City Council

Belton City Council Meeting July 12, 2022 – 5:30 P.M. The Belton City Council met in regular session in the Wright Room of the Harris Community Center. Members present included Mayor Wayne Carpenter, Mayor Pro Tem David K. Leigh and Councilmembers Dan Kirkley, John R. Holmes, Sr., Daniel Bucher and Stephanie O’Banion. Councilmember Craig Pearson was absent. Staff present included Sam Listi, John Messer, Amy Casey, Mike Rodgers, Jon Fontenot, Tina Moore, Chris Brown, Matt Bates, Bob van Til, Paul Romer, Daniel Aguirre, Allen Fields, Charlotte Walker, Kim Kroll and Cynthia Hernandez. The Pledge of Allegiance to the U.S. Flag was led by Mayor Wayne Carpenter, and the pledge to the Texas Flag was led by City Clerk Amy Casey. The Invocation was given by Mayor Pro Tem David K. Leigh. 1. Call to order. Mayor Carpenter called the meeting to order at 5:31 p.m. 2. Public Comments. (Audio 1:53) There were none. Mayor Carpenter thanked City staff and Chamber staff for the great work on Belton’s Independence Day celebration. Consent Agenda Items 3-5 under this section are considered to be routine by the City Council and may be enacted by one motion. If discussion is desired by the Council, any item may be removed from the Consent Agenda prior to voting, at the request of any Councilmember, and it will be considered separately. Each item was considered separately. 3. Consider minutes of June 28, 2022, City Council Meeting. (Audio 2:38) Upon a motion by Mayor Pro Tem Leigh, and a second by Councilmember O’Banion, Consent Agenda Item 3 was unanimously approved upon a vote of 6-0. 4. Consider an ordinance abandoning a portion of a sanitary sewer easement at 3080 Pecan Meadows and authorizing the City Manager to execute an Encroachment Indemnity Agreement. (Audio 3:06) This item was presented by Director of Planning Bob van Til. Upon a motion by Mayor Pro Tem Leigh, and a second by Councilmember Kirkley, Consent Agenda Item 4, including the following captioned ordinance, was unanimously approved upon a vote of 6-0.  7/14/2022 EXHIBIT "A" FY 2023 – 2027 CAPITAL IMPROVEMENTS PROGRAM 1 Presented on July 12, 2022 1 WHAT IS A CAPITAL IMPROVEMENTS PROGRAM (CIP)?  A Capital Improvements Program represents the City’s plan for infrastructure development over a specific period – here, five years.  Plan is reviewed annually to reflect changing priorities and to provide a framework for identifying capital requirements.  The CIP consists of three sections:  Project name and cost estimate  Possible sources of funding  Effect upon future operations and maintenance costs 2 2 1  7/14/2022 WHY CREATE A CIP?  Capital planning ensures that essential government services can be provided in the future.  It represents a significant portion of City expenditures and exemplifies a government “Best Practice.”  It implements capital components of the Strategic Plan. 3 3 HOW IS A CIP DEVELOPED?  Management assembles projects anticipated for the next five years.  Costs are estimated and possible funding sources are recognized.  Changes to operations and maintenance costs are projected. 4 4 2  7/14/2022 CHANGES FROM THE 2022-2026 CIP  Most cost estimates were increased by 25% to reflect inflation and recent Opinions of Probable Cost.  Certain projects were advanced or postponed due to anticipated development and/or availability of funding.  Some new projects were added:  Fire and Public Works Equipment Replacement  Hubbard Branch Park  Mount Zion Methodist Church Rehabilitation  E Central Avenue Bridge Replacement  Capitol Way Extension  Finance Building Renovation  College Street Sewer 5 5 GENERAL GOVERNMENT PROJECTS 6 6 3  7/14/2022 GENERAL GOVERNMENT PROJECT FUNDING AND IMPACT UPON FUTURE BUDGETS 7 7 UTILITY PROJECTS 8 8 4  7/14/2022 UTILITY PROJECT FUNDING AND IMPACT UPON FUTURE BUDGETS 9 9 CONCLUSION  Over $68,000,000 of capital projects have been identified for the next five years, $24,548,000 of which is scheduled in FY 2023.  Cash-funding may come from many sources:  TIRZ $21,306,000  City revenue 7,002,000  Grants 5,917,000  BEDC 4,875,000  Other funding 8,902,000  $20,000,000 of projects may be funded with bonds. 10 10 5  EXHIBIT "B" FY23 Budget Workshop Follow-Up July 12, 2022 Presented by: Michael Rodgers, CPA Director of Finance 1 Topics To Be Discussed • Health insurance assumption • Sales tax revenue assumption • Street maintenance funding assumption • Compensation assumption 2 2 1  General Fund FY23 Statement of Fund Balance Projected Spendable Balance, Sept 30, 2022 $ 6,213,119 35.5% Increases/(Decreases) to Fund Balance: FY23 Revenue 21,198,970 FY23 Expenditures (20,666,570) Net Increase/(Decrease) to Fund Balance 532,400 Spendable Fund Balance, Sept 30, 2023 $ 6,745,519 32.6% The City has adopted a fund balance policy with the goal of achieving and maintaining fund balance equal to 30% of budgeted expenditures. At no time, shall fund balance fall below 25% of budgeted expenditures. 3 3 Health Insurance Assumption • The preliminary proposed budget did not include any increase to health insurance premiums • City management and staff met with our benefits consultant, Andrew Weegar with HUB International, on July 7, 2022 • Preliminary data reflects a 15% - 18% increase – General Fund expenditures increase by $149,000 – Water/Sewer Fund expenses increase by $34,000 – Other funds increase by a total of $17,000 • An RFP will be released in August with City Council approval in November for January implementation 4 4 2  Sales Tax Assumption • Sales tax revenue is expected to grow by $555,809 (10%) over the FY22 estimate – The average growth rate from 2020 to 2022 was 15.9% – The average growth rate from 2016 to 2019 was 2.7% • Even if growth returned to 2016-2019 levels, revenue would still increase by $150,066 • The projected increase to reserves in FY 2023 would be enough to cover the difference 5 5 General Fund Sales Tax Revenue $7 25.0% $6 20.0% $5 15.0% Millions $4 10.0% $3 5.0% $2 $1 0.0% $- -5.0% 2016 2017 2018 2019 2020 2021 2022 2023 % Change from Previous Year Sales Tax Revenue 6 6 3  Street Maintenance Assumption • The FY 2023 preliminary proposed budget includes $1,000,000 for street maintenance • Deferred in FY 2022 due to cost, $650,000 was transferred into a capital project fund for use in FY 2023 • Council allocated $1,500,000 of ARPA funding for street and sidewalk maintenance • $1,350,000 has been set aside for reconstruction of W 13th and N College • A bid package totaling $4,500,000 should draw a lot of interest from vendors 7 7 Street Maintenance Funding FY16 to FY23 $1,200,000 FY Revenue 2017 $465,000 $1,000,000 2018 466,000 $800,000 2019 332,130 $600,000 2020 372,870 $400,000 2021 663,342 $200,000 2022Deferred 650,000 $0 2023Budget 1,000,000 2017 2018 2019 2020 2021 2022 2023 8 8 4  Compensation Assumption • Implementation of the recent compensation study adds more than $1,000,000 to the budget • A 2% cost of labor adjustment plus a 5% merit or a 2.5% civil service step increase boosts expenditures in the General Fund by $454,000 – Non-civil service employees would increase up to 7% – Civil service employees would increase by 4.5% 9 9 Compensation Assumption • Our personnel consultant, Lori Messer, points out that the COLA is an adjustment for the cost of labor not the cost of living • Most organizations are not matching inflation due to fiscal constraints • Market research shows that organizations are proposing pay increases of 5% on average • Lori recommends maintaining our assumption of 2% COLA plus merit or step increases 10 10 5  Compensation Assumption Cost of 1% Increase Merit COLA Water/Sewer Fund Water/Sewer $15,790 Fund $16,240 General Fund $44,840 General Fund $101,310 11 11 Recommendations • A 15% increase to health insurance premiums should be assumed while various plan alternatives are being explored • Sales tax revenue assumption should remain at 10% with projected reserves covering any shortfall • Street maintenance funding for FY 2023 should remain at $1,000,000 to meet the goal set by City Council given the ever-expanding street network • A 2% cost of labor adjustment plus a 5% merit or 2.5% civil service step increase should keep our salaries in line with the market 12 12 6  Questions/Comments? 13 13 7