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HomeMy WebLinkAboutMin - City Council - 1989 - 02/08 - WorkshopALLEN CITY COUNCIL CALLED - SPECIAL WORKSHOP SESSION FEBRUARY 8, 1989 Present: Joe Farmer Mayor Council Members: Rex Womack Jerry Wilson, Mayor Pro Tem Bobby Glass Jim Wolfe Jim Pendleton Gary Edstrom City Staff• Jon McCarty City Manager Marty Hendrix, City Secretary Charlotte Smith, Finance Director Tom Glab Director of Public Works With a quorum of the Council Members present, the workshop session of the Allen City Council was called to order by Mayor Farmer at 7 25 p.m. on Thursday February 8 1989 in the lunch room of the Allen Municipal Annex, One Butler Circle, Allen, Texas. Review Preliminary Financial Statement (Agenda Item II) Finance Director Charlotte Smith reviewed with the Council the financial materials contained in a booklet that had been prepared for the Council containing information on the city's combined balance sheet, statement of revenues expenses and changes in fund equity - proprietary fund type and nonexpendable trust fund, and combined statement of changes in financial position - proprietary fund type and nonexpendable trust fund. Mrs Smith pointed out to the Council the figures reflecting total retained earnings and fund balance, the net income reflecting a loss, and the net decrease in working capital. Mrs Smith also explained to the Council that the city's audit firm had recalculated the depreciation factor from the retained earnings figure and applied it to the contributed capital. She pointed out that the net loss reflected the depreciation figure. A ALLEN CITY COUNCIL CALLED - SPECIAL WORKSHOP SESSION FEBRUARY 8, 1989 Page 2 Review Water and Sewer Rate Packet (Agenda Item III) Mrs. Smith then reviewed the information in the booklet regarding the city's water and sewer function, which were documents showing payments to the North Texas Municipal Water District, comparison of water and sewer revenues to payments to water district, ratio of water and sewer revenues to payments to North Texas Municipal Water District, comparative area rate study of water rates and sewer rates, comparison of current water and sewer rates to the proposed new rates, comparison of water and sewer billing amounts at various consumptions, estimated statement of revenues, expenses and changes in retained earnings year ended September 30, 1989, summary of changes in working capital, and changes made to the water and sewer rate ordinance in May 1988 During review of the above documentation, the Council discussed with city staff the amount of infiltration in the city's sewer system and if the amount was critical, and the average water consumption by customers. The Council discussed when the last rate increase was made and the amount of the increase, which was in May of 1988 and the amount was 14.92%. The Council also discussed previous water rates before May of 1988 There was further discussion by the Council on the loss this year in the water and sewer fund and how the proposed rate increase affect the fund finances Finance Director Charlotte Smith explained to the Council again the recalculation of the depreciation factor from the retained earnings figure and then applying it to the contributed capital. There was also discussion on the amount of growth that was used to calculate the figures as well as the amount determined for water loss. The Council also discussed the possibility of a rate increase by the North Texas Municipal Water District. City Manager Jon McCarty spoke before the Council on the amount of increase in the costs for sewer treatment from the North Texas Municipal Water District due to operation and construction at the Wilson Creek Plant. The Council discussed how the Water District sets their rates by year and how the growth factor can relate to the water loss factor Review Rate Implementation Schedule (Agenda Item IV) Finance Director Charlotte Smith reviewed again with the Council the rate increases necessary in the city in order to bring the water and sewer fund in line. She advised that those increases were 14.19% if adopted by February 15.35% if adopted by March, and 16.84% if adopted by April. There was considerable review and discussion on the information provided on the water and sewer charges in area cities and how Allen compares in those statistics. The Council discussed why the city doesn't place more emphasis on the sewer charges and why those charges are not considered separately ALLEN CITY COUNCIL CALLED - SPECIAL WORKSHOP SESSION FEBRUARY 8, 1989 Page 3 Review Rate Implementation Schedule (cont'd) (Agenda Item IV) The Council reviewed the number of days considered in working capital and the times coverage factor The Council reviewed with the city staff if and when the city can sell additional water revenue bonds. There was discussion on the need to look again at inverted water and sewer rates There was considerable discussion on what can be done to reduce operational costs in the water and sewer personnel costs and capital equipment purchases costs. The Council also reviewed and discussed contractual services, the solid waste collection service, and asked the city staff to provide a clarification of other operating expenses. There was further discussion on the purchase of water rate paid by Allen as a user city to the North Texas Municipal Water District in comparison to what member cities pay In further deliberation, the Council reviewed the water loss and personnel costs to see if the city can reduce the amount of the increase to around 14%. Finance Director Charlotte Smith distributed to the Council statistics showing the current water rates in other local cities as well as the combined water and sewer rates and reviewed that information with the Council. The Council discussed what rate should be recommended for approval, how this information should be communicated to the community and when the rate was to become effective. There was further discussion with city staff to see if a public hearing had to be held on this issue, what type of presentation was to be made on this issue and how difficult it is to explain all of the facts that result in the need for this increase. There was considerable discussion by the Council on the communication process to the citizens and how that should be handled, whether it be by cable television, a letter to every water customer articles in the newspaper a public hearing, town hall meeting, etc. In further discussion between the Council and the city staff it was the Council's recommendation that the city staff take another look at reducing the personnel costs and capital equipment costs in the water and sewer department, looking at the growth factor and the water loss factor in order to see if a lower rate of increase perhaps around 14% can be reached. It was also concluded by the Council that a presentation of the water and sewer rate increase would be presented at the regular City Council meeting to be held on February 16th and that a communication plan would be recommended at that I ALLEN CITY COUNCIL CALLED - SPECIAL WORKSHOP SESSION FEBRUARY 8, 1989 Page q Review Rate Implementation Schedule (cont'd) (Agenda Item IV) time, and that city staff would bring back any additional information that they had after reviewing again the factors referenced in previous discussions Items of Interest (Agenda Item V) There were no items of interest to discuss at this time. Adiourn (Agenda Item VI) With no further discussion, Mayor Farmer adjourned the called - special workshop session of the Allen City Council at 10:10 p.m. These minutes approved on the 2nd day of March, 1989 APPROVED• Jbe Farmer MAYOR ATTEST - N\" ,1cL�� Marty Hendrix, qMC, CITY SECRETARY