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HomeMy WebLinkAboutMIN AUG 11 1987 REGULAR SESSION CITY COUNCIL - CITY OF BEAUMONT HELD AUGUST 11, 1987 - 1 :15 P.M. BE IT REMEMBERED that the City Council of the City of Beaumont, Texas, met in regular session this the 11th day of August, 1987, with the following present: HONORABLE: Maurice Meyers Mayor Bob Lee, Jr. Councilman At Large Andrew P. Cokinos Councilman At Large Lulu L. Smith Councilman, Ward I Mike Brumley Councilman, Ward II Audwin Samuel Councilman, Ward III David W. Moore Councilman, Ward IV Albert E. Haines City Manager Tyrone Cooper Assistant City Attorney Rosemarie Chiappetta City Clerk -000- The Invocation was given by the Bishop Bernard Gantor of the Catholic Diocese of Beaumont. The Pledge was led by Councilman Samuel. -000- Mayor Meyers recognized Sandra Dollarhide accompanied by Glenda Cagle, Vice-President of Rubin Smith Association Advertising and Public Relations firm, and Don Eisen of the Philip Morris Co. Ms. Dollarhide is the recent winner of a Philip Morris Essay Magazine Contest to focus public awareness on the threat of censorship and will receive an award at 11:30 a.m. , August 12, 1987. The contest was entitled, "If Liberty is Worth Fighting For, Its Worth Writing For. " -000- MAYOR MEYERS: And, I will break from tradition because my arm has been twisted and ask if Naaman Woodland would come to the microphone because I believe he's heading to Austin, and Naaman, I think you wanted to make a comment at this time, or a plea, or a statement, or whatever fits what you're gonna say. NAAMAN WOODLAND: = Thank you, Mr. Mayor, Honorable City Council. I appreciate this opportunity to speak, and I will try to speak briefly. I did ask the Mayor a special favor cause I've got to go to Austin. Before I talk about what I came to talk about particularly, I do want to remind you that on August 19th, as part of our Sesquicentennial celebration, we're having a special benefit for Tyrrell Historical Library, "Stars Over Beaumont. " I know that all of you will want to come and bring your friends and family to support, not only the Tyrrell Library, but to support these three fine young artists that we're -292- August 11, 1987 MR. WOODLAND, continued: bringing here. We're hoping it will be such a tremendous success that we can do this every year. We've discovered there's so many fine young people who've gone from Beaumont that are in the professional music and art world that it would be nice for us to honor them each year with something of this sort. I particularly want to invite all of you to come to the reception immediately after the concert to meet these young artists. It's going to be over at the Tyrrell Library, and it's being sponsored by the Friends of the Library. I also want to announce what you have seen in the paper this morning, if you read the paper, that after many years of work we were able to start a support group for Tyrrell Historical Library called the Tyrrell Historical Library Associates. We were very fortunate in finding three outstanding citizens who agreed to serve as an executive committee to begin organizing this, and we had about fifty people who turned out yesterday with much enthusiasm to organize this group. I also, but what I came to particularly talk with you about this afternoon briefly is that we also in the paper the possibility we may get $63,000 back from the government, and I wanted to be one of the first to put in a plea to use that for the Tyrrell historical Library restoration. We have made a good start, but we still have a long way to go. And, this would go a long way towards helping finishing up the outside. Thank you very much. MAYOR MEYERS: What is that on your lapel? MR. WOODLAND: Oh, this is our new logo! All of you will soon be wearing one. We're going to have a Youth Campaign Drive for the benefit of Tyrrell Historical Library this first week of the Sesquicentennial celebration and we're going to have young people all over ..the city with cans, and we will not want to see anybody without one of these logos. Look at it, and it's a little thing. .. the Mayor and I have one, but I don't see that the rest of the Councilmen have one yet. MAYOR MEYRES: They'll have opportunity. . . MR. WOODLAND: I should of brought my can and my tickets. . .Thank you all very much. MAYOR MEYERS: I would say that for those who have objected to people on the corners with roses, you will now have opportunity to object to youngsters on the corners with canisters, sticking them in every car window, I hope, asking you to make contribution to the restoration of the Tyrrell and that will continue from next Wednesday, August 19th, where we hope we'll have a packed house of 1 ,700, and then continue right on up to the Sesquicentennial celebration. Dr. Alan Coleman, a young dentist in Beaumont, is taking the leadership role and met this morning and last week, and he has the young leadership of all of our high schools already locked in, and they will be conducting different -293- August 11, 1987 MAYOR MEYERS continued: kinds of competitions, as well as when conventions come the badges will have opportunity to get these put on them, every restaurant, every theater, every bus, hopefully, every place you turn in the next ninty days, you will have opportunity to drop a coin, or a bill if you wish, into a canister. Naaman, thank you and have a safe trip. COUNCILMAN SAMUEL: Before you leave, Naaman, also, several weeks ago Naaman went to Austin along with myself and Maurine Gray, and he made a presentation before that Advisory Board which turned out to be very fruitful in that we did receive accreditation for this upcoming year for our Library, and I think that in itself he took a step beyond the call of duty. And, I think he should be commended for that. Thank you, Naaman. MR. WOODLAND: Thank you, but Councilman Samuels is being far too modest. He made the major presentation, and actually, I think it was the fact that a councilman was there impressed them the most, that this City cared enough for a councilman to go. COUNCILMAN SAMUEL: We're not gonna debate that, but anyway, thanks a million! MAYOR MEYERS: We thank you and the Library Commission and Councilman Samuel for the clean bill of health that we got for our Library System, and it's a job well done. We did express that, but we're glad to express it again because it was very important. -000- No citizens wished to speak on Agenda Items A through F. -000- The following Consent Agenda Items were considered: Resolution 87-160 appointing Marilyn Johnson and reappointing Frederick Adams to the CDBG Advisory Commission with terms expiring May 31, 1989; appointing I. H. Thacker to the Planning Commission with a term expiring July 31, 1990; and appointing Chloeteele Barclay to the Housing Rehab Loan Board with a term expiring May 31, 1988; and Resolution 87-161 rejecting the $49,864 bid of Steel Life, Inc. for cleaning and painting of the 1.0 m.g. elevated water storage tank located on Liberty at 13th Street since $35,000 was the budgeted amount for the project; and Resolution 87-162 refunding $2,130.18 to Rinsel Motors for overpayment of 1984 and 1985 city taxes; and -294- August 11, 1987 Resolution 87-163 refunding $620.73 to Mr. Thomas K. Lamb, Jr. for overpayment of 1984 city taxes. The Consent Agenda was approved on a motion made by Councilman Samuel and seconded by Councilman Smith. Question: Ayes: All Nayes: None -000- ordinance 87-63 canvassing returns of the August 8 special election on increasing the local sales and use tax by half a cent in order to reduce the property tax rate was considered: (Councilman Samuel left auditorium. ) ORDINANCE 87-63 ENTITLED AN ORDINANCE CANVASSING THE RETURNS OF THE SPECIAL CITY ELECTION HELD IN THE CITY OF BEAUMONT ON THE 8TH DAY OF AUGUST, 1987 FOR THE PURPOSE OF PRESENTING THE FOLLOWING PROPOSITION: "THE ADOPTION OF AN ADDITIONAL ONE-HALF OF ONE PERCENT LOCAL SALES AND USE TAX WITHIN THE CITY TO BE USED TO REDUCE THE PROPERTY TAX RATE"; PROVIDING FOR SEVERABILITY AND PROVIDING FOR REPEAL. Ordinance 87-63 was approved on a motion made by Councilman Lee and seconded by Councilman Brumley. Question: Ayes: Mayor Meyers Nayes: None Councilman Lee Councilman Cokinos Councilman Smith Councilman Brumley Councilman Moore (C-ionellman Samuel returned to auditorium. ) -000- Ordinance 87-64 extending the moratorium on building permits for residential care facilities was considered: ORDINANCE NO. 87-64 ENTITLED AN ORDINANCE EXTENDING THE MORATORIUM UNTIL AUGUST 25, 1987,. ON THE ISSUANCE OF ANY BUILDING PERMITS OR CERTIFICATES OF OCCUPANCY AND COMPLIANCE FOR ANY RESIDENTIAL CARE LAND USE INCLUDED IN THE 1972 SIC MANUAL, GROUP 836; PROVIDING FOR SEVERABILITY AND PROVIDING FOR REPEAL. Ordinance 87-64 was approved on a motion made by Councilman Moore and seconded by Councilman Samuel. Question: Ayes: All Nayes: None -000- -295- August 11, 1987 An ordinance amending Chapter 21, Section 21.9, of the Code of Ordinances relating to City employees' short term disability benefits was removed from the Agenda by the City Manager for future consideration. -000- Resolution 87-164 rejecting all bids received on a contract for construction of Phase II of the Marina Expansion Project which, if accepted, would result in an overrun of the budget amount and breaking the work down into smaller components to be included in other contracts or performed by City crews under force accounts was approved on a motion by Councilman Brumley and seconded by Councilman Smith. Question: Ayes: All Nayes: None -000- Resolution 87-165 authorizing some of the Marina Expansion Project Phase II work (equipment and labor to install wood bulkheads, using materials furnished by the City of Beaumont and furnish a dragline for excavation of materials and provide a D8 Dozer to grade excavation placed adjacent to the marina ships) to be incorporated into the contract for Phase I with Bo-Mac Construction as Change Order No. 31n the amount of $5,080 was approved on a motion made by Councilman Lee and seconded by Councilman Brumley. Question: Ayes: All Nayes: None -000- Resolution 87-166 authorizing a contract with Gold Crest Electric Company, Inc. in the amount of $37,103 for the electrical portion of the Beaumont Marina Expansion, Phase II Project was approved on a motion made by Councilman Brumley and seconded by Councilman Lee. Question: Ayes: All Nayes: None -000- The first reading of an ordinance granting an amended franchise to REM Waste Control, Inc. for a commercial garbage collection service was held: AN ORDINANCE ENTITLED AN ORDINANCE GRANTING A FRANCHISE TO REM WASTE CONTROL, INC. TO OPERATE A COMMERCIAL CONTAINER GARBAGE COLLECTION SERVICE IN THE CITY OF BEAUMONT; PROVIDING THE TERMS, CONDITIONS, OBLIGATIONS, AND LIMITATIONS OF SUCH SERVICE; PROVIDING INDEMNITY TO THE CITY; RETAINING AUTHORITY TO REGULATE RATES; PROVIDING FOR FRANCHISE PAYMENTS AND PROVIDING FOR SEVERABILITY. The first reading of an ordinance granting an amended franchise to Browning Ferris Industries, Inc. for a commercial garbage collection service was held: -296- August 11, 1987 AN ORDINANCE ENTITLED AN ORDINANCE GRANTING A FRANCHISE TO BROWNING FERRIS INDUSTRIES TO OPERATE A COMMERCIAL CONTAINER GARBAGE COLLECTION SERVICE IN THE CITY OF BEAUMONT; PROVIDING THE TERMS, CONDITIONS, OBLIGATIONS, AND LIMITATIONS OF SUCH SERVICE; PROVIDING INDEMNITY TO THE CITY; RETAINING AUTHORITY TO REGULATE RATES; PROVIDING FOR FRANCHISE PAYMENTS AND PROVIDING FOR SEVERABILITY. The first reading of an ordinance granting an amended franchise ordinance to Waste Express, Inc, for a commercial container garbage collection service was held: AN ORDINANCE ENTITLED AN ORDINANCE GRANTING A FRANCHISE TO WASTE EXPRESS, INC. TO OPERATE A COMMERCIAL CONTAINER GARBAGE COLLECTION SERVICE IN THE CITY OF BEAUMONT; PROVIDING THE TERMS, CONDITIONS, OBLIGATIONS, AND LIMITATIONS OF SUCH SERVICE; PROVIDING INDEMNITY TO THE CITY; RETAINING AUTHORITY TO REGULATE RATES; PROVIDING FOR FRANCHISE PAYMENTS AND PROVIDING FOR SEVERABILITY. Councilman Cokinos expressed deep concern regarding the 5% gross receipt payments being insufficient, the life of the landfill reduced by use of the commercial collection services, and the damage to streets by their vehicles and heavy loads. Other councilmembers expressed their concern of deterioration of streets by trucks hauling heavy loads and voiced interest in considering a street use fee for wear and tear of the streets to these users. Public Works Director Tom Warner is preparing a report for submission to Council regarding probable damage by trucks hauling excessive tonnage for the streets. An ordinance granting an amended franchise to REM Waste Control, Inc, for a commercial container garbage collection service was passed to its second reading on a motion made by Councilman Lee and seconded by Councilman Brumley. Question: Ayes: Mayor Meyers Nayes: Councilman Cokinos Councilman Lee Councilman Smith Councilman Brumley Councilman Samuel Councilman Moore An ordinance granting an amended franchise to Browning Ferris Industries, Inc. for a commercial container garbage collection services was passed to its second reading on a motion made by Councilman Brumley and seconded by Councilman Smith. Question: Ayes: Mayor Meyers Napes: Councilman Cokinos Councilman Lee Councilman Smith Councilman Brumley Councilman Samuel Councilman Moore -297- August 11, 1987 An ordinance granting an amended franchise to Waste Express, Inc. for a commercial container garbage collection service was passed to its second reading on a motion made by Councilman Samuel and seconded by Councilman Moore. Question: Ayes: Mayor Meyers Nayes: Councilman Cokinos Councilman Lee Councilman Smith Councilman Brumley Councilman Samuel Councilman Moore -000- City Manager Albert Haines presented to Council his proposed Budget for Fiscal Year 1987/1988 stating the need for a $ .03 property tax increase to fund capital improvements in the area of streets with anticipated revenues totaling $125,675,346 and proposed expenditures totaling $112,858,990. (copy of City Manager's budget letter attached as Exhibit A) MR. HAINES: When we talk of productivity I must acknowledge to you that this budget is a direct reflection of increased productivity. This document was prepared by half the staff that prepared last year's budget. So, publicly I must make special commendation to Amy Barton, Kandy Daniel, Carol Toups and the rest of the Finance Department for their efforts in providing a document that, in my opinion, is reflective of the high standard of quality. Also, appreciation is appropriate to express to Department Heads for their cooperation, and above all, their efforts to provide services to you and our community. And finally, to you, on their behalf as well as my own appreciation for your dedication to your responsibilities, and, in advance for the time and effort that you will have to take to weigh those isssues that are contained in this budget which appropriately will require the highest levels of judgment and statesmanship. Mayor and Council, I submit to you this budget and ask for your approval of the resolution. MUYOR MEYERS: We thank you and we thank the staff that you've recognized plus any others that have cooperated in bringing forward this document, and I'm sure in the weeks ahead they'll be significant discussion. . . The Manager's proposed budget was received on a motion made by Councilman Lee and seconded by Councilman Brumley. Question: Ayes: All Napes: None MAYOR MEYERS: Thank you very much for the condition of the document. I mean, it is outstanding. The content we shall all discuss, but no kidding, (various Council joking comments evoking laughter and Mr. Haines' comment "it's pretty, though" referring to the budget) no, no it's better than that, I think it's the best I've ever seen in the form of a preliminary budget, and I compliment all of you for the work that you've done, and we thank you f or that. -298- August 11, 1987 Resolution 87-167 setting a public hearing for all interested parties concerning the proposed budget of the City of Beaumont at 1 :15 on September 8, 1987 in the City Council Chamber of City Hall was approved on a motion made by Councilman Lee and seconded by Councilman Brumley. Question: Ayes: All Nayes: None -000- Councilman Smith reported that the third "Concert on the Move" at Kline Park was very good and the band excellent and that "Sunday in the Park" sponsored by the Girl Scouts of the San Jacinto Division was a good experience in spite of the rain. Councilman Cokinos shared an ad for application for employment for an Employee Benefits Coordinator running in both the Beaumont Enterprise and Houston Chronical and requested that Mr. Haines explore the number of days run in both publications and asked why layout not the same in each newspaper. Councilman Lee invited everyone to "Sunday in the Park" on August 16th from 2:00 p.m. to 4:00 p.m. sponsored by Sears. (He promised there would be no rain.) He also requested that Public Works Director Tom Warner investigate and instruct that more care be taken in picking up litter before mowing boulevards and medians to eliminate shredded trash and litter blowing about. Councilman Brumley encouraged attendance at the fourth "Concert on the Move" on August 27th at 7:00 p.m. at Magnolia Park. The music will be a combination of rhythm and blues and gospel and announced the final concert will be hosted by Councilman Lee and Councilman Cokinos. Councilman Samuel echoed Councilman Brumley's invitation for August 27th and said more information will be forthcoming regarding the bands and choirs that will be participating. Councilman Smith thanked all the City Departments for their assistance in making all the functions, especially the "Concerts on the Move" possible and so successful. The Parks Department was particularly helpful in getting lights installed at Kline Park for the concert in Ward I. 11AYOR MEYERS: I would like to ask Sherrell something. I had opportunity earlier today, I think some others from Council were there, to experience or witness what I think is an outstanding program prepared potentially by BISD. It's their program towards adult and young people literacy improvement, both within the school system and at night. I thing the opportunity for a program like this is outstanding. The costs basically are about $3,200 per class of sixteen. I want to present this to you because I'd like you to look through any Block Grant potential that we might have if there were any opportunity for us to participate, perhaps in the first such program jointly between us and the School District, because I think the benefits to not only the people, but to the City and to all of us in being able to speak to what our school is doing would far outweigh the cost involved. It is an outstanding program, and I hope they can get the resources. I know Atlanta, Mayor Young has had taken initiative for such a program, and I assume it -299- August 11, 1987 MAYOR MEYERS Continued: was done that way, but I'd like you to look at that and let me hand you the information on it. MR. HAINES: If you don't mind, I would like to perhaps add one thing to what you've said. I extend thanks to Councilman Brumley and Councilman Smith for this. We have been having an ongoing dialogue with the Superintendent on this program, and I know that Maxie has completed an inventory on perspective employees that might be interested in this program. And, I know perhaps Sherrell you could get with Max because he, I know he's already underway in trying to figure out how it could be done. MAYOR MEYERS: Well, they are prepared now, for example, and I understand on numbers in the City which would be fantastic. It would be an expense of $6,300 as I understand the numbers. And, we could pilot the first two programs and encourage and hope others. But, let me pass this down to you. It, it says so much, I think, for our community and our education) system and what it would do for us as well as those people that are assisted. -000- Jessie Cooper, 446 Georgetown, addressed Council regarding sewer processing and presented the City Manager with the business card of Johnny Hale, developer of a new pump that is ready to be marketed, that could possibly save the City costs in sewer processing. C. L. Sherman, 585 Belvedere Drive, addressed Council regarding citizens input on line items of the budget; in opposition of the City Manager's proposed $ .03 increase in property tax and - pledged the Tar. Reduction Committee's fight regarding the proposed increase; and informed Council that Beaumont's garbage collection rate is not competitive with other cities--the average rate is $1.50 less than ours. Henry Dannebaum, 1567 Wall, addressed Council to suggest instituting an educational program to recruit young people to teach them to dispatch and accompany the officers on their assignments; commended the two soups programs that are serving 633 unemployed; announced the Job Pair set for August 18th; complimented the City Manager on the budget presentation; and commented on the heavy equipment and possible truck routes. -000- There being no further business, the meeting was recessed before continuing with the City Council Workshop Session. -000- I, Rosemarie Chiappe tta, City Clerk of the City of Beaumont, Texas, certify that the above is a true copy of the regular City Council session held August 11, 1987. Rosemarie Chiappetta, City Clerk -300- August 11, 1987 Ci6y Of Beaumo-it P.O. Box 3827 L Beaumont, Texas 77704 -2 ; 1 UARR (409) 838-0600 Office of the City Manager August 11, 1987 TO: Mayor and City Council SUBJ: FY 1987-1988 BUDGET In accordance with the terms and conditions of the Charter for the City of Beaumont, I am submitting the budget for the period October 1, 1987, to September 30, 1988. IlTIRODUCTION As this past year unfolded, several major themes developed that have become primary issues for the City Council and the citizens of the community. These issues center around capital improvements, tax reduction, and expenditure controls through increased efficiency. lip recent flooding focused attention on the drainage problen ; backed--up sewers demonstrated the desperate need for sewer line repair work; and street deterioration continued to be one of the most chronic s:;urces of frustration. The mood of our community is properly turning toward a thorough examination of the City's environment. Deteriorating parks, buildings, dilapidated structures, needed curb and sidewalk repairs, and better general maintenance are dominant issues that have been expressed lately by all sectors in our community. We have seen a continued emphasis on property tax relief. It goes without question that this City's revenue base has been too dependent upon the property tax, as evidenced by its higher than should be expected rates. The %zG sales tax referendum was approved as one means of shifting the tax base from property owners to consumers throughout the region who derive benefits from the City's services but do not share equally in the financing of those services. Although this budget will not reflect the property tax reduction since the action will not take effect until 1988, next year's budget will lower the City's dependence on the property tax by approximately $4.2 million. Although this action will bring the ratio of the property tax to the total General Fund in line with other municipalities, it will not address EXHIBIT "A" Mayor and City Council Page 2 August 11, 1987 the $7.2 million obligation to meet the City's annual debt service. More than 40% of our property taxes in FY 1989 will be needed to pay for debt. Finally, the theme of cost containment through improved productivity and strong fiscal management has been stressed continually by the Council. You have scrutinized the City's hiring a;id promotion practices, fleet operations, h purchasing policies, and monthly and quarterly financial and activity !' reports. Citizens, rightfully, continue their statements in favor of service efficiency and maximum value for their tax dollars. Their presence at Council meetings as well as participation in appointed committees validates their concerns. I have heard and perceive these issues of higher levels of capital improvement funding, tax reduction, and increased employee efficiency and productivity to be of paramount importance to this Council and the citizens of Beaumont. Therefore, the budget I have developed, with attendant policy directives, obliges each issue. However, there are some points of divergence which I feel should be presented, because it is my professional judgment that a wholesale adoption of each policy message would carry severe consequences for this City's future. Issue number one is that the Council and citizens have a continued interest in tax cuts. Unfortunately, dollar property tax reduction has become synonymous with property tax rate reduction, which takes into account neither inflated nur deflated assessed property valuations. If 'Ia.x revenues {not rates) for FY 1987-88 were at the same dollar level as FY 1986-87, we could fund the current operating budget and begin a "pay-as-you-go" capital improvement program. With the decline in assessed property values, the current tax rate will produce a tax savings to the citizens and a corresponding revenue loss to the City of approximately $1' raillion. In other words, to generate comparable property tax revenue would require a tax rate of approximately 730. I am proposing a continuation of the 690 rate to meet ongoing funding requirements as follows: General Fund $11,099,230 43.050 Debt Service 6,190,300 24.010 Insurance 500,000 1.940 Total FY 1987-88 $17,789,530 69.000 Total FY 1986-87 18,776,850 69.000 Real Property Tax Savings $ 987,320 The second policy issue, which I agree will be the most critical facing this City in the near future, is the continued development, restoration, and maintenance of our infrastructure. There is no question that the capital _ � w Mayor and City Council Page 3 August 11, 1987 inventory belonging to this City has been allowed to fall into various states of disrepair and, in some instances, total deterioration. There are no capital outlay financing reserves available. With reduced revenues and the current debt burden, additional bond sales cannot be financed. Yet, everyone is demanding street repair, drainage improvements, park rehabilitation, building restoration, and increased general maintenance work on City facilities. It would be easier to gloss over these needs than to recommend a budget that lays a beginning foundation for an ongoing, "pay-as-you-go, " capital improvements funding plan. Nevertheless, at some point, citizens have to understand that if they want to have a vital, well cared for and sound community, they cannot continue to erode the financial resources necessary to do the work. And debt financing is no longer available, given our present revenue raising constraints. As you know, the City, in FY 1986, reduced its property tax rate and consequential funding capabilities with an understanding that some of the taxes would be restored the following year for drainage improvements. Funds were not restored and $13.3 million in voter authorized bonds have not been issued, nor can they be in the foreseeable future. The loss of Federal Revenue Sharing and other federal and state grant fund resulted in further strain on the City's already declining revenue sources. Had the elimination of those revenues not occurred, ;rre than $3.7 million in c_cinual resources, including $2.3 million from property taxes, would be available to help fund our capital improvements. Since these resources are not available and our ability to issue new debt has been so severely limited, I am recommending that a Street Rehabilitation and Maintenance Fund be established and $773,460 of the $987,320 in tax savings be dedicated to the Fund. This proposal would still provide a real tax savings of $213,860, although the rate would be' Incr�as-d by 3G to 72�!. Additionally, I am recommending that $89,190 of ending Federal Revenue Sharing money in the General Fund balance be transferred to this newly created fund. There are 339 miles of asphalt streets within the City, of which 40% require rehabilitation, 40% are in need of an overlay, and the other 20% will require seal coat or overlay in the next three years. The Jq proposed first year program would rehabilitate five miles, overlay twelve miles, and seal coat six miles. In addition to the dedicated tax revenues to street improvements, I am ` recommending that $663,150 of the ESM recovery, previously earmarked for the General Fund be trapsferred to the Capital Improvement Fund and allocated to projects to be designated by Council during the upcoming Work Sessions prior to final budget adoption. The sum of these actions will provide an initiative that will fund over $1.3 million in projects. Finally, regarding increased productivity, I will agree that this City should continue to become more efficient. I must remind Council that efficiency and productivity can only be focused in on those departments that are not covered Mayor and City Council Page 4 August 11, 1987 under collective bargaining—that is, if productivity is to be measured only in terms of reduced dollars. I feel it is unfair to the majority of our employees to judge their productivity, or lack thereof, in terms of dollars saved. Work output is equally as important a measurement of productivity as bottom line dollar costs. Unlike private industry where work demands are directly correlated to business volume, governmental work demands are not directly related to revenue base or general economic conditions. There have been staff reductions and reduced available resources, yet, the service expectations have not decreased, but, in fact, have increased. Every Department Director has been given additional projects this year for which there was no increased funding allocation or staff. In each case, the Director and staff responded professionally, willingly, and competently. Public Works, for example, increased brush collection, made improvements to Fair Park, and spent $119,000 on improvements to the Athletic Complex, the Park's playground equipment, and the Garden Club building. Finance produced a the annual report., took on the accounting for BUILD, Inc. and the Sesquicentennial Commission, provided support staff for the computer conversion, and personal computer training. Gomunity Development was assigned all of the associated grant writing for economic development projects, produced an overall economic development plan, provided technical assistance for Summit I and II, and still achieved the highest volume of Housing Rehab loans and demolition completions ever. The Convention Facilities Department helped produce Summit I, support Sunday in the Park, "Concerts on the Move," and numerous special projects, in addition to its routine work. The Resource Management Department has realized cost savings by changes implemented in our employee benefit plan and through improved aLlAnistration of worker's compensation. These_ are only some of the many examples of increased work output which can'be found throughout the City. I am not skirting the issue of productivity. We certainly will continue to find more efficient means of getting the work done. I just do not believe it is fruitful to imagine that there are sufficient savings from improved productivity to finance any sustained capital improvement program. Neither am I convinced that cost-cutting automatically assures increases in efficiency. However, this budget has incorporated cost-cutting measures in the operating depart;-,ents of $435,000, with a clear understanding that increased productivity be the result. THE 1987-1988 BUDGET Keying off these concerns, the process for developing the budget was established, along with policy considerations, to ensure that the direction for the organization this next fiscal year is consistent with the City's Mayor and City Council Page 5 August 11, 1987 goals of cost containment, improved productivity, increased capital improvement outlays, and better overall maintenance of City facilities. BUDGET POLICY kk 1. Base Budget Concept. f` The base budget reflects essentially the same service level as the prior year. In developing the base budget, the prior year budget figure was adjusted based on assumptions and projections used in preparing the City's five-year financial plan. Increases were factored in for higher utility rates and other service costs. Identifiable cost savings were factored into the base budget in two ways. First, the total was reduced by approximately $200,000 for projected decreases in overtime costs. Secondly, the departments were told to maintain merit raises for employees; however, no increases were made to the base budget to accommodate these raises, forcing departments to find savings in other areas. Once this base was established, target numbers were calculated for each department. All Department Directors submitted initial budgets within their targeted goals. 2. Fund Balance Rem.iirements. It is recommended that a General Fund balance equal to approximately 9% to 10% of current revenue estimates be maintained. This amount should be an adequate operating reserve for the City. For FY 1988, our ,* targeted fund balance is $4,000,000. 3. Enterprise and Internal Service Fkwmds. Since those funds are designed to be, supported by fees associated with their activities, no base budgets were required. 4. Establishment of New Budget Format. This budget document incorporates a shift from a fund budget to a departmental budget. All activities encompassed in each department will be presented in summary expenditure categories and divisional totals by department, regardless of the funding source. The FY 1987 numbers will J.- be restated in this format for comparative purposes. The intent is to present the scope of activity of each department and the funding sources allocated to support those activities. 5. Funding Commitment to the Arts. In the recommended budget, the funds allocated to the arts remain constant at the 1987 levels, with the exception of a $49,860 increase to the Art Museum of Southeast Texas. Mayor and City Council Page 6 August 11, 1987 6. Employee Compensation and Benefits. No across-the-board cost of living increases are included for non-civil service employees. We will administer compensation under the recently completed Classification/Compensation Plan, although refinements to the system will be continued. Moving toward restoration of civilian E employee benefits, this budget contains a reduction in the health insurance deductible from $300 to $150, increased life insurance benefits, and the implementation of a cafeteria benefit plan. t In the collective bargaining process, a cost of living adjustment of 2z% has been recommended for the Fire Department. No cost of living adjustment has been included for the Police Department because beginning salaries are more competitive for police officers. However, it is recommended that the Police Department restructure its career laddF_ program and create more opportunities for officers to progress through ;' the ranks. Approximately $200,000 has been set aside to fund the El program. 7. Capital PL�ojects. We are coiurdttad to the establishment of a "pay-as-you-go" plan for _ capital improvements. To that end, General Fund resources in excess of those necessary to maintain an acceptable Lmd balance are recommended for appropriation for capital improvements. S. Budget Enhancements. All requests :in excess of the departmental target numbers a;re, presentc-_? in a separate section of the budget as enhancements. This will allow Council to evaluate additional service requests and allocate funds for enhancements they feel will be most beneficial to the City. 9. Non-Departmental Budget. This budget has been established to contain funds for programs and activities that are not related to one of the other typical departmental functions. Funds are budgeted here for outside agencies which provide service to the community, like the Art Museum of Southeast Texas, the Economic Development Council, BUILD, SET, Inc., and First Stop Business Center. In addition, the capital project fund for general improvements will be shown under non-departmental until specific projects are authorized by the City Council. Typically, these funds have been budgeted in various departmental budgets, thus obscuring the total impact of these allocations. 10. Budget Adjustments. FY 1987 estimated revenues and expenditures will not be adopted as the final 1987 budget, as has been the custom in the past. The original Aam F'. Mayor and City Council Page 7 August 11, 1987 JA1987 budget as amended by Council prior to year end will be the final budget for that year. 11. Capital Project Budgeting. The current year budget reflects a departure from the procedures utilized in preparing prior capital budgets. We will be asking Council ! . to reappropriate funds for all capital projects that are not completed. The Council will be requested to establish priorities during this reappropriation process in order to ensure that total project authorizations do not exceed available funding. Once the initial project budget has been established, increases or decreases in project funding will require Council authorization. n 12. Debt Service. Concurrent with the submission of this budget, partial refunding of the City's debt is underway. We expect to generate a reduction of debt servicing requirements as a result. Should this be the case, approximately $200,000 in revenues will be available for appropriation. „ It Will be my recce mendation that the entire mount be allocated exclusively to an ongoing 0rainage improvements Program similar to the Street Rehlabllitation Program contained in this budget. BUDGET OVERVIEW JR..�ENUES I am recommending an operating budget that does not require a property tax rate increase. Re-e- nue estimates for General Fund operations reflect a tax reduction attributable to the 5.3% decline in assessed property values. This _$ amounts to approximately $1,000,000 in decreased property tax revenue to the - General Fund for FY 1988. Total sales and use tax revenues for FY 1988 are projected to be $12,422,850. Gross receipts taxes and industrial payments reflect slight increases of $365,360 and $488,530, respectively. The projected increase in gross receipts taxes assumes a 15% electric utility rate increase for GSU. The industrial payments increase is based on renewed contract negotiations. We are estimating a decrease in fines and forfeitures, and permit and user fees. I am not recommending an increase in these fees at this time. Overall general fund operating revenues are projected to be $41,903,800, or 4.23 higher than the FY 1987 estimated revenues of $40,223,365. However, this apparent increase is deceiving because it includes the one-time cash flow benefit from the k(� sales tax. Revenues from all sources, excluding capital projects, are projected at $87,313,900, or 200- more than FY 1987 budget. Mayor and City Council Page 8 August 11, 1987 EXPENDITURES Expenditure levels for all departments, excluding capital projects, total approximately $88,795,950. This represents an increase of 5%, or $4,478,908 over the FY 1987 budget level. The General Fund expenditures reflect a total budget increase of 4.8%, or $1,980,900 over last year's $40,973,550 level. The following specifically identifiable increases total more than $2 million: rs: Funded from Current Revenues: *Transfer to Debt Service $ 69,260 *Summit II 70,000 *Increased Contribution to the Art Museum 49,860 *Capital Outlay - Fleet for Fire Department 231,000 rf *Partial Restoration of Employee Benefits 166,000 *Estimated Utility Cost Increase 300,000 *New Position in Community Development (Loan Processing Technician) 20,000 Subtotal 906,120 Funded from Fund Balance: *Collective Bargaining - Fire and Police 450,000 *General Improvements - Capital Projects (ESM Allocation) 663,150 Subtotal 1,113,150 TOTAL $2,019,270 As noted above, increased expenditures of approximately $906,120 are funded out of current revenues. 'a The remaining $1,113,150 is available in the excess fund balance over the $4,000,000 fund balance target established for FY 1988. Of this balance, $663,150 represents monies from the ESM settlement. WATER FUND There are serious problems which must be addressed in the Water Fund. FY 1988 Water and Sewer revenues are projected to be $13,238,800--slightly less than the estimated FY 1987 revenues, which were down over a million dollars (7.3%) from the FY 1987 budget. This decrease is due to fewer customers and the lowest consumption ever. Expenditures were reduced accordingly 411 throughout the year to match the declining revenues. �.r Mayor and City Council Page 9 August 11, 1987 However, balancing the Fund's expenditures to revenues by continually eliminating part of the scheduled capital maintenance program is simply balancing the current budget at the expense of future generations. There are no capital replacement reserves; and, in fact, by deferring necessary maintenance, the deterioration of the Fund's existing capital stock has accelerated. The current water rate does not provide enough resources to cover the costs associated with debt service, capital replacement, and operations and maintenance. I am not requesting a rate increase at this time; however, I will appoint a citizen advisory committee and request a liaison from Council to review the current rate structure in the context of present and future expenditure requirements for the Fund. After the study is completed, I will report their findings and recommendations to Council in Work Session. FY 1988 expenditures for the Water Department are projected at $13,835,260, $596,460 above revenues. This deficit will be funded out of the working capital of $2.69 million. Included in the budget are four new positions, one engineer and three workers who will comprise a smoke detecting crew to locate breaks in the water and sewer lines. x LANDFILL FUND Landfill expenditures were slightly over estimated revenues for FY 1987. In FY 1988, implementation of a special waste disposal program will increase expenditures approximately $242,000, but will be offset by projected revenues A of $250,000. A Post-Closure Maintenance Division will oversee the required five-year maintenance of the City's old land fill and c1c6e the filled cells in the new landfill. This "pay-as-you-go" approach to landfill closure should prevent large capital outlays for final closure such as we experienced for the old landfill, SANITATION FUM I am recommending significant changes in the Sanitation Division operations. Foremost is the purchase of additional automated refuse equipment in order to change all trash collection within the City from twice a week hand pick-up to automated weekly pick-up. This will result in the elimination of 25 positions in the residential collection activity. I am proposing to shift 10 of these positions to brush collection to enhance our services so unsightly piles of debris can be removed within 5 to 10 days after residents call in. The new automated system will result in lower costs than the hand collection system, reflected in a rate decrease from $6.07 to $5.96 per month, including free containers. However, in the past, brush service costs have not been offset by revenues. Last year's fee of $1.43 would have to be increased to $2.98 in order to pay for the service as proposed. Total increase in garbage fees would go from $7.50 to $8.94, with no increase in the senior citizen rate of $6.50. Mayor and City Council Page 10 August 11, 1987 Estimated Sanitation activity expenditures are expected to exceed estimated FY 1987 revenues by $135,320. FY 1988 expenditures are budgeted at $3,524,130, which reflects an increase of $275,830 over last year. CONCLUSICN As has been previously stated, it is my opinion that the City needs to re-establish a "seed corn" commitment to infrastructure improvements. This budget makes a beginning attempt to do just that. In my budget transmittal letter to you last year, I stated, "The weightier matters of dealing with capital projects and infrastructure improvements are being deferred." I believe now is the time to come to terms with this issue, because the consequences of deferral not only would mean putting it off, but also exaggerating the cost of replacement. ,. At this time, I am suggesting that Work Sessions be scheduled as follows: `4M August 11: Budget Presentation August 1.8: Budget Overview OM Debt Service Non-Denartmental August 25: Public Works September 1: Capital Improvements September 8: Public Hearing ,later Depart September 15: Open September 22: Adoption of Budget If members of Council would like to have other issues discussed, I would appreciate hearing from you. When we talk of productivity, I must acknowledge to you that this budget is a direct reflection of increased productivity. This document was prepared by half the staff that prepared last year's budget; so, I must make special commendation to Amy Barton, Kandy Daniel, Carol Toups, and the rest of the Finance Department, for their efforts in providing a document that is truly reflective of the highest standards of quality. I also express appreciation to all Department Directors for their cooperation and, above all, their efforts to provide services to you and this community. Finally, I express, on their behalf as well as mine, appreciation to you for your dedication to your responsibilities and, in advance, for the time and Mayor and City Counci.L Page 11 August 11, 1987 effort ou will y take to weigh those issues that are contained in this budget, which will require the highest levels of judgment and statesmanship. r Albert E. Haines City Manager AEH:swb i Is I