moore Ditch. Proposed improvements include the construction of
storm sewers, the removal of a concrete restriction at the old Lower Neches Valley Authority Crossing and
realignment of the channel, the installation of a box culvert crossing Highland Avenue and the replacement
or modification of existing inlets. The preliminary engineering design is complete. The estimated cost of
this project is$4,000,000.
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Due to the significant development in the Parkdaie Mail area, a very high demand has been placed on Old
DaMen Road between Dowlen and SH 105.While the Dowlen/Old Dowlen intersection has been signalized,
little room for improvement exists at the Old DaMeNSH 105 intersection due to its dose proximity to US 69.
Accommodating the various intersection movements and traffic queuing will require the relocation of the
north section of Old Dowlen Road several hundred feet west. This change would move the intersection
further away from US 69,and it would allow the installation of a traffic signal.Pavement widening to provide
a curb and gutter street will allow greater traffic bads with much less required maintenance. Also included
is the reconstrucbon of Caswell through to US 69, which Old Dowlen will conned to when relocated. The
estimated cost for this project is$2,600,000.
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Phelan Boulevard west of Major Drive is a heavily traveled tvuo lane roadway that provides access to west
Brook High School and the west end of Beaumont The current roadway cannot adequately handle the traffic
demand and requires widening to a four lane curb and gutter section. Estimated cost for this project is
$1.500.000.
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The remaining phases of the South Park Relief project includes construction of laterals on Campus Avenue,
Zavalla Drive, East Woodrow, Kenneth Avenue, Saxe Street and Florida Avenue. Also included are
improvements to substandard inlets, manholes and connecting pipe. Estimated cost for this project is
$3,600,000.
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Twenty-third Street is currently a two lane roadway with open ditches from College Street to Washington
Blvd.Development along this section of Twenty-third consists of both commercial and residential properties.
The commercial development exists on each end with residential development in the center section. The
reconstruction of Twenty-third Street into a four lane concrete curb and gutter roadway will provide an
improved north/South corridor. Estimated cost for this project is$1,500,000.
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VIRGINIA - MERCANTILE TO AVENUE A
Virginia Street is cuurently four lanes from Fourth Street to Mercantile Street. The section from Mercantile
to Avenue A is only two lanes with ditches on both sides.The reconstruction of this section into a four lane
concrete curb and gutter roadway would provide a continuous collector between Fourth Street and Avenue
A. This construction would not require any additional right-of-way. Estimated cost for this project is
$2,500,000.
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CAPITAL IMPROVEMENT PROGRAM 2002-2006
GENERALIMPROVEMENTS
AIRPORT RUNWAY EXTENSION
This project provides for the extension of runway 13-31 and its taxiway by
approximately 400 feet, the installation of runway lighting and markings for the
extended area, expansion of the aircraft parking ramp, and a seal-coat over the
existing runway, taxiway and ramp. The total cost of the project is estimated to be
$2,300,000. This project is eligible for Texas Department of Transportation grant
funding totaling 90% of eligible project cost. The City's share is estimated at
$270,000.
ATHLETIC COMPLEX -Tennis courts
This project will replace the existing eight (8) tennis courts. Seepage of water
makes the existing courts,constructed in 1976,unsafe and unplayable after rainfall.
Estimated cost for this project is $300,000.
CHARLTON-POLLARD NEIGHBORHOOD PARK
This project replaces Carroll Street Park which was sold to Exxon-Mobil in 1998.
Proceeds from the sale of the old park will be used to procure property for the new
site. The new park, located at the intersection of Sabine Pass and Mary Streets, is
part of a neighborhood revitalization effort in the City's south end. Park facilities
include off-street parking,security lighting,covered picnic area,creative playground
equipment,aquatic spray devices,softball fields,tennis courts,multi-purpose court,
restrooms and jogging path with exercise stations.Construction funding is provided
by a Community Development Block Grant(CDBG)and an Economic Development
Initiative (EDI) grant. The estimated construction cost is $500,000.
EMS 2 FACILITY
This project would provide for the construction of a new EMS 2 Facility at 3020
Municipal Drive. "Medic 2"was previously stationed in a former City fueling station
at this address. Due to severe deterioration, the building was abandoned, and will
be demolished. The City now rents a modular unit to house the medic team. A
rental fee of$5,760 is paid annually. The requested facility contains living quarters,
supply storage areas and covered parking for two to three units. Estimated cost for
this project is $375,000.
T. R. JOHNS, SR. LIBRARY CONSTRUCTION
This project will provide for the construction of a new library facility in the south end
of the city. The current location of the Spindletop Branch Library is very crowded
and unable to grow. Due to this space limitation,an adequate supply of books is not
available and children's activities are limited. Cost of site acquisition and
construction is estimated at $1,950,000. It is anticipated that this project will be
funded with HUD Section 108 ($1,825,000) and Community Development Block
Grant ($125,000) funds.
MILLER LIBRARY ADDITION
The Hibernia Bank Trust Committee has authorized the Miller Community Fund to
underwrite the cost of an addition to the Miller Branch Library. This project will
provide an additional 2,400 square feet to the building for adult circulation. Lower
than expected construction bids result in a total project estimate of$500,000. The
authorization limit for this project is $800,000.
PERLSTEIN PARK - Phase I
The Park and Open Space Element of the Comprehensive Plan calls for a
neighborhood park in the Amelia area. A 7.2 acre tract of land in the Gulf Terrace
addition has been purchased for the site of the new park. Proposed improvements
include a parking lot, security lighting, spray device, creative playground and
shelter. A generous donation of $30,000 will be provided by the Perlstein family.
Total project cost, including purchase of land, is estimated to be $260,000.
PLAYGROUND RENOVATIONS
Existing facilities at Gussman,Sprott,Gilbert, Forrest,Athletic Complex and Rogers
Parks are outdated and require replacement. The equipment at Gilbert was
removed in 1997. The equipment at the remaining parks has served its useful life
and is no longer repairable. Estimated cost for this project is $300,000.
RIVERFRONT PARK - Bank Stabilization
This project provides for 1,225 feet of bank stabilization. The shoreline along the
west bank of the Neches River is eroding and the existing sidewalk supports are
exposed. The existing sidewalks on the north shore will collapse without support.
Estimated cost for this project is $1,110,000.
TELEPHONE SYSTEM REPLACEMENT
This project would provide for complete new telephone systems at City Hall, Police
Department, Fire Headquarters and health facilities located on Washington Blvd.
The existing systems at these locations are outdated and only used or
reconditioned parts are available. City Hall telephone communications switch
remains to be the hub for four sites and is at maximum capacity at this time.
Replacement of the switches would allow for future expansion, include improved
features,and would relieve the City of the precarious situation that currently exists.
Estimated cost for this project is $500,000.
TYRRELL AP RK -Clubhouse
This project provides forthe renovation of the clubhouse at the Henry Homberg golf
course. Estimated cost for this project is $350,000.
Capital Program 2002
Water and Sewer Improvements
Current Projects Amount
Alley Water Meters & Mains $ 960,000
Bunn's Bluff Canal 356,000
Dowlen Road Interceptor 2,204,000
Eleventh Street Interceptor(Phase 1) 1,780,000
Lawson's Canal Pipeline & Pump Station 5,750,000
Primary and Secondary Digesters 258,000
Prison Force Main 816,000
Salt Water Barrier 2,000,000
Sanitary Sewer Main Relocations 2,702,000
Water Distribution Mains 2,743,000
Water Main Replacement 3,250,000
Water Storage Tank- North 5,300,000
Total $ 28,119,000
Scheduled Projects
Aeration Ponds Dredging $ 255,000
Chemical Facilities - Liquid Lime System 847,000
Chlorine Dioxide Feed System 745,000
Electric System Replacement 1,542,000
Eleventh Street Interceptor(Phase 11) 5,047,000
Filters and Clarifiers 6,167,000
Inlet Gates 51,000
Laboratory Refurbishing 158,000
Pond Aerators 158,000
Sidewalk Replacement 113,000
Site Development 900,000
Standby Generator- Reclamation Plant 473,000
Standby Generator-Well No. 2 137,000
Tyrrell Park Road Interceptor 1,597,000
Washwater Facilities 583,000
Water Storage Tank- Loeb 393,000
Total $ 19,166,000
Planned PrQlects
Elevated Water Storage Tank $ 1,625,000
Envirex Boiler 108,000
Raw Sewage Hoist System 81,000
Standby Generator-Well No. 3 147,000
Twenty-Third Street Interceptor 2,684,000
Total $ 4,645,000
CAPITAL IMPROVEMENT PROGRAM 2002-2006
WATER AND SEWER IMPROVEMENTS
AERATION PONDS DREDGING
The dredging of two(2)aeration ponds is needed to remove and process 3.0 million
cubic feet of sludge. Excess sludge in the aeration ponds will hinder operations and
cause state and federal wastewater permit excursions. This project is needed to
comply with TNRCC regulations. Estimated cost for this project is $255,000.
ALLEY WATER METERS $ MAINS
This project provides for the relocation of alley water lines and alley water meters
to street right-of-ways. This will replace the unlined cast iron alley pipes with low
volume and low pressure.The new lines will provide customers with adequate water
volume, water pressure and prevent interruption of water service. Estimated cost
for this project is $960,000.
BUNN'S BLUFF CANAL
Bunn's Bluff Canal dredging is needed to increase canal carrying capacity and
protect water supply from salt water intrusion. It is needed to improve the reliability
of the raw water delivery system. Estimated cost for this project is $356,000.
CHEMICAL FACILITIES - LIQUID LIME SYSTEM
This project provides for the installation of liquid lime system chemical facilities to
improve water treatment process and to comply with regulations from the TNRCC.
Estimated cost for this project is $847,000.
CHLORINE DIOXIDE FEED SYSTEM
The chlorine dioxide food system is needed to comply with Texas Natural Resource
Conservation Commission regulations. In addition, this project will improve water
quality. Estimated cost for this project is $745,000.
DOWLEN ROAD INTERCEPTOR
This project provides for the rehabilitation of the Dowlen Road sanitary sewer
interceptor from Folsom to Phelan Boulevard due to poor structural condition of the
pipe. The existing sanitary sewer line is in a very poor structural condition.
Restoring the line will provide uninterrupted service to a very large area and reduce
maintenance cost. This is a requirement of TNRCC. Estimated cost for this project
is $2,204,000.
ELECTRIC SYSTEM REPLACEMENT
This project will provide for the upgrade of the electrical system at the Water
Reclamation Plant. The existing eiectrical system is very dangerous and very
expensive to maintain.The new system will provide a safe environment for workers,
automation of the wastewater plant, will save money, and improve operations and
reliability. Estimated cost for this project is $1,542,000
ELEVATED WATER STORAGE TANK
This project provides for the construction of a new elevated water storage tank at
Major Drive and Humble Road to provide additional elevated water storage for fire
protection and to provide adequate volume of water during peak hours. This is a
requirement of the TNRCC. Estimated cost for this project is$1,625,000.
ELEVENTH STREET INTERCEPTOR (PHASE 1)
This project provides for the rehabilitation of the Eleventh Street sanitary sewer
interceptor from Harrison to Washington. The existing sanitary sewer line is in a
very poor structural condition. Restoring the line will provide uninterrupted service
to a very large area and reduce maintenance cost. This is a requirement of the
TNRCC. Estimated cost for this project is $1,780,000.
ELEVENTH STREET INTERCEPTOR (PHASE 11)
This project provides for the rehabilitation of the Eleventh Street sanitary sewer
interceptor from Washington to the Water Reclamation Plant.The existing sanitary
sewer line is in a very poor structural condition. Restoring the line will provide
uninterrupted service to a very large area and reduce maintenance cost. This is a
requirement of the TNRCC. Estimated cost for this project is $5,047,000.
ENVIREX BOILER
This project provides for the replacement of the 1,250,000 BTU Envirex Boiler due
to the poor condition. This is a safety and operational/maintenanoe requirement.
Estimated cost for this project is $108,000.
FILTERS AND CLARIFIERS
This project provides for the construction of six (6) new filters and two (2) new
clarifiers to comply with regulation set by the TNRCC. This construction will
increase plant capacity from 27 MGD to 50 MGD. Estimated cost for this project is
$6,167,000.
INLET GATgS
This project provides for the replacement of two (2)inlet gates at the wetwell main
pump room due to poor structural condition. This is an operational requirement.
Estimated cost for this project is $51,000.
LABORATORY REFURBISHING
This project provides for the refurbishment of the existing laboratory to provide a
safe environment for workers and improve lab performance. This is a safety and
operational requirement. Estimated cost for this project is $158,000.
LAWSON'S CANAL PIPELINE & PUMP STATION
Lawson's Crossing pipeline and pump station improvements are needed to comply
with the Environmental Protection Agency's Safe Drinking Water Act and to provide
reliable raw water delivery system. Upgrade of the existing pump station and
installation of 2.5 miles of pipeline from the east side of the Neches River to the
Water Production Plant. Estimated cost for this project is $5,750,000.
POND AERATORS
This project provides for the replacement of aerators for primary and secondary
aeration ponds. Existing aerators require constant maintenance.This is a TNRCC
requirement. Estimated cost for this project is $158,000
PRIMARY AND SECONDARY DIGESTERS
Primary and secondary digesters need to be cleaned by removing snails and solids
from inside the units. Units also need to be repaired and repainted. This is an
operational requirement. Estimated cost for this project is $258,000.
PRISON FORCE MAIN
This project provides for the installation of a 16" force main to provide adequate
capacity to all state and federal prisons. The existing 12"force main cannot handle
the increased sanitary sewer waste from all the prisons. Estimated cost for this
project is $816,000.
RAW SEWAGE HOIST SYSTEM
This project provides for the refurbishing of the hoist system in the raw sewage
main pump room. This is a safety and operational requirement. Estimated cost for
this project is $81,000.
SALT WATER BARRIER
This project provides for the Neches River Salt Water Barrier Project The City's
share of the cost is estimated at $2,000,000.
SANITARY SEWER MAIN RELOCATIONS
This project provides for the relocation of sanitary sewer mains throughout the city
to accommodate new street and drainage improvement projects. Estimated cost for
this project is $2,702,000.
SIDEWALK REPLACEMENT
This project provides for the replacement of sidewalks at the Water Reclamation
Plant to provide safe access to isolated units for maintenance.The project will also
repair roadways and improve storm drainage inside the plant. Estimated cost for
this project is $113,000.
SjTE DEVELOPMENT
This project provides for site development for operational requirements and flood
protection at the Water production Plant.Estimated cost for this project is$900,000.
STANDBY GENERATOR - RECLAMATION PLANT
This project provides for the installation of a standby generator for the Water
Reclamation Plant to maintain service to our residential, commercial and industrial
customers. The standby generator is needed to prevent sanitary sewer overflows
and ensure reliability of the sanitary sewer collection system.Estimated oostforthis
project is $473,000.
STANDBY GENERATOR -WELL NO. 2
Installation of a new standby generator at water well number two in Hardin County
is needed to ensure reliability of the ground water production. Estimated cost for
this project is $137,000.
STANDBY GENERATOR -WELL NO. 3
Installation of a new standby generator at water well number three in Hardin County
is needed to ensure reliability of the ground water production. Estimated cost for
this project is $147,000,
TWENTY-THIRD STREET INTERCEPTOR
This project provides for the rehabilitation of the 23rd Street sanitary sewer
interceptor from the Santa Fe Railroad to the Water Reclamation Plant.The existing
sanitary sewer line is in a very poor structural condition. Restoring the line will
provide uninterrupted service to a very large area and reduce maintenance cost.
This is a requirement of the TNRCC. Estimated cost for this project is $2,684,000.
TYRRELL PARK ROAD INTERCEPTOR
This project provides for the rehabilitation of the Tyrrell Road sanitary sewer
interceptor from Frint Drive to Fannett Road. This existing sanitary sewer line is in
a very poor structural condition.Restoring the line will provide uninterrupted service
to a very large area and reduce maintenance cost. This is a requirement of the
TNRCC. Estimated cost for this project is $1,597,000.
WASHWATER FACILITIES
This project provides for the construction of a washwater facility to comply with rules
and regulation from the TNRCC. Estimated cost for this project is $583,000.
WATER DISTRIBUTION MAINS
This project provides for the relocation of water distribution mains throughout the
city to accommodate new street and drainage improvement projects, which
encompasses the installation of water and sanitary sewer lines to the new
entertainment complex. Estimated cost for this project is $2,743,000.
WATER MAIN REPLACEMENT
This project provides for the replacement of 2", 6", 8", 10" and 12" water mains
throughout the City due to the poor condition of the water mains which require
constant maintenance and interruption of service to our customers. In addition,
water main replacements are needed because of the loss of large qualitites of
treated water. Estimated cost for this project is$3,250,000.
WATER STORAGE TANK - LOEB
The Loeb five-million gallon steel ground water storage tank is in poor structural
condition and it is leaking. The inside of the tank has no paint coating protection.
This project will provide for the repair and repainting of the tank. Estimated cost for
this project is $393,000.
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WATER STORAGE TANK - NORTH
This project provides for a five-million gallon ground water storage tank and new
high service/backwash pump station in order to meet future capacity as required by
the Texas Natural Resource Conservation Commission. Replacement of the north
water ground storage reservoir will provide reliable and adequate volume of
finished water. Estimated cost for this project is $5,300,000.
Other Projects for Consideration
General Improvements
Protect Amount
Air Conditioning Duct Cleaning $ 175,000
Alice Keith Paris Walking Path 150,000
Colliers Ferry Recreation Area - Bank stabilization 1,690,000
Colliers Ferry Recreation Area - Expansion 250,000
Lefler Park 150,000
Mechanic Shop Addition 375,000
Northwest Command Center-Police 3,750,000
Perlstein Park - Phase II 150,000
Playground Renovations (Phase 11) $00,000
Port Interchan9e Yard 720,000
Restroom Facilities-Alice Keith Park 125,000
Rooftop Air Handler 175,000
School Safety Sidewalk Program - Various locations 100,000
Tyrrell Park- Horse.Stables 175,000
Total $ 8,285,000
Public Works Improvements
Pro" c# Amount
Avenue A - Virginia to Cardinal Drive $ 2,200,000
Broadway Box 1,500,000
Calder Avenue - 18th to West Lucas 1,000,000
Concord Road - Lucas to Hwy 105 8,475,000
Delaware - Dowlen to Major
3,500,000
Dowien Road - College to Walden 4,000,000
Fannett Road Outfall 700,000
Fannin Street Box 8,400,000
Laurel Avenue & Laurel/Phelan connector 1,500,000
Rolfe Christopher Drive 1,250,000
Royal Street Outfall - Remaining phases 1,680,000
Twenty-Third Street Overpass 2,500,000
Washington Boulevard - Langham to Major 2,500,000
Total $ 39,205,000
OTHER PROJECTS FOR CONSIDERATION
AIR CONDITIONING DUCT CLEANING
To prevent particles of black soot from blowing onto employees'clothing,desk and
papers, mesh screens have been installed over air conditioning vents in Public
Works, Engineering and Human Resources office areas.These screens frequently
become clogged and they reduce air flow. To protect health and to improve the
quality and volume of air flow throughout City Hall, it is necessary that the duct
system be cleaned with a disinfectant. The duct has not been cleaned since its
original installation in 1978. Estimated cost for this project is $160,000.
ALICE KEITH PARK WALKING PATH
Construct a walking path beginning on the northeast side of the park encompassing
the outer areas of the entire site. Estimated cost for the project is $150,000.
AVENUE A -Virginia to Cardinal Drive
Avenue A from Virginia to Cardinal Drive is currently a two lane asphalt roadway
that will connect to the TxDOT proposed Spur 93. This new TxDOT highway will
provide better access to the prison system located in mid Jefferson County. With
the reconstruction of Avenue A into a four lane roadway,the increased traffic along
this corridor will be relieved. Estimated cost for this project is $2,200,000.
BROADWAY BOX
This project is designed to relieve the 204 acre area served by the Broadway Box,
by cross connecting the box with a parallel box in the abandoned Southern Pacific
Railroad right-of-way and reconstructing or replacing damaged or overloaded inlets.
This area runs between Eighth Street and the Neches River. Estimated cost for this
project is $1,500,000.
CALDER AVENUE - 18th to West Lucas
To relieve traffic congestion on Phelan Boulevard during peak hours,the widening
of Calder into a four-lane roadway from 18th to West Lucas is necessary.
Additionally,a significant increase in traffic has been realized due to the completion
of the West Lucas and Liberty/Laurel Overpass projects. Estimated cost for this
project is $1,000,000.
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COLLIERS FERRY RECREATION AREA - BANK STABILIZATION
This project provides for 1,875 feet of bank stabilization. The shoreline along the
west bank of the Neches River is eroding and the existing road along the river will
have to be relocated without protection. Estimated cost for this project is
$1,690,000.
COLLIERS FERRY RECREATION AREA - EXPANSION
The Parks and Open Space Plan calls for additional improvements at Colliers Ferry,
including expansion to the south of the existing park. Additional parking, trails,
shelters,piers,and site improvements are proposed to increase the public's access
to the Neches River and enhance the Neches River Hike and Bike Trail. Estimated
cost for this project is $250,000.
CQNCORP ROAD - Lucas to Hwy 105
This project will provide for a continuation of the reconstruction of Concord Road
through to Hwy 105. Estimated cost for this project is $8,475,000. Funding of
$7,375,000 has been approved by the Federal Highway Administration for this
project.
DOWLEN ROAD -College to Walden
The extension of Dowlen Road to the south of College is needed to provide an
additional north/south corridor in the developing southwest area of the City.
Specifically, it will extend from College to Walden Road.The right-of-way has been
donated by property owners adjacent to the corridor. Estimated cost for this project
is $4,000,000.
FANNM ROAD OUTFALL
This project is required to improve the drainage in the Fannett Road area. The
construction of a trunk line system along Fannett Road to Harriot was recently
completed. It is now necessary to redirect the flows of existing ditches on each side
of Fannett Road into this trunk line system. Estimated cost for this project is
$700,000.
FANNIN STREET BOX
This project is needed to provide for more effective drainage of the Fannin Street
Box System which is approximately 490 acres. This project will include the
construction of 2,850 feet of concrete lined ditch,8,200 feet of concrete boxes and
approximately 1,000 feet of pipe ranging from 18 inches to 72 inches. Engineering
for this project is complete. Estimated cost for this project is $8,400,000.
LAUREL AVENUE & LAUREL/PMELAN CONNECTOR
Due to increased traffic from the Liberty/Laurel Project, the widening of Laurel,
between the IH-10 West Service Road and 23rd Street, into a four-lane roadway
is proposed. This project will relieve traffic Congestion in the area, particularly
during heavy traffic hours. Also included is the provision for a direct connection
between Laurel and the Liberty-Laurel overpass project. The short connection
between these two projects is needed to complete the roadway system involved
with the 1-10 Overpass. This project, in conjunction with the Calder project, will
complete the arterial system in this area. Estimated cost for this project is
$1,500,000.
LEFLER PARK
Citizen requests and the Parks and Recreation Advisory Committee has
recommended an uncovered basketball court and additional parking at Lefler Park.
The part is a Community park and the master plan calls for a court on the east side
of the park. Estimated cost for this project is $150,000.
MECHANIC SHOP ADDITION
This project would provide for the construction of a 60'x 1 00'mechanicshop facility
at the Lafin Road Fleet Service Center. The old former Municipal Transit Building
on Milam Street is currently being used by the Fleet Maintenance Division for
servicing equipment owned/operated by the Fire Department. Moving all of the
City's Fleet Maintenance operations to a single site would reduce operating costs,
allow for better utilization of available manpower, and improve management's
control over the quality and quantity of work performance. Estimated cost for this
project is $350,000.
NORTHWEST COMMAND CENTER
This project would provide for the construction of a new police command center in
the northwest end of town which is a current and presumably future growth area of
Beaumont A site in the vicinity of the population and commerce expansion would
better serve the citizens by enabling officers to report to service and go into service
in the area in which they will work. Out of service time for prisoner transfer would
be significantly reduced by bringing prisoners to a holding area incorporated into
this building. Construction of this facility would relieve some of the current
overcrowding and lack of expansion potential for the current police building.
Estimated cost for this project is $3,750,000.
PERLSTEIN PARK -PHASE It
This project provides for parking, a walking path, additional landscaping, and a
picnic shelter at Peristein Park. Estimated cost for this project is $150,000.
PLAYGROUND RENOVATIQNS - PHASE II
Existing playgrounds at Alice Keith, Chaison, McLean, and Roberts Parks are
outdated and require replacement. The equipment at these four parks has served
its useful life and is no longer repairable.Estimated cost for this project is$300,000.
PORT INTERCHANGE YARD
As a part of the downtown revitalization effort,the City would like to take advantage
of its material resources and develop the riverfront behind the Civic Center and City
Hall. In order to make the development a reality,the City would need to purchase
the Port of Beaumont's Interchange Yard (6-7 acres) located between the Civic
Center and City Hall and Riverfront Park. Estimated cost for this project is
$720,000.
RESTROOM FACILITIES -Alice Keith Park
This project would provide for new restroom facilities at Alice Keith Park. The
existing public restrooms are not ADA accessible and plumbing is very old with
frequent vandalism and sewer problems. Estimated cost for this project is$125,000.
ROLFE CHRISTOPHER DRIVE
The widening of this two-lane asphalt roadway from Virginia Street to Cardinal Drive
into a four-lane concrete roadway will greatly improve the flow of traffic around the
Lamar University area. Estimated cost for this project is $1,250,000.
ROOFTOP AIR HANDLER
This project would provide for the replacement of the rooftop air handler at City Hall.
The existing air handler unit at City Hall is 20 years old and in very poor condition.
The housing, door gaskets, and drain pans have deteriorated beyond repair.
Approximately 30 feet of duct Is coated with asbestos containing materials. Water
is leaking from rusted through drain pans, causing built-up roofing materials to
deteriorate. Estimated cost for this project is $160,000.
ROYAL STREET OUTFALL - Remaining,Phases
Provides for the completion of Phases II, Ili, and IV of the Royal Street Outfall
Project. This project will be bounded by MLK Parkway on the east, Wall Street on
the north, Southern Pacific Railroad on the west and Irma Street on the south.
Estimated cost for this project is$1,680,000.
SCHOOL SAFETY SIDEWALK PROGRAM -Various locations
Prior to the beginning of the school year,a safe route to school map is prepared for
each elementary school. In conjunction with the safe route map,a listing of potential
sidewalk projects is developed that will enhance the safety of students walking to
school. The goals of the program are to serve the elementary school children;
provide sidewalks on high volume streets;provide sidewalks on streets with a large
pedestrian population; and provide a significant enhancement to the overall
sidewalk system. Estimated cost for this project is $100,000.
TYRRELL PARK - Horse Stables
The horse stable facilities at Tyrrell Park are currently unoccupied and in need of
extensive renovation. Approval of this project would allow for roof replacement;
extensive repairs to wooden stalls,including support columns;complete renovation
of stable restroom facilities to comply with ADA requirements; and exterior repair
and painting of the stable building, outdoor fencing and caretaker's house.
Estimated cost for this project is $175,000.
TWENTY-THIRD STREET OVERPASS
Due to the impact of the Liberty/Laurel and West Lucas projects, the extension of
Twenty-third Street will be needed to maintain a smooth flow of traffic in this area.
This project will involve the rehabilitation of Twenty-third Street from Laurel Street
to the Southern Pacific Railroad tracks with the construction of an overpass at the
railroad tracks. Estimated cost for this project is $2,500,000.
f
WASHINGTON BOULEVARD - Langham to Major
It is desirable to continue Washington Boulevard from Langham Road to Major
Drive as a four-lane arterial. The section from IH-10 to Langham Road was a
participation project with TxDOT and has been completed for several years. The
completion of the last section should be scheduled to coincide with improvements
on Major Drive. Estimated cost for this project is $2,500,000.
City Council
City of Beaumont
SUBJECT: STORM WATER MANAGEMENT ADVISORY COMMITTEE-
TRANSMITTAL OF CONCLUSIONS AND DIRECTIONS
Dear Mayor and Council:
On behalf of the Stone Water Management Advisory Committee members, I have enclosed the
"Points of Approval" and "Position Paper' regarding the future of storm water management in
Beaumont. Since January of this year, the Committee has met 7 times to review information,
analyses and proposed directions for storm water management in the City. We have discussed the
system's maintenance needs, capital requirements, regulatory compliance, budgets and funding
options in order to formulate ideas regarding the priorities, structure and financing for the City's
storm water system. During the course of this effort, Committee members debated and discussed
a broad range of topics including the effect that dedicated storm water funding would have on the
City's General Fund and whether property taxation or a service charge is the better source of
revenue. In reviewing all this material, the committee's stated objective has been to prepare our
conclusions for consideration by the Council at its "Budget Summit" scheduled for May 15,
2001. We feel that committee's objective has been accomplished through transmittal of the
enclosed documents.
As Chairman, I want to personally acknowledge the participation of the following Committee
members who routinely attended the meetings and assisted in reviewing the "Points of Approval"
and"Position Paper"being sent to you today:
Ms. Emelie LaRousse (Southeast Texas Food Bank, Inc.); Mr. William McDonald (Christus St.
Elizabeth Hospital); Mr. LeRoy Saleme (Beaumont Independent School District); Mr. Rusty
Chimeno (Catholic Diocese of Beaumont); Mr. Sam Parigi Jr. (Parigi Property Management Ltd);
Mr. Jose Pastrana (Jefferson County); Mr. John Brier (Beaumont Chamber of Commerce); Ms.
Laurie Leister(Hall& Hall Real Estate)
Other members of the Committee whose schedules or priorities did not allow ongoing attendance
represented Drainage District Number 6; the Baptist Church; and the Restaurant Association.
Their ideas and input were also appreciated.
Mayor and Council, the time for action regarding storm water management in Beaumont is now
and the preferred funding approach is through a utility service charge. As stated in the "Position
Paper," establishing a new fee in the City is not something the Committee sought to advocate, but
given the system's needs and costs,it was considered the fairest approach available.
The Committee looks forward to the Council's review of our ideas and appreciate the opportunity
to work with the City and its staff during this important process.
Sincerely,
Adrian Eddleman - -
Committee Chairman& Parkdale Mall Manager
CITY OF BEAUMONT
STORM WATER MANAGEMENT ADVISORY COMMITTEE
- POSITION PAPER TO COUNCIL -
Beaumont's Storm Water Management Advisory Committee was formed by the
City Administration, in collaboration with the City Council, in January of 2001. The
Committee has been evaluating how to best approach storm water
management throughout the City as well as how to address federal storm water
regulations. Prior to the formation of the Committee was the development of the
National Pollutant Discharge Elimination System (NPDES) storm water permit for the
City. That Plan included a commitment that the City investigates funding options
and, if determined to be appropriate, implement a funding structure. Over the
last 3 months, staff initiated an analysis of these funding options with the Advisory
Committee. This summary addresses the Committee's preferred direction and
requests Council comment regarding these proposed policies.
What are the problems/issues Beaumont faces in storm water?
• the City's storm water system is not being maintained on a routine or
preventative level. This has resulted in more nuisance flooding during
smaller storm events. Repairs and replacements to the system - which are
long overdue -are put on hold due to lack of funds;
• Beaumont is way behind in addressing identified capital improvement
needs
for the storm water system. These total approximately $40,000,000 in capital
requirements;
• the pace of new development and redevelopment is significant and the
City's ability to ensure that developers meet Beaumont's storm water
regulations needs to also increase;
• the public needs to be an active partner in this program and the City needs
to better inform them regarding their role in storm water quality; and
• compliance with new federal NPDES regulations affecting storm water
quality is an immediate requirement and a long-term expense.
Overlaying these needs is the fact that funding for the storm water program is
through allocations from street maintenance fees and the General Fund. This
approach toward funding cannot support the kind of storm water management
necessary to meet the needs identified through this process. It is important to
understand that the program developed through this project means more than
preparation of an NPDES Permit to meet immediate regulatory requirements.
Beaumont's program not only targets implementation of the Permit but also
establishes the program structure for long-term water quality compliance and
management of the City's storm water drainage system. Meeting the storm
water quality regulations can only be achieved through an approach which
includes the services necessary to regulate, enforce, maintain, monitor, improve,
repair/replace and get the public involved with the storm water system. The
bottom line is that Beaumont has attempted to support a full time need with part
time funding sources. Not surprisingly, this approach has meant that most
improvements have been deferred and repair/replacement of the system is done
only after system failure. These existing needs and the additional costs
attributable to specific water quality regulations have forced Beaumont to
evaluate other funding strategies.
The approach determined to represent the best blend of equity and the ability to
meet program needs is the service charge or utility approach. Just as water and
sewer systems are rate supported, the Advisory Committee consensus is that the
storm water system should be funded through its own dedicated revenues.
The storm water rate structure being developed through the Committee strikes a
good balance among, equity, simplicity and legal defensibility. This equity is
reflected in a structure where everyone pays into the program. * The rate is
based on how much impervious surface is on developed parcels within
Beaumont. Single-family residences will be treated as 1 equivalent residential unit
(ERU) while all other developed property will have a rate based on their specific
measured impervious area. The structure also contains provisions for a service
charge credit in cases where on-site improvements reduce the City's costs in
providing downstream storm water facilities. This results in an equitable,
understandable and accurate service charge that can support a full time
program for meeting Beaumont's storm water needs.
• Note: Under Texas law, federal and state properties are exempted from this fee;
additionally, the Committee did not reach unanimous approval for application of the fee
to not-for-profit organizations.
Staff and Committee members are also committed to spend an increasing
amount of time speaking to groups and individuals, such as the large rate payers,
about the storm water program. In addition to Advisory Committee meetings, the
administration is preparing articles for publication and conducting neighborhood
meetings on the program. At least one citywide newsletter on the program is
anticipated. Every effort will be made to let the public know about the program
and how the storm water rate impacts them.
Implementing a new program and the fee structure that goes along with it is not
something that anyone necessarily enjoys. However, the magnitude of the needs
identified, almost $4,000,000 annually, versus continued reliance on street fees or
the City's General Fund do not match up. And Beaumont is not alone in this, as
many municipalities in Texas and across the U.S. either have or are moving toward
a storm water utility. This approach is something whose time has come in
Beaumont and the proposed rate structure reflects an equitable method for
funding the community's storm water needs now and into the future.
The members of the Stormwater Management Advisory Committee appreciate
the Council's support of our efforts and trust that the conclusions will be favorably
considered during the upcoming Budget Summit meeting.
Adrian Eddleman, Committee Chairman & Parkdale Mall Manager
CITY OF BEAUMONT
STORM WATER MANAGEMENT ADVISORY COMMITTEE
Points of Unanimous Approval
Beaumont has significant and unfunded needs in terms of storm water quantity and
quality management
• The question is not"ir but"when" Beaumont begins to address these problems
• Federal National Pollutant Discharge Elimination System (NPDES)requirements are in
place and need to be funded
• The estimated size of the City's storm water needs is approximately$4,000,000 annually,
with a$40,000,000 CIP already identified
• Long term "fixes"to the City storm water system require dedicated and consistent
revenues in order to plan for and carry out maintenance and capital improvements
• The two primary funding approaches are through property taxes and utility service
charges
• The preferred of the two options is the utility approach because, by law,the revenues
generated will be dedicated to storm water and the rate can be related to a
property's impact on the storm water system
• The appropriate form of the service charge should be based on measured impervious
surface coverage because it seems fair and consistent,plus it is generally accepted. It is
also reasonable to apply a uniform rate of t equivalent residential unit(ERU)to single
family residences.
• There should also be a credit procedure available to non single-family residential storm
water customers.The credit must be structured to reflect the cost offsets these facilities
create in terms of the utility's costs
• There may be funding available through the General Fund which is a subject that the
Committee has debated, however,when looking at storm water needs in the context of a
utility service charge,the issues of overall City budget have not been considered.
• The Committee should recommend the storm water utility concept to the City Council (see
position paper)
Point Not Receiving Unanimous Approval
• Application of the storm water rate to not-for-profit organizations has not received the
unanimous approval of the Committee
CITY OF BEAUMONT
STORM WATER MANAGEMENT
CITY INVESTIGATES POSSIBILITY OF
CREATING A STORM WATER UTILITY TO
MEET CRITICAL STORM WATER
OPERATION AND MAINTENANCE NEEDS
Overview
To meet current and growing funding needs for operation,
maintenance, and upgrade of storm water drainage facilities
as well as comply with unfunded federal mandates for
improving the quality of storm water runoff, the City of
Beaumont is investigating the possibility of forming a City-
operated storm water management utility. By collection of a
monthly utility fee, similar to the way a water bill is paid, a
dedicated, reliable source of funds for critically needed storm
water management facilities and operations would be
developed. The utility fee would eliminate reliance on the
City's ad valorem tax-based general fund to meet storm water
needs. A Citizen's Advisory Committee has been formed to
explore the pros and cons and potential structure of a storm
water utility.
Why does the City need funds for storm water activities?
Storm water funds are needed for debt service on capital
improvements for drainage and flood control works, continuing
maintenance and operation of the City's storm water conveyance
system, and programs to comply to the City's National Pollutant
Discharge Elimination System storm water discharge permit.
Without adequate funds, the storm water system will receive less
than necessary levels of maintenance and the City's storm water
drainage system will not function effectively. Flooding during
heavy rainfall events would continue to be a problem for many
citizens. Inattention to meeting storm water discharge permit
requirements could lead to fines by federal or state agencies.
To meet these needs an estimated $4,000,000 per year is required.
This need results from commitments made by the City for long
needed, but in part deferred drainage and flood control projects,
as well as growing increases in storm water management activities
arising from the City's storm water discharge permit. Some of
these needed funds were previously met by the City's general
fund, but other City program needs are also growing. If the
City's storm water funding needs are not addressed then
deterioration of the existing storm water drainage system and an
inability to address serious drainage and flooding needs in parts of
the Beaumont community will occur.
What is this storm water discharge permit?
Federal regulation promulgated in 1990 pursuant to the 1972
Clean Water Act requires cities across the country, like Beaumont,
to obtain what is called a National Pollutant Discharge Elimination
System (NPDES) permit for discharge of storm water runoff to
the rivers and bayous that pass through the city. These regulations
were issued in response to nationwide engineering studies done in
1970 and 1980's which found urban storm water runoff to contain
significant amounts of various pollutants that created a serious
pollution problem in the creeks, rivers, streams, and lakes across
the United States.
The City was issued its NPDES storm water permit by the U.S.
Environmental Protection Agency in October of 1998 after a six-
year application process. The permit gives the City, along with
Jefferson County Drainage District No. 6, the legal right to
discharge the storm waters it collects in its storm sewer system to
Hillebrandt Bayou, Taylor Bayou, Pine Island Bayou, and the
Neches River. Without this permit, the City could not legally
discharge its storm waters to these receiving waters.
What does this storm water discharge permit require?
In addition to giving the City the legal right to discharge its storm
waters, the City's storm water permit requires the City to conduct
a variety of activities and programs including:
• storm water monitoring,
• sewer system inspection,
• evaluation of possible drainage facility
retrofit for water quality improvement,
• illicit discharge identification and
elimination,
• household hazardous waste collection,
• use of best management practices in
operation of City facilities,
• construction inspection and sediment
discharge control, review and evaluation
of development and redevelopment
practices for pollutant control,
• incorporation of water quality
considerations into flood control activities,
• documentation and reporting of these
various activities, -
• implementation of public education and
awareness programs, and
• assurance that the City will fund the
necessary programs at sufficient levels to
enable compliance to the mandates of the
discharge permit.
Since issuance of the City's permit in October of 1998, the City
has been phasing in the activities necessary to comply with the
discharge permit conditions. By October of 2001, all program
activities are scheduled to be brought online. During this phase-in
period, funding needs for permit compliance have been growing.
Storm Water Utility
A storm water utility is being considered as a possible way to fund
the needs for capital improvements for drainage and flood control,
operation and maintenance of the City's storm water system, and
full implementation of the storm water permit programs on a
continuing basis. A storm water utility is like any other utility:
it collects fees on the basis of services provided and uses those
fees to fund the continued provision of those services. In the case
of Beaumont, those services would be primarily debt service for
capital improvements for storm water drainage and flood control,
operation and maintenance of the City's storm sewer system, and
conduct of the various storm water programs required by the
City's NPDES storm water permit.
Use of a utility would provide a reliable and stable source of funds
for the City's storm sewer needs. A utility is a cost efficient and
equitable means of charging residential, businesses, and
institutions in the community for the storm water services city
government is providing. Cities across the nation and the state,
like Austin and San Antonio, are utilizing storm water utilities to
meet their storm water management needs. The utility would
operate much like the City's water division; everybody would be
charged in accord with the service they use -- like a charge for the
amount of water used each month. Similiar to the water fees, the
City Council has to approve the rate upon which the storm water
utility fee is based.
How is the utility fee determined and how much would it be?
There are different methods that can be used to determine fee
amounts, but one that is commonly used, and being considered by
the City if a storm water utility was created, would be based upon
impervious area (i.e., hard surface areas from which rainfall
runoff easily flows off, like roofs and paved parking areas).
Experience has shown that impervious area is a reasonable and
fair method for determining the relative amount of storm water
services that are provided to various properties in a typical
community.
In the case of Beaumont, all single family residences would be
assigned a 3,000 square feet standard unit of imperviousness area
to account for roofs, patios, driveways, and walkways.
Businesses, industrial facilities, multi-family housing facilities,
and institutional facilities -- all non-single family properties --
would have their imperviousness areas computed and be assigned
a fee based upon how many equivalent standard units of
imperviousness area the property has. For example, if a small
business property had a building covering an area of 11,000
square feet, a parking lot covering 3,500 square feet and
walkways covering 500 square feet, that business would have a
total impervious area of 15,000 square feet, five times the
standard residential unit of 3,000 square feet. Thus, the business -
would pay a fee five tunes as much as a residence. The actual
determination of impervious area would be done by the City using
computer-based analysis of aerial photographs.
The actual fee that would be assessed if a storm water utility is
created for Beaumont is still being evaluated, but preliminary
estimates are between $3.00 and $4.00 per month, probably about
$3.76/month for a single family residence. For a business with
five standard units of impervious area as in the above example, the
fee would be about $18.80 per month. Precise determination of
the fees will depend upon the actual total amounts of
imperviousness area the City has on its non-single family
residence properties and any exemptions that might be
incorporated in a rate structure.
The Process
In the spring and summer of 2000, a feasibility study was done to
explore the formation of a storm water utility. The City Council
was presented with the results of the feasibility study in September
2000. The study demonstrated that a storm water utility was a
viable mechanism for funding storm water needs in Beaumont. In
January of 2001, the Mayor, with the assistance of the City
Manager and City staff, invited community representatives to
participate in an administrative citizen's advisory committee. A
12-member Storm Water Utility Advisory Committee composed
of community representatives was formed. The Advisory
Committee has been meeting since January to discuss and assess
the idea of a storm water utility for Beaumont. The character of
the storm water management issues and needs have been
examined. Funding mechanisms have been reviewed and the
features of a workable storm water utility had been explored and
evaluated. The committee is anticipated to provide a report to the
City Council in April or early May of 2001. If the City Council
decides at the May 2001 Budget Summit that a storm water utility
continues to warrant additional evaluation, more detailed
development or the features of the utility would be conducted
during the spring and summer of 2001. If Council approves
including a storm water utility in the FY 2002 Budget, it would be
implemented January 2002 as an additional charge on the City
utility bill.
a
FY2002 Budget
with Storm Water Utility
If implemented by January 1, 2002, the establishment of a Storm Water Utility Fund with an
appropriate fee structure containing no exemptions would provide funding of approximately$3
million for nine months. The fund has the restricted purpose of funding storm water activities in
the City of Beaumont.
The activities that this funding would finance are:
Street Sweeping
Ditching
Pipe Flushing/Repair
Catch Basin Cleanout/Repair
NPDES Permit and h4anagement/Monitoring
Watershed Protection
Capital Improvement Financing($40.5M proposed projects)
These activities would be transferred from the General Fund Budget and would offset the need to
raise additional General Fund revenues to fund ongoing"general government"activities. Ongoing
programs that are funded by the"use of fund balance" in the FY2001 Budget.
Advantages
• Provides for the establishment of a dedicated funding source for the cost of storm
water operations and capital improvements.
• Distributes the financial burden for stormwater management to include non-profit and
other local government property owners in addition to residential and commercial
taxpayers.
Disadvantages
• Without the creation of the Storm Water Utility other revenues must be
established/increased or expenditures decreased to maintain existing General Fund
service levels.
• Does Council support the creation and funding of a Storm Water Utility as a major
source of financing for the FY2002 budget?
• Does Council support consideration of any exemptions provided by State law for
City, County, School District, and/or religious institutions?
• V the creation of the Storm Water Utility is approved, does Council support a two-
cent property tax reduction to ease the burden on the business community?
EXHIBIT "B"
FY2O02 Budget
with Property Tax Increase
To fund existing service levels,the FY2001 Budget was balanced by adopting a budget which
included the use of fund balance($2.1 million) as an available revenue source. This practice is a
short-term solution only.
The use of fund balance provides necessary funding for several ongoing and recurring needs.
Ongoing programs that are funded by the`use of fund balance"in the FY2001 Budget include:
Retiree Cost of Living Adjustment
Compensation/Classification Study(Phase 1)
Addition of Six Firefighters
Economic Development Incentive
Shift of Two Cents of Property Tax to Debt Service
Additional programs under consideration for the FY2002 Budget include:
Compensation/Classification Study(Phase 2)
Shift of an Additional Two Cents of Property Tax to Debt Service
The combined effect of the above issues create a funding deficit of approximately$3M. When
combined with the projected revenue shortfall in Sales Tax receipts($1 million) a need for$4M in
"hew"revenue is created. The City has limited ability to raise significant`hew"revenue by any
other means than a Storm Water Utility Fee or Property Tax.
To realize the necessary revenues to fund City operations would require an increase in the
property tax rate of eleven cents. It is likely that a tax increase of that size will trigger a rollback
election and thus limit Council's ability to raise property taxes by more than nine cents($3.285
million.)
Advantages
• Provides necessary funding to balance the FY2002 Budget and maintain a minimum
level of fund balance as dictated by City of Beaumont Financial Policies.
Disadvantages
• Places the increased tax burden on residential and commercial property owners only.
• Creates a negative impact on economic development efforts.
• Does Council support an increase in the property tax rate of nine cents ($0.093100
assessed valuation)to provide additional revenues to balance the FY2002 budget?
FY2002 Austerity Budget Proposals
5% Expenditure Reduction
To balance the FY2002 Budget without the creation of a Storm Water Utility or additional
property tax revenues will require budget reductions. It is unlikely that the current level of service
will be maintained under this scenario.
An across the board budget reduction of 5%will produce expenditure savings of$3.2M in the
General Fund. To effect this funding level,personnel reductions will be necessary in all
departments. Using an average full-time equivalent(FTE) of$40,000, a personnel reduction
across departments equates to eighty(80) employees.
In addition to personnel reductions, it will be necessary to use approximately$800,000 of General
Fund reserves to prepare a balanced budget. This will force the ending fimd balance below the
lower limit of the City's existing financial policy of 8-10% of expenditures.
If personnel reductions were to be initiated through attrition only,this will necessitate either a
greater number of required vacancies and/or other operating expenditure reductions.
On a departmental basis this equates to a reduction in force of seventeen sworn positions for
Police. In the Fire Department it would necessitate the closing of one station. Programs such as
Animal Control and the Sexually Transmitted Disease Clinic would be discontinued in Public
Health. It should be expected that longer lines at Central Collections will be common place as
there will be less staff to serve the public. The elimination of positions in Public Works would
effect the number of crews the City would have available and effect response times in many areas.
Maintenance of City facilities will also be impacted.
• Does Council support an across the board General Fund budget reduction equal to
5% of the FY2001 Operating Budget?
Programmatic Adjustments and the Use of Fund Balance
To balance the FY2002 Budget without the creation of a Storm Water Utility fee or additional
property tax revenues will require budget reductions in the form of program
reduction/elimination/outsourcing. The current level of service will not be maintained under this
scenario.
To mitigate the use of General Fund fund balance the following actions will be employed:
► Creation of an impound facility(impact- $100,000)
► Aggressive solicitation of corporate sponsorship (impact - $50,000)
► Aggressive sale of city-owned assets(impact- $100,000)
► Contracting out parks mowing (impact - $50,000)
► Fleet reduction(impact- $25,000)
► Postpone shift of two cents(property tax) to Debt Service(impact - $730,000)
�elective Defer new projects(Delaware, Twenty-Third and Virginia)
program reductions(impact - $100,000)
Use of fund balance to balance the General Fund budget would be necessary in the amount of
$2,345,000. This will drop the ending fiord balance to an unprecedented$3,255,000. Using
FY2001 budgeted expenditures as a measure this would result in an ending fund balance equal to
4.7%,well below the City of Beaumont financial policy's approved minimum threshold of 8%.
Drastic reductions in fund balances of the General Fund and Debt Service Fund will impact the
City's ability to borrow fiends in the future. These actions could cause a downgrade in the City's
bond rating which could lead to higher borrowing costs of future bond issues.
• Does Council support a combination of revenue enhancements, program redactions
and use of fund balance to balance the FY2002 Operating Budget?
Action Plan
Strategy Action Steps Responsible By When? Key
Party Players
USE OF FUND BALANCE
The following are the Financial Policies pertaining to fund balance.
1. The annual budget shall be presented to Council with an ending fund balance that reflects a
prudent level within the following ranges:
a. General Fund ending fund balance shall reflect a level no less than eight(8) percent and
no more than ten(10) percent of that fiend's annual operating expenditures.
b. Debt Service ending fimd balance shall reflect a level no less than twenty(20)percent of
that fund's annual debt service requirements.
2. Fund balance which exceeds the minimum level established for each fund may be
appropriated for non-recurring capital projects or programs.
3. The City will exercise diligence in avoiding the appropriation of fiord balance for recurring
operating expenditures. In the event fiord balance is appropriated for recurring operating
expenditures to meet the needs of the Beaumont community, the budget document shall include
an explanation of the circumstances requiring the appropriation and the methods to be used to
arrest the future use of fund balance for operating expenditures.
1999 2000 2001 2002*
Actual Actual Estimate Projected
General Fund
Fund Bal. $7,915,722 9,014,784 5,452,000 968,000
Percentage 12.7% 13.7% 7.7% 1.4%
Debt Service Fund
Fund Bal. $4,367,498 2,880,474 2,306,000 2,389,000
Percentage 39.5% 23.1% 17.6% 17.5%
At the end of FY 2001 the ending fund balance in both the General Fund and the Debt Service
Fund will fall below minimum policy thresholds. General Fund fund balance has been appropriated
for recurring expenditures for the FY 2001 budget.
* Basis is established with no property tax increase or storm water utility fees and shifting two
cents of the existing property tax rate to Debt Service.
• Should the financial policies be amended to delete or revise the minimum thresholds
and restriction relative to the use of excess funds for recurring operating
expenditures?
Fund Balance
At 04/30
$20
. ....................... ................................ ............... .......................... ........................................................
.................................. ................................................ .........................
$15
..............
.............. ...... ...........................
O
$10
................ ..............................................................................................................
................... ............ ............................... ......................................................
$5
................ .....
$0
General Water Solid Waste
Fund Fund Fund
■ 1998 ❑ 1999 ■ 2000 s 2001
Fiscal Year End Fund Balance
$10 ..... ................---..... "'-------- ------------ .............................-----------
$8 T;` ........'"''-.... ........."-'...... . ............._..................._. .----....._.. .......
N
$g _ ......._.. ....... ._............ .. .............. ..-....._................................................ _
.---------
_ -.is ..._.... _. . _ __
O
,,.. ........ -------------------------- -----_------ '-"-"................. anti;;" '..'.--'-'-'-'---.......
$4
$2 ... ......_------
$0
General Water Solid Waste
Fund Fund Fund
0 1998 Actual ❑ 1999 Actual ® 2000 Actual m 2001 Projected
DEBT SERVICE FUND
Fund Balance
No two cent increase in tax rate
3 -
2
N
c
O
1
0
2001 2002 2003 2004 2005
Fund Balance
Two cent increase in tax rate
3
I
2
ti
c
0
1
0
2001 2002 2003 2004 2005
The assumption used in this presentation includes the issuance of$10M in Certificates of obligation
in FY 2001 and FY 2003 and assessed value (AV) growth of 2% in FY 2002 and 3% in FY 2003
and FY 2004 and 3.5% in FY 2005. Preliminary estimates for AV in FY 2002 indicate a 2.5% growth.
As evidenced by this graphical presentation, even with the two cent shift increase in the dedication
to the Debt Service Fund, the balance would still be below the $2.7M needed to meet the policy
requirement of 20% of debt service requirements.
STATUS OF SECTION 108 PROJECTS
In 1998,the City of Beaumont received approval of Section 108 funding in the amount of$11,000,000
from the Department of Housing and Urban Development. The Section 108 Program is a loan guarantee
provision of the Community Development Block Grant (CDBG) Program whereby municipalities can
borrow up to five times their annual CDBG allocation. The $11,000,000 loan will be repaid by the City
and project developers over a 20-year period.
Crockett Street - The Beaumont City Council approved a Section 108 loan for the Crockett Street
project in the amount of$3,000,000 in August, 1998. The total project cost is estimated at$5,700,000.
The project is the redevelopment of the "Dixie Street"commercial block in downtown Beaumont. The
developers plan to redevelop the two-story historic storefront buildings into a combination of
entertainment,eating,and drinking establishments.Approximately 300 permanent jobs would be created
upon completion of the project. A ground breaking ceremony was held on Wednesday, May 17, 2000.
Restoration of the storefront shell is approximately 50%complete. The anticipated opening date for the
Crockett Street Entertainment District is late November,2001.
Hotel Beaumont Retirement Home-The Council approved a request from the National Development
Council(NDC) for Section 108 funding in the amount of$3.175 million($2.0 million loan and $1.175
million grant)in December, 1998.The NDC is completely renovating the Hotel Beaumont,located at 625
Orleans Street. Currently, there are 88 elderly occupied units at the Hotel Beaumont. The total project
cost was $7,495,000. The project is 100%complete.
Jefferson Theatre - Council approved Section 108 funding in the amount of$2,000,000 (grant) in
September, 1998. The Theatre will be restored as close as possible to its original design In 1996, a
concentrated effort was initiated to mobilize over 150 civic leaders and area citizens to undertake a
comprehensive planning process and capital campaign with a goal ofraising$3,000,000 in addition to the
$2,000,000 grant from the City. To date,private donations total approximately$2,900,000.
Theodore R. Johns, Sr. Branch Library - Council approved Section 108 funding in the amount of
$1,825,000 for the construction of a new library,the Theodore R.Johns,Sr.Branch.The new library will
replace an outdated facility, the Spindletop Branch, currently serving the south end of Beaumont. The
building will be approximately 12,000 square feet on a five-acre site at the intersection of State Highway
124 (Fannett Road) and Sara Street. A groundbreaking ceremony was held on April 26, 2001 and
construction will begin the latter part of May.
L. L. Melton YMCA - Council approved Section 108 funding in the amount of$1,000,000 (grant) for
the renovation of the L. L. Melton YMCA and the construction of new facilities. The Melton has also
received an Economic Development Initiative(EDI) from Congress to assist in the development of the
project. As the reconstruction of the existing facility is currently underway, construction on the new
facility is scheduled to begin in September, 2001.
Good News/Bad News
FY 2001
Good News
0 Growth of Beginning Fund Balance
0 Personnel Cost Savings
O Building Permits Growth
0 Economic Development Incentive Impact
West Teleserve - New Business
Phoenix Millworks - Retention/Expansion
0 Increased Enrollment- Fire Training Center
0 Appraised Values (may end up on the bad news list)
0 Improved Financial Performance in Enterprise Funds (increase General Fund
Contribution)
0 Successful Theatrical Series
0 Increased State/Private Grants
0 Increased Employee Safety — Decreased Worker's Compensation
Bad News
0 Sales Tax Revenue Short of Projection
• Proposed Expansion of Sales Tax Holiday
• Potential Reduction in State Transit Subsidy
• Reduced EMS Collections
0 Historically Higher Natural Gas Prices
0 Census Estimate of Population Loss .04%
Effect on Grant Funding Ratio
0 Rising Employer/Employee Health Care Cost
0 Fiscal Impact of GASB 34
0 Increase in Liability Claims
Growth of Beginning Fund Balance
Factors such as increased EMS collections,departmental vacancies, lower operating costs and the
elimination and reclassification of existing positions contributed to a$2M turnaround in the
FY2000 General Fund Ending Fund Balance. The FY2000 Budget was adopted with a$1 M use
of Fund Balance projected. The additional fund balance was available to appropriate for the
FY2001 Budget and provided sufficient means to support a budgeted used of fund balance for
FY2001 of over$2M.
1999 2000
Actual Actual
General Fund
Fund Bal. $7,915,722 9,014,794
Percentage 12.74/o 13.7%
Personnel Cost Savings
The Administration will continue the efforts of the past two fiscal years,to use attrition to cut
under-utilized positions from the budget. Savings from positions cut during the present fiscal year
(as in previous fiscal years)will have a substantially larger budget impact next year. At that time
the full amount of the savings will be realized.
As positions were cut,the tasks assigned to those jobs were distributed among other employees.
In those instances where job reclassifications were not warranted,the persons assigned those
additional duties were given a pay increase commensurate with the amount of work and added
responsibility that they assumed.
In addition to salary savings from eliminating jobs, there is also benefits cost savings. The person
assuming additional duties is already a participant in the City's benefits program,therefore the
City is able to save nearly 30%of the salary amount for each position eliminated. For example
the elimination of the Parks and Recreation Director position will result in savings in excess of
$100,000 for the General Fund. Full oversight of Parks and Recreation will be re-assigned.The
day-to-day responsibilities for the two divisions will remain the same with the division managers
remaining in-place reporting to existing Department Directors. Parks will be a division of Public
Works while Recreation will be a division of the Library.
To date a total of 23 positions have been designated as"Will Not Be Filled" for a grand total
savings amount of$1,246,926. By cutting those under-utilized positions,the City has been able to
add 38 needed positions at a total cost of$1,233,988 across all funds. The results are a net gain
of 15 positions, along with a net savings of approximately$12,938. The General Fund impact is a
net savings of approximately$190,668.
Building Permits Growth
In October 1999, the building, electrical, plumbing, gas and mechanical permit fees were increased
to reflect the fee schedule in Appendix B" of the 1997 Standard Building Code. The new permit
fee schedule became effective on December 1, 1999. The FY 2000 anticipated revenue from
permit fees was $316,000. Actual revenue from building related permit fees in FY 2000 was
$471,890.
The total anticipated revenue in FY 2001 from building related permit fees were estimated at
$371,000. With fifty-eight (58)percent of the fiscal year complete, approximately$312,350 in
revenue has been generated from building related permit fees. It is anticipated that the total
amount of revenue generated from building related permit fees for FY 2001 will total $471,210.
This represents a forty-four(44)percent increase in anticipated revenue. A breakdown by permit
type reflecting the budgeted revenue amount, the revenue to date and the year end revenue
estimate is provided below for FY 2001 and FY 2000.
FY 2001 Building Related Permit Revenue
Permit Type Revenue Estimate Revenue to Date Estimated Year End
Revenue
Building $250,000 $256,540 $375,500
Electrical 55,000 26,440 45,330
Plumbing 30,000 10,520 18,050
Gas 6,000 3,870 6,650
Mechanical 30,000 14,980 25,680
Totals $371,000 $312,350 $471,210
FY 2000 Building Related Permit Revenue
Permit Type Revenue Estimate Year End Revenue
Building $200,000 $353,330
Electrical 55,000 51,500
Plumbing 30,000 24,930
Gas 6,000 8,460
Mechanical 25,000 33,670
Totals $316,000 $471,890
Economic Development Incentive Impact
West Teleservices
West Teleservices is an inbound call center operation that opened in January of 2001 in the
Village Shopping Center. West currently employs 800 people and anticipates hiring an additional
800 to 1,000 employees over the next year.
The City of Beaumont expanded the Beaumont/Nederland/Jefferson County Enterprise Zone to
include the Village Shopping to allow West to receive State incentives as well as tax abatement
from the City. The City of Beaumont also committed to provide $100,000 a year for four years
to West if hiring targets are met by the company. The City of Beaumont's unemployment rate
was 6.3% in February of 2001 which is the lowest rate in more than 2.5 years.
Phoenix Millwork
Phoenix Millwork, currently leasing a 15,000 square foot facility in Beaumont, is a division of
Baker McMillen. Phoenix Millwork is a manufacturer of hardwood Victorian trim and other
specialty wood products. On December 12, 2000, City Council established a Reinvestment Zone
at south Cardinal Drive and 4'h Street to allow local economic incentives(principally tax
abatement) in order to promote economic development, provide employment opportunities and
encourage new investment. On March 20, 2001, City Council approved a tax abatement
agreement with Phoenix Millwork. As part of the agreement, Phoenix Millwork agrees to
construct an approximate 50,000 square foot building at south Cardinal Drive and 4`h Street with
a total construction cost of not less than$1,200,000. Subject to complete compliance with the
terms and conditions of the agreement, all increases in ad valorem real property taxes resulting
from the development and improvement of the premises will be abated 30% for a period of five
years beginning the year after the construction is completed.
Increased Enrollment- Fire Training Center
The Training Center saw an increase in both student enrollment and revenues for the first half of
the 2001 fiscal year. The student enrollment for the first quarter of this fiscal year(803 students)
saw an increase of 15.21% over the preceding year(697 students). The second quarter saw a 4%
increase as well(1276 students in 2001 and 1227 students in 2000). The Training Center revenue
for the first quarter was down 3.22 % ($63,080 compared to $65,180) but made a sharp increase
of 33.26% (97,399 compared to $73,090) over the preceding fiscal year.
With a purchase agreement for the Training Center's blended fuel with Lamar University's Center
for Industrial Fire and Hazardous Materials Training and new projects coming on line, like the
BASF project, the outlook for growth in both student enrollment and Training Center revenue is
very positive.
Appraised Values
A preliminary evaluation of appraised values indicates a growth rate, net of allowance for disputed
values, of approximately 2.6%. This is slightly higher than the 2% projected in the Long Range
Financial Forecast. In FY2001 one cent of the collectible tax rate is equivalent to $366,648 . With
the increase in appraised values, the value of one cent will increase to $376,349. If the increase in
appraised values of 2.6% is realized, total collections (at the current tax rate) will increase by
$617,000 to approximately $23.9M for FY2002.
Improved Financial Performance in Enterprise Funds(increase General Fund Contribution)
The Water and Solid Waste Funds make in lieu payments annually to the General Fund. Such in lieu
payments are typically made to reimburse the General Fund for services such as personnel,
accounting,payroll, legal and computer that are provided to Enterprise Funds by the General Fund.
The in lieu payment for the Solid Waste Fund was reinstated in FY 2001 with increased fiscal capacity
related to the transfer of the grass cutting function to Parks and the potential sale of landfill space to
other entities.The in lieu payments to the General Fund totaled$4,250,000 in FY 2001, accounting
for approximately 6.3% of total revenue.
Improved financial performance in the Water Fund provides the capacity for an increase in its in lieu
payment. Growth in revenue sources other than water and sewer sales provides the capacity for an
increase to the Water Fund in lieu payment. FY 2001 revenues are projected at $26,685,000. The
proposed increase of$300,000, for a total in lieu payment of$3,950,000 in FY 2002, is well below
the 20% of prior year revenues allowed by the City Charter.
Successful Theatrical Series
The Broadway performance of Chicago on January 25 ended the inaugural season of the City's
theatrical series. According to the responses of those attending and the unprecedented ticket sales,
the series was an immense success. Attendance at each performance averaged more than 1,220
patrons. Chicago was the most favored performance with more than 1,522 attendees. Music of
Andrew Lloyd Webber and Man of La Mancha were attended by 1,116 and 1,033 respectively.
Season ticket sales were in excess of 870. Thanks to series sponsorship from Hibernia Bank and
performance sponsorships from Entergy,The Beaumont Enterprise and KFDM-TV,the City netted
approximately$19,000 in show revenues.
Due to the success of the series, staff has negotiated with Theatre League of Louisiana (TLL) to
present a 2001/2002 series. A partnership was started last year with TLL to provide talent booking
and promotional expertise. The following performances have been secured for the upcoming season:
Ragtime-October 18, 2001,Sunshine Boys-January 20,2002,and Annie Get Your Gun-April 13,
2002. Based on the results of last years shows, the City can expect another sensational Broadway
series.
Increased State/Private Grants
Ever active in pursuing Federal/State/Private grants, the Police Department and Library System
have both been very successful this year.
For FY2002 the Public Library System received in excess of$369,000 in grant funding. The
source of these awards were: The Miller Trust administered by Hibernia Bank, the Bill and
Melinda Gates Foundation,Texas Education Agency, the State of Texas Telecommunications
Fund, the Texas Book Festival, the Dollar General Store Foundation,the Meadows Foundation
and the Houston Area Library System.
In the Police Department several grants cover overlapping periods and are in some cases
extendable. Programs funded in FY2002 include: Violence Against Women Act($24,831), COPS
More 98 ($765,893),Local Law Enforcement Block Grant"LLEBG" 1999($332,911), LLEBG
2000 ($290,874), Weed and Seed($50,000), Juvenile Justice Accountability Lock Grant
($92,929), Auto Theft Task Force($347,501), Texas Statewide Tobacco Education and
Prevention- Cigarette Compliance($3,000) and Safe and Sober S.T.E.P. Grant FY2001
($32,986) FY2002 ($27,488).
Increased Employee Safety—Decreased Worker's Compensation
Based on Best Practices as reported in Workers Compensation and Human Resources
publications, an aggressive program which monitors the safety of the work environment, trains
and rewards employees; as well as actively seeks out the best care for injured workers, serves as
the most effective cost-containment program in which an organization can invest.
Periodically the City's Safety Pays program rewards departments whose employees have worked
an inordinate number of weeks without an accident and/or individuals who demonstrate success
from a new personal health regime.
As a self-insured municipality,the City is entitled to submit a notice of subrogation for any
settlement made with an injured City of Beaumont employee from a third party that is responsible
for the injuries. As in the past, during fiscal year 2001 the City has aggressively sought out
opportunities to recoup a portion of its Worker's Compensation costs through subrogation.
Resulting in payments back to the Workers' Compensation account in the amount of$40,332.
Sales Tax Revenue Short of Projection
The numbers are in for March Sales Tax Collections and they are significantly below FY2001
Budget estimates. Collections for the same period in FY2000 yielded $2,786,018. The FY2001
March sales produced $2,519,867 a difference of$266,151 or-9.55%.
The cumulative effect for FY2001 is lagging revenues to the tune of$868,122 which is equivalent
to a 5.24% budget shortfall. By year end this will approximate $1,400,000 if economic conditions
remain the same. The impact of an expanded Sales Tax Holiday has not been factored into this
equation.
With offsetting revenue gains in other sources and minor expenditure savings this shortfall will
impact the General Fund ending fund balance resulting in a$3.25M deficit which will cause the
ending fund balance to rest at the bottom of the policy threshold of 8-10% of expenditures at a
historically low 8.09% of expenditures.
Proposed Expansion of Sales Tax Holiday
Currently under consideration by the Texas Legislature is legislation which would increase the
number of items exempt from taxation and the number of days that the holiday would last. In
FY2000 the impact of the holiday was revenue neutral as the economic expansion leading up to
the holiday compensated for the loss of revenue associated with the sales tax exemption relative
to the FY2000 Budget.
At this time, when coupled with the downturn in the economy, it is anticipated that the proposed
expansion of the Sales Tax Holiday will exacerbate the projected $1M revenue shortfall
anticipated in Sales Tax Revenues.
Potential Reduction in State Transit Subsidy
The City was notified in March 2001, that the contribution from TxDOT would most likely be
reduced by $170,000. Also, operating costs are anticipated to increase due to fuel costs, age of
the fleet and employee wages. The ability to maintain or decrease the City's contribution can only
be accomplished through an increase in fare box revenue or a decrease in service.
Reduced EMS Collections
As of the end of April, EMS Revenues were lagging behind estimates by$236,549.
Approximately$250,000(in gross billings)have been identified as claims pending with twenty-
three private insurance carriers. These claims are being reviewed and refiled if necessary.
Compared to April 2000, city staff have billed less runs year-to-date in FY2001. The total runs
billed as of April 2001 was 5,191 compared to 6,183 for April, 2000. This reflects a relative time
period for both fiscal years. There has also been a change in the type of billing processed. The
number of self-pay accounts has decreased significantly while Medicaid filings have increased. The
number of accounts sent to collection has also increased.
Collections year-to-date are at 45.4%compared to 52.2% for the same period in FY2000. As
staffilng levels have now stabilized it is anticipated that some gains will be made by year end but it
is unlikely that the current shortfall will be recouped in total
CITY OF BEAUMONT
BILLING AND COLLECTION REPORT-EMS SUMMARY
For the period ended April 30, 2001
Current Month: April-2001
Tool %COkcted % Collected
Number Gross Billed Adjustments Net Billed Revenue to Gross To Net
BOW (1) CoNected(3) Billed Billed
Medicare 260 98,415 28,983 (4) 69,432 48,129 48.9% 69.3%
Medicaid 122 45,025 13,835 (4) 31,190 12,067 26.8% 38.7%
Other Insurance 204 76,415 992 75,423 47,667 62.4% 63-2%
Self Pay 217 73,415 0 73,415 13,732 18.7% 18.7%
--- - ---------
Total 803 $293,270 ;43,809 ;249,461 5121,595 41.S% 48,7%
Fiscal Year-To-D z Apr#.ZM
Number %Collected % Collected
Billed Gross BiNed Adjustments Net Billed %of Total to Gross To Net
Y-TD Y-TD(2) Y-T-D Y-T-D' Billed 681ed Y-TD. Billed Y-T-D
Medicare 1643 628,945 158,076 470,869 28.6% 429% 57.3%
Medicaid 872 322,960 123,009 199,951 12.2% 35.8% 57.7%
Other Insurance 1209 456,445 3,862 452,583 27.5% 65.6% 66.1%
Self Pay 1467 524,980 3,239 521,741 31.7% 11.9% 12.0%
Total 5,191 ;1,93 330 5288,186 $1,645.14 100.0% 38.6'6 4&4%
Revenue Revenue Over/ Prior Year%Collected
Estimate Cok4Aed %Of Total (Under) To Gross To Net
Y-T-D Y-TD(3) CoNected Estimate Billed Y-T-0 Billed Y-T-D
Medicare 355,322 269,818 36.1% (85,505) 52.9% 73.6%
Medicaid 151,986 115,448 15.5% (36,538) 41.3% 92.7°x6
Other Insurance 393,884 299,223 40.0% (94,662) 95.6% 98.4%
Self Pay 82,436 62,592 8.4% (19,844) 7.4% 7.5%
Total 5983,727 -- ;747,080 100.096 _ (2236, 43.7% 52.2°/.
Analvsis o�Ou��131gAcCouRt�:
Active Collection InstaNment
Accounts _Accounts Accounts _ Total
Medicare 190.281 190,2131
Medicaid 326,D97 326,097
Other Insurance 328,162 328,162
Self Pay 2,417,668 894,478 609 3,312,755
Total $3,262,208 $894,478 ;609 $4,157,296
(1)Includes dates of service Mar 16, 2001 to Apr 15,2001.
(2)Includes dates of service Sep 22, 2000 to Apr 15,2001.
(3)Includes collection on delinquent accounts-agency collections net of fees and refunds
(4) The difference in charges billed and charges allowed and denied claims must be written off.
Historically Higher Natural Gas Prices
According to the American Gas Association(AGA)a record cold winter played a major factor in
the higher natural gas bills that customers have received nationwide. Industry sources point to an
overall increase in demand on the part of both residential and industrial customers, as well as the
increasing role of natural gas in generating electrical power.
The historically higher prices have definitely adversely affected the City's operating budget
allocated for natural gas procurement. As of the end of April, the City has expended more than
$173,000 for natural gas used to heat City facilities. During the same period last year,the City
paid only $71,000. This represents a 144%increase in gas expenditures.
For FY2001, $98,000 was budgeted for the purchase of natural gas. If gas prices continue to
hold at current levels, the City could anticipate spending approximately$236,000 for heating
energy. This is$138,000 over the City's total gas expenditure allocation.
In order to address the issue, President George W. Bush has identified developing a
comprehensive national energy policy a top priority. Also,expectations for the future include a
diverse gas supply base, growing domestic productivity, increases in gas directed rig activity,
more gas well completions and additional gas imports from Canada. These factors will assure an
adequate natural gas supply for gas consumers, however, it is too early to predict what affects, if
any, will be seen in firture gas commodity pricing.
Census Estimate of Population Loss .04% -Effect on Grant Funding Ratio
Beaumont's population in the 1990 Census was 114,323 and the estimate in the 2000 Census is
113,866. The population loss of an estimated 457 citizens will have a minimal impact the
Community Development Block Grant funding the City receives each year. The effect of updating
population in the CDBG formula is a possible reduction of$1,000 in CDBG funding.
Rising Employer/Employee Health Care Cost
Over the past three years City employees have had the choice between an HMO(NylCare)or a self-
funded 80/20 indemnity plan(Memorial Sisters of Charity[MSCH]/Humana).Since January 1,2001,
the City's healthcare provider has been Blue Cross Blue Shield of Texas for a Point of Service plan
and HMO Blue Texas for the HMO.
The Point of Service(POS)plan is a managed-care plan with a gatekeeper that provides services at
discounted rates which result in savings to the City and its employees. The POS has an out-of-
network benefit which closely mirrors the previous 80/20 indemnity plan. (The indemnity benefits
must be maintained to be in compliance with the Fire and Police contracts.) The HMO provides
excellent coverage while requiring lower out of pocket expense for employees than the POS.
Dental insurance is a self-funded plan through Blue Cross Blue Shield of Texas for Civilian and Fire
employees, while a separate fully-funded plan is purchased through Combined Law Enforcement
Associations of Texas(CLEAT) for Police Officers.
As reported at last year's budget summit,and due to the current trend,the fund-balance is forecasted
to be less than the amount required to meet the contract-end reserve requirements.
Because the current carrier only quoted a one-year rate guarantee, the contract with HMO Blue
Texas and Blue Cross Blue Shield of Texas will expire on December 31,2001. In June the City will
solicit bids for a self-funded medical and dental indemnity plan as well as a HMO. The projected
forecast for health/benefit plans is a cost increase of 13% to 15% for this year. The increase is
anticipated to be equally high for next year. The other factor raising costs is the higher price being
charged for prescription drugs. Prescription drug costs continue to rise and are predicted to top out
at no less than 20%. The change is due to higher ingredient costs and increased utilization of new,
more expensive drugs, many of which are aggressively marketed directly to consumers.
To contain medical costs,the City will seek the services of an Insurance Broker/Consultant. Previous
experience validates the use of a consultant to save the City more than the fees charged by the firm
A consultant will be retained only if the cost of the service can be funded through savings. Because
an Insurance Brokerage firm will have the leverage of total knowledge of the market,they will have
the ability to secure long-term contracts and competitive rates.
The City will utilize their services to prepare a Request for Proposal(RFP) for a single provider to
furnish a multi-year contract for employee/retiree medical and dental insurance.Price and plan designs
will be requested for two medical plans and one dental plan.
Fiscal Impact of GASB 34
The new financial reporting model will have a significant fiscal impact on cities during the
conversion phase of GASB 34. In terms of audit fees it is estimated that the audit costs will
increase by 50%or more in some cases. The increase in charges is directly related to an
anticipated increase in the number of billable hours expected in the conversion process.
Also impacted will be City staff time. This process is expected to have an effect across
departments as input and planning from public works is essential to the accurate reporting of
infiwtructure included in the new model. In the course of a normal audit accounting staff will
work overtime/comp-time on an as needed basis. With the implementation of GASB 34 it is
expected that the city staff will double or triple the number of"extra"hours required to prepare
for the annual audit and Comprehensive Annual Financial Report(CAFR)publication.
The staff has been preparing for the transition by attending numerous training sessions and
reviewing available related materials. The next step is prepare an implementation schedule with
the collaboration of the Public Works and Central Services departments.
Increase in Liability Claims
Thus far this year the City has experienced a slight increase in the number of claims as compared
the results over the past three years. An increase has also occurred in the average amount paid per
claim. An area of particular concern involves sewage backups resulting from the Water
Departments operation of flush trucks. While there has not been an increase in the frequency of
these claims, a noticeably large increase has resulted from the cost associated with cleanup and
restoration. It has now become necessary to evacuate the dwelling and test for air borne
contaminates. The entire process to restore the building back to its condition prior to the incident
has increased cost significantly. In addition to sewage claims, an increase in payments and
reserves made on auto liability claims has occurred. The increases come as the result of accidents
involving multiple bodily injury claims deemed to be severe in nature.
2001 BUDGET SUMMIT
FINANCIAL AND BUDGETARY CHALLENGES
In order to meet the increasing challenges of reduced or limited funding and increased citizen
expectations for service, the City is exploring ideas to reduce cost, generate revenue and
increase service quality.
It is important to match the taxes and fees that the public is willing to pay with the cost of
services that the public demands. The Administration's efforts to Rightsize, as opposed to
downsize, a service cost means having the right number of people with the right kind of
skills and training, the right amount of supplies and just the right amount of physical plant
and equipment to provide the service properly.
"If you downsize,you're cutting costs but you're not fixing
fundamental problems."
- W. Edwards Deming
Before any organization attempts to Rightsize its efforts, it should ask the following
questions:
Does the activity fit the organization's strategic plan?
Does the activity produce more value for the customer than it consumes in
resources?
If not, why is the organization doing this?
Crucial to all downsizing or rightsizing efforts is deciding on what the organization does
well. Rational resource allocation simply means putting scarce resources to good use.
Government activity should produce more value than it consumes.
"Unless we change our direction, we are likely to end
up where we are headed"
- Old Chinese Proverb
To meet the financial challenges of FY2002, the City must consider changing the
fundamental way government operates. This process of change involves new directions -
• Empowerment of Neighborhoods in Decisions Allocating Resources
• Ensure Competition In Service Delivery
• Government Focus on Mission/Values
• Results-Oriented Government-Funding Outcomes, Not Inputs
• Meeting the Needs of the Customer, Not the Government
• Creating Revenue Rather Than Spending Opportunities
• Anticipate-Focus on Prevention Rather Than Correction
• Increased Employee Participation and Teamwork
The City needs to move beyond the basic improvement of an existing process. What must
occur is a fundamental change to an existing process or eliminating it totally. Therefore,
Council and Administration must provide the necessary leadership if significant changes are
to be made to provide the most efficient and cost effective services to our customers.
A process to analyze service effectiveness provides Council with various policy options:
Provide services differently or at a different service level
Raise revenue (fees and/or taxes)
Ask for understanding for a declining City and reduced service levels
An Administrative analysis of services and programs provides significant cost savings for the
long-term financial stability of the City by:
Determining services to be eliminated
Identifying subsidies to be discontinued
Determining appropriate service levels focusing the organization on mission,
engendering an entrepreneurial spirit throughout the organization
COMPETITIVE GOVERNMENT
INJECTING COMPETITION INTO SERVICE DELIVERY
Most obvious advantage of competition is greater efficiency or more bang for the
buck.
Competition forces public or private monopolies to respond to the needs of their -
i
customers.
Competition rewards innovation; monopoly stifles it.
Competition boosts the pride and morale of public employees.
Competition must be carefully structured and managed, if it is to work...unregulated
markets generate inequity.
PRIVATIZATION TECHNIQUES
Service Shedding. A form of total privatization in which government stops providing a
service entirely.
Contacting Out The City contracts with a private organization, for profit or nonprofit,
to provide a service.
Public-Private Competition. Public in-house units compete against private firms to
provide a public service.
Franchise. A private firm is given the exclusive right to provide a service within a
certain geographical area for a limited time.
Vouchers. Government provides individuals with certificates redeemable for purchase of
a good/service on the open market.
Subsidy. The producer of the service is subsidized by the government contributing
financially or in-kind to a private organization to reduce the cost of private provision of
service to consumers.
Internal Markets. Government departments are free to purchase services from either the
private sector or internal support units.
Asset Sale or Lease. Government sells assets such as airports, utilities or real estate to
private firms, thus turning physical capital into financial capital.
Volunteers. Volunteers are used to provide all or part of a government service.
Self-Help. Community groups and neighborhood organizations take over a service or
government asset such as a local park.
Private Infrastructure Development. The private sector builds, finances and/or
operates infrastructure such as roads and airports, recovering costs through user charges.
Deregulation. Government regulations are eliminated to allow private providers to
compete against a government provider; for example, allowing firms to compete with the
U.S. Postal Service.
The following are critical activities to support a process of financial renewal and
revitalization:
Create a mission and shared vision of the community and organization.
Embrace the primary values of the organization.
Mayor/Council sets strategic goals and objectives.
Mayor/Council sets priorities and eliminates programs that do not support the
mission of the City.
An effort is made to reduce organizational layers as part of streamlining the
administration.
All non-essential work that does not provide value to the customer is eliminated
through improving work processes.
Implement a quality improvement/customer service perspective.
Emphasize performance measures for all services areas.
Explore alternative service delivery approaches.
Create meaningful opportunities for citizen involvement.
Communicate the results of the process to the organization employees and
community.
Celebrate the success achieved!
ORGANIZATION GUIDELINES
Is it the right thing for the community and organization?
Is it the right thing for the department?
Is it ethical and legal?
Is it something you are willing to be accountable for?
Is it consistent with the organization values and policies? -
When the answers to all of the above questions are yes, the guidelines state "just do it"
without asking for permission or forming a committee to decide. This is direction that
encourages employees to think; and when employees think, they can respond with flexible,
innovative solutions and services for their customers.
The funding strategies to be utilized focus on the following areas:
Preserve and enhance the capital improvements program and planning
process.
Commit to not substituting City funding for reductions in state or federal
funding programs.
Reduce personnel positions by attrition when feasible.
* Identify best practices through benchmarking- search for best practices that
lead to performance; and become the standard against which the local
government compares itself.
Survey citizens to understand demands and expectations for service.
Emphasize user fees as opposed to increase in taxes.
Maintain a reasonable fund balance.
Develop productivity initiatives and gain-sharing with departments that are
successful in reducing costs while maintaining or increasing service quality.
Initiate a trust fund to encourage and facilitate private sector donation.
Institute an aggressive program to procure federal/state grants to address
identified priorities to the City.
"The only person who likes change is a wet baby."
-Roy M.Bliuw
There are other important aspects to an improvement process that Mayor and Council need
to consider prior to a major commitment.
To be successful, long-term financial forecasting and planning is essential.
However, unexpected and unpredictable events can and will occur to
impact any forecast no matter how well prepared.
The Mayor, City Council and Administration need to commit to the process
and its potential outcome.
A major improvement process can't be accomplished in one or two years. It
is a long-term commitment and a basic rethinking of the fundamental mission
on how government provides service.
It is important to solicit community understanding and involvement as the
process proceeds into reducing or eliminating programs and reviewing fees
for services.
A commitment must be made to enhance volunteer programs and
public/private partnerships in order to maintain existing levels of priority
services.
A renewed commitment is necessary to education and training to lead and
change the organization.
Sufficient time must be spent on communicating openly through focus
groups, staff meetings, public forums, citizen newsletters and other strategic
sources of information that can be identified.
"There is nothing more difficult to take in hand,
more perilous to conduct...than to take the lead in
the introduction of a new order of things."
-Nxxolo Machiavelli,"The Prince"
IDEAS THAT SAVE COSTS AND INCREASE REVENUE/SERVICE QUALITY
Mayor/Council and Administration are agents of change. Change requires a driving force
and the most powerful change agent is financial stress. The City of Beaumont must make
major changes in the operation of government if financial stability and quality services are
to be continued.
The implementation of a portfolio management tracking system to monitor
taxes, water, sewer and other City assessments will result in increased
revenues received in a more timely manner.
The City should aggressively sell assets - land, buildings, equipment to the
extent possible in order to turn underutilized physical capital into financial
capital and produce tax benefits.
Privatization of public services should be considered through a competitive
process with City employees when contracting provides a clear advantage
on cost savings and service quality. While the private sector can be an
effective agent for delivering public services,the responsibility for providing
services - determining the scope, level and conditions under which they are
delivered remains with City officials committed to the public interest.
Management improvement efforts many times focus on how to do unimportant
things cheaper. Instead, as City leaders we should ask- "should we be doing
this at all?" City government should limit activities to core functions and
missions. Does the City activity/service provide more value for the customer
than it consumes in resources? Is the service essential? Is the private sector
already providing the service or if not, is it capable of doing so better than
government? Does the program displace voluntary community or
neighborhood networks? This approach must be applied to all service areas
with the intent to eliminate activities that don't meet the criteria.
The City Council and City Manager meet quarterly with the Beaumont
Independent School District to discuss common issues and priorities. The
Council and Manager also meet quarterly with the Chamber of Commerce and
all Beaumont governmental entities for the same reason. Programs, services
and taxpayer facilities should be identified for better coordination and use.
For example, the City and BISD could expand use of joint facilities for
recreational programs.
Institute energy management program through public/private partnership to
retrofit City facilities with capital costs paid from energy savings overtime.
Develop Government business opportunities to market products or services to y
other public agencies, e.g. the "webber" back-flow device for toilets.
Solicit private sponsorship of public facilities such as the Civic Center.
Proposals would be solicited from the business community for naming rights
for an annual fee for a 20 year term.
Use of Fund Balance to address revenue shortfalls or unexpected expenses.
This is a short term solution that has negative consequences long term if the
fund balance is depleted.
Establish an employee incentive program to enhance morale,productivity and
cost savings. The program will provide monetary incentives to employees
exceeding departmental goals and budget targets. The program is based on the
following:
Incentive is based on performance measures through budgetary savings
Incentive is not related to performance evaluation system
It is department and program based not individual based
Each department has a mission statement and performance measures;
incentive comes if the department meets performance measures;partial
accomplishments are recognized as well
Capital outlays/improvements, insurance and professional fees are not
included
5001* of savings is returned to general fiord, 50% is shared equally
among employees generating the savings.
Reduction in number of Fleet vehicles.
Outsourcing City Internal Services.
Elimination/Transfer of Service Responsibility.
Adjust Service Levels.
Discontinue Subsidy of Programs/Services.
Subsidize Transfer of Service.
Encourage Volunteer/NonProfit Participation in Service Delivery.
Private Infrastructure Development.
Establish Trust Opportunities for Private Donations.
Improve Effectiveness of Collection Process of City Fees. -
ENGAGING CITIZENS IN THE BUDGET PROCESS
Why should a city market their budget?
• The annual budget process is an opportunity to dialogue with citizens regarding
community goals and priorities and to create public support.
How can the City involve the community in the budget process?
• Neighborhood meetings
• Citizen survey (PAFR distribution)
• Website
• Newsletter(water bill distribution)
• Channel 4 (local government access)
Relying on the public hearing process is in most cases "too little, too late" to involve a
significant number of participants. It is desirable to inform and educate the public so that
they might understand the "budget process" but this is often "one-way," not two-way
communication.
Focus of Public Discourse
Informing Citizens Engaging,Citizens
One-Way Two-Way
Telling/Selling Listening/Responding/Listening
Education Learning
Presenting Information Eliciting values, hopes,
aspirations, concerns
Discerning"Public Opinion" Promoting "Public Judgement"
ANALYSIS OF FUND BALANCE
Traditionally, two methods have been used to determine the appropriate size of the
unreserved fund balance:
• allocating financial resources equal to a percentage of annual operating expenditures
• allocating financial resources equal to a certain number of months' operating
expenditures
The City of Beaumont uses a range of 8-10% of expenditures in the General Fund. This
relates closely to one month's operating expenditures(8.3%)which is widely used standard.
What factors influence the establishment of a certain level of unreserved fund balance?
Revenue structure - Is it volatile? What is the City's dependence of sales tax? Are City
revenues sensitive to the effects of the business cycle?
• Expenditures - Can purchases be deferred?
• Cash flow - Can sufficient cash balances be managed with an uneven cash flow?
The projected level of unreserved ending fund balance for the General Fund as of April
30, 2001 is $5,753,484.
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City of Beaumont
March 30, 2001
To the Honorable Mayor and Councilmembers
INTRODUCTION
The Long-Range Financial Forecast, the Capital Improvement Program and the Annual
Budget, combine to form the basis of the annual budget process for the City of
Beaumont. The first report, the Long-Range Financial Forecast, is presented to Mayor
and Council prior to April 1 each fiscal year. The forecast is prepared to assess the
City's current financial condition and project that position ten years into the future
utilizing current policies, trends and assumptions, while maintaining the existing levels
of City services. The Capital Improvement Program and Annual Budget provide
increasing levels of detail and analysis.
The impact of the Long Range Financial Forecast will be reviewed during the 2001
Budget Summit on May 11, 2001 in preparation of the fiscal year 2002 Annual Budget.
The City's fiscal year encompasses the period from October 1 to September 30.
GENERAL GOVERNMENTAL FUNDS
General governmental funds include the General Fund and Debt Service Fund. The
General Fund accounts for the fundamental operating costs of most city departments.
The Debt Service Fund is used to record the resources received to retire the
outstanding debt obligations which are secured by taxes levied by the City.
General Fund Revenues
The majority of revenues recorded in the General Fund are derived from Sales Tax,
Property Tax, Industrial Payments and Gross Receipts Tax. The following illustrates the
proportion of each source for FY 2001.
General Fund Revenues
by source
39.1% Sales and use tax
18.5% Property taxes
0
10.3% Other
16-8% Industrial payments 6.3% Utility in Neu
9.1%Gross receipts tax
$67,630,200
The forecast of revenues is based on several assumptions.
Sales and use tax is projected to remain flat in FY 2001 at $26.4M. This reflects the
current national economic downturn. The remaining years of the long range forecast
project annual increases of one to four percent providing increasing additional revenue
of between $250,000 - $1.3M annually.
Property taxes represent $12.5M of total General Fund resources, a tax rate of$0.33
per $100 of assessed value. The current revenue estimate assumes the potential for
growth in assessed value which is included at an increasing rate of 2% - 3.5%. Positive
economic conditions related to the openings of Folsom Road, the Entertainment
Complex and Crockett Street support the increasing assessed value anticipated in
future years. Funding requirements for existing debt service dictate an increase of
$0.02 to the Debt Service portion of the tax rate. Rather than increase the total tax rate,
the administration proposes to shift this amount from the dedicated General Fund tax
rate. The anticipated increase in assessed value combined with the proposed decrease
in the tax rate will produce revenues of$12M in FY 2002. This is a decrease of 4.1%
from FY 2001 estimates. The forecasted increase in assessed value will drive the
increased property tax revenues for FY 2003. In fiscal years 2004, 2006 and 2008 the
anticipated reduction in debt service requirements allows for a reverse shift in the
dedication of the tax rate from the Debt Service Fund to the General Fund.
Industrial payments account for approximately$11 AM. A growth rate of 3.5% is
expected for FY 2002. Current contracts expire on December 31, 2001 and
negotiations are currently under way. The most significant contract is with ExxonMobil
followed by duPont and Goodyear. These industries combine to provide over 82% of
the existing industrial payment revenues. Projections beyond FY 2002 present a growth
rate of 3%, which like the property tax, is predicated on positive economic conditions
and growth in assessed values.
Gross receipts taxes (franchise fees), collected from utility companies operating
within the City, are estimated at $6.2M for FY 2001, an increase of 6.7%which was
attributable to extraordinary natural gas prices during FY 2001. Based on current
known conditions and trends, these revenues are projected to increase 1.5% annually
for the foreseeable future. Entergy is the lead contributor of gross receipts tax and is
the most sensitive to fluctuation. Utility rate reductions and lower usage directly impact
the receipt of these taxes by effectively reducing the "gross receipts" on which the tax is
based.
Overall, an average 3.2% growth rate is projected for in General Fund revenues for the
10 years in this forecast.
Total General Fund Revenues
100
80
w 60
c
0
40
17
20
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fiscal year
0 Sales and use tax ■Property taxes 0 Industrial payments
0 Gross receipts tax N Utility in lieu N Other
General Fund Expenditures
The basic costs of operating the City are charged to the General Fund. These
disbursements provide for Police; Fire; Public Works; Health, Cultural and Recreation;
Central Services; and General Government.
Current assumptions maintain existing services at FY 2001 staffing levels, contractual
salary increases for fire personnel, an annual salary adjustment of 3%for civilians and
the second phase of the Classification Compensation plan.
Transfers, reflecting those charges related to dependent healthcare, the cost of liability
claims and lawsuits, facility renovation and the transit subsidy, are anticipated to
increase $134,000 for FY 2001. This increase reflects an increase of$479,000 for
dependent healthcare and decreases in the transfers to Capital Reserve and General
Liability as well as a slight decrease in the transit subsidy of$45,000. Future increases
in this category are most significantly related to dependent healthcare.
Total expenditures are expected to grow an average of 3.1% annually throughout the
projection period.
General Fund Expenditures
by category
FY 2000 FY 2001 FY 2002
Actual Estimated Projected
Wages $39,563,705 42,506,800 43,782,000
Benefits 8,051,373 8,455,700 8,635,700
Other Operating 13,083,957 13,694.300 13,773,000
Total Operating 60,699,035 64,656,800 66,190,700
Dependent Healthcare 3,155,300 4,069,100 4,548,100
Workers Compensation 800,000 822,000 822,000
Capital Reserve 500,000 500,000 300,000
General Liability 400,000 300,000 200,000
Transit Subsidy 500,000 845,000 800,000
Total Transfers 5,355,300 6,536,100 6,670,100
Total General Fund $66,054.335 71,192,900 72,860,800
Fund Balance
For the fiscal year ending September 30, 2001, the City will maintain a fund balance in
the General Fund of 8% of expenditures. It is projected, based on current
assumptions, that by FY 2002, the level will fall critically below the goal of 8-10%
and end the year with a fund balance equal to 1.3% of expenditures. Using
projected levels of revenues and expenditures, the FY 2003 fund balance will fall to an
unprecedented$3.9M deficit.
Storm Water Utility
Currently under consideration is the creation of a Storm Water Utility to capture the
rising costs associated with unfunded mandates of the Environmental Protection
Agency (EPA) related to storm water runoff. If implemented, approximately $4M in
General Fund costs related to storm water would be recovered by a fee charged by the
Storm Water Utility. This revenue source could effectively provide funding relief to
General Fund resources that could be directed to other uses. It would also serve to
sustain General Fund fund balance at a level that is sufficient to meet policy guidelines.
Debt Service Fund Expenditures
The major source of revenue recorded in the Debt Service Fund is property taxes.
Currently, a rate of$0.305 is applied to each $100 in assessed valuation. As noted in
the General Fund discussion, the rate of growth for assessed valuation is estimated to
range from 2% to 3.5% during the term of this forecast.
It is anticipated that $0.02 of the General Fund portion of the tax rate will be shifted to
Debt Service for Fiscal Year 2002. This will provide the necessary resources to retire
current debt and sustain an adequate fund balance for that year.
In order to fund the ongoing Capital Improvement Program (CIP), debt issues of$10M
are anticipated in July of 2001, 2003, 2005 and 2007. The first $10M issue would
provide the resources to complete projects classified as current in the FY 2001 CIP and
fund selected scheduled projects. A dynamic document, the projects in the CIP are
reviewed, prioritized and approved annually by Mayor and Council.
Debt Service Requirements
Existing and Potential
15
C
s
5 s
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fiscal Year
IM Existing Debt Service W Potential$10M-July 2001 I® Potential$10M-July 2003
O Potential$10M-July 2005 M Potential$10M-July 2007
The full effect of debt service related to the anticipated July 2001 issue will be realized
in FY 2003. Additional revenue of$625,125 will be required to fund total debt service
and maintain an adequate fund balance of approximately 20% of principal and interest
requirements. Equating to an increase in the tax rate of $0.02, this could be achieved
by either increasing the total tax rate or shifting this amount from the dedicated General
Fund rate.
This increase in the dedicated Debt Service tax rate, along with the roll-off of existing
debt, will be sufficient to fund current and proposed debt issues through FY 2010, the
term of this plan. Based on these assumptions, the capacity exists to shift a portion of
the tax rate dedicated to Debt Service, to the General Fund in fiscal years 2004, 2006
and 2008.
INTERNAL SERVICE FUNDS
Internal Service Funds account for common charges to all departments. Risk
management for claims and lawsuits are recorded in the General Liability Fund. The
Employee Benefits Fund includes all health benefits, worker's compensation and
unemployment charges. Equipment and vehicle purchase, as well as building
renovations, are charged through the Capital Reserve Fund. These charges are
recorded proportionately in individual departments, per employee or by equipment. The
funding sources for these funds are through charges and/or transfers from other funds.
Employee Benefits Fund
Funded through charges and transfers from other funds, the Employee Benefits Fund
has no independent revenue source other than employee contributions, which provide
approximately 12% of the revenues in this fund. For FY 2001, the City raised it's
contribution toward health benefits from $5,300 per employee to $6,100, which was
primarily related to the increased cost of dependent health care. The employee rate for
dependent coverage was increased $12 per month, effective January 2001, to further
offset rising costs. Current contribution levels will result in a fund balance for FY 2001
of$750,000. An increase in the City's contribution of$450/employee is included in this
forecast for FY 2002. The approximate amount of claims that have been incurred but
not reported in the indemnity plan, coupled with the reserve requirements necessary to
fund incurred workers compensation claims, dictate a level of fund balance equal to
$13M. The projected level of contributions will not be sufficient to provide that level of
coverage. Increasing the contribution from the City, current and former employees
and/or retiree's could provide the additional resources necessary to sustain this fund.
Capital Reserve Fund
Originally created to provide for the replacement of equipment and vehicles, the Capital
Reserve Fund also exists to provide for the renovation of public facilities that are not
major capital improvements. It is anticipated that expenditure levels will be reduced and
available fund balance will be utilized during the first several years of the projection
period. The ending fund balance in FY 2002 is projected at $740,000. This will drop to
a projected low of$390,000 in FY 2004.
General Liability Fund
Initiated in FY 1987, the General Liability Fund is the central repository for the payment
of claims, lawsuits and the professional services related to the defense of claims made
against the City. With an estimated liability for claims and lawsuits of$1 M, it is
projected that adequate resources will be available through this projection period. The
sole funding source for the General Liability Fund is transfers from other funds.
SUMMARY
In summary, administration's assumptions include average general revenue increases
of 3.2%. Projections for General Fund operating expenditures show an increase 3%
annually for personnel, with other operating costs remaining relatively flat. This
increase is expected to maintain the same level of service. Based on these revenue
and expenditure assumptions, fund balance is expected to drop critically below policy
levels in FY 2002, with a deficit fund balance anticipated by fiscal year end 2003.
The Debt Service Fund will require an additional $0.02 in FY 2002 to cover existing
requirements. To achieve this, the administration proposes a transfer of a portion of the
dedicated General Fund property tax rate. Beginning in fiscal year 2004, the capacity
exists to reverse shift a portion of the Debt Service dedication to the General Fund.
Internal Service Funds, including Employee Benefits, Capital Reserve and General
Liability, are dependent on service charges and transfers from other funds to service
the claims and purchases recorded therein. Sustaining sufficient fund balances will
require additional revenue in the Employee Benefits Fund.
Tables are attached for each of the funds discussed. The information provided is
organized so that a brief historical perspective may be gained as well as a forecast
studied, which is based on current known conditions and historical trend analysis.
Reports to Council will be made as needed should future developments occur that
significantly impact the City's financial condition.
Respectfully submitted,
Stephen J Beverly P. H g , CPA
City Manager Finance Offi r
CITY OF BEAUMONT
LONG RANGE FINANCIAL FORECAST
Debt Service Fund
(In thousands)
Actual Estimated Projected Projected Projected Projected Projected Projected Projected Projected Projected
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
REVENUES
Property Tax Revenue $ 10,606 11,473 12,444 12,809 12,590 13,020 11,765 12,167 7,575 7,829 8,093
Interest Earnings 276 260 258 263 268 274 285 280 278 257 228
Miscellaneous Revenue 119 838 1,027 1,034 1,099 1,148 1,153 1,155 1,154 1,232 1,232
TOTAL REVENUES 11,001 12,571 13,729 14,106 13,957 14,442 13,203 13,602 9,007 9,318 9,553
EXPENDITURE CATEGORY
Principal& Interest(P& 1 12,481 13,135 13,299 13,386 12,867 12,867 11,579 11,519 6,923 6,991 6,984
P& I-anticipated issues -- -- 338 637 968 1,385 1,705 2,109 2,415 2,806 2,762
Bond Sale Expense - -- - - - -- -
Service Charges 7 10 10 10 10 10 10 10 10 10 10
TOTAL EXPENDITURES 12,488 13,145 13,647 14,033 13,845 14,262 13,294 13,638 9,348 9,807 9,756
EXCESS(USE)OF FUND
BALANCE (1,487) (574) 82 73 112 180 (91) (36) (341) (489) (203)
FUND BALANCE
Beginning Fund Balance 4,367 2,880 2,306 2,388 2,461 2,573 2,753 2,662 2,626 2,285 1,796
Ending Fund Balance $ 2.880 2,306 2.388 2.481 2,573 -2,753 - 2,662 ,626 -2,28 1.796 1.593
CITY OF BEAUMONT
LONG RANGE FINANCIAL FORECAST
Capital Reserve Fund
(In thousands)
Actual Estimated Projected Projected Projected Projected Projected Projected Projected Projected Projected
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
REVENUES
Service Charges $ 1,504 1,521 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Interest Earnings 77 70 50 40 40 40 40 40 40 40 40
Miscellaneous Revenue 22 40 20 20 20 20 20 20 20 20 20
Transfers In 559 558 359 358 359 358 359 358 359 358 359
Other Financing Sources 452 - - - - - - - __ _ _
TOTAL REVENUES 2,614 2,189 1,929 1,918 1,919 1,918 1,919 1,918 1,919 1,918 1,919
EXPENDITURE CATEGORY
Renovations 153 185 50 50 50 50 50 75 100 100 100
Equipment 1,051 627 400 400 400 400 500 500 600 600 600
Vehicles 1,469 1,145 1,050 1,050 1,050 1,050 1,100 1,200 1,200 1,250 1,250
Debt Service 296 585 725 675 510 325 325 - -
TOTAL EXPENDITURES 2,969 2,542 2,225 2,175 2,010 1,825 1,975 1,775 1,900 1,950 1,950
tXCESS (DEFICIT) REVENUES
OVER EXPENDITURES (355) (353) (296) (257) (91) 93 (56) 143 19
(32) (31)
FUND BALANCE
Beginning Fund Balance 1,743 1,388 1,035 739 482 391 484 428 571 590 558
Ending Fund Balance $ 1,388 1,035 739 482 391 484 428 571 590 558 527
CITY OF BEAUMONT
LONG RANGE FINANCIAL FORECAST
General Fund
(In thousands)
Actual Estimated Projected Projected Projected Projected Projected Projected Projected Projected Projected
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007_ FY 2008 FY 2009 FY 2010
REVENUES
Sales and Use Tax $ 26,481 26,415 26,679 27,213 28,029 28,870 29,736 30,628 31,853 33,127 34,452
Property Taxes 13,077 12,500 11,993 12,340 13,300 13,750 15,910 16,460 22,030 22,780 23,570
Industrial Payments 10,969 11,351 11,748 12,100 12,463 12,837 13,222 13,619 14,028 14,449 14,882
Gross Receipts Tax 5,770 6,155 6,247 6,341 6,436 6,533 6,631 6,730 6,831 6,933 7,037
Water Utility Fund In Lieu 3,650 4,250 4,650 4,650 4,650 4,650 4,650 4,650 4,650 4,650 4,650
Other 7,206 6,959 7,060 7,095 7,130 7,166 7,202 7,238 7,274 7,310 7,347
TOTAL REVENUES 67,153 67,630 68,377 69,739 72,008 73,806 77,351 79,325 86,666 89,249 91,938
EXPENDITURE CATEGORY
Wages 39,564 42,507 43,782 45,095 46,448 47,841 49,276 50,754 52,277 53,845 55,460
Benefits 8,051 8,456 8,636 8,821 9,012 9,208 9,410 9,618 9,832 10,053 10,280
Other operating 13,084 13,694 13,773 13,896 14,020 14,166 14,293 14,421 14,550 14,701 14,833
Total Operating 60,699 64,657 66,191 67,812 69,480 71,215 72,979 74,793 76,659 78,599 80,573
Dependent Healthcare 3,155 4,069 4,548 4,807 5,061 5,340 5,062 5,918 6,200 6,515 6,846
Workers Compensation 800 822 822 822 822 822 822 822 822 822 822
Capital Reserve 500 500 300 300 300 300 300 300 300 300 300
General Liability 400 300 200 200 250 250 400 400 400 400 400
Transit Subsidy 500 845 _!_. 800 700 700 700 700 700 700 700 _ 700
Total Transfers Out 5,355 6,536 6,670 6,829 7,133 7,412 7,284 8,140 8,422 8,737 9,068
TOTAL EXPENDITURES 66,054 _71,193 72,861 74,641 76,613 78,627 80,263 82,933 85,081 87,336 89,641
EXCESS (DEFICIT) REVENUES
OVER EXPENDITURES 1,099 (3,563) (4,484) (4,902) (4,605) (4,821) (2,912) (3,608) 1,585 1,913 2,297
FUND BALANCE
Beginning Fund Balance 7 916 9,015 _ 5,452 968 _ 3,934 (8,539 13,360 1( 6,272) 1( 9,880) 1( 8,295) _(16,3
Ending Fund Balance $__9,015 5,452. _ 968 (3,9341 (81539) (U360 (16,272 (19,860 (18,295 (16,382 -111Q85
CITY OF BEAUMONT
LONG RANGE FINANCIAL FORECAST
Employee Benefits Fund
(In thousands)
Actual Estimated Projected Projected Projected Projected Projected Projected Projected Projected Projected
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 _FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
REVENUES
Charges to Funds
Health Insurance $ 7,325 8,569 9,200 9,541 9,876 10,243 10,635 11,003 11,374 11,788 12,224
Worker's Comp. 990 1,015 1,015 1,015 1,015 1,015 1,015 1,015 1,015 1,015 1,015
Unemp./Term STD 268 290 270 270 270 270 260 260 260 260 260
Employee Contributions 1,209 1,381 1,396 1,411 1,427 1,442 1,458 1,474 1,490 1,506 1,522
Interest Earnings 105 90 100 100 100 100 100 100 100 100 100
Miscellaneous Revenue _ 332 50 25 25 25 25 25 25 25 25 25
TOTAL REVENUES ___10,229 11,395 12,006 12,362 12,713 13,095 13,493 13,877 14,264 14,694 15,146
EXPENDITURE CATEGORY
Health 8,676 10,374 10,716 11,066 11,433 11,809 12,211 12,589 12,986 13,410 13,855
Workers Compensation 997 1,003 1,010 1,016 1,010 1,016 1,022 1,028. 1,018 1,024 1,031
Unemployment 69 40 40 40 40 40 40 40 40 40 40
Short-term Disability 406 350 240 240 230 230 220 220 220 220 220
TOTAL EXPENDITURES 10,148 11,767 12,006 12,362 12,713 13,095 13,493 13,877 14,264 14,694 15,146
EXCESS (DEFICIT) REVENUES
OVER EXPENDITURES 81 (372) - -- -- -- -
FUND BALANCE
Beginning Fund Balance 1,041 1,122 _ 750 750 750 750 750 750 750 750 750
Ending Fund Balance $-, .- 1,122 750 750 750 750 750 750 750 750 750 750
CITY OF BEAUMONT
LONG RANGE FINANCIAL FORECAST
General Liability Fund
(In thousands)
Actual Estimated Projected Projected Projected Projected Projected Projected Projected Projected Projected
REVENUES
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
- -
Interest Earnings $ 67 60 80 70 60 60 50 50 60 60 60
Transfer in/Service Charg 600 500 400 400 450 450 600 600 600 600 600
Miscellaneous Revenue 1 -- --
TOTAL REVENUES 668 560 480 470. 510 510 650 650 660 _ 660 660
EXPENDITURE CATEGORY
Professional Services 74 80 100 100 100 100 100 100 100 100 100
Liability Claims 385 600 500 500 500 500 500 500 500 500 500
Other Insurance _ 3 _ 4 4 4 4 4 4 4
TOTAL EXPENDITURES 462 _ 684 604 604 604 604 604 604 604 604 604_
EXCESS (DEFICIT) REVENUES
OVER EXPENDITURES 206 (124) (124) (134) (94) (94) 46 46 56 56 56
FUND BALANCE
Beginning Fund Balance 1,271 _ 1,477 1,353 1,229 1,095 1,001 907 953 999 1,055 _ 1,111
Ending Fund Balance $_ 1,477 —1-353 1,229 1,095 1,001 907 953 999 1.055 1,111
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CAPITAL IMPROVEMENT PROGRAM
May 15, 2001
To the Honorable Mayor and Councilmembers
Capital Program
The Capital Improvement Program (CIP), is a plan prepared annually to provide for both
short end long range physical development within the City of Beaumont.Charter requires the
submission of the CIP to Council as part of the financial planning process. It is adopted in
September with the annual operating budget. The CIP allows for project evaluation at a
comprehensive level and also provides the financial information necessary to plan and
anticipate potential changes to the tax structure, user fees and bonded indebtedness.
Generally, a capital improvement has the following characteristics: relatively high monetary
value (at least $100,000), long life (will last at least 10 years), and results in either the
creation of a fixed asset, or the revitalization of one. Fixed assets are resources owned by
the City which have monetary value, long-term character and*11 be held or used. Examples
are land,buildings and improvements to land other than buildings. Included within the above
definition are the following specific items: purchase, improvement and development of land;
construction of new facilities for the delivery of City services;remodeling of existing facilities;
and the planning/engineering costs related to specific improvements of the type listed above.
The CIP includes a listing of all General and Public Works improvement projects along with
project descriptions and cost estimates. General Improvements include Parks and
Recreation, Public Safety and other general government municipal facility improvements,
whereas Public Works Improvements include street and stormwater drainage projects. For
informational purposes, water system projects are listed separately in this document;
however, they are funded through water revenues rather than property taxes.
Approved projects are classified in three phases: current, scheduled and planned. A
project classified as current is underway orwill be underway within the calendar year.Those
classified as scheduled are under design and right-of-way is being acquired however no
construction contract has been let. Projects classified as planned are approved projects but
are only in the preliminary stage. Other projects for consideration, also included in this
presentation, represent projects that are desirable but are not included in the five year plan.
Capital Program 2002
May 15, 2001
Completed Projects (1997-2001)
Since 1997, approximately$61.1 M of projects,both general improvement and public works,
have been completed or will be completed prior to fiscal year end 2001. The general
improvement projects completed during this five year period totaled $15.1 M. The costs for
all public works projects topped $46M. An average of$12.2M in projects were completed
annually during this period. A summary of the projects completed from 1997-2001 follows:
YEAR DESCRIPTION AMOUNT
General Improvement Projects
1997 Colliers Ferry Park $ 1,300,000
Julie Rogers Theatre- Foundation 410,000
Tyrrell Park 226,000
1998 Elmo Willard Library 1,695,000
Julie Rogers Theatre-Site Development 255,000
1999 Alice Keith Swimming Pool 1,380,000
2000 Municipal Court Building 1,904,000
Fire Station Construction (3) 2,285,000
Beaumont Yacht Club Additions 1,080,000
Parks Maintenance Facility 700,000
Airport Runway Extension 261,000
2001 Police Building Renovation 300,000
Fire Training Center Improvements 1,496,000
Athletic Complex-Softball Fields 1,616,000
Airport Fuel Facility 195,000
Public Works Projects
1997 Maury Meyers Overpass 4,050,000
West Lucas 9,000,000
South Park Relief 3,400,000
Twenty-Third Street 400,000
1998 Royal Street Outfall 940,000
Eleventh Street-Washington to Fannett 1,900,000
Folsom Road -Crow to Dowlen 1,500,000
1999 Chaison Street-Threadneedle to Harriot 156,000
2000 Walden Road/Ditch 109 845,000
Ector Street Ditch 500,000
2001 Concord Road - Phase 1 (1-10 to Helena) 3,500,000
Franklin Street 765,000
Concord Road - Phase 11 (Includes Deleware outfall) 8,556,000
Walden Road -Major Dr. To Fannett 6,570,000
Folsom Road 2,900,000
Frontage Road - Entertainment Complex 1,000,000
Capital Program 2002
May 15, 2001
.Outstanding Debt
Relative to the assessed value of property within the Beaumont city limits, the outstanding
general obligation debt has ranged between a high of 2.54% at 10/01/92 and a low of 1.95%
at 10/01/97.The increasing assessed valuation of property is attributable to both the addition
of new property to the tax roll and increasing values of existing properties. The growth in
assessed value mirrors the level of debt issued by the City for improvements to infrastructure
which support a growing economy.The debt level has fluctuated between$67M at 10/01/94
to $89M at 10/01/99 while maintaining an average basis of 2.17% for period under review.
The projected debt ratio at 10/01/01 is in line with the average at 2.12% of assessed value.
The following table illustrates this discussion.
Outstanding Assessed Debt
Debt(1) Value Ratio
10/01/92 75,991,091 2,986,049,120 2.54%
10/01/93 71,922,491 3,245,152,910 2.22%
10/01/94 67,584,491 3,251,615,993 2.08%
10/01/95 68,501,191 3,311,639,210 2.07%
10/01/96 71,482,591 3,420,010,280 2.09%
10/01/97 68,286,391 3,499,102,595 1.95%
10/01/98 76,723,691 3,661,785,240 2.10%
10/01/99 89,243,491 3,701,491,226 2.41%
10/01/00 81,093,791 3,779,873,302 2.15%
10/01/01 (prelim) 82,276,091 3,879,891,423 2.12%
(1) Outstanding debt shown net of self-supporting HUD Section 108 loan.
Capital Program 2002
May 15, 2001
As a percentage of total general government expenditures(General Fund and Debt Service),
annual tax supported debt service payments have ranged from 13.16%to 15.78%during the
period FY98 through FY01. Considering existing debt levels,this ratio is projected at 14.76%
for FY 2002.
Fiscal General Govt. Debt Service Percent
Year Expenditures Payments of Total
1998 70,273,731 9,248,501 13.16%
1999 73,707,665 11,046,675 14.99%
2000 78,433,086 12,371,272 15.78%
2001 (Est) 83,500,181 12,297,281 14.73%
2002 (Prof) 85,480,653 12,609,853 14.76%
Debt Service Payments
Relative to General Government Expenditures
100
80
so
5 40
20
0
1998 1999 2000 2001 2002
Fiscal Year End
0 General Fund Expenditures =Debt Service Payments
Capital Program 2002
May 15, 2001
Capital Program 2002
Current, scheduled and planned projects total $65.6M. Individual project descriptions, with
maps for street and drainage projects, may be found in the section titled "Project
Descriptions."
The following table identifies the specific cost associated with each phase of the CIP.
Capital Program 2002
Program Summary
Cost
Public Works Improvements
Current $21,860,000
Scheduled 9,200,000
Planned 25,200,000
Total 56,260,000
General Improvements
Current $3,810,000
Scheduled —
Planned 5,531,000
Total 9,341,000
Total Program Cost $65,601,000
Funding
Financing for the annual program is provided by the "cash flow" approach, whereby debt is
issued to generate enough cash to pay the actual expenditures during the year for both
existing and new projects. This approach provides the most efficient use of the public tax
dollars by allowing multi-year projects to be initiated without issuing debt for the full cost of
the projects at the time of project commencement. All available funding sources are
considered. Historically, funding has been provided by the sale of general obligation debt,
Community Development Block Grant, and various State agencies.
Capital Program 2002
May 15, 2001
Based on a "cash flow"approach the City expects to sell $10 in Certificates of Obligation in
the summer of FY 2001. This inflow of cash will provide sufficient cash flow for current
General Improvement and Public Works Improvement projects.
Funding for scheduled and planned projects has not been identified. As these projects
transition into the"current"classification funding requirements will be reviewed and proposed.
Several factors which are unforeseeable will dictate the amount of debt issued. Weather,
planning, design and construction costs all factor into the decision of when and how much
debt to issue.
The funding required to complete all current and scheduled projects is estimated at $8.6M
at this time.
Capital Program 2002
Funding Summary
Estimated Cost of Projects
Current $25,670,000
Scheduled 9,200,000
Planned 30,731,000
Total $65,601,000
Funds Available
Committed $16,267,000
2001 Certificate of Obligations 10,000,000
Total $26,267,000
Funds required to complete
Capital Program 2002 $39,334,000
Effect on Operating Costs
It is expected that the operational needs related to current and scheduled Public Works
Improvements will be absorbed into existing operating departments and will not require
additional personnel. The most significant operating item is maintenance of rights-of-way
related to street projects, which will be handled by the Parks and Recreation Department.
Capital Program 2002
May 15, 2001
Most of the projects within the General Improvements category will be handled the same
way.Additional operating needs will be absorbed.The T. R. Johns, Sr. Branch Library is the
only project of the current/scheduled projects that will affect operating costs. Included in the
FY 2001 budget is $50,000 to begin acquiring the collection. The full impact of these
additional operating costs will be in FY 2002 when personnel are hired and the remainder
of the collection is secured.
Water Utilities Improvements
The City Public Works Department has worked with engineering firms to identify necessary
improvements to the water and waste water systems. Preliminary estimates for the
renovation of the systems, which will be completed over a five year period, is in excess of
$50M. These renovations are required to meet federal and state mandates as well as meet
the needs of the City's growth. Individual project descriptions may be found in the section
titled "Project Descriptions."
The initial sale of$25M in Water Revenue Bonds in August 2000, is expected to fund the
first phase of these improvements. A rate adjustment of 30%was made in July 2000 with
increases of 4% in 2001, 2002 and 2003 to follow in July of each year. These increase are
necessary to adequately fund debt service requirements. Additional debt issuance will be
required in subsequent years to complete these projects.
Conclusion
The Capital Program is designed to annually review the development and continuing
maintenance of the City's infrastructure. The relationship between the assessed valuation,
outstanding debt, annual debt service requirements and general government expenditures
as illustrated provide a basis for project consideration and funding. Revisions and
amendments may be incorporated into the plan as desired by Council.