001Call to order this special meeting the Minnesota City Council at 4:30 at city hall city council chambers. And item two, we don't sir have any. >> And item three is to conduct a workshop on the proposed budget for fiscal year 2526. Mr. >> Yes. Good evening, mayor and council. Uh this is a uh a bit of an exciting day uh for for me as my first budget uh presentation to you all and and the council and to the community and and so um I have no doubt that there will be some adjustments and we will make some adjustments along the way. But um as we go through tonight's you all have the proposed budget book have had it for about a week. Um, it is available on the city website for any community members that
002uh that would like to look at it. And I will um just right off the bat, I will uh um I suppose apologize. I know that you all are accustomed to these slideshows being somewhat over a hundred slides and taking multiple hours. Um frankly, I just got hired a few months ago and didn't have time to put those together. And so I'll apologize to you, but I'll be upfront and tell you I probably am not going to have time to do it next year either. So hopefully this will let that go. >> Hopefully this will meet you all's needs, but if we need to make adjustments, we will along the way. So um again, thanks for the opportunity and and I want to thank the staff for the effort that um has gone into this.
003Uh Lupe, what' you do different because I'm not working now. >> There we go. >> All right. So thank you. Um so we we'll this is kind of the budget of the agenda and you all have your slides there and um the the uh audience can see it and we will um we'll incorporate this into the uh uh the minutes uh of this meeting and so it will be available for for anyone that wants the uh the slide deck as well. Um that's the uh the order of the items that we'll go through the methodology that we used this year. Um just to kind of hit some of the highlights, there is no change in our proposed tax rate from last year. Uh we are proposing to adopt the same tax rate that you all
004uh had last year, which is 05078 per $100 valuation. As we've talked a couple times already, there are no new full-time personnel positions. Uh there is no increase in our city provided utility rates. Uh we do have a small increase in the garbage collection because of a contractual obligation. We'll get to that. It's on one of the slides later. A and just to kind of as this is my first uh budget with you all just to kind of share again a little bit of the the conservative approaches that we take where there is rounding to be done. All revenues are rounded down. all uh expenses are rounded up and so that way we don't get into a bind. If there is some some adjustments through the way or they're they're a little bit off because
005a budget is always estimates. You're forecasting things sometimes 14 16 months in advance. Uh we try to give give ourselves a little bit more of a conservative approach there to to help uh catch those little little things that might adjust throughout the year. Uh we do feel like we have improved transparency with this budget uh as opposed to uh prior years where we have we've really simplified that approach to looking at our revenue against our expenses and keeping our debt service as a separate um fund and tracking those separately rather than trying to keep up with small portions of the debt throughout and broken up into the various city departments. Uh we also separated out and and really tried to emphasize our our tracking of capital projects. The new software that uh we implemented earlier
006this year will allow us to track those with um with project codes and and will allow tracking and and capturing of that data uh for reports uh in future or if we're researching things. It allows us to track that a little better. And we've uh we've added some organizational efficiency through our uh department tracking of departmental costs particularly we've talked about the maintenance services which will be a new department that you'll see in this proposed budget and a new public works administration and and just to kind of hit a highlight on that in prior years we had some of our public works employees that were functioning in the utilities but maybe they worked part of the time in uh water, part in sewer, part in gas, but their their salary was budgeted all in one
007of those three. And so it really wasn't an accurate depiction of the costs that any one of the utilities should have been paying. And so what we do with this is we move those personnel to public works administration and then we transfer funds from the utilities that cover a pro a proportionate cost uh of those salaries. uh we'll get into that a little bit more uh in another slide as well. And then again th those transfers come from the utilities into the general fund. That's also kind of a a purpose for or a a precursor into why it might look like we have a bigger um increase in our general fund than we actually do. But again to talk about the balanced approach that that we've talked about um I I wouldn't call this the
008ideal situation but I will call it a a good situation that we are in. Uh we we tried to incorporate as much as we could of capital projects that we felt like hit the priority areas that the council has identified and our strategic strategic plan identifies. And so we took a really close look at this year's uh budget that will be ending September 30th. And it appears that we will have about $350,000 in surplus at the end of this year. Money that was budgeted this fiscal year that we will get in revenue, but we will not spend in expenses. Um, and so we used some of that to help us incorporate more projects into next year without dipping into the fund balance. And so the the the picture here is we will use some of
009that 350,000 to cover the deficit funding in what you see as a proposed budget. We don't have to do that. We could choose that no, we want that whole 350,000 to go in our fund balance and we can walk through what you all feel like are the lower of the priorities that you would like to see cut out of the proposed budget in order to get there. But we felt like this really hit as many things as we could without dipping into the fund balance. We're still balanced in that we're not going to dip into the fund balance. We're just going to use what will be left at the end of this year to offset that that money. I I hope that's approach an approach that you all uh appreciate and and desire to do.
010But if not, we we can go through the effort of of identifying which projects should be cut out of this to make sure it is a truly balanced uh single-year revenue versus expenses uh approach. Um, and then as we look at um the organizational um structure, as we talked about, we're we're looking for ways to make this a more efficient organization. And on the far left side there of the departmental line, you see maintenance services. That will be a new uh department um that that's created. And I there is another change. You also will see that the city secretary uh is along that line. I just felt like it really clearly depicts now the organization with the 10 departments that we have and the department directors uh um all of that leadership team being on
011a single line there. It just makes it a really good illustration of um how our how our departments are divided, how their responsibilities are divided and it really identifies that that leadership core and all the directors uh on that single line uh of departments there. So, um that's uh um the illustration for for that uh organization as a whole. And then we did also make some improvements to the public works structure. uh as you can see uh they have had a director and a an assistant director for some time but they they kind of had some lopsided responsibilities with a lot of direct reports and and really not a good span of control uh for some of those mid-management supervisors. So now we have in that manager level the superintendent uh role uh we'll have
012three different superintendent one over each of the major functional areas uh with a little bit better uh structure or efficiency built into that structure so that each superintendent is over roughly um the the same level of of responsibilities and uh and scope. Maybe not exactly the same number of personnel but a little bit more balanced uh as to the approach there. Looking at our our tax rate, our proposed tax rate, this is where it fell last year. There will be undoubtedly there will be some changes to this chart because not every city in our area will adopt the exact same tax rate like we are uh as as last year. But this is where we fell and it it will it will still be close. there's not going to be huge swings most likely. Uh
013so our general fund revenue as I mentioned a minute ago is approximately 18.5 million. Uh that does appear at least initially like a 22% uh increase but much of that um I I would say about six of the 9 million uh if I remember correctly it's not 9 million total. That's not an accurate statement. Don't let me try to speculate on the numbers. Of that 22%, the vast majority of it is the change of accounting methodology of moving those personnel from the utility funds over to the general fund and then transferring that money in from the utility funds so that we're tracking the their costs a little bit more accurately. The property tax revenue uh is uh total about 3.9 million and that is up a little under 8% uh from last year. And so
014again, revenues rounded down. Utility rates, which are proposed, are to remain the same without the previously authorized increase. Uh you all had an action item several years ago that um illustrated you would have increases in your utility rates for 5 years in a row. Uh our proposal is let's let's keep them let's hold them uh steady for now. Let's get the budget underway. Let's continue the audit of our utility billing system. Let's proceed forward with our utility uh rate study and let's see where that all comes out and then let's set the rates later uh next calendar year that we feel like are appropriate for the systems that we have once we get the the the issues worked out. We just we just didn't feel it was appropriate to compound a problem where we know
015there are some issues and if we try to raise them then we're just going to we're just going to potentially make it worse and we just would rather have the opportunity to go in review everything fix it and then come in with whatever the the appropriate rates need to be. Um and like we mentioned earlier, garbage collection does have a CPI based increase. This is the rate structure from your previous action. And again, we're we're going to propose to hold it at that 20 FY2025. So, it's kind of highlighted in yellow there. We're just going to hold it. That's the current rates, and we're going to propose that we hold those. Um, and then on the next slide, this is from uh Republic Services, the proposed uh garbage collection rates, which do reflect a 4.3%
016CPI based increase that would come that would be effective as of February 1st. it won't be for a few more months, but they are obligated to give us by July 31st. Um, they're required to give us notice and they have done so. So, we wanted to go ahead and incorporate that in for everyone's awareness. >> Can um >> Yes, sir. >> for the contract that we have with them, is it one more year or two more years? >> It goes until, if I remember correctly, January 31st of 27. So, one one more full year plus a few months. >> That's right. Right. >> I think that's right. >> I think yeah, >> I can verify it tomorrow. I think that's right. >> Is there any way that we can get out of that contract with
017them? >> Generally speaking, no. those those are usually and and the city attorney would have to speak more to the legal side of that, but my experience is those those really unless they default by some egregious action. Uh there's not usually an opportunity because the the way the it's perceived is they've they've counted on that. They've they've bought trucks. They've accounted on those rates, I mean on th that revenue uh for their business and they've bid on it for the lockedin period. Um and so unless they default um by by doing something really offthe-wall uh inappropriate or just not collecting at all, there's really not a whole lot of usually opportunity to get out of them early. We don't have to go through any extensions. If it ends January 31st of 2027, we can be
018ready that that winter that third fourth quarter of that 2026. We can do the whole process. we can bid it out and we can be prepared um with a new contract uh come at the end of it without any extensions. And then when we look at the actual base budget um numbers of our uh our city budget, it's really no different than what we have in our in our home budget budgets. We have certain things that we have to pay. uh they have to come right off the top, our mortgage or our rent, our uh utilities, our basic food and clothing. Um the city has the same kind of things. We have personnel costs, personnel salaries that are built into that. We have equipment that has to be purchased or maintained. We have supplies for
019uh providing the services that we provide. Um and those costs kind of have to come right off the top and then what's left become somewhat discretionary and we have options. uh of how we prioritize that uh what we would in our home budget call our discretionary um funding. And so we as a portion of that use our strategic plan to help guide those um those decisions. And you all have offered some thoughts on the strategic plan and where those priorities are and what those goals are. And our current adopted strategic plan has seven different goals uh that that we've gone through. We've talked about some specific tasks um and we've gone back with the staff and we've worked on correlating those items into their departmental requests and making sure that they align with um the
020priorities that that the council has has provided or or has acknowledged and affirmed. Um and so we've really tried to focus on uh in this budget particularly some quality of life initiatives and some infrastructure initiatives to make sure uh that we are uh really focused in on those things that are that are of high value and high importance to our community. Um and so as we move forward, I think that's what we're going to see uh in this proposed budget. And um two of the things that that we did want to uh kind of highlight were we still had funding from previous debt issuances that you all have authorized. Your 2022 certificates of obligation had not been fully uh utilized and obviously the 2025 were just issued a few months ago right before I was
021hired and there's some funding there. And so we we tried to capture that and maximize our use of those funds in order to again get as many projects as we could funded in here but still preventing presenting a a balanced approach of not dipping into our fund balance. And so as you can see here your 22 2022 certificates of obligation. They were already funding the elevated storage tank. There's a little a little under 1.4 4 million in remaining obligation there to finish that project out. It's looking great. It's already up over the trees. I can't wait to see that up and in the air with the logos on it and and and really uh in use and and available to our community. And then there are a few other projects that um really a lot
022of uh utility fund type stuff there. there is a need for another gas regulator station on the east side of Highway 6 if we are going to um provide additional services init additional developments out there. Um and so as we've had some conversations, as we start preparing for that, um that opportunity uh presents itself. And and while while gas, natural gas is not available to do an impact fee on, this is one of those things that we would look for. um if we embark on this, if we do this, as we have developers come and approach us and they ask for development agreements with concessions for a special district, uh concessions for use of TUR funds if they're in the TUR area that you all have already created. if they ask for um variances to
023your subdivision ordinances, anything that they come and ask for that you all feel like you might be willing to say yes to, that allows us to say, "Okay, we're willing to give you these concessions, but we've also invested, as you can see here, on the natural gas system. We've invested 3/4 of a million dollars. We would like your development to pay a prora portion of that in order to serve the development that you you intend to bring to our community. Again, we want to welcome the developers here, but we don't necessarily want the creation of all of the infrastructure for to serve their development to be born by our current residents. So, we go into those things and even if we can't uh obligate it through a designated impact fee, uh there are ways for
024us to negotiate that contractually with developers. Um and then there are a couple items there for a water loop and a gas loop to finish out the east uh I'm sorry, the west side uh over near Pan Lakes. Um there is some needed repairs at the wastewater treatment plant discharge site. Um, and there is a a need for a portable water pump. Um, the up an upgrade to a portable water pump to help um clean out areas when there's a water lake to to help uh pump out areas and and allow the crews to get down into service uh the lines um in a more efficient manner. And again, all of those things we intend to fund with 2022 uh certificates of obligation that you all have already issued. the money is already sitting there
025in the bank and these are eligible projects for that. So really um and you have based on the uh offering statement that you gave or that whoever the council was at that time gave when that debt was issued there is limits to what we can use those funds for. So we looked for opportunities to maximize and use those funds for eligible projects that would serve the community as a whole. And then on the right side, your 2025 certificates of obligation. There are a number of projects there. Again, these were things that got requested in this or some of them were identified when you issued the debt, but some maybe weren't. Um, but they are eligible based on the offering statement. Uh, and we feel like they would be the best use of those funds rather
026than them again just sitting and us dipping into fund balance to do these kinds of projects. Uh, it just maximizes that uh that use. And so you you've already done your pool repairs. The the roof repairs and recoding at the library are already well underway. It's looking great. I went by there today. Um we do have some interior repairs at the library. I'll quickly touch on the two that are highlighted in yellow just because that's a as we were putting the final touches on the budget, we made some adjustments along the way. And initially um these two numbers were a little bit different. Uh if you look at the cover memo, the city manager's cover memo, uh that is in the very beginning of the budget book, these are the numbers that you'll see. But
027if you look later in the detail pages, uh there's a different number. So before you adopt the actual budget, uh we will make these changes and we will reflect that in a and we'll make sure that we capture those. But these are the actual uh what we would like to see in the proposed budget for you all to adopt. And then uh the basketball court at Miller Park, that's an estimated number that's underway. Uh got some pictures today. Half of the concrete is already poured. It's looking great. Special thanks to the public works team uh for getting out there and making that. I'm I'm really looking forward to seeing uh the neighboring uh residents getting to use that basketball court and have some fun at that park. So, uh great job there. And then again,
028we do have some roof repairs needed at the pool house. Uh some interior repairs at the fire station. We've talked about, you know, if we're going to delay uh the actual construction of a new station while we figure out what's the best use of those funds, what's is it should it be a public safety combined building or what what are the is the best option and what can we afford to do? Um if we're going to wait a little while, we felt like we probably ought to get in there and and fix some of the issues uh that are in the existing station. And even if we do end up building another station and they move out, that would still put that building in uh the the ability to be used whether it be by
029the fire department or by another city department. Uh so certainly I think a good investment there. Uh we have some painting for the Navasota Center, repaving of the the remainder of the walking trails at August Horse Park. That'll be a continuation of uh there's some effort going on in this year's budget. This will continue that uh effort. And then also a barrier fence to protect not only from vehicles going out there and damaging the fields, but uh heaven forbid someone tried to go out there to hurt someone that was out on the fields. Uh protective uh fence to help uh give a barrier there. >> Robert, I did look it up and um our public services contract does end January 31st of 2027. >> Yeah. Okay. Perfect. And we will make sure um that we
030are prepared well in advance for an RFP. the um on on the pool house. Do you think it's a good idea to spend or propose to spend $55 uh,000 on it when we may have a overhaul on the new park master plan on it? >> Well, I I don't know that that that building would go away even if um even if we were to move forward or find some funding to do a larger scale uh project. I I don't I don't think that even in the um proposal that was done on Bruy that there was a that that building would still be there, right? It would still be used. So that um I I think the investing in the roof to stop any further damage from going on. And I did notice that there was
031a there's actually some interior repairs for the pool house as well that are in the uh proposed budget that I didn't apparently get on this spreadsheet. I mean on my PowerPoint. Um, so that's uh again I think that fixing the roof stops additional damage from happening and minimizes what we will have to do on the inside. But uh right now the building is is is really not usable and we would like to get it back to a position where it could be rented out and be used. And even if we did decide to do something at at that park uh on a bigger scale because we get a windfall of some grant funds, I I think we would still use that building. I don't I don't think anyone envisions us discarding that building and starting
032over. All right. And then as we get into um CIP projects that are actually funded in the general fund um the all the ones before that we were talking about on the previous slides are from are coming from other funding sources. So they're not really hitting our our general fund. These are are ones that we did incorporate into this year's general fund um and are all part of what you saw as a proposed uh total. And so you have your continuation of your annual street maintenance. We have the mobile data computers uh for the police vehicles which are uh in need of replacement. We have animal shelter renovations which I believe everyone is in agreement is desperately needed. Uh we have a vehicle lift for maintenance services to to really start getting some more of
033our vehicle maintenance done inhouse. Uh but we don't have a lift that we can currently lift up the vehicles and work on underneath. uh we have uh several vehicles that are being replaced in public safety and the the premise here is there's really no advantage to the community uh or to the city's budget by continuing the enterprise lease for public safety vehicles. Uh so for these three that are getting replaced this year, our proposal is to replace them, cash fund them, upfit them, and then uh maintain them here and not put them in the lease program. We're continuing the lease and continuing to evaluate its effectiveness uh for public works and we do have multiple that are that we were are going to propose uh maybe on the next agenda. I'll have to look um
034one of the next couple agendas uh to get proposed for the next uh year and that dollar amount is already built into the budget as well the continuation of the lease that you've had. Uh and then we plan on this year really evaluating that and taking a close look at for the long term. Do we want to continue the enterprise lease or do we want to start going with like what we're going to do for public safety? Um, and the idea there is it's almost like we lease the vehicles from oursel. So, we would we would cash fund the vehicles and then in the department's budget instead of that $500,000 lease payment to Enterprise for the year, uh, we would fund that into a vehicle replacement fund for ourselves. And every four, five, 6 years,
035whatever a vehicle lasts, then we have the cash in transfers, we have the money sitting there to to fund the replacement vehicles. Uh, >> does that just give us more flexibility? >> It Well, it does because we're in complete control. The one the one negative that you that people could bring up immediately is well, then it's on us to try to trade the vehicles in or to try to sell the vehicles at auction. Enterprise has a pretty robust system and they get us a they get us a premium on on selling them. And that's why we're really going to look closely at what do we realistically think we would sell them for an auction and what is Enterprise getting us and is that delta worth continuing the program with them and the administrative cost that
036we pay them versus doing it ourselves. And so we want to really get into that level of detail to to decide is it which way makes more sense economical for us. Um we do have some city hall and council chambers uh technology upgrades. Uh we have the employee compensation plan and the strategic plan and CIP uh plans at at $25,000 each. Those are the those are the CIP things that are uh in incorporated into uh the proposed budget as we get into employee benefits. Um sorry um the salary survey as mentioned is in there that allows us to really take a close look at in these new pay grades uh are the positions in the right grade? Are are we in are we competitive in the market with the other hiring jurisdictions around us that
037are that we're competing with for the talent acquisition? Um and making sure that that we're staying in that competitive market. We do have a proposed pay plan that uses standardized job titles. We've we've s changed a few job titles in the organization to give us a standardization there to make sure that we've got par so that positions that are working um in like responsibilities are on a on a parody level similar pay scale. Um, and we have predetermined performance-based increases so that we don't have allegations of favoritism or it it really makes it easier to budget for those kind of things. If a an employee is meeting our performance matrix and they're performing satisfactorially at their annual review, they move up to the next step. And we have a picture of that in a minute.
038Um, we also have in this proposed budget a 2.5% cost of living increase across the board. um that roughly matches the CPI uh for the Houston area. The the idea here is that we would do uh the COLA would be at the first pay period starting after the budget goes after October 1st. So, everyone would get a 2.5% pay increase. Then we would get the salary survey going. We get the results in. We might make a couple adjustments of that pay plan and then we would implement the pay plan after the salary survey results are in. You all have adopted that. have blessed the the final pay plan and we would likely implement that early in next calendar year. So, it would kind of be a two-phased approach, but rather than implementing everything right off
039the bat on October 1st and then finding that there were some things in the salary survey that told us we should make some adjustments, we'd rather just hold off on implementation until we have the salary survey results and then implement the pay plan, but go ahead and give the employees a COLA at the beginning of the fiscal year was the the premise there. Uh and as we've been discussing the the retirement system increased benefits, this uh proposed budget does inc include a portion of what our goal was and that it does get us to 20-year retirement eligibility and it does get us to a 6% contribution rate. I did put a little note there at the bottom. Today TMRS offers five, six, and 7% as the contribution rate options. we are at 5% but effective
040next week on or effective on in just a few weeks on September 1st uh they will offer 8% as an option and so it became a little bit more of a priority for us to at least take that first step this year because if we stay at five and other cities start offering 8% contribution rates that would really start being obvious in our recruiting efforts I think and so uh this will keep us from falling any further behind uh with other jurisdictions. >> Do they offer a 6 and a2? >> They do not. It's it's straight percent. Yeah, it's straight percentage points. Five, six, seven, and eight will be the fourth option. >> And they don't offer anything between 20 and 25 year as the eligibility. It's 20 or 25. Um, so the the proposed
041pay plan is a defined step pay plan is what it would be called. Each job title is placed in its specific paygrade and there are job family titles that have progressive paygrades that give employees uh a career ladder uh to promote into. So in an example of someone comes in as an operator one, they get certain licenses, certifications or proficiency, they move to an operator two. After that they could move to an operator three. Each one of those is a promotion up the up the career ladder. It moves them to a higher pay grade. And then as they move across that pay grade uh each year with their performance uh they get those built-in increases. Um and jobs with similar similar levels of knowledge, skill and ability generally past placed in the same pay grade.
042And so this will be very difficult for people in the audience to see but it is in the in the budget if you go online and download the proposed budget. Um this just kind of shows this is the actual general pay scale. So for all positions listed there on the left and how it starts at the probationary step all the way through uh they're defined increases uh each step along the career path and then there is a separate pay scale for the executive leadership team. So all directors and above are in that pay scale. And then the final page there is the public safety pay scale uh that has all of the uh positions within the police and fire departments um illustrated there. So with that I do want to just talk about because you
043know we talked about a lot about what's included in the budget. There are some questions about well what's not in there? What did we have to cut? U obviously we can't do everything we want to do in one year. Um, we did fund through a lot of different creativity. We we funded over a million dollars in general fund uh CIP projects. Uh, but we had almost $3 million requested by the by the departments. And so, as you can see, uh, we we obviously can't do it all. uh they did help us to prioritize those and there's a partial list of some of the things that on the right there that that we just weren't able to uh to get into into this year's but the departments have all looked at that. They've all um none
044of them quit because this stuff wasn't included. So I assume they can live with it for for another year. Um no one laughed. Doesn't have to be that serious. Um but anyway, yeah, we we we want to do a lot of good things for the community, but obviously we understand there is a limitation to the resources that we have and and so we we make the best of what we have. There is a calendar here, but I did um we were having a conversation earlier and I think there's going to be a couple adjustments here to the action dates in September. Uh so um while while this was good until just a couple hours ago, um I'm I'm afraid we might make just because we want to make sure that we meet all the statutory
045timelines for posting of notices for the public hearing and adoption and all of that. So there might be some slight tweaks to uh the action items and we may have one special call council meeting just to make sure we get everything done in the in the prescribed timelines. So, with that said, 35 minutes. I was pretty close. Um, what questions do you all have? What items do you have? Obviously, I didn't go page by page through the book. I felt like that's just not really the best use of our time. I kind of wanted to hit the highlights and hit the big topics. And if you all have specific questions, um the staff is here to ask if there are any at their level. If there's anything that I need to answer, uh we are
046available whether it be tonight or in the days and weeks ahead. Um, so if you have any prepared in the time that you've had to review the budget, I we do have the budget and Lupe does have the PDF that he could if we needed to put it up on the screen if there was a specific page that you wanted to call attention to for those in the audience uh from the actual budget book, we can do that as well. You had you had talked briefly about contingency and I think that's something that we may want to kind of delve into just a little bit more just as far as what what kind of numbers or I guess industry standard you know how many months >> you know should we should we have you know
047available and what have we had in the past. >> Yeah. So >> kind of what is your idea for this budget? >> Yeah. So, so I I'll say that um we won't know the exact, you know, we we're waiting on um you know, with the close out of the fiscal year, we we will update. I anticipate that we are somewhere between Heaven, correct me or throw something if I'm way off, we're somewhere between 7 and $8 million in fund balance, unassigned fund balance, uh reserves, which if you look at this year, we're proposing an $18.5 million um budget. So that's 40%. You know, give or give or take. So maybe that's um somewhere between four and 5 months of operating capital. Um the auditors will almost all tell you that uh 25% is the bare
048minimum to to maintain your bond ratings. they they think if you get below 25% or 3 months of operating capital, you start looking to bond holders as you know a a negative turn in the economy could put you at risk for defaulting on obligate debt obligations. Um so obviously we want to stay clear of getting too close to that number. Um I think for this community with the relative risk that we have for large scale events, you know, 6 months is certainly um aspirable and and we will get there. I think over the course of the next few years, we will see budgets that involve depositing money into that to get us up to, you know, nine and a quarter on the 18 and a half. Nine and a quarter would be exactly six months
049of operating capital. I think we will get to that. My personal budget philosophy is I would like us to even be farther than that. I would like us to get to closer to 9 months or even 10 months so that we can cash fund some of our CIP projects and then pay ourselves back instead of paying bond holders interest out the door. I would rather borrow that money from the fund balance when we do a project and pay ourselves back. Kind of like we're talking about doing with vehicles. if we can I mean obviously when we build a large 15 or$20 million building or some huge investment in the wastewater treatment plant we can't just cash fund those there are times when cities reasonably issue debt but I think where there are items uh even
050big ticket things um that we need to do like I would have liked to have been in a position where we could have cash funded the repairs to the pool we weren't there so we issued some debt we did it and that's Okay. But my philosophy will be I would like us to get to a a a position where we've got 9 or 10 months of operating capital in the bank as a fund balance. We know that we're comfortable because of our if we have a disaster or something, we know that six or seven of those months, we we're comfortable that that'll get us through uh those obligations and then have, you know, a couple million dollars there that we can borrow from ourselves and pay ourselves back over time and and cash fund some
051of our CIP needs. Uh I think that puts us in a much better uh position and it will ultimately it will lead to an improved bond rating so that when we do issue debt we get best >> a better interest rate. >> Well that wouldn't be something new because in years past we were able to pay like pay cash for our a fire truck and you know there were other things that you were able to do that. So that's something definitely to aspire to. >> Yes sir. And also um our policy, our financial policy is about 90 days of reserves. And if you take a look at our general fund fund summary, I included a snippet on the bottom. Um our targeted reserve is 119 days, which is just a day shy of 120 days,
052which is the norm that you typically see for other municipalities. So I think we're doing very well. And that can be found on page 11. >> I just wanted that kind of outbody kind of could understand why we do that kind of on page 12 of the proposed budget book under utilities uh utilities reimbursement and utility payment in lie of down at the bottom. >> Yes sir. >> Got a pretty large increase for this proposed year. >> Yes sir. That's so that's the the product of moving all of the personnel costs which used to be in these budgets. We moved them completely out of those budgets into the general fund and now they are they are funding their proportionate cost of of that into the general fund and so the salaries will be paid out
053of the general fund instead of out of the utilities themselves. It really it the bottom line didn't change much. It's really an accounting philosophy change where we move the personnel over to the general fund so that each of these utilities, water, sewer, and gas are only paying their proportionate um portion of the employees salary. So, as one example, the director of public works was last year funded 100% in the water fund, but she doesn't work 100% of her time in the water fund. So, it made more sense for us to move that position to the general fund and take I don't remember the percentage of let's just say 25% of her salary out of water, 25% out of sewer, 25% out of gas, and 25% out of the general fund. It's probably not 25% each,
054but that was just well, I could do it in my head quickly that way. Um, as an example. And so, so really moving all of those positions and only making the utilities pay their part that they should be responsible for that approximately reflects the percentage of time that that employee works in that utility. Gives us a better accounting, better tracking of the of the costs. Would that be just about the same thing on the next page on page 13 up under development service uh on the following fees flat fee and the preliminary plan following fee >> uh on page 13. >> Yes. What where we at? >> Uh up under development services. >> Uhhuh. >> 4045. >> Yeah. 4045. >> Okay. So yeah. So what we one of the things that we are looking at
055and and we intend to to be coming to you all with is as we prepare for these developments right now uh the system that we have in place results we don't have an engineer inhouse. So when we get a development application or a permit application we outsource the review of those plans to an engineering firm and from day one as soon as we send it to them we have lost money on that. So we are looking at what should we be collecting as permit fees for these developers so that they are so that we're not losing money. And so this reflects that trying to at least break even on issuing permits and getting at least one round of engineering review done. There may be it may change even more as we get into you know
056two and three rounds of reviews. We may develop some other options, but we do intend to come to you all in the next few months with uh a schedule of fees uh amendment change to our development fees uh so that we make sure that we're at least breaking even and we're and we're really establishing those permit fees on what it costs us to issue the permit. >> Okay. I've just seen it quite a bit increase. Uh on the next page on page 14 uh and I know that here a couple months ago we changed the fees of the softball, baseball team, football team, soccer teams on the u use of the fields on a 6150 >> Mhm. >> 6160. Did all those youth team pay the fee? Yes. And so, uh, at the, uh, uh,
057on the same page, uh, parks and recreation 6105, uh, we're projecting to bring in $25,000 for the rental of the Navasota Center from 7,000. That's a pretty large jump, isn't Well, so I think what what you're seeing there is the budget for this year was 28,000, >> right? >> But we have not seen that much rental income this year. I don't know if there were some delays or some uh time that that facility was not available uh for rental. But the last two years, if you look at actual 23 24, we brought in 37,000,000 >> and then 28,000 was budgeted this year, but it looks like we're down. That's in the estimate column. So, we lowered what we expect for next year down to 25. Um, I don't know, Tiffany or Kristen, do y'all know
058offhand why the the revenue might be down or I >> I'm not sure. >> I'm going to guess a result in the pricing change and the all the talks that we had in 2023 that affected 2024. As far as changing those days, we're still >> there was a period of time though when you had lots of groups that were having to find alternate locations and I just you know but that was >> heaven heaven. Can you look at >> Can you look at what our yearto date is? >> I want to make sure that 7,000. I was going to say that may that may be a typo. There may be 27 below. >> Yeah, because >> because I've definitely noticed we we get those regular reports and then we're going to it has been booked.
059>> We're going to look into that. We'll get back with you. That may that very well may be that 7,000 may be a 17 or 27. I was going to say that hope >> so maybe not. >> Yeah, there could be a delay in the journal entry and also um this year we are trying to like put everything in the correct accounts. So like if you look you'll see that we have received revenue for some accounts but there's no budget. So I'm thinking previously that they just lumped it all within that 6105 in prior years. Um, and this year we're kind of just trying to break it out more with within each account. That one, that one, if if we could stay on that page that um just had a question about library donations. Um
060that would be anytime that any organization gives the library money to do something, >> right? Or sometimes people >> $5, you know, put the extra five towards donations. [Music] But you now we now have a nonprofit that's helping to fund something I think. And so that's I was just curious if that if that nonprofit if their money is going into another account. >> They have their own separate >> they're just Okay. So but they're collecting the money. They're not saying here take the money. They're just doing it on their own. I'll buy 27 books and donate the 27 books. >> Correct. Or I'll send them a [Applause] Okay. Feels like we should have the Jeopardy music Yeah. >> On page 23. >> Yes, sir. >> Uh, human resources. >> Yes, sir. >> $213,000 from 109
061last year. >> Yes, sir. So the the 109 is that they have a they had a separate a second position that was funded or that was a um approved in last year's budget but it was never it was never hired. Um and so we have added funding in for that position. Um we will only the the 109 shows it to be vacant through the rest of this uh fiscal year. Um that would that includes salary and benefits for that HR generalist position. And if you look there at the bottom of that same page, it shows that in the 23 24 and 2425 budgets, there was an edge generalist position, but apparently it's not been filled or they had one part of the time in 23, they left and it never got refilled. And so, um,
062right now Peggy is trying to do everything on her own. And I feel like that's one that we need to we need to really make sure that we get filled for her this year so that so that that department gets some assistance. >> I thought they moved that position to utility billing like it was just it just moved over. My understanding is that it was funded last year, Robert, but then that those funds were redirected to another position. >> Okay. Redirected by the council or by the city manager? >> By the city manager. >> Wasn't me. >> We remember. So Beggy will be getting help. >> Yes, sir. We hope so. That's the proposal. >> Okay. If we can back up page to page 22. >> Yes, sir. >> Administration. >> Yes, sir. >> Personnel
063service. >> Yes, sir. >> Big big jump. >> I want to point out that you hired me. There's a little bit do with it. >> Sorry. The big pay raise you had, huh? >> It also includes the um pay raise that we had for the city secretary this year. >> It was what? Uh we did pass a pay raise for the city secretary this year that had not been previously budgeted from last year. So it includes that as well. So it includes the pay increase for the city manager, the pay increase for the city secretary and >> it also includes um >> sorry it does also include internship and partner. >> Yeah, we had some funding in there. We had some funding in there also for internships that we're hoping to partner with&m to expand
064our use of of internships from from there. And um so yes, there are there are it is slightly more than that. It also does incorporate all of the the changes that we've talked about with the um with the pay plan, with the cola, with the TMRS. All of that is is already incorporated into there. >> Okay. Well, that makes sense cuz I know you and Susie both didn't get that big raise. >> No, no. Yes, sir. >> Yeah, >> there there are a few other things in there. >> It's just hard to illustrate internships that we don't know if we'll get down in that bottom where the personnel roster. Those are the full-time positions and we very well may have some interns that come in and do some of those. >> I know that uh
065you probably got it in here somewhere and I just hadn't found it yet. uh had uh asked uh after one of the sounds of summers to buy the drone for the police department. >> Yes, sir. So, what we discovered in our in our discussions with the leadership team is the city already owned a drone. So, we are reassigning that from Oh, we do. >> Yeah. We're going to make sure that the police department has access to that uh to use in addition to um it's it it's kind of shared between um development services, economic development, and and the police department. and and so we're going to we're going to make sure that everyone marketing can all have access to it and make sure that it's available. But yes, the city does did have one. I
066didn't know that when you asked me, but the city does have one. Under supplies, just in general, does supplies include computers that would also be in it's budget or does it take on the assumption of every expense for cost of software, cost of upgrades, cost of new equipment? Is that broken down at each department or is that solely just looking at his supplies at 43,000 um and everybody else's supplies? I'm wondering I don't know if that's enough money to cover the whole city under his department or does each department have their own? >> Yeah, I think I I think it's kind of a combined approach right now, but we did we just didn't have time this year. What we would like to do is divide those out in in the IT budget. Currently there are
067a lot of costs that we feel like would be more accurately tracked at the department level like for specific software for you know production of you know again th those kind of things those those hardware elements um even our all city cell phones regardless of what department they're in they all fall in it um and so we're going to try to break those out next year uh so that we get better tracking and we have an accountability for each department that's using cell phones or desk phones or computers. Um, and so today it's kind of a hodgepodge and there's just some departments have have budgeted for things and and it budgets for the big things like servers and those kind of things, but if it's a desktop replacement, that's probably in the department's budget. >>
068Okay. on page 27 and the personnel position roster. >> Yes, sir. >> Building official plan examiner. Is that a dual position or >> That's our current building official, right? >> Yes. and building. >> Okay. >> Building. I've got another question here. Financial services page 31 at the very top. Non departmental that 707 number. Yes, sir. So, the so the non-dep departmental um expenses, heaven, I I'll I'll take a stab at it and then you can kind of correct. Um so non-EP departmental are those citywide expenses that that aren't really borne by one department. That might be our insurance, our property and casualty insurance. It might be a part of our debt service that's being paid by the sales tax because our sales a portion of our sales tax buys down our uh property tax and
069so it goes towards the debt uh service side of our tax rate and so you see some of those kind of expenses uh in there and I know I've left some out. Heaven helped me with >> Heaven helped me. >> I did. He's correct. So, you may recall council that that last year you had a city hall budget and there was a department for city hall and a lot of those were lumped in there. But it became to be like it, and I'm not throwing anyone under the bus, but that seemed like if departments didn't have extra money for their supplies, well, we'll just buy it out of the city hall budget. and you know and kind of became a little place and we just felt like it was better accounting for us to just
070do away with that and track those expenses more accurately uh in a non-EP departmental those those expenses that are truly and not have an extra bucket of supplies and those kind of uh dollars just sitting there for whoever wants to dip their hand in the cookie jar. On the next page, page 32, uh, can you just identify the both of these positions here? The senior financial analyst and the financial analyst. >> Yes, sir. >> Difference. >> So, I'll let our senior financial analyst handles procurement, accounts payable, um, anything in that, um, anything going out. And then our financial analyst handles payroll, accounts receivable, um, anything coming in. So it would not be uncommon. I would just offer from my experience. It wouldn't be uncommon if particularly in an organization this size um this is very
071reasonable. I think in positions in finance you might sometimes see different titles. You might see an an accounts payable uh manager, a payroll manager. um that we're just using different titles so that we can better optimize their their use and and use them for multiple things uh rather than specialties. But it it wouldn't be uncommon to see someone in purchasing a buyer uh a purchasing manager uh an AP accounts payable, accounts receivable, different functions. And so they're just kind of using the financial anal analyst positions to to group a few of those responsibilities together under one person. and and divvying up the tasks with >> and down at the bottom where uh let's see receptionist. Uh is that for the whole city though? Right. >> The receptionist is the downtown the city hall receptionist. And
072there is you you'll see there there is a part-time position there that's not filled currently that we will be trying to fill so that when the receptionist is out, we don't have to take one of the utility billing clerks or someone from another department, put them up there. We could we could call in the part-time employee and and let them fill that that gap. So would it be wise to say that we had some positions that was budget last year that was not peeled last year? There are a few. Yeah, there there's there's a few even when we were going through the budget this year. There six or eight I would I would say of current um positions that are that are funded in this year's budget that are currently vacant. Um and and some
073of those have been, you know, getting filled or some of them are currently being uh advertised and some uh we really decided, well, we might as well just wait until we get a good handle on the on the budget. And so, you know, but are they needed? It's just I I think so. I I I think that the staff positions that we have are a good a good spot for where we are right now. Um we didn't add any obviously. We we had that conversation um prior. Uh but before we start cutting, I'd like to to to really get that opportunity to take a good evaluation of where are we and if we need to make reassignments or shift things around. Um kind of like we've done in in public works. They did a great
074job of coming in, sitting down, going through the positions they had, kind of organizing them under those superintendents that we saw on the chart a few minutes ago. um and really kind of optimizing uh their their organizational structure with the positions that they have. Uh and then we can evaluate okay do we need more positions or are we heavy in a certain area. Um I think that's a good exercise and and I think the departments are ready to to embark on that. The reason I asked the question is you know we we're saying that we're we're not going to hire any new employees and I just want to make sure that the general public knows that. Okay. Uh it was budget last year, but we didn't really hire. We may be hiring this year or
075something. And so I I think the only position that I'm aware of that was budgeted last year from the get-go and was never filled was the HR generalist. I think all of the other ones have at least been filled for part of the year, but maybe they've they're vacant now, or maybe they were filled when the year started, but that someone left or there's been some turnover. I think we have had some positions like that, but I don't know of any, at least not that's been brought to my attention other than that HR generalist that was clearly included in last year's budget um and has never been filled in the current fiscal year. That's the only one that I'm aware of. And I from just the little time that I've been here, I would suggest
076that position is needed. I I think HR does need another another person. But as you get more and more settled in, you may determine that, >> you know, other things. >> Absolutely. >> May or may not be >> That's correct. >> You know, from seeing the workflow and the the way the department working together and working. >> Yes, sir. Correct. So out of the uh I think we we have 139 employees 132 rings a bell I'm not looking at that okay the public work and then the police department would be the two biggest uh departments. Uh yes sir I would think. Um yeah there for sure those two are the two largest 326. >> Do you want combined part-time and full-time or just full-time? >> Uh parttime and full time. Is it 139? >> I
077have 136 on the spreadsheet here but that may not >> I think that's fand part. That's fine part time financial report 67 >> Friday's financial report on the on your message >> sure 132 okay >> I I think there's number of paychecks >> well we may have some seasonal workers on there for now because the pool was just go >> people were on vacation >> um I can get you a a better answer, but it looks like just a quick glance. It looks like 125 full-time and nine part-time on my spreadsheet that I'm looking at here. Is that >> I would think there's more um part-time because how many part-time firefighters do we have? >> That's what I'm counting down. There's eight part-time firefighter positions >> and we have three part-time uh Navas Center. >>
078I probably skipped over them. I was going I was trying to run through 130 lines real quick. Yes, I see them. There are Yes, three part-time. So that would be 11 part-time. So from 136 total minus 11 part-time would be 125 full-time. >> Is is that kind of average for a town size? >> Yes, sir. I would say that the um I don't have the uh the survey, but HGAC does a uh an annual sal Houston Galveston area council that we're in a different cog up here, I understand, but they do a big um regional salary survey each year. And I've been tracking the last several years of the average you can go in, they show the population for the cities and then the number of full-time employees that they have. And so I just
079kind of came up with my own little matrix of tracking number of employees per thousand residents. Um, and so the average is usually somewhere between um, and it's it's going to be a wide range, but you'll see somewhere between 12 and 20 um, people per thousand residents. If we have, let's just say, 10,000 residents and we have 120,000 employees, that would be 12 employees per thousand residents. I know we don't have exactly 10,000, but we don't have exactly 120, so I'm just trying to do something. I can do the math in my head. Um, so I I think we're within the average of what I've seen on um surveys, particularly because we also offer gas that not a lot of cities offer and we have employees that work on the gas side. So I think
080a 12 to 15 employees per thousand residents is a reasonable number. Doesn't mean we can't make ourselves more efficient and can't get towards the lower end of that range, but I think that's kind of where we are today. and and we'll continue to look at that and see if we can find even more efficiencies and get lower or do we need to add some positions because there's there's gaps that we're not able to fill with what we have. >> Some of the vol some of the towns have volunteer fire departments. >> That's true. Yeah. Some some cities might be volunteer fire, you know, it's just different things. Some we have most of our garbage collection is contracted where some cities would have that as in-house employees. So there there's always that's why the range is
081so wide because cities offer different services under you know as city employees as opposed to contract labor. >> What about city engineer? I know that that's been done different ways with us over the years mainly because of just availability of >> Yeah, I think able to do it. I I think if you're happy with the way it is and and getting good service out of contractors, um there's nothing wrong with keeping it that way. And if you at some point decide you want to hire that, certainly a city this size could certainly hire an engineer and it it wouldn't be no one would say why do they have they're too small for a city engineer. It's just it but you know that that's really just a matter of preference of are you getting good service
082from the from the engineers that are that are working for you right now or do you do you want to inhouse >> I would just ask Lupe I mean is it just for our knowledge I mean >> yeah I mean the pretty smoothly >> yeah the various companies we use they provide good service turnaround pretty good >> yes sir I know it's definitely gotten better now that the our building official and they've got those positions filled and that's helped a lot, I'm sure. >> Yes, sir. Yeah, having the in-house building official has helped on the commercial and residential uh construction plan review side. that has turnaround is really quick and obviously you get more customer service having that in-house. >> Bless you. >> My last question. Yes sir. page 43. Uh on the uh library,
083uh the uh requested 20 256 15 dropped pretty pretty low, didn't it? From the last two previous years under the service and charges. >> Yes. So I I believe what that is is that's um in services is where you would find the maintenance obligations and most of the maintenance for most departments was moved bless you to the new maintenance services department. So that funding just moved out of the department budgets over into maintenance services a a new budget. >> Okay. definitely put it together better than I won't I shouldn't well I just use the word better than the last couple years I mean we we'll have to get someone to order us food tonight we could have worked food if that would have made it better I I appreciate the opportunity mayor and counsel I
084I I think uh it's been a lot of ef a lot of effort quick three months for me getting into knowing as much about the budget as I do. Um, the staff really helped. Uh, I couldn't have done it without them and and I'd like to express a a personal thanks to to the staff for all of their efforts in putting this together and and a personal thanks to you all for the opportunity to to sit up here with you and to present this to you tonight and look forward to seeing the progress that we continue to make. I'm just glad after all that's gone on and all that you have done that you're you're still willing to sit up here and around. Yes, sir. I'm not going anywhere. We're about to buy a house.
085I'm not going anywhere. >> Thanks, council. Thank Thank you. Yes, sir. >> I need to adjourn. Oh, okay. We're