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HomeMy WebLinkAboutMinutes - City Council - Regular - 7/1/1999CITY OF LUBBOCK REGULAR CITY COUNCIL MEETING July 1, 1999 8:00 A. M. The City Council of the City of Lubbock, Texas met in regular session on the 1st day of July, 1999, in Committee Room 103, City Hall, 1625 13th Street, Lubbock, Texas at 8:00 A. M. 8:16 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. ( 1.) Invocation was given by Councilmember Marc McDougal. (2.) Pledge of Allegiance was given in unison by those present. ( 3.) Review of the Proposed FY 1999-2000 Annual Budget and Capital Projects Budget for the City of Lubbock. Robert Doty, Municipal Court Judge Anna Mosqueda, Director of Management Services City Council discussion as to rates and enterprise funds. City Attorney to review subsidizing concerns. Debra Forth, First Assistant City Manager, Rate Model. 9:30 A. M. COUNCIL RECESSED 10:00 A. M. COUNCIL RECONVENED City Council and staff discussion in reference to the stormwater issue as pertains to the playa lake system. Engineering report is due in six (6) weeks. Ty Cooke, Councilmember, Electric Utility De -regulation. 11:30 A. M. COUNCIL RECESSED 1:08 P. M. COUNCIL RECONVENED Transcript of Council's comments: Mayor Sitton: Bob, I have a question. It has to do with... I know you and Debbie have mentioned from time to time that you have been able to fund so many projects and not issue debts, because of good money management. Would you have any idea about how much money that would be? Bob Cass: I had a slide yesterday, and the Water and Sewer Fund, roughly $56 million over about a ten-year period in water and sewer, the Water and Sewer Fund. That is about 28 % of our capital spending over that period of time, in those two funds. Regular City Council Meeting July 1, 1999 Page 2 Mayor Sitton: And so, what we're saying is many or most cities issue debt to fund those, but because of a variety of reasons why you have been able to save money, you're able to pay for them later. Bob Cass: I wouldn't want to speak to what other cities are doing, I haven't looked at that. But I would say 28 % cash flowing on major projects that are debt eligible is a pretty good ratio, we think. Mayor Sitton: I know you have a lot of questions. Who's ready? Councilmember Ince: I'm just going to throw out some general questions that anyone can answer. We spoke yesterday of the GSI Information Services, and I think you've asked for one additional personnel in that department. I know that this has been an ongoing project for several years, and I would just like to know when you project completion in bringing all that system up. It's GIS; I put GSI, I don't know why. Jim Bertram: This initial funding is to do the digital ortho photography. Before we get all the overlays, the departmental layers on, we've got to complete the digital ortho photography base maps. And this is being funded over a three-year period. Councilmember Ince: We've been on this project for how long, Jim? Jim Bertram: Well, we've been doing the base maps, the parcel maps for about a three-year period. This particular set of maps, thi's is something we wanted to do initially, and that was create the digital ortho photography maps. We didn't do that; in other words, that actually ties it to a geographic base. What we have right now is we can go in and retrieve data, but you have to do it on a range of parcels that is tied to the tax appraisal district. This action creates a set of maps that are geo- reference but also computer generated aerials that have the quality of an aerial photograph, but yet they have the geometric properties of an actual measured base map. This is what we would have liked to have done three years ago, but the cost of this type of technology has come down by over 100% since we first started talking about it. This takes us to the level that we wanted to go originally but couldn't afford it. Councilmember Ince: With the addition of this one person, once we get all this on line, will we still need the same number of personnel working in that area? Jim Bertram: I don't think the number of personnel would come down. You've got to maintain the system, so the answer is no. Mayor Sitton: Along those same lines, before Councilman Ince continues, is it safe to assume that we're going to have a fairly large technological item every year? I mean, that's just the "nature of the beast" this day and time, isn't it? Bob Cass: Yes, ma'am. Councilmember Ince: Well, it's a wonderful project. 1 know we discussed it a number of years ago, and when it's fully implemented it's going to be much further reaching than... I understand a contractor can come in here and sit down on the computer and get information that he needs off of it, instead of going to the water department, to the electric W Regular City Council Meeting July 1, 1999 Page 3 department, he can get all that at kind of a "one -stop shopping" type deal. So, it's going to be a big advantage to the public, also, as well as to our staff. Jim Bertram: This was the number one recommendation of Land Data Consulting Group that came in here and looked at the appraisal district, looked at the county, looked at the city in trying to get some way where we consolidate and coordinate our mapping system. And this was the one way which we can create some economies by having one base map system as geo-reference. Councilmember Ince: Thank you. That's just the question I had on that. Councilmember Cooke: What's the status of the tax appraisal district in melding all this stuff together? Jim Bertram: Good time for Sally to show up. She has been our liaison on that. Sally Abbe: We're actually expecting our draft report from the consultants, Land Data Associates from San Antonio, on that consolidation today. So I don't have all the recommendations in hand, but we've had a really good series of meetings with 9-1-1 and the tax appraisal district. I think we're many, many miles closer to an answer and a common solution than we were just a few, even a few months ago. I think it's going to be something that we can all live with. Councilmember Cooke: Like Mike said, this is going be a tremendous tool for this community, once it all comes together. It's going to be really something. Sally Abbe: We're really excited about the advances we've made just in the last few months. Councilmember Cooke: It can be accessed on the Intranet, can't it? Sally Abbe: Eventually. Councilmember Cooke: We'll be able to. Sally Abbe: The base maps are available on the Internet right now, and we'll be moving more of our applications that way within the next few months. Councilmember Cooke: Thank you. Councilmember Ince: Next set of questions. I want to talk about this legislative person. I've got a series of questions, and I'll try to just take those one at a time. If the Council approves this budget with this person on there, when do you expect that person to come aboard? Bob Cass: Well, we wouldn't have the authority to hire anybody until the budget began, which will be October 1. Now, we might start recruiting earlier than that, although typically by the time we put a job description together and start the recruiting process, I really would be surprised if we had anybody on board by October 1st. But we could, technically we wouldn't hire them until at least, that would be the earliest, but probably later than that. Councilmember Ince: What is your estimation, do you have an estimation when that person will be hired? 3 Regular City Council Meeting July 1, 1999 Page 4 Bob Cass: No, sir. As soon as possible, but we really don't know. Councilmember Ince: Can you kind of give me, have you worked out a job description for that person? Bob Cass: That's what I was saying: We have not yet put the job description you would advertise together, but basically what we would have them do is, in the off season it is very typical for both the Senate and the House and the Governor to appoint various study committees. Ty monitored the last two off seasons, I believe the de -regulation bill, so there are typically any number of issues that would need to be studied. We are also finding numerous groups with whom we need to form alliances, and we don't even know who they are, the county associations, the major urban counties. Councilmember Cooke: Can I address this? The best work will be done between now and the next session, not during the session. You cannot start and be effective by showing up in those guys' offices in Austin. You can badger them to death and make them hate you forever, but if you form the liaison and the relationships, those bridges have got to be built, and the sooner, well, what I said up there a while ago, we're starting now. There's no wait to it. You've got to have all your ducks in line before you get there. The more important work will be done during, as Bob called it, the off season. Councilmember Ince: Along with that, Ty, I assume that this person would coordinate all the legislative matters, if he needs testimony from a staff person or needs testimony from a council person, he is going to be the one, or she is going to be one to coordinate and make those type of decisions. Bob Cass: And we would also want to use this person in Washington. Frankly, we spent most of our efforts in Austin, and there's a lot ground we can make up in Washington, too, we think. Councilmember Cooke: And it will still require, there's still a role for Randy/Susan type people. They have their function, but these people all work for various and sundry diverse interests. And I'm not being critical at all, because they did a good job and they worked hard. Mayor Sitton: But what happened is they did such a good job for us that other cities started hiring them. Councilmember Cooke: That's true. But they're diluted, and we need somebody that's primary function in life is to keep track of--T. J., how many bills did you say were filed just affecting... Councilmember Patterson: 1,400. I mentioned the state legislators, but also the county officials; they, too, must be held accountable because we had some information the other week at the state level in the county areas, and maybe things came out towards cities. People are playing for keeps, and this can help us in many areas. Let me leave something else with you. Along about January of next year, the new TML president will be appointing about 100 people to serve on various committees. And that person, as well, should tie in with that because you've got a lot of expertise, a lot of networking that's involved with that. So keep that in mind, there's so many things that we can do. But I guarantee you, it's going to get pretty critical. 11 Regular City Council Meeting July 1, 1999 Page 5 Councilmember Cooke: In my mind, this person is going to coordinate all these resources and make sure the bases get covered. TML has got a tremendous amount of expertise and a long time and a lot of people working for them covering a lot of ground. But they're working for all the cities, and we need somebody that's looking out for Lubbock. Councilmember Ince: I agree, because when we first got here, we were not nearly as active legislatively as we are today. Over the last two legislative sessions I know it's taken a tremendous time with various council people, certainly with legal, I think Debbie was the liaison for staff two years ago. I forgot your name during that time because I never saw you, but really I think, and I'm for this, it seems to me that we could, even when we are adding a person in this job, overall it would probably save us money. Councilmember Cooke: Or make us money. Councilmember Ince: I'm not just talking about money, but staff time, council time. Councilmember Patterson: What kind of person are we looking for? Councilmember Patterson: We're looking for a person of this caliber. Councilmember Cooke: You said you hadn't written your description yet, have you? Bob Cass: Right, we're working on it. Councilmember Ince: Do you think we could even lower the lobbying costs ? Bob Cass: Possibly, long term; I think, though, short term, depending on who we hire, they may not have the contact that our current folks do. But long term, we think that might be a possibility. Councilmember Cooke: Or it might at least keep us from incurring more. Councilmember Hernandez: Along those lines --and I'm very much in favor of doing this as well --I had requested that you provide us with some information as to what our lobbying costs were for this past session. Bob Cass: That's right. Councilmember Hernandez: So, I think in the long run this will save us money, but I'd like to be made aware of how much it did cost. Bob Cass: When you meant more than lobbying costs, you also meant travel costs... Councilmember Hernandez: Travel costs, and not just regardless of which pocket it came out of. The other thing is you and I had visited on this topic, and I had recommended that this city --and I don't know if the other council members agree or not --but that this city start forming some stronger alliances with the larger cities across the State of Texas. Because I know the County Association of Governments, they do that and they're able to advocate a little bit better on particular issues. And I think that's a move that maybe we ought to take a look at. G7 Regular City Council Meeting July 1, 1999 Page 6 Bob Cass: There used to be, back when I was doing legislation, this was ten or twelve years ago, the major cities that had full-time lobbyists and a couple of cities that were part-time had an informal association. I don't know that it's ever been formalized. I know the major urban counties do exactly what you're talking about. Their interests are just somewhat more different from the more rural counties, so we would agree with that. Councilmember Cooke: Some think it's kind of a by-product of having somebody on. And really, we do that. I think when you've got common interests, which is the only time it's going to be effective anyhow. Bob Cass: But it's probably more effective if you're working full time on it. Councilmember Cooke: If you've got somebody full time where they know just exactly and they can call "Joe" instead of "Mr. Smith ". Bob Cass: Well, that's how we met Randy Cain. Randy was doing that job for Dallas; I was doing it for Lubbock, and that's how we met Randy Cain. Councilmember Patterson: How do you feel about this? From time to time, invite our state legislators back to come to a session, like a work session. Communicate with them, it's a two-way street. They work for us, but at the same time a dialogue in these quarters would make a lot of sense. It puts us on the same plain, on the same team. I highly would encourage something like that as we look at the upcoming session. I think that's important. That gives them support. I'm not running their business, what I'm saying is it puts us on the same playing field. Councilmember Cooke: There's been a tremendous amount of interaction with our state elected officials during this last session. In fact, when they had their news conference over there, Senator Duncan said that he thought that I had taken over his office. I was in it more than he was some days. Councilmember Ince: We've given the freeport exemption tax, which goes in effect October 1 for anyone that has applied. I know that we had one estimate. At this point --and I say this point because there certainly could be applications in following years --about $280, 000 in revenue was lost because of the freeport exemption. Of course, that's designed to encourage certain businesses to locate and to expand in Lubbock. I think that we have also asked from the Solid Waste Fund, what was the percentage that we had asked from them to fund community development, 6% ? Does that correlate to what, about $1 million, is that right? Bob Cass: Actually, it was a million new this year, and then we had, it was closer to $1.1 million or $1.2 million. The new portion is a million but the total is about $1.1 million or $1.2 million. Councilmember Ince: Of course, Market Lubbock is going to pay the $280, 000. Bob Cass: Right. Councilmember Ince: So, the net to them even with this increase is not going to be... 0 Regular City Council Meeting July 1, 1999 Page 7 Bob Cass: That's correct. Councilmember Ince:...they've still got to fund the $280,000. Is it an agreement between them in the future years that, if the freeport exemption tax grows from this $280, 000, that they will also participate in the same manner? Bob Cass: Yes, and I would say that's not in a written agreement, because remember, you the Council, we hold that Community Improvement Fund. And so we would simply put that much less in it, but it would be basically a revenue back to the General Fund. Councilmember Ince: That's all I have at this point Mayor Sitton: Bob, I just wanted to reiterate a point that I think is important, because sometimes our citizens misunderstand this. When we're talking about the 4 % pay raise for employees, people have a tendency to think everybody in the City organization will receive a 4% pay raise. Would you address that, please? Because that is not true, not everyone receives a 4 % raise. Bob Cass: Now, first of all let me speak to civil service. Under civil service law, we are required to pay people in the same rank, with the same tenure, the same amount of money. So in that case, the firefighters and the police officers will receive an across-the-board raise, police 6% and firefighters 4%. In addition, the firefighters have assignment pay, which would receive that increment if the Council approves that. For other, non -civil service employees we have what's called merit based pay. Now we will have a small increase in base pay in the salary ranges for employees, probably about less than one-half of that 4 % would just be to increase the pay grades there. But, you've got to earn the balance through merit. Bottom line, what happens is there's an average 4 % rate increase. Debbie might get eight; I might get zero based on our performance. But you're correct: It is not automatic for non -civil service employees. Mayor Sitton: And then, one other question. This has to do with what Councilman Nelson asked yesterday and Councilman Cooke kind of alluded to it, that it is ongoing. I know we're looking at insurance costs. Do you have any idea what that might cost us, the range? Is that going to increase our budget? Bob Cass: Well, we have plugged in an assumption that there will be an approximate 8 % increase in costs just to maintain the same level of coverage for employees. We're in a bid mode now, and I think those bids close the 8th, so we can give you more information, we would bring that back to Council... Councilmember Nelson: Are you referring to health insurance or are you referring to liability insurance? Mayor Sitton: Liability insurance; I'm sorry, I didn't make myself clear, liability insurance. Bob Cass: You wanted to know how much we budgeted? Mayor Sitton: I know that we're looking at that, and I was just trying to think into the future about next year's budget or maybe redoing it in August before we approve the budget. 7 Regular City Council Meeting July 1, 1999 Page 8 Bob Cass: We have some bids out on the liability, too. August 12 will be when we have the budget hearing, but we'll be analyzing it probably in time for the budget. But, again, we're in agreement with the city attorney's office. We want to look at some different ways; we're fundamentally self insured now, but we think that we can, if the marketplace has changed enough, we'd like to apply some umbrella type, some stop loss type of insurance and maybe give ourselves a little bit better coverage. But that's being analyzed, will be analyzed at the end of the month. Mayor Sitton: And we don't know how substantially that might impact the budget? Bob Cass: No. Councilmember Ince: One comment I would make --and I think we certainly can't use this as a guideline —but just recently you had gone out to worker's compensation to the marketplace, which we had been self funded. Not comparing our current, what was bid and what bid we took, but I would like to ask Mary that, considering all the bids, they were considerably less than what we had been putting in that fund, isn't that correct? Mary Andrews: Yes, they did come in smaller amounts almost every time. Most of the bids came in less than what we were self -insuring, but what we're seeing is that we're having to shift what we were self insurance in worker's comp because that has changed, but liability has been going up, so we've just kind of been shifting that money over into the liability side. And we're going to be looking specifically at police liability and electric utility, in those two areas, along with the umbrella coverage. Councilmember Cooke: But that's how the situation has changed, though, because we were paying a lot more than what it was costing us to self insure when we started doing that five years ago. Councilmember Ince: No, about ten years ago. Mary Andrews: Yes, it's been since before I came. I came in 1988 and I think that happened in 198Z Councilmember Nelson: Before the tort reform bill. Councilmember Ince: That's correct. There's been a lot of changes in legislative process in dealing with both worker's compensation as well as tort reform, which has driven the price down in the insurance lines. Probably when that decision was made in 1987, it was probably a good decision, but things have changed drastically, and that's why the staff has decided to go out and look at that one more time. And I think it's going to, in my estimation, it's going to be a cost -saving thing. Councilmember Hernandez: I just had a couple of questions. You're recommending a 6% increase to the police. Where does that put us as far as any out of the ordinary increases to the police next year? In other words, are they going to be back to the same level as pretty much everybody else? Regular City Council Meeting July 1, 1999 Page 9 Bob Cass: Well, it's sort of a moving target. Last year, about the time we went to the budget hearings, you'll recall we heard that Austin was giving like a 14 or IS% rate increase. So our objective was to move to the head of the pack. What we've always said, at least for the 20 some odd years I've been here, is that basic city employee compensation -- which we try to be at the middle of the pack, not toward the end, not toward the front, but we felt comfortable in the middle --but what we told you last year was the police compensation, since we're having so much difficult competing and since the pipeline is shrinking in terms of people coming in, we wanted to move to the head of the pack. It depends on how aggressively the other cities give raises. Mary has done some survey work. Mary, you might want to step up to the podium and kind of tell what you know. Mary Andrews: In our salary survey work, what we have currently, as we have been for quite a number of years, we are ahead of west Texas cities that were behind metroplex cities in terms of the information that Ken showed you, the surveys that did show the same trend, and that's been pretty much the same for the last ten years. What we did is a brief survey of cities, right now when we're going into our budget process so is everyone else. So many cities couldn't give us a reply, so what they would give in raises next year, but a lot of them were around the five to six percent increase, of the ones that we could get answers from. Councilmember Hernandez: So far as trying to gain some ground and becoming the leader of the pack, where do you think this will place us? Mary Andrews: That won't make us leader of the pack in the State of Texas. It still puts us ahead of west Texas cities and probably a little bit lower than the metroplex cities. But then, again, when we go out and recruit --and Bill Carter, Anthony, and Delores who are out there meeting with people --we looked at our whole package. We talked to them about the car that they get that's not included with most cities, so we look at that total compensation package. Councilmember Hernandez: So how do we compare with those cities as far as the total package is concerned? Mary Andrews: There's only two cities that give take home cars, so if you calculate that in, I mean I can't give you the bottom line figure, but I think we're competitive with most Texas cities. Councilmember Hernandez: So you think next year we'll be, assuming everybody is doing even 6% this year or up to 6% this year, are we going to look to basically maintain this or increase it or you just don't know? Mary Andrews: I think with the few cities, there were only about six or seven that could give an answer, so it's hard to say, but I think we're probably just staying even. I don't know that we're launching out and getting really ahead of the pack. And that might be something to think about in the future. Councilmember Hernandez: The other question I had was that you're proposing a no property tax rate increase, but you say nothing about a property tax rate decrease. How much of a possibility is that, Bob? I know we've had, I think the last thing I read was something about we've had a tax rate decrease for the last five years, ten years? I Regular City Council Meeting July 1, 1999 Page 10 Bob Cass: Well, we've reduced I want to say over the last few years, I hesitate to say how many years, the last three or four or five years, property taxes have gone down six cents. Now, five of that was voted by the public, and they simply substituted a sales tax for a property tax, then on top of that, we reduced it another one penny. But in addition, remember, we took on eight cents worth of new capital, debt service and operating costs there as well. Councilmember Cooke: That five cents was a little more than what was authorized in the election. Bob Cass: Right. Councilmember Cooke: In the election it was like four -and -a -half and we made it five, so the Council actually did twice lower the tax rate. Bob Cass: I'm not projecting in the near future a, but I'll be recommending a property tax reduction, because as I was telling you, all of our margins are thinning out and the second biggest revenue stream in the General Fund is the property tax, excuse me, the sales tax, and the economy is simply substantially cooler now than it has been. Now, if your question is how much can we cut property taxes, give me a number and we can do it, but there will be consequences in terms of what we don't do anymore in service areas. Councilmember Hernandez: Well, and that's the one thing I don't want to do. I don't want us to, because one of the other things that I want to make sure that we do is maintain adequate reserves, as well. Bob Cass: Our General Fund liquid reserves are very healthy. It took us a number of years, some of the, especially Mr. Patterson was on the Council, when we were far below what the bond raters want, but we have our two -month liquid operating reserves, and the bond raters are very pleased with that. But it took us about ten years to get there. Councilmember Hernandez: Your recommendation is to keep it at $0.58? That is 58 per 100. Bob Cass: Yes, and again, remember that next year we will be receiving --not the forthcoming year but the subsequent year --will be receiving the revenue from the newly annexed area that we're not getting this year. But we're also this year taking in a new fire station. Councilmember Cooke: With our sales tax flattening, some of the indicators that we looked at, Bob's presentation yesterday morning, even if we could squeeze out some kind of token tax decrease, which is all that would be possible would be a token tax decrease, very likely we would have to just turn around and capture it again in the next year or so. And I think that, personally, I would prefer and a lot of people I know would prefer because I've had this discussion with them, keep that rate flat than to have it move up and down. Councilmember Hernandez: No, and I totally agree, and that's why I'm asking about it, to make sure that this particular tax rate that we've got, I'm not going to be at all in favor of decreasing it. But, I would like to see if we can't maintain it for as long as possible. 10 Regular City Council Meeting July 1, 1999 Page 11 Bob Cass: Absolutely. It's been years since we increased the tax rate. I recall a three penny tax increase I want to say a decade or two ago when we added 16 police officers. But in my 23 years here I only recall one tax increase, and I believe that was it. There might have been one earlier in my career. We always operate from the premise we'll recommend as much as we can, taking what we get from re-evaluations and new construction, but the premise we always start from when we start building the budget is we're not going to be able to recommend a tax increase. Councilmember Hernandez: The last question I've got has to do with the surpluses that individual departments have at the end of the year. I was kind of under the impression that those normally fall to the bottom line, do they not? Bob Cass: Uh-huh. Councilmember Hernandez: This year there's a recommendation by the police department to use that surplus for technology, to a large extent. What I would like to see is, if the police department through that discretionary fund that they've got available to them, which granted, I think they have $150, 000 or so, can be used for that purpose and then whatever shortage there is to be made up by that surplus. Instead of all of it coming out of the surplus and then have the additional $150, 000. The reason why is because it's my understanding that that particular discretionary fund is limited as to its use, and this is one of the uses that it can be used for. And that kind of gives us a very easy solution to their problem, which we need addressed. Bob Cass: Just so the Council is aware, the fund that Mr. Hernandez is talking about, when the police department seizes drug dealers' equipment, vehicles and all like that, eventually that is sold and the money comes back to the police department. And it is, by law, put in a fund, it must be used for law enforcement purposes and it cannot be used, in essence, to relieve the General Fund of an expense that it's always been incurring. But it can be used for new technology or new items, and that's essentially what we've been using. I believe the infrared technology, the technology we showed you a couple of weeks ago where they are building the crime scene digitally and all like that, that's been the source of that funding. So, we've been using it that way, anyway. Councilmember Hernandez: And in fact, the idea came from the police chief when he made his presentation, because he kept referring to the fact that criminals had paid for this and that and the other, and I would like for the criminals to continue paying for this, that, and the other whenever we can. Plus, I kind of want to discourage department heads from thinking that maybe at the end of the next budget cycle, if they've got some monies left over that it's not going to fall to the bottom line. Bob Cass: Well, again, that is a management decision. We do not leave that discretion with the department heads. We capture all of that money, but that was a recommendation while the chief and his staff made that presentation to the Council, that was a recommendation that senior management supported. But it does fall through to the bottom line, however, we bring it back to you, and it's allocated by the Council upon a recommendation from us. 11 Regular City Council Meeting July 1, 1999 Page 12 Councilmember Hernandez: Right. Mayor Sitton: Bob, I'd like for you to elaborate on the question that Councilman McDougal asked yesterday. Admittedly, we're not raising the tax rate. And then we always get criticism from the citizens: "Well, they may not be raising the tax rate, but our taxes are going up!" And I don't want us to be in a position where we are trying to mislead anyone. So, can you tell us... My understanding is with the re -appraisals, not every home in Lubbock is re -appraised every year like a lot of people _ think. Some values go down and some go up; some go up more than others. How much money did we get this past year from those things that Marc asked for yesterday, the new construction, the re-evaluations, and what else? Councilmember McDougal: The tax rate, the difference between last year and this year is $227 million. $148 million of that is from new construction, and $79 million of that is from re-evaluations. Anna Mosqueda: Total revenue to the General Fund from re-evaluations was approximately $677, 000. So that's the main, the re-evaluations, if you take the amount, and then I say total revenue and then, of course, part of that goes to Market Lubbock for the three cents we give them, and that was part of that revenue. Councilmember McDougal: Anna gave out a, this morning --and I don't have it right here in front of me —she gave us... Bob Cass: Yes, it's in the packet that we handed out this morning with all the questions from yesterday. Mayor Sitton: On the appraisal district, do they re-evaluate homes like once every four years, once every five years? Councilmember Patterson: They go by quads, every four years. Councilmember Cooke: Three. Mayor Sitton: So, every three years they revalue certain segments of the city, and it's ongoing, as a minimum. Debra Forte: I think they are required by state law to do it every three years. Mayor Sitton: And they changed the law, didn't they, this year about the percentage? Bob Cass: A cap, yes. Anna explained the other day, in the past if your values went up 30%, when they came around that third year then you would pay that much more. Now they are capping the increase at 10%. I believe, though, in subsequent years you could get another ten and another ten, but it could not be all at once. But that's a new feature, that's probably not the most recent session... Councilmember Cooke: It was '97, yeah. Bob Cass: ... that the legislature passed that. Mayor Sitton: And even though that we, as a city, benefit from those re- evaluations we don't have anything to do with setting them. That's important for people to know, because they think we do it all. 12 Regular City Council Meeting July 1, 1999 Page 13 Councilmember Ince: That's very, very important, Mayor, because many, many people think that someone on the city staff says, "Well, we need more tax money, we'll go out there and re-evaluate them. " I know people who have had that experience when they get their tax notice and re-evaluation, the same experience I find mine out when I get my notice. I have no prior notice of it, just like any other citizen. But, for some reason, people think it's the City of Lubbock that does re-evaluate. Our position in this, we get to appoint what, two board members? Councilmember Cooke: One and a half or something. Bob Cass: Right. Councilmember Ince: Two board members to this and the other taxing entities, and that's run by a board. Councilmember Cooke: An independent board. Councilmember Ince: An independent board, we don't have any control over what the taxing entity does when it goes out to do re-evaluation. We have no say so, and I think by law we're not supposed to have say so. Bob Cass: That's correct. Councilmember Cooke: State law governs that whole deal; that's absolutely run by state law that is specifically for that, and that tax appraisal district is represented, and the boards are appointed by all of the taxing entities in Lubbock County: Slaton, Lubbock County, Wolfforth, Frenship School District, Lubbock School District, Cooper. Anyhow, you see what I'm saying. They all have input on appointments to the board; that's why it's in fraction. It depends on how much you receive, what your tax rate is compared to the others, or tax valuation as compared to the others. And that's why it comes out in fractions: we have one point something appointments to that board. Councilmember McDougal: But the overall tax rate, I think it was pointed out yesterday that the City of Lubbock's share of this is what, 24%? Bob Cass: Roughly, yes. Debra Forte: Yes. I think, Mayor, the confusion is the legislature made changes and it would be before you were seated; it would be 12 or 14 years ago. Those agencies were a government department for the city, and the legislature split it out, so that they would be separate, so that they assessed professionally and then you determine the tax rate. So that's happened in the last... Councilmember Ince: Well, actually, the way it works is we say we need "X" number of dollars; they have the evaluation, and then you compute a tax rate off of it. We give them the money in our budget, they know the evaluation, so who sets the tax rate? Bob Cass: I think we do. Councilmember Ince: Well, indirectly, they do, but we do set the budget. 13 Regular City Council Meeting July 1, 1999 Page 14 Mayor Sitton: It's kind of difficult for some people to understand, because they really have no intention, they think, of ever selling their home. But I know if I were going to sell my home I would be very upset if it hadn't increased in value each year, so that when I went to sell it I could either make some money or at least get my money back. So it's a double-edged sword. Councilmember Cooke: State law requires them to, their target is to market value. That's what they are supposed to do by state law, 100% of the market value. If it's too high, if they have made a mistake and made it too high, you can just go visit with them. If they have made that mistake, they will make the correction. Mayor Sitton: Okay, I have one other question and then I'll be through. It has to do with the increase in the sewer, the 3 % increase in the sewer. Tell me again why we need that increase. I understand the water, because we've got a capital project out there, and the citizens have known about that. Why do we need that sewer increase? Bob Cass: I'll let Debbie go into the detail numbers, but our rate models that we displayed to you were projecting that, not the year that we're talking about now but the subsequent year, we would need a 6% rate increase, fundamentally to keep our reserves up. As Debbie showed you today, we're really drawing down our rate stabilization reserves. I believe in this year alone we're looking at drawing down rate stabilization $1.4 million and change. The bond rating agencies have only recently come out with some recommendations about the level of reserves you need in rate stabilization, and we were simply projecting that we needed to do that to keep them up to speed. The other thing that we would point out --and, again, it's difficult to explain publicly --we were originally looking at a 6% water rate increase; we now are recommending to you a 3 % in water and 3 % in sewer. The combination of 3 % water and 3 % sewer is $0.20 less out of the average bill than the 6 % we had originally contemplated. But fundamentally that's the reason we need to keep our reserves as healthy as possible. Debbie, I don't know if you have any other details you'd want to lay out there. Debra Forte: That was one of the things we looked at when we changed the proposal from 6.63 % in water to a zero, from the 0.663 in sewer was to lessen the impact on the citizens, so we reversed, not only did we reduce the 15 % to 12 %, we reversed the order so that it would lessen the impact on the citizens, have the 3 % in the first year. Then, we are drawing down our rate stabilization and reserves to do some capital improvement projects for which we are not bonding. Councilmember Hernandez: As a follow-up to the Mayor's question, that's kind of an odd situation, isn't it? You're increasing the sewer rate in order to have enough funds in your rate stabilization fund so that it doesn't affect your bond rating, is what I'm hearing? Debra Forte: Um -hum. Bob Cass: That is a factor, yes. Councilmember Hernandez: You use the rate stabilization fund to keep your rates low, and yet... 14 Regular City Council Meeting July 1, 1999 Page 15 Debra Forte: It was built up and we've depleted it down to the level for which you are recommended maintaining that level. For instance, when you go out... Councilmember Hernandez: The bond rating. Debra Forte: Yes, because we've been in the bond market quite a bit recently. Bob Cass: I believe, Debbie, you indicated it had been six or seven years, '93 or '94 since we had any rate impact in the sewer fund, and that was about the time we were bringing on the wastewater treatment plant, which was about a $50 million package, as I believe. Debra Forte: And the budget since that particular time, not only the capital but all the operational costs that we have incurred have been absorbed by various cost recovery measures, and we've not passed on any rate increases in that time. Mayor Sitton: Does anybody else have a question? Councilmember Hernandez: One last question and that is notice requirements. Could you go over that? Bob Cass: Anna was going to go over the calendar with you after we are through with the Q&A. We've got a discussion of the calendar from her. Councilmember Nelson: With regard to the wastewater fund increase, the 3 %, I'm certainly not, I'm not in favor of that. According to the figures that you gave us earlier, you are trying to raise an approximate $420, 000 through that 3 % increase. Is that approximately right? Bob Cass: That's correct. Councilmember Nelson: The deferral of that increase might result in a lower increase if we defer it until we get the new annexed properties on line next year, we would spread that need for additional funding over additional homes. In other words, there would be additional people... That's already figured into it? Bob Cass: No, the property, this is not property tax. This is the sewer and the sewer will not even be installed for two more years, until 2002 we will not have the sewer installed in the newly annexed area and be receiving any revenue at all. Councilmember McDougal: And they don't have to go on it then. Bob Cass: And they don't have to tie on at that point in time. Property tax should be correct, but on sewer fund it's a different deal. Councilmember Nelson: Alright. The fact that this is the first time that I've heard about a sewer increase does not set well with me. And I know that we've had the benefit of having a water rate increase advertised to us and being prepared for that for three or four years. $420, 000 is to me a small amount of money that we should be able to find elsewhere. The General Fund, I've asked you for some additional information. We may find some in those areas that I've asked you to give me some information on, but I'm not in a position at this point in time to support a sewer rate increase. 15 Regular City Council Meeting July 1, 1999 Page 16 Mayor Sitton: Well, I would like to make just one final comment before we get a consensus on whether or not to ask you to file the budget. I've had the opportunity to travel a lot and visit with a lot of mayors from a lot of different cities. I might tell you, I'm extremely proud to be Mayor and to live in the City of Lubbock. I think we have an extremely competent staff who has listened to the public and who has said we want a streamlined government; we want those high services at the least amount that we can. I think you all have done a good job. What I appreciate about what you do more than anything: you don't just live for today. You're not just planning on today, you're looking five years, ten years, fifteen years out. I think that serves our citizens very well and our community very well, and I think that's why we are very sound financially. I think that's why we are at the head of the pack in infrastructure and all of those other things is because you all are visionary. You know, we are adding some things to the budget, but we're also taking some things away from the budget. I for one think it brought us a very good budget. We've had time to work with you for a long period of time now, telling you the things that we didn't support, ask if you could cut out, and you've done those things, and I just wanted to say thanks for what I consider a job well done. To be able to have the high level of service that this city has --and I'm telling you our citizens expect a lot and we give a lot --to not have a property rate increase in how many years, now, that is. How many years is that? Councilmember Cooke: At least ten or twelve. Mayor Sitton: At least ten years, that's just unprecedented. Councilmember Cooke: It's longer than that. T. J. says it was '64 when he came and he's been on fifteen years now. Mayor Sitton: And that doesn't just happen; you have to plan. I know with Debbie coming on board being so good financially, it's certainly been an asset to us. But I just want to thank you all. Now, I personally don't have a problem with the budget. Is there consensus to file the budget as is, or do you have other discussion? Councilmember Hernandez: Could we just... There seems to be some disagreement on one or two items. Could we just go over your list that you proposed? Bob Cass: Are you talking strictly in terms of rates? Councilmember Hernandez: Well, no, your whole list. You said Lubbock Police Department 6 %, personnel 4 % . Councilmember Cooke: Keep in mind, though, that just because we haven't filed the budget doesn't mean we've approved the budget. We're not taking any action. It just allows them to make their legal obligation. Councilmember Hernandez: But this would give you a consensus, would it not? Bob Cass: Stop me if I'm getting into too much detail... Mayor Sitton: So, you're wanting to take each item, get a consensus on each item, is that what you want, Victor? Councilmember Hernandez: There's only like ten, I think. 16 Regular City Council Meeting July 1, 1999 Page 17 Bob Cass: Right, in terms of the big financial blocks of money, there's really only five. Again, we indicated with the tax increase from the water fund... Councilmember Hernandez: So that's the first one. Bob Cass: Right. Councilmember Cooke: I'm in favor of no property tax increase. All: I agree. Mayor Sitton: It's unanimous. Okay, we don't vote; there is consensus. Bob Cass: The second one was a water rate increase of 3%, the first of a three-year series, three, four and five, but this year it would be 3 %; sewer rate increase of 3 %, the first of two, two-year sequences the way we're recommending three and three. Then the Community Improvement Fund, basically shifting $1 million in revenue from the Solid Waste Fund into the Community Improvement Fund. So there's no consensus yet, and we're not recommending at this point doing anything on the stormwater rate until we have more information. So the only rate increases we're talking about are water and sewer and then the other big one is the shifting of the money from the Solid Waste Fund into the Community Improvement Fund. Councilmember Hernandez: Which we've already done. Mayor Sitton: Yes, we've already done that, it was 6-1, I believe. We didn't vote; we got consensus, didn't we? Bob Cass: Now, if you're talking about the other in terms of compensation, we're talking about 4 % performance based for all non - civil service employees, 4 % for fire civil service employees, plus roughly $280,000 for assignment pay in the fire department, and then 6% across the board for police. Mayor Sitton: Does anybody have a problem with that one? Councilmember Cooke: I'll just say that for what it's worth, I really like the budget the way they've put it together. I'm really disappointed to hear that you didn't know about the three -cent increase. I guess maybe it's because I'm around here so much that I've kind of followed this thing as it's been put together over the last few weeks. But I'm really proud of the fact that we took that 3 % out of our water increase. One way of maybe looking at that is a tradeoff: I like the idea of going ahead and doing three cents now and three cents next year, instead of that six cents at one time. It just allows you to kind of work your way into it and the same way, obviously, with the water thing, three, four, five. I hate that we have to do it. You've got to have a sewer and we've got to have water. One way of looking at it when you look at other ways of collecting it or making up the deficit, one of the priorities of this Council for the last several years is cost recovery and user fees. The people that are using it are paying for it. Councilmember Hernandez: And another way that you might want to look at recovering it is impact fees. We've talked about that periodically. [VI Regular City Council Meeting July 1, 1999 Page 18 Mayor Sitton: Okay, Victor, are you okay now? Councilmember Hernandez: Thank you, Mayor. Mayor Sitton: So, we do have consensus to file the budget, as is. Bob Cass: As presented? Mayor Sitton: As presented. 2:08 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: 5 Yeas, 0 Nays. Motion carried with the majority of remaining Council present at adjournment (Mayor Sitton and Councilmembers Ince, Hernandez, Nelson, and Patterson). WI Y SITT, MAYOR ATT Kaythie Parnell, City Secretary Read and approved this -4�lL day of G44� , 1999 WIN Y SI O AYOR A EST: Kaythie Darnell, City Secretary IN