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HomeMy WebLinkAboutMinutes - City Council - Regular - 6/30/1999CITY OF LUBBOCK REGULAR CITY COUNCIL MEETING June 30, 1999 8:00 A. M. The City Council of the City of Lubbock, Texas met in regular session on the 30th day of June, 1999, in Committee Room 103, City Hall, 1625 13th Street, Lubbock, Texas at 8:00 A. M. 8:06 A. M. CITY COUNCIL CONVENED Committee Room 103, 1625 13th Street, Lubbock, Texas Present: Mayor Windy Sitton, Mayor Pro Tem Max Ince, Councilmember Alex "Ty" Cooke, Councilmember Victor Hernandez, Councilmember Marc McDougal, Councilmember David Nelson, Councilmember T. J. Patterson; Bob Cass, City Manager; Anita Burgess, City Attorney; and Kaythie Darnell, City Secretary Absent: None ( 1.) Invocation was given by Councilmember T. J. Patterson. ( 2.) Pledge of Allegiance was given in unison by those present. ( 3.) Ordinance No. 10168 - Amending Section 84 of the Code of Ordinances with regard to establishing voting precincts and voting locations for newly annexed areas (second and final reading). ORDINANCE NO. 10168 AN ORDINANCE AMENDING SECTION 8-4 OF THE CODE OF ORDINANCES OF THE CITY OF LUBBOCK, TEXAS, WITH REGARD TO ESTABLISHING VOTING PRECINCT BOUNDARIES IN NEWLY ANNEXED AREAS; CORRECTING THE BOUNDARIES OF EXISTING VOTING PRECINCTS AFFECTED BY ANNEXATION; ESTABLISHING VOTING DISTRICT BOUNDARIES IN NEWLY ANNEXED AREAS; CHANGING THE NAME OF A POLLING PLACE DUE TO A CHANGE IN BUILDING OWNERSHIP; PROVIDING A MAP OF THE VOTING PRECINCTS AND POLLING PLACES OF THE CITY OF LUBBOCK; PROVIDING THAT ALL PORTIONS OF CHAPTER 8 NOT AMENDED SHALL REMAIN THE SAME; PROVIDING A SAVINGS CLAUSE; PROVIDING FOR PUBLICATION; AND PROVIDING AN EFFECTIVE DATE. Motion was made by Councilmember Patterson, seconded by Councilmember Cooke to pass on second and final reading Ordinance No. 10168 as recommended by staff. Motion carried: 7 Yeas, 0 Nays. ( 4.) Ordinance No. 10169 - Calling a bond election for September 18, 1999 (second and final reading). ORDINANCE NO. 10169 AN ORDINANCE ORDERING A BOND ELECTION TO BE HELD IN THE CITY OF LUBBOCK, TEXAS, MAKING PROVISION FOR THE CONDUCT OF THE ELECTION AND RESOLVING OTHER MATTERS INCIDENTAL AND RELATED TO SUCH ELECTION. Jim Bertram, Director of Strategic Planning, presented comments regarding a change in this ordinance after first reading on June 24, 1999. On Proposition #5, the site specific wording was removed, and the ordinance was amended to reflect this change. Regular City Council Meeting June 30, 1999 Page 538 Motion was Councilmember Ordinance No. 7 Yeas, 0 Nays. made by Councilmember Cooke, seconded by McDougal to pass on second and final reading 10169 as recommended by staff. Motion carried: (5.) Review of the Proposed FY 1999-2000 Annual Budget and Capital Projects Budget for the City of Lubbock. Video presentation by Senior Management. Bob Cass, City Manager Background Issues Economic Climate Sales Tax - Impact of SB 441 Economic Climate: Lubbock Economic Index Council/Management Objectives: Community Improvement Fund Quality Services Technology Enhancements Debt Infrastructure Personnel Cost Proposed Budget 9:38 A. M. COUNCIL RECESSED 10:14 A. M. COUNCIL RECONVENED Anna Mosqueda, Director of Management Services Budget Presentation: Capital/Operating Budget Enterprise Fund Internal Service General Fund Civic Services Health and Community Transportation Other General Fund Revenues Leslie Cox, Budget Manager Capital Projects Overview Transcript of Council's comments: Councilmember Nelson: Leslie, you've mentioned, well, specific capital projects that I noticed that we have included approximately $671, 000 of apparently one-time capital projects in our General Fund Budget this year. How did we determine which... Number one, whether to include any of those in this General Fund Budget and which ones got in there? Leslie Cox: We're using that utilization of fund balance to cover some of these one-time projects, the large computer requests that we have to replace all at once and some other one-time items. I can get you a list of some of the items that were looked at to be used for that utilization. 538 Regular City Council Meeting June 30, 1999 Page 539 Councilmember Nelson: Well, my concern was a little more general in nature. Last year, we were told we had one-time capital projects, it was $2.5 million or so. Is that going to be an annual portion of the General Fund Budget that we're going to have specific capital projects that we're going to include in that? Councilmember Cooke: We always have some capital projects every year. Bob Cass: Excuse me, the $2.5 million last year was the money that was transferred to Reese, the beginning fund balance was transferred to Reese. This year, we also have some fund balance that we are bringing in, and it was just management judgment is about the best way that I can tell you. We always have far more requests than we have ability to pay, but we saw these were higher priority. I would say it's premature to say whether or not we'll have that next year or not. It depends on what requests are made by our managers and making decisions as to whether or not we (a) have the money and (b) even if we do have the money, if we want to recommend if they're high priority or not. Councilmember Nelson: Do we need to change up our capital reserves that we're setting back funds to do these very projects, do we need to change the process by which we do that, so that we won't have to do these special additions to our General Fund Budget? Bob Cass: Either that or look for new revenue streams. You may recall, some of these are technology based, some of these recommendations. And you may recall that when we reworked the franchise fee for Cox Cable this time, that is going to result in additional revenue, which we will set aside for technology purposes. So, again, we're looking at new revenue streams, and that's one way of responding that we think we've got a revenue stream that will offset some, maybe not all of that. Councilmember Hernandez: Could you all work up a list of reserve funds, regardless of where they're from? Reserve funds. I would like a list on one or two sheets of paper of all the reserve funds that we've got, regardless of where they're at. Councilmember Cooke: Designated or undesignated? Councilmember Hernandez: Both. Councilmember Nelson: We've got that. Councilmember Cooke: Yes, it's here. Councilmember Hernandez: Well, it's in there, but some of them are here, some of them are there. I would like to see them all together. Mayor Sitton: I thought what we might do, Council, if it's all right with you, at this time, rather than get into specific numbers, maybe save that until tomorrow, until you had time to visit with different people this afternoon. But maybe take a few minutes to discuss with our City Manager the idea that he understands that the Council is directing him toward a certain goal. Let's kind of discuss our philosophy and make sure that the staff is operating under the direction in which, uh... Bob Cass: Basically, we're talking about those, getting those policy issues I laid out. Let me summarize those for you. I think, did we hand out copies of the slide screens? That would be back on... This Council/ 539 Regular City Council Meeting June 30, 1999 Page 540 Management Objectives slide here would be the one here. Basically, every correctly assessed Council value, and again, some of these are management values that have not really been articulated by Council, we're think we're headed in the right direction. Councilmember Hernandez: Page 6? Well, and I guess you're going to take these down the line, the first Community Improvement Fund. What I'd like to ask, Bob, is on that particular issue, what has the policy been as far as a directive from this Council, just to kind of start off. Bob Cass: To my knowledge, I do not recall a directive that is numerically specific. We were simply, in the last goal setting session -- and that was two or three years ago, I can't remember the exact time, over in the Civic Center --the directive was "we need more money for economic development purposes. " The staff interpreted that to mean "as we can, " to the extent that we do not sacrifice quality of service and basic functions, we need to find additional revenues to do that. That got a bit accelerated somewhat by the task force that came this year. Now, last year before the task force was formed, we simply put together what we thought those funds could absorb, and that was 1 % of the LP&L, solid waste and the general fund. That augmented it by slightly over $2 million, getting us up to four. The proposal before you now would increase that to five. Now, since that time, the Council has not formally adopted, but nevertheless you have had a recommendation from the task force that set a target of $10 million. Now at the staff level --and Council is not present at those meetings --at the staff level we told them that we thought that, over time, we could attain that goal, but we could not do it obviously as aggressively as everyone would want, if you accept $10 million as a number. So, again, we've been given a directive, or a direction let me say from the Council, we have not been given a specific numeric target, although the staff is working under the assumption that the recommendation from the task force somewhat approximates Council directive, and we wanted to see whether or not that's true. Councilmember Hernandez: Well, and let me make sure I understand and get you to clarify something. The original monies that went into the Community Improvement Fund, or the CIF, was at I %. Was that... Bob Cass: For the current fiscal year, yes. Well, not, the original money was the three pennies on the property tax. Councilmember Hernandez: Well, that's the original monies, but that's been therefor a very long time. Bob Cass: The other was the I %, that's correct. Councilmember Hernandez: It seems to me, about a year ago, we had a discussion as to whether or not we should increase that from 1 % to 2 %. Bob Cass: That may be true; I don't recall that, but that may be true. Councilmember Nelson: I recall that, and I think that was the recommendation of the task force, that we should eventually get to that point. And I know there was some discussion, informal discussion of that. Councilmember Hernandez: And so, because I remember that discussion, because I agreed that increasing it from 1 % to 2 %, and now we are talking about getting it up to 4.98 million, which equates to what percentage? 540 Regular City Council Meeting June 30, 1999 Page 541 Bob Cass: Well, of the Solid Waste Fund, it's 6%. Councilmember Hernandez: 6%. Bob Cass: Right. Councilmember Hernandez: And you're saying at 6% because you're pulling that one million, that extra one million, from the Solid Waste Fund. Bob Cass: Yes, sir. Councilmember Hernandez: 1'd kind of like to take a look at it across the board, even though you're just pulling it from one fund, what does that equate to across the board? Bob Cass: Well, let me make sure I understand what your question is. Are you saying how much is the five million that is currently recommended as a percentage of the total city budget? Is that your question? Councilmember Hernandez: No, of the total Enterprise Fund, because I think that's what the 1 % was based on, what it not? Bob Cass: No, it was also out of the General Fund as well. Councilmember Hernandez: So it's Enterprise plus General Fund. Bob Cass: Yes, and only four of the Enterprise Funds. Mayor Sitton: My understanding was, and correct me if I'm wrong, that there was a consensus from the Council to do that, provided that we put it in a Community Improvement Fund, that we didn't send it to Market Lubbock, Inc., but that in essence we're putting it in savings, so at which time a major project that would put forward this community, we would have the money. Now, did I understand, is that what we decided as a Council? Bob Cass: You're correct, Mayor, in terms of the philosophy that would dictate where the money was placed and how it would be released. I don't know that we have a directive from the Council as far as how much goes into that on an annual basis. Councilmember Cooke: No, not how much goes into it. Bob Cass: But the process and the concept, yes, Ma'am. Councilmember Cooke: I'm still trying to figure out Victor's question. Councilmember Hernandez: Well, 1'm... It seems to me we bumped it up to 2 %, is my point. Councilmember Cooke: No. It was at I % and the 1 % was a target. We targeted I % in the budget from all the funds, provided it was there at the end of the year. Bob Cass: Right, right. Councilmember Cooke: And that was if we had something come up, if Lubbock Power & Light had a tornado hit Holly Station, well that 1 %'s not going to be there. 541 Regular City Council Meeting June 30, 1999 Page 542 Councilmember Hernandez: Right, right. Councilmember Cooke: You know, that type thing, but it was never set at anything other than I % as a target. Councilmember Hernandez: Well, then, let me ask, let me rephrase the question. 1 % of the Enterprise Fund plus the General Fund equates to how much? Bob Cass: Roughly, to $2 million that we budgeted in the current fiscal year. Councilmember Hernandez: So what does 2% equate to? Councilmember Cooke: Double that. Bob Cass: It would be double that; it would be $4 million. Councilmember Hernandez: In order for us to get to the $10 million that you need to do this, what percentage are you going to end up needing? Bob Cass: Okay, I can tell you what $10 million would be as a percentage of those funds. The important point to realize, though, is that we're not recommending, nor did the committee recommend that we do that this year. They were anticipating that as growth occurs you'll be taking that money from a bigger base. And so, 10% of today's budget, or $10 million, excuse me, as a percent of today's budget would be a larger percent than $10 million out of the budget five or ten years from now, and so they were saying get there over time, don't get there tomorrow. But I can tell you what $10 million as a percent of the budget would be, and it's roughly, did you say a $280 million budget? Mayor Sitton: With capital in there. Bob Cass: With capital in there so, I mean, we'll work the math for you, but about 3% roughly? Yes, the committee was recommending that we go $2 million a year, and we're simply not able to do that without impacting rates. Anywhere. Councilmember Hernandez: You're recommending that we bump it up another million from the Sewer Fund. Bob Cass: The solid waste. Councilmember Hernandez: The Solid Waste Fund, I'm sorry. And then I think one of your slides said that 28 % of your debt is cash flowed in your Water and Sewer Funds. Bob Cass: Water and Sewer Funds, yes, sir. Councilmember Hernandez: How is this going to affect your, that percentage? How is it going to affect your ability to cash flow? Bob Cass: From solid waste? Councilmember Hernandez: Yes. Bob Cass: We've already cash flowed the projects we were worried about, which are the new landfill opening --we still have debt service on that --and the closure of the existing landfill. We've already accumulated the cash and it's in the bank. 542 Regular City Council Meeting June 30, 1999 Page 543 Councilmember Hernandez: Well, I understand that, but I mean I'm talking about other projects that come along. Bob Cass: Well, again, our ten-year rate models take that into account and we don't anticipate a problem. Councilmember Hernandez: So you're going to maintain that 28 % is what I'm saying. Bob Cass: Well, it was not in the Solid Waste Fund, it was in the Water and Sewer Fund. We can show you the percentage of the Solid Waste Fund. Councilmember Hernandez: Well, it kind of all in my mind plays together, because you can also do fund transfers, can't you? And so, you can help offset rate increases with this additional monies. You can also increase the amount of debt that is cash flowed in those other enterprise funds. You can use it for other purposes. Bob Cass: You can use it for other purposes, then again, and that's exactly what brings us to pose the questions. There are other purposes to which this money can be put, but we have interpreted, and we just want to make sure that we're correct in our interpretation of the Council's will that the highest priority, other than basic services, the highest priority is economic development funding. I know I heard that at the goal setting session two or three years ago, although not numerically specific, I think I heard that when Barry Orr's committee made a recommendation. Did I hear right, that's the question. Councilmember Hernandez: Well, I was going to say, I don't think there was any disagreement from any of us, including me, that some money should be going into economic development. The disagreement arises as to how much. Bob Cass: That's correct. Councilmember Hernandez: Right Councilmember Nelson: It was our highest priority, though, of all of our goals. Bob Cass: That's what we have interpreted, yes. Councilmember Cooke: And it still is. You know, for the last several years, we have taken, at the end of the year, what money we didn't have to have for something else, if there's something left over, excess, and shoved it into economic development. The difference is this year we budgeted, we targeted a number. In the form of a percentage, but it interprets to a number that was a target to fall through at the end of the year. And what you're saying is, in essence, that there is another million dollars there that was unanticipated, and the question is, do we do with it what we've been doing the last few years and that's squeezing everything we can into economic development. Bob Cass: That is an annually sustainable number. A good example of what Mr. Cooke has indicated was the beginning fund balance in the current fiscal year of $2.5 million for Reese. I would consider that economic development money. That is money that, when we came at the year end of the General Fund, revenues came in better, we always 543 Regular City Council Meeting June 30, 1999 Page 544 budgeted very conservatively, we managed our expenses down, we had that left over, one-time money, not ongoing, not annually sustainable, and we set it aside for that purpose. Councilmember Hernandez: This money that we've been sending to this Community Improvement Fund over these years, how much is in there and how much have we expended? Bob Cass: Well, one year. We've not even completed the first year. We project that at year end we will have $2 million, which is what we budgeted. Councilmember Hernandez: And we haven't used any of it. Bob Cass: No, Market Lubbock has not requested... We will reimburse ourselves the freeport, the $200, 000 out of that, but other than that none has been expended, nor has Market Lubbock, to my knowledge, approached us about any of that. Councilmember Ince: But this year, you're adding an additional amount of money from solid waste in the budget, which was not there last year. Bob Cass: That's correct. Councilmember Ince: What is that, did you say 6% of the gross? Bob Cass: That equates to roughly, the total solid waste contribution to the community investment fund would equate to roughly, and we'll get you a more precise number, roughly 6% of the gross revenues of solid waste. Mayor Sitton: Because solid waste had done well, is that correct? Bob Cass: Yes, it's roughly $1.2 million over the two-year period. We're adding a million this year and it was $170, 000 last year, so the combination of those numbers equates, roughly, on an annual basis to 6%. Councilmember Ince: So all the other enterprise funds, you're taking 1 % of the gross, and in solid waste you're taking 6%. Bob Cass: On water and sewer we are, on Lubbock Power & Light last year we added I % to what they were already doing, and the same thing on the General Fund. The General Fund already, effectively the three pennies comes from the General Fund, and on top of that we added another $800, 000, so the General Fund and Lubbock Power & Light exceed that I % anyway, if you account what they were previously doing. Solid waste would now approach that level. Water and sewer would still be at the I % level, but then again, water and sewer, we are asking for rate increases for other capital needs and just didn't feel like we could recommend a higher increase. Councilmember Hernandez: What sort of impact would this $1 million have on, if instead of doing what you're suggesting, if we transferred that over to the rate stabilization fund? What sort of impact would it have on these proposed rate increases, on the sewer rate, or on the water rate ? Councilmember Cooke: None, if you put it in a rate stabilization fund. Councilmember Hernandez: Well, then, and use that to... 544 Regular City Council Meeting June 30, 1999 Page 545 Bob Cass: We'd have to run the calculations on that. Councilmember Hernandez: I mean, is it significant, I mean are we talking... Bob Cass: Well, a million dollars is significant money. I don't know, though, in terms of the rate recommendations, I would, I just need to caution, but then again Council has latitude to do a lot of things. It would never be my recommendation to use revenue from one enterprise fund to subsidize of the activities of another enterprise fund. That would be the effect of that. We can still calculate that and see what that would do. Councilmember Hernandez: But you've done it before. Bob Cass: No, not from enterprise fund to enterprise fund. Now, from enterprise fund to the general fund, because all taxpayers represented by the general fund own those enterprises, so we have no problem philosophically with that. But we run the enterprise funds as separate business units. Mayor Sitton: Could we as a Council discuss the idea of privatization? Bob has said that he feels like he's gone maybe as far as he can go in terms of privatization. Could we discuss that? Could we discuss his philosophy that maybe we have spent enough on really dwelling on infrastructure, and maybe now it's time to look at moving some of those monies to personnel? Could we just kind of discuss that as a Council and kind of help give him direction, make sure that... Councilmember Cooke: I'd like to... What's this about, we've spent enough on infrastructure? That's a never-ending deal. Bob Cass: Right, right. Mayor Sitton: Well, the overburden. Bob Cass: Right. Now, first of all Mayor, do I have a direction on the economic development funding? Councilmember Cooke: I don't blame him; he needs an answer. You know, my priority hasn't changed in economic development as a top priority. Bob Cass: And, again, am I targeting over time, not tomorrow, am I targeting over time that $10 million figure, or do you just want me to set a general direction and we'll decide when we get there? Councilmember Cooke: I think the second would be my thought, because the $10 million is a number out of the air. And let's face it, this community has shown that if a big project comes along, they'll support it. And we can find... (short piece missing from side A to side B of tape) ...how we're going to do it if something out of the ordinary comes. Hopefully, they've got enough on the books over there that, as it rolls over, they're going to need this money just for the average, you know, bear that comes along. Councilmember Ince: Well, I'll say a real popular thing in this regard, because sooner or later the public is going to have to realize the best and most efficient, effective way to fund economic development is through the 318C sales tax. You know, we can ask the staff to work on a $10 million 545 Regular City Council Meeting June 30, 1999 Page 546 project over a period of time, but now I've looked at this for seven -and - a -half years, and I'm convinced that that is the way to fund economic development. It's the most efficient, effective way. Councilmember Cooke: And the fairest way. Councilmember Ince: And this community needs to understand that, because we're going to fund economic development. And it's how are you going to fund it? Mayor Sitton: But do I hear a consensus? Councilmember Nelson: Yes, I think you hear a unanimity of voice if we set the direction, isn't that correct, from what I hear? Councilmember Hernandez: Well, what I... Yes, let me put some caveats on this. You know, I'm poor in this city and I voted in favor of it that we set aside some monies for economic development. The concern I've got is I think what you're shooting for is $10 million a year. In other words, you're not looking at a one shot, $10 million. Bob Cass: Annually sustainable; that was the recommendation from the committee. Councilmember Hernandez: So that's something very different from just shooting to get a pot of $10 million. Bob Cass: That's correct, that's correct. Councilmember Hernandez: Number two, I would like to have us discuss putting a cap as to when you start getting these monies on a yearly basis, regardless of how much money it is, putting a cap on there, to where if you're not using it, you do something else with it. Because I don't want to have a pot of gold over here that we've amassed over a number of years of $150 million that we're not using and no one coming to us for use. Councilmember Cooke: We do that every year when we sit in here and do this budget. That's within our purview to make that decision on an annual basis. Councilmember Hernandez: But, I would like a staff recommendation as to what would be a good cap, because I don't know if $150 million is a good number, or $50 million is a good number, or $20 million is a good number. There has to be some mechanism to where we feel comfortable in the level that we have in that particular savings account. Bob Cass: We can come back with a, we probably out to consult with the Market Lubbock Board and staff as far as a recommendation on that, since this is basically a number that was identified by at least some of their board, and sort of a funding date with you. So we'll be happy to come back with a recommendation. Councilmember Cooke: Let me point out, it will still be an educated guess. Councilmember McDougal: What do they have in that account now? Regular City Council Meeting June 30, 1999 Page 547 Bob Cass: Zero, because we have not completed, we're only one year into it. As a practical matter, wherever you would want to place a cap, we will be years from reaching it, because ideally what you want to happen is, you're never getting anywhere near those kind of things building up, because as we're placing money in, they're out bringing prospects in and giving incentives. So the objective, ideally what I'd like to see is that zero every year because they are giving incentives out and building the economy. Councilmember Hernandez: I think it would be a really good idea to reaffirm with Market Lubbock, Inc. some of the directives that we've given to them. Because here recently in their last proposal to the City -- which we passed, which I voted for --there was absolutely no job creation. So I think we need to reaffirm some of those things. We also need reaffirm what you said earlier, that we would do this provided that it didn't affect services, provided we had the ability. Bob Cass: They're aware of that, yes. Councilmember McDougal: The last vote you're talking about, though, last week, that did not come from Market Lubbock funds. Bob Cass: That's correct; it would come from future revenues of ours. We asked the Market Lubbock Board, since they're the economic development link, to make a recommendation, but it is not funding that is set aside for them, it's simply an abatement that we grant on future revenues we'd have otherwise had. Councilmember McDougal: Now, it's my understanding what we're talking about doing here, like the Mayor said earlier, basically these funds go into an account that, if they are needed, we can move them over into the economic development fund or for Market Lubbock. But if not, then we could do what Victor had said, if substantial amount of money was accumulated in there, and use them for a special project other than economic development. Bob Cass: They are designated in the budget, I don't know the exact, Community Improvement Fund, we all know what that means is economic development. However, you would have the legal authority... Several years ago we had a horrible winter, freeze, thaw, freeze, thaw, potholes everywhere. We had to come up with several million dollars to fix the streets. You have that authority now to transfer the money from those funds if you have a higher need that comes up. In the general direction, we're hearing you say economic development. All this understanding, that the tornado rips through or we have unusual natural or unnatural circumstances, you can use those funds for a higher public purpose. You've always had that authority, and I assume unless the constitution changes, always will. So, those monies will be set aside; the general assumption is they're for economic development purposes, if there's a project you can support. But if not, and a higher need comes up, you're the Council and you can use it. Mayor Sitton: Rather than setting a cap, I would be supportive of doing what Ty said. Every year, we would be looking at this. Councilmember Cooke: That's what we're supposed to do. 547 Regular City Council Meeting June 30, 1999 Page 548 Mayor Sitton: Scrutiny of it and we'll have these ongoing discussions on a yearly basis. I can't fathom that we would ever have $150 million in that fund, either. Councilmember McDougal: Well, I'm not sure that we can set a cap for our future councils. Mayor Sitton: That's true. Councilmember Cooke: Every council, every year can change whatever; I mean it seems counter productive to me. Councilmember Nelson: And we couldn't fathom whether we want to spend $150 million on a project, but we lost the Dell project to Memphis, who spent almost $150 million on that. Mayor Sitton: $160 million. Councilmember Nelson: $160 million. We just don't know what's going to come down the pike and what opportunities we're going to have. Councilmember Cooke: But if you get that $160 million shot and you can make it work, the money would be there. It's like the Department of Defense thing where the City and the people of Lubbock, Texas voted the sales tax to pay for it. And that is still back there in the background, and people in this community will support it, they will support something if it comes along that way. I'm a little leery of something that large in one way because it's scary. You got all your eggs in one basket, and what happens if a Dell computer all of a sudden crashes, or they decide to move out of Lubbock. You can look at the Texas Instruments situation where we had several thousand people come in with Texas Instruments, and then, I don't know how long ago, it's 20 years ago, they cut it in half. And it crashed our real estate market in Lubbock, Texas for probably ten years before we recovered. Because it was such a large percentage of our workforce. Mayor Sitton: I think we have a good plan in place, putting a certain amount aside each year, looking at it on a yearly basis. I think it's to our advantage, and I think the citizens of Lubbock would approve of our having a very good savings account, if you will. We're saving it in case the Dell computer comes along, or something else. Councilmember Cooke: But this is, the little ones that come along on a day-to-day basis, that they're working, they've got several projects over there that are ongoing projects that would require this money. And this is not excessive at all. Bob, you asked about Council management and objectives slide, we talked about Community Improvement Fund. Bob Cass: Here's what I'm hearing you say, and this is what will drive the staff unless I hear otherwise, is the general direction is you would like to see us increase, I'm going to assume although we've not talked about it and you've not said it, I'm not to increase rates for the sole purpose of augmenting this fund, but to the extent that I relieve myself of other costs or the tax base grows or revenues grow, I can make choices and try to augment it and push toward $10 million, although that is not a precise number and we'll take it on an annual basis, but the general direction is to increase funding, keeping it in that reserve. Councilmember McDougal: I agree. 548 Regular City Council Meeting June 30, 1999 Page 549 Councilmember Cooke: In other words, squeeze everything out we can for economic development. Bob Cass: But do not increase water, sewer tax rates for the sole purpose of augmenting these funds. Mayor Sitton: There is consensus to do that. Bob Cass: Right. Councilmember Hernandez: It's not unanimous. Bob Cass: I understand, I understand. Okay, I'm sorry, Mr.... Councilmember Cooke: I was just going to say you've got six things here, we've talked about the first one. Bob Cass: The other two on which we really need direction are infrastructure and personnel, unless there's some other... Councilmember Cooke: That's when we went back to that, what I was trying to ask was that infrastructure question. Infrastructure is always going to be a priority. Bob Cass: Let me bring you to this graphic. And we're not saying diminish what we're doing now. What we're saying is, and this is a subtle thing, but based on the trends that I'm seeing on the personnel side, I expect it to be a little more aggressive. I'm not recommending diminishing what we're currently spending on parks, on facilities, or streets. What I'm saying is "got a little bit of gap" I can close, but given what I'm seeing in the personnel market and what I'm seeing as getting worse there, I'm saying my recommendation would be freeze in place here, realizing that I'm going to have year-end monies that come in that I'll put into capital types of things, and I can augment these numbers. But I probably need, if I've got a balance now, it's been balanced heavier on the infrastructure side than the personnel side, then I'm saying I may need to bring that back the other way. I don't have a precise number for you, but I'm just saying it looks like the trends are saying I've got to be more aggressive on personnel issues. Councilmember McDougal: Well, I don't think there's any question about that. Councilmember Cooke: I don't disagree with that, but it's got to be an ongoing... I worry about Council making a broad -based statement that okay, we're not going to worry about personnel costs as the percentage of the budget anymore, because we are. Bob Cass: I understand. Councilmember Cooke: Full understanding of the things you've got to do, and I'm aware of them, and I know what you're talking about and the things you said while ago. I don't disagree with that. But it's always going to be a priority to me to keep a handle on personnel costs, because that is one of the very few costs that you have a handle on. Bob Cass: That's true. Councilmember Cooke: That you can get a handle on. And if it gets out of control, then it gets ugly real quick. 549 Regular City Council Meeting June 30, 1999 Page 550 Bob Cass: And again, it's more than just.. Councilmember Cooke: Again, I'm not arguing with what you're saying. I know the upgrades that we've had to do and I know the ones that we've got to do ahead of us, and I know that it impacts that. But I don't want all of a sudden for staff to feel like there's no pressure on that anymore. Bob Cass: Right, and we understand that. Councilmember Cooke: And the same way on infrastructure. I don't want you to feel like there's, where we can blow off infrastructure. Bob Cass: But as an absolute mandate, I guess what I'm asking for is relief from the mandate that personnel costs need to continue to decline. They may inch, I'll try to keep them within reasonable levels, but I don't know that I can do the job you want us to do and let them continue to decline. Let me say this: I've painted a —and I'm the pessimist on the staff and I've got the optimists around me to kind of bring me up from time to time --but we're in a cooler economy right now. One reason, not the sole reason because we did some very good managing in terms of divesting ourselves of certain functions and we downsized some of our staff, but one reason we were able to reach that is our revenues coming in. It's more than just cutting personnel costs and cutting expenses. As long as your revenues are growing at a faster clip, the math works out right. Now, we're in a cooler economy right now. I anticipate that this is a cycle that we're in, it's always been that way. So eventually, the property values will come in; we do a good job with Market Lubbock and we build the economy, we're going to also be okay on the revenue side. We're in a short-term thing where I've got an intersection of a declining availability of workforce and competition for them, coupled with an economy that is cooling. So the lines are intersecting in a place that I don't like. They're both going to turn, but right now for the next two or three or four years, it's going to be a little more difficult to do what we were very ably doing as recently as three, four, five years ago. Councilmember Cooke: Along those lines, what you're saying is as your economy continued to grow, your budget continued to grow. Even though the percentage of personnel costs didn't grow and may have reduced, your personnel costs continued to grow. Bob Cass: That's correct, but as a percent of the budget, they declined. Councilmember Ince: What you're saying now is that this line of increased growth, you don't predict it's going to continue, but your personnel cost is going to continue, so that gap is narrower. Bob Cass: That gap is narrower, you're right. I think the economy will continue to grow, though not as aggressively. Councilmember Ince: Let me ask a couple of questions. How many new personnel are in this budget? Bob Cass: I believe, was it eleven? Councilmember Ince: Total number of employees. Councilmember Nelson: Well, there was eight in the enterprise funds and then there was, it looks like, 26 in the general fund. 550 Regular City Council Meeting June 30, 1999 Page 551 Bob Cass: Well, part of those were firefighters that I'm not counting in the number I distributed, because you had already approved them in the annexation. The fifteen new firefighters, and it's the higher number. As far as the budget that I just recommended to you, I believe the net was nine or eleven. I'll get you that exact number and then add the fifteen firefighters. But the bulk of it is firefighters. Councilmember Ince: Let me ask a question along those lines. As we revamp our fire stations we close some fire stations. What was presented to Council at that time, understanding, I understood that annexation, that we would not increase, because of attrition, we would not, we would actually probably reduce the total number of fire personnel. Bob Cass: And we did. Councilmember Ince: Okay. Councilmember Cooke: That's where the numbers came from to break even on paying for the new stations. Councilmember Ince: Yes, I realize it. The question is that these fifteen new firemen, those are all assigned to that fire station? Bob Cass: That's correct. Councilmember Ince: Okay. How does that number of personnel in the fire department compare with this increase to what we had two years ago? Before we started... Bob Cass: Prior to the downsizing? I believe, didn't we cut 24? We cut 23; we're adding fifteen back, so we're still eight down. Councilmember Ince: So, we're a net over this entire program, including unanticipated annexation, total number of firemen is eight. Councilmember Nelson: Eight less. Councilmember Ince: With privatization, and this is a number that I've asked for in years past; it's always kind of confusing. We privatized some of the things that have been mentioned: Meadowbrook Golf Course, privatized the maintenance, turf maintenance. And at that time, even though it is, you can still consider that personnel cost, that we looked at some big reductions in the cost of doing some of these privatization issues over what we could do it for is why we did it. So let me just give you an example, which are just numbers that I'm drawing out of my head, but let's say in the park maintenance deal we were able to do it for $400, 000 less than we did, which is highly labor intensive. That $400, 00 should have come off of personnel costs somewhere. Bob Cass: They did, and that was one of the reasons we were driving those numbers down. Councilmember Ince: We're still in the privatization, so if we lost eight employees there, did we actually lose number of employees? Bob Cass: Well, again, you were cutting those personnel while you were adding police officers and some other funds. As I recall a budget presentation, I think it was two years ago, where we showed you the net reduction was nearly what privatization had accumulated. We added eight officers, for example, when the President's Crime Bill came out, 551 Regular City Council Meeting June 30, 1999 Page 552 and we took advantage of that. We've added officers for other purposes. So, yes, trends were going down in functions other than public safety. The public safety, we have substantially increased that. The authorized staffing, obviously we haven't hired all those bodies. Councilmember Ince: I'm, too, concerned and I would watch it very closely that it's easy to get into a trap of increased budgets. Of course, for personnel costs, and all of us have had experience with technology, and my personal experience, with all the money I've spent on technology I didn't reduce my personnel costs any. So, I think that's a smoke screen that you can reduce personnel costs. Bob Cass: And we don't represent that, we would increase productivity, but not reduce personnel costs. Councilmember Ince: We've all been through that experience. I'm just very cautious, and many of you did sit in that session seven years ago -- Ty and 1 and T. J. did and I guess that's it --when that directive was given out. And I guess that we're a little bit more proprietary because we were there when all that happened, and some of you can't move because you didn't make that decision. But I'm going to watch that very closely. I want to withhold my comments on where I stand on that until tomorrow. Bob Cass: Okay, that's fine; no problem. Councilmember Nelson: If I could comment, from talking with Anna and Mary, it's my understanding that back in 1993 when ya'll gave that directive, there was roughly 1,917 employees. The numbers have gone down and come back up, and I'm not going to say how far down they got. But the figures that we have now would show that the current — budget would ask for 1, 855 employees. Now, there are grant -funded employees that I think amount to approximately 50 more. And I don't know how far down those numbers got. Councilmember Ince: That's a net decrease of 62 employees. If I understand what you're saying, 55 of those employees are grant funded, who have come aboard since 1993, is that correct? Anna Mosqueda: That doesn't include the grant funded employees. Councilmember Hernandez: It's in addition to. Councilmember Cooke: But the 1,900 didn't include grant funded employees back then, either. Councilmember Ince: 1,917, okay so we're about down 62 employees. Councilmember Cooke: Roughly 1,800 in round numbers. I think the low spot was right at 1,800 employees. But the organization has grown and the city has grown. There's going to be some growth. I take some pride in the fact that the directive that we gave Bob in 1992 results in that, and I'm glad you got those numbers. I like that. Bob Cass: Again, it was an excellent directive, and it continues to be an excellent target. What I'm saying is I don't want to be so doctrinaire that I hold to a target and sacrifice quality or my ability to recruit, but I totally agree with what Mr. Ince is saying. That's something that we absolutely should be charged with monitoring every year. We should report to you every year. And if you start to get concerned, you 552 Regular City Council Meeting June 30, 1999 Page 553 shouldn't have to discover it, management should bring it to you. Right now I'm just telling you the trend is shifting, and I don't know where it is going to end up. We will continue to monitor it, though. I guess my request is that it not be a hard and fast rule, it should be a directive, an objective, but if we can't make it, I ought to be able to justify it to you or mandate it. But I think we're able to justify this year that it's just not advisable right now. Councilmember Cooke: We're in agreement. You're saying the same thing I was trying to say. You just did it much more eloquently. Councilmember Nelson: Well, I think we need to continue to look at ways that certain descriptions may be obsolete with the technology that we're having. And we need to continue to look to ways to put offline those jobs that are no longer necessary, and as we've done over the last couple of years that I've been involved, we've created new jobs that because of technology, because of special needs, we're needing. For instance, the graph information systems that planning wants. Because of that technological advancement, we need a person to be in charge of that, so we created a job for that. So, it's a constant evaluation of what your needs are, what technology is available and what your goals are, and you have to continue to change that, and we expect staff to continue to do that. Councilmember Cooke: I'm glad you said continue, because I was going to say they do that. Councilmember Nelson: That's right. Bob Cass: Okay. Mayor Sitton: Do you have any other questions now? Bob Cass: No, if Council has any thoughts, but on those policies I think we've got some pretty good... Mayor Sitton: Anyone else? Councilmember Nelson: I just want to, when I get those ten-year rate models, I want us to be conscious of what those rates are going to be over the next ten years, so that if that needs to be a priority, and how we compensate or offset rate increases, we've done an excellent job in deferring rate increases, in making those ten-year projections be even more conservative, and we put those things off`. Obviously, when the time comes we're going to have to implement those, but I think we need to look at... Not only are we looking at trying to keep our tax rate level, but we also need to do the best we can with our rates. And I think we've been doing that, so I want to have information. Bob Cass: That is the presentation that Debbie is preparing for you for tomorrow. Councilmember Hernandez: I would like the City to really come up with a plan of action on how it's going to deal with the impact of the Internet sales tax. Because you said that our sales tax or the revenue that we get from the sales tax is about 29 % ? Bob Cass: Yes, sir. 553 Regular City Council Meeting June 30, 1999 Page 554 Councilmember Hernandez: And that's going to take a bigger and bigger chunk every year, and I'd like to know what it is we're doing to plan for that. Bob Cass: That's an excellent recommendation. I will tell you that there were four high-tech cities that really, we're not really able to measure the impact now. I know it's occurring, but I don't know how big it is. But I will tell that cities like Austin, I want to say Boston, San Jose, some very high-tech cities that have a higher than normal number of their citizens that are computer adept and use it, they are really seeing some impact on their sales tax. But what we'll do, maybe we can do some research on their trends and try to translate that into our situation in the future. Councilmember Hernandez: The other thing is, the Mayor had brought up a couple of issues, the privatization and the cost recovery issue. I didn't know if we were going save that for a later day or... Bob Cass: That might be another work session discussion. I will kind of tell you in a very broad, I'm going to paint with a broad brush here and there's lots of exceptions to what I'm about to say, but we were very aggressive for a number of years in privatization with some very obvious things. Councilman Ince helped us a lot on putting together the privatization of Meadowbrook Golf Course, privatized the facilities maintenance, numbers of things that we could enumerate for you and we do annually when we take it. I'm getting to the point where I'm concerned that if we go too much deeper, we're getting into functions that are not, that are regulatory in nature, and you will grate on that private sector counterparts. I'm not going to recommend privatizing the police department or the fire department. I have a problem philosophically with recommending privatizing enforcement areas such as the building inspection department or the health inspectors and all like that. There are private sector models for privatizing the running of a sewer plant or a water plant. My look of history is that I would not advise that. And I've got a variety of reasons in terms of environmental liability that continues after those companies leave and somebody else has it. So, you may want to direct the staff to bring back a policy discussion with you in the work session. We're not prepared now. I think that's a valid discussion, but the wants for which there are logical, obvious private sector counterparts, we've done. Now, we've won some of those back. We won solid waste back, the Civic Center didn't go, and so we were able to cut costs anyway. But we're getting to the point where you've got some substantial public policy issues that the Council needs to consider, if you want me to continue going. Councilmember Cooke: This may not be a fair example to use, but I share some of your concerns in some of those other areas. I'll talk about Alan Henry Lake, when the flooding was happening, not flooding really, but when the lake went up 14 feet, got higher than we preferred for it to be, that was being operated by another entity, not us. There was no one that knew how to turn the valve on to start letting the water out of it. If it had been under our operation --and I've gotten to know this organization pretty well --somebody would have been there that knew what was going on, period. 554 Regular City Council Meeting June 30, 1999 Page 555 Councilmember Ince: Bob, let me step back in time when we talked about privatization, because I think there's been, on my part, a very misunderstanding of the whole issue. I don't think that privatization was the issue. Bob Cass: That's correct. Councilmember Ince: Privatization, what we were trying to do is to operate more efficiently, more effectively, to bring the same or better quality of service for less cost. Privatization is one area to do that. And what's happened, through the privatization or the look at privatization as an option, many departments have become more efficient. That's how we won back the solid waste and those type things. But that was the goal, and I think it's been misunderstood that privatization was an issue. It's not an issue, I don't think it is an issue in itself. Councilmember Cooke: It's not a goal; it was never a goal. The goal was to more efficiently spend our tax money. Councilmember Ince: The goal hasn't changed in my mind, and that is that we are going to still try to operate the most efficient and effective way that we can operate. So, I'm not going to change my goal because it was never privatization, but my goal is still for management to still pursue those areas, whenever it looks right, and constantly be on guard to be more efficient, more effective, and better service. Bob Cass: We totally agree with that. Councilmember Ince: So, I don't think that there's an issue. Councilmember Hernandez: Even I wouldn't disagree with that as a goal provided you take a holistic approach in assessing that entire situation and not just a bottom line assessment. Bob Cass: Right. Well, again, that's exactly the look that I've taken in terms of the wastewater plant operation. I might could cut costs, but 1 don't think that from a holistic approach it's going to be good public policy. So that's exactly the approach that we're taking. Councilmember Nelson: Two areas that I'd you to look at that, and I know you've started, one that are akin to outsourcing and privatization is looking at our risk management and that is insurance, liability insurance area, various packages whether you have a stop/loss and effect, or insuring the entire operation. Councilmember Cooke: That assessment is going on now. Councilmember Nelson: Yes, and I was hoping we would have some information on that, because it does have a bearing on the legal department. Secondly, we constantly need to look at ways to get out of the jail business, and I know that we're in it now and that was our choice. But, if we could shift that responsibility back to the county jail, and with the changing of the sheriff this past year, we always need to explore what opportunities that has. Bob Cass: Okay. Mayor Sitton: And that is a goal of ours. 555 Regular City Council Meeting June 30, 1999 Page 556 Bob Cass: I've had a very general discussion with Sheriff Gutierrez on that point, and he indicated he is more than willing to talk to me. He's got a lot to do before he gets to me, and I told him we're ready whenever he is. Councilmember Cooke: He's kind of reshaping things over there. Councilmember Nelson: As we all know, oftentimes there are opportunities that an election year creates, and sometime opportunities that are eviscerated because of an election year. But he's coming up for election again next year, and we should have his ear, at least between now and the election. Mayor Sitton: One more point I wanted to make. It's what Councilman Hernandez brought up, and it's about cost recovery. We continue, or I continue to get calls from people about are we providing our local citizens every benefit of the doubt when it comes to our civic services. I get more complaints and more criticism over that one area than any other area. My question is just this: are we too aggressive for our own citizens in the area of cost recovery in terms of civic services? I'm only asking that question because I do get those number of complaints from all over our community, and I would like for us to look, really look at what other cities do in that regard. Because I get calls all the time and people say, "this is what I pay my taxes for. " Councilmember Cooke: It's a simple matter... Mayor Sitton: I hear what you said. But I still want us to look at the other cities and see if we're being overly aggressive or not. We may not be. Councilmember Ince: That study was done two or three years ago, and we have some comparison with what some other cities were doing. And it runs the gamut, the full gamut. Councilmember Cooke: But the whole deal's basically... And I understand what you say. Basically what it is now is kind of a shared thing. But if you are going to go use it, should we all pay for it? For you to use it. Mayor Sitton: That's not, no, that's not exactly my point. Councilmember Cooke: That's what it comes down to. Mayor Sitton: No, my point is if we've got a Convention and Tourism Bureau over here who are in the business of going out and selling room nights and selling the city and promoting the city, and we have a facility that is sitting over there unused, empty, I would expect them to pay for all the utilities to operate it. But to ask them to pay 100% when other cities are giving convention and tourism discounts, when our building is just sitting there, I just don't know that that is fair and just. I just want us to look at that. Councilmember Cooke: I understand what you're saying, but let me just say this one more time: $100, 000. You used the number a while ago-- 100, 000; I don't know what the number is --but it's $100, 000. That $100, 000 is in our budget we just looked at. That $100, 000 has got to be there. The question is whether it's going to come from the general fund or visitors and tourism. The money's not going to go away; the 556 Regular City Council Meeting June 30, 1999 Page 557 need for the money is not going to go away. Building empty or not empty, it's still part of the budget. It's part of the operating expenses of the deal overall. So then, the only decision you've got: are you going to pay for it with hotel/ motel taxes, that $100, 000, or are you going to pay for it with general fund money? That's really what the decision is, and I'm not saying that, maybe looking at it, maybe general fund money is what we should be doing, and take it off hotel/motel. Maybe we should put more money, hotel/motel in there. Maybe we should pass one of those bracketed taxes for car rentals and what all, the various and sundry cities have looked at to increase that funding. Make more money available from our visitors instead of our residents. Mayor Sitton: Convention and tourism feels that they are a handicap, that we have handicapped them, and they're trying to go out and recruit conventions and tourism and all of that. I just want to make sure we're not (unable to distinguish). That's all I'm saying. Councilmember Hernandez: Well, I'm also wondering if this also wouldn't be a good subject to revisit during the work session, and kind of hear both sides again, because it has been a long time since we started the cost recovery initiative. It might be a time to revisit it. That doesn't mean that we will change it, but we can revisit it. Bob Cass: After bringing that back to you? Mayor Sitton: Does anyone have anything else? Councilmember McDougal: I have some information that I would like to have for tomorrow. The difference between the assessed value this year versus last year, can someone get me that? I would also like to, I think Max touched on it earlier, how much of this is the result of new construction, what's been added to? And then I don't think annexation will be in there this year, will it? Bob Cass: It will not, that's correct. Councilmember McDougal: Also, on the water rate increase, 3 %, and on the sewer rate increase, I'd like to know what that number is, what that average is. Bob Cass: To make sure I know, the average bill? How much that will be in dollars? Well have that in our presentation tomorrow. Councilmember Hernandez: All of us asked for additional information, it seems like. We're not going to have to remind anybody, to get that to us as well? Bob Cass: Yes, we're taking, what we'll do is after the Council leaves, we'll sit down and debrief and start pulling that together. Councilmember McDougal: I don't necessarily need mine this afternoon. I just want to have it by sometime tomorrow. Bob Cass: Yes, sir, we can do that. Councilmember Nelson: One more thing in addition to what Marc has asked on those rate increases, what the total amount of money you want the sewer fund to generate this year. 557 Regular City Council Meeting June 30, 1999 Page 558 Mayor Sitton: And we are going to have a healthy discussion tomorrow on our stormwater, right? Bob Cass: We'll be talking to you about options on the rates. I think Mr. McDougal had posed, Councilman Hernandez had posed that question about what are we going to be able to do within the existing rates. Mayor Sitton: Thank you very much. We'll now recess into executive session, is that right? Bob Cass: Actually, we'll break for lunch. 11:40 A. M. COUNCIL RECESSED 12:40 P. M. COUNCIL RECONVENED 12:40 P. M. COUNCIL ADJOURNED There being no further business to come before Council, Councilmember Patterson made a motion to adjourn; Councilmember Nelson seconded the motion. Motion carried: 3 Yeas, 0 Nays. Motion carried with the majority of remaining Council present at adjournment (Mayor Sitton, Councilmember Nelson, and Councilmember Patterson). W SITT614,MAYOR Darnell, City Secretary Read and approved this a& day of �, 1999 Jl WIN Y SITTO , MAYOR 558