COUNTY OF DALLAS/COUNTY OF KAUFMAN CITY OF SEAGOVILLE CITY COUNCIL MINUTES  CITY OF SEAGOVILLE  The City Council of the City of Seagoville met in a Regular Meeting on Thursday, August 5, 2010, beginning at 7:30 p.m. in the Council Chambers of City Hall, 702 N. Highway 175, Seagoville, Texas, with the following members present:  Mayor Mayor Pro Tem Council Member Council Member Council Member Council Member City Manager City Attorney SEDC President and CEO City Secretary  Sidney M. Sexton, Jr. Brenda Thompson Harold Magill Lee Landess Peggy Day Carl Polnac  The following Council Members were absent: The following City staff members were present:  Denny Wheat Bob Hager Bekki Roberts Sheila Martin  Mayor Sexton called the meeting to order at 7:31 p.m. and delivered the invocation. The City Council led the Pledge of Allegiance. Adding Carl Polnac  was not in attendance due to an excused absence. PRESENTATION/PROCLAMATIONIS) NONE WERE SCHEDULED CONSENT AGENDA Meeting  1. Consider approval of the minutes of the July 15, 2010 Regular City Council  Motion: Harold Magill made a MOTION Brenda Thompson SECONDED to  approve, the Consent Agenda as presented.  VOTE: 4- Ayes  O-Nays  ITEMS FOR INDIVIDUAL CONSIDERATION:  PUBLIC HEARINGS None Were Held    City Council Regular Meeting Minutes  August 5, 2010 Page 2 of6  ACTION ITEMS  2. Consider Resolution No. 28-10 Authorizing the City to enter into an Agreement with CIGNA for Employee Health Insurance Benefits  Motion: Harold Magill made a MOTION - Brenda Thompson SECONDED to Lee Landess requested that Council be briefed on future contracts far in advance of the formal vote to approve a contract - to allow the Council Peggy Day asked for Council to consider additional employee benefit options ina an effort to avoid furlough days and layoffs including but not limited to the following; withdrawing from Social Security (but retaining Medicare), and eliminating car allowances. See Attachment A for Councilmember Day's City Attorney Bob Hager stated the deadline for the withdrawing from Social Security was 1983 as a result of Section 218 Agreement of the Social Security Harold Magill requested a "Point of Order" be entered into the record - Stating Peggy Day's e-mail (Attachment A) potentially violates the Open Meeting Act. E-mail as a rule pose no problem but, the e-mails need to be presented to the City Secretary for inclusion in the City Council Friday Agenda packet. Lee Landess requested the "drop-dead" date for Employee Health Insurance Human Resources Director Janet Goad stated the cut-off date for Council Lee Landess stated he did not want employees to be without health insurance  approve Resolution No. 28-10 as presented.  Discussion:  enough time to review and consider contract options..  additional FY 2010-11 Budget Recommendations.  Act.  Benefit approval.  approval will be September 2, 2010. and the vote needed to be taken tonight.  VOTE: 4- Ayes  O-Nays  3. Formal presentation of the City Manager's Proposed FY 2010-11  For the City of Seagoville, Texas  City Manager Denny Wheat read the City Manager's Budget Memo (Attachment B) into the record. Denny Wheat also stated; decisions made tonight will impact the future. Setting an FY10-11 effective rate of 0.681528 will generate the same amount of property tax revenue as in FY09-10. Given    City Council Regular Meeting Minutes  August 5, 2010 Page 3of6  Seagoville's FY10-11 property valuation each penny (0.01) cents on the FY10- Council may set = they may set a lower rate upon adoption of the budget; but may not set a FY10-11 property tax rate higher than the rate that's adopted  11 rate will raise an additional $45,000 in tax revenue...  tonight.  4. Council will Discuss the Tax Rate, Take a Record Vote on the Maximum Tax Rate to Consider (if required), and Set Public Hearings on Mayor Sexton commented the adopted rate will determine service levels. Brenda Thompson stated Council could also lower the rate, but she is hesitant  the 2010 Tax Rate.  to' 'lock-us-in" at the effective rate of0.681528  Harold Magill - Iti is difficult to raise the rate in a poor economy.  Lee Landess - Does not want to lock-in at 0.65. Does not want to go to the effective rate of 0.681528. Council needs to do whatever needs to be done to Denny Wheat stated 0.65 tax rate budget to fund current service levels for FY10-11 was presented to Council on Monday, August 2, 2010. Peggy Day = Willing to go to the effective rate of 0.681528, if Council can  maintain current service levels.  adopt a lesser rate if warranted in future years.  CONSIDERATION OF THE MAXIMUM TAX RATE THE COUNCIL SUBMITTED THE FOLLOWING RATES FOR CONSIDERATION  Council Member Brenda Thompson Harold Magill Lee Landess Sidney Sexton, Mayor Carl Polnac Peggy Day  Round 1 0.6600 0.6700 0.6650 N/A Absent 0.6800  Round 2 0.6650 0.6650 0.6650 N/A Absent 0.6650  Vote on 0.6650 Ayes Ayes Ayes N/A Absent Ayes  Motion: Peggy Day MOTIONED to adopt an FY 10-11 tax rate of 0.6650 cents  per $100 valuation - Lee Landess SECONDED  Vote: 4 Ayes  01 Nays    City Council Regular Meeting Minutes  August 5, 2010 Page 4 of6  Following the vote on the FY10-11 rate of 0.6650 cents, the Mayor proposed holding the first public hearings on the FY10-11 Proposed Tax Rate on Thursday, August 19, 2010 at 7:30 p.m., and the second public hearing on  Thursday, September 2, 2010 at 7:30 p.m.  PUBLIC HEARING DATES ON PROPOSED FY10-11 TAX RATE Lee Landess made a MOTION and Harold Magill SECONDED to approve the FY 10-11 Proposed Tax Rate dates of August 19, 2010 and September 2,  2010. Vote: 4 Ayes  ON Nays  MAYOR'S STATEMENT ON PROPOSED FY10-11 TAX RATE Following the vote to set the FY 10-11 Tax Rate and dates for the First and Second Hearings on the Tax Rate, Mayor Sexton read the following statement Council Member Peggy Day made a MOTION to propose a tax rate for FY 10- The current rate is 0.6500 cents. The proposed rate is 0.66500 cents per $100 taxable which will set the FY10-11 rate at 0.016528 cents below the Two hearings on the FY10-11 Tax Rate will be held at Seagoville City Hall at 702 Hwy 175. The first hearing will be held Thursday, August 19, 2010 at 7:30 p.m. The second public hearing will be held Thursday, September 2, 2010 at  into the record as required by State law: 11of0.6650 cents per $100 valuation.  FY10-11 effective rate of 0.681528 cents.  7:30 p.m.  4. Council will Discuss the Tax Rate, Take a Record Vote on the Maximum Tax Rate to Consider (if required), and Set Public Hearings  on the 2010 Tax Rate. CITIZEN COMMENTS  Jose Hernandez, 733 Fairview, Seagoville, Texas referenced the Executive Session Agenda Item to Review the City Manager's Performance = speaking in support of City Manager Denny' Wheat. Hernandez outlined improvements to the City infrastructure and included the City Manager's Reverend Jim Wilkins, 1311 Bryan Place, Seagoville Texas spoke in support City Manager Denny Wheat and the benefits of his leadership including the  professional experience as being assets to the City.    City Council Regular Meeting Minutes  August 5, 2010 Page 5of6  Comprehensive Master Plan, Five-Year CIP, and Master Thoroughfare Plan. Wilkins encouraged the Council to wait until there is a full Council to consider Jose Hernandez, 733 Fairview, Seagoville addressed the Council stated Concerns about violations of the Open Meetings Act, and requested the City Secretary to forward information on Recall Petitions from the City Secretary. Joe Mitchell, 720 May Road, Seagoville, Texas addressed the Council, stating - Comments being made tonight are encroaching upon violating the Open  Agenda Item No. 6  Meetings Act.. FUTURE AGENDA ITEMS  5. Peggy Day made a MOTION to delay Future Agenda Items until after the Executive Session, Agenda Item No. 6-Lee Landess SECONDED.  Vote: 3Ayes (Thompson, Landess, Day) 6. Review City Manager's Performance  1N Nay (Magill)  EXECUTIVE SESSION  At 8:18 p.m. The City Council convened into closed executive session pursuant to Section 551.074 of the TEX. GOVT CODE to deliberate the appointment, employment, evaluation, reassignment, or duties of a public officer, to wit, the City The Council re-convened into Open Session at 9:22 p.m. City Attorney Bob Hager stated the following: As a result of the Executive Session, the Council agreed to accept City Manager Denny Wheat's resignation as of Monday, August 9, 2010 at 5 p.m. Denny Wheat will receive a payout as outlined in his employment Lee Landess made a MOTION to accept the City Manager's resignation - Peggy  Manager  agreement, including sick and vacation time.  Day SECONDED  Vote: 3 Ayes (Thompson, Landess, Day)  11 Nay (Magilly  Lee Landess made a MOTION to re-schedule the Monday, August 9, 2010 Budget Worksession for Tuesday, August 10, 2010 at 7:30 p.m. - preceded by a August 10, 2010 Special-Called Meeting at 7:00 p.m. to appoint an Interim City  Manager. - Brenda Thompson SECONDED  Vote: 4 Ayes  0 Nays  FUTURE AGENDA ITEMS  5. Harold Magill requested an Ordinance to prevent the sale of K2 in Seagoville  and an Executive Session to discuss the City Planning Firm..    City Council Regular Meeting Minutes  August 5, 2010 Page 60 of6  ADJOURN  Mayor Sexton adjourned the Council meeting at 9:26 p.m. Approved this the19th day of August, 2010. Mayor AAg Sexton, Jr.  ATTEST:  Sel QHaphn Sheila J. Martin, City Secretary  TEXAS    Prinf  cH-ysaNpPrAAr  Rm-1- Min CC Meeting-08-05-10  From: sharyn day Gum/2/@sbegobalinel) Date: Thu, August: 5,20101:22:11PM Subject: [No Subject]  Attachment A  To: randbtbompson@attnet; gwmag@sbegobalmet; mdesamisupe@gmuicen:  Cc:  These are my issues tonite. Thought Id give you a heads up and welcome your  views.  The proposed FY 2010-11 budget for General Funds: Anticipated revenue is $6,671,566.  The Total Adjusted Wages after frozen positions is approx. $5,255,882. Thisis  78.78% of projected revenue. 7.5% oftotal wages.  TMRS will be approx, $396,000 total per year for enrolled employees. Thisi is Health Ins. is $564,660 for 90 employees. Thisi is 10.74% oft total wages. City's FICA contribution for SSi is approx.$254,368 (6.2% xt total wages of $4,102,712, including longevity, FLSA O/T, and car allowance). This is approx. The full FICA, SS: and M/C ($4,102,712x629+1 1.3% or 7.5%= $307,703), is Total benefits = 24.09% oftotal wages. Car allowances of $23,600 isi included in Ipropose to withdraw from Social Security (retaining Medicare). This will save the City approximately $254,368, next FY and return the same amount of$254,368 to the employees. The employees could usej part oft this to copay Health Insurance at perhaps $100-$125 per month (and have some left for an IRA). This would reduce Health Ins. cost by $108,000 or $135,000 (from total of $564,660 to $456,660 or $429,660). This would seem more desirable than cutting coverages. It then propose eliminating car allowances and instead instituting a set mileage reimbursement to be paid upon submission of actual expenses. We would then have an amount that would allow rehiring of a code inspector, street maintenance worker, perhaps upgrading the pay scale oft the lowest-paid workers, and something more to keep our streets from further deterioration. On Ramsey Ins., Imet with Bekki and Ithink giving Balch $9,500 to get him out of our hair will be a bargain. It will also tenant another at SEDC location which may attract a small biz. We can't "sue" the people who may have misled him, and the Kaufman/Mathis Sts. neighbors willl be grateful along with the seniors who walk and toddle down Mathis St. to the shopping center. (Bekki gave  4.83% oft total wages, 5.85% oftotal wages. base+ wages.  an unsolicited compliment for "new council")  1of2  8/5/20104:44PM    Prinf  pamp0lmally.loacmdlamanpwver-sbe.gri&rand.  On the sanitation, will the automated pick-up bej practical in Seago where sO many people park on thes street?Idon't have any idea how many of them would be  in the way between 8am and 6pm.  God bless us tonight as we tackle all these issues!  Peggy  2of2  8/5/20104:44PM    BUDGET ARGUMENTS General Funds  This Council has come to a critical point ini its financial oversight with instructions by the CM that Council has no choice but to raise property taxes and/or eliminate the 10% Neither of the two suggested items above will win my support. The citizens of Seagoville bave paid dearly through the neglect of city services primarily in the street infrastructure. The city must be managed as a business and we council members must rededicate our energy to leading Seagoville as the citizens desire and in ai fiscally sound  homestead exemption.  manner. Let me review the definitions ofal business:  1. A business is described as an ongoing concern. Such is Seagoville. 2. A business has financial statements. Seagoville has those. 3. A business has a profit and loss statement. Our P&L statement is 4. A business has a board of directors. Our board of directors is the 5. A business has an annual audit. Seagoville has an annual audit. Wel know the list goes on and on. Our responsibility is no less than that of any other In studying the budgets for the past five years, Ifind that the City operated each oft these years at a deficit (borrowing from prior years unexpended fund balance) by the expenditures exceeding the revenue: received in that year. According to my calculations, the sum ofthese yearly deficits isj just shy of three million dollars. Att the current rate of spending and revenue remaining at the present-day level, the General Fund of our City Asa Council, we need to move away from committing all our attention toi thei revenue side ofthe equation. Itisi imperative that our collective thoughts be directed to the reduction of expenses with maximum attention on employment cost. Present employment cost exceeds 5 Wmillion, sucking up 80% of General Fund revenues. Icall your attention to possible areas that could greatly reduce expense and minimize the impact on employees. These cost reductions would provide the General Fund the additional monies it needs toj provide the citizens the service they deserve.  called a fund balance. this Council.  business.  will soon be depleted.  1. Carallowance to be discontinued. Present cost is $23,600. Ifan employee has a need to use their personal vehicle for City business, an expense report should be prepared and mileage allowance payment equal to the IRS-approved 2. Reduce the City contribution to TMRS back to 1-to-1 from the present level of2-to-1. For the FY2010, the City cost ofTMRS will be $427,000. The  level be given for reimbursement.    employees contribute 7% oftheir gross salary to TMRS, the City matched with 14%. By reducing to 1-to-1, we will be able to save about $213,000. 3. Opt out ofSocial Security which is not required by law when government employees have another form ofr retirement plan. This itselfi is worth close to $260,000. Not only would this bei major savings fort the City, but it translates into a 6.2 salary increase for employees as they will: no longer contribute their share to Social Security. Furthermore, most employees have already contributed to Social Security for the 10 years necessary for Disability and Survivor Benefits. Medicare will continue as required by law. 4. With regard to the 8 frozen vacant positions, thereis a need to fill the position ofs streets maintenance worker and code enforcement officer. Lack of code enforcement in the old high-density neighborhoods is on the verge of creating areas of severe blight where non-enforcement could result in a high crime  rate.  These suggestions are submitted for your consideration, prior to our frst budget session next month. They are a starting place result of three months research, meditation and anguish. The benefits Isuggest turn out to be the ones that City ofl Dallas employees received. Isubmit this to you to! ponder and weigh as you continue your own research,  meditation and anguish. Peggy Day July24, 2010    RM-1-Meeting Minutes-08-05-10  Attachment B  Bole  Memorandum  To: From: Date:  Mayor and City Council Denny Wheat, City Manager August 5, 2010  Subject: FY2010-2011 Proposed Budget Presentation  Mayor and Members of the City Council  As provided for in the City Charter, we are presenting the Cily Manager's proposed FY 2010-2011 Operating Budget. As you know, given the current economic climate this year's budget and budget process will be very different from that which we have experienced the last several years. The staff has spent a significant amount of time in developing what I believe is a fiscally sound program of work under what will be next year's constraints. The proposed budget also draws on the feedback received at the Council Retreat held July 10, 2010. The Summary & Overview found in the budget provide the significant portions of the proposed budget that require policy level As you know, the national and regional economies have nearly slowed to a stop and anticipating where the economy will bottom out has made budgeting for next year difficult. The private sector and the vast majority of cities are feeling this financial pinch. While Seagoville is in better financial shape than some, the City, too, is feeling While we have been adjusting to the economic slow-down for the last two years, as you will note in reviewing the proposed budget, the rate of increase in revenues has slowed significantly and, in some cases, gone negative. While most cities in north Texas saw a decline in taxable value last year and this year, Seagoville's taxable values remained essentially flat last year largely due to the addition of 141 new parcels to the tax roll. New construction has been steadily declining from a high of $40 million several years ago to $9 million in 2009 and to $3.8 million this year. Impacted, of course, by this slow down in construction are building inspection and construction fees. Sales tax, the general funds second largest revenue source, has also declined in this fiscal year by over $30,000 or two percent. We are estimating, optimistically, that sales tax will remain flat in Fiscal 2011. Also, with interest rates declining, interest income has also taken a big dip. While we may see a slight increase in FY 2011 revenues of .2 percent or approximately $16,000, an estimated revenue decrease of $94,201 in budgeted revenues this yearhas taken its toll. Taken together, these declining revenues have resulted in a 3.5% decrease in overall available resources in the general fund. In spite of this tight budget year, we feel that we are presenting a proposed budget that maximizes our limited resources and maintains a very healthy fund balance of $1.25 million or 67 days of operating  decisions.  this economic crunch.  reserves.    Budget Presentation to the City Council Formal Presentation of the FY 2010-2011 Budget  August 5, 2010 Page 2  In order to close the revenue to expense gap in the proposed budget, we" are recommending some significant reductions in general fund operating expenses. Through a series of reductions this year, operating expenses in the general fund have been reduced by $137,470, allowing us to end this year with a 74.1 day fund balance, 9.4 days over what was budgeted. Operating expenses in the proposed FY 2010- 2011 have been reduced by $524,713 from the base budget. When compared to the FY 2010 year end estimate of expenses, the total expenses in the proposed 2010- These budget reductions have all come from the base budget. We have attached a list of the proposed reductions, many of which will significantly impact city operations and a few of which will directly impact the delivery of services. For example, the proposed budget provides for only one replacement a marked police vehicle and there are no compensation adjustments for employees. The equivalent of 8.8 positions has been "banked". This effectively eliminates a clericalassistant position, one code officer, one animal control officer, one records clerk, one street position, one dispatch position, 2.8 parks maintenance positions. These positions will be filled on a mission critical basis as other positions become vacant, the goal being to reduce personnel cost by almost $400,000. The street maintenance budget had been reduced by $80,000 in the current year and no additional reductions are proposed for next year.. Making up the balance of the $202,650 is a myriad of smaller reductions which will impact the individual departments. In addition, department managers submitted supplemental funding requests for $71,200 that have been included for consideration. Although we are optimistic that the economic decline has run its course and that we will experience modest increases this next year in construction and retail sales, we can still anticipate a very difficult year in FY 2011. As our demand for services continues to increase, we would anticipate the need for a slight property tax rate As mentioned above, this is a very unusual year in many respects, one of which is that we should, for the second year, see an effective tax rate higher than the currently adopted rate of $0.65. Should this occur we would recommend to the Council that the Although a water and sewer rate increase was forecast last year for an additional increase in FY 2010, rates have performed significantly well enough to forgo that increase this year. We would expect to update the Cost of Service Plan this fall and, if a water or sewer rate increase is warranted, present that information to the Council for consideration. As discussed with the Council previously, moderate increases are necessitated as a result of our membership in the North Texas Municipal Water District's wastewater regional system. This wastewater expansion will provide wastewater capacity for the City until 2025. Although the existing wastewater treatment plant has been decommissioned, the City will continue to pay debt service until 2015. The other large impact requiring a rate increase is the construction of the  2011 general fund operating budget will be reduced by $132,607.  increase in FY2012.  property tax rate be raised to the effective rate.    Budget Presentation to the City Council Formal Presentation of the FY 2010-2011 Budget  August 5, 2010 Page 3  City's second water tower. This $2 million project will provide water capacity to the would like to take this opporlunity to thank my staff for their hard work in compiling this budget and I believe the efforts of the Council and staff will result in a sound financial plan and program of work that will align the City with both its financial The staff and I look forward to working with you in finalizing a budget that reflects the  community through build out.  capabilities and its many opportunities.  needs of the community within the resources available.