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Minutes TC 01/25/2010 - Special SessionMINUTES OF A TOWN COUNCIL SPECIAL JOINT SESSION WITH TCMUD NO. 1 100 MUNICIPAL DRIVE TROPHY CLUB, TEXAS 76262 MONDAY, JANUARY 25, 2010 AT 7:00 PM SVORE MUNICIPAL BUILDING BOARDROOM STATE OF TEXAS COUNTY OF DENTON The Town Council of the Town of Trophy Club, Texas, met in a Special Joint Session with TCMUD No. 1 on Monday, January 25, 2010. The meeting was held within the boundaries of the Town and was open to the public. TOWN COUNCIL MEMBERS PRESENT: Connie White Mayor Glenn Strother Mayor Pro Tem Philip Sterling Council Member Kathleen Wilson Council Member Bill Rose Council Member TOWN COUNCIL MEMBERS ABSENT: Susan Edstrom Council Member TCMUD NO.1 MEMBERS PRESENT: Dean Henry Joint President James Budarf Joint President Gary Cantrell Joint Vice President Kevin Carr Joint Vice President Jim Hass Secretary/Treasurer James Thomas Secretary/Treasurer Neil Twomey Director Bob Fair Director Steven Kohs Director Bob West MUD Attorney Pam Liston MUD Attorney TCMUD NO. 1 MEMBERS ABSENT: Joseph Boclair Director STAFF AND GUEST(S) PRESENT: Brandon Emmons Town Manager Stephen Seidel Assistant Town Manager Lisa Hennek Town Secretary Patricia Adams Town Attorney Kathy DuBose Finance Director Danny Thomas Fire Chief Scott Kniffen Police Chief Town Council Minutes dated January 25, 2010 (Joint Session TCMUD No. 1) Carolyn Huggins Robert Scott Mary Moore Planning and Zoning Manager TCMUD No. 1 District Manager TCMUD No. 1 Secretary Mayor White announced the date of January 25, 2010, called to order and announced a quorum at 5.00 p.m. JOINT SESSION WITH TROPHY CLUB MUNICIPAL UTILITY DISTRICT #1 1. 2010-47-T Receive report from the SEMO (Shared Employees MUD Organization) Committee, Town Manager to provide information regarding Services Providers, discussion regarding the same. Director Hase indicated that the SEMO Committee was created in order to determine better efficiency operations. Director Hase presented the SEMO Committee Report consisting of four scenarios. Scenario No. 1 - Present Day 50150 Split (Shared Service Providers) Scenario No. 2 - Bid by Town Scenario No. 3 - Bid by CPA Firm Scenario No. 4 - All MUD Personnel Services In-house Director Hase stated that there would be a one time fee of $87,159 to move the Shared Service Providers from their current retirement program with Texas Municipal Retirement System to Texas County District Retirement System. The fee is necessary in order not to affect the current earnings of the employees with less than five years of service. Mayor White commented that the past May Election was a very tumultuous election and she had hoped that the SEMO Committee would have included members of the Town. White stated that the MUD has also vowed support of the Town and creating organizational efficiencies. Mayor White gave a presentation regarding the Impact of the SEMO Committee Options on the Residents of Trophy Club. How do we deal with remaining shared employees? • Hiring for vacancies • Processing payroll • Administrative Support • Training - Which Departments will remain shared? 1T Fire/EMS The Police and Fire Administrative Assistant currently serves as Secretary for Denton County Fire Chiefs Association as Chief Thomas is the Chair. Town Council Minutes dated January 25, 2010 (Joint Session TCMUD No. 1) 2 Mayor White asked the Board to consider the Financial Impact on the Residents: �- Shifts employee compensation from water revenue to tax base ➢ One time start-up cost — $1 Ok (software) Other costs — $87k (retirement buy -in) ➢ Productivity loss Mayor White explained the Current Financial Process — Basic Town -MUD Split Purchase versus Future Financial Process —Town -MUD Split Purchase - Current Electric Bili Payment Process versus Future Electric Bill Payment Process, showing the complications created if the processes were to be separated. Director Cantrell questioned if the Town has ever looked at outsourcing on the city side in order to be more efficient. Director Budarf questioned why the Mayor and Town Manager did not participate in the SEMO meetings. Mayor White responded that the Town had asked to be involved but the SEMO Committee requested that the Council wait until the SEMO Committee had the opportunity to put together some numbers at which time they would give the Council to opportunity to respond. Director Cantrell questioned if Town Manager Emmons felt that the Water District is a revenue generating system. Mayor White responded that the Water District is a cost sharing District. Town Manager Emmons stated that he has never claimed that the Municipal Utility District was a cost revenue system, only that the cost to run the operation is recouped in the maintenance. Director Thomas stated that the shared employees concept worked well for a long time; however when talking to the employees now, the system is broken. Thomas said that the Board's intent is to run TCMUD No. 1 as a business and keep the politics out of it. Thomas said that it is hard to run a business when they receive financials three months old. Mayor White explained that the Finance Department has had an extremely tough year and was short staffed for much of the year. During the interview process for a Finance Director, the department had two individuals out on sick leave. White commended the Finance Department and the obscene hours they have worked trying to catch up. White stated that the MUD financials have always been behind during Audit in October and November. Director Hase said that perhaps the Town/MUD is too small to maintain a finance department and that a CPA firm is better equipped to manage the responsibilities even when one person is out. Director Twomey stated that TCMUD No. 1 received push back when they offered to fund a finance position at 100% after the former Finance Director resigned. The CPA firm could produce the financials within seven to ten days after months end. The CPA firm has an obligation to perform regardless of who is out sick. Twomey suggested the Town consider a regional police department. Mayor White responded that a regional police department is a great concept, however it is not always easy to achieve and both sides need to be open to discuss. Town Manager Emmons commended TCMUD No_ 1's theory of running the MUD as a business and saving the residents. Emmons reminded the Board that their business is a public service that has to be provided to the residents and hopes that the business concept still allows quality customer service to the community. Emmons responded to the discussion regarding outsourcing, stating that one employee would still be responsible for the data entry of the Town Council Minutes dated January 25, 2010 (Joint Session TCMUD No_ 1) 3 information needed for the CPA firm. What happens when this employee is out? There is back-up under the current situation and Elected Officials must understand that daily job functions take precedence over certain financial reporting requests when short-staffed. Town Manager Emmons asked the Board to consider a couple of different factors in response to Director Thomas' claim that the shared employee concept no longer works. First the lack of direction; employees are made to choose loyalties between both entities and there is a constant, prevailing notion that TCMUD No. 1 will cease funding for their position. Emmons stated that the Town has routinely picked up the funding of positions that have been cut by TCMUD No. 1; Building Inspector, Planning and Zoning Manager, Code Enforcement, Deputy Town Secretary/RMO (although still listed as a Shared Service Provider on the SEMO Report.) Emmons questioned who would be responsible to perform the Fire and EMS job functions of the Police and Fire Services Administrative Assistant should TCMUD No. 1 cut funding for her position. Emmons explained that this position currently serves as Secretary for Denton County Fire Chief's Association as Chief Thomas is the Chair. Director Thomas explained the separation would only impact ten of the twelve shared employees as it does not make sense to separate the IT Department. Thomas suggested possibly cross -training the remaining fifty-three employees. Mayor White clarified that approximately thirty of the fifty-three employees Thomas referred to are summer (part-time) employees. Director Thomas offered for one of the 100% MUD funded employees to help out with the 50% portion/job functions that would be cut with Police and Fire Administrative Assistant and suggested that the Town then find something else for that person to do. Director Carr said that it does not make economical sense to have two different network servers. TCMUD No. 1 gets very little bang for the buck for the Town Secretary and Human Resources Department and TCMUD No. 1 now has their own MUD Secretary. Carr stated that TCMUD No. 1 is obligated to the tax payers to run an efficient operation, even if it means separating in order to create a savings to the tax payer. Mayor White reminded the group again that the Board has always been committed to supporting and working together with the Town for the sake of the community. Director Budarf questioned Mayor White about the Park Director 50150 funding as listed in the SEMO report. Mayor White explained the reference is inaccurate, the Parks Director is funded 100% by the Town and the Town did not produce the SEMO report. Director Budarf reminded all of the Elected Officials to consider the residents' tax when deciding what option is best. Director Cantrell stated that the consolidation of MUD No.1 and No. 2 has reduced the financial impact and should for the Town as well. Mayor White agreed that there may be inefficiencies from too many systems and that the Council will be looking at positions, however splitting is only transferring cost from one hand to another. Director Thomas said that the SEMO Committee's intent was to start the separation process now, with an October 1, 2010 effective date; this way the employees will not have to continue worrying about whether their positions will be funded or not. Thomas questioned what the Town would do about the funding for the folks no longer funded by TCMUD No. 1. Town Manager Emmons said historically, the Town has always picked up the 50% no longer funded by the MUD. Town Council Minutes dated January 25, 2010 (Joint Session TCMUD No, 1) 4 Town Manager Emmons requested Council's permission for the Town to offer TCMUD NO. 1 an Employment Contract Services Agreement. Mayor White completed her presentation with an explanation of the tax impact and insurance savings. Town Manager Emmons stated that the Town's Insurance Broker advised that coverage currently provided to the Town for all employees (100% Town funded, 100% MUD funded, and the 50150% funded) would not be possible if the Town and TCMUD No. 1 separate into two different entities. Currently the policy is for coverage of Town employees as provided in the Intergovernmental Contract for Employee Services. Should the separation occur, and employees with family coverage and the same benefits currently provided can expect an increase of approximately $1,000 per month. Mayor White agreed that the system is broken, but would like an opportunity to work together with TCMUD NO. 1, before the decision to tear it apart is concluded. White stated that based on the numbers the Town was provided, the split would cost the residents a total $304,500. Mayor White asked TCMUD NO. 1 to work with the Council to come up with the best options. Council member Sterling said that while everyone is totally emerged in the Town versus the MUD, the bottom line is the total savings and aggregate affects on the entire community as a whole. Director Hase said when asked what job functions he performed for TCMUD No. 1 were; the Permit Clerk's response was "Practically nothing, Utility Billing does the majority of his work." Council member Sterling commented that even if TCMUD NO. 1 decides not to fund the Permit Clerk, the residents will still pay for it, as the Town (Town and TCMUD No. 1) need this position. Director Budarf said the bottom line is that the staff is under two different governances. The SEMO Committee streamlined all of the MUD functions in order to save money. Mayor Pro Tem Strother and Council member Sterling agreed that the MUD will only be shifting the payment to the Town as ultimately the MUD savings will result in an increase to the Town's side. Director Budarf told the Council to consider the money the Town is receiving from the PID. Town Manager Emmons and Mayor White explained that TCMUD No. 1 is going to receive monies from the PID as well. Director Twomey stated as its own entity, is it cheaper for the owners of TCMUD No. 1 to outsource. Twomey said that the SEMO letter was dated in November and that the Town should have become involved sooner and sent out their presentation earlier. Mayor White replied that the Town only just received the SEMO report late Friday night. Director Twomey said that the Town's response to the SEMO report is slanted. Town Manager. Emmons said that he keeps hearing from TCMUD NO. 1 that separating and outsourcing is the cheapest and less expensive option. Emmons asked the Board to consider if the less expensive option is really the best option for the residents. For example, the Town has researched outsourcing the Police Department, however based on the service needs of our residents; this was not the best option for the Trophy Club Community. While true that TCMUD No. 1 is not getting a true 50% from the Permit Clerk, the Town is not charging TCMUD No. 1 for the support services performed by the Building/Plumbing Inspector, whose job is to ensure Town Council Minutes dated January 25, 2010 (Joint Session TCMUD No. 1) that adequate plumbing ties into the TCMUD No. 1 infrastructure. The permit fee is cost neutral. When it comes to City Services lowest cost will frequently not meet the needs of the residents_ Council member Rose said that it is difficult to know where to start and that this is a real attention getter. Rose stated that the Finance Department has been operating the general ledger by pencil and paper due to very old systems and also addressing MUD finance errors dating back to 2002. Rose surveyed forty-three cities and the Town's Finance Department, by comparison is seriously under staffed. Only one out of forty-one cities outsource their finance department which would suggest that outsourcing is not the best idea. Rose questioned if the SEMO Report, Chart #1, actually compared apples to apples. The Town quoted a price for financial services with sixty-eight points. The CPA Firm only quoted for sixteen points. Rose is in favor of the Town providing a cost for services agreement. Director Hase said that he is driven in regard to the shared employees based on the unpleasant work environment that has been created. Hase stated that TCMUD No. 1 will have more control with outsourcing than what they currently have with the Town. Mayor Pro Tem Strother agreed with Director Hase about the work environment and realizes the added stress, yet feels that there are better solutions than breaking the whole process apart. Strother commended the research gathered by the SEMO. Strother said it is disappointing when the debate is consistently us versus them and everyone should be looking at this as a unit of one and focus on the common goals. If TCMUD No.1 totally outsources, a position is still going to be needed to perform the data entry and provide information. Strother believes that there is still a lot more progress to be made and reminded TCMUD No. 1, if you take away from one, you still have to pay for it one way or the other. There will be an added cost to the residents however you split it. Council member Sterling stated that outsourcing has been considered, however quality control, continuity and promptness of service quality were big factors in keeping positions in-house. Town Manager Emmons said this is about serving our community and our staff. Employees get tired of having their position threatened every year because one entity can find someone or something cheaper. During the budgeting process last year, Council looked at outsourcing the Inspection Department. Estimated cost to outsource was $183,000, as opposed to $90,000 in- house; a huge savings to the Town. Outsourcing the Street Department was also considered, however when evaluating the repairs alone, there was a cost savings to keep in-house, not even including the additional services received, like sanding the roads in bad weather and keeping the storm drains clear. The Community will not receive these services with out- sourcing and there is a cost associated with superior service to the residents. Emmons said that he could find cheaper means to perform services, however not at the risk of quality services to the residents. Council member Wilson stated that she felt there were some disingenuous comments being made. Wilson does not get this sense when she delivers her TCMUD No. 1 Liaison report to the Council. Wilson has not received any reception in past budget workshops when she has suggested certain employees/positions be evaluated as the Town is managed by a Manager/Council form of government and the Town Manager gets to make these decisions. Wilson sits on both sides, realizing TCMUD No. 1 is not getting the value of some employees, yet the Town wants TCMUD No. 1's 50% contribution. Wilson stated the Council snipes about TCMUD No. 1 yet wants the MUDs to entrust their business with the Town. Wilson believes that there is so much aggregate BS at the top; however we are not talking about the top but why Town Council Minutes dated January 25, 2010 (Joint Session TCMUD No. 1) 6 TCMUD No. 1 is paying 50% of services they are not getting. On January 4I' Wilson offered to provide the SEMO report to the Council, yet no one on the Council requested a copy. 2. 2010-48-T Set Next Joint Meeting Date for Saturday, February 6, 2010, 9:00 a.m. - 12:00 p.m. and select the venue. Mayor White proposed that the Council and TCMUD No. 1 meet again on Saturday, February 6, 2010 to continue discussing. Joint President Budarf is in favor of the meeting. Joint President Henry is in favor of this meeting. Director Cantrell is in favor of this meeting. Director Carr is in favor of the meeting, providing the Town come with a mindset and solutions to fix the problems. Director Twomey said that consideration to the financial side of the community and the atmosphere to the employees need to be given. Twomey remarked that Council member Rose has been on the Council since May, yet suddenly the Council needs to look at TCMUD No. 1 and the impact it may have on the Town. The TCMUD No. 1 may be the bad guys but are the bad guys the residents' taxes. Twomey is in favor of the meeting, providing the Town come with honest information. Director Fair is in favor of the joint meeting. Director Thomas requested Town Manager Emmons and District Manager Scott work together to provide the numbers should the TCMUD No. 1 take over EMS. Thomas suggested limiting the staff to the two managers. Director Cantrell is in favor of joint meeting. Director Kohs is in favor of the joint meeting. No action taken Mayor White adjourned the Joint Session at 9:42 p.m. Council to reconvene to Public Services Conference Room Mayor White called the Special Session to order at 9:50 p.m. TOWN COUNCIL SPECIAL SESSION 3. 2010-49 T Consider and tate appropriate action adopting goals and objectives for FY 201011. Council member Rose revised the Goals and Objectives created by the Council, to include his legacy goals as groupings for the Goals and Objectives. . Council members Wilson and Sterling liked Council member Rose's revisions. Motion made by Sterling, seconded by Wilson to adopt the goals and objectives for FY 2010-11, and requested Staff to reformat. Town Council Minutes dated January 25, 2010 (Joint Session TCMUD No. 1) 7 Council member Wilson thanked Finance Director Kathy DuBose for her help keeping the Council on track at the previous workshop sessions. ADJOURN Motion to adjourn made by Strother, seconded by Wilson. Meeting adjourned at 10:05 p.m. L) o--2 Q ZL Lisa Hennek, Town Secretary Town of Trophy Club, Texas Connie White, Mayor Town of Trophy Club, Texas Town Council Minutes dated January 25, 2010 (Joint Session TCMUD No. 1) $