Loading...
HomeMy WebLinkAbout04/23/1990 City Council003598 MINUTES OF TH~ CITY COUNCIL ~ETING HELD ON APRIL 23, 1989 The Regular Session of t, he City Council of the City of The Colony, Texas was called to order at ?:00 p,m. on the 23rd day of April, 1990 at City Hall with the following Council roll call: Don Amick, Mayor Present Bill Manning, Councilman Present Steve Withers, Councilman Present Mike Alianell, Councilman Present Steve Glazener,Mayor Pro-rem Present Dick Weaver, Councilman Present $oel Marks, Councilman Present and with seven present, a quorum was established and the following items were addressed: 1. PLEDGE OF ALLEGIANCE Mayor Amick led the Council and the audience in the Pledge of Allegiance to the flag of the United States of America. 2. MAYORAL PROCLAMATION DECLARING TENTH ANNIVERSARY CELEBRATION FOR COLONY PARK BAPTIST CHURCH Mayor Amick read the proclamation as follows: I~IEREAS, a small congregation of just thirteen members met for t. he first time on April 27, 1980; and ~/HEREAS, that small group, in the spirit for which the City of The Colony has become known, did establish Colony Park Baptist Church; and ~IEREAS, the congregation that met on that first Sunday, has grown in spirit and size, to a congregation of over 600; and ~REAS, from that small beginning three missions have been founded in our community; NOW, THEREFORE, I, DON AMICK, Mayor of the City of The Colony, do hereby proclaim the Tenth Anniversary Celebration of Colony Park Baptist Church, to be held April 27, 28 and 29, 1990, as yet another visible sign of continuity in our community, for which City Fathers and all interested citizens of The Colony have strived. Rev. David Bird was present representing Colony Park Baptist Church and accepted the proclamation, thanking the Council for ---. their time and attention and stated that the church would continue to work with the City toward stability in the corrrnunity. 003593 3. CONSIDERATION OF ACCEPTANCE OF LETTER OF RESIGNATION FROM MEMBER OF PLANNING AND ZONING Mayor Amick stated that a letter of resignation had been received from Agnes Foster. Councilman Alianell moved to accept the letter and Councilman Glazener seconded the motion, which carried with a unanimous roll call vote. Councilman Weaver stated that Ms. Foster had done an outstanding job during her tenure on the Planning and Zoning Commission and should be recognized in a special way. 4. CONSIDERATION OF A RESOLUTION SEEKING DESIGNATION AS THE MANAGEMENT AGENCY FOR WASTEWATER COLLECTION AND TREATMENT WITHIN THE CITY LIMITS OF THE CITY OF THE COLONY AND ITS EXTRA TERRITORIAL JURISDICTION Mayor Amick read the caption of the resolution as follows: A RESOLUTION OF THE CITY OF THE COLONY, TEXAS SEEKING DESIGNATION AS THE MANAGEMENT AGENCY FOR WASTEWATER COLLECTION AND TREATMENT WITHIN THE CITY LIMITS OF THE CITY OF THE COLONY AND ITS EXTRA TERRITORIAL JURISDICTION Mayor Amick said that the M.U.D. had rights to water and wastewater service outside the actual city limits of The Colony. Mr. Hall agreed and stated that when the City and M.U.D. merged, those rights were given up and that this document allows that management by the City. Councilman Alianell moved to approve the resolution and Councilman Manning seconded the motion which carried with a unanimous roll call vote. 5. CONSIDERATION OF A RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF AN EQUIPMENT LEASE/PURCHASE AGREEMENT BETWEEN THE CITY OF THE COLONY AND MARYLAND NATIONALEASE CORPORATION Mayor Amick read the resolution as follows: A RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF AN EQUIPMENT LEASE/PURCHASE AGREEMENT AND RELATED INSTRUMENTS AND DETERMINING OTHER MATTERS IN CONNECTION THEREWITH Councilman Alianell asked if this was authorizing the same contract as presented in an earlier meeting and Mr. Hall said it is the same, but that this resolution is required by the company. Councilman Manning moved to approve the resolution and Councilman Glazener seconded the motion which carried with a unanimous roll call vote. 6. REVIEW AND DISCUSSION OF PROPOSED WATER AND SEWER RATES Mr. Ken Wood, member of the Water and Sewer Rate Study Committee gave a presentation, summarizing the meetings and final recommendation of the committee (See Attachment "A"). After the presentation, Mr. Wood gave a personal opinion, that he believes this whole issue relates to next year's budget and that if the Council acts to raise the rates now, that the difference between what is currently budgeted and the increased revenue realized by the rate increase should be held over until next year, since this year's budget is balanced. Mayor Amick agreed with the last statement, as did Councilmen Weaver and Manning. Mayor Amick asked Mr. Wood to do a follow-up memo to the Council stating that recommendation. Councilman Withers asked if the $600,000 depreciation was in the 89.90 budget and if it is a legitimate expense; Mr. Wood said it shows on the balance sheet but not in the actual budget. Councilman Weaver said it is not, however Mr. England, Finance Director explained that it does have to be shown as an expenditure per accepted accounting principles. Councilman Weaver made the following statement: A 5 year financial plan should be adopted, not a year by year plan as was done this year and the year before. It looks as though we just took $785,000.00 and balanced the budget, but where will we get the $785,000.00 the following year. Mr. Weaver said he did not see any alternative to this increase at this time. The $600,000.00 has been discussed before and if this Council puts it in a Special Account, the Council next year can use the whole $600,000.00 for something else, other than depreciation, so I don't feel this debt can bee paid up and kept that way. Mr. Weaver went on to say the City refinanced $200,000.00, --, and that this year budgeted payments of the bonds in the City for $200,000.00 is more than we put in the budget, and by reducing through the re-financing there should be $2000,000. in the budget this year to carry over into next year. The budget next year will show a $200,000.00 deduction for the financing of the bonds for the City. There's $400,000.00 you're going to have next year then if we put through this increase in rates, we should get around $300,000.00 additional revenue for June, July, August and September, since those are the highest water usage months and with that increase we should get more than one half of the total for a year. We will get $550,000.00 according to what is planned on this particular change (increase) in your book (packet) so that about a total of approximately 1 million dollars in assets will be coming in next year. However, Councilman Weaver went on, you will not have the $785,000.00, you won't have the full tax valuation as expected. According to Joe Rogers there will be about a $150,000.00 shortfall and I'm sure you will want some police cars at a cost of about $60,000.00, you will need to re- paint the water tower on N. Colony Blvd., at a cost of about $80,000.00 and the sludge being kept in a holding tank will have to be moved at a cost of about $80,000.00. There is a total of about 1 million, 5 thousand dollars in debts for next year and Mr. Weaver said he saw no way of handling those without this -- proposed water rate increase. Mr. Weaver asked Mr. Hall if he had told the Department Heads to come in with a lower budget this year than last year and 00860i then said he highly recommends the Council mandate to Mr. Hall, as City Manager that the budget be reduced by 2-5%. Mr. Weaver then stated that he hoped all realized that we have $3,114,285 bonded indebtedness that must be paid. Ken Wood said that these problems may be a result of rapid growth, we are a young city and have lots of services, going on to say the Council needs to "pull in" and that they have a tough job next year. Mayor Amick said he has always advocated no tax increase and that the citizens always want more, noting that we can;t have more without more tax revenues. The Mayor said we have reached the point where increases in services will have to be looked at very carefully. Mayor Amick commended the committee, stating they had done a good job and commended Ken Wood for the report. Councilman Marks said he thought we said no police cars for two years. Mayor Amick said no and Bill Hall agreed that was just last year and that it would be looked at again this year. Councilman Marks asked if the appraised value goes up, could the water rates then be lowered. Mayor Amick said in his opinion, if the tax remains flat, the rates should be reviewed to be raised, noting the city cannot grow without increases. Mr. Wood said that is why the committee recommends reviewing the rates yearly. 7. CONSIDERATION OF AN ORDINANCE AMENDING THE CODE OF ORDINANCE, AMENDING CHAPTER 12, BY AMENDING THE WATER AND SEWER CODES RELATING TO RATES Mayor Amick read the caption of the ordinance as follows: AN ORDINANCE OF THE CITY OF THE COLONY, TEXAS AMENDING THE CODE OF ORDINANCES AMENDING CHAPTER 12, BY AMENDING WATER AND SEWER CODES AS ADOPTED BY ORDINANCE NO. 449, PASSED AND APPROVED BY THE CITY COUNCIL THE 29TH DAY OF SEPTEMBER, 1986; AMENDING SECTION 6 OF THE WATER AND SEWER CODES, RELATING TO RATES; PROVIDING A SEVERABILITY CLAUSE; PROVIDING A PENALTY; DECLARING AN EMERGENCY; AND PROVIDING AN EFFECTIVE DATE. Councilman Manning moved to approve the ordinance and Councilman Weaver seconded the motion. Councilman Manning asked why the winter months of January, February and March are not outlined in the ordinance. Mr. Hall explained that those months may fluctuate and will need to be addressed yearly. After a brief discussion, regarding the months, Councilman Manning suggested amending the ordinance by adding the following sentence to Section 6.2 (a): "These 3 months will reflect the lowest months of usage." Councilman Withers moved to amend the ordinance as stated and Councilman Manning seconded the motion, which carried with the following vote: Manning - Aye, Withers - Aye, Alianell - Aye, Glazener - No, Weaver - Abstain, Marks - No, Amick - Aye. 003602 The vote was then taken on the original motion to approve the ordinance, which was as follows: Manning - Aye, Withers - Aye, Alianell - Aye, Glazener - No, Weaver - Abstain, Marks - No, Amick - Aye. The Mayor declared the motion to have carried. 8. CITY MANAGER REPORT Mr. Hall explained that the April 21, Clean-Up had been cancelled due to the heavy rains and that it will be held on April 28, 1990. Mr. Hall did say that those persons who have items stacked by their driveway, etc. will be given special consideration by the Inspections Dept. until the Clean Up takes place. Councilman Glazener suggested that next time a rain date be advertised . Councilman Marks asked about the drainage problem from old 423 to new 423. Mr. Hall said that is to be done, however weather has prevented the contractor from working. With no further business to address, Councilman Alianell moved to adourn and Councilman Withers seconded the motion which carried with all members voting Aye. Mayor Amick adjourned the meeting at 7:54 p.m. APPROVED: Don"'K'~ick,' Mayo"f- ~ t- ATTEST: Patti A. Hicks, City Secretary [SEALI RATE COMMITTEE FINAL REPORT 1.0 Introduction As a result of the public concern about the Langford Rate Study' presented to the City Council, the Mayor appointed this coamittee to examine the issue in detail. Members of the committee are Mayor Don Amick, Councilman Dick Weaver and Bill. Manning, City Manager Bill Hall and Finance Director James England, and citizens Carol Chabinak-Ball and Ken Wood. The report consists of the following sections: Section 1 - Introduction Section 2 - Overview of meetings held Section 3 - Financial Findings Section 4 - Water and Wastewater Rate Recommendations Section 5 - Other Recommendations 2.0 Overview of Meetings Held The committee met several times. Topics discussed included: * A detailed review of the city budget; * A review of existing revenue sources and how they relate to the operational expenses of the city; * }An explanation of how the city budget is related .to the financial records of the city, i.e., the "balance sheet"; * A history of MUD before and after consolidation with.the City; * The impact of the proposed loan for Eastvale improvementsl * The financial impact of having a Federal Agency, for example the EPA, force upon the City a ,solution to the Eastvale problems, rather than allowing the City to devise the most economical plan still deemed practical. * The requirements imposed on the Utility Fund, which is a debt service fund, versus the General Fund. * Several studies of water and wastewater rates in surrounding cities. 3.0 Financial Findings The co~n'~ittee learned that: 1. Water and Wastewater rates have not changed since 1984. 1 ate '~ommittee Final Report :"~.: 2. The ci ty has maintained a '~ 'no tax increase" approach for 3 years. The budget , in respons:e to planned growth and citizen demand for services, has grown, and this growth has been covered by using sources of revenue that ~will no longer be' available in the 1990-1991 Fiscal year and beyo'nd. 3. Since MUD was consolidated w~th ~he city, the city could have been compensating for the annu~'l depreciation cost of ~UD capital facilities, through budget reductions or tax increases. While there is no dollar expenditure for depreciation that affects the budget, depreciation does affect the city's balance sheet. In essence, $600,000 average deficit per year due to depreciation is a failure t.o save money for the day when replacements will be need. This failure to save for future expected expenses affects how external financial institutions judge the city, which in turn can affect the city's bond rating and/or interest rate on loans. This concern has also been raised by the city's auditors. 4. The appraisal values are expected to drop about 4% ($150,000), further decreasing city revenue. The actual appraisal values will be ava~ lable after 4/15/90. 5. One requirement of the loan for the Eastvale improvements is that any assessment cannot be imposed on only the affected residents. While none of these thin§s, individually or in combination, / onstitute a "crisis", they do suggest that changes are needed. z~Recommendat ion A: ~// The. committee recommends that future councils carefully · examine the long term impact of budgetary decisions. Recommendation B: /o The committee recommends that the Council the cost recover f the Eastvale improvements loan via an assessment on every /~/~ water customer of between $1.06 and $1.10 per month. The rates ///- presented below do NOT include this assessment , as it is an .unrelated aspect of the rate study. 4.0 Water and Wastewater Rate Reco,~,uendations Since it is not only unreasonable, but impossible, for ~"ate increases, and rate increases alone, to make up the differeflce between where the city's balance sheet stands today, and where it should be standing in the future, the committee specifically limited the maximum average rate increase considered to 25%. [ate Committee Final Report Recommendation C: A water rate of no greater than $10 minimum, $2.10 per 1000 gallon over 2000 gallons; and a wastewater ~ate no greater than $9 minimum, $2.00 per 1000 gallon over 2000 gallons. In the case that no winter average exists, the wastewater bill will be $15 until a winter average is set. The 3 months for setting the winter average are December, January and March. The committee estimates the average increase to be 24% (in contrast with the Langford study, which proposed rate increases that ranged from 39% to 43%). The net increase in revenue is estimated to be $544,520. Note that, for some users, the wastewater bill will decrease, for some it will be unchanged, and for others it will increase moderately. It is the belief of the conmuittee that this structure will help those on fixed incomes. Note also, in response to public displeasure with proposed wastewater rates based on monthly consumption, the wastewater rates are based on an average of three winter months consumption. The committee favored a flat monthly fee for all users independent of consumption, However, a consumption based rate was forced upon the city by State requirements for the revolving fund loan for the Eastvale improvements, Attached is a rate table for various levels of consumption, WARNING! WARNING! You cannot simply look up some number of gallons, for example 10,000 gallons, and add the dollars from the two charts, The numbers cannot be added since the numbers in the WATER bill chart are actual consumption, while the numbers in the WASTEWATER chart are winter average consumption, For example, if a resident's winter average is 4000 gallons and the current water usage is 14,000 gallons, the combined water and wastewater bill will be $48.20. 5.0 Other Reco~uendations While the primary purpose of this committee was to study the issue of water and wastewater rates, the co~n~ittee, as summarized above, had to understand the current financial condition of the city. The water and wastewater rates recommended by this committee, by choice, do NOT provide sufficient revenue to overcome these problems. Recommendation D: This committee urges the Council to examine the big picture, looking not only at these proposed rates, but also look at all B Rate Committee Final Report the other sources of revenue. Recommendation E: The committee recommends the Council examine the budget carefully for areas where zero growth or budget cuts are required. To deal with the coming budget, cuts of 2% to 5% may be required. It is clear that tough decisions lie ahead, but the committee feels it's better to deal with the problems now than to postpone them to later, incurring greater costs. Recommendation F: The committee recommends ttiat the Council form a similar committee on an annual basis, to review the expenditures, revenues, and rates, and to ensure that the City doesn't allow a problem to grow to "crisis" proportions. Recommendation G: The committee recommends that each year, the finance director review with the Council the long term goals for the city. For example, it appears to be sound fiscal policy for a utility department, as its debts decline, to wean itself from excessive dependence on ad valorem taxes. However, this weaning process is planned in terms of decades rather than years. Therefore, it's easy for a body whose membership changes often, such as a city council, to lose track of the long term issues. Recommendation H: The committee also reviewed, in depth, the issue of the transfer of funds from the Utility Fund to the General Fund. This practice has been used since the consolidation of the City and MUD, and was never an issue before. It is also common practice in most cities. The issue was discussed at great length, with no real consensus by the committee. The committee recommends that the Council, in consultation with staff, review and determine to their satisfaction, the pros and cons of this practice. Respectfully Submitted, members of the Water Rate Study Commitee. 4 of The Colony Utility Department , '* Honbhly Bill Comparison WATER $10.00 Minimum and $2.10/1000 Gallons of Water Used Over 2000 \ Gallons of Minimum Charge For Ney Current Difference Water Used Water Water Over Water Water In Water Sill 2000 Gals Sill Sill Bill 2000 $10.00 $0.00 $10.00 $10.00 $0.00 3000 $10.00 $2.10 $12.10 $11.50 $0.60 4000 $10.00 $4.20 $14.20 $13.00 $1.20 5000 $10.00 $6.30 $16.30 $14.50 $1.80 6000 $.10.00 $8.40 $18.40 $1G.O0 92.40 7000 $10.00 $10.50 $20.50 $17.50 $3.00 8000 $10.00 $12.60 $22.60 $19.00 $3.60 ~ $10.00 $14.70 ~ $20.50 $4.20 1O000 $10.00 $16.80 $26.80 $22.00 $4.80 11000 $10.00 $18.90 $28.90 $23.50 $5.40 12000 $10.00 $21.00 $31.00 $25.00 $6.00 13000 $10.00 $23.10 $33.10 $26.50 $6.60' 14000 $10.00 $25.20 $35.20 $28.00 $7.20 15000 $10.00 $27.30 $37.30 $29.50 $7.80 WASTEWATER $9.00 Minimum and $2.00/1000 Gallons of Water Used Over 2000 Gallons Of Hlnlmua Charge For Hey Current Difference Difference In Water Used Sever Gallons Over Sever Sever In Sever Combined Water Bill 2000 Bill Sill Bill And Sever Sill 2000 $9.00 $0.00 $9.00 $11.50 ($2.50) ($2.50) 3000 $9.00 $2.00 $11.00 $11.50 ($0.50) $0.10 4000 $9.00 $4.00 $13.00 $11.50 $1.50 $2.70 5000 $9.00 $6.00 $15.00 $11.50 $3.50 $5.30 6000 $9.00 $8.00 $17.00 $11.50 $5.50 $7.90 7000 $9.00 $10.00 $19.00 $11.50 $7.50 $10.50 8000 $9.00 $12.00 $21.00 $11.50 $9.50 $13.10 9000 $9.00 $14.00 $23.00 $11.50 $11.50 $15.70 10000 $9.00 $16.00 $25.00 $11.50 $13.50 $18.30 11000 $9.00 $18.00 $27.00 $11.50 $15.50 $20.90 12000 $9.00 $20.00 $29.00 $11.50 $17.50 $23.50 .. 13000 $9.00 $22.00 $31.00 $11.50 $19.50 $26.10 14000 $9.00 $24.00 $33.00 $11.50 $21.50 $28.70 15000 $9.00 $26.00 $35.00 $11.50 $23.50 $31.30