City Council

Non-Annexation Development Agreement Discussion EXHIBIT "A" City Council Meeting June 22, 2021 1 Purpose The purpose of this item is to discuss and receive direction on the pending expiration of the Non-Annexation Development Agreements that were approved on November 22, 2016. 2 Background 1. On December 13, 2016, the City Council approved ordinances annexing 542.86 acres. 2. On November 22, 2016, the City Council approved 50 Non- Annexation Development Agreements. a. 35 expire on November 22, 2021 (5 years), and b. 15 expire on November 22, 2026 (10 years). 3. We are focused on the Agreements expiring in November 2021. 3 Background Property owners maintain Non-Annexation Development Agreements only if their property is exempt being limited in use to Agricultural, Timber Land, or Wildlife Management. In the last five years, one property owner lost their exempt status. That tract is indicated in red on the map. 4 2016 Non-Annexation Development Agreements Pink = 2021 Blue = 2026 City Limits Proposed FM 2271 ETJ Extension 5 2016 Non-Annexation Development Agreements 1. IH 35 widening 2. Water line: Groves Rd. to the northwest corner of River Farm on Toll Bridge Road. Pink = 2021 3. Sanitary sewer line: FM 436 Blue = 2026 /Loop 121 to River Farm and IH 35. City Limits 4. River Farm (brown area) ETJ 6  Analysis Clearly, the South IH 35 corridor, and other areas previously studied for annexation, remain significant for future development review. The Agreements provide an important balance of interests between the City and property owners. Properties remain outside the City while no development is planned, but if development is contemplated, the City has an opportunity to evaluate annexation, given surrounding conditions. 7 Options 1. Allow the Agreements to expire and exercise the agreed upon language to initiate the annexation process. 2. Allow the properties to revert to the City’s Extraterritorial Jurisdiction (ETJ), limiting the City to Plat review only. 3. Extend all the eligible Non-Annexation Development Agreements for another term (i.e., five years). 8  Recommended Process We suggest there may be merit to consider Option 3. If chosen, the following process is recommended: • 6-22-2021 – Council workshop and consensus. • 7-13-2021 – Council adopts a resolution authorizing the City Manager to process voluntary annexations after the 10-15-21 deadline or execute Non-Annexation Development Agreements for a specified additional period, such as five years. • 7-14-2021 – Send letters to the landowners. • 9-20-2021 – Send out new Non-Annexation Development Agreements to landowners with a deadline of 10-15-2021 for signatures. • 10-15-2021 – Deadline to sign the new Non-Annexation Development Agreements. • 10-18-2021 - Initiate the annexation process for those property owners who do not qualify for an extension of the Non-Annexation Development Agreement or those who did not sign the new agreement. 9 THANK YOU 10  EXHIBIT "B" FY22 Budget Workshop June 22, 2021 Presented by: Michael Rodgers, CPA Director of Finance 1 Funds To Be Discussed • Water and Sewer Fund • Drainage Fund • TIRZ • BEDC 2 2 1  Water and Sewer Fund Year-End Forecast for FY21 FY21 FY21 Amended Year-End Budget Estimate Revenue $ 9,003,733 $ 9,914,379 Expenditures (8,989,710) (9,262,450) Incr/(Decr) to Reserve $ 14,023 $ 651,929 3 3 Forecast for FY21 • Water and sewer revenue surplus is the result of greater than anticipated consumption compared to a COVID- influenced conservative budget • Expenditures exceed budget due to BCWCID debt payments and carry-over (FY20) purchase orders for capital projects 4 4 2  Water and Sewer Fund FY22 Statement of Fund Balance Projected Unrestricted Balance, Sept 30, 2021 $ 7,345,991 Increases/(Decreases) to Fund Balance: FY22 Revenue 10,460,630 FY22 Expenses (10,604,060) Net Increase/(Decrease) to Fund Balance (143,430) Projected Restricted Balance, Sept 30, 2022 $ 7,202,561 5 5 Status of Water and Sewer Fund Reserves $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2015 2016 2017 2018 2019 2020 2021 2022 Unrestricted Reserve Balance Minimum Reserve Requirement 6 6 3  Budget to Budget Comparison Revenue by Category Water and Sewer Fund FY21 FY21 FY22 Increase / Revenue Category Budget Estimate Budget (Decrease) Water Revenue $ 5,068,687 $ 5,675,646 $ 6,014,130 $ 945,443 Sewer Revenue 3,319,370 3,612,873 3,829,650 510,280 Fees and Other Revenue 482,998 522,280 489,690 6,692 Miscellaneous 132,678 103,580 127,160 (5,518) Total Revenue $ 9,003,733 $ 9,914,379 $10,460,630 $ 1,456,897 Revenue increases by $546,251 (5.5%) over FY21 estimate 7 7 FY22 Water and Sewer Revenue • Water and sewer revenue increases 6% with growth in customer count and consumption • No rate increases are planned for FY22 • Fees and miscellaneous revenues remain relatively flat 8 8 4  FY22 Water and Sewer Fund Revenue Water revenue $ 6,014,130 Sewer, 37% Sewer revenue 3,829,650 Fees and other 489,690 Water, 57% Miscellaneous 127,160 Total $10,460,630 Water Sewer Fees & other Miscellaneous 9 9 Utility Rates Approved Water Rates 2015 2016 2017 2018 2019 2020 2021 Minimum Bill $15.00 $15.50 $16.00 $16.50 $17.00 $17.00 $17.00 Per 1,000 Gallons $3.49 $3.49 $3.70 $3.70 $3.70 $3.70 $3.70 Approved Wastewater Rates 2015 2106 2017 2018 2019 2020 2021 Minimum Bill $12.00 $12.50 $13.00 $13.50 $14.00 $14.00 $14.00 Per 1,000 Gallons $4.00 $4.50 $5.00 $5.00 $5.00 $5.00 $5.00 • Rates from the 2014 study were implemented • No rate changes are proposed for FY22 • Rate study will be done next year to explore different rate models 10 10 5  TML Survey of Water and Sewer Charges* Leander $94.68 Cedar Park $62.33 Belton $57.10 Harker Heights $54.15 Temple $53.60 Killeen $49.07 $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00 *Amount charged by each city for residential consumption of 5,000 gallons 11 11 Water and Sewer Fund Revenue from FY15 to FY22 FY Water Sewer Other $12,000,000 2015 $3,780,854 $2,100,850 $ 413,554 $10,000,000 2016 $4,030,216 $2,468,700 $ 420,284 $8,000,000 2017 $4,557,170 $2,827,928 $ 567,997 $6,000,000 2018 $4,907,703 $3,087,121 $ 697,601 $4,000,000 2019 $4,725,361 $3,155,709 $ 750,217 $2,000,000 2020 $5,244,147 $3,289,304 $ 558,943 $0 2021Projected $5,675,646 $3,612,873 $ 625,860 2022Budget $6,014,130 $3,829,650 $ 616,850 Water Sewer Other 12 12 6  Budget to Budget Comparison Expenses by Division FY21 Water and Sewer Fund FY21 FY22 Increase / Amended Division Estimate Budget (Decrease) Budget Utility Administration $ 813,340 $ 802,001 $ 1,699,900 $ 886,560 Utility Finance 558,008 587,628 2,184,010 1,626,002 Water 3,450,235 3,825,324 3,628,300 178,065 Sewer Collection 883,727 882,288 1,697,450 813,723 Sewer Lift Stations 981,852 1,123,251 1,394,400 412,548 Other Costs 2,302,548 2,041,958 0 (2,302,548) Total Expenses $ 8,989,710 $ 9,262,450 $ 10,604,060 $ 1,614,350 13 13 FY22 Water and Sewer Fund Expenses by Category Personnel $ 2,120,690 Personnel, 20% Supplies 123,070 Transfers, 27% Maintenance 182,350 Services 1,017,220 Debt 1,536,880 Water Purchases 1,500,700 Sewage Treatment 829,340 Water Purchases, 14% Debt, 14% Other Expenses 50,000 Personnel Supplies Capital Outlay 404,000 Maintenance Services Transfers 2,839,810 Debt Water Purchases Sewage Treatment Other Expenses Total $10,604,060 Capital Outlay Transfers 14 14 7  Budget to Budget Comparison Expenses by Category FY21 Water/Sewer Fund FY21 FY22 Increase / Amended Expense Category Estimate Budget (Decrease) Budget Personnel $ 1,882,602 $ 1,869,527 $ 2,120,690 $ 238,088 Supplies 120,912 125,640 123,070 2,158 Maintenance 224,930 173,600 182,350 (42,580) Services 473,514 510,481 1,017,220 543,706 Debt 1,802,548 1,541,958 1,536,880 (265,668) Water Purchases 1,191,543 1,446,688 1,500,700 309,157 Sewage Treatment 831,516 898,707 829,340 (2,176) Other Expenses 0 0 50,000 50,000 Capital Outlay 292,410 526,114 404,000 111,590 Transfers 2,169,735 2,169,735 2,839,810 670,075 Totals $ 8,989,710 $ 9,262,450 $10,604,060 $ 1,614,350 15 15 Significant Changes • Personnel costs increase due to position reclassifications, salary allocations, and performance-based merit adjustments • Consulting expenses include $400,000 to update the utility master plan and $30,000 to perform a rate study • The appropriation for anticipated debt service has been removed • The cost of water rises by $257,000 to reflect an entire year of payments on BCWCID-issued debt 16 16 8  Significant Changes • Capital outlay includes $159,000 for weather protection on buildings and $75,000 for a new work order system • Transfers for capital projects total $1,900,000 in FY22 to cash fund several projects, including – E 20 ½ Avenue water line replacement – Loop 121 pump station pump and motor – Loop 121 pump station generator – Lift station generators – McFarland Estates water/sewer improvements 17 17 Outstanding Debt as of October 1, 2021 Outstanding Bond Issuance Description Amount Certificates of Obligation, Series 2002 $ 355,000 Certificates of Obligation, Series 2008 $ 79,200 Certificates of Obligation, Series 2015 $ 6,420,000 Certificates of Obligation, Series 2016 $ 8,955,000 G.O. Refunding Bonds, Series 2017 $ 695,000 Revenue-Supported Debt Outstanding $ 16,504,200 18 18 9  Annual Debt Service Payments on Revenue-Supported Debt $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Interest Principal 19 19 Drainage Fund 20 20 10  Drainage Fund Year-End Forecast for FY21 FY21 Year-End Budget Estimate Revenue $ 548,061 $ 547,408 Expenditures (531,260) (476,935) Incr/(Decr) to Reserve $ 16,801 $ 70,473 21 21 Forecast for FY21 • Revenue is in line with budget • Expenses are under budget due to savings in salaries, employee insurance, and engineering 22 22 11  Drainage Fund FY22 Statement of Fund Balance Projected Spendable Balance, Sept 30, 2021 $ 304,929 Increases/(Decreases) to Fund Balance: FY22 Revenue 580,400 FY22 Expenditures (558,180) Net Increase/(Decrease) to Fund Balance 22,220 Spendable Fund Balance, Sept 30, 2022 $ 327,149 23 23 Budget to Budget Comparison Revenue by Category Drainage Fund FY21 FY21 FY22 Increase / Revenue Category Budget Estimate Budget (Decrease) Storm Drainage Fees $546,121 $547,008 $580,000 $33,879 Interest Income 1,940 400 400 (1,540) Total Revenue $548,061 $547,408 $580,400 $32,339 24 24 12  FY21 Drainage Fund Revenue • No change to the City’s drainage fee is proposed for FY22 • Storm drainage fee revenue increases by six percent over the year-end estimate for FY21 as the customer count continues to grow • Interest income falls due to lower yields on investments 25 25 Drainage Fee Comparison Residential Rate Non‐residential rate for 100,000 SF Temple Temple Killeen Killeen Harker Heights Harker Heights Georgetown Georgetown Cove Cove Belton Belton $‐ $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $‐ $50.00 $100.00 $150.00 $200.00 $250.00 26 26 13  Drainage Fund Revenue from FY15 to FY22 FY Drainage Fees $600,000 2015 $360,021 $500,000 2016 $377,990 $400,000 2017 $389,230 $300,000 2018 $452,742 $200,000 2019 $492,639 $100,000 2020 $517,462 $0 2021Projected $547,008 2022Budget $580,400 Drainage Fees 27 27 Budget to Budget Comparison Expenses by Category Drainage Fund FY21 FY21 FY22 Increase / Expense Category Budget Estimate Budget (Decrease) Personnel $ 261,427 $225,308 $ 268,990 $ 7,563 Supplies 16,280 14,797 15,630 (650) Maintenance 19,160 14,632 31,260 12,100 Services 30,243 18,130 30,090 (153) Debt 25,790 25,708 25,030 (760) Capital Outlay 0 0 8,000 8,000 Transfers 178,360 178,360 179,180 820 Totals $ 531,260 $476,935 $ 558,180 $ 26,920 28 28 14  Significant Changes • Flood warning expenses increase by $10,400 to replace the first of three sensors at Paddy Hamilton • Capital outlay includes the purchase of a zero-turn mower for $8,000 29 29 Annual Debt Service Payments on Revenue-Supported Debt $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 2022 2023 2024 2025 2026 2027 2028 Interest Principal 30 30 15  Tax Increment Reinvestment Zone #1 31 31 TIRZ Operating Fund FY22 Statement of Fund Balance Projected Spendable Balance, Sept 30, 2021 $ 653,202 Increases/(Decreases) to Fund Balance: FY22 Revenue 2,867,950 FY22 Expenditures (2,210,240) Net Increase/(Decrease) to Fund Balance 657,710 Spendable Fund Balance, Sept 30, 2022 $ 1,310,912 32 32 16  Budget to Budget Comparison TIRZ Operating Fund Revenue TIRZ Fund FY21 FY21 FY22 Increase / Revenue Budget Estimate Budget (Decrease) City $1,630,640 $1,421,889 $1,757,200 $ 126,560 County 1,054,435 893,761 1,106,750 52,315 Interest 4,700 4,000 4,000 (700) Total $2,689,775 $2,319,650 $2,867,950 $ 178,175 FY22 revenue assumes a 15% increase in TIRZ property value to $278 million, along with a City tax rate of $0.63/$100 of taxable value. 33 33 Revenue Compared to Study $3,050,000 $2,850,000 $2,650,000 $2,450,000 $2,250,000 $2,050,000 $1,850,000 $1,650,000 $1,450,000 $1,250,000 $1,050,000 $850,000 $650,000 $450,000 $250,000 $50,000 TIRZ Study Actual Taxes 34 34 17  Budget to Budget Comparison TIRZ Operating Fund Expenditures TIRZ Fund FY21 FY21 FY22 Increase / Expenditures Budget Estimate Budget (Decrease) Services $ 0 $ 36,200 $ 35,000 $ 35,000 Debt Service 413,685 414,055 402,710 (10,975) Grants 50,000 30,000 90,000 40,000 Transfers 1,480,206 1,480,206 1,682,530 202,324 Total $ 1,943,891 $ 1,960,461 $ 2,210,240 $ 266,349 35 35 Façade Grants • FY 2021 grants awarded – Arusha Coffee Shop $20,000 – The Spa at Greenbriar $10,000 • FY 2022 approved/pending projects – Jo Mapel, 108 N Central Ave $20,000 – Woodhouse Day Spa, 110 N Main St $20,000 • Potential projects – Dusty Miller, 222 W Central Ave $20,000 – Bobby Spradley, 204 N East St $20,000 – Main Street Bridal, 100 N Main St $10,000 36 36 18  Outstanding Debt as of October 1, 2021 Outstanding Bond Issuance Description Amount G.O. Refunding Bonds, Series 2017 $ 140,000 G.O. Refunding Bonds, Series 2019 $ 495,000 Revenue-Supported Debt Outstanding $ 635,000 37 37 TIRZ Capital Projects Fund • The Capital Projects Fund provides funding for multi-year capital projects within the Zone that are approved by the Board and City Council • On October 1, 2021, the cash balance is expected to be approximately $2,000,000 38 38 19  TIRZ Capital Projects Fund Project Allocations Funding Funding Provided Remaining through through FY 2022 FY 2023 FY 2024 Total Project FY 2021 FY 2021 Allocation Allocation Allocation Funding Heritage Park $3,550,000 $2,447,479 $1,450,000 - - $5,000,000 Southwest Parkway 450,000 280,855 200,000 750,000 - 1,400,000 South Belton SUP 432,114 - - - - 432,114 Standpipe Park 120,000 120,000 - - - 120,000 Library 125,000 12,686 - 250,000 - 375,000 Connell Street - - - 1,200,000 2,436,000 3,636,000 6th Ave 100,000 14,740 - - - 100,000 Beautification Total $4,777,114 $2,875,760 $1,650,000 $2,200,000 $2,436,000 $11,063,114 39 39 TIRZ Fund Long-Term Forecast FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Actual Estimated Budgeted Forecasted Forecasted Beginning Fund Balance $ 304,842 $ 294,013 $ 653,202 $ 1,310,912 $ 2,059,424 Ad Valorem Taxes - City $ 1,155,204 $ 1,421,889 $ 1,757,200 $ 2,020,780 $ 2,323,897 Ad Valorem Taxes - County $ 735,127 $ 893,761 $ 1,106,750 $ 1,272,763 $ 1,463,677 Bond Proceeds $ 1,060,751 $ - $ - $ - $ - Other Misc. Income $ 5,324 $ 4,000 $ 4,000 $ 4,000 $ 4,000 Total Revenue $ 2,956,406 $ 2,319,650 $ 2,867,950 $ 3,297,543 $ 3,791,574 Grants $ 60,000 $ 30,000 $ 90,000 $ 50,000 $ 50,000 Debt Service $ 1,456,382 $ 414,055 $ 402,710 $ 265,200 $ - Administrative Costs $ 26,174 $ 36,200 $ 35,000 $ - $ - Transfer To General Fund $ 30,679 $ 30,206 $ 32,530 $ 33,831 $ 35,184 Transfer To Capital Projects $ 1,394,000 $ 1,450,000 $ 1,650,000 $ 2,200,000 $ 2,436,000 Total Expenditures $ 2,967,235 $ 1,960,461 $ 2,210,240 $ 2,549,031 $ 2,521,184 Fund Balance Impact $ (10,829) $ 359,189 $ 657,710 $ 748,512 $ 1,270,389 Ending Fund Balance $ 294,013 $ 653,202 $ 1,310,912 $ 2,059,424 $ 3,329,814 40 40 20  Belton Economic Development Corporation 41 41 BEDC Operating Fund Year-End Forecast for FY21 FY21 Year-End Budget Estimate Revenue $ 1,702,199 $ 2,320,110 Expenditures (546,643) (452,311) Incr/(Decr) to Reserve $ 1,155,556 $ 1,867,799 42 42 21  Forecast for FY21 • Sales tax revenue of $2,281,600 surpasses the unamended budget of $1,659,081 • Expenditures are under budget due to savings in business park maintenance, marketing, training, special services, and capital outlay 43 43 BEDC Operating Fund FY22 Statement of Fund Balance Projected Spendable Balance, Sept 30, 2021 $ 4,548,021 Increases/(Decreases) to Fund Balance: FY22 Revenue 2,455,330 FY22 Expenditures (685,260) Net Increase/(Decrease) to Fund Balance 1,770,070 Spendable Fund Balance, Sept 30, 2022 $ 6,318,091 44 44 22  Budget to Budget Comparison BEDC Operating Fund Revenue BEDC Fund FY21 FY21 FY22 Increase / Revenue Budget Estimate Budget (Decrease) Sales Tax $1,659,081 $2,281,600 $2,418,500 $759,419 Rental Income 27,600 27,600 27,600 0 Miscellaneous 15,518 10,910 9,230 (6,288) Total $1,702,199 $2,320,110 $2,455,330 $753,131 45 45 Budget to Budget Comparison BEDC Operating Fund Expenditures BEDC Fund FY21 FY21 FY22 Increase / Expenditures Budget Estimate Budget (Decrease) Personnel $ 200,468 $ 211,200 $ 218,600 $ 18,132 Supplies 7,200 4,921 5,080 (2,120) Maintenance 71,785 48,970 76,190 4,405 Services 217,190 150,083 185,390 (31,800) Capital Outlay 50,000 37,137 50,000 0 Transfers 0 0 150,000 150,000 Total $ 546,643 $ 452,311 $ 685,260 $ 138,617 46 46 23  BEDC Capital Project Fund Current Spent/ Remaining Project Encumbered Project Project Budget To Date Budget Avenue D Extension $ 2,070,000 $ 310,000 $ 1,760,000 Rockwool Site Enhancements 80,000 0 80,000 IH-35 Water Line 1,897,674 1,099,065 798,609 IH-14 Water Line 500,000 81,530 418,470 IH-14 Sewer Line 1,330,585 230,585 1,100,000 Capitol Way Extension 150,000 0 150,000 Total $ 6,028,259 $ 1,721,180 $ 4,307,079 47 47 BEDC Incentives Fund • The cash balance in the BEDC Incentives Fund is just over $1,875,000 • This money is available to pay incentives that have been offered by BEDC, including CGI and Belltec 48 48 24  In Summary • Water/Sewer Fund and Drainage Fund revenue continues to grow as more customers utilize City services • No rate increases are planned for water, sewer or drainage • Both utility funds will set aside significant funding for future capital projects • The TIRZ and BEDC have been great partners for completing capital projects 49 49 Upcoming Budget Calendar Meeting Date Budget Item to be Presented July 13 -Discuss the 2022-2026 Capital Improvements Program -Present the FY22 Proposed Annual Budget to City Council July 27 -Call date for public hearing on the proposed budget -Presentation of fee schedule changes -Propose a property tax rate August 10 -Call date for public hearing on the property tax rate -Present the Strategic Plan -Hold public hearings on budget and property tax rate September 7 -Receive public input on the Strategic Plan (Special) -Adopt fee schedule September 14 -Adopt Strategic Plan, FY22 Annual Budget, and tax rate 50 50 25  Questions/Comments? 51 51 26