City Council Meetings

MINUTES SPECIAL MEETING MINERAL WELLS CITY COUNCIL CITY HALL ANNEX July 27, 2017 - 6:00 pm City Councilmembers present were Mayor Mike Allen, Mayor Pro-Tern Tarruny Underwood, Councilmembers Brian Shoemaker, Jerrel Tomlin, John Upham, and Doyle Light. Councilmember Regan Johnson was absent. A quorum of City Councilmembers was present. Staff members present were City Manager Lance Howerton, Police Chief Dean Sullivan, Fire Chief Mike Pool, Finance Director John Moran, Public Works Director Kelly Jones, and City Clerk Juanita Formby. The City Attorney was not present. Mayor Allen called the meeting to order, Councilman Jerrel Tomlin gave the invocation, and the Pledges of Allegiance to the U.S. and Texas were recited. Mr. Howerton briefly explained the budget process. He said that this particular agenda did not include any opportunity for citizen comment, nor did it provide for discussion among the City Councilmembers. This meeting is held at this time each year for the express purpose of presenting a proposed budget to the City Council for the upcoming fiscal year; it is typically the first time the City Council or the public sees the newly-crafted budget, so many questions or discussion may be premature. However, public hearings will be scheduled tonight which will allow ample time for both the Council and the public to question and comment. With that, Mr. Howerton presented to the Council and those present the City Manager's proposed 2017-2018 annual budget for the City of Mineral Wells. He reminded the Council that the City was immersed in economic difficulty beginning in 2013 with the loss of large employers, Corrections Corporation of America, a private pre-release prison, and Baker Hughes, and oil field company. The City's financial health is closely tied to the community's overall economy, and these losses were very damaging to the City, and we are still striving to recover. On a positive note, he said that the City is currently in active discussions with three new industrial prospects. Mr. Howerton described revenues and expenditures contemplated in the 2017-2018 budget in the City's four funds: General, Water/Sewer, Airport, and Drainage Utility. Regarding General Fund revenues, Mr. Howerton said the City's sales tax revenue has been sluggish and continues to be below sales tax collections of ten years ago. Ad valorem property valuation is higher resulting in more property tax revenue. Staff is proposing an ad valorem property tax rate of 58¢ per $100 valuation, or 1¢ above the current tax rate. This proposed rate is above the effective rate but Mineral Wells City Council Minutes 07/27/2017 Page 1 of3  583 lower than the roll-back rate. Inasmuch as the proposed rate is over -l the effective rate, public hearings will be required prior to I adoption. Most secondary revenue sources in the General Fund are ! expected to remain constant. Regarding expenditures in the General Fund, staff hopes to continue to honor the pay/salary schedule adopted in 2015 and give a 2% pay increase to all General Fund employees. Employee Health insurance premiums continue to spiral upward and have become more than what the City can bear. Staff has strongly resisted charging employees any amount for their own health insurance, but that becomes increasingly difficult with each passing year. The renewal amounts are not yet known, but if they exceed 7%, it is possible that staff will implement a two-tier insurance structure, whereby the City will pay 100% of a lesser insurance plan, and employees can buy up to a richer plan. It is hoped that this will not be necessary, and the City can fund employee insurance 100% for another year. Mr. Howerton mentioned several larger-ticket expenditures anticipated in the Police, Fire/EMS, and Parks and Recreation Departments. It is also anticipated the addition of one position, that of a custodian, which will be funded out of the Finance Department. Revenues in the Water and Sewer Fund are more static, being funded through water sales. Drought conditions are over, Lake Palo Pinto is full, and water sales are reflecting more normal consumption. It is anticipated that the long-proposed Turkey Peak Reservoir Project will be permitted through the Corps of Engineers during 2017, and the Water District will be considering financing options for that project. Also, should bond debt for street improvements be approved at an election, water/sewer infrastructure must also be financed. The new budget contemplates a 7% water rate increase and a 3% sewer rate increase to support this work. This new utility rate would increase the c~arge to a customer using 5,000 gallons of water a month by some $3.51 monthly. With respect to expenditures in the Water/Sewer Fund, the new budget could contemplate a 2% pay increase for Water/Sewer employees, and health insurance premiums present the same issue as earlier stated for the General Fund. Mr. Howerton mentioned several anticipated larger- ticket expenditures for equipment in the Water/Sewer Fund. Regarding the Airport Fund, we continue to aggressively market and promote our Airport and the services available there. The City's new Airport Manager is experienced in this regard. Staff has included a small (10%) increase in fuel sales, though other revenues at the airport are expected to remain static. As for expenditures at the Airport, there will be some limited position upgrades, as well as the same 2% salary adjustment for Airport employees. Funds are budgeted to continue to market and promote the Airport as well as continue to participate in the TxDOT Aviation Routine Airport Maintenance Program (RAMP) • Mr. Howerton said that the City Council established the Drainage Utility Fund in 2017, and monies are now being collected via utility Mineral Wells City Council Minutes 07/27/2017 Page 2 of 3 584 bills to support the Fund. The City Council has approved the application for a FEMA grant for the purpose of compiling a Comprehensive Drainage Master Plan at an estimated co~t of $225 1 000. The hoped-for grant would require a 50% match from the City 1 and monies for said match would come from this fund. However 1 if the grant is not successful 1 by implementation in FY 2019 the Drainage Utility Fund would be able to fully fund the study. In the upcoming fiscal year 1 it is contemplated that the Fund would pay for one piece of equipment 1 a gradall to be used for drainage ditch maintenance and cleaning . In summary 1 Mr. Howerton said that the City is operating at a very basic service level 1 and staff has crafted a proposed budget that will generally maintain the cost of City services at current levels. The public will likely be asked in the near future to consider a series of capital projects to include Turkey Peak 1 which will affect both the tax rate and water/sewer rates . Ci rcumstances are far from ideal, but the City will continue to seek opportunities to improve its financial condition. Following the discussion 1 Mr. Upham moved and Mr. Light seconded to set dates for public hearings on the proposed budget for August 8, 2017. Additional public hearings are indicated in the calendar for the proposed budget on August 22 1 2017 and September 5 1 2017 1 all to be held at 6:00 pm. Motion carried 6-0. There was no further business to be considered 1 and the meeting was adjourned at 6:56 pm. l ATTEST: L Mineral Wells City Council Minutes 07/27/2017 Page 3 of 3