M2012-W-02 City Council Chambers 1110 Houston Street Laredo, Texas 78040 August 13, 14, & 15, 2012 5:30 P.M
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CITY OF LAREDO SPECIAL COUNCIL MEETING ANNUAL BUDGET WORKSHOP M2012-W-02 CITY COUNCIL CHAMBERS 1110 HOUSTON STREET LAREDO, TEXAS 78040 AUGUST 13, 14, & 15, 2012 5:30 P.M. I. CALL TO ORDER With a quorum present Mayor Raul G. Salinas called the meeting to order. II. PLEDGE OF ALLEGIANCE Mayor Raul G. Salinas led in the pledge of allegiance. III. ROLL CALL In attendance on August 13, 2012: Raul G. Salinas, Mayor Mike Garza, Council Member, District I Esteban Rangel, Council Member, District II Alejandro Perez, Jr. Council Member, District III Juan Narvaez, Council Member, District IV Johnny Rendon, Council Member, District V Jorge A. Vera, Council Member, District VII Cynthia Liendo Espinoza, Mayor Pro Tempore, District VIII Gustavo Guevara, Jr., City Secretary Carlos Villarreal, City Manager Cynthia Collazo, Deputy City Manager Horacio De Leon, Assistant City Manager Jesus Olivares, Assistant City Manager Raul Casso, City Attorney Motion to excuse Cm. San Miguel. Moved: Cm. Garza Second: Cm. Rangel For: 7 Against: 0 Abstain: 0 IV. DISCUSSION AND POSSIBLE ACTION REGARDING THE PROPOSED FISCAL YEAR 2012-2013 ANNUAL BUDGET: 1 A. INTRODUCTION OF THE BUDGET BY CITY MANAGER, CARLOS VILLARREAL City Manager Carlos Villarreal reported that this year the challenge was to do something for the non-civil service employees. He added that it was due time for these employees to get some sort of raise. He stated that they were recommending a 3% cost of living adjustment for all non-civil service employees, of which $900,000 would come from the general fund and $1,350,000 from all other enterprise and non-general fund expenditures. He went on to say that property tax would be the same, 0.6370 per $100 evaluation. He advised that they were getting pretty close to a 10% contribution to their Health and Benefit plan. He summarized that they had a $500,000,000 consolidated budget, but with grants and bond expenditures they were closer to $650,000,000. He said that other highlights were an operational budget of $850,000 for the city’s new animal shelter facility. They had transferred $2.2 million to the general fund from five other funds; in order to balance the budget, they had taken an additional $2 million to pump back into the proposed budget from general fund savings. He added that some of the largest revenue categories were $51.3 in property taxes, sales tax of $32 million, and a transfer from the bridge fund for $22.5 million to give them $105 million. He went on to state that personnel took up the largest amount of the general fund in an amount of $150.3 million, and the largest activity was always fire and police expenditures amounting to $96.1 million, or 62% of the total budget. He concluded that today they would be presenting a bond package and would be spending $434 million on the water and sewer system, which was unprecedented. B. PLAN OF FINANCE – PROPOSED BOND ISSUANCE Noe Hinojosa, Estrada Hinojosa Investment Bankers Noe Hinojosa gave a presentation before Mayor and Council. WW & SS Revenue – Proposed 2012 Issue Combined WWSS 2012 Sources of Funds Par Amount $43,080,000 Accrued Interest -- $43,080,000 Uses of Funds Project Fund $39,658,000 Debt Service Reserve Fund $2,643,888 Deposit to I&S Fund (Accrued Interest) -- CostofIssuance 254,219 Underwriters Discount 290,790 BondInsurancePremium 233,103 $43,080,000 All-In True Interest Cost Rate: 4.51% Dated Date: 9/1/2012 Delivery Date: 10/11/2012 2 WW & SS 5-Year CIP History and Proposed Total Grants Open Water Total Grants Subsidize Open Water Water Market Projects Water d Loan Market Projects Projects Bond Projects Bond Issues Issues 2007 21,455,000 0 21 2013 7,802,300 0 0 7,802,300 ,455,000 2008 0 5,455,000 2014 25,377,240 0 0 25,377,240 5,455,000 40,107,800 0 0 40,1 2009 5,455,000 0 5,455,000 2015 3 07,800 71,673,000 0 0 71,673,000 2010 5,455,000 0 5,455,000 2016 64,051,000 0 0 15,855,000 2011 31,203,000 0 0 31,203,000 2012 278,034,340 0 229,838,340 TOTAL Total Grants Subsidized Open Total Grants Subsidized Open Wastewater Wastewater Loan Market Wastewater Loan Market Projects Projects Bond Projects Bond Issues Issues 2007 21,680,000 0 0 21,860,00 2013 8,464,500 0 0 8,464,500 0 2008 0 5,680,000 2014 20,843,391 0 0 20,843,391 5,680,000 0 0 0 10,860,000 2009 5,680,000 0 0 5,680,000 2015 10,860,000 4 0 0 11,230,000 2010 5,680,000 0 0 5,680,000 2016 11,230,000 0 48,750,000 9,320,000 2011 58,070,000 0 0 8,455,000 2012 156,642,891 0 48,750,000 107,892,891 TOTAL 8,455,000 Total Grants Subsidized Open Market Total Total Grants Subsidized Open Total WW & Loan Bond Issues WW & Loan Market SS SS Bond Projects Projects Issues 2007 43,135,000 0 0 43,135,000 20 16,266,800 0 0 16, 13 266,800 2008 0 11,135,000 20 46,220,631 0 0 46,220,631 11,135,000 0 14 50,967,800 0 0 50,967,800 2009 11,135,000 0 0 11,135,000 20 15 5 82,903,000 0 0 82,903,000 2010 11,135,000 0 0 11,135,000 20 16 122,121,000 48,196,000 48,750,000 25,175,000 2011 39,658,000 0 0 39,658,000 2012 434,677,231 48,196,000 48,750,000 337,731,231 Total Solid Waste C/O’s – Proposed 2012 Issue Sources of Funds Par Amount $8,895,000 Accrued Interest -- $8,895,000 Uses of Funds Project Fund $8,719,000 Deposit to I&S Fund (Accrued Interest) -- CostofIssuance 115,959 Underwriters Discount 60,041 Bond Insurance Premium -- $8,895,000 All-In True Interest Cost Rate: 2.59% Dated Date: 9/1/2012 Delivery Date: 10/11/2012 Solid Waste Certificates of Obligation, Series 2012 (Current Market Insured Rates + 30 BPS) Project Fund Deposit Pre-2012: $8,719,000 Estimated Net Revenue Available for Debt Service (FYE 09/30/2012): $949,876 Estimated Net Revenue Available for Debt Service (FYE 09/30/2013): $3,457,920 Fiscal Year Existing Solid Debt Service Revenue Ended 9/30 Waste Self- Coverage Available after Supporting Debt Debt Service Service 2012 $1,516,404 0.63x $(566,528) 2013 1,523,669 2.27x 1,934,251 2014 1,527,586 2.26x 1,930,334 2015 1,541,682 2.24x 1,916,238 2016 1,567,170 2.21x 1,890,750 2017 1,564,749 2.21x 1,893,171 2018 1,550,436 2.23x 1,907,484 2019 970,872 3.56x 2,487,048 2020 970,352 3.56x 2,487,568 2021 973,548 3.55x 2,484,372 2022 971,393 3.56x 2,486,527 2023 577,213 5.99x 2,880,708 2024 577,981 5.98x 2,879,939 2025 577,500 5.99x 2,880,420 2026 576,375 6.00x 2,881,545 2027 574,000 6.02x 2,883,920 6 PPF Contractural Obligations – Proposed 2012 Sources of Funds Par Amount $3,880,000 Accrued Interest -- $3,880,000 Uses of Funds Project Fund $3,762,524 Deposit to I&S Fund (Accrued Interest) -- CostofIssuance 91,286 Underwriters Discount 26,190 Bond Insurance Premium -- $3,880,000 All-In True Interest Cost Rate: 3.16% Dated Date: 9/1/2012 Delivery Date: 10/11/2012 This presentation can be viewed at the City Secretary’s Office, 1110 Houston St., Laredo, TX 78040. B-1. RESOLUTION 2012-R-066 Directing publication of notice of intention to issue City of Laredo, Texas, combination tax and revenue certificates of obligation, in one or more series, in the maximum principal amount of $17,000,000.00, for the purpose of 1. acquiring municipal equipment and municipal vehicles for the City’s Solid Waste Department; 2. acquiring, designing, constructing, improving and equipping landfill cells and buildings at the City landfill; and 3. for paying legal, fiscal, and engineering fees in connection with such projects. Motion to approve Resolution 2012-R-066. Moved: Mayor Pro Tem Liendo Espinoza Second: Cm. Vera For: 7 Against: 0 Abstain: 0 C. PROPOSED GENERAL FUND HIGHLIGHTS Martin Aleman, Budget Manager Budget Manager Martin Aleman gave a presentation before Mayor and Council. 7 Consolidated Operating Revenues $499,258,627 General Fund $ 153,643,903 30.8% Debt Service $ 62,028,599 12.4% Other Special Revenue Funds $ 50,451,244 10.1% Bridge $ 46,087,767 9.2% Water $ 42,743,110 8.6% Sewer $ 31,814,345 6.4% Health & Benefits $ 24,523,519 4.9% Transit System $ 20,628,558 4.1% Solid Waste $ 16,728,515 3.4% Health Department $ 16,662,014 3.3% Other Funds $ 15,167,567 3.0% Fleet $ 12,301,669 2.5% Drawdown $ 6,477,817 1.3% Consolidated Operating Expenditures $499,258,627 General Fund $153,699,593 30.8% Debt Service $63,760,642 12.8% Bridge $46,420,860 9.3% Water $42,678,874 8.5% Sewer $29,071,775 5.8% Transit System $22,598,660 4.5% Health & Benefits $22,515,272 4.5% Health $16,662,014 3.3% Solid Waste $16,228,515 3.3% Fleet $13,369,302 2.7% Other Special Revenue Funds $12,352,643 2.5% Sports & Community Venue $10,766,879 2.2% Other Funds $9,824,251 2.0% Environmental $7,959,454 1.6% Risk $7,287,000 1.5% Community Development $6,647,774 1.3% Airport $6,592,932 1.3% Special Police Programs $6,284,095 1.3% Hotel Motel $4,538,092 0.9% Full Time Equivalent Positions History (All Funds) FY09-10 FY10-11 FY11-12* FY12-13* TransitSystem 183.70 185.10 180.10 180.10 AllOther 1,166.38 1,221.38 1,217.38 1,194.38 GeneralFund 1,453.53 1,434.53 1,417.22 1,446.49 8 General Fund Revenues Taxes $87,315,511 56.8% ChargesforService $36,720,887 23.9% FranchiseFees $7,344,894 4.8% Licenses&Permits $6,412,891 4.2% OtherFinancingSources $6,225,000 4.1% Reimbursements&Miscellaneous $3,992,865 2.6% Fines&Forfeits $3,257,336 2.1% Fees&Collections $902,845 0.6% Rents&Royalties $824,174 0.5% Intergovernmental $647,500 0.4% General Fund Major Revenues 08-09 09-10 10-11 11-12 12-13 PropertyTaxes(M&O) 50,856,872 51,794,478 52,306,926 52,443,384 51,331,733 General Sales&UseTax 24,229,523 23,471,292 26,935,219 30,404,148 32,076,385 BridgeTransfer 19,927,117 21,410,067 21,819,101 22,198,862 22,531,066 ElectricSystem FranchiseFees 4,603,454 4,633,716 4,950,629 5,059,449 5,122,692 AmbulanceServiceFees