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Minutes TC 08/30/2010 - Special SessionMINUTES FROM BUDGET WORKSHOP/SPECIAL SESSION TOWN COUNCIL MEETING FOR THE TOWN OF TROPHY CLUB LOCATION: 100 MUNICIPAL DRIVE, TROPHY CLUB, TEXAS Monday, August 30, 2010 6:00 P.M. Svore Municipal Building Boardroom STATE OF TEXAS § COUNTY OF DENTON § The Town Council of the Town of Trophy Club, Texas, met in a Budget Workshop/Regular Session on Monday, August 30,2010. The meeting was held within the boundaries of the Town and was open to the public. TOWN COUNCIL MEMBERS PRESENT: Connie White Mayor Bill Rose Mayor Pro Tem Glenn Strother Council Member Larry Hoover Council Member Margi Cantrell Council Member TOWN COUNCIL MEMBERS ABSENT: JD Stotts Council Member STAFF AND GUEST(S) PRESENT: Stephen Seidel Acting Town Manager Lisa Hennek Town Secretary Patricia Adams Town Attorney Kathy DuBose Finance Director Scott Kniffen Police Chief Danny Thomas Fire Chief Adam Adams Parks Director Carolyn Huggins Community Development Director Mike Pastor Information Systems Director Ed Helton Director of Street Services Mayor White announced the date August 30, 2010 call to order and announce a quorum at 6:04 p.m. Mayor White announced the absence of Council member Stotts . WORK SESSION 1. 2010-442-T Town Council Budget Discussion; discussion ofthe same. 1. Compensation & Benefits (presentation attached) 2. Capital Planning 3. Survey on Legal Services (presentation attached) Acting Town Manager Seidel stated that the last meeting focused on Parks & Recreation and Council will focus on Compensation, Legal Services and Capital Planning at tonight's meeting. Finance Director DuBose first refreshed the Council on the Property Tax Rate and the two components that comprise the Property Tax Rate, Operations and Maintenance and Debt Service. The Tax Rate that would produce the same amount of tax if applied to the same properties taxed in both years is the Town Council Minutes dated August 30, 2010 1 effective tax rate. Council reviewed the Rollback , Proposed Discussion Limit, Manager's Proposed, Effective and Current Tax Rates. Property Tax -Trophy Club's average Home Value in 2010 is $267 ,215. Every 1 cent tax rate provides $77,000. Every 1 cent tax rate increase equals $27/year. The Acting Town Manager Seidel proposed a budget that does not include a Cost of Living Adjustment (COLA) increase, but does propose the addition of two holidays, estimated at $7,300 and for the Town to absorb the employee's portion of the Health Insurance increase of 11.5%, approximately $23,000. Council confirmed that 2% COLAs were given in the past three years , but the last time merits were given was in FY2007-08. Mayor White questioned why Trophy Club employees pay over two times the amount for insurance compared to other cities' average . Acting Town Manager Seidel explained that the Town has a very good health plan and the Insurance Broker negotiates great rates without drastically reducing the benefits. Rates are also considered based on claim data . Council member Cantrell questioned if the Town could reduce their contribution to the Texas Municipal Retirement System (TMRS). Staff explained that full-time employees are required to become members of TMRS. Employee contributions equal 7% of their gross, which is tax deferred, and is matched 2:1 by the Town. After 5 years of participation in TMRS, an employee is vested 100% in the Town's contributions. Acting Town Manager Seidel stated that this is a factor in recruitment and that TMRS is one of the best managed funds. Potential employees will look at the 2: 1 match when considering working at Trophy Club . Mayor Pro Tem Rose said that he reviewed the Consumer Price Index for the area . The index shows COLAs at 2.8, 3.8 and 4%, the 2% COLA does not even cover the increase, so inevitable the Town is always behind. Acting Town Manager Seidel stated that the employees would appreciate a merit and/or a COLA, however the employees are a very mature group and they understand that raises may not be in the cards; therefore Staff is looking at different ways to make coming to work as an advantage. Mayor Pro Tem Rose commented that there is a lot of red amongst the Fire Department personnel and perhaps Council needs to consider a selective increase for this group . Rose said that TCMUD No.1 is planning a 2% COLA and 1 % Merit. Mayor White stated that a comprehensive salary analysis does need to be conducted. Acting Town Manager confirmed that there is no risk to service levels with having two extra days off. Public Safety is on duty regardless of the holiday and there is an on-call group ready and prepared to come in should the need arise. Seidel stated that the two additional holidays will fall on the Wednesday before Thanksgiving and a day between Christmas and New Years . Council member Cantrell clarified that the compensation and benefits proposal was recommended by the Employee Action Committee (EAC). Community Development Director and EAC Chair, Carolyn Huggins stated that not every employee was questioned and this was just a representation of the entire staff. All thought this would be a great motivation and those with families were more enthusiastic than those without. Staff clarified that the two additional holidays will be ongoing from here on out. Mayor Pro Tem Rose stated that he has a strong sense that if there is no negative reason to migrate folks at the bottom of the pay scale up to market standard; these folks need to be compensated . Acting Town Manager Seidel stated that this is a bigger discussion as it involves a financial commitment from the Council and this would take time to survey and actually calculate . Mayor Pro Tem Rose stated that he sees too much red at the bottom and feels that red needs to be targeted . Council member Hoover agreed that the salaries for the Fire and Police employees need to be targeted and brought up. Mayor White stated that this is not something that can be resolved tonight; however Council can decide on a certain amount that can be applied towards the disparity in salaries after Staff has accurately evaluated a salary survey. Council member Cantrell questioned the difference in the salary chart presented tonight from last week. Finance Director DuBose stated that the handout represents three cities of the seven additional Texas Town Council Minutes dated August 30, 2010 2 cities requested by Council. Four of the cities do not participate in the TML Survey . Cantrell stated that the comparison needs to be of cities closer to Trophy Club in order to look at apples to apples, as Trophy Club has different positions. DuBose explained that the survey is matched by job description not title . Council member Strother stated that even if you compare similar cites they are still going to differ, if even slightly . Some data will be a judgment call and Strother stated that he would defer to the Managers to speak to as they are the ones with the knowledge and experience. Strother said that while salary is important in retaining great employees, attitude and sense of appreciation is also important. Mayor White, Mayor Pro Tem Rose and Council members Hoover and Strother agreed with the Manager's proposal of compensation and benefits at a minimum. Mayor White acknowledged Council member Hoover who wanted to make some comments prior to the beginning of the workshop. Council member Hoover stated he wanted to read a brief statement after the somewhat contentious Executive Session last week. Hoover stated that the Council is in the people business, not enforcement, billing, flying airplanes, selling of groceries or the IT business. The outsourcing concept only works to reduce costs if you are small enough relative to the other party, and you can get a reservoir of skills that you could not afford to maintain on your own. Pay-scales of outsourced employees are significantly less than the Town's. Outsourcing is not the way to control employees; in fact you have lost control of the people who have worked for you. The first is not relevant to the Town, as the Town is not going to hire illegal aliens or ship the Town's business to India . So the second thought is a non-starter. The last thought is more a reflection of the Town's inability to control costs and any way to improve service; just slashing at people and costs will not improve efficiency . Hoover stated that the Council is the Board of a corporation for a service business and the result is all about people, people on both sides of the fence, the residents and the staff. You cannot push a rope, you have to lead and not push. Hoover stated that the Staff has done an excellent job presenting a budget to the Council. The reality is that as a Council , we have less than a year to address four major impending budget busters -the Parks and Recreation Operation and Maintenance Budget, due to the $5 million Park Bond, the PID, the Police Department Building due to TCMUD No . 1 building a water tank where the current Police Department Building is and drainage issues. We do have opportunities to generate a synergic relationship with neighboring communities . Council member Rose spoke in support of a 1 % increase specifically looking at merit and targeting specific positions. Council member Cantrell stated that she was hoping to give employees a 2% merit, but doesn't mean that it is distributed in April but rather on the employee's anniversary date. Staff estimated $37 ,000 for a 2% merit. Acting Town Manager Seidel asked the Council to let Town Attorney Patricia Adams speak to legal services prior to Capital Planning as it relates to compensation. Town Attorney Adams gave an overview of her job duties. Adams handed out research information that was gathered last year, but was not forwarded to the Council. Adams listed the cost per hour of legal services performed by surrounding communities . Council member Strother advised that the Council is just getting a subset of the services the Town Attorney performs and some of these services will not get done if legal is outsourced . Strother stated that Council is not going to be able to compare hard dollars and services will vary from community to community. Strother asked the Council to consider in-house Legal from a liability standpoint, pay me now or pay me later. Council member Hoover is opposed to outsourcing the Legal Department. Council member Cantrell questioned why the cities Staff compared to the Town are larger than Trophy Club. Cantrell does not disagree that Town Attorney Adams does a lot of work but would like to look at this further and drill down deeper. Cantrell stated that the Council cannot keep doing what they are doing and need to do something for the employees, without putting it on the backs of the tax payers . Town Council Minutes dated August 30, 2010 3 Council member Strother questioned whether the risk analysis cost should be cut it in half. Eventually the older homes will decrease in value and the effective tax rate will go up, Council needs to look at how to get out of the box while maintaining the current level of service. Mayor White stated that it would be useful to have a cost per resident for legal services. Finance Director DuBose asked the Council to remember the cost per hour. Mayor White asked how Town Attorney Adams calculated her billable hours and said that the Council needs to consider the risk of people not being able to just stop by for and ask a legal question. Acting Town Manager Seidel stated that Staff needs direction regarding the Capital Improvement Projects. Mayor White stated that the Town does a great job on the streets but she does not have a good comfort level that all the needs have been addressed over the next five years. Seidel stated that the needs of the Administration Building and the Police Department have not been addressed; therefore the $50,000 has been added for a facility study. The Council discussed the elevated tank and that a needs assessment for the Police Department would need to be completed again. Council member Cantrell commented that the Council has talked a lot about innovative ways to cut the budget, yet every suggestion has received resistance. Cantrell said that she is not an advocate on any one particular idea. Mayor White supports saving money; however in the past a bond issue was voted and passed. Then all of the money was taken out of maintenance to keep the tax rate even. White cautioned the Council not to short change the Town's future. Acting Town Manager Seidel spoke to the drainage study, stating that perhaps Council complete the first phase. The Staff can bring back a very comprehensive list in the spring for Council to consider a Bond or several bonds. Mayor Pro Tem Rose is not comfortable delaying action on the Streets. Finance Director DuBose suggested funding as a Certificate of Obligation with the ability to refinance it. Total reconstruction of a concrete street lasts approximately 30 years and the debt would be structured for the life of the asset. Council member Strother is in favor of the pay as you go philosophy, however bonds are still necessary to pay for things. Strother suggested partnering with the MUD on the drainage study as it takes a coordinated effort and look at all water tank options. Finance Director DuBose stated that the Town took over storm drainage in FY2008 1 which is one of the reasons the Town does not have a long-term plan as there have only had two years to plan for a study. Mayor White stated that the Town took over the storm drains before 2008. The Council took a five minute break and reconvened at 8:20 p.m. The Invocation was offered by Council member Cantrell. The Pledges were led by Council member Rose. CITIZEN PRESENTATIONS: Kim Quile, 350 Quorum -Spoke in support of keeping Legal Services in-house. 1 .. After research, Staff found that the Town took over storm drainage in 2003. Town Council Minutes dated August 30, 2010 4 Dean Murray, 505 Glen Hurst -Spoke in support of keeping Legal Services in-house . Susan Edstrom -269 Oak Hill Drive -Encouraged the Council to have the Town Attorney present during Executive Sessions . Edstrom asked the Council to look at all Capital Improvement Projects holistically rather than each individually . 2. 2010-443·T Consider and take appropriate action regarding the Town Manager Search Activities to include: A. The interview process, scheduling of candidate interviews, and any related expenses; B. Establishment of an Interview Panel and Council appointments to the Panel. Gary Holland from The Mercer Group was in attendance . Mayor White would like to have the candidates interview with the Council and then have an informal reception composed of a residenUstaff panel. Council d iscussed paying the cost for airfare, should one of the candidates need to fly . Council member Hoover feels the candidate should bring the spouse and Council member Strother said the cost should not be that significant if the flight is booked now. Mayor Pro Tem Rose confirmed the process as : interview, tour and meet with the resident group. Council understood that the Candidates would interface with the Management Team and provide input to the Council. Chief Police Kniffen asked if Council was going to include the citizens in the interview portion and suggested that the citizens not ask questions , only listen and provide input. Police Chief Kn iffen asked if the reception was to be formal or informal and sa id that residents may not have enough time to interact with all three candidates and provide a fair assessment to Council. Council member Cantrell understood that the citizens would be involved in the reception/social gathering and not be involved in the interview. This Council was elected to hire the Town Manager and should be held accountable . Mr. Holland suggested if Council asks citizens to be in the interviews , they only select three to four citizens and allow them to observe , not ask questions. Council member Cantrell said that she is committed to having a MUD Director and the MUD Manager involved . The Council discussed selection of the citizen panel and whether a listserv should be sent asking for volunteers or if Council should just send names of the residents they would like on the panel to the Town Secretary to compile a list. The Council discussed possible dates for an interview and not pushing the date out too far so that they don't risk losing a great candidate . Mayor Pro Tem Rose feels the interview panel should be the Council No action taken . ADJOURN Motion made by Rose , seconded by Hoover to adjourn . Meeting adjourned at 8:56 p.m. ~ . "7 /ok: I ~1a I,UH;,) /, Jl)) fJilA .. ~. SMnnon DePrater, Interim Town Secretary .,eonnie White, Mayor Town of Trophy Club, Texas Town of Trophy Club, Texas Town Council Minutes dated August 30, 2010 5